Summary: The goal of our Investor Spotlight series is to provide you with stories of real physicians and professionals who are at different points in their journey to financial freedom through real estate investing. At Semi-Retired MD, we love to share many perspectives and learn from others’ experiences along the way. Today’s spotlight is on Jennifer, an endocrinologist, and her husband Patrick, who grew their portfolio from zero to 30 units in just nine months.
Jennifer and her husband Patrick are both physicians. Their families helped them through college and medical school, and they always wanted to give their kids the same opportunities — so when their teenage daughter began expressing interest in medicine, they knew they wanted to help.
But they also don’t want to have to work forever.
So when the couple received some cash from an inheritance and a land sale, they started looking for a new way to invest it. Then they found real estate.
How did you become interested in real estate investing in the first place?
Last year, I got some money from a piece of land that was being sold. At the same time, my husband’s mother passed away and we knew we were inheriting some money.
We had been discussing real estate investments, and just a few weeks later saw Zero to Freedom pop up, which seemed to be a sign. It’s great to have a course that helps us DIY real estate. It’s great timing and a great fit.
What is your “why” behind this? Was there a triggering event that led you to start your journey in real estate investing?
I started thinking a lot about health and mortality when all this was going on. My father was very sick and has since passed away. My rheumatoid arthritis had been flaring pretty badly. I had some pretty significant fears about physically being able to work.
I didn’t want to work forever. We know that there are no guarantees when it comes to length of retirement.
My daughter wants to go to medical school, so we want to help. We’d really like to be able to help with grad school for our two children, but I didn’t want to have to keep working indefinitely in order to both fund our retirement and help with that.
Once you decided to pursue real estate investing, how did you get started? What was your first purchase?
When we were signing documents for the sale of the land, I mentioned I was going to need to do a 1031 exchange. Kenji messaged me in the Semi-Retired Facebook community and said I needed to jump on it. He helped me identify potential markets and connected me with agents. The agent in Columbia, S.C. presented us with a great opportunity right before Christmas — a pair of duplexes on one piece of land.
I had practiced with the cash-on-cash calculator so often, I was able to analyze the deal and commit within minutes. We put in the offer before the course had even started. Kenji was kind enough to call me while we were negotiating to make sure I knew the best way to handle the contract and inspections.
The deal didn’t go perfectly, but by then we had IDed a couple of more properties and knew we had other options. We put in the offer in December and closed in March. By then we had also closed on two additional properties for a total of nine doors.
What type of properties make up your portfolio (SFH, multifamily, etc)? Were they in state/out of state? Has what you’ve bought changed over time or, if it hasn’t, do you plan on it changing in the future?
We have single-family homes, duplexes, one triplex and a bunch of quads. We went from zero to 30 doors in less than a year. There was also a big purchase of 16 units last month.
We’re just in Columbia right now, because the deals have come up right when we’ve needed them and we’ve got reliable people in place.
How are you balancing your real estate investing with your career(s) and your clinical work?
I work part time. I see patients from 8-1 and 8-2 and don’t work Fridays, so I usually jump right into real estate after work and spend Fridays and weekends on it as well.
I’m the perfect person for REPS because I’m an independent contractor with the hospital. I’ve been tracking my hours for work as long as I’ve been practicing. In terms of knowing exactly how many hours I’m working in medicine vs. real estate, that’s a very simple calculation.
My husband is an academic nephrologist, so his job is more full-time than mine. He brings a lot of his work home. We talk through all of the decisions and the issues and the goals a few times a week, and he’s starting the SRMD bookkeeping course since he does most of our books.
Can you tell us about any difficulties or failures you’ve had in investing? Any big learning points you’ve taken from these experiences that you can share with us?
We bought a small commercial property for cheap at an auction with a tenant in place. The tenant made some upgrades and changes to the place. He definitely wanted to stay and was willing to pay market rent — which would have been 17% cash-on-cash with essentially no expenses due to a triple net lease.
After we bought it, he did sign the lease and paid the first month and a half’s rent… and then has paid nothing since. This is a definite difficulty of real estate investing.
We hired an eviction attorney who got the eviction processed and a set-out date set up. Then, two days before the eviction was supposed to happen, the tenant’s uncle emailed our attorney and wanted to buy the place. We sold it at cost after our expenses, and asked for a $20,000 non-refundable deposit to make sure it wasn’t a scam to keep the eviction from happening.
Then the eviction got canceled, and we actually closed on the sale of that property two weeks ago. I think our experiment with commercial properties is over for the moment.
How about any big successes? Anything you learned from these good outcomes that you can share that might help other investors?
A lot of it is just jumping right in. When a deal comes up, grab your phone, do the math and swoop it up if it works.
We got an offer that looked really good early on. I was ready to do a really quick analysis from the initial lessons from SRMD. We put in our offer right away which established a good relationship for us with our agent. I’m right at the top of his list if things come up because I jumped on something when it was first presented.
Where are you now in your journey? What are your goals for where you want to be in 1 year, 5 years or 10 years from now?
Our next adventure will be a few short-term rentals in a different market. We just put an offer in on a new-construction home in the Florida Panhandle. It won’t be ready until later in 2021 and we will keep our eye on additional markets in the meantime. We want to be able to keep going with depreciation and cost segregation, so buying properties to run as Airbnbs would give us further tax benefits from real estate investing.
In five years, I can for sure see us having 50 units or more. Patrick wants to eventually consolidate and own an apartment building. It just depends on the cash flow and how everything performs and whether we’re able to do cash-out refinancing as expected.
How has real estate affected your lives? The good and the bad.
It’s been a very difficult year, starting well before COVID, with all the stuff that’s gone on with our family. We have felt like, ‘what else could possibly happen?’
Real estate has been the primary good, exciting thing that we’ve been making happen at a time which otherwise has felt like too much has been happening to us. It makes me feel like I have more hope. It’s pushing us in a new and good direction and will hopefully free us up to do what we want.
We’re not in any rush to retire, but things are always changing in medicine with corporate pressures. I want to feel like I’m always practicing just because I want to be. I really like what I do — I just don’t want to feel handcuffed to it because I need to keep earning enough money to live on or dump into a 401(k). It’s reassuring to know we are creating a source of income outside of our retirement accounts through real estate investing.
I think real estate is going to set me up nicely for the last decade of my career so I can enjoy practicing for its own sake, as well as set the stage for a nice retirement with my husband, whenever we decide that might be.
Have you found a way to creatively fund your real estate portfolio and achieve financial freedom? Join the conversation! Follow our General Semi-Retired MD Facebook page and then join our Physicians (for MDs or DOs only) or Professionals group! Also, if you missed it, check out our prior Investor Spotlight.
Semi-Retired M.D. and its owners, presenters, and employees are not in the business of providing personal, financial, tax, legal or investment advice and specifically disclaims any liability, loss or risk, which is incurred as a consequence, either directly or indirectly, by the use of any of the information contained in this blog. Semi-Retired M.D., its website, this blog and any online tools, if any, do NOT provide ANY legal, accounting, securities, investment, tax or other professional services advice and are not intended to be a substitute for meeting with professional advisors. If legal advice or other expert assistance is required, the services of competent, licensed and certified professionals should be sought. In addition, Semi-Retired M.D. does not endorse ANY specific investments, investment strategies, advisors, or financial service firms.
