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Real Estate

CallumConnects Podcast – Gurpreet Padda

Gurpreet Padda – My biggest hurdle as an entrepreneur.

Welcome to “CallumConnects.” Five-minute entrepreneurial inspiration for your day. Joining us today on “CallumConnects” micro-podcast is Gurpreet Padda. Dr. Padda is a serial entrepreneur who started rehabbing houses and repairing diesel engines while in high school, before entering medical school at the age of 17. His secret power is his ADD and curiosity about how things work.

– A hurdle I’ve faced as an entrepreneur is also my greatest strength. I have horrendous ADD and I have shiny object syndrome, and I’ve had that ever since I can remember. I started a company when I was probably 14 years old while I was in high school. And I loved science but I loved taking things apart and I loved construction as well. So I ended up doing a construction company and then starting a company that fixed diesel engines, and I did this all while I was in high school. But I was so curious about anatomy and physiology that I went to medical school. I got into medical school when I was 17 and then I ended up graduating when I was, it was a six-year program, so I graduated when I was 22 or 23 years old. I’ve got an incredible curiosity about how things work and that often leads to a lot of nonsensical learning or appearingly nonsensical learning. So I end up getting curious about something and doing a deep dive and learning everything that there is to know about it and then I get distracted by my ADD, which says, hey, this is something interesting over here. And what that does is it allows me to learn and deep dive on things that appear non-related and then my ADD interrupts me and I end up jumping to another topic eventually. And often I’m able to reconnect a variety of different topics. So what I ended up learning from this is essentially use that superhero strength of ADD to learn and to move from topic to topic, but then use the overarching entrepreneurial mindset to give it application, to come up with a cohesive theory and a business model of how to get things done. One of the coolest books that I’ve ever read is “Who Not How.” And so I’ve been able to use some of those concepts more and more, which is not necessarily doing a deep dive into every single aspect of every single thing, but finding experts that already know that and engaging them, learning from them. And that way I’m not spending forever learning about a topic that I had no interest in. I ended up starting an entire restaurant company because I was curious about the food production system. I ended up with five restaurants before I knew it. And I was interested in fermentation and ended up starting a brewery. So this can really get out of control. And I’ve found that in order to channel that correctly and do it the right way, I have to be able to bring other people on board who will keep me in check. I have an amazing business partner that helps keep me in check. And I think that the ability to rely on others to kind of self-monitor our own behavior, that you trust these others, is really valuable. The ADD permits rapid reiteration of concepts. And it also allows you to abandon concepts that are less than ideal, but only within the context of getting assistance from other people. I don’t think that if I had other great people around me, I would be as successful.

– If you have enjoyed today’s show or got any value from today or previous episodes of “CallumConnects,” do please subscribe and leave a review. It means the world to our guests to be able to see what they’re sharing has led to your learning.

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Real Estate

The Journey of a Physician and Real Estate Investor with Gurpreet Padda, MD

This week’s episode is the first in a two-part series that features Gurpreet Padda, MD. He is a private practice physician out of St. Louis, Missouri, who runs Reversing Diabetes MD and Padda Institute Center for Interventional Pain Management. Dr. Padda also runs Red Pill Kapital, which is a real estate investment development and management company. He is an advocate for educating private practice physicians on passive wealth strategies through owning real estate.

In this episode, we talk about…

[5:05] Getting into real estate as a teenager

[6:08] The desire to have a life outside of the hospital

[9:05] Characteristics that are more relevant than your education when it comes to owning a business

[10:30] The applicability of medical training to real estate

[11:09] How Dr. Padda decided on his medical specialty

[12:39] How capital flow impacts our health as well as the real estate market

[15:17] The importance of investing in real estate for your practice(s)

[16:31] How to decide where to purchase real estate for practice locations based on patient perspectives

[17:33] The effect of the pandemic on retail real estate

[21:28] Selling restaurants before the pandemic began

[24:14] Educating clinicians on creative passive cash flow and equity growth

[25:22] Why physicians tend to make financial decisions based on narcissism

Links to resources:

