Interview with Dr. Peter Kim
I’ve brought a great guest back to the podcast. Dr. Peter Kim will teach us a bit about how to build a thriving real estate passion project on today’s show.
Many of you should be familiar with Dr. Peter Kim. He offers the Leverage & Growth Virtual Summit, the Passive Income MD blog, and his Passive Real Estate Academy. He first joined us in Episode 154 to talk about building a passive income side business using real estate.
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Producing Passive Income with Real Estate
As I assist physicians considering a nonclinical career, I find that there are many who achieve the same freedom and security from a side hustle like Peter’s that does not involve being an employee.
Peter designed the Passive Real Estate Academy to be an effective learning experience. It offers all of the lessons in conveniently digestible segments. It leverages a Facebook group to provide networking and ongoing support. And it builds accountability so that progress is optimized.
Developing a Thriving Real Estate Business
And once you join, you’re a member for life, able to access a growing network of other professionals investing in real estate. His goal is to be certain that you're able to build a thriving real estate business that generates income and reduces your income taxes.
If you’re listening to this episode when it comes out, you can learn more about the Passive Real Estate Academy using this link: nonclinicalphysicians.com/prea. If you click it right now, you can sign up for the free masterclass. Otherwise, use it to go to the information page before May 2nd at midnight, when the course closes.
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Summary
If you're looking for a way to develop more passive income, Peter is an excellent teacher. There is plenty of information about real estate and other passive income options on his website.
But, if you want a masterclass that will get you up and running in a few weeks, his course Passive Real Estate Academy is a proven way to do that. And once you're in, you will have a growing source of new ideas and support forever.
NOTE: Look below for a transcript of today's episode that you can download or read.
Links for Today's Episode:
- Passive Real Estate Academy Sign Up Page
- Link to April 29, 2021, LIVE Free Masterclass with Dr. Peter Kim
- Episode 154 with Peter Kim
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Transcription - PNC Episode 193
How to Build a Thriving Real Estate Passion Project Without Being a Landlord
John: I'm so excited today because I have a friend and colleague back here. He was on the podcast before, it was episode 154, and he talked to us about passive investments and real estate investing. And so, I want to welcome Peter Kim to the podcast. Hi Peter.
Dr. Peter Kim: Hey John, how are you doing? Thanks for having me again now.
John: I'm glad to have you on. I heard you got some things going on, so I thought I'd love to have you give us an update. And so, we're going to get right into it. I know the physicians look for ways to diversify their incomes, do something on the side, not full-time, but it seems like real estate is one of the most popular passive investments. So, do you see this as continuing to grow? Is the interest growing in this or is it kind of flattening?
Dr. Peter Kim: I think it's growing. Just the idea of creating other streams of income is growing just because of the state of medicine as it is in today. You know this very well, physicians are in a place where they realize that they're kind of trapped in the system, but one of the major ways to kind of create that freedom for themselves, choose to ultimately live life how they want is to create income outside of medicine so they can live the life in medicine that they want. And it just so happens that real estate fits really well with a lot of these physician's goals, which is they make good incomes, so they have the capital. So, they want to put the capital to work and they want to do it in a way that's tax efficient. And then it's also hopefully passive for them so that they can create cash flow for themselves, which can ultimately replace their doctor income. And so passive real estate investing is like, I mean, I wouldn't say perfect, but it is a great vehicle to do so.
John: And so, there are ways to do this that require some learning obviously, and you have to know what you're doing, but once you get things set up, you're not going to have to spend three, four hours a day kind of keeping track of things or taking care of a house or an apartment building or something like that.
Dr. Peter Kim: Yeah. I think what you're referring to more is like what I consider active real estate investing, where you have direct ownership of properties. Now I do that as well. I think it is a great way to create wealth, create that cash flow. But for a lot of physicians, they just don't want to be a landlord. They already have a job. They have their business. They like being a doctor. They create income from it, but they want that time freedom. Right? And so, they don't want to create another job. Their time is probably the scarcest resource that they have. So, they'd rather take that capital and have it create more income for them.
And so, passive real estate investing in other people's deals is what I'm talking about. Sometimes you might hear these things called syndications or funds, but basically these operators put together a deal and you can invest as a limited partner and really honestly get like close to 75% to 80% of the benefits of investing in real estate. But once you've done your due diligence, which is probably the most time intensive part, make sure you're partnering with good people, making sure the deal is good. Once you make that investment, it is totally hands-off. You wait for quarterly updates, quarterly distributions, you've got to send a K-1 at the end of the year to your CPA and that's about it. And you got to decide ultimately when that cash comes back, what'd you have to deal with.
