EPISODES
Episode 44.
Nate Hedrick and David Bright, Hosts of Your Financial Pharmacist
Your financial pharmacist to ten out of ten. Name Right. The Y FP crew joins me to talk about full time career professionals who are thinking about making the jump into real estate investing. It is a leap of faith and it’s a massive balancing act, but the rewards are out there. I’m Dalton Elliott. This is the real estate of things. You’re listening to the real estate of things podcast. Gentlemen, we were catching up just before I pressed record. You’re like you both have been on a million podcasts separately, but maybe this is the first one together. So thanks for joining. Thanks so much. Yeah, absolutely so, Nate Hedrick and David Bright, of your financial pharmacist. Uh, What an interesting uh concept for a company, for a group. Absolutely love it. Give me the rundown on what your financial pharmacist is. Yeah, so so. Y FP, for Short, was started as a an answer to the question of what happens when you’re a well paid professional with six years of pharmacy school debt and you have no idea what to do with your finances once you graduate, because you’ve been trained to be a pro but you’ve not been trained to handle the day to day finances. Pay Your taxes invest that money. And so why? APP was started with the idea of can we support pharmacists like that? It was founded by our founder, Tim Olbrick, and since then we’ve grown and expanded to tax services and real estate services, which is where David and I come in. Um. And it’s just it’s been a whole ecosystem now of of pharmacists supporting each other to figure out life and finances. It’s been it’s been really cool ride. Yeah, and that’s that’s where I want to kick it off right. Like balancing, I think, a big hurdle uh, sometimes for UH folks who are already established in their career as a professional and they have, you know,…
…good trajectory of where I’m going in you know, you know, pays the bills and then some type career, white collar job, to pick the kind of not a crazy fan of that, but that’s what it is. Effectively, uh, how do you how do you get over the initial hurdle of the balance? I feel like that’s something that has to play on the mind of a lot of folks who are high performing in their normal day job and then you look at this potential side hustle. is how it usually begins and you don’t go from full time pharmacist full time real estate investor overnight. Uh. And so what does what does that process look like? What are some of the common misconceptions, mental blocks, hurdles that, as you work with folks and educate them, you break down? Yeah, I think one are the ones that I would jump in and start with. You mentioned this, this potential from full time professional to full time real estate profession. Know, and I think that that a lot of content out there in the in this real estate space right now is talking about that kind of romantic jump into like I’m going to be a full time investor and I’M gonna go for it and and as you know, I support that for those that want to do that. But I think that there’s a lot of busy professionals out there that invested a lot into getting into their career. They love what they do and they’re looking for a more diversified financial picture. They like investing in real estate. They may not like maybe the lack of control of a read or. They think they can maybe do better if they go by their own rental property Um, but they don’t necessarily want to do that full time. And I think I think that’s okay. Also, I don’t think that that message comes out in a lot of places, that it’s okay to invest in real estate and to be a full time professional and you don’t have to leave your career in order to invest in real estate. And I think that’s one of the things that, Um, I hope that pharmacists latch onto, because nothing, nothing that we do is trying to encourage people like quit pharmacy and now, like there, you can be a pharmacist, you can be a working professional…
…and you can still invest in real estate, that that balance can happen. Yeah, that is such a true call out, Um, and I hadn’t thought about it until now that you could probably slap on this real estate investing education is around. Start doing this with the ultimate goal of quitting your day job and being a full time real estate investor, right. And Yeah, that’s a big different. Yeah, it’s just it’s something that we we spend a lot of time and intentionally about when we started our PODCAST, to say we’ve got to make sure that we’re different and and this is how we’re gonna be different. Right, we’re not going to encourage that that quit like we’re gonna WE’RE gonna encourage fire, we’re gonna encourage people to to diversify, but it’s not the ultimate goal is not to get out of pharmacy or get out of your professional career. It’s it’s to use this to supplement your life, so you can go to twenty hours a week or whatever, and then you can do both. And it’s just that’s the that’s the big differentiator for us. Yeah, talking about time, right. UH, times valuable and all the more valuable, Um, the more you have going on in life, and a professional career soaks up a ton of time. UH, property management right, as you grow a portfolio, even even if you have one property, right, sometimes that can be uh time consuming from a property management standpoint. So, you know, do you have kind of one lane of guidance or like one size fits all guidance around personally managing a property versus pay right out of the gate you should do third party property management. Now, questions asked. What? What? What message do y’all preach? I think we’ve kind of gone Um, it’s hard to find a one size fits all. Is kind of my take on that. I think that both options can be viable and I know nate and I have taken divergent options. So I can share kind of my story and then maybe, nayill share his Um. You know, I started out the first rental property that we had. I was like how hard can this be? I’ll figure out property management right and tried…
