Aileen: [00:00:00] Thank you, everyone for joining today’s episode of the, How Did They Do It? Real Estate podcast, we’re your hosts Seyla and Aileen. Today we have Dr. Brian Evans as our guest. Dr. Brian Evans is a practicing periodontist in Connecticut who received his bachelor of science with honors from Leon College and his Doctorate of Dental Surgery from Louisiana State University School of Dentistry. He also served on active duty with the United States Navy as a staff periodontist in Norfolk, Virginia. Dr. Evans is the author of the book ” Everything You Need to Know About Dental Surgery – A Guide to Safe, Successful Periodontal and Implant Surgery”, and has been investing in real estate as a passive investor.

Welcome to the show Dr. Brian Evans.

Dr. Evans: [00:00:43] You can call me Brian for this.

Aileen: [00:00:48] It was great having you today. Thank you so much for making the time. So can you start by, telling the listeners a little bit more about your background and how you got started in real estate?

Dr. Evans: [00:00:56] Yeah, well, the background and it’s a little bit of a long story to how I actually got into real estate, but, hopefully I can condense it for you guys.

So I’m actually, as you mentioned, I’m a practicing periodontist. I’m in Connecticut, but I actually grew up in Arkansas. And I went to grad school down in New Orleans, Louisiana, and there, I met my wife who happened to be in grad school as well. So during grad school, we, you know, we’re busy with our training and we both ended up getting married right before we graduated from dental and medical school.

She went to medical school. And we continued our training there for three more years. And during that time of being married, being together, you know, trying to get through our training, we also tried to get on the same page with our finances, which we all know can be a struggle. And one of the best things that ever happened to us was we found a guy by the name of Dave Ramsey. He’s a big proponent of debt-free, you know, start out debt free, pay off, you know, he has what are called baby steps and it’s basically a formula to get out of debt and become wealthy over time. And as he says, you can get out of debt and then be  someone who can give,  and prosper through life.

You, you have the means to give. And one of the things that he advised and his portfolio outside of investing 15% of your income into your traditional 401k is his real estate. He was a big proponent of that. And as I started listening more to Dave and as we got out of training and started making an income and not having a residency salary and maxing out our retirement, we looked for other ways to invest and, really, we thought about real estate, but we weren’t really in a position of knowledge to know how to best do that, but that was sort of our start in being interested in it. As time went by, we accumulated a little bit more wealth outside of our quote, retirement through 401ks and all, but we didn’t know where to put that.

So we just started using a mutual fund, an index fund just started putting next money there. And when I, as I grew up as a kid, we, my parents were really young. They were 20 and 16 when they had my mom was 16. When she had me. And we wanted to provide them a better opportunity and a better place to live.

So we actually bought our first single family home outside of our own home for them and moved them to this place up in Northwest Arkansas. And, you know, that was a great experience because it was rewarding in that we were able to give back to my parents who gave so much as to me as a kid. And it was an opportunity for my sister who happened to live with them who had two daughters to be in an environment where they have more opportunities.

So real estate was very rewarding just from that first purchase for us. Up in that area of the state, if anyone’s out there that listens to you that knows the state of Arkansas and the Northwest part of the state is a booming economy,  the University of Arkansas is there and there’s a lot of growth and a lot of people that are moving to that area, because one, the taxes are lower, and two, there’s a lot of opportunity for jobs. So, once we bought that single family home, we started looking at, well, maybe we could buy another single family home and rent it out to a grad student. We were both grad students. We were the quintessential rule followers didn’t have parties. We were too busy training to have parties. So we took care of the house that we rented and we’re thinking let’s find a couple like that. And you know, that would be a way to develop some, some passive income. And we started that process and we quickly found out that it wasn’t as easy as I thought it was going to be. My thoughts were, my father is really handy with things, so maybe he could be the property management person.

My mother’s really good with numbers, so she could help us with the rent checks and things like that. And so we had this thought that we had this empire real estate and in Northwest Arkansas and so we did put a few offers in, for different condos and homes around the university there. And nothing really came to fruition simply because the real estate market was booming there, and prices were higher, rents weren’t really the numbers didn’t match for what the rent that folks were receiving. And what I found also very quickly was, you had to be in the know if a lot of the actual agents who you contacted to help you find listings, they were already investing in listings that weren’t going on the MLS. So they had these pocket listings themselves.