John: Now, I laughed because we owned a small condo for my wife's business and we sold it. We didn't do any kind of a 1035 exchange or something. We bought a building that needed to be rehabbed, and rehabbed it. We had to do a construction loan, then got the mortgage on it. And I think that my accountant thought it was a nightmare. And I'm laughing because that's probably the biggest accountant bill I had in a long time, but it's going to go back to normal this year.
Now let me ask you this. When I think about this, that's my experience with real estate in a sense, and I think it's going to all pan out very well because the building is worth the money, the business is paying the mortgage. And at the end of the day, we'll have that asset that will continue to benefit us, even if she's not even renting it anymore as her business. So, you mentioned the landlord thing. That was my one big thing. So, I don't want to be a landlord. I've always thought about doing it. And then I said, no, I don't want to be a landlord, but you've already talked about that. The syndications, is that the only way to avoid being a landlord?
Dr. Peter Kim: No, there are other ways to invest in real estate as well, I mean, passively. You can actually lend money out. You can be what's called either a hard money lender, or invest in notes. So, you can lend money out for people. Let's say people who are doing fix and flips. They need access to capital. So, they come to you, you offer them at a pretty high interest rate, but a short-term loan. So, they can go out renovate the property, flip it, and then they come back and pay you off. And so, that's one way to get involved in it. Another way is to ultimately buy mortgages that are non-performing out there. You can take over, try to fix those up and they start paying you. Like, you're the lender. That's another way to do it.
There are so many different ways in real estate. It's funny, like when people say, "Oh, real estate investing is not for me", I'm like, there's so many different ways to get involved from more active to more passive. Even there's things like REITs, right? Real Estate Investment Trusts. A lot of times it can be found on the public markets. You can go online, like you're going to buy a stock or a mutual fund. You can buy a REIT online and at least some shares and that sort of thing. So that is a way to also get involved in real estate in a passive way.
John: All right. So, I want to dig into a little about it, see if I can pick your brain. Let's say I don't mind taking some risks. But I'm afraid of being sold something that's not appropriate for me and my family and my level of risk. So, what kind of things does one consider when looking at those? Especially in the syndication world.
Dr. Peter Kim: I mean, you got to figure out what your goals are first. You can find a deal. I'd say you find a deal according to what you're looking for. If you're trying to hit a home run, there are deals that you can try to hit a home run on, but there's going to come with a certain level of risk. Then there are deals that are a little bit more stabilized, let's say you're going with a 30-year operator who has a track record of never losing investor capital. They kind of find these properties that need a little bit of work and use very low debt and leverage and diversify it by putting in a fund with other properties in different areas, in different areas of the country. You start mitigating risk all over the place and then it'll affect the returns in some way, but maybe that's what you're looking for versus the home run.
Now I try to mix and match my portfolio depending on what I'm looking for, because it's nice to have that stable cash flow. Because again, that's what enables me to work less. I give up nights, give up weekends, this kind of thing. I feel like I'm young enough that I can take a few swings at this. And so, a small portion of my portfolio is allocated to I would say little bit higher potential deals. It may carry a little bit of risk with it. Now I try to mitigate that risk as much as possible by understanding where that risk lies, like what are potential pitfalls whenever I see a deal? That is one thing I always look at. No matter what, where are the big pitfalls here? Is that property in a market where they have one big industry that could undergo huge disruption and change? Or is this an area of the country that has huge environmental issues or are they taking on way too much debt than they can handle? Or the operator, they're totally new to this?
So, I'm always looking at that risk to mitigate that. But there are opportunities for people who don't want to take a lot of risks, but still have some upside. And so, I actually like sometimes these funds, which is kind of like a basket of investments together, almost like a mutual fund where you get a couple of stocks and you put it together. So, for some of these funds, they put together a bunch of these real estate opportunities and you can have it like across multiple sponsors. So multiple deals all within one investment in multiple different areas of the country, with sometimes different kinds of risk profiles within the deal. It's nice to sometimes invest in those kinds of things, because it allows you to spread that risk and you get instant diversification when you invest.
John: So now do you feel that there is a sufficient amount of transparency where you have a comfort level, either you know the person that's putting in syndication together or in one of these funds of multiple investments, there's enough data to look at, analyze and assess your risk mitigated if you can and then move forward.
Dr. Peter Kim: I'll say that the first couple investments that I made, I did very little due diligence. I kind of just picked it here and there. Maybe a friend did it or this kind of thing. I'll be honest. But then now that I've kind of learned ultimately how to really dig into the deal and kind of built a roadmap for how to actually do the due diligence for these investments, really understanding the sponsor, the deal itself and all the numbers, and then the market and understanding risk. Like now that I do that, I do spend a lot of time upfront, really, making sure this is the right deal for me. And if I don't get the questions answered, I realize also that there's another one down the line. So, you should never feel rushed into these things. You just come upon a deal like, "Oh man, it's the last day before the closing' and you just feel this rush and you don't feel comfortable with it. You should not be investing in it. Because guess what? There'll be another one down the road. I promise you that.
