Real Estate Investing For Medical Professionals

Professional athletes have turned to real estate investment; in particular, multifamily investment, to generate passive income and diversify their portfolios. Nathan Loy, our senior acquisitions analyst, joins Ravi in this episode to discuss how multifamily investing combines his love for real estate and helping people. We learn how multifamily investments cater to families and individuals, providing a larger tenant base compared to other real estate classes, and hence allows investors to make a positive impact on communities.

The duo offer insights on passive income, contrasting it with active income tied to working hours. We learn about the importance of choosing investment options that outperform inflation rates and highlights multifamily investments as a true form of passive investment, offering "mailbox money" that flows in regardless of one's activities.

Aside from the benefits, we also get into the risks and considerations that come with multifamily investing. By learning how to invest in the right markets and partner with experienced sponsors who prioritize stable debt, ask the right questions, and conduct thorough due diligence, we'll be able to make the most out of multi-family investment.

Key Takeaways

● Passive income is a significant benefit of multifamily investing, allowing investors to make money while they sleep.

● Choosing investments that outperform inflation rates is crucial for long-term financial success.

● Tax advantages, such as depreciation and cost segregation, make multifamily investments attractive and provide potential tax deferral.

● Choosing the right debt structure and lender is crucial to mitigating risks and ensuring long-term stability.

● Conducting thorough due diligence, including evaluating market conditions and the track record of sponsors, is essential for successful multifamily investments.

● In multifamily investing, it is beneficial to have sponsors who also invest alongside the limited partners (investors), as it aligns their interests and demonstrates commitment to the investment's success.

● Multifamily properties serve as a hedge against inflation, as rising expenses tend to correlate with increased rents. The affordability of purchasing a home can push individuals into the rental market, making multifamily investments attractive. "Being an LP, or a limited partner in a deal means that you contribute your cash contribution and then you let your professional sponsor do the actual investment portion of it." - Nathan Loy

Connect with Nathan Loy LinkedIn - https://www.linkedin.com/in/nathanloy/

Connect with Viking Capital Website - https://www.vikingcapllc.com

If there's one thing we could imbibe from the lives of top investors, it is that we must plan our finances properly. We're joined by one such investor, Jonathon Evans, on this episode. As an experienced attorney at Anderson Business Advisors, he tells us the importance of proper planning to achieve financial security, reduce taxes, and protect assets.

Jonathan advises us on the potential pitfalls and recommends structuring investments through limited liability companies (LLCs) to provide asset protection and separate personal and business assets. He emphasizes that owning investments through an LLC shields personal assets from potential legal claims and highlights the significance of selecting the right state and obtaining correct documentation. He also delves into tax planning strategies, highlighting the differences between earned income, passive income, and portfolio income. Jonathan tells us that not all types of income are taxed equally and mentions that the wealthy often select the most advantageous types of income to minimize taxes.

Today's conversation teaches us how continuously investing in real estate and utilizing tax breaks can provide ongoing tax advantages. When properties are sold, the income can be reinvested into new properties through the same LLC, allowing for ongoing tax benefits. It also tells us how it's like using a 1031 exchange to defer taxes when reinvesting in similar properties, introduces the concept of legacy planning, and highlights the importance of creating a living trust to facilitate the transfer of assets to family members after death.

Key Takeaways

1. Proper planning, including structuring investments through LLCs, is crucial for financial security and asset protection.
2. Selecting the right state and obtaining correct documentation are important when setting up LLCs.
3. Avoid common mistakes like grouping risky investments with others in the same LLC.
4. Seek expertise in legal, tax, and investment areas to maximize tax efficiency and protect assets
5. Differentiate between earned income, passive income, and portfolio income for tax planning.
6. Real estate investments offer tax advantages, such as cost segregation and rapid depreciation.
7. Continuously investing in real estate and utilizing tax breaks provide ongoing tax advantages.
8. Consider legacy planning and create a living trust for asset transfer and protection.
9. Understand the benefits and limitations of self-directed IRAs and solo 401(k)s for investing through retirement accounts.
10. Consult a tax advisor for personalized guidance and recommendations.