Reversing Diabetes MD: https://reversingdiabetes.com

Padda Institute Center for Interventional Pain Management: https://painmd.tv

Red Pill Kapital: https://redpillkapital.com

Categories
Real Estate

Dr. Gurpreet Padda: Creating Wealth with Real Estate for Healthcare Professionals

OVERVIEW:

Jason A. Duprat, Entrepreneur, Healthcare Practitioner and Host of the Healthcare Entrepreneur Academy podcast speaks with Dr. Gurpreet Padda, MD, MBA and entrepreneur. Dr. Padda is an avid real estate investor. He shares the lessons he has learned as an early entrepreneur and also provides tips for healthcare professionals interested in creating wealth through real estate investment.

EPISODE HIGHLIGHTS:

Dr. Padda grew up in India during war and uncertainty. He moved to the US when he was 8 and started his first business at the age of 10 selling cards door-to-door. At 16, he had a team of 30-year-old men working for him. He states – I was an entrepreneur before I went into medicine. Dr. Padda made it through medical school by hustling, which he did through real estate auctions. During his first year of residency, Dr. Padda rehabbed an eight-unit building in Chicago. After his residency, he went into pediatric anesthesiology for heart, liver and lung transplants. His medical path also included addiction and interventional pain management. Dr. Padda’s practice has 7 locations and he provides $1.5 million in free care. “Option” is when you purchase a sale contract with an option to buy. You have three months to decide if you want to buy and the price is held at the same level. If you decide not to buy, you’re usually only out $100. Dr. Padda uses option contracts, where he’s looking at zoning and municipal plans. He researches what’s being planned for development in the area. Option contracts are low risk and offer a high reward. There are two types of wholesaling. “Ugly” includes houses below $80k requiring a lot of work. “Pretty” is when someone wants to sell and is having a hard time finding a buyer. This option provides great margins and it’s the one Dr. Padda recommends physicians to use. Dr. Padda also recommends going big with real estate vs buying single units. Cap rate is the net operating income divided by the price. Become a passive investor with somebody first, watch and learn from their mistakes, and then become an active investor. To get started in real estate investing, talk with people you know. Work referrals through friends and contacts. Don’t blindly trust people on the internet.

3 KEY POINTS:

The most valuable resource on earth is not money but time. You have to look at both active and passive methods of gaining wealth. Passive income is what people pay you while you’re sleeping. The biggest impediments to becoming wealthy are ourselves and our taxes. The number one impediment is our personal wealth operating system and how we think about money.

TWEETABLE QUOTES:

“Time is like a water hose and you’re watering a particular concept or project. The more water and fertilizer you apply to it, the better it grows.” – Dr. Gurpreet Padda

“I think entrepreneurship is the ability to ask questions of yourself, realizing you don’t know, and then trying to figure out the answer.” – Dr. Gurpreet Padda

“Leverage what you know.” – Dr. Gurpreet Padda

RESOURCES:

Red Pill Kapital: https://redpillkapital.com/

Dr. Gurpreet Padda’s LinkedIn: https://www.linkedin.com/in/gurpreet-padda

Michael Blank podcast: https://themichaelblank.com/podcasts/

Adam Adams podcast: https://podcasts.apple.com/us/podcast/creative-real-estate-podcast/id1285094279

Categories
Real Estate

Section 8 Multifamily Ownership to Build Wealth

The Section 8 Housing Program offers financial assistance to access low-cost housing, sometimes referred to as the housing choice voucher program.

According to the latest figures, about 2.2 million households by low-income earners receive subsidized rent through the section 8 housing choice voucher program.

Since the government takes care of a large chunk of rent payment, the section 8 multifamily subsidized housing program has a massive advantage over traditional rental contracts. We examine how a shrewd property owner can tap into the program and build wealth.

What is the Section 8 Program?

Under the program, the government pays a percentage of the tenant’s rent directly to section 8 landlord whose property is in the listing.

The U.S. Department of Housing and Urban Development Management (HUD) funds the program by paying, on average, 70% of a section 8 tenant’s rent and utility bills.