So, I make sure that I understand these things that I get the transparency that I want, because like you mentioned, I have gotten a deal before when I've asked the sponsor for the track record and they told me it's confidential because of these kinds of things. And honestly, that's not the normal standard way these things run business. They should be able to give you full transparency of the record. And if they don't, that's a big red flag and I go running.
John: Yeah. I can relate to that feeling. Like sometimes you're looking at a new car or a used car or whatever, and they're saying, "Well, it's going to be gone tomorrow" and you get this urge like, "Oh, I got to make a decision. It sounds like a great deal". But it's like, you know what? There's going to always be another car to buy.
Dr. Peter Kim: FOMO. It's called FOMO - Fear Of Missing Out.
John: All right. Well, the other thing I was going to ask you, you kind of touched on some of it, but there are people like us that are out here not having studied it. We just kind of don't know where to start. Basically, how would you start if you were someone like me and I had some cash on the side and I'm trying to decide whether to put it in the stock market or put it in some kind of real estate investment?
Dr. Peter Kim: Well, if you decide to invest in the real estate investment because of, again, there's good tax benefits there, a lot of tax protected cash flow. You think it provides a diversification in your portfolio that you need and it fits your profile there. Then I think the first thing you do obviously is educate yourself. There are books, there are podcasts. There are some courses out there. Do your best to educate yourself. I mean, you are probably a busy professional that's listening to this.
So yes, you can go scouring all over the net and looking for stuff. I promise you can find anything online. The question is, what is good knowledge? Is it curated for you and is it packaged nicely? And I tell people, save your time and find something that works for you in a short period of time. Now that's number one.
Number two, I tell people to find a community of people that are doing this because I think there's definitely strength in numbers. I actually have discovered that this is like a team sport. Like we're not against each other with other investors. By getting together, you share collective knowledge, you see things that maybe somebody else doesn't see, somebody else has experienced with them possibly, that would be even better. And so, you gain a lot of knowledge from that. So, find a community of people that are doing this and learn from them. Find mentors, find people to model and things like that. And that's what I would've done earlier in my investing career, especially that second part with community and modeling. And I found that to be huge. And I try to help people with that today.
John: That's good advice. There's always a place to start. You can find people out there, Facebook groups, LinkedIn groups, books, what have you, courses and so forth. And we're going to talk about your course. I just want to plug the issue or the concept of coaching. I did this online marketing thing. It goes with the podcast and I've been in a coaching program for a year. It cost me $8,000. And it's like, you know what? It's well worth it. You just get this stuff shoved down at you. Like, try this, try this, someone has done it before, they know how it works. I don't have to spend 5, 10 years trying to figure this stuff out. So, I'm definitely a believer in getting help.
And so, your course has just recently opened, it's going to be open for a week or two. I think some of my listeners know about it because you were doing this last year, but why don't you update us and tell us about the course and the things we've talked about? What does it focus on?
Dr. Peter Kim: Sure. The course is called Passive Real Estate Academy. And the goal is to help physicians and high net worth professionals, like dentists as well, to ultimately feel confident investing in these real estate investments. And our goal is to do that in four weeks. You're a busy professional. You'll see these deals come along. How do you know how to choose a good deal? How do you know what are the red flags to avoid? And ultimately, how do you know how to do the proper due diligence on the front end so you can create that cash flow on the back end?
And so, that's what the course does. So, we do it in four weeks. Not only that, do we provide a community of people and other investors, not only during the course, but also afterwards. We have all our alumni. That's probably one of the strongest points of the course actually. It's that you get to join our alumni group who is now educated, who is now vetting deals together, is seeing opportunities, even honestly going in on deals together to leverage our collective capital, to get better deals out there. And all this happens, like I said, in a four-week period.
And so, we launched it twice a year because it's not just like we give you a course and off you go and good luck. This is a very guided course. Because again, we try to do this as a very high yield thing. We have weekly live Q&As. We have experts come in and we make sure you're supported along the way. And I always tell people, I just want there to be no risk for anybody when they do this thing. You hear about these courses. You're like, I don't know if it's going to be worth it. I don't know if it's right for me.
So, I tell people, honestly, we do a whole 30-day money back guarantee because I want you to see basically the entire course. And if you tell me that you don't feel like you're going to get at least 10 times the lifetime value of this course, let me know, we'll get you hundred percent, I'll give it back to you. And so, people who have taken our course have invested and have been able to take that leap. And those people have created cash flow in a year that has been multiples of even the investment in the course. And so, I think that's an opportunity for a lot of people. There are a lot of other great resources out there, by no means do I think this is the only one. But I think for physicians and busy professionals who want to get into this, see opportunities, have that community, I think it's a great resource.
