Approaching Physicians to Invest in Syndications
Oxnard, CA · Member since 2016 · 44 posts · 12 votes
Approaching Physicians to Invest in Syndications
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Mary K.Pro Member
Investor · Ocala, FL · Member since 2015 · 157 posts · 88 votesMarc C. and Brian Adams has great advice - find out their pain points. Many doctors overspend to have a certain lifestyle but are still paying off student loans and have high overhead at the office, and are unsophisticated when it comes to investing, leaving them unprepared financially for retirement. (see http://whitecoatinvestor.com/personal-finance/) article on "why doctors aren't rich"
One idea: You might call Hospitals and speak to either the Marketing Director or Benefits/HR or COO. I did this once in marketing something to physicians. Hospitals often look for "free or almost free benefits" they can offer physicians to entice them into their systems and keep them happy. i.e. a free car detail once a year on Doctor Day, a free session with a work/life balance counselor, etc.). I have a friend who has a book company that comes to the hospital every 8 weeks and sets up displays in the lobby and sells books (a mini Barnes and Noble) and donates 10 percent to the hospitals favorite charity. You get the idea - make it sound like its a benefit to the hospital and the doctors (not you).
Ask the Benefits/Marketing person if you can offer their doctors a seminar on a "How To" that addresses their pain points and have maybe 2-3 experts so it doesn't seem overly self-promoting and more benefit-oriented (you being 1 of the speakers). For example, their pain point is that they don't have the time or knowledge to focus on a serious retirement plan that will offer better than standard returns and provide a dependable annual income with low taxes. You put on a seminar like this at a dozen hospitals. Give the seminar a catchy name such as "Get Your RX To A Happy Retirement...blah blah" or something.
Each person speaks for 20 minutes (a 1 hour lunchtime seminar) You talk about RE investing (briefly talk about college investment property, most detail about that could be provided to those who show interest during/after the seminar so don't get overly bogged down with details).
Someone else talks about dividend paying stocks (a financial planner) and why dividend paying stocks are great for retirement and how to learn which ones to buy. And someone else talks about annuities or trusts or something.
The HOSPITAL promotes the seminar for you to their doctors. You can offer it several days, different times to hit the most doctors (morning, lunch, evening, Saturdays). Ask everyone to register or sign in, so you can follow up. Provide sandwiches, coffee.
If you have a "success story" where a doctor partnered with you and is doing great with it, he/she could stand up and intro to you and say "My name is Dr. John Doe and I want to introduce my good friend and investment partner @Michael Ibarra. I've invested with Mr. Ibarra and have had a great experience with him and am enjoying excellent returns that should lead to a solid retirement with little or not interaction on my part. I'm really excited about my future now that I've been investing with Mr. Ibarra. And now Here is Mr. Ibarra..."
You should have a pro videographer film one of the seminars and edit it into a validating testimonial and informational video, for those who cannot attend a seminar but want to learn about it later. This can go on your website, in e-blasts, etc.
This is my 2 cents on how to do marketing on a shoestring and get others to do most of the work for you. If the hospitals won't cooperate, hold this seminar somewhere else - Country Club? - and mail and email announcements (handwriting an invitation gets attention, though its a pain but teenagers are cheap). Direct mail is if you want to send hundreds/thousands and just need to do a fast blitz. It can have mixed results. You can also hold a webinar. Or give a "workshop on real estate investing for medical professionals" at an industry trade show - try the smaller, local shows first to build up your reputation in the medical industry. Good luck.
34 Replies
- Investor · Cincinnati, OH · Member since 2013 · 2k+ posts · 1k+ votes9y
@Account Closed congrats on getting to this point. The best way to approach physicians is to have a pre-existing relationship with them. If you send something blindly via mail or email it won't work. I recommend speaking to physicians you already know then working your way in via referrals.
- 9yDon KonipolBusiness MemberInvestor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
Originally posted by @Account Closed:
FYI, I would not be marketing a security here, just an idea.
Can you explain what you mean by the above?
- Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes9y
Doctors get a lot of this type of advertising. You really need an in of some sort to be taken seriously. Blasting email lists of doctors is unlikely to be very successful.
