Podcast Episode 83 – Demystifying Real Estate Investments – Dr. Sunil Saxena
Episode 83 – This week’s guest is Dr. Sunil Saxena. He’s a physician turned real estate mogul, and he’s going to show us how to make money on real estate without losing everything. With a modest investment, you too can diversify your wealth strategy with a tool that spans the width of the risk spectrum. Dr. Saxena’s going to spend the next episode demystifying real estate investments and you’re not going to want to skip this one!
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Meet Sunil Saxena, M.D.
Dr. Sunil Saxena is a life-long entrepreneur. He has started six successful companies mostly focused on real estate and real estate development. Dr. Saxena has been active in the DC real estate market since moving to the area in 2001. He has been involved in construction, remodeling, development and sales. He has completed over 100 projects including small rehabs to larger multi-unit projects.
In early 2021, Dr. Saxena launched his online brand, @thesunilsaxena. In the past 5 months, he’s grown from zero to over 600 thousand followers on TikTok, over 120 thousand followers on Instagram, and over 6 thousand subscribers on YouTube. Dr. Saxena is also a best-selling published author and speaker. Dr. Saxena graduated from medical school and practiced Emergency Medicine for 8 years, retiring from medicine in 2009.
He is grew up in the Columbus, Ohio area and has four wonderful children. His hobbies include tennis, golf and comedy.
Connect to Dr. Sunil Saxena
- Hyperfast Development’s Home Page
- On Instagram
- On YouTube
- Upcoming Webinar on Investing
- Real Estate Investment Group on Facebook
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Demystifying Real Estate Investments
2021, Brent Lacey And The Scope Of Practice Podcast
The Scope of Practice Podcast
[0:00] So Halloween was yesterday and I’m sure many of you were out with your kids trick-or-treating.
[0:05] You know I was thinking about it and I’m not really sure how this whole trick-or-treat thing got started but it’s really just treating Now isn’t it I mean when was the last time that you went trick-or-treating and ended up getting tricked.
[0:15] As a kid trick or treating is great because you basically want her around and just get treats in exchange for nothing but very few things in life are like that and real estate is no exception.
It can be easy to get tricked in real estate or at least to fail to get treats there are lots of ways to lose money and many Physicians discover that to their detriment.
But that’s why I’m excited about today’s guest he’s a physician turned Real Estate Mogul and he is going to show us how to make money on real estate without losing everything so buckle up because this is going to be even better than that Halloween candy you’re munching on.
[0:55] Welcome to the scope of practice podcast where we help busy Healthcare professionals learn to manage their businesses successfully in master their personal finances,
now here’s your host dr. Brent Lacey.
[1:09] Hey y’all thanks so much for joining me for the scope of practice podcast where you can get the knowledge and resources you need to grow your leadership skills your business and your personal finances,
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[3:19] My guest today is dr. Sunil saxena dr. saxena is an emergency medicine doctor and lifelong entrepreneur.
He has started six successful companies mostly focused on real estate and real estate development,
he has been involved in construction remodeling development and sales and he’s completed over 100 projects including small rehabs.
To larger multi-unit projects he retired from full-time clinical practice to take on the real estate world and I am excited that he’s here today to share his tips and tricks,
for how to take our real estate game to the next level so here is my conversation with dr. Sunil sexy.
[3:57] Hey y’all thanks so much for joining me this week to welcome my guests on the scope of practice podcast,
this is the co-founder of hyper-fast development a real estate investment company dr. Sunil saxena doctor saxena thank you so much for joining us today.
Well thank you for having me excited to be here and looking forward to talking a little bit about it real estate Investments.
[4:21] Well this is going to be great we haven’t actually had a chance to talk about real estate investments in quite some time and we’ve talked a little bit about
buying a house with Ryan Inman about three or four months ago and we talked about short-term rentals last summer but it’s been closed onto a year since I had an episode where we talked really seriously about real estate Investments and I know that’s something that,
a lot of dogs are really interested in and even if they’re not ready to start investing they want it to be part of their you know big time,
investment strategy in the future at least and so there’s a lot of interest on this subject but
one of the things that I always like to hear from folks that have interesting stories which really is most of my guests is just hear a little bit about your your personal story and in your case you started out as emergency medicine you did emergency medicine for what eight years and then went into this full time so
how do you go from full-time emergency medicine to full-time,
real estate investment yeah we tried to the whole episode just on that question if you really want but I graduated really young for medical schools in a six-year program so I was 23 when I graduated medical school have MD at 23.