John: I know a little bit about it and I think it's a fantastic resource, but I was reflecting, I was thinking about there's statistics out there that say like 80%, 90% of online courses that are bought, the people never get past like the first day. But I can tell from what you said, it's like, you have a group, you have interactions daily. It's sort of you're walking them through it. So, if they get in and they start it, they're going to finish it because of the engagement that you've created.
Dr. Peter Kim: Right. We also do accountability partners. That's one thing too, like just to solve those kinds of issues is what I found is that we don't want to put it on a course and you don't get the results because that doesn't help anybody. And so, we want you to take the course, really become confident, tell everybody else about it, get results, change lives, these kinds of things. And the only way to do that is get through the course. So yeah, we've tried to build in mechanisms for that.
John: Is there sufficient flexibility? Is it something that I have to log in every day or a certain time of the day? Or are there a combination of videos and live at the evening? How does that work?
Dr. Peter Kim: Yeah. It's a combination of videos and live. And so, all the live sessions are also recorded just in case if you need it. But you can take it at your own pace. We drop like a module every single week. And again, busy professionals, high yield. Like these are things you could watch or listen to. A lot of people say, listen to it on their commute, right? Or in between cases or in between patients, you can fit in wherever you need. And then we have the live support if you need. In our real estate, we do coaching. We have other people come in to help coach during this whole period. We have an expert live Q&A's, but that all goes into a library for you to have access for life.
We do these live components and some people say, you know what? This happened to be a bad season in my life. Like something happened. And we tell people, sure, you have access to it for life and all the updates that we do. And then they just join in sometimes with the next cohort and go live. And we don't make anybody pay any extra for that. This whole alumni club that we have, we call it the Platinum Investor Club. We don't charge anything extra for that. There are no membership fees, you're part of it. Once you're part of the group and part of the alumni, you're part of it forever. And so again, we are continually making updates to it. In fact, we are going to add a little bit more meat on the whole tax section right now, because that is one of the most important parts of this whole thing. So, we beef that up this time, but again, everyone who has bought the course in the past for whatever price it is at that time, they get access for life.
John: The thing I like too, as you said, there's the alumni. So, if I go through the four weeks and I'm in the middle of trying to set something up or pursue something that I just go and bounce that off to a bunch of other people and say, "Does this sound legit? And do you know the person here or this group that's promoting this?" And you can get some pretty good feedback, it sounds like.
Dr. Peter Kim: Yeah, yeah. With each iteration of the course, the group actually gets stronger. And so, stronger, smarter, and again, more leveraged to go out there and get better deals for people.
John: So where are we in your scenario here on the 27th? It's kind of hard for me to visualize.
Dr. Peter Kim: We have probably about a week left of the launch. So, we will close doors on May 2nd. And again, the reason we do this in batches, we only do it twice a year is because it's so intensive with the live. You know what I mean, we put a lot of time and energy into making sure the class gets through it, that we only offer it twice a year. The first module starts on the 5th. So, May 5th is when we drop the first module, but again, people can take it whenever they want, within a week, within two weeks, whatever it might be.
John: But we've got to get them in if they're going to do it by the 2nd. It shuts down at midnight on the 2nd something like that?
Dr. Peter Kim: Yes.
John: All right. Well, I think I have the links that I can put in the show notes. Is there anything else we need to know at this point?
Dr. Peter Kim: Regardless whether they take the course or not, again, I'm just a big fan of creating other streams of income. Whether it's nonclinical or whether it's through some of these other investments. I think ultimately, it's so important for physicians to feel that sense of control and the way to do that is by having that income that isn't tied to your normal clinical day job trading time for money. And so regardless if that's the message I could spread out there and that helps people, again, I'm all for it.
John: Well, yeah, in my mind, I'm thinking, "Take this job and shove it". Sometimes you just reached the end of your rope and if you have some other sources of income and you can kind of lay back a little bit for a while and rethink what's going on, definitely it's better than if you're desperate and deeply in debt and have no cash coming in.
Well, I really appreciate you taking the time to come back and give us the update on this. Because I know some of my listeners will definitely take advantage of it and they wouldn't want to miss it. And unless they're already following you, they might not even know this is going on. So, thanks for taking the time and talking to us about it.