Doctors are not the only source of capital though. Software engineers and other professions are pretty lucrative right now. If your goal is to advertise using the new securities exemptions there are quality products to help with this right now. You need:
1. Legal to be set up correctly
2. Software to help
3. Marketing support to drive traffic
4. Ideally a marketplace of existing investors to help
Those 4 value centers will help you support your effort to develop your brand and grow your capital base over time. Think of this as an investment in your lifetime value of the investor relationships you generate.
- Investor · Austin, TX · Member since 2015 · 263 posts · 186 votes9y
@Michael Ibarra You are definitely on the right track by focusing on a specific niche of investor to build your investor network.
A few thoughts:
1. Be able to simply and clearly articulate your business plan/investment approach and ask "Would you be interested in evaluating these opportunities as I put them together?" The doctor pre-qualifies themselves to receive investment information and to further the conversation about your business.
2. Be able to simply and clearly explain how they would share in the profits and what their role in the investment would be. You need to identify two things here - (1) Do they understand how to value income stream properties & are they open to being educated about it? (2) Do they need control? Convincing investors who need control to invest in a passive investment is a waste of time. Understanding these two things will help you focus on the right doctors and save you a ton of time and energy.
3. Building a track record with your investments & investors (doctors) will organically grow your investor network through referrals. Ask the community you are trying to serve what they need and try to meet those needs. This will add value to the community, build your brand & grow your investor network.
Good luck! RC
- Gaithersburg, MD · Member since 2016 · 36 posts · 12 votes9yMichael Ibarra You said two things that don't go so well together in the eyes of the SEC: the fact that investors would not have control in the day to day operations but this would not be a security. For more information regarding the qualifiers for being a security, please google the Howey Test. Generally based on that court ruling, if the investors have an expectation of profit and do not have control, it is a security and subscribing investors for an allocation would require registration of the program with the SEC. There are various exemptions available from the SEC from full registration but they usually need to know about it. If you wish to continue down this route with using passive investors, you should definitely connect with a group who does this type of transaction regularly for guidance.
- Financial services executive · Frederick, MD · Member since 2015 · 609 posts · 341 votes9y
Your assumption about doctors is flat wrong. Every investment marketer in the land knows doctors have money and blasts their crap to them. You would have to get to know doctors and get them to trust and like you. Attending their conferences is a good setting where you have designated social time to ingratiate yourself to them.
I also advise registering in every state you intend to market in, have an expert law firm prepare your offering documents etc. Failing to operate this scheme legally means first syndication that loses money will be labeled a Ponzi scheme and you'll get a multi year vacation, but won't choose the destination.
Be careful.
- Oxnard, CA · Member since 2016 · 44 posts · 12 votes9y
I don't think I mentioned anything about offering documents, subscription agreements, or investment questionaires. All I have is a idea. All I am trying to do is generate interest, and get potential investors lined up for when I find a deal. I figure most beginning syndicators find a great deal, and then have no idea where to find the money. They lose out on the deal, and get a bad rep for not being able to close the deal.
My idea mentions nothing about concrete about returns; Do you mean to tell me those guys that are pitching ideas on "Shark Tank" are offering securities?
- Oxnard, CA · Member since 2016 · 44 posts · 12 votes9y
@Tom Scott
Yes, a syndication is a security. I understand that. An idea/pitch book is not.
- Oxnard, CA · Member since 2016 · 44 posts · 12 votes9y
Ex. I'm pitching an idea that "purple lightbulb" need to be installed all over the the city of Los Angeles. There is a need for this in the market for the following reasons:
1. Purple is loved my many
2. This is a problem that needs to be addressed by the market, because well purple shows better in the bright sunlight.
3. We have extensive experience making these in Asia., and their a hit.
If you see this a great idea, then lets me for coffee.
That's the essence of my pitch book. Here's the problem in the market, here's how we can address it, and here's the potential to make some money. IF you think it is a good idea, let's have another meeting to generate interest.
- Financial services executive · Frederick, MD · Member since 2015 · 609 posts · 341 votes9y
What we are telling you is that your idea in present form requires all the offering documents, government registration etc that you do not wish to think about. If you fail to do that before taking investors money or think you have a way around it and you lose somebody's money it is likely you'll be put in jail for it.