…to market it and I tried to get it set and we we even like had some potential tenants walked through and they weren’t really interested and and it just wasn’t working at it was like weeks and weeks of I just didn’t have enough time to dedicate to it to get someone into that property, and so I had this ballooning vacancy Um. Instead, we interviewed a few property managers. We hired a property manager. They had one showing open house. Three people came through, two people made an application, one was approved deposit, moved in almost right away and that property manager got a hundred and fifty bucks more month and then charged me a hundred and thirty. So a hundred and fifty more than I was trying to get, charge a hundred thirties. So I ended up making more money than I was planning on and doing a lot less work and I’m like this, this is it. I’m never going back. Why would I ever manage my own properties like this? is fantastic. I don’t have time to do this because I am a busy pharmacist. Professional property management is awesome, but I know that you know once ice doesn’t always fit off. So I know nate has a kind of an opposite story there too. Yeah, so when I bought my first rental I was, you know, from the beginning I said I’m a detail oriented like hands and everything pharmacists. I want to be the one that handles this right. So, the very first property I bought, it was always going in with me being the property manager Um. And so now I have all the local properties that I have I manage myself and the ones that are out of state I’ve got property managers for. And so if I can be here, I’ll do it. If if not, I’M gonna have somebody professional handle it. And what I like about that is that because I am a property manager for my own stuff, I can figure out how to manage my property managers better, I think, because I know what I would do and I can tell them you know, this is how I would operate this and if you’re not doing it that way, you know, explain to me why not and maybe I can learn something or may but you can learn something, and so it’s just it’s helped me to be a better property manager on my own rentals and understand what those operate like, but also managing my property managers as well, which is great. What are some of those Um differences you mentioned? You know, I do it versus the way you do it as a PM firm, like what…
…are some of those differences? Yeah, I think just the way that Um, you know, when I’m asking the questions, interviewing the property manager, especially when we’re setting up for the first time, you know, the questions around. Okay, well, what’s your tenant screening process like like? What are the things that you’re looking for? Um, you know, again, when we do it, for for local property management, we’re writing a list ahead of time of like these are the criteria that we’re going to meet, these are the things that have to be, uh, you know, in place. And once we have the first applicant that meets these criteria that we’ve established ahead of time, like boom, that’s the person we’re gonna put in there. And so how does that differ for a property manager? What are the things that they’re looking for? Um, what do they do for for rent collection, for example? I’ve got some that we’ll say you know again. And are they following the state laws? You know, hopefully their professional property manager that are already doing that part right. But, you know, are they following it or are they doing it and then kind of, you know, fluffing the end right? I want to make sure that it’s it’s it’s accurate and it’s being done the way that the state the state requires, and wherever that is, it needs to be the right way. So there are just pieces that I once you are in it, you get a little more nuanced and you can make sure that your property managers doing it the same way that you’d want to be operating. Makes Complete Sense. Makes Complete Sense. I’m going down this line of, you know, big things whenever you’re getting into real estate investing. Property Management’s a big one. What are some of the other you know, we talked to the beginning about misconceptions, hurdles, just like big education gaps Um, that you all see and work to cover down on. Yeah, I think one other thing. If if you, you know, flip through any social media or anything out there, you see people walk into these like boarded up, disgusting houses and they spend a hundred thousand dollars and make it look amazing, right, Um. But not all real estate investing has to do that. Like I think that in Pharmacy School I was not trained how to frame a house, how to install cabinets right like. That’s that’s not part of my training. I’m not good at it. I fully admit that that’s something I can’t do and I’m not going to try it right, but I also don’t have to go through and Rehab…
