Dr. Jeff Anzalone, CEO of DebtFreeDr.com
Grow Your Network of Real Estate Investors to Include Physicians
My guest today is a fellow called Dr. Jeff Anzalone and he runs a website called Debt Free Doctor. Jeff is a Periodontist, based in Louisiana and his mission is to help other doctors become debt free and invest in real estate.
Today you’ll hear about his journey into and through real estate and crowdfunding. Jeff learned the hard way about real estate investing and his story is a lesson to us all. He shares his insights into the way that doctors and medical professionals think, you'll hear him describe the way that medical practices are actually run, the (unexpected) challenges that doctors face, and much more.
What You're Going to Learn
- How to Approach the Physician Network to Raise Money for Real Estate Deals
- Do Real Estate Developers Pitch to Doctors and Physicians Differently?
- How to Understand the Physician’s World before You Pitch a Real Estate Deal
- How Instead of You Working for Your Money, You Should Make Your Money Work for You
- What Drives Physicians to Consider Real Estate Investments
- Why Real Estate Developers Need to Build Trust with Physicians before They Will Invest
- A Few Places a Real Estate Developer May Find New Prospects
- How Understanding What People Search on Google to Drives Business Your Way
- A Physician’s Real Estate Investment Income during Uncertain Times
- How Debt Free Doctor Moved into Real Estate Investing
- What Was This Doctor’s Hardest Lesson in Real Estate Investing
- What Real Estate Developers Who Want to Raise Capital from Physicians Need to Know
- And much more!
Listen To or Watch the Full Podcast Here
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Approaching the Physician Network to Raise Money for Real Estate Deals
ADAM GOWER: So, you and I chatted a little bit by email before. You have got a website where you, by the looks of it, raise money for real estate. Tell us a little bit about what it is that you do, and you focus on the physician network, let's put it that way. So, one of the things that I did want to talk to you about was, what should a sponsor/developer keep in mind, specifically, when trying to raise money from doctors. Let's drill down on that topic. So, I'm going to let you start with that very broad, open-ended question.
DR.JEFF ANZALONE: I think the easy answer to that question would be, put yourself in their shoes. And, I don't think people do that. They automatically think, hey, here's a doctor, they make a lot of money. They've got this big "S" on their shirt, that doesn't stand for "Superman". It stands for "Sucker". You know, and being a doctor, I can certainly attest to that. Being pitched, many different, you know, products and services over the last, you know, 15, 17 years, of my practice. So, we become leery about that. You know, any time now, somebody wants to tell us something, whatever, it's almost like a reflex action. Hey, you know, what are you trying to sell me? And, you know, I would say, I would focus more on building trust with that person, educating that person, sort of, trying to figure out how to get into their circle of influence. A perfect example is Bernie Madoff. He was very good about that, you know, because once, you know, we have such a small circle of influence typically, and once you are able to penetrate that area, then you're in, basically. So, I would focus more, from that perspective.
Do Real Estate Developers Pitch to Doctors and Physicians Differently?
ADAM GOWER: Why is it any different? Why are doctors, you think, any different? Do you think that real estate developers, when they pitch doctors, particularly, pitch them in a different way than they do, say, a tech entrepreneur or, I don't know, an accountant or a business owner? Are you treated in any way different? It seems to me that the idea of approaching a doctor, thinking there's a big "S" on the front, as a "Sucker". I can't imagine that because, you're quite bright. I mean, you've been to university for about 40 years before you're allowed to practice, so you can't be a sucker. Tell me more about what you think and what does that mean and why is it any different than any other industry?
DR.JEFF ANZALONE: Well, I've been around other doctors long enough to realize they.... this is just a, sort of a, general idea. I mean, this is not every single person is like this. But, the general consensus is, hey, they have this arrogance to them and they think that they're smarter. Hey, I've gone to school for so long. I've typically made, top in the class. Made great grades. They think they know everything about everything. And, it's just, they have that, sort of, air to them. Now, again, I'm not saying everybody is like that, but, whenever you talk to these people, these other doctors, you know, it seems like that, you know, a lot of times they're easy prey. Because, you can just promise them something, and, you know, a lot of times they want to be the first to get, you know, whether they get in a deal first or they want to be the first one, where they can brag to their other colleagues. Hey, did you invest in this stock or did you invest in this deal? I made all this money, and, so, it's a lot of pride, part to it as well.
Understand the Physician’s World before You Pitch a Real Estate Deal
ADAM GOWER: So, as a real estate developer, how do I want to communicate with physicians? Do I want to assume that they do have a high level of understanding of real estate and, kind of, discuss it from a detailed, sophisticated way or do I want to start at a "101-level" and then dive deep? What's the best approach, do you think?