"One of the first things that I recommend people do is they take a look at how you are actually going to own these investments. Are you planning on just buying them in your personal name? Are you going to be doing something else with them?" - Jonathan Evans

To learn more about Jonathan's Tax Workshop please visit: aba.link/Viking

Connect with Jonathon LinkedIn - https://www.linkedin.com/in/jonathon-evans-17a51364

Connect with Viking Capital Website - https://www.vikingcapllc.com

What goes into the making of a wise investment decision? In this episode, underwriting expert Rob Beardsley joins us to discuss evaluating investment opportunities and protection against Ponzi schemes. We look into the fraudulent nature of the Ponzi scheme involving Freedom Impact Consulting LLC and how it collapses when new investors slow down. Rob delves into the underwriting process, emphasizing the need to trust the sponsor or operator. He tells us that underwriters evaluate investment opportunities by analyzing financials, projections, and factors like renovations, management practices, and expenses. The conversation also touches on the relationship between interest rates and cap rates in the multifamily market, as well as the benefits of interest-only debt for cash flow enhancement. We also discuss other metrics and considerations in evaluating investment properties. The importance of understanding the source and sustainability of cash flow is highlighted, and investors are advised to ask the right questions and assess the legitimacy of deals. Rob urges investors to focus on their areas of expertise, practice diversification, and thoroughly understand investment opportunities to make informed decisions and mitigate risks.

Key Takeaways

1. Ponzi schemes are fraudulent investment schemes that promise high returns with little risk. Thorough underwriting is essential to protect against such schemes. 2. Return on cost (yield on cost) is an important metric in underwriting real estate deals, but it should be analyzed in conjunction with risk factors. 3. Leverage can enhance returns if the return on cost exceeds the cost of debt, but it also magnifies negative outcomes. 4. Interest rates and cap rates in the multifamily market are interconnected, impacting property prices and transactions. 5. Interest-only debt increases cash flow but has limited impact on total returns, making it favorable from a cash flow standpoint. 6. Internal rate of return (IRR) calculations are subject to manipulation and assumptions about reinvesting cash flow. Practical implications may not align with mathematical outcomes. 7. Metrics like cash flow, equity multiple, and IRR are important in evaluating investment opportunities, but understanding the source and sustainability of cash flow is crucial. 8. Balancing risk and return is essential when assessing investment properties, and diversification and understanding are key in making informed decisions.

"The essential core practice of underwriting is looking at an opportunity and analyzing, either if you would pay the asking price, or what price you would pay for that asset. And that's based on again, the future projections as well as more subjective risk analysis and deciding well, are these potential returns worth the effort and risk that I'm going to have to take in order to potentially achieve those returns?" - Rob Beardsley

Free Real Estate Terminology ebook:

https://go.vikingcapllc.com/optin57sucwlm

Connect with Rob LinkedIn - https://www.linkedin.com/in/rob-beardsley/

Connect with Viking Capital Website - https://www.vikingcapllc.com

What investment options must we leverage for maximum financial growth? Greg Dickerson, our guest for today's episode, centers today's conversation on that very aspect. We discuss the importance of carefully analyzing real estate deals based on factors like cash flow and low cost basis to identify opportunities that make financial sense and offer potential returns.

Greg also discusses the timing of investments. He advises us about exercising caution until the end of the year or early next year to assess the unfolding economic conditions. This would help us make informed decisions and navigate potential risks or uncertainties in the market. We also touch upon different investment avenues, including the stock market, crypto markets, and AI investments as these may hold potential opportunities for investors. We also discuss the concept of artificial superintelligence and its potential implications. Greg pinpoints the need for thorough analysis, careful consideration of timing, and a focus on areas with potential for growth and long-term impact. By applying these principles, we can navigate the market, identify investment opportunities, and position themselves for potential success.

Key Takeaways

1. Opportunities exist in distressed assets and general assets with reduced cost basis. 2. Carefully analyze deals based on cash flow and low cost basis. 3. Exercise caution in investing until the end of the year or early next year to assess economic conditions. 4. Consider opportunities in the stock market and crypto markets. 5. Look for AI investments with strong network effects and long-lasting impacts. 6. Artificial superintelligence is on the horizon and may significantly impact economic conditions. 7. Understand the business cycle and be aware of factors such as debt, leverage, and global currency dynamics."

