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What competitive advantage does the MD have in real estate

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  • Avatar ifonlyFI 
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    Status: Physician
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    Joined: 08/23/2017

    I’m finally comfortable enough in my finances to focus on real estate investing

    I spend a lot of time on biggerpockets. The MD is really not represented there. Specifically, I’m not interested in 10’s or even 100’s thousand portofolio. I don’t want to rehab a $60k house and refinance at a new appraisal of $100k. Relative small drop in the bucket. I don’t expect to make millions on one deal and recognize the importance of scaling.

    An end goal for me would be 10’s millions portofolio in retirement.

    There has to be some advantage that we have as MD. Obviously our bigger income may allow us to have more disposable income. But what else? Does the MD degree let us open nursing homes, hospice, rehab centers? I know about buying your practice building but I don’t have that option as an w2 employee physician.

    Thoughts?

    #189712 Reply
    CordMcNally CordMcNally 
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    Status: Physician
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    Joined: 01/03/2017

    The biggest advantage, like you stated, is usually more income than the average Joe. The advantages typically stop there. I’m confused about what you want. You say that you don’t want to do low level rehabs (although I think everyone in that business would take a $20k-$40k profit on a rehab) but you also say you know you won’t make millions and you have to scale. Being an MD lends zero advantages to be able to open a nursing home or the like. If anything, it probably gives a false sense of security on trying to make money with one. Besides, I see enough nursing home, rehab, and even hospice patients every shift that I wouldn’t want to have anything more to do with them than I already do.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #189716 Reply
    Avatar Anne 
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    Status: Physician
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    Joined: 11/07/2017

    Opening a SNF, hospice, or rehab center would be a separate business.  Don’t confuse real estate investing, which refers to buying property in some form (residential, commercial, or land) and renting out the use and/or selling it when it appreciates.  Real estate development can be a side arm of this, but is still  a separate business (and another job if you want to take it on).  If you own a commercial property, you want the tenant that is most responsible, reliable, stable, who will be able to pay the rent.  I don’t know why you care whether it is medically related or not.  Now if you want to own and run a medical facility, that’s a business (separate from the business of real estate management). Part of the business plan will be whether you own your space or lease it.

    Rehab beds are tightly regulated, you can’t just open an inpatient rehab facility.

    I think the only advantage doctors have in real estate is potentially larger access to capital to start (although honestly most physicians’ income is small potatoes compared to many others in this arena).  Thinking that we know about investing in real estate that is used for medical purposes just because we know about medicine could actually be a disadvantage.

    Cord, I agree with most of your response, but show the rehab patients some love! ?

     

    #189721 Reply
    ENT Doc ENT Doc 
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    Status: Physician
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    Joined: 01/14/2017
    Earnest refinancing bonus

    Nothing. Plenty of people making as much as if not more. We have no competitive advantage by the true meaning of the phrase.

    #189722 Reply
    Avatar ifonlyFI 
    Participant
    Status: Physician
    Posts: 93
    Joined: 08/23/2017

    My specific question which I didn’t state clearly was whether our clinical expertise opens doors. Thus, I used the above nursing home, hospice , etc as an example.

    I would think, and maybe wrongly so, that owning real estate and leasing such property to a healthcare business would be more profitable than non-healthcare.

    #189726 Reply
    ENT Doc ENT Doc 
    Participant
    Status: Physician
    Posts: 2867
    Joined: 01/14/2017

    Our training confers no competitive advantage in regards to real estate, of any kind.

    #189731 Reply
    CordMcNally CordMcNally 
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    Status: Physician
    Posts: 1781
    Joined: 01/03/2017

    Just curious but in what way do you feel your clinical expertise will help you in leasing a property? Some properties are better suited for a healthcare related business but being a physician gives you zero advantage in leasing out a space. I would argue someone that has real estate experience has significantly more advantage because they’ll be better suited to find somebody to lease a space and they’ll know the leasing market much better.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #189733 Reply
    Avatar Complete_newbie 
    Participant
    Status: Physician, Small Business Owner
    Posts: 801
    Joined: 01/03/2017

    ZERO.