DR.JEFF ANZALONE: You need to figure out what's in our mind and meet us there. And, unless you, you know, can empathize with, what we're dealing with, because, you know, the general public typically thinks, hey, there's a guy, he's a doctor, he's got it all under control. He's got the lifestyle, he's got the money, he's got everything. And they don't realize, the amount of debt, that we have. The amount of taxes that we have. How prevalent burnout is. And, once you start learning about that, then you're able to figure out, what benefit could real estate have. With, meeting those issues and I think that's why my blog has become so successful, so quickly, is because, I am the prospect, you know, I know what they're going through. I deal with it every day and I talk their language and it's just been really easy for me to do it because, you know, I'm dealing with the tax issues and I'm dealing with how real estate can help with that and the burnout. You know, people are just miserable. Well, real estate can help with passive income. To get you out of your practice if you want to. So, I think that, from my point of view, that's really helped a lot.
Instead of You Working for Your Money, Your Money Works for You
DR.JEFF ANZALONE: I'm sure your listeners are familiar with Robert Kiyosaki. As a doctor, I guess the light bulb really comes on a lot of times when we discuss the cash flow quadrant. And, once we realized that, hey, we're nothing more than an employee or a self-employed person, we're trading time for dollars. So, I think that would be, one of the top, if not, the top thing that it solves. It helps us go from the left side, which is, "the poor side" to the right side of the quadrant. Which is, instead of you working for your money, your money works for you. And I think real estate really helps with that. I mean, wouldn't you agree?
ADAM GOWER: It sure does, yeah, absolutely.
What Drives Physicians to Consider Real Estate Investments
ADAM GOWER: What I did find with doctors was that, one of the driving motivators to invest in real estate was replacing existing income. And it's interesting that you described that as being, kind of a, an hourly...your time is money. You can only earn as much as you work, hours to the day. So, the nice thing is that, if you can invest some of that money, that replaces that, if you like. I mean, I'm thinking about guys that are moving, obviously you're much younger but, for guys that are moving towards retirement. How do I maintain my standard of living, in retirement, when I stop working". How do I that?
DR.JEFF ANZALONE: Typically, the insurance reimbursements go down. We have to dedicate more employee time to filling out more paperwork for insurance. So that means that, we have to see a higher volume of patients, which means we have to work longer. So, we're having to go through all this, just to barely maintain or even be a slightly less, the income level as previous years. And it just keeps getting worse and worse each year. And I think after doing that for 15, 20 plus years, that's when people really start to have the burnout creep in.
Real Estate Developers Need to Build Trust with Physicians before They Will Invest
ADAM GOWER: A real estate developer has exactly what an investor wants. They offer wealth development, you can build your wealth if you invest with me, and I'll pay you passive income. That is exactly what investors want. And yet, investors are instinctively skeptical and suspicious, when they first meet a developer. So, how do doctors come to trust developers? You presumably have the same skepticism. What does it take to earn the trust? You talked about the circle of influence. What is that exactly? In practical terms, what does that mean?
DR.JEFF ANZALONE: Here's a good example. I remember when I first got out of practice. This was, you know, some 15 plus years ago and was just starting to invest, like, you know, in a retirement account. So, I started doing that and there was a a local dentist here, that was, I thought based on the practice he had, the cars he drove, the house he lived in, looked very successful. So, he sent out an email to a lot of the people in the dental community to tell them that the person, his financial adviser group, that was from Texas, that has helped him be very successful was coming in to our area in Louisiana to give a talk and a dinner. And, I think that right there is like, oh, hey look at this guy, he's real successful and here's the person that helped him. Shoot, I'm in, boom. There was nothing more to that. And, what was even better was, they had to break it up into two separate outings because there was so much interest, you know, they couldn't fit all the people in the room. So, that's a good example of how to do that, to win the trust and get into the circle of influence, who you deal with on a daily or weekly basis.
Places a Real Estate Developer May Find New Prospects
ADAM GOWER: What about for a developer? Where are the great places to go? Not to learn about real estate, but to find doctors who want to invest in real estate, other than your website?
DR.JEFF ANZALONE: Ok, go back to the Robert Collier principle. Meet your customer where he is. So, where is that doctor going to be online? Well, it's not going to be the guy that's looking for COVID treatments. Where is that guy going, to learn about finance? Maybe not so much real estate, but learn about money. And once you figure out, and Facebook groups. And again, I'm not a big IT person, and I'm sure there's people out there that could teach me or teach other people how to search Facebook groups or, you know, whatever, to figure out where those people are. But, meet those people where they are and then just start educating. You know, one of the the ways that I met one of the guys that helps me with my practice website was, I found him on a forum. It was for dentists only. And, all he was doing, he never said anything about his website. He was just answering questions, as people would post them. And then, in his little signature, was his contact information. So, it was very discreet way to organically acquire, you know, clients.
ADAM GOWER: Isn't that interesting? That's a way of building trust.
DR.JEFF ANZALONE: Yeah.
ADAM GOWER: That's how you develop a relationship. You communicate, you provide value. You are selfless and it develops a relationship. You develop a relationship with people that way.
Understand What People Search on Google to Drive Business Your Way
ADAM GOWER: What's the biggest challenge you have finding new patients? How do you do that?