So you never had those opportunities to kind of get some of the best deals. So that was frustrating. And after six months of that, I just said, all right, you know, let’s forget it. That led me into, you know, I listened to, I don’t know if you guys are listened to some of the podcasts and blogs by the white coat investor, being a healthcare provider.

White coat investor is a really good site for healthcare providers to learn a little bit more about how to build wealth, but also there’s a big real estate aspect of it. And that also led me into the physician fire website, which fires things for financial independent through real financial independence through real real estate and retire early.

So that sparked my interest in knowing a little bit more about how to passively invest in apartments, kind of led me down that path. A really good friend of mine, who you guys have interviewed, Dr. Jeff Anzalone, had tested the waters with some of these crowdfunding sites and made some mistakes along the way, which you’re sort of taking a leap of faith when you invest your money into some of these companies, what that, you know, quite frankly, it’s hard to know and trust what you’re really investing in. But that sort of was the impetus for me to take the next step and learning a little bit more through podcasts about multi-department syndications.

In that I found myself listening to bigger pockets. I read Rich Dad, Poor Dad by Robert Kiyosaki and a lot of other books about podcasting. And then I found Joe Fairless. Joe Fairless has a podcast called Best Real Estate Advice, investing advice ever. And I, on my way to work and home, I was hooked listening to all his podcasts and I learned a tremendous amount about passive income through these syndications. And so at that point, I approached my wife about it and said, look, you know, I think this is a great way to diversify our portfolio outside of what we’re doing with index funds. And it’s also a way to have some income streams coming in where we’re not having to be at our respective offices to make that income.

And so that was very attractive, but it was again taking a leap of faith and trusting. You are investing our hard, earned dollars into a firm and believing that some of the things that they’re telling us as far as a preferred rate of return and IRR and all are going to actually come to fruition.

What I liked about Joe was number one, I had a couple of friends who had invested their money with him. So I had at least some sense of trust from that standpoint. I also liked that he wanted to interview me and see if I was a good fit to invest in his firm Ashcroft capital. So that, that was really, comforting.

During that conversation with him, probably the last motivating factor for us to invest with him was that he was also investing in the deals. He puts his own money into the deals. So, his business model, you know, I learned a little bit more about business models as far as their business plan, they invest in class B assets neighborhoods.  They do value add properties. So that, that all I kind of had an idea about though, these are the kinds of things that make sense to me and he was doing those. So it just, it just seemed like a great fit. And so that’s kinda where I finally led into, uh, and I told you it was going to be a long story, but that’s kind of how it evolved and got to the syndications with apartments.

Seyla: [00:10:15] So I want to go back a little bit about you talked about mutual fund and the real estate investing, why you choose to invest in  real estate as well while you already have mutual funds? Is there any benefits on top of that?

Dr. Evans: [00:10:31] Well, I think that one, it really helps diversifying your portfolio. I think in downtimes, such as COVID like the market, I mean, if you look at our market, right? Over a five-year period, usually you’re going to get a positive return on your investment, but there are a lot of ups and downs, and I felt like no matter what people need a place to live, right? And particularly in this terrible time that we’re going through with COVID and all.  You know, people still need a place to live no matter what.  I think it was just a way to shelter from the market ups and downs, diversify your portfolio a little bit, and you’re able to take those distribution incomes per month or quarterly, depending on the deal that you choose.

And, and there’s some, you know, not as a limited investor, but you do have some benefits of the upside on the sale of the property. Right. So, you know, the preferred rates are great. I typically invest, as a B investor. So I’m not as interested in that monthly income stream as I am on the upside of the sell.

And so I think there’s that part of it. And you accumulate over time. I could see. And these deals, you go into one deal and, usually if it’s a five-year hold, you can take those proceeds and roll it over into another deal. Ultimately, I would like to consider doing my own investing through real estate because we can take more advantage of the 10 31 exchanges  and just build more of a network of same like-minded folks who are looking to do the same thing that I am. And that’s just basically create financial independence through passive income.

