The gospel of real estate has received a lot of air time on Big Physician Finance recently.
I consider myself to be on good terms with the powerhouse physician finance bloggers (even if all but a couple couldn't pick me out of a lineup). I realize that's such a niche market that it's akin to boasting of your band's status as the fourth most popular folk duo in New Zealand.
As this blog remains a passion project where my hourly income averages well below minimum wage, I hope that lends me a partial air of the detached observer.
Some of the fervor may be entrepreneurial - these bloggers stand to make income through affiliate relationships with others who either sell courses teaching docs to invest in real estate, or else funnel referrals to real estate syndicates seeking accredited investors who can meet their high minimum investments.
But profit motive is not the only story. The natural history of physician financial literacy goes something like this:
- Drive a beater! Live like a resident! Frugality as you pay off educational debt.
- Index funds! Bogleheads! Backdoor Roth! HSA!
- Gonads of bronze: Pray for a recession early in my career to buy stocks on fire sale.
- Recession came later in my career than I'd planned. Maybe I ought not to be 100% in equities after all.
- Gonads of glass: Bonds! TIPS!
- Eventual achievement of financial security if not outright financial independence.
- [Bored by vanilla index funds, watching the other kids lick cones with this interesting new real estate flavor.] I'll have what she's having.
So it goes - you accumulate sufficient wealth with index funds that an urge to learn something new, a desire to diversify your portfolio or a drive to juice your returns leads you, eventually, to real estate.
That's where I've been headed, mostly because it's interesting to learn the new skills involved and see how it might engage my intellect after medicine.
After a year of planning, and a few false starts, I've spent the past week signing every legal document ever created.
I made an unsentimental offer and went into contract on a property, sight unseen, that had been listed on the MLS for fewer than 30 hours. It met my paper investment criteria, and I wanted the right of first refusal to purchase it.
I report this with a mixture of excitement and the sense that I might hurl at any minute - this is the largest deployment of capital I've made since buying our doctor house - but it's a healthy sort of uncertainty, like a high school crush.
More to come...
Comments 10
When I was in the Navy we bid folks: “Fair Winds and Following Seas”, when they started a new journey. I’m reading a book called “How to Decide” by Annie Duke. Annie is a champion poker player 10 years your senior and expert in managing decision making as a process not based on outcomes. Acid production is due to uncertainty in outcomes. Process is making choices with sequential high probability of success. The book is available on kindle and audio so you can listen while you bike. It won’t tell you what to think but how to judge. May burgers flood your reality.
Author
…if not my coronaries. Thanks for the recommendation, I’ll add it to the cue!
CD
I believe Annie is the poker player featured in Charles Duhigg’s “Smarter, Faster, Better.” Great read for doctors as well 😉 (Good luck, CD!)
Love the Physician trading cards post you linked to (need to update that and curious what mine would say. Lol)
Congrats on your first foray into real estate.
Author
Maybe I’ll have to revive the idea, Xray!
GOAL! Congrats! You put your “Big Boy” pants on and dove in!
Random unsolicited advice:
1. Have you heard of Rent-O-Meter? I use it ALL the time!
2. A bottle of wine at your tenant’s door when anything goes wrong, or random holidays or renovations goes a LONG WAY.
3. Double check with your Tax professional and/or get one who is very familiar with depreciation of rental property (You’re going to love, love, love the tax breaks coming your way – yes Sir).
Even if things go left, you’re financial mote runs DEEP (in my James Earl Jones voice).
Author
D2D,
Thanks for the kind words. Let’s hope I don’t soil my big boy pants in the process. I love the wine recommendation. Finally, my CPA is familiar with real estate so that duck is all set.
Appreciate the support,
CD
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Oh you tease.
Do tell us more.
I have invested in real estate for over 25 years and have no regrets.
Author
WD,
You caught me. That’s my version of dancing the real estate burlesque…