Actually start an orthopedic surgery believe it or not did a year of that really didn’t like surgery at all and then transition over emergency medicine it’s difficult because you know as a physician you make you make good money you know
yeah I was making about 200 250 thousand dollars a year and to replace that salary takes a while.
[5:47] But I just knew I was an entrepreneur heart I really just medicine wasn’t my long-term future I knew that but it was a tough transition but was able to do it just decided to do it one day and kept moving forward but.
Took me about eight years you had a really you know transition out of it full-time do you feel like people need to be entrepreneurial minded in order to,
take real estate investment seriously or do you is that just something that was interesting to you and sort of lead you down the path of creating this company.
No actually yeah I am an entrepreneur hard I’ve actually done
kind of other businesses while I just keep going back to real estate’s I think it’s the best of anything I’ve ever done but do you know I don’t think you have to be entrepreneurial II feel like
everybody should be involved in real estate in some form or fashion so even if you have a day job as a physician that’s what you love doing and you know that’s what you want to do for the rest of your life.
I still feel to really build wealth you still should be well real estate in some form or fashion whether it’s completely passive like investing with us in a van and are fun.
Or you can do it more actively like I did where I left medicine and this is all I do I bet there’s all I’ve done since 2009 full time.
[6:53] Well so we’re going to definitely break some things down today cuz I know one of the things that prevents people from.
Really doing anything is going to be some series of limiting beliefs and I think there’s a lot of misconceptions out there from among Physicians and really people in general that.
The idea of real estate investing is is unattainable or is unnecessarily complicated or as only for the Uber uber wealthy but,
as I hope we’ll discuss today there’s a lot of opportunities for people that really all stages so let’s let’s start from the beginning then so,
we’ve got a lot of folks that are listening that are either in training or fairly early in their career a lot of folks are still working on paying off student loans but they’re looking to the Future and they’re thinking okay well I don’t have.
A million dollars to invest in a big real estate venture right now but I want to get started on something so when you’ve got someone who’s
first getting started what are some options that people can consider yeah I think the first thing you have to think is again are you looking to kind of you know do this full-time as an acting completely active like I do.
Or you know is either are you truly going to be completely passive complete active or somewhere in the middle that’s really the first decision you got to make.
Again if you want to be completely passive one of the nice things is there a lot of real estate funds including ours that you can invest in for example we pay a fifteen percent annualized preferred return.
[8:09] These type of funds weren’t available to the general public even things like 2016-17 with the SEC change the rules where we,
you know generally solicit funds like that before was kind of like you said kept for the uber wealthy in the rich and all that kind of stuff.
So they’re much more available if you look online you’ll see a lot of people doing this including us.
So I think you can earn a lot better return and being well with a lot better investments just as a non Insider if that makes sense.
[8:35] So that’s one thing you can consider if you get if you want to be really active you just start educating yourself and start you know deciding your path I you want to do it or you can be somewhere in the middle you can buy a few properties hold them for the long-term build that long-term wealth.
Are there still work involved that’s the thing so if you’re going to become in that middle Zone it’s not like a hundred percent we’re just passive you have to still have some active involvement with the with the properties in the.
[8:58] So when people are first getting started there’s so many different things.
Did they can consider and what I’d be curious to know as someone who’s been doing this for a really long time are there certain things that really should not be considered
first line investor choices for someone whose first getting started like should we be thinking about starting with single-family rentals or should we be thinking more about looking into more of the Diversified funds or should we be thinking more about
looking for individual commercial real estate deals where do we even start there’s just so many options.
[9:30] You know I agree with you that’s getting I guess the downside and upside of real estate there’s you know a lot of options but that can also be kind of confusing when you start again I think you start with your end goal in mind again are you looking to you know,
kind of stopped doing medicine or some point or is this just more of a,
the passive income sitting in the back the again like funds like mine it’s truly passive there’s nothing you have to do you literally send us a check we do all the work we send you a check back with the return so that’s more of a of your style or your interest where you don’t want to really be involved at all.
we have a lot of Physicians that invest with us not not because I’m a physician but just because it’s perfect for them they’re super busy they don’t want to really even understand what’s going on they just want to know hey these guys are good they know what they’re doing.
And they just invest with us you can like you said start with single family homes multifamily commercial.