DR.JEFF ANZALONE: Two main sources are from other dentists. So, I focus on networking with those local dentists. And then, the other way is online, you know, figuring out what they're searching for. And, one of the ways that helps me get better each month is, whenever somebody comes to see me, I'll ask them, well, how did you hear about us? And if they say, well, I found you online. Well, I'll ask, do you remember what you were searching for? And if it's something off the wall, that I'm not already, you know, running Google ads or something like that for, then I will pass that along to the person that handles that for me. Because, you know, I'm thinking more in technical terms, like an implant supported denture, whereas they're like, oh, yes, I searched for "snap-on teeth". What is snap-on teeth? But that's, you know....
ADAM GOWER: It's what they searched for, right.
DR.JEFF ANZALONE: It's what they search for. So then, I'll ask my guy. Is that a keyword? And he's like, no. And we'll add it to it and then test it.
A Physician’s Real Estate Investment Income during Uncertain Times
DR.JEFF ANZALONE: We think, hey, I'm always going to have this income and what's the big deal about getting a $100,000 car lease? But, what happens when COVID hits, that you never, you know, what is that called, like the Black Swan event? Nobody sees it coming. And, you know, we're shut down for two months. And, there was a lot of other states that were shut down, a lot longer. So, you get somebody 2, 3, 4 months or more without any income coming in. They still have bills to pay. A practice, you know, employees to pay or supplies or whatever. It's tough. So, that's what could happen.
ADAM GOWER: And real estate, picked the right way, can help alleviate that, kind of....
DR.JEFF ANZALONE: Uncertainty.
ADAM GOWER: Yeah,
DR.JEFF ANZALONE: Yeah, because we talked earlier about, you said, you wanted three things and we said the first one was regarding the trading time for money and I think the second one would probably be that. You know, having some sort of, lowering your risk. You know, the older we get, the less risky we want to be. So, I was 99 percent, in the stock market, before real estate. You know, I was in index funds and knew that I needed to lower my risk and I needed to diversify. So, real estate is a, you know, asset class that can help with that.
How Debt Free Doctor Moved into Real Estate Investing
ADAM GOWER: I'm interested in knowing what it is that you're doing over there at Debt Free Doctor. Tell me more about that.
JEFF ANZALONE: Well, it started off as a blog, just teaching people about my experience with practice and finances and the mistakes that we've made and hopefully the same people wouldn't make the same mistake. And then, about a year and a half ago, because we were getting more and more into real estate, I decided to make a switch and focus mainly on real estate for other doctors and health care providers. And it was just information. And then, last year, I learned about the possibility of working with people to help raise capital. I mean, I had no clue about it. And I got into it a little bit and, this past year, right as COVID was hitting, was given a deal to try to raise capital for. But when all of that happened, you know, a lot of people got scared and like, I can't invest anything, because I don't have a job. So, that really didn't go real well, which, I don't know if I really should count that as the first time I've raised capital, but it really was. And then, the second time that I've helped people with a deal was just actually, last month. So that was really my "first time" to go through the whole process, send out emails and that sort of thing. And, I really like it because I'm able to provide other doctors with good deals with sponsors that I've vetted and that sort of thing. So, they really trust, you know, that. So, I guess, I'm kind of, the spokesman. So, I guess if your sponsors can maybe find, like a spokesperson, that other people would trust. It's just, kind of, happened that way with me.
A Doctor’s Hardest Lesson in Real Estate Investing
ADAM GOWER: What has been the biggest mistake that you have made in your career? And I would say, in real estate, but you've not been in real estate for that long. So, let me ask you, just kind of general career, biggest mistake you've made. It's the wrong questions sorry. Hardest lesson. That's my question. Hardest lesson learned.
DR.JEFF ANZALONE: Which actually has to do with real estate. I started off with crowdfunding online. $1,000 here, $2,000 there. Thought I knew what I was doing and decided to step it up. Invest in a apartment complex, it was a syndication in Tulsa. Wound up, every investor lost all of their money. Lost 50 grand. That was a, a pretty big deal. And, that actually helped me because I took a step back to realize I didn't know what I was doing and I really started learning about it. And then from there, that was sort of the catalyst to start teaching people about my failures and then now, what you should look for instead of just looking for the returns, the best returns and the prettiest pictures on the website.
ADAM GOWER: That's a hard lesson Jeff.
DR.JEFF ANZALONE: That it is.
Real Estate Developers Who Want to Raise Capital from Physicians Need to Know This
ADAM GOWER: For a developer, who wants to raise money, from doctors, what would be the most important thing, they should keep in mind?
DR.JEFF ANZALONE: Probably, what we talked about before. Finding out, what the target audience, which in this case, a doctor. What are their pain points and then providing benefits to each of those pain points that their product or service could alleviate. So, for instance, I used to always try to explain to patients, hey, a dental implant is a screw that goes in your bone and this and that. They don't want to hear about that. They want to know what the benefit is. It's going to allow you to to chew better, build your confidence. You can smile. Once you start talking in those terms.
ADAM GOWER: You talk about the benefits. That's what sells.
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