Dr. Peter Kim: Great. Thanks John. Just one last thing to mention is that we will also have one free masterclass that I'm going to basically teach for an hour about a lot of things that I've learned about passive real estate investing, why doctors need multiple streams of income, what are their options with passive real estate. We talked about some of them and then ultimately the whole roadmap for them. There is a free master class that I give. So, it's going to be on the 29th. And then, I think you'll be able to leave a link for them somewhere in your show notes, but they can just join in and come in through free class. And if they get value out of that, then fantastic.
John: So, they can get an extended version of today's conversation with you. It'll be about an hour?
Dr. Peter Kim: Yeah. Yeah. That'd be a live session, live Q&As, we'll do some giveaways. We'll have fun with it. And go from there.
John: Okay. I'll definitely let them know. I'll get that out in an email and we'll be talking about it on the podcast a couple of days before that happens. All right, Peter, I will let you get back to your life and I'll get back to whatever I was doing before. We just had some crazy days here. I think both of us. So, I really appreciate you coming on and I'll talk to you again in the future.
Dr. Peter Kim: Okay. Thanks John. Take care, everyone.
John: Bye-bye.
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Transcription - PNC Episode 193
How to Build a Thriving Real Estate Passion Project Without Being a Landlord
John: I'm so excited today because I have a friend and colleague back here. He was on the podcast before, it was episode 154, and he talked to us about passive investments and real estate investing. And so, I want to welcome Peter Kim to the podcast. Hi Peter.
Dr. Peter Kim: Hey John, how are you doing? Thanks for having me again now.
John: I'm glad to have you on. I heard you got some things going on, so I thought I'd love to have you give us an update. And so, we're going to get right into it. I know the physicians look for ways to diversify their incomes, do something on the side, not full-time, but it seems like real estate is one of the most popular passive investments. So, do you see this as continuing to grow? Is the interest growing in this or is it kind of flattening?
Dr. Peter Kim: I think it's growing. Just the idea of creating other streams of income is growing just because of the state of medicine as it is in today. You know this very well, physicians are in a place where they realize that they're kind of trapped in the system, but one of the major ways to kind of create that freedom for themselves, choose to ultimately live life how they want is to create income outside of medicine so they can live the life in medicine that they want. And it just so happens that real estate fits really well with a lot of these physician's goals, which is they make good incomes, so they have the capital. So, they want to put the capital to work and they want to do it in a way that's tax efficient. And then it's also hopefully passive for them so that they can create cash flow for themselves, which can ultimately replace their doctor income. And so passive real estate investing is like, I mean, I wouldn't say perfect, but it is a great vehicle to do so.
John: And so, there are ways to do this that require some learning obviously, and you have to know what you're doing, but once you get things set up, you're not going to have to spend three, four hours a day kind of keeping track of things or taking care of a house or an apartment building or something like that.
Dr. Peter Kim: Yeah. I think what you're referring to more is like what I consider active real estate investing, where you have direct ownership of properties. Now I do that as well. I think it is a great way to create wealth, create that cash flow. But for a lot of physicians, they just don't want to be a landlord. They already have a job. They have their business. They like being a doctor. They create income from it, but they want that time freedom. Right? And so, they don't want to create another job. Their time is probably the scarcest resource that they have. So, they'd rather take that capital and have it create more income for them.
And so, passive real estate investing in other people's deals is what I'm talking about. Sometimes you might hear these things called syndications or funds, but basically these operators put together a deal and you can invest as a limited partner and really honestly get like close to 75% to 80% of the benefits of investing in real estate. But once you've done your due diligence, which is probably the most time intensive part, make sure you're partnering with good people, making sure the deal is good. Once you make that investment, it is totally hands-off. You wait for quarterly updates, quarterly distributions, you've got to send a K-1 at the end of the year to your CPA and that's about it. And you got to decide ultimately when that cash comes back, what'd you have to deal with.
John: Now, I laughed because we owned a small condo for my wife's business and we sold it. We didn't do any kind of a 1035 exchange or something. We bought a building that needed to be rehabbed, and rehabbed it. We had to do a construction loan, then got the mortgage on it. And I think that my accountant thought it was a nightmare. And I'm laughing because that's probably the biggest accountant bill I had in a long time, but it's going to go back to normal this year.
Now let me ask you this. When I think about this, that's my experience with real estate in a sense, and I think it's going to all pan out very well because the building is worth the money, the business is paying the mortgage. And at the end of the day, we'll have that asset that will continue to benefit us, even if she's not even renting it anymore as her business. So, you mentioned the landlord thing. That was my one big thing. So, I don't want to be a landlord. I've always thought about doing it. And then I said, no, I don't want to be a landlord, but you've already talked about that. The syndications, is that the only way to avoid being a landlord?