That’s where you’re going to have to spend a little more time you have to educate yourself understand what the different options are then pick which one you want.
Typically more smaller single families or small multi families are going to be easier.
If you want to start with commercial you can certainly do that that’s going to be a little bit more complicated than numbers are bigger but again the return is bigger.
So really I think you have to start with your end goal in mind see where you really want to go with this and then kind of work backwards and pick the best solution there.
[10:43] How much start-up Capital does somebody need in order to get started I mean is it.
[10:48] Do you need like 50 or a hundred thousand dollars to even have any hope of breaking into this or can you do it with smaller amounts like 5 or 10 or 20 thousand.
My recommendations about 50,000 that’s what I always recommend is if you don’t have 50,000 kind of build that up some form or fashion which if you’re a physician it shouldn’t be too hard to get to that point.
But you know anything under that is tough because even if you’re in for like for example my fund is a 50,000 hour minimum,
most funds like mine are going to be 50 tufted even 250 minimum even if you want to go buy a house or single family or small multifamily.
You’re looking at 25 percent down so even at 50,000 you’re buying a 215 mm on property.
IDC that’s that ourselves almost difficult even find anything at 200,000 the rest of the country is certainly can be done but once you get like 10 20 thousand it’s just kind of hard to do much with that kind of money in real estate,
you know one of the things that I think is challenging for folks is that as you’re looking at different options for where you can put your money in a savings account CDs the stock market real estate there’s a lot of sort of
vagary a lot of nebulous nests to real estate you say real estate and people are like okay
I like the idea of real estate but I don’t know what that means but people talk about the stock market incessantly it’s on every it’s on every scrolling feed on CNBC and CNN and MSNBC so,
what would you say is are some of the advantages of real estate over things like the stock market or other avenues.
[12:12] To me real it’s a no-brainer I mean absolutely real estate a hundred percent without question no brainer so I think again the typical model is you work a job whether it’s medicine or something else you have a 401k you invest in your 401k
you work your career and you retire that’s the typical you know whatever model the problem is it doesn’t work it’s very it’s very difficult to build wealth that way
I did the same thing when I was in my 20s and started getting started making an income was like okay let me invest in my IRA or 401k or what are they tell me to do
it just didn’t do much for me so I think you have to think outside the box if you really want to build some wealth
again as a physician you make good money but I don’t think your wealthy if that makes sense you know again it’s a good living and all that kind of stuff so I think you really have to look at real estate so again if
just if you compare like again the post completely passive a fund like ours we’re going to pay you 15 percent per year.
[13:04] Double probably with the stock market will do if you look at a compound over a 15 or 20 year period the numbers are crazy how much more you would wake now if you want to get more actively involved in by properties you get significant advantages right you’re getting cash flow you’re getting
appreciation of the property you’re getting debt paid down you’re getting tax advantages so to me
again it’s a no brainer go to Real Estate over the stock market or certainly cash cash has the worse but again it does take some time and effort to do this so it’s not like just
you complete that easy.
[13:34] So how are you guys able to consistently beat the stock market with those kinds of returns I mean so the the stock market the S&P 500 historical averages between seven and eight percent year-over-year
and that’s average I mean there’s gonna be some years that it’s 30 up and there’s going to be some years where it’s 20 down but seven eight percent year-on-year is about right so
how are you guys able to consistently beat That by almost double again it’s we’re doing development projects so these projects make you know.
Return on Equity a hundred percent for hundred percent kind of returns is what we’re looking at I mean these are these are real estate development projects where we’re taking properties and,
in DC typically we’re adding density we’re adding square footage we’re doing luxury condos that says you’ll be the typical thing we’re doing we have some single family homes as well so the returns we get are are really really good for us as developers who are able to because of that.
Afford a pair investors 15% there are funds out there that invest in.
[14:28] In real estate like single tenant stuff which is less return so they pay their investors like seven or eight percent.
What you get is more comparable to the stock market but because we’re doing development we’re able to pay a much higher return.
[14:40] Gotcha well that all sounds really excellent but we also know that with higher returns oftentimes comes,
higher risk so what are some of the risks that we have with investing in some of these real estate Ventures.
Again I can’t speak for other folks because I don’t you know I only all my money is invested in my stuff I feel that.
You know I think we offer a really really good low risk type of fun because we’re investing in a world-class Market DC even during 2008 crash I guess you can call it
DC propers only down four percent believe it or not the suburbs a DC a little bit farther out we’re down about 30% maybe up to maybe up to 40%
DC propers only down 40%.