On Shark Tank entrepreneurs are selling ownership shares in their businesses not realty syndications. Totally different offerings.
You don't really think the firms actually selling these things legally did any work to be in the correct legal position prior to accepting funds? Come on. Daydreams are great but this forum is rooted in reality.
- Oxnard, CA · Member since 2016 · 44 posts · 12 votes9y
@JR T Of course, I would hire a securities lawyer. I have no interest in going to Federal Prison for doing this incorrectly.
- 9yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Account Closed remember doctor does not = rich automatically they are people like the rest of us.
noble Idea ... Very Very difficult to do in reality if your not already coming from a deep finance background and know a lot of folks that currently invest personally.
- Buy-and-Hold Rental Investor · Santa Fe, NM · Member since 2015 · 438 posts · 352 votes9y
I like your idea on the pitch book. The pitch book/deck is a fine way to show you have thought things through and know what you are talking about. (If it's good and professional looking.) You can mention generics in it, like, "typical investor returns in the apartment market are an 8% preferred cash return plus 50% of any appreciation once the property is sold or refinanced." But stress that each deal will be different, and the returns you are offering will be contained in the Private Placement Memorandum you will distribute to investors after you have a deal.
All you are trying to do is establish a business relationship with these people so you can legally pitch them later. That doesn't mean one meeting over coffee...that means multiple meetings, i.e., getting to know them.
As to reaching high net-worth individuals, start with your local REIA groups. TheThen maybe put on a seminar on how to invest in RE with your IRA, or why multifamily RE is the best, etc.
The key though is building your network: You need to meet lots of millionaires. Get on it.
- Buy-and-Hold Rental Investor · Santa Fe, NM · Member since 2015 · 438 posts · 352 votes9y
One more thing: If you can just use investors and projects in your state, the regulations will be a lot easier, as many states have a Rule 147 exemption that allows you to raise up to $1-5M from even unaccredited investors...and even do general solicitation/advertising. Each state's rules are different, though, so begin with your state's securities regulator and speak with them (IN PERSON...go visit them at the capitol. Not many people visit them, and you'll find them to be very friendly and helpful.)
- Oxnard, CA · Member since 2016 · 44 posts · 12 votes9y
@Marc C @Joe Fairless @Bryan Hancock @Ryan Cox
You guys get it. Thanks
- Buy-and-Hold Rental Investor · Santa Fe, NM · Member since 2015 · 438 posts · 352 votes9y
Here are some generic info on the Rule 147 (intrastate) securities exemption to SEC registration requirements.
The following items must be satisfied to comply with Rule 147:
- The issuer is incorporated or organized (or if an individual has his or her principal residence) in the state in which the offering is made.
• The issuer derived at least 80 percent of its gross revenues and those of its subsidiaries on a consolidated basis from that state ((A) For its most recent fiscal year, if the first offer of any part of the issue is made during the first six months of the issuer’s current fiscal year; or (B) For the first six months of its current fiscal year or during the twelve-month fiscal period ending with such six-month period, if the first offer of any part of the issue is made during the last six months of the issuer’s current fiscal year from the operation of a business or of real property located in or from the rendering of services within such state or territory; provided, however, that this provision does not apply to any issuer which has not had gross revenues in excess of $5,000 from the sale of products or services or other conduct of its business for its most recent twelve-month fiscal period.).
• The issuer had at the end of its most recent semi-annual fiscal period prior to the first offer of any part of the issue, at least 80 percent of its assets and those of its subsidiaries on a consolidated basis located within that state.
• The issuer intends to use and uses at least 80 percent of the net proceeds from sales made pursuant to the rule in connection with the operation of a business or of real property, the purchase of real property located in, or the rendering of services within such state.
• The principal office of the issuer is located within such state.
• No part of the issue may be offered or sold to non-residents for a period of nine months from the date of the last sale of an issue under the rule (For purposes of determining the residence of offerees and purchasers: (1) A corporation, partnership, trust or other form of business organization shall be deemed to be a resident of a state or territory if, at the time of the offer and sale to it, it has its principal office within such state or territory. (2) An individual shall be deemed to be a resident of a state or territory if such individual has, at the time of the offer and sale to him, his principal residence in the state or territory. (3) A corporation, partnership, trust or other form of business organization which is organized for the specific purpose of acquiring part of an issue offered pursuant to this rule shall be deemed not to be a resident of a state or territory unless all of the beneficial owners of such organization are residents of such state or territory.).
