EPISODE 02
[INTRODUCTION]
00:00
Announcer: The Limited Partner shares in the potential outsized returns of a well-planned and executed investment. But as a passive investor with no day-to-day operating requirements, whose liability is limited to the extent of their share of ownership, the limited partner has the maximum leverage on their most precious asset – their time. Now, they say you're the average of the people you surround yourself with. Are you looking to elevate your network, connect with individuals that bring your average up? The Limited Partner is more than just a podcast. It's a community to learn, to participate to connect. There's no other community out there like this for limited partners. So, subscribe to the podcast. But most importantly, join the community at thelimitedpartner.com. Welcome to the podcast with your host, Jake Wiley.
Jake Wiley (JW): Welcome partners. This is your host, Jake Wiley. This week, I'm joined by Dr. Jeff Anzalone of Debt Free Doctors. Jeff, welcome to the show and thanks for being here.
00:00:56
Dr. Jeff Anzalone (JA): Yeah, thanks for having me. Looking forward to our conversation together.
00:01:00
JW: I am too because this is gonna be a little bit different than probably the conversation I have with with most folks because you are a practicing doctor, and you have a very targeted market. So, I'd love to hear how did you get where you are, like, tell us your backstory?
00:01:12
JA: Well, I always thought I wanted to go into the medical profession early on and had some relatives and friends or their dads were physicians, dentists, that sort of thing. So, I wind up going through dental school, and then a surgical residency at LSU down to New Orleans. But unfortunately, the deal fell through I was supposed to join a practice back in my hometown deal fell through two weeks before graduation. I think that really affected me financially a lot as far as my mindset, because when I was in residency and all that, you know, when you're getting out, you kind of think, well, I'm gonna have a pretty decent income. So, I'm not too worried about debt, student loan debt, that sort of thing. But when you have all that taken away, I really went into a big scarcity mode. And that affected me a long time, you know, almost 10 years. And it also affected the way that I invested because it was, there was only a certain amount to go around, didn't want to lose anything. It was very conservative when everybody else did 401k, you know, mutual funds, that sort of thing. And really got on top of the debt, used Dave Ramsey philosophy really attacked it real well. And then got to the point where we were debt free, had some savings, but it was kind of like, you know, now what, and I had a minor snow skiing accident that injured my wrist. And that really got me thinking that was a wakeup call. If I can't work with my hands, then what do we do, there's no other streams of income coming in. So, I think that was the real catalyst to me starting to look at other streams of income, specifically passive income, which eventually led me to real estate.
00:02:47
JW: That's a really, really interesting story. So, Debt Free Doctors, obviously, you have identified that you are not the only one that came out of medical school with probably significant debt, and really a lot of uncertainty about what the future holds. So is are you talking to other doctors is that is that kind of a strategy sharing the love?
00:03:05
JA: When I first started my blog, it was that's what it was geared towards just a lot of the mistakes that I've made and sort of what I was learning along the way. But the more that I got real estate focused, and if you go on the blog now debtfreedr.com you'll notice that the majority of the articles or focused on real estate or passive income or the mindset around going that route with your career and started a YouTube channel a few months ago really enjoying that, it seems like I connect more with the audience. You know, when you get to see somebody, it's different seeing them speak versus just reading an article. So that's been real fun. I got to interview Grant Cardone a few weeks ago, so that was really cool. Connect with him and see how people like that think and process things. It's pretty amazing.
00:03:53
JW: Yeah, for those of you that are not familiar with Grant Cardone, check him out. He's got plenty of energy. He's got a great story, too. So, in terms of your audience, I guess who's following your blog? Do you find that you have a lot of doctors or is it really expanded?
00:04:07
JA: At first it was but now it's all sorts of high-income professionals I guess that are just in high-stress professions like law, engineering, other accountants, airline pilots a little bit everything. So, I would probably say it's more targeted to people in the health care profession, maybe 70-75%. And then the rest, a little smattering of other things.
00:04:32
JW: I like your point about the high-stress professions too. There's a lot of folks, you know, like you like I'm a CPA, that's my background, where you're trading hours, right? And you get to the end of the day and put in everything you've got into your work. And at the end of the day, you're left with what do I do now? Right, and there's not a whole lot left that you can give. So, thinking about how do you invest appropriately and then how do you learn how to invest appropriately right, because the idea is that you're a passive investor. So, there's cash flow coming in. It's not an adding to your the stress of having another job. The idea is finding good investments. But tell me what you've learned along the way. And you know, as you've communicated with folks, what seems to be resonating the best with them about kind of getting into passive investments and in real estate?