That’s one of your biggest risk with development right you develop something your ProForm it at this number also in the market goes down significantly and it’s worth half that
you’ll knock on what it essentially doesn’t happen in DC there’s such strong demand always we’ve got a world-class market in terms that we’ve got this thing called the federal government and if you heard of them but good old Joe Biden’s running the show right now and I probably about 15 minutes from here
and they just spend money like crazy I mean it’s just unbelievable ungodly amounts of money they spend and when things are bad they tend to spend more money as you just seen with Coronavirus.
Which we’re still coming out of our Market you know last March when we went into the pandemic I was pretty concerned but.
We were actually up ten percent last year are we had one of the best years we’ve ever had.
[16:05] I don’t know the entire country experienced that but we did and a lot of that was because the federal government just spent spent more money.
I am keep going on on but we’ve got a ton of business coming into DC as well because it’s kind of this government business Partnerships are becoming more and more common Amazon just you know their head.
Quarter to just was announced about a year or two ago but it’s not just Amazon we’ve got Microsoft Oracle every company you can think of is coming here so it’s really Market risk it’s working with
seasoned professionals like us I’ve been doing this so long so again we know how to navigate DC we know how to develop buildings,
so when you look at all of those factors that’s what you have to consider when you’re thinking of an investment.
Who are you investing with what Market what type of product are they delivering what’s their track record if all of that is good then your risk is very low even though we can offer a very good return.
[16:51] Well how do you start to vent that I mean how do you know what kinds of questions to ask if you’re a novice at this stuff.
Like see the okay first of all who are the sponsors right who’s running the show how long have they been doing it.
What is your track record can they can you show me projects you’ve done exactly like you want me to invest in and what are their financial results what type of product are you building right again
to me a condo development is
in DC is much less risky than something in you know I don’t pick up Orlando Florida or something Florida tends to be a market that goes really get really hot sometimes but also goes down a lot so you have to those are the factors you have to ask and consider.
And then again like I say historical performance of the fund itself if the fund has been long around for a while but yeah those are the very important questions to that before you invest with anybody.
So let’s think more National so you mentioned the DC area and so for places that don’t have the federal government a stone’s throw away you know dumping money like crazy.
[17:51] What percentage of the real-estate ventures out there are going to be flops or total failures is that a fairly high percentage or does it.
Just really vary from company to company and year to year.
I think it’s very it’s very easy I don’t think doing it like a ten percent fail kind of thing is really because it really depends on who’s doing who’s running the show and what are they doing I think real estate in general at a high level is rest less risky than a lot of things.
Certainly if you’re an angel investor in your investing in start-up companies that the risk is super super high
again compared to real estate because it real estate were still buying an asset they’re still like an actual value to this asset
I was involved like with restaurants for a while about a year or two that didn’t go very well at all and again when you’re buying a restaurant assuming you’re not buying the real estate.
Whatever you put in can go to like 5% of the value everything in go down because with the restaurant goes out of business there’s really no value left there,
all the equipment in the furniture and things like that have essentially zero value so in general real estate tends to be less risky but again I think is very important is that who you’re working with because
you know there’s plenty of people out there that will take your money and still you know maybe not deliver what they promise
you mentioned tax advantages of second ago can you walk us through what some of those tax advantages are for real estate.
[19:05] Yeah there’s a number I mean again we I could talk forever about taxes but
the biggest one is depreciation so a lot of times if you set up a rental property properly whatever cash flow you’re getting that’s your profit every month or year you can offset that almost a hundred percent with depreciation so essentially that’s
kind of free money that you’re not free money tax-free money you’re getting until of course you sell the property there’s nothing I don’t know if you’ve heard about accelerated depreciation is still available President Biden wants to get rid of this which you know that’s why I’m.
You can maybe tell by the way I’m saying his name I’m not a big fan but he he’s trying to get rid of accelerated depreciation
so what a lot of things we do is for example we just sold a S6 unit building we made a fair amount of profit on it we just closed it out about a month ago and we’ve bought three or four properties.
Basically all the accelerated depreciation on those three or four are going to offset this this this profit so we’re gonna have a,
essentially Net Zero tax on the profit other things you can do as a 1031 exchange which is again he’s trying to get rid of it but it’s still available right now you have a property it goes up in value you get a bunch of equity into it,
or from it and then you can exchange it tax free for another property set of having to pay tax so there’s a number of things you can do with real estate
it can really really be a lower your tax burden essentially.