    Next.

    #189735 Reply
    abds abds 
    Participant
    Status: Physician
    Posts: 168
    Joined: 01/16/2017

    There has to be some advantage that we have as MD. Obviously our bigger income may allow us to have more disposable income. But what else? Does the MD degree let us open nursing homes, hospice, rehab centers?

    Click to expand…

    Yes. Although that is different than “real estate investing.”

    #189736 Reply
    White.Beard.Doc White.Beard.Doc 
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    Status: Physician
    Posts: 712
    Joined: 02/06/2016

    One example of an advantage as a high income earner is the capital to take on bigger real estate projects.  For example, most on bigger pockets can only take on very small projects with minimal capital needs.  As a physician with higher income, you could potentially take on a multi-family investment with a property manager.

    #189765 Reply
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 1783
    Joined: 09/18/2018

    No offense . Capital is always an advantage, MD or not.
    Having capital to invest simply eliminates the need for partners or financing. Cash deals are always the easiest.

    Actually an MD can be a disadvantage. Over confidence can be a real problem . Working closely does not translate into skill or expertise.
    Would you hire Michael Phelps to build your pool?
    For all I know, a pool builder may not know how to swim.
    Check your ego at the door when dipping your toes in.
    Since your looking at big investments, try not to drown. Learn to swim first. I wouldn’t suggest dropping big bucks in your first venture, be it real estate or business.
    Have you considered investing in index funds? You might like it.

    #189779 Reply
    Avatar G 
    Participant
    Status: Physician, Small Business Owner
    Posts: 1381
    Joined: 01/08/2016
    some advantage that we have as MD

    Click to expand…

    None with investing.  Unless I missed that elective in my MS-4 year.

    Perhaps access to tenants for residential and commercial RE (nurses, med students, residents, other docs) if you work as property manager.

    #189782 Reply
    Liked by Peds
    wonka31 wonka31 
    Participant
    Status: Physician
    Posts: 480
    Joined: 03/24/2018

    Nothing. Plenty of people making as much as if not more. We have no competitive advantage by the true meaning of the phrase.

    Click to expand…

    So, I actually really disagree with you here. I mostly see ‘eye to eye’ with you, on almost any topic that comes to mind but I think you’re missing something. The ability to obtain financing, particularly during a downturn, is a huge advantage. Few professions allow for this is an economic downturn, physicians however sustain this fairly well. As the market goes down and people are scrambling to sell or are unable to obtain financing, we can. We have capital when others don’t. That’s a HUGE advantage.

     

    Our training confers no competitive advantage in regards to real estate, of any kind.

    Click to expand…

    This is 120% accurate. Unless you know the game, our training offers no valuable insight or advantage. Nail. Head. Hit.

    #189789 Reply
    Liked by NaOH
    Avatar G 
    Participant
    Status: Physician, Small Business Owner
    Posts: 1381
    Joined: 01/08/2016
    The ability to obtain financing, particularly during a downturn, is a huge advantage. Few professions allow for this is an economic downturn, physicians however sustain this fairly well

    Click to expand…

    I’m still not sure what the OP is getting at, but since s/he specifically mentions no interest in turning 60k into 100k…I don’t suspect that the profession of physician is gonna help when talking about 7-8 figure deals.

    Just sayin…?

    #189796 Reply
    Avatar StarTrekDoc 
    Participant
    Status: Physician
    Posts: 1701
    Joined: 01/15/2017

    On the opposite side, I believe the simple fact that folk think this very thing — that MD has SOME advantage whereas it really doesn’t, and folk get into trouble without researching prior to investing.

    The single benefit most MDs afford is the ability to cash flow projects.   This is important in real estate investing where one can build out leveraged growth, take on depreciation and tolerate negative cashflows on projects as they incubate and turn profitable.

    Otherwise, the MD is more often than not a liability.

    #189797 Reply

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