Just understand where we are in the cycle peaks and valleys when the economy is running hot, you've got to slow it down and cool it off, when the economy's running slow, you've got to speed it up and stimulate." - Greg Dickerson

Connect with Greg LinkedIn - https://www.linkedin.com/in/agregdickerson

Connect with Viking Capital Website - https://www.vikingcapllc.com

Investing With Your Tribe with Travis Smith

Travis Smith, the founder and CEO of Tribevest, comes from a family of doctors. Yet, he pursued finance instead of medicine because he sought financial independence, which the latter did not seem to offer. Despite having a good income as a doctor, financial freedom was still miles away in a doctor's profession. So, 15 years ago, he decided to venture into the business world. He didn't know what way to go, which path to follow, and what deals to find. But he knew something: he wanted to break into real estate and own a business.

Today, he joins the Real Estate Investing For Medical Professionals podcast to share his personal wealth journey and how it took shape into financial independence. Starting with forming an LLC to creating Tribevest, a whole platform for launching LLCs, he gives away everything that went into the journey. He went from seeing financial independence as a personal need, to building a tribe that helps limited partners to come together, pull their capital, and invest in higher thresholds. This allows them to get better terms, play the role of a co-GP, and achieve financial freedom.

Tribevest takes care of all the administrative work and makes it easy to file an LLC, open up a business bank account, onboard members, set up an equity cap table, and wire funds.

Learn about the platform and its services for forming investment tribes in this episode and get inspired to accelerate your entrepreneurial journey. Travis's goal is to make investing in real estate syndications more accessible and easier for groups of friends or family.

Key Takeaways

● How starting an LLC and forming a business bank account can help in pooling capital and investing in real estate deals. ● What is Tribevest and what does it do? ● What is meant by open tribes and closed tribes? ● How do investment tribes work?

"When we focus specifically on passive investing into real estate syndication, we can really even automate this and make it even 10 times easier." - Travis Smith

Connect with Travis Smith LinkedIn: https://www.linkedin.com/in/travissmithmovethechannel/ Website: https://www.tribevest.com/

Connect with Viking Capital Website: https://www.vikingcapllc.com

Deferring Capital Gains Taxes Using 1031 Exchanges With Bill Angove

As a qualified intermediary for 1031 exchanges, Bill Angove has helped businesses defer capital gains taxes for over 25 years. He joins Viking Capital's Real Estate Investing For Medical Professionals podcast to walk us through the basics of 1031 exchanges and how to leverage them for real estate investing growth.

Bill lays out examples and facts to explain exchanges. For instance, he talks about a family that bought a property for $40,000 that's now worth $1 million and how it could buy $2.6 million worth of property with an exchange. He emphasizes that the like-kind exchange is often misunderstood and can include any type of property held for investment, such as office space, apartments, retail space, and vacation homes. Bill also discusses the advantages of 1031 exchanges, such as diversification into different property types, consolidation of rental properties, and estate planning.

He advises people to talk to their tax person and a tax attorney to make sure they understand the rules and regulations surrounding 1031 exchanges. Additionally, Bill explains the rules and timelines of exchanges, including the identification period and the 2% rule, which limit the number of properties an investor can identify for purchase.

Remember, a 1031 exchange can be a smart strategy for real estate investors, but it requires careful planning and execution to maximize its benefits. Tune in to this episode to make sure you're doing it – and doing it right!

Key Takeaways ● Why a 1031 exchange is a tax-deferred way to sell investment properties + purchase new ones. ● How and where to leverage exchanges ● How to engage a qualified intermediary to facilitate exchanges ● The timeline for a 1031 exchange and what is done during that period ● The rules of exchanges: the three property rule, the 2% rule, and the 95% rule ● Why to consult a tax professional and run the numbers before committing to a 1031 exchange

"The real power of exchange is you're deferring that tax, you take that million dollars at the same loan to value and look how much more property you can buy." – Bill

Resources:

Turbo Tax: https://turbotax.intuit.com/

Connect with Bill Angove Website: www.apiexchange.com

VIKING CAPITAL LLC. Connect with Viking Capital Website: https://www.vikingcapllc.com

From Side Hustles to Syndications: Strategies for Financial Independence

Through Real Estate

Key Takeaways

1. Manage and delegate: Use time management and delegation tools such as TaskRabbit,

Fiverr, Upwork, and AI programs.