[20:22] So that makes sense for a single-family Properties or for individual real estate properties but you’re probably not going to be able to do that with with a real estate fund or real estate syndication or something like that right.
Yeah that’s the one thing is that the likely if you invest in our fund that is taxable money the percent you can invest in our fund a lot of people do through a self directed IRA.
So you have money in your IRA and then all the profit that’s coming out of it goes right back into the IRA,
that’s very very popular we have a number of people to do do that so that’s not that is one way to avoid paying the tax up front at least you do with the Roth IRA as well
can you walk us through the self-directed IRA a little bit I think that this is a concept that I think probably a lot of people are not familiar with,
I’m so can you walk us through a little bit about what that means and how would we go about setting something like that up.
[21:11] Absolutely yeah it’s kind of like a like a hidden secret out there I think I’ve been doing it for at least 10 years probably closer to 15 years myself I’ve had a self-directed IRA but when I first learned about I’m like.
Hmm really you can do this because the idea is that the big companies are Schwab’s infidelities don’t want you to know about this.
Because they want to keep your money with them because that’s where they make their fees and that’s that’s our whole business model and I actually still remember walking into a Schwab branch and asking the person they’re like.
Do you have an IRA where I can invest in real estate directly or by a company or by a property like oh you can’t do that in IRAs not possible obviously they were wrong.
So the idea with the self-directed IRA is it essentially you can invest in almost anything you want in your IRA there are some limitations
Collectibles fine wine art things like that are disallowed but very very few things are so you could actually buy a company in your IRA you could buy shares of a company and your IRA like,
you know like an actual like not up stock market company but like a local company you could buy a rental property in your IRA
you can invest in our fund with your IRA they’re very easy to set up we work with Mid-Atlantic Ira they’re kind of a medium-sized company right here in Frederick.
We do podcast with them once a month so if you want to check out my social media we get into this in more detail how this how to do this but it’s really easy to set up you essentially just fill out the paperwork and the money goes from your regular Ira into a self-directed IRA.
And then that money can be used essentially for almost anything you want to invest in.
[22:39] So is that the kind of thing that you need certain licenses to be able to set that up or certain qualifications to be able to maintain or is that something that just any Average Joe off the street can have something like that set up,
absolutely anybody anybody yeah I mean they’re certain companies that they’re the custodians so you have to go with a self-directed IRA company.
Again we use Mid-Atlantic there’s Equity trusses other big one out of Ohio that I’ve used in the past but as long as it’s a self-directed IRA company once the money is in there that account.
Again you as the you’re not really the owner you’re the you’re the trustee or whatever the term is there the custodian but then they are actually doing the investment for you,
into whatever you decide to invest in so let’s say that we are thinking about a particular real estate venture and maybe it’s a,
let’s let’s take it from the idea that we’re using a real estate investor Company Real Estate developer company and they bring us an opportunity and says okay for.
[23:37] An investment of
$25,000 or $50,000 you can have X number of shares in this luxury Condo building that’s going up outside of Chicago how do we determine
if that deal is going to be a good deal or not because we talked a little bit about vetting the company themselves but let’s say it’s
let’s say it’s a company that has been recommended from a friend who’s done deals with them in the past and they feel like it’s a pretty reputable thing and let’s say we think it’s a pretty reasonable company but how do we vet a particular deal to know that this one has a high likelihood of success versus this one’s pretty shaky shaky yeah
the biggest number I would I would tell you look as what I call I call it return on cost you can look at a return on investment but look at what their total costs are on that project so.
[24:22] Let’s say it’s a million dollars right that’s acquisition development,
the financial are all their cost total on this project some you million dollars you want to see a pretty high return on cost for the.
[24:33] So you want them to be making at least 20 percent 30 percent return I don’t even touch a deal anymore unless it has a 20% return for us and again the people like well why do I care what the developers making the reason access your insurance.
So if I’m making a 30 percent return on my deal,
almost everything would have to go wrong and even more before I would even get close to getting it to negative and that if we can do a negative that’s where your Equity would be at risk what you put into the deal if the developers operating at like an 8 or 10 percent return.
You know it can get Negative pretty quick just an example when I was building new homes in Arlington I don’t really do that much because of this reason we were operating at like between 9 to maybe up to 15 percent returns in DC we’re like.