…a house by myself and bust through a wall on Demo Day or anything like that like that. I don’t have to do that to be a real estate investor. Um. So I think helping people to understand that maybe you buy a house and you go in and you make sure the fire extinguisher and the smoke detectors and like all the safety things are there and you rent it out and it’s just essentially turnkey, like maybe that’s an effective strategy for a busy professional. Um doesn’t mean that you can’t hire a team of contractors and and do major rehabs. Um Nate and I have both done that. We we kind of think that there’s some fun there and taking this property that’s uninhabitable and make making it inhabitable and safe and respectable and and there’s something fun about that. But uh, you know, different, different working professionals with different amounts of time and skill and expertise and knowledge and just intention into that Um they can find very different ways to be successful real estate investors. I also think that a lot of pharmacists that we would that we work with, are people that we talked to, struggle with the the initial hurdle, right, and I think this is this is common throughout the real estate investing space, right, is that initial by it’s it’s it’s risky, it’s a clog toilet at two o’clock in the morning, right. All these like preconceived notions come into it, and so getting them over that hurdle of this is actually pretty normal. You probably know ten people that have an investment property somewhere. They just don’t they just don’t talk about it or you’ve never brought it up, and so getting it like normalizing it in that conversation so that it can be a part of their financial plan. That’s been big for us too, and I think it’s been really, really insightful to see people who all of a sudden they talked to, you know, Uncle Jeff and she’s got five rentals and you didn’t even know that, but now that you’ve started bringing it up, it comes out of the woodwork. So I think that’s been really cool for us to to make that more part of the mainstream financial conversation. Yeah, you know that. Definitely see you know and feel about the first property hurdle. That’s a big one. And Market Wise, like what markets have the attention of you, David, you nate, the folks you’re working with,…
…like what’s what are you hearing right now? What do you see in market? Was Yeah, one thing that that we were talking before we hit recorded and we talked with pharmacists that are in all different parts of the country and and Um, different pharmacists seemed to latch onto different areas that excite them. And one of the things that I think is a commonality is pharmacists are inherently kind of risk averse and safety oriented, and so if there’s something out there where it’s like I know that place and I can make a better informed decision about that place. Like, personally, I invest in the Midwest. I like Michigan, Um, but that’s also because I’m familiar with it, and so I would rather. I’m not saying that Michigan is the best or the worst or anything like that, but by having greater familiarity with it, I feel like I can make better decisions than I could if I was trying to invest in Louisville or Fort Wayne or Nashville or anywhere else. So, Um, I think that one advantage part aicularly if you’re trying to be a full time professional. You don’t have time to investigate what’s the best market and you don’t just want to jump on Tiktok and find the first video that says Alabama is cool right, like you want to. If you want to find that local market where you have some knowledge, that could be a great way to do it. To make a really intelligent decision, even in an okay market, might be better than a bad decision in a great market. Yeah, I think I would echo with David saying. I mean I think I’m biased. Right. So I live in Cleveland, Ohio. I’m actually a licensed realistic agent here, so I invest here. I also invest out of state, Um, but but again, I you know what you know, and so if you invest in areas where you know the area or you invest in areas where you know the people and you can trust the boots on the ground, that’s gonna be so much better than than, like you said, going and following some advice from somebody else that says, oh, the next hot market is here, go there. So again, I like the Midwest for the price point. When we were starting early on on our first property and all of a sudden our our investment account, like our investment land account,…
