Younger Dentist on disability $56k/yr RE or dental Practice owner

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Younger Dentist on disability $56k/yr RE or dental Practice owner

Lance Gordon
Member since 2022 · 11 posts · 4 votes

Hi BP family,

Full disclosure: I'm a single 40yr old dentist, have no home, and have $100k to my name (half in an IRA) and make $56,000/yr passively through long term disability income.

I enjoyed the freedom of not having to work for a few years now, as I worked on reducing my back issues.  However, I am ready for the next moves.  I need to make more money to set myself up for myself and a potential family.

The complicating factor is that if I go back to work and make over $1,300/month through work income, I will lose my $56k in disability income.  Hence, my interest in investing as it is not considered work income. 

Now for the actual question:

With all this free time, I have immersed myself in learning all about REI for the past 3 months and find it exciting.

I am currently deciding between RE investing and dental practice investing (I have never owned/run a practice) as a way to creat more passive cash flow.  I’m looking at house hacking a Tri or quadplex, flipping, and the other 10,000 ways to invest.

Could anyone, especially experienced investors or people with dental office investment knowledge share their insight and guidance?

Should I pursue REI or dental investing? More specifically, which could provide more passive cash flow, which is faster/less difficult to scale?

If I do REI what would be the best way to do it considering I have a lot of time and my financial situation?

Thank you for hearing me out.

Lance 



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Lawrence Potts
Real Estate Agent · Member since 2018 · 459 posts · 414 votes
3y

Hi @Lance Gordon, you are in a very unique situation.

The easy route is to find a W2 job and forgo your disability so you are traditional financeable again. But if you are adamant about not working, you have some options. These are just a few ideas trying to look at in your shoes:

1. You have what most dentist do not have: time. So you can become the "real estate investing" dentist, or the bridge between dentist that have money and want to invest but do not have the time or energy to learn and find the right deal. Partner with them, leverage their income and you have the free time to manage the deal, run the numbers, etc., and grow a portfolio.

2. Maybe you can create a franchise model for new dentists coming out of school that they can buy into and you provide them with the equipment, facility, network, team, etc., but it's similar to a McDonald's franchise model where you own the real estate and collect the passive income of rent and royalties? (Check out the movie The Founder).

3. You can partner with Dentists to pull money together to buy large apartment complexes. Similar to the first idea but instead of lending based off of their income, you go the DSCR route and pull their money together to create the down payment and then find apartment complexes. Definitely find an attorney that would be familiar with this model and figure out how to structure this appropriately.

Just some ideas shooting from the hip, but you have time which is very valuable to most people that have money. Use the time to teach yourself and become the expert to a target audience that need an expert and have money and want to invest. Hope that helps!

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  • Lawrence Potts
    Real Estate Agent · Member since 2018 · 459 posts · 414 votes
    3y

    Hi @Lance Gordon, you are in a very unique situation.

    The easy route is to find a W2 job and forgo your disability so you are traditional financeable again. But if you are adamant about not working, you have some options. These are just a few ideas trying to look at in your shoes:

    1. You have what most dentist do not have: time. So you can become the "real estate investing" dentist, or the bridge between dentist that have money and want to invest but do not have the time or energy to learn and find the right deal. Partner with them, leverage their income and you have the free time to manage the deal, run the numbers, etc., and grow a portfolio.

    2. Maybe you can create a franchise model for new dentists coming out of school that they can buy into and you provide them with the equipment, facility, network, team, etc., but it's similar to a McDonald's franchise model where you own the real estate and collect the passive income of rent and royalties? (Check out the movie The Founder).

    3. You can partner with Dentists to pull money together to buy large apartment complexes. Similar to the first idea but instead of lending based off of their income, you go the DSCR route and pull their money together to create the down payment and then find apartment complexes. Definitely find an attorney that would be familiar with this model and figure out how to structure this appropriately.

    Just some ideas shooting from the hip, but you have time which is very valuable to most people that have money. Use the time to teach yourself and become the expert to a target audience that need an expert and have money and want to invest. Hope that helps!

    1Reply
  • Scott Mac
    Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes
    3y

    Can you teach at the Dental school for 6 figures (under some kind of contract--so they don't release you and your out of luck totally)???

    Minimum wage in Austin is $20 an hour...at McDonalds...flipping burgers...$40,000 a year flipping burgers.

    0Reply
  • Danny Polanski
    Chicago, IL · Member since 2020 · 184 posts · 182 votes
    3y

    I think I would strongly look into buying a mixed use bldg. 

    commercial space on ground floor (dental practice) and residential unit(s) above. 

    0Reply
  • Lance Gordon
    OP
    Member since 2022 · 11 posts · 4 votes
    3y
    Quote from @Lawrence Potts:

    Hi @Lance Gordon, you are in a very unique situation.

    The easy route is to find a W2 job and forgo your disability so you are traditional financeable again. But if you are adamant about not working, you have some options. These are just a few ideas trying to look at in your shoes:

    1. You have what most dentist do not have: time. So you can become the "real estate investing" dentist, or the bridge between dentist that have money and want to invest but do not have the time or energy to learn and find the right deal. Partner with them, leverage their income and you have the free time to manage the deal, run the numbers, etc., and grow a portfolio.

    2. Maybe you can create a franchise model for new dentists coming out of school that they can buy into and you provide them with the equipment, facility, network, team, etc., but it's similar to a McDonald's franchise model where you own the real estate and collect the passive income of rent and royalties? (Check out the movie The Founder).