30s almost my minimum 20 is my absolute minimum my hard minimum so that’s really why I prefer DC because I’ve got a lot more cushion things go wrong we have delay if you know.
We’ve got big
issue we’ve got issues right now with a price increase in prices of lumber and all the materials yet we’re still fine our deals are completely fine even though we’re paying more for the materials so really that’s what you want to really dive into is what are they making and what their margin if they got a really fat margin,
then you’re safer as the investor compared to someone who’s operating on a thin margin.
[25:47] So how is someone going to know upfront if they’re you know what that return on cost is going to be because those are going to be estimates before the project get started right.
Yeah that’s again where I mean you have to dive into their financials a little bit asked him for that information but you know I’m not saying they would fudge it but.
Like you’re saying those are estimates so they can kind of make it look really Rosy so maybe look at the Historical deals and say look you just finished um show me some deals you finished show me the actual numbers of what
what you’ve done or what you’ve experienced that that’s why I’m saying like if you’re going to invest I think you have to be it’s not just like blindly saying you know whatever here’s hundred grand go go
take a little time investigated you look at the numbers especially when you’re first investing with somebody.
You mentioned earlier that you know I know you went and did this full-time but I’ve,
got to believe that most Physicians are probably not gonna go off and do this kind of thing full-time is going to be more of a side thing for them but how do you know when it’s the right move for you to do full-time,
what would you need what would need to be true in order for you to feel like going full-time into real estate investing is the person’s best move.
[26:52] I mean I think it’s number I for some what do you enjoy right you enjoyed this more than practicing medicine if you’re really enjoy practicing medicine out
continue doing that absolutely we need good doctors to we absolutely need that to me it was more I had to replace my income because I had no small children I had a mortgage and the wife’s like hey you know what are you doing over here so once I was able to replace my income pretty you know
I was like look I don’t need to work shifts anymore and I can take all that time and energy and focus into real estate and build this thing even bigger and my you know passion and dream is more to build a large real estate
development company so that’s just what I want to do and I think to me it’s like once I was financially able to let go of medicine and I haven’t.
[27:32] Work my last shift in October of 2009 I have never stepped foot in ER again so,
how do you feel like the real estate investment world has changed in the last two years because we’ve had tremendous upheaval in the country right so we had a huge.
Economic shutdown massive artificial recession and now we’re coming out of it and we’re spending more money than we knew could be spent by God or man
so a lot of things are going on right so how have you seen the real estate marketing changing over the last couple of years here,
I think I mean obviously the one of the biggest Milestones or issues was covid which hit what is it like spring of last year right february-march it was that’s when it all kind of,
came to light that this is going to be a really big deal what we’ve seen is again prices or up I mean that’s really what we’re seeing in the last 12 to even 18 months
we’re experiencing at least ten percent increases in our construction budgets but we’re also getting at least ten percent more on the out sale
so net-net we’re actually making more money as developers because I my project I just closed out we had a million-dollar.
Construction budgets we spent about 1.1 in the project but we had a three million dollar out sale so we got about 3.3 million out of the project so we were net you netted out where I should be making more people are always asking is is it bubble or we can Market going to crash all this kind of stuff.
The answer is I don’t know nobody knows and anybody who tells you they know don’t they don’t really know either.
[28:55] I think the most important thing is just look at the deal and look at your strategy real estate is a long-term investment thing and I think everybody gets hung up on what happened what’s gonna happen this year what happened last year.
I’ve been doing this 20 years I’ve been I’ve seen great things I’ve seen things go down.
You just have to have a long-term philosophy of what are you doing with your real estate Investments and just kind of stick to it whether the markets up or the markets down that type of thing.
So one of the financial adages that I like is don’t have all your eggs in one basket and so if someone’s got.
$100,000 in the nest egg and all of its in one property and it goes under they lose everything so
do you have any recommendations for maybe a percentage of someone’s portfolio that should be dedicated to
real estate do you have some allocation that you like to keep in the in the stock market or other types of Investments or or does it change as one’s nest egg and portfolio grows.
[29:50] Yeah I think it depends on how much money you have because if you have 50,000 is hard to diversify to a large extent,
yeah I’m still a big group believe in real estate so I’m Diversified with in real estate I have like three or four different things I do in real estate.