00:05:17
JA: I like what Grant Cardone teaches. He teaches that specifically what you're talking about professionals, our best wealth, building tools, our income, we spent all this time and money and effort getting a law degree, getting an accounting degree, getting a medical degree, whatever, that's where your money is best spent. And I can't tell you how many times I've spoken with people, specifically doctors that they just started learning about real estate, and they want to start doing it all themselves. And I'm not saying they can't do that. But again, think about how much time they're gonna have to take away from their number one wealth-building tool, is it worth it? Is it worth sacrificing all that time versus what you've already put in? Is it worth sacrificing all the time you're gonna miss with your kids growing up? So, there's a lot of what-ifs, but if that's what you want to do, that's fine, but he's real big on and I agree with him, Grant Cardone, about get really good at what you do, whether it's a dentist or an accountant, lawyer, whatever, because the better you get at something, the more money you're gonna make, right? And the more money you're going to make, the more money you can invest. That's the route that I chose. That's what I teach is, you know, focus on that and leave the real estate and investing to somebody else. But of course, you got to know enough. And so, what I do on my YouTube channel and blog is give people enough information to where they can you know, like, for instance, you're an accountant. Well, does that mean that I need to know every single, you know, in order to do my taxes, right do I need to know, every single thing? Or do I need to trust you to do it for me? Well, of course, I need to trust you. But I also need to be educated enough to where I know what you're doing for me. That's sort of the approach that I take, not being an expert, but knowing enough to find the right sponsors to know the tasks, the right questions to know that when they're looking at a property in South Carolina, or whatever, and they give you this business plan, you know, enough to just oh, but that's a pretty decent deal or no, I’m gonna pass on it. So that's, that's sort of the goal that I have for my audience.
00:07:14
JW: I think that's a great point is that it's not a blind handoff, right? I think that there's there's a tendency for us working professionals at times to kind of just hand everything over and abdicate their responsibility to somebody else, because you think they know better. And probably the majority of the time, it doesn't necessarily work out in their favor, sometimes you get lucky, but you need to know enough to know what you're getting into. And I think that, you know, for example, you pick real estate, right? It would be really difficult for you to do real estate, and then potentially invest in stocks. And then you have a certain type of real estate like all of those things are important to make a distinction. So, you know, enough to be dangerous. So, I guess let's talk about real estate. What's tell me a little bit more about why you like it, and what got you into real estate specifically?
00:07:55
JA: Well, after I had this snow skiing accident, and I knew I needed to do something. Once I started researching, I found that the majority of the two main facts stood out to me, most millionaires had, 90% of millionaires had real estate in their portfolio. At the time, I had zero and the majority of millionaires had an average of seven to nine income streams. And at the time, I had one. So, that told me that I needed to figure out how to build multiple streams of income using real estate. And that's what got me into it and then sent out my wife and we figured out well the active route after we learned about it wasn't going to be right for us because again, it was gonna take time away from my practice and family. Luckily, we found that there was other options such as passive options, mainly with syndications and started going to meetings conventions, connected with Joe Fairless. He helped me really connect with a lot of people, a lot of resources, a lot of educational resources, learned a lot from him. And once I kind of told him at the time, I just I think I've maybe been doing a blog for like a year that I was thinking about taking the information, I was starting to learn about real estate. So basically, as I'm learning stuff, put out what the relevant things that I think you or somebody else should learn. He's like, yeah, that’s probably a good idea and I started to do that. And it did, well, took a while. But it started to do well and then saw where people started asking me what I want to help them with bringing investors to their deals for them. I didn't even know that was possible. I know talking about outside. But, at the time, I have had enough people asking me that were on my email list, hey, can you tell us what deals you're going to invest in? So, there was one particular one that I was going to be investing in September 2020. Not that long ago. And the particular sponsor said, hey, you know, I think at the time on my investor list, I had like 200 people so not a whole lot, but I emailed him said, hey, look, I'm getting ready to invest in this property. I think it was like in North Carolina or something like that, here's everything about it, if you want to invest alongside of me, here's the link with the sponsor, they'll connect you blah, blah, blah. And that sponsor, you know, sent out the email to their list too. So, they had a big list of people. And I sent out one more email, I think 48 hours later, and then the deal filled up, you know, between, you know, majority of them plus mine in two emails, I'd raised like $2.3 million. And it just blew my mind that there's a lot of people out there that are actually wanting this type of information or whatever. So that right there, it sort of changed the course that I started to go and my focus on really helping people connect with the right sponsors. But the little bit different thing that I do is I only recommend people that I personally invest with, whereas a lot of these people out there, they just take the highest referral fee and go, hey, you know, invest with this group. And to me, I don't think that's right, if I'm going to recommend somebody that's gonna be somebody that I'm working with, that's what I want my brand and my site to reflect.