Dr. Peter Kim: No, there are other ways to invest in real estate as well, I mean, passively. You can actually lend money out. You can be what's called either a hard money lender, or invest in notes. So, you can lend money out for people. Let's say people who are doing fix and flips. They need access to capital. So, they come to you, you offer them at a pretty high interest rate, but a short-term loan. So, they can go out renovate the property, flip it, and then they come back and pay you off. And so, that's one way to get involved in it. Another way is to ultimately buy mortgages that are non-performing out there. You can take over, try to fix those up and they start paying you. Like, you're the lender. That's another way to do it.
There are so many different ways in real estate. It's funny, like when people say, "Oh, real estate investing is not for me", I'm like, there's so many different ways to get involved from more active to more passive. Even there's things like REITs, right? Real Estate Investment Trusts. A lot of times it can be found on the public markets. You can go online, like you're going to buy a stock or a mutual fund. You can buy a REIT online and at least some shares and that sort of thing. So that is a way to also get involved in real estate in a passive way.
John: All right. So, I want to dig into a little about it, see if I can pick your brain. Let's say I don't mind taking some risks. But I'm afraid of being sold something that's not appropriate for me and my family and my level of risk. So, what kind of things does one consider when looking at those? Especially in the syndication world.
Dr. Peter Kim: I mean, you got to figure out what your goals are first. You can find a deal. I'd say you find a deal according to what you're looking for. If you're trying to hit a home run, there are deals that you can try to hit a home run on, but there's going to come with a certain level of risk. Then there are deals that are a little bit more stabilized, let's say you're going with a 30-year operator who has a track record of never losing investor capital. They kind of find these properties that need a little bit of work and use very low debt and leverage and diversify it by putting in a fund with other properties in different areas, in different areas of the country. You start mitigating risk all over the place and then it'll affect the returns in some way, but maybe that's what you're looking for versus the home run.
Now I try to mix and match my portfolio depending on what I'm looking for, because it's nice to have that stable cash flow. Because again, that's what enables me to work less. I give up nights, give up weekends, this kind of thing. I feel like I'm young enough that I can take a few swings at this. And so, a small portion of my portfolio is allocated to I would say little bit higher potential deals. It may carry a little bit of risk with it. Now I try to mitigate that risk as much as possible by understanding where that risk lies, like what are potential pitfalls whenever I see a deal? That is one thing I always look at. No matter what, where are the big pitfalls here? Is that property in a market where they have one big industry that could undergo huge disruption and change? Or is this an area of the country that has huge environmental issues or are they taking on way too much debt than they can handle? Or the operator, they're totally new to this?
So, I'm always looking at that risk to mitigate that. But there are opportunities for people who don't want to take a lot of risks, but still have some upside. And so, I actually like sometimes these funds, which is kind of like a basket of investments together, almost like a mutual fund where you get a couple of stocks and you put it together. So, for some of these funds, they put together a bunch of these real estate opportunities and you can have it like across multiple sponsors. So multiple deals all within one investment in multiple different areas of the country, with sometimes different kinds of risk profiles within the deal. It's nice to sometimes invest in those kinds of things, because it allows you to spread that risk and you get instant diversification when you invest.
John: So now do you feel that there is a sufficient amount of transparency where you have a comfort level, either you know the person that's putting in syndication together or in one of these funds of multiple investments, there's enough data to look at, analyze and assess your risk mitigated if you can and then move forward.
Dr. Peter Kim: I'll say that the first couple investments that I made, I did very little due diligence. I kind of just picked it here and there. Maybe a friend did it or this kind of thing. I'll be honest. But then now that I've kind of learned ultimately how to really dig into the deal and kind of built a roadmap for how to actually do the due diligence for these investments, really understanding the sponsor, the deal itself and all the numbers, and then the market and understanding risk. Like now that I do that, I do spend a lot of time upfront, really, making sure this is the right deal for me. And if I don't get the questions answered, I realize also that there's another one down the line. So, you should never feel rushed into these things. You just come upon a deal like, "Oh man, it's the last day before the closing' and you just feel this rush and you don't feel comfortable with it. You should not be investing in it. Because guess what? There'll be another one down the road. I promise you that.
So, I make sure that I understand these things that I get the transparency that I want, because like you mentioned, I have gotten a deal before when I've asked the sponsor for the track record and they told me it's confidential because of these kinds of things. And honestly, that's not the normal standard way these things run business. They should be able to give you full transparency of the record. And if they don't, that's a big red flag and I go running.
John: Yeah. I can relate to that feeling. Like sometimes you're looking at a new car or a used car or whatever, and they're saying, "Well, it's going to be gone tomorrow" and you get this urge like, "Oh, I got to make a decision. It sounds like a great deal". But it's like, you know what? There's going to always be another car to buy.
Dr. Peter Kim: FOMO. It's called FOMO - Fear Of Missing Out.