Seyla: [00:12:20] so would you be able to walk us through, from a passive investor standpoint  if you already talked to a sponsor and you get to know the person and you know that the sponsor is someone that you would like to invest with, what is the process after then?

 Dr. Evans: [00:12:36] you know, then obviously you need deals and a deal is presented. And I think that, you have to have some knowledge, one of the benefits, again, of doing the passive real estate investments for these syndications is if you’re with a firm they’re doing a lot of the due diligence for you, but you still need to have the knowledge to know  what those parameters are and how they’re determining that. Right? Like, so you have to know what’s the business model of this firm that you’re investing with, what is their goal?

And so I think it has to be a situation where you’re getting all the information communicated to you. In a way in which you understand it. And if there are questions that you don’t really understand about what information they’ve given to you about a deal, you should be able to ask that sponsor and they should be able to answer it for you so that you can understand it.

And then in a timely manner. So I think communication is huge from, you know, general sponsors, when you’re looking to be a limited partner in an investment deal for sure. So I think that’s huge. I think also just geographically knowing the areas in the country where investing is more favorable.

There certainly seems to be areas that seem to be more favorable than others. Just, you know, again, I was using that example earlier about it wasn’t with apartments, but it was with, condos and single family homes up in Northwest Arkansas. You have a great environment where you have  a university where there’s always going to be college and graduate students who need rentals, right? Or apartments. And then if you look at the economical side of things, if there’s a lot of growth in that area and population increases, looking at schools and what is the school system like? Cause we all know if you guys have kids or anyone who has kids, they’re part of a big part, at least for my wife and I also a big part of where we decided to buy our own residential home was where, what the school system was like. So, the passive investing groups that you can potentially do deals with, they look at all those things, but again, I still think it’s your responsibility as someone who’s going to invest with them to do that research too.

Seyla: [00:15:03] for the first, apartment deal or syndication that you invested in, do you have any recommendation for the passive investor of how they can educate themselves and to be more confident to make a decision to take that leap of faith, to invest in that deal? 

Dr. Evans: [00:15:18] Yeah. I, well, I think the first step is to educate yourself just simply the basics, right? So, and there’s, we’re living in a world where you can do anything these days, right? Like you can do any kind of home project if you know how to go on to YouTube and it gives you a play by play. I think you should spend some time before jumping in and investing your hard, earned dollars from whatever occupation you have and learn more about it.

Learn what type of, neighborhood classifications there are, learn what a preferred rate of return is and an IRR and what all that means, right? So I think that those things can be easily learned, and you should do that before you invest. And then I think it’s also helpful to have a network and connection with the firm that you’re investing in. I mean, if you have colleagues like I did that just made me more comfortable. And knowing, Hey, that group, those sponsors, they did what they said. They followed through, you know, they promise that, I know there are no guarantees in real estate.

We can have changes ups and downs, but you know, if they’re pretty much close to providing you with what they said they were going to do and a certain deal, that’s huge.

Seyla: [00:16:44] So once you received the deal flow from the sponsor, what are the key qualities that you are looking for in an investment opportunity?

Dr. Evans: [00:16:55] Things that I’m looking for?

Well, you know, I’m a, I’m a professional periodontist, right? This is not my forte. So, I lean more toward the general sponsors to do that due diligence and the, all the specifics, my wife and I just went through the process of, we bought a ski condo up in Vermont. And while we finally, the transaction went through and everything, you know, dealing with the banks these days, after the great recession, I think things really tightened up as far as their criteria.

And now with COVID, I had everything outside of a, an official tax audit, just to get a loan for the property. And so I don’t want to deal with those types of things. So, the physical investment side, I like, you know, as long as it’s sort of under the criteria that I feel comfortable with is a value add apartment in a good location geographically, that seems to be growing.

And it’s under that business plan that, a firm is telling you that they’re used to, and they know this type of business. And then I’m comfortable with that.

Aileen: [00:18:12] So since COVID now, has your investing strategy changed a little bit?