00:11:00
JW: You know, one, I think you're talking around a little bit of a landmine, right, you gotta be really careful, if you're dealing with somebody that's just brokering money, and is not registered to do that, that could come back and get you. So, to your point of, you're just sharing the love with your community of investments that you're making. I think that's great. There is an art and a science to finding the right sponsor to work with, right you need somebody that's got the experience, you need somebody that's got the right credibility and morals, I guess, because there are some less than scrupulous people out there in the marketplace. So I think that's, that's spot on. So, what kind of real estate do you invest in?
00:11:34
JA: The majority is multifamily syndications, we did get into two hotel deals last year, just COVID had obliterated as you can imagine the hotel space, so able to pick up some really good deals on a couple of properties. One of them in just north of Charlotte Holmes, two suites, and then another hotel, literally in downtown Dallas. So, I mean, you know, both of those areas, it's, it's like, it was just like a no brainer, but other than that everything else has been multifamily. And look to be adding some self-storage in the future as well.
00:12:09
JW: You're tiptoeing around another really important point, right, is locations, because that's super key, like you can have properties and they look identical, but the locations are very different. You know, and obviously, the old adage of location, location, location, but it's thinking through your strategy and who you're working with, I think in a due diligence type of mindset, if I'm a limited partner, and I'm truly looking to find the right deal, one thing I would want to know or be comfortable with is the location. So, I guess, talk to me a little bit more about how you get comfortable with location.
00:12:38
JA: Well, being from the south and Louisiana, I know this area, you know, a lot better than if I were to live somewhere else. And what's really cool is the sponsors that I invest with that I helped them bring money to their deals they’ll allow me to go there, they’ll allow me to walk the property with them, they'll allow me, if I can't do that, then they'll have a person there that actually we're on a zoom call together, and they're walking around with their phone, and everybody's holding the call together, and they're going over the business plan. So, it's almost like I'm walking, you know, with them, and really getting to see behind the scenes of what's going on what their plan is for the area, what the growth is like in the area. Once you get that and once you get a sense of that it's much different than just looking at, you know, an offering memorandum and a book, you know, once you're physically, can be there or see what's going on, it really makes much more sense to me.
00:13:29
JW: Since you brought it up. I'm a big fan of Joe Fairless, as well. And his book, The Best Ever Apartment Investing book is really great for a lot of these points have been averaged out to Joe and Joe, like you have been super helpful. Well, you also alluded earlier in the call about some of the mistakes that you've made, that you started sharing what some of your biggest mistakes you can help my audience avoid.
00:13:49
JA: A big mistake actually, wrote an article about it, is how I lost $50,000 in a deal; first deal I did was crowdfunding. And the main mistake from that is I don't do crowdfunding anymore, that with those sites, you're putting trust in a website, and you're not able to meet the sponsors, personally meet them, know who you're investing with. If you're investing 500 bucks or something, it's not that big of a deal. But if you're investing $50,000-100,000 or more, I want to know who you are, where you live, who invest with you. And I get to do that when I'm best, you know, one on one with somebody, like you know, find us with you, or whoever I would want to know a lot about you a lot about your character, your track record, that sort of thing. I think that's really important. Because when I get on calls, people are asking me about specifics of the deal, the rate of return that sort of thing. And I said you're asking the wrong question. It's who the sponsor is who you're working with. You can have a great sponsor and they can turn a bad deal good, but you can have a bad sponsor and they can turn a really good deal bad so it's definitely who you're working with.
00:14:55
JW: Interesting point about crowdfunding is that, and I'm not trying to poopoo on crowdfunding in theory I think it's a great concept, but typically crowdfunding is a platform. Right? So, you really almost have to ask the question, I think this is a good question to ask because like, what business is this platform i and probably more than half the time, it's there in the technology business trying to develop a crowdfunding platform, right? And the outcome is, can we raise money on this crowdfunding platform? Not necessarily, are we experts in real estate investing? And this is our core focus. And this is what we do. So, I think that there's crowdfunding seems easy, right? And it seems like it kind of could be the wave of the future. And I'm not saying that it might not be. But I do think that that is a distinction that you know, for, for my listeners, I'd like you to have in your mind when you think about it is what business is the crowdfunding platform in? Right? Are they trying to be a crowdfunding platform? Or are they investing in real estate? And I think that you got to do a little bit more diligence on that one. So, great point. So, if you can make any changes to the industry, what would you change to make it better?