A family must typically earn under 50% of the median income in a given area to qualify for HUD Section 8 relief.

Section 8 Multifamily Home Ownership

Homeownership and maintenance under the program can involve financial support from the HUD. The owners can also access conditional government subsidies when renovating, building new homes, or putting up properties for a mortgage.

The homeowner must set aside units to house the low-income American population under the section 8 housing list.

Section 8 landlord application can be lengthy and costly, involving a lot of paperwork, a waiting period, and property inspection. It can take up to 5 months to get approval.

Multifamily homes are properties with up to4 units, and still qualify as a single residence from lending standards. These can be townhouses, duplexes, triplexes, or apartments with up to four units.  Five units and above are multifamily, but usually require a commercial mortgage.

Most multifamily dwelling property owners rent them out to residents. They are great for generating a higher monthly rental income with lower maintenance costs, so you can rely on property to build wealth over time.

Vouchers under the Section 8 Housing Program

Section 8 includes two types of vouchers for the tenants– The Housing Choice Voucher Program and the Project-Based Voucher.

The Housing Choice Voucher program allows tenants to choose any unit within the section 8 program.

The Project-Based Voucher ensures that the federal rental assistance stays within the selected housing unit and is often more profitable for the owner.

Advantages of Section 8 Multifamily Home Ownership

 

1. Easy Bank Financing

For real estate investors with a record of handling rental assets, the bank can use the projected rental income from the units to finance down payment programs for multifamily homeownership.

2. Certaintyof Rental Income

Upon qualifying for the Section 8 program, the HUD agrees with the property owner on the expected rental income, per the Fair Market Rate. The landlord will receive monthly payments from the government, even when there’s a recession.

3. Occasionally Higher Rental Rates

As an incentive, the government often includes an annual 5 to 8% incremental increase on rent payments. The rate could translate to a better deal than what they would get from the open market.

4. Increased Occupancy Rate

Qualified and listed property multifamily homeowners get access to a vast pool of would-be tenants on the waiting list. The list can have 2 million or more Americans at any given time. That means minimal vacancy issues, reducing your marketing budget significantly.

5. Stability of Rental Income

The federal subsidies make multifamily homes in the Section 8 program suitable for long-term tenancy, as the tenants are likely to stay longer in the units.

 

Building Wealth through section 8 Multifamily Home Ownership

Investing in several multifamily homes is a remarkable way to achieve long-term cumulative wealth. Here are some tips to consider when investing in section 8 multifamily homeownership:

a) Choose and manage tenants wisely

While renting out the multifamily units under Section 8, you pay off your mortgage from the tenants’ rent. Hence, liabilities go down, while in almost every instance, the property’s value goes up.

In this case, there comes a time when the mortgage is zero, and the income is primarily profit. Therefore, you can obtain more multifamily property, which you can scale to millions of dollars in wealth.

b) Ready Investors

The multifamily concept is more investor friendly as compared to single-family units. In this case, when you need financing, you bring the deal to the table while investors bring the money on board. Later, the profits get split as agreed.

c) House ‘hacking’

When you own a multifamily home, you can live in one of the units while renting out the rest. The tenants’ rent caters to your housing expenses, and you can save up over time.

d) Add more rooms

A sure-fire way to increase your rental income is to follow the BRRRR (buy, renovate, rent, refinance, repeat) strategy. Additionally, it would be best if you thought about increasing the number of rooms.

There’s a healthy market for multifamily homes with more than four bedrooms, but a chronic shortage for them:

Source: U.S. Department of Housing and Urban Development, Multifamily Properties: Opting In, Opting Out and Remaining Affordable.

For example, a single home will make you $150 in profit per month, but a duplex will rake in $300, while a four-unit multifamily will fetch $600 within the same timeframe.

Bottom Line

Scaling up wealth from multifamily units has a longer time horizon, is not entirely problem-free but is assured, especially when listed in the Section 8 program, whereby there is the assurance of monthly government payments.

It gets better over time as you can hire property managers to run it on your behalf, and you can adjust rental prices upwards after periodic renovations.