Dr. Evans: [00:18:19] Well, COVID has changed a lot. You know, as I said, I didn’t work for eight weeks.

And so, you know, having that additional income through some of these real estate deals really helped, get us through it necessarily. I think that again, depending on the year area of the country that you’ve done, your deals will dictate how COVID is, affecting things. I will say that a couple of the deals that I would normally be getting monthly distributions, we went to quarterly and it’s not because the occupancy went down this necessarily, but there is this sense of, we should be a little conservative.

And see how things are going to play out before we go back to that monthly distribution. And then I had other deals where the monthly distribution stayed the same. And, I don’t know if clearly COVID may have had some role in that. So to answer your question, it hasn’t necessarily changed my investment strategy per se, but I think everyone is sort of being more conservative with their money these days

Aileen: [00:19:36] And from a sponsor’s side of it. Like what kind of communication are you looking for from the sponsors?

Dr. Evans: [00:19:42] Well, I, you know, I think consistency with updates on a monthly basis at minimum, I think that’s appropriate.

And I also think that if there are anticipated changes because of a pandemic who no one really knew that we were going to be having a, if you asked us in December of last year. so if there are changes that require it, just consistency and communicating. And if there are things that are happening, that shouldn’t wait a month, that information should be disseminated to investors sooner.

And, you know, I think there’s plenty of good, good firms out there that are doing that. You know, I think that we have to weed through some of the ones that aren’t so good at that.

Seyla: [00:20:29] So from your perspective as an LP investor, is now is it still a good time to invest in real estate?

Dr. Evans: [00:20:37] Oh, I think it’s a great time.

I don’t think it’s ever a bad time there really. I mean, like I said before, everyone needs a place to live. And, you know, interestingly, I don’t know how it is in LA, but here in Connecticut, we had a, you know, from the great recession, we never truly recovered a lot of parts of the country. Did, I mean, Dallas Fort worth booming, you know, Tampa booming, you know, Connecticut, not so much.

And one of the things that we have been noticing over the last few weeks is. I wouldn’t call it a mass Exodus, but a lot of folks who lived in New York city are moving away and it’s because they don’t have to spend so much money to stay in the city anymore because they can work from anywhere a lot.

And they would rather go somewhere. You don’t have the benefits of the city that you would normally have where the Broadway shows aren’t happening and the restaurants are not necessarily 100% up and going so. A lot of folks thought about, well, why don’t I just move to suburban Connecticut? I can still do my job from there.

I can buy a larger home or a nicer home and pay less for it. So, we never know what’s going to happen necessarily with real estate. There’s ups and downs. I mean, we thought as a state, we’re never going to have our, market come back up, but then we have something like this happen. You just never know up in Vermont.

You know, people are gravitating to Vermont and they are noticing, over the last decade, they’ve had a reduction in students and this year they’re going to have an increase for the first time. And again, it’s from people moving to other parts of the, away from sort of like the epicenter of COVID.

So.  I think it’s always going to be a good investment. And I think that being in the syndication aspect, especially from someone who has to be at their job and working, and doesn’t have the ability to be a landlord and worry about how to fix a toilet at 3:00 AM in the morning or things like that, you can go to sleep at night knowing you have a source of passive income and you’re being a part of the deal and avoiding a lot of the headaches that go along with it.

Aileen: [00:23:05] Okay. That’s great. and so you’ve invested passively in a couple of deals so far. What do you think is going to be next for you?

Dr. Evans: [00:23:14] Well, I really liked real estate. I do. And I think that hopefully, you know, outside of private tuition for kids and other things, you know, I will still be able to continue to invest in real estate deals. I love to teach and I teach my specialty at  Yale university, to some students there. And one of the things that I would love to do is to affiliate myself over time with a syndication firm where I can

be a resource for them to teach others in my same situation where, you know, I’m a dentist or a physician, you go through school, you don’t get a lot of information about real estate and how to invest outside of  the market, the stock market. And there’s a big world out there for us to be able to, as healthcare providers and others who, you know, depend on just their regular income, to invest in real estate.