    3. You can partner with Dentists to pull money together to buy large apartment complexes. Similar to the first idea but instead of lending based off of their income, you go the DSCR route and pull their money together to create the down payment and then find apartment complexes. Definitely find an attorney that would be familiar with this model and figure out how to structure this appropriately.

    Just some ideas shooting from the hip, but you have time which is very valuable to most people that have money. Use the time to teach yourself and become the expert to a target audience that need an expert and have money and want to invest. Hope that helps!

    Thank you for the advice! Having dentist classmate/friends who have good income are great sources to finance these deals. I'm not as familiar with DSCR but will look more deeply in to it.

    1Reply
  • Lance Gordon
    OP
    Member since 2022 · 11 posts · 4 votes
    3y

    @Scott Mac 
    thank you! I could potentially teach but then I’m trading all of my time for money and the goal is financial freedom.  My disability income is not fully taxed so my income would actually be somewhere around $65k. Not sure it’s worth the trade off for $100k working as a teacher full time

    @Danny Polanski
    Thank you! I guess in that case I'm not choosing one or the other. I just know that building and running a dental practice takes a lot of time, money, and effort to grow and make profitable. I'm not sure I could do REI at the same time.

    1Reply
  • Danny Polanski
    Chicago, IL · Member since 2020 · 184 posts · 182 votes
    3y

    I actually wasnt thinking of your own Dental Practice. 

    You would be the landlord for another dental practice and maybe work there part time to stay below your target annual income.  And you would house hack in the residential section of the property.  Owner occupied. 

    You know the dental area already so lean on that is my thinking, and will soon know the landlord area as well. 

    0Reply
  • Lawrence Potts
    Real Estate Agent · Member since 2018 · 459 posts · 414 votes
    3y
    Quote from @Lance Gordon:
    Quote from @Lawrence Potts:

    Hi @Lance Gordon, you are in a very unique situation.

    The easy route is to find a W2 job and forgo your disability so you are traditional financeable again. But if you are adamant about not working, you have some options. These are just a few ideas trying to look at in your shoes:

    1. You have what most dentist do not have: time. So you can become the "real estate investing" dentist, or the bridge between dentist that have money and want to invest but do not have the time or energy to learn and find the right deal. Partner with them, leverage their income and you have the free time to manage the deal, run the numbers, etc., and grow a portfolio.

    2. Maybe you can create a franchise model for new dentists coming out of school that they can buy into and you provide them with the equipment, facility, network, team, etc., but it's similar to a McDonald's franchise model where you own the real estate and collect the passive income of rent and royalties? (Check out the movie The Founder).

    3. You can partner with Dentists to pull money together to buy large apartment complexes. Similar to the first idea but instead of lending based off of their income, you go the DSCR route and pull their money together to create the down payment and then find apartment complexes. Definitely find an attorney that would be familiar with this model and figure out how to structure this appropriately.

    Just some ideas shooting from the hip, but you have time which is very valuable to most people that have money. Use the time to teach yourself and become the expert to a target audience that need an expert and have money and want to invest. Hope that helps!

    Thank you for the advice! Having dentist classmate/friends who have good income are great sources to finance these deals. I'm not as familiar with DSCR but will look more deeply in to it.

    You’re best option might be to protect your time. Getting a full-time teaching job would get you some income to be lendable again but then you lose disability and your time. If you’ve got a good disability income, you have no risk of trying to build something with your time freedom that is a huge hinderance to those who leave full time work to get their time back but have to make something soon.

    Always look at your network. It’s who you know, not always what you know. Surround yourself with experts in where you want to be and then be the solution to the problem for your target audience. 

    DSCR (debt service coverage ratio) where the loan is based off of the income of the property minus the expenses in very simple terms. It’s not for primary homeowners, it’s for businesses and commercial real estate. The lenders don’t necessarily care about how much you make, they care about how well the property performs financially.  
    0Reply
  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    3y

    @Lance Gordon start by househacking right away. Try to do that every year for a few years and it'll work well!

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  • Lance Gordon
    OP
    Member since 2022 · 11 posts · 4 votes
    3y

    @Danny Polanski oh I understand. Yes that could be a feasible idea.  I guess I would have to get a big loan or investors to finance that. I’ll look in to it as an option. Thank you.

    @Lawrence Potts thank you! Great advice 😊

    @Jordan Moorhead yes! I have some meetings set up with realtors in different cities in Florida to look at tri and quadplexes for house hacking. Thank you for confirming I might be doing the right thing to start 🙏🏼

    2Reply
  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    3y

    Why not go into commercial real estate a broker and develop a niche working with dentists on the sale leaseback of their real estate? You could also work as business broker helping retired dentists sell their business. You could also help locate new sites to open as a leasing broker.

    You could also start your own investment firm specifically doing money raises from other dentists.

    65k a year is hardly anything in todays world with inflation. Not trying to say anything bad about what you make just trying to get you to expand your mind.

    I typically make over 100k per deal. If you go the broker route when first starting out the company gets most of the commissions earned until you have time in to go it on your own. Business broker or doing a syndicate might be better for you.

    Even when you get millions to tens of millions you do not sit on your as$ all the time doing nothing. Even if you could most get bored quickly. You still have to (MANAGE THE MONEY). It's still better for most than being trapped in the rat race but stress does not go away it just changes to something else to deal with. People have to decide if that something else causing stress is better than the alternative they had in the past.

    No legal advice given. 

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