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August 30, 2018 Articles

NOW, I Finally Get It… After 23 Years In Practice

By: Arturo Bonilla, M.D.

Throughout my career, I was hesitant to invest in real estate. Now I have participated in $168 million in commercial multifamily real estate acquisitions along with our asset manager partners.

Doctors, in general, tend to be very risk-averse. We are taught to invest only in things we understand. Well, the only thing we are taught in medical school is medicine. So how then, are we supposed to know how or what to invest in?

Enter the financial planners…people who know much more than we do about money. I am not knocking on the planners because there are very good ones out there, but their famous “diversification” strategies are used so that when one investment class goes down, hopefully another one will go up…and I stress “hopefully”. Warren Buffet states “Diversification is protection against ignorance. It makes little sense if you know what you are doing”.

I have been there and done that. I have invested in the stock market, made money and lost money. For example, there was a time I owned quite a chunk of Apple stock. My financial planner informed me that there were some insider trading scandals looming in the future for Apple. He highly recommended that I sell all my stock, which I did. Soon after, the first iPhone was released. In retrospect, selling my Apple stock was not a good move, to say the least. For years after, I shied away from the stock market because I felt that all my financial decisions were based on someone else’s recommendations. These recommendations were loosely based on the economy, politics, oil prices, wars, etc.

So, I did what many doctors do…started swinging for the fences (trying to get a home run on every single investment). I heavily invested in several startup companies. The potential payoff should still be lucrative, though it may take several more years due to factors outside of my control like FDA clearances, etc… Also note, there is no cash flow from these investments until that home run hopefully occurs!

This was my dilemma. How can I continue to perform pediatric ear reconstructive surgery, which is my true passion, and at the same time have investments that are growing, providing cash-flow and providing financial security for me and my family…regardless of the economy?

This is where I discovered commercial multifamily real estate investing. No matter the state of the economy or the state of the world, people still need a place to live. In this asset class, we profit from multiple sources: 1) Cash Flow 2) Appreciation 3) Principal Pay Down, 4) Inflation-Hedging and 5) Tremendous Tax Benefits.

In the graph below, you can appreciate how a $10,000 investment would have performed when invested in commercial real estate versus the S&P 500 Index.

 

I have participated in over $168 million dollars in apartment acquisitions in San Antonio and Houston, and
am a key principal in our latest acquisitions in Fort Worth and Dallas. After collaborating with our asset manager partners, we founded Surgical Multifamily Investments to offer these unique real estate deals to our doctor partners. Our asset manager partners have over $600 million in combined assets under management.

To learn more about this amazing asset class and become our partner, please watch our “Introduction to Multifamily Investing For Doctors” webinar. We will be having our next large investor meeting soon. Don’t miss out on our next acquisition. Feel free to call us for details at 210.696.RENT.

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