And so it’s just part of it is educating them. And I think that I would love, I’d love to do something like that in the future.

Seyla: [00:24:22] How has the real estate investing impacted your life?

Dr. Evans: [00:24:26] Well, it’s, you know, it’s made it more exciting in ways. It’s something interesting outside of what I normally do, but it hasn’t impacted it  I mean a great amount, but it’s just something else that I’m interested in and it’s an Avenue to learn more about and, as you guys know, I mean, anything in life there’s always room to grow and learn more about, and I’m finding that more and networking with you guys and doing other podcasts. And that’s the fun of it too, is meeting other people who are interested in real estate and doing that networking , that’s when I say it’s kind of exciting and reinvigorating .

Aileen: [00:25:05] Yeah. And that’s what we’ve been finding too, especially during COVID. it’s been a great way to kind of network with a lot of people across the country that we hadn’t been able to before.

Seyla: [00:25:13] What is one thing that you know now about real estate that you wish you knew when you first started?

Dr. Evans: [00:25:20] well, I wish I’d learned earlier about passive versus trying to go through the headaches of considering, you know, being a landlord , and looking back at that, that would have been so tough, you know, being in Connecticut and even having one property in Arkansas outside it, you know, it’s different when we bought that single family home and my parents lived there and your family’s there.

It’s a different situation when you just have a tenant. Right. And so having,  just knowing all the headaches that would go along with being a,  you can get a property manager and all that good stuff, but that just takes time. So I wish I knew earlier on about passive apartment syndication investing, because I think I would have just went straight to that and that’s why I think it’s great.

Look, some people can buy real estate and run it and buy multiple properties and that’s good and all, but you know, again, with my occupation, I don’t have time for that. And there’s plenty of other people out there I know in my same boat, but want to learn more about real estate and would invest. And again, that’s why I want to get out there and educate more of my colleagues to hopefully get them in the same lane that I am.

That’s cool stuff.

Seyla: [00:26:31] So if someone wanted to be successful in investing in real estate passively, what is the one thing that made them successful?

Dr. Evans: [00:26:41] You know, I think it’s consistency in doing it. You know, get the first one under your belt. But then also I think we, as a society, when we generate more income, we tend to just up our lifestyle.

And I, and I go back to sort of Dave Ramsey’s principles. He tells physicians when they graduate, you should live like a resident for a few more years until you pay off all your loans and then buy your house or the BMW or whatever. So I would say, you know, to be successful, this passive income is to try to take those distributions and not up your lifestyle, but put them toward another deal and let it snowball, you know, let it snowball. And, and at some point you reach a place where you have enough investments that it does replace your income at your occupation. And so for me, that’s financial freedom.

If I know that I don’t have to go to work because I have monthly distributions coming in to offset my salary. You know, I still love what I do and I’m going to keep doing it, but there’s that sense of freedom and peace and that you can’t, you know, you, you can’t trade.

Seyla: [00:27:55] What tools or techniques have you used to improve the efficiency of your business or personal life?

Dr. Evans: [00:28:02] never really needed to do much to motivate myself to be efficient, get up early and start the day with a workout, you know, try to read and listen to podcasts that I’m interested in as far as real estate. That’s what I typically listen to. so just staying focused that way and also having fun.

Right? You just, it’s a life is balanced and it’s not all, you know, driven by money, or fame or any of that stuff. I mean, it’s a balance. So, you know, I want to be known for one of those people that we don’t live to work, but we work to live and I feel strongly about that. So, I think efficiency and techniques, nothing really special there.

Just try to have a balance in life in general.

Aileen: [00:28:48] So Brian, if our listeners wanted to learn more about you or get in touch, where can they go?

Dr. Evans: [00:28:54] Easiest way is probably by email. My email is dr. brianEvans@gmail.com, D as in dog, R and then my name brianEvans@gmail.com. I can also be reached, my office in Hamden, Connecticut.

And that number is (203) 288-5916.

Aileen: [00:29:11] Awesome. Well, thank you so much, Dr. Brian Evans. We really appreciate your time today and definitely learned a lot.

Dr. Evans: [00:29:17] Thank you.