2. Sponsorship: Find a trustworthy sponsor before investing in real estate.

3. Strategy: Assess your time, energy, and money before deciding on a real estate investment

strategy.

4. Consider your passive income goals: Set a modest and achievable goal of $20,000 a

month in passive income.

5. Financial freedom through real estate investment: Achieving financial freedom through real

estate investing is doable and doesn't necessarily take as long as one might think.

6. Personal brand: Build a personal brand to attract opportunities and grow your network.

7. Liquidity and cash flow: Calculate your net worth and understand your liquidity and cash flow.

8. Smart investment: Don't rely solely on traditional retirement savings like stocks and bonds - explore alternative investments like real estate.

9. Start early: Start planning for financial freedom early, rather than waiting until retirement age.

"We only have so much limited time, energy, and money. So, how do we leverage what we

currently have to get that outsized return? I think we're all looking for that." - Peter Kim

Connect with Viking Capital:

Website - https://www.vikingcapllc.com

Episode Resources:

https://docs.google.com/spreadsheets/d/1DB40KEoM2DliM3YC07oj8Hg3koVfmefd/edit?usp=share_link&ouid=115847507912224788486&rtpof=true&sd=true

https://drive.google.com/file/d/1Be2J9PXmS9xSDh6Jpca_a3M9cp3L_kcq/view?usp=share_link

https://drive.google.com/file/d/1bh1QIJoW5uAXszytWIKja4HyichDJbvW/view?usp=share_link

Navigating Economic Uncertainty in Real Estate With Art Cordova, Viking Capital LLC.

About this podcast

The global economy is currently teetering on the brink of a recession, and successfully navigating this challenging landscape requires a profound understanding of financial matters, ideally from an expert in the field. In this installment, viewers are fortunate to gain access to the invaluable insights of Art Cordova, Director of Finance at Viking Capital, who generously shares his proven strategies for effective financial management, with a particular emphasis on real estate investment.

Leveraging his wealth of experience, Art methodically shares his approach to navigating the complexities of today's financial landscape. He delves into strategic budgeting, conducts ad hoc analyses, scrutinizes financial statements, and evaluates the operations and valuations of multi-family properties. Art highlights the significance of factoring in "below the line" expenses, which tend to be owner-specific and can vary significantly. Additionally, he provides a comprehensive overview of the distinctions between cash-based accounting and accrual-based accounting, outlining the respective advantages and disadvantages of each.

Key Takeaways

1. NOI, no problem: Net Operating Income (NOI) as a key figure in valuing multi family properties.

2. Balance is everything: How to keep your balance sheet in check to stay on top.

3. Cash is king, but accrual is queen: The differences between cash-based and accrual-based accounting.

4. Plan for the worst, hope for the best: Being proactive in managing finances by seeking advice,making projections, and preparing for unexpected events.

5. Interest rates: friend or foe?: What Higher and Lower interest rates mean during a recession.

6. Teamwork makes the dream work: Building strong relationships and teams for the win.

7. Renovate to elevate: How renovations add value to properties and attract happy tenants.

8. Reviews matter: A good reputation is key for real estate success

9. Keep it rollin': A rent roll is a crucial tool for tracking rental income and staying organized.

10. Quilt your data: Use a dashboard spreadsheet to keep all your data in one place and easily accessible.

11. Don't forget the 'below the line': When valuing properties, remember to factor in owner-specificexpenses like debt service, management fees, and CapEx.

"When a recession hits, it's almost like, not a bad thing, because interest rates drop. And in our line of business, we need to be very focused on the industry, because the lower the interest rate, the more that we could get, the more properties we could buy, right?" - Art Cordova

Connect with Viking Capital

Website - https://www.vikingcapllc.com/

Viking Capital - Real Estate Investing for Medical Professionals

Episode 9: Gaining investor Trust with Chris Parrinello

It's easy to get caught up in a new deal or be sold the promise of massive returns – but what are the most important conversations investors need to have with their investment strategists to ensure that a deal doesn't go sideways?