• During that nine month period, all resales of any part of the issue, by any person, shall be made only to persons resident within the state.
• The issuer shall, in connection with any securities sold by it pursuant to the rule: (i) Place a legend on the certificate or other document evidencing the security stating that the securities have not been registered under the Act and setting forth the limitations on resale contained in the rule; (ii) Issue stop transfer instructions to the issuer’s transfer agent, if any, with respect to the securities, or, if the issuer transfers its own securities make a notation in the appropriate records of the issuer; and (iii) Obtain a written representation from each purchaser as to his residence.
• The issuer shall, in connection with any offers, offers to sell, offers for sale or sales by it pursuant to this rule, disclose, in writing, the limitations on resale contained in the rule. - The issuer is incorporated or organized (or if an individual has his or her principal residence) in the state in which the offering is made.
- Buy-and-Hold Rental Investor · Santa Fe, NM · Member since 2015 · 438 posts · 352 votes9y
California participates in the Small Corporate Offering Registration (SCOR), which allows you to raise $1M from the public, without limitation as to advertising and accredited/unaccredited investor status. This is sometimes called a Direct Public Offering. Takes about 6 mos. to get it approved, though. www.cuttingedgecapital.com specializes in these. They are pushing using DPO's to fund the rehab of downtowns, etc., but I haven't seen it used for real estate syndications yet. A DPO might be better for a "fund" than for an individual transaction.
Info on SCOR in California: http://www.dbo.ca.gov/forms/doc/DBO-260.113%20SCOR.pdf
- Financial services executive · Frederick, MD · Member since 2015 · 609 posts · 341 votes9y
The real issue is Michael could not prepare legitimate offering documents because he has no background or experience that would induce someone to invest with him. He cannot state any relevant experience to what he is trying to do.
If you want to change your life Michael it's not going to happen here. You need to address the causes of your unproductive thinking with a cognitive behavioral therapist. Good luck.
- Buy-and-Hold Rental Investor · Santa Fe, NM · Member since 2015 · 438 posts · 352 votes9y
Originally posted by @JR T.:
The real issue is Michael could not prepare legitimate offering documents because he has no background or experience that would induce someone to invest with him.
A little rude in the delivery, but correct: You need to get a couple deals under your belt before anyone will trust you. (Maybe you already have; you didn't say.) I'm in the same boat...no recent history. But I have been in business for over 20 years, was an apartment broker for a few years, and have owned up to 20 units at a time in the past. It can be overcome: Add a local partner with LOTS of experience to your team or a bunch of them as a Board of Advisors, and put them in your pitch book. Also include your team in the pitch book: Your property manager, your contractor, your broker, etc., all of whom should be REALLY experienced.
- Oxnard, CA · Member since 2016 · 44 posts · 12 votes9y
No ned to attack character JR T. Are you a troll? I am.simply.asking for.advice You spend your time behind your.keyboard generalizing and attacking. You need help because you are projecting your issues
- Oxnard, CA · Member since 2016 · 44 posts · 12 votes9y
Actually Marc you have a track record. You can use that to your advantage
- Syndicator of Large Apartment Buildings · Glen Mills, PA · Member since 2009 · 1k+ posts · 1k+ votes9y
@Account Closed in that the best way to raise capital is to create and establish a pre-existing relationship first. You can raise capital via general solicitations under Reg D 506(c), but I would strongly suggest you consult with a securities attorney to ensure your marketing docs are in compliance before sending anything out.
Make sense??
- Investor · Cincinnati, OH · Member since 2016 · 34 posts · 53 votes9y
Michael,
I think this will be very difficult to do unless you are personally friends with a physician(s). Physicians are constantly bombarded by financial advisors and firms. They tend to develop a barrier to these advances. Also, this is a overgeneralization, but physicians generally like to be in control, and are risk-averse. I don't think this type of investing would be up their alley. My opinion is that this is not a good idea and your time is better spent targeting another investor group.
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