00:15:53
JA: That's a good question, maybe have, sort of my vision is to build a bigger platform to where somebody came in. And you know, the main thing people are looking for is people to do business with it, that people other people trust, you know, when you go buy something old Zappos or Amazon, and if there's a lot, you know, say you're buying a pair of clay court, tennis shoes, well, there may be 300 different pairs, well, how do you choose? Well, you look at the reviews, right? You want to see what other people are buying and what other people are saying about them? You know, same thing if you know, if I came to Charleston to visit you, and I fell and broke my arm, well, how would I go find the orthopedic person, you know what to ask other people, I just wouldn't the first person that I drove by, and you know, go to I would want to know, you know, who's a good guy to go to. So, I think from talking to people on a weekly basis, they're searching for people that they can trust, yet, they're having a hard time doing that. So, I think that's a big problem right now. And you know, maybe at some point, begin building a big enough platform so when somebody comes in whether they want to invest in real estate apartments, whether they need an accountant, accounting services for the real estate, that's a question I get, a lot of times, I get a lot of legal questions so having attorneys that specialize in real estate, so having all of these different resources, building like a group of trusted advisors. So, I think that would be one thing that I would change. And that's what I'm striving to do as I continue to build my audience.
00:17:22
JW: Yeah, that's a great point. And I think, you know, I've talked to a lot of people in the industry. And I think what you'll find is that it gets pretty small, pretty quick. But you have to have a lot of conversations to start hearing the same names over and over again. And I think what you're really talking about here is making that easier for everybody to get to the right people in the food chain without having to ask a million questions because the local guy might not necessarily be the best bet. But that's probably the easiest. And they may be able to talk the talk, but how do you know, right? And it's reps? It really is reps?
00:17:52
JA: Well, it's kind of like a would you take advice from a 400-pound overweight person about what you should eat? And how to work out? Yeah, no, you mean you need somebody that's, that's walking the walk and talking the talk and that's been there that's successful with it.
00:18:07
JW: Well, I like to wrap up my show with a bit of gratitude, right, I always want to call out somebody in your life, or give you the opportunity to call it somebody in your life that's given you a leg up and helped you see the light and get there quicker than you could have gotten there on your own. So, who, in your, your past, your history, would you like to specifically call out and give a word of thanks to you?
00:18:27
JA: Well, it's a guy that my dad went to high school with, here in Louisiana, he's one of the probably can't be more than five or six billionaires in Louisiana, and really big with real estate. It's amazing that these people that you would think aren't very approachable, that have that kind of money, but they're very willing to share their knowledge. So, you know, if you could find a mentor like that, that that's in your area, they don't have to be in your area, but very willing to share the information and sat down with me for two and a half hours a few years ago. And I got home and I told my wife that I learned more that in those two and a half hours than I did like in four years of college. It was just, it's eye-opening that how everybody has a story and how much you can learn from it. So that was a big shout-out to him. And the sort of the path that he took me on, started me on.
00:19:17
JW: Oh, that's a great story. And last year, in my podcast, I asked everybody if they mentored and if they had a mentor, and you know, most people would say they had unofficial mentors, but kind of my follow-on question to that was, yeah, how did you find that? Did you just and most people just asked, right, they kind of got outside of their comfort zone and they went up and they found somebody that they believed could help shortcut their path forward. And they asked the question, and the overwhelming result of that question was people said, yes, I will have a conversation with you. I will help you. I'll take emails here and there from you. I mean, obviously, it's you don't want to take too much. But the lesson that I learned from all of those conversations is go ask you know, people may seem unapproachable, they may seem too far out of your sphere. But people are generally willing to share their information. And a lot of times most everybody else feels the same way that that you do. And they don't ask, I think that's a great story of here's somebody who didn't think would give you the time of day that, you know, sat down with you for two and a half hours and probably changed your life.
00:20:20
JA: For sure. (Inaudible.) I saw him in a grocery store one day, and I said, you know, and I knew him, but just say, hey, look, you know, I'm thinking about getting a real estate, I'd love to come and sit down with you and ask you some questions. He said, yeah, absolutely. And you know, you know, when people say that, you're like, okay, yeah, whatever. But next week, I called him up. And, you know, this is a busy guy. And I said, hey, you know, reaching back out and want to see if you're still willing to talk. So yeah. And he said, what day works best for you. Because I know you're busy treating patients, I was like, blown away by that. So, we did it on a day where I went in treating patients and he, you know, two and a half hours in his office. And that was unbelievable.
00:21:01
JW: That's a great story. So, call them up. Hey, I'm that guy from the grocery store. You remember me? You're just being nice, dude. That's such a cool story. Well, Jeff, thank you for being on the show. This has been a great conversation. I love the message. I love how you got where you are. Because I think that a lot of us feel the same way. Right? We don't even know where to start. So, thank you for sharing your story and really being willing to share your experiences and the mistakes you've made along the way.
00:21:26
JA: My pleasure.
00:21:27
JW: Well, awesome. Well, thanks again.
00:21:28
JA: Yes, sir.
00:21:29
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