John: All right. Well, the other thing I was going to ask you, you kind of touched on some of it, but there are people like us that are out here not having studied it. We just kind of don't know where to start. Basically, how would you start if you were someone like me and I had some cash on the side and I'm trying to decide whether to put it in the stock market or put it in some kind of real estate investment?
Dr. Peter Kim: Well, if you decide to invest in the real estate investment because of, again, there's good tax benefits there, a lot of tax protected cash flow. You think it provides a diversification in your portfolio that you need and it fits your profile there. Then I think the first thing you do obviously is educate yourself. There are books, there are podcasts. There are some courses out there. Do your best to educate yourself. I mean, you are probably a busy professional that's listening to this.
So yes, you can go scouring all over the net and looking for stuff. I promise you can find anything online. The question is, what is good knowledge? Is it curated for you and is it packaged nicely? And I tell people, save your time and find something that works for you in a short period of time. Now that's number one.
Number two, I tell people to find a community of people that are doing this because I think there's definitely strength in numbers. I actually have discovered that this is like a team sport. Like we're not against each other with other investors. By getting together, you share collective knowledge, you see things that maybe somebody else doesn't see, somebody else has experienced with them possibly, that would be even better. And so, you gain a lot of knowledge from that. So, find a community of people that are doing this and learn from them. Find mentors, find people to model and things like that. And that's what I would've done earlier in my investing career, especially that second part with community and modeling. And I found that to be huge. And I try to help people with that today.
John: That's good advice. There's always a place to start. You can find people out there, Facebook groups, LinkedIn groups, books, what have you, courses and so forth. And we're going to talk about your course. I just want to plug the issue or the concept of coaching. I did this online marketing thing. It goes with the podcast and I've been in a coaching program for a year. It cost me $8,000. And it's like, you know what? It's well worth it. You just get this stuff shoved down at you. Like, try this, try this, someone has done it before, they know how it works. I don't have to spend 5, 10 years trying to figure this stuff out. So, I'm definitely a believer in getting help.
And so, your course has just recently opened, it's going to be open for a week or two. I think some of my listeners know about it because you were doing this last year, but why don't you update us and tell us about the course and the things we've talked about? What does it focus on?
Dr. Peter Kim: Sure. The course is called Passive Real Estate Academy. And the goal is to help physicians and high net worth professionals, like dentists as well, to ultimately feel confident investing in these real estate investments. And our goal is to do that in four weeks. You're a busy professional. You'll see these deals come along. How do you know how to choose a good deal? How do you know what are the red flags to avoid? And ultimately, how do you know how to do the proper due diligence on the front end so you can create that cash flow on the back end?
And so, that's what the course does. So, we do it in four weeks. Not only that, do we provide a community of people and other investors, not only during the course, but also afterwards. We have all our alumni. That's probably one of the strongest points of the course actually. It's that you get to join our alumni group who is now educated, who is now vetting deals together, is seeing opportunities, even honestly going in on deals together to leverage our collective capital, to get better deals out there. And all this happens, like I said, in a four-week period.
And so, we launched it twice a year because it's not just like we give you a course and off you go and good luck. This is a very guided course. Because again, we try to do this as a very high yield thing. We have weekly live Q&As. We have experts come in and we make sure you're supported along the way. And I always tell people, I just want there to be no risk for anybody when they do this thing. You hear about these courses. You're like, I don't know if it's going to be worth it. I don't know if it's right for me.
So, I tell people, honestly, we do a whole 30-day money back guarantee because I want you to see basically the entire course. And if you tell me that you don't feel like you're going to get at least 10 times the lifetime value of this course, let me know, we'll get you hundred percent, I'll give it back to you. And so, people who have taken our course have invested and have been able to take that leap. And those people have created cash flow in a year that has been multiples of even the investment in the course. And so, I think that's an opportunity for a lot of people. There are a lot of other great resources out there, by no means do I think this is the only one. But I think for physicians and busy professionals who want to get into this, see opportunities, have that community, I think it's a great resource.
John: I know a little bit about it and I think it's a fantastic resource, but I was reflecting, I was thinking about there's statistics out there that say like 80%, 90% of online courses that are bought, the people never get past like the first day. But I can tell from what you said, it's like, you have a group, you have interactions daily. It's sort of you're walking them through it. So, if they get in and they start it, they're going to finish it because of the engagement that you've created.
Dr. Peter Kim: Right. We also do accountability partners. That's one thing too, like just to solve those kinds of issues is what I found is that we don't want to put it on a course and you don't get the results because that doesn't help anybody. And so, we want you to take the course, really become confident, tell everybody else about it, get results, change lives, these kinds of things. And the only way to do that is get through the course. So yeah, we've tried to build in mechanisms for that.