Chris Parrinello is the Director of Investor Relations with Viking Capital and he is in candid conversation with Ravi Gupta about the red flags that we need to look out for and the tough questions we need to ask before putting pen to paper on a new investment deal.

Understanding the risk upfront, ascertaining your salesperson's honesty and transparency, and asking to be walked through the underwriting of your potential deal are just some of the hot tips you need to take into account when building a trusting relationship with your investment strategist.

Doing your own research is another piece of good advice. That starts here. Please join us.

"At the end of the day the thing that nobody really talks about when they're an investment salesperson is risk. And I've learned that it's the most important thing you should talk about." ~ Chris Parrinello

In This Episode:

• Addressing risk upfront as an investment salesperson

• How do you gain investor trust?

• Dealing with bad actors in the industry who aren't transparent

• Ensuring the investment salesperson actually understands the deal

• Being a steward to create wealth for your client

• How honesty and transparency go a long way in relationship building

• What questions should an investor ask of an investment salesperson

• The value of doing your own research as an investor

• The danger of being negatively leveraged on a 2% spread

• Asking your investment salesperson about their track record

• Why everything is not going to go according to plan when you prognosticate for the next five years

• Making yourself available as an investment salesperson

• What is the key to forming lasting relations with investors?

• What is the investment salesperson process when looking for a new deal?

And more!

Connect with Chris Parrinello:

• Viking Capital Website - https://www.vikingcapllc.com/

• LinkedIn - https://www.linkedin.com/in/cjp88

Connect with Viking Capital:

• Viking Capital Website - https://www.vikingcapllc.com/

Connect with Ravi Gupta:

• LinkedIn - https://www.linkedin.com/in/ravi-gupta-md-a23677107

• Email - [email protected]

Viking Capital - Real Estate Investing for Medical Professionals

Stress-Testing Real Estate Deals with Brandon Baksh

What are the biggest challenges facing multifamily real estate investors? To understand the market from a debt perspective, today's guest is Brandon Baksh – a partner at Dwight Capital.

Brandon has closed over $2.8 billion in FHA financing at Dwight Capital, one of the fastest-growing direct lenders with more than 100 employees. He's offering valuable insight into the multifamily investment market, within the context of a challenging global economy.

Caution is the watchword for Brandon as he reminds us that everything is cyclical, as well as intertwined. What is happening in the world today is how we can view key drivers in the market.

From people leaving the city for the suburbs during the pandemic (and now returning) to increasing insurance premiums for properties affected by adverse weather in places such as Florida, a holistic outlook is needed when considering your next investment approach.

Brandon's philosophical viewpoint strikes a balance between assuming the world is ending versus seeing things in too positive a light, which leaves us with a reminder to learn as much as we can about a deal that is on the table before making an investment. Please join us.

"We stress test everything in a significant way so that if things go awry there is a workable plan, and we're not panicking." ~ Brandon Baksh

In This Episode:

• Brandon's birds-eye view of the market and where he sees it headed

• Understanding variable rate debt

• The difference between what Brandon does versus an equity investor

• What does 'balance sheet bridge lending' entail?

• What is the HUD program? Understanding permanent fixed-rate financing

• What does it take to offer a non-recourse loan?

• How has underwriting multifamily real estate changed recently?

• How does Brandon stress test a real estate deal?

• Considering tax and insurance when assessing a deal

• What are the biggest challenges facing multifamily real estate investors?

• Understanding DSCR (Debt Service Coverage Ratio)

• Unpacking Dwight Capital's Rescue Fund

• Where are the opportunities for multifamily investors?

• How is fintech impacting the multifamily market?

• What trends is Brandon seeing in the multifamily market?

• Brandon's advice on getting started as an investor

And more!

Connect with Brandon Baksh:

• Website - https://dwightcapital.com/

Connect with Viking Capital:

• Viking Capital Website - https://www.vikingcapllc.com/

Connect with Ravi Gupta:

• LinkedIn - https://www.linkedin.com/in/ravi-gupta-md-a23677107

• Email - [email protected]