…went from you know, x amount of dollars to zero and we were starting over again. Okay, I gonna save up for the next one. So then it became clear like we need a different strategy. We need to look at the bur method and being able to recycle that cash, and that bur method is really darn hard if you’re in a market where the average house is three hundred thousand or four hundred thousand dollars, and so targeting areas where that money can go a little bit further. Again, a fifty thousand dollar house or a hundred thousand dollar House that you can then burn into a hundred two hundred thousand. That’s a much different feel and it’s much easier to jump in, and so that’s that’s where we got started and it’s kind of where we stayed. I really like the Midwest for that reason. Yeah, that’s a great call out. On the Burg piece, right, the last couple of years that has exploded. I remember, Um Twenty probably been late, maybe so not terribly long ago. Um, a couple of colleagues from the company and I went to Dallas to go see this project that they were talking of. Client of ours was talking about like hey, we’re doing this whole subdivision and we’re gonna rent the whole thing out and we’re like that sounds crazy, that sounds really risky. Like what what are we doing here? We literally need to jump on a plane. So it’s myself, the CEO and our like top sales person all got on plane go out to Dallas and I remember walking around the job site and, uh, you know the magnitude of you you have to rent up almost all of these’s a lot of units. You have a different type of risk here whenever you’re doing a whole um subdivision of it. But that that all that to say. The burer piece, in terms of being mainstream is still relatively new and it is uh, it’s trickier, right, like we we do at Lema one, we underwrite and with clothes for clients, Um, rehabs, rentals, new construction, multi family and their similarities and underwriting and credit risk across those products. But there are a lot of differences, right, and so you’re you have to you have…
…to really be buttoned up on the short term siding and the long term side and you have double the assumptions. Um. So it is. It is tricky and it’s not, you know, not to say it’s you know it. It is a strategy that is wildly successful for so many people, but it’s definitely there’s more to it than I’m going to flip the property or I’m plus I’m going to rent a property. It’s very different and, like a lot of other things, it gets riskier than the bigger the dollars, right, because if you can’t pay that back now of a sudden, you’ve got a lot more that you need to be able to find or if that Burr, if that refinance doesn’t go the way you wanted it to. I mean David and I have both have it at properties where we thought the air of view is one thing. The lender thought it was something different and that that really made it challenging. And again, if that difference is is big on a really big dollar amount, now all of a sudden you’ve got a lot to come up with. And so if you’re just starting out where you’re thinking about burring and you want to try that method, start somewhere where that price point is lower. That it’s not always the case, but in that particular model I think the risk is lower as well. Yeah, very true, very true. So all right, David Nate, your financial pharmacists. People want to learn more. Where do they go? How do they reach out? Yeah, so you can reach our our main page at your financial pharmacist dot com. Again, we’ve got a sub page dedicated all toward real estate at YFP REAL ESTATE DOT com. Both those are great resources. We’ve got a podcast with, I think, three separate channels on it. We do, uh, three weekly episodes. One is like the main financial episode. We’ve got one about ask a, Y F P CFP, so you can learn from our certified financial planners. And then David and I are every Saturday morning all about things real estate investing. So lots of different options, lots of different resources. Definitely recommend checking this out. Absolutely a wealth of knowledge. If you’re a pharmacist, it’s a no brainer. If you’re not a pharmacist, go check it out. Like so much information there and so many different mediums. Uh Yeah, absolutely great. Cannot thank you both for jumping…
…on and spend some time with me. Definitely have to have you back. These episodes are always too short. UH, David Bright, nate head Drick, your financial pharmacists. Thank you again, gentlemen. Thanks to appreciate it. Thanks so much. Thanks everybody for listening. Take care. Are you a real estate investor looking for the right lender that can finance all your deals and help you scale? Lima one capital has the best suite of loan products in the industry, Barnet, whether that’s fixed and flips, fix and holds, building new construction or buying rental properties, they have incredible financing solutions for it all. A reliable, comment sense lender is one of the most important parts of your investment team, and that’s exactly what you get with Lima one. Let Lima one capital show you how they’ve helped thousands of real estate investors scale and increase their wealth. CHECK OUT LIMA ONE DOT COM or call eight hundred to five, nine zero five to speak with a consultant and preparation for your next project. Thank you for joining us today on the real estate of things podcast. Subscribe and tune in weekly for new content from the industry’s best while we continue to unpack the nuances of this dynamic market. Follow US across social media for additional insights and analysis on the topics covered in each episode, and remember to rate, review and share the show.
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