So I feel like I’m well-diversified but again some people like no I want to be in the stock market I want to be in real estate I want to be in gold or you know whatever.
It’s really a personal preference I wouldn’t necessarily say you know you have to put 10% here or 50% they’re that type of thing it’s really what you’re comfortable with but even but understanding even with in real estate you can diversify.
Just because you’re in real estate doesn’t mean that you have your only in one thing.
[30:28] Let’s talk about that for a second very interested to know what what you see is diversification within real estate you’re talking about having a mix of single family homes versus Real Estate,
projects versus real estates indications are you talking about you know condos versus versus homes or what are we thinking about there.
I have probably developed as my main thing so there’s you know DC development so that’s
that’s a significant portion of what I do but I also have short-term rentals so we require a portfolio short-term rentals we just opened an office in Florida so we’ve got we just purchased three just recently and we’re going to grow that so to me that’s very Diversified because you got development has completely different risk
you know like reasons why I could go wrong versus the short term rental market I also have long-term rental assets that I hold as well in different in a different market so I feel like those are Diversified even though there
technically all real estate we also do education and some other things with in real estate do you think that
it’s helpful for someone to have either a property manager or some kind of asset manager when they’re first getting started or is this or is the the cost-benefit not there and people just
needs a kind of learn how to do this on their own so that that way they can keep all their money in their pockets yeah.
[31:41] As far as Property Management again it’s really up to you to you know long-term management as you know typically around nine percent is the number they’re going to charge so it’s not a huge number I’ve done it both ways I’ve had properties in Northern Virginia where I self-managed them.
I mean literally I did nothing the tennis were so easy never heard from a much and it was you know very very easy situation I’ve had property managers and other properties where.
I felt like there was more like Hands-On management of the tenants.
You’ve got to understand that property managers are they’re all just okay so they’re not going to just just because you put the property with them they’re not going to 100% take it over,
there’s still issues that come up if there’s a foreclosure not a foreclosure but if there’s an eviction we’ve had issues with like they didn’t pay my taxes one year they were like well we’re not supposed to be your taxes you’re supposed to your taxes I’m like wow I didn’t know that you didn’t really tell me so just things like that
that you’re still involved but it just gives you one less your.
Another buffer between you and the day-to-day tenant management so I don’t necessarily have like you have to go one way or the other on that.
It’s really personal preference and maybe how much time and effort you think the tennis will take to manage.
[32:43] Can you talk about what you think would be some of the big mistakes that you’ve seen people make when it comes to getting into real estate investing is I imagine that there’s a lot of.
Common mistakes that people make of me we see this in medicine to write the kind of diagnostic errors that people make it syndromic I mean the kinds of,
the kinds of Errors we see make it your Consultants will say like,
man here comes another one of these consoles I get these all the time so what they’re calling us out.
So how what are some of the more common mistakes that people make and just help us avoid some of those.
[33:19] You do not understanding that again like what are you getting into right so again if you’re in a passive fund like ours there truly is.
[33:27] We’ve had my business partner Dan and Kerry they have a huge real estate sales organization,
are there actually by far the largest DC and they’re actually like number 11 in the country so they you know they have a lot of people approach him and say hey we want to buy rental property we’ve heard it’s good all this kind of stuff.
And when they actually sit down and explain to them the the actual numbers the amount of work it takes.
Lot of more like mmmm I don’t know if this is really what I want to do and a lot of those actually tend to be Physicians believe it or not because they think they’ve heard they got to be real estate they want to buy some property there when tells them they should there buddy or whatever is doing it so they approached the sales team hey I want to buy property and then we went.
Not me not me but they tell them that the details are like.
Now and then we actually talking about are fun they’re like oh that sounds a lot better so I think just not understanding what you’re getting into and the amount of potential work there is involved.
[34:15] If you want I think there’s a lot of folks who are whether Physicians are not want to do rehabs like that’s how I started they watch an episode of HGTV and they make it look so easy and they put all the little fancy numbers on the screen and they’re like wow that’s really easy I can do that
but not understanding that you know there’s a lot more that goes into it than what you see on HDTV so again it’s a business you have to learn it,
up your first couple you’re probably going to be
screw up and maybe maybe even lose money but if you’re committed to this for a long term you’ll eventually figure this out and do that so I think those are probably the two things if you’re thinking more passive they think it’s.
