Everyone always says to diversify using real estate, but how do you actually do it?
Investing in real estate comes in many forms. Many physicians enjoy investing in "passive" real estate investments where you invest alongside others into a project, but are not part of day to day operations. Others prefer "active" real estate investing, where they actually own and manage properties themselves, develop projects ground up, or flip properties. There are advantages and disadvantages to each, with different tax implications, level of effort, and level of risk.
*Sign up for our *free* Real Estate Educational Series here on the group. We do ~1-2 live events per month discussing passive and active real estate investing, how to get started, terminology, and how to vet sponsors and opportunities. Recordings are in the pinned announcement section on the top of the group.*
Crowdfunding Opportunities/Passive Real Estate Investing
Many physicians are interested in passive real estate investing, because it comes with less hassle than owning property directly yourself and can result in passive income streams, while also allowing you to take advantage of the potential upside at the time of sale and some tax benefits. You can read more about the pros and cons of different types of passive real estate options here.
Some things to consider when choosing how you proceed:
1. How much capital do you want to invest? If you want to start with < $50,000, you may want to start with the crowdfunding platforms, as they allow you to invest with as little as $500. Most private syndication companies these days require minimums of $50,000, though there are some exceptions.
2. Are you an accredited investor? For some investments, you must be an accredited investor. Many private syndication companies require this unless designated as 506b, where there can be a limited # of non-accredited investors. This is not a certification, but a set of income qualifications or net worth criteria you have to meet - see image.
3. How diversified do you want to be? Some people prefer picking the exact property they'll invest in, while others prefer picking a REIT or a real estate fund, which will distribute their investment across multiple holdings.
To start, consider signing up for some of these sites.
This will give you an idea of what kinds of deals and returns are out there, and practice in looking at and vetting deals. Please note that we do not recommend or endorse specific opportunities, and you should do your own due diligence or consult appropriate expertise before investing in any opportunities. Several of these companies are sponsors of our real estate education series on the group, and several of these links are affiliate links. Scroll up for definition of accredited investor (not a test you have to take, but a set of criteria you meet based on income or net worth).
Crowdfunding Platforms for Syndications
Crowdstreet (must be an accredited investor, commercial real estate investments around the country in many asset classes, including multifamily apartment buildings, commercial office buildings, medical office buildings, hotels, student housing, data storage, and more)
AcreTrader (much be an accredited investor, farmland syndications)
RealtyMogul (open to both accredited and non-accredited investors)
Private REITs (You do not need to be an accredited investor for these.)
Private Syndication Companies (You must be an accredited investor for these. You should let them know that you are coming from PSG, in case they are offering perks to the group as part of their sponsorship of our real estate education series!)
MLG Capital (real estate funds in multifamily and commercial real estate)
Craig Davis Properties (development deals in commercial real estate, multifamily, mixed use)
Sovereign Capital (development deals in multifamily apartment buildings)
Vive Funds (value add deals in multifamily apartment buildings)
Origin Investments (real estate funds in multifamily real estate)
Introductory Books and Resources
Passive Real Estate
Active Real Estate
www.biggerpockets.com has a great forum and a podcast for learning more about active real estate investing (finding and managing properties yourself).
Real Estate courses
Passive Real Estate Investing
Many physicians are excited about the idea of passive real estate investing, but either don't know where to start, get stuck in analysis paralysis with all the options available to them, or freeze when they're told to "do their own due diligence, before investing in a deal. This course, Multifamily Syndication Masterclass, is taught by a group of experienced real estate professionals, including several physicians, and relevant tax and legal professionals. It goes over terminology, how to vet deals and sponsors, the life cycle of deals, and other relevant topics to get you up and running! It is only offered a few times a year, and is currently open for enrollment. It starts October 4th, and you can use our promo code PSG500 for $500 off!
Active Real Estate Investing
For those who want to get started with owning their own properties, the learning curve can be overwhelming - how to find properties, determine whether they are good investments, understand tax benefits, and how to have the confidence to buy that first property.
This 8 week course, Zero to Freedom through Cashflowing Rentals, is a very popular incubator program for physicians that guides them, start to finish, through the entire process of finding, selecting, and ultimately purchasing their first rental property...so they can create income that helps them protect themselves and their families right away. It is only open for enrollment twice a year, and is now open for enrollment Sept 20-29. The earlier you sign up, the more bonuses you get.
At $3199, the course is an investment, but one that our members rave about and one that many have used to start their active real estate journey. This is an action-based class. There is pre-recorded weekly content and homework, four weekly 'office hours' for coaching/Q/A, community mixers, opportunity partners, a 24/7 Facebook course community, connections to relevant networks of investment agents, lenders, accountants, and managers, and more.
If you sign up through our affiliate link we will send you a bonus bundle of our favorite real estate books from the resources above (or if you have others you've been wanting, will try to accommodate!).
A lot of physicians stay away from rental properties because of the perceived time commitment. This course, The Doctor's Course to Automating Your Real Estate Investments, is taught by a general surgeon who actively managed 64 units while he was working full time and had a family, and who was able to achieve financial freedom through real estate. He walks you through his methods in four weeks titled Emergencies and Maintenance, Turnover, New Tenants and Money, and Evictions, Taxes, and Accounting. The information is practical; it's not meant to guide you in how to choose a real estate property, but rather how to deal with the day to day management - and regularly save or earn you money - through helpful tips and rules of thumb. He also gives you access to all of his spreadsheets and forms for your personal modification and use. The course is significantly cheaper than most real estate courses and there is a satisfaction guarantee. Incorporating a few of these tips will save you far more than the course of the course. More about the course here.
Disclosure: This page contains affiliate links (which help support the group), but I'd recommend them regardless! Any decision to invest with sponsors is purely your own, and should only be entered into after your own due diligence. We are not a licensed real estate professional or investment advisor, and these links are not an endorsement of any particular investment opportunity or company.