John: Is there sufficient flexibility? Is it something that I have to log in every day or a certain time of the day? Or are there a combination of videos and live at the evening? How does that work?
Dr. Peter Kim: Yeah. It's a combination of videos and live. And so, all the live sessions are also recorded just in case if you need it. But you can take it at your own pace. We drop like a module every single week. And again, busy professionals, high yield. Like these are things you could watch or listen to. A lot of people say, listen to it on their commute, right? Or in between cases or in between patients, you can fit in wherever you need. And then we have the live support if you need. In our real estate, we do coaching. We have other people come in to help coach during this whole period. We have an expert live Q&A's, but that all goes into a library for you to have access for life.
We do these live components and some people say, you know what? This happened to be a bad season in my life. Like something happened. And we tell people, sure, you have access to it for life and all the updates that we do. And then they just join in sometimes with the next cohort and go live. And we don't make anybody pay any extra for that. This whole alumni club that we have, we call it the Platinum Investor Club. We don't charge anything extra for that. There are no membership fees, you're part of it. Once you're part of the group and part of the alumni, you're part of it forever. And so again, we are continually making updates to it. In fact, we are going to add a little bit more meat on the whole tax section right now, because that is one of the most important parts of this whole thing. So, we beef that up this time, but again, everyone who has bought the course in the past for whatever price it is at that time, they get access for life.
John: The thing I like too, as you said, there's the alumni. So, if I go through the four weeks and I'm in the middle of trying to set something up or pursue something that I just go and bounce that off to a bunch of other people and say, "Does this sound legit? And do you know the person here or this group that's promoting this?" And you can get some pretty good feedback, it sounds like.
Dr. Peter Kim: Yeah, yeah. With each iteration of the course, the group actually gets stronger. And so, stronger, smarter, and again, more leveraged to go out there and get better deals for people.
John: So where are we in your scenario here on the 27th? It's kind of hard for me to visualize.
Dr. Peter Kim: We have probably about a week left of the launch. So, we will close doors on May 2nd. And again, the reason we do this in batches, we only do it twice a year is because it's so intensive with the live. You know what I mean, we put a lot of time and energy into making sure the class gets through it, that we only offer it twice a year. The first module starts on the 5th. So, May 5th is when we drop the first module, but again, people can take it whenever they want, within a week, within two weeks, whatever it might be.
John: But we've got to get them in if they're going to do it by the 2nd. It shuts down at midnight on the 2nd something like that?
Dr. Peter Kim: Yes.
John: All right. Well, I think I have the links that I can put in the show notes. Is there anything else we need to know at this point?
Dr. Peter Kim: Regardless whether they take the course or not, again, I'm just a big fan of creating other streams of income. Whether it's nonclinical or whether it's through some of these other investments. I think ultimately, it's so important for physicians to feel that sense of control and the way to do that is by having that income that isn't tied to your normal clinical day job trading time for money. And so regardless if that's the message I could spread out there and that helps people, again, I'm all for it.
John: Well, yeah, in my mind, I'm thinking, "Take this job and shove it". Sometimes you just reached the end of your rope and if you have some other sources of income and you can kind of lay back a little bit for a while and rethink what's going on, definitely it's better than if you're desperate and deeply in debt and have no cash coming in.
Well, I really appreciate you taking the time to come back and give us the update on this. Because I know some of my listeners will definitely take advantage of it and they wouldn't want to miss it. And unless they're already following you, they might not even know this is going on. So, thanks for taking the time and talking to us about it.
Dr. Peter Kim: Great. Thanks John. Just one last thing to mention is that we will also have one free masterclass that I'm going to basically teach for an hour about a lot of things that I've learned about passive real estate investing, why doctors need multiple streams of income, what are their options with passive real estate. We talked about some of them and then ultimately the whole roadmap for them. There is a free master class that I give. So, it's going to be on the 29th. And then, I think you'll be able to leave a link for them somewhere in your show notes, but they can just join in and come in through free class. And if they get value out of that, then fantastic.
John: So, they can get an extended version of today's conversation with you. It'll be about an hour?
Dr. Peter Kim: Yeah. Yeah. That'd be a live session, live Q&As, we'll do some giveaways. We'll have fun with it. And go from there.
John: Okay. I'll definitely let them know. I'll get that out in an email and we'll be talking about it on the podcast a couple of days before that happens. All right, Peter, I will let you get back to your life and I'll get back to whatever I was doing before. We just had some crazy days here. I think both of us. So, I really appreciate you coming on and I'll talk to you again in the future.
Dr. Peter Kim: Okay. Thanks John. Take care, everyone.
John: Bye-bye.
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