Completely passive when it’s not but if they want to do something more active they don’t understand the scope of what’s involved with it and then they kind of end up getting to the negative medical my God
they stop doing this if people want to learn more about how to do this well I mean there’s an endless supply of resources and books and websites and various things do you have any resources that you like to recommend for folks if they’re first starting out they want to,
kind of learn the process and just familiarize themselves with with some of how to do this.
[35:20] Yeah absolutely check out my social media that’s what I that’s all I talked about on my Tick Tock and my Instagram my handle is the Sunil saxena on both of them.
I have my top 100 books I recommend as well as my top 50 real estate books I recommend so if you’re I’m an Avid Reader so if you I’ve written two books as well so if you’re interested in reading books I think it’s a great way to build your knowledge base check out all my,
book recommendations again it depends on how much bandwidth you have and how much time and effort you really want to put it in this
but I highly recommend attending conferences you know networking just kind of getting to know your local real estate Community that’s how I started.
You know those type of things I think even paid education is good we have programs that we’re coming out with if you want to do paid education so there’s a there’s a ton of stuff you can do it just because of how much time and effort you really want to put into this thing.
[36:07] Do you think four when people are starting out it makes sense to start with investing,
in some kind of venture that’s local they know they could drive by the site they can kind of keep tabs on it keep an eye on things and
really understand the market better or is there just so much information out there nowadays about various Ventures that it’s fairly easy to vet a deal from a long distance away
my personal opinion I’m more a local kind of guy I really feel like that’s why I you know one of my girls had to be kind of where I can go and touch it and feel it
I don’t think you have to do that but it my recommendation BF you can invest in something local you get to know the people the properties the area just by living in an are you kind of know right already oh here’s a good area as a bad area what’s going on if you’re investing in you know
most of you would ever use either never been to or use visited for a weekend you don’t really know what’s good and bad in that City so again my recommendation is is local if you can.
[36:58] Excellent well
dr. sexy now this has been really interesting I think that you’ve given us a lot to think about and hopefully this is going to start to demystify the idea of real estate investing and take real estate from being this sort of
nebulous vague term too
maybe being something more tangible more practical that people can actually start to dive into if people want to connect to you and and get more content or kind of continue the conversation how can people connect to you.
Yeah social media is the best way right now I’ve got big on Tick Tock and Instagram I’ve got a YouTube channel as well as Facebook but all the handles are just my name so it’s with us it’s the Sunil saxena,
you put that in any of them you should my stuff should come up there.
Awesome will make sure we put all that in the show notes so that way people can find it really easily Well – I see Anna this was a great discussion I really appreciate you coming on and what.
To encourage everyone go connect to him on social media will have all the links for that in the show notes and you know if you want to learn more about real estate investing me he is literally written books on the subject so you definitely got to go check it out,
well he is dr. Sunil saxena dr. sexy and I’m going to say thank you again so much for joining us on the scope of practice podcast today we really appreciate it okay well thank you for having me I enjoyed it.
[38:14] Real estate is one of those things that seems a lot scarier than it actually is
and I hope that this conversation with dr. saxena gave you some pearls to help you feel like you’re ready to take the first step towards getting into the real estate game or to take the next big leap if you’re already in the game there are a lot of great opportunities out there so keep an open mind
the tax code is so heavily slanted to favor real estate and business investment that it really makes sense to invest in real estate as part of your long-term Financial strategy.
[38:42] And Hey listen if you’re looking for other ways to capitalize on new long-term Financial strategy or if you’re looking for more resources about real estate don’t forget you can sign up for the marriage and money MD Summit for free,
it’s going to be November 15th through 17th and you can sign up at www.marriageguy.com money MD.com.
[39:01] Don’t miss out on this amazing Summit it’s free and it’s full of amazing speakers and phenomenal content sign up today by clicking the links in the podcast.
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plus 10 hours of bonus content a free online financial planning course to give you a concrete step by step plan for Building Wealth MP3 files of all the talks and exclusive access to attend the live Q&A sessions after the summit presentations each night.
[39:30] Tickets are $99 until November 14,
so take advantage of great savings and upgrade now just click the link in the podcast description to register thanks so much for joining me on the scope of practice podcast today you can also find all those resources in the show notes at www.thekingofrandom.com,
/ episode 83 that’s www.scopemonth.com episode 83 or just click the links in the podcast description.
Thanks so much for joining me and I’ll see you next time.
Thanks for listening to the scope of practice podcast at www.viscambio.net.
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