EPISODE 442: Owning Your Practice Real Estate with Brian Wine

Hey, chiropractors. We're ready for another Modern Chiropractic Marketing Show with Dr. Kevin Christie, where we discuss the latest in marketing strategies, contact marketing, direct response marketing, and business development with some of the leading experts in the industry. 

Dr. Kevin Christie: [00:00:00] Welcome to another episode of Modern Chiropractic Mastery. This is your host, Dr. Kevin Christie , and today I am bringing you an interview with Brian Wine from the Wine Group. And we're gonna talk about real estate. Uh, you know, it's something that we haven't talked a lot about in the eight years of this podcast, and I, I really wanted to have this conversation and, and Brian specializes in.

Uh, brokerage of medical real estate nationwide. They have a, a unique niche within the vet, uh, industry, the veterinarian industry, but they work with all kinds of other healthcare practices and they do a wide array of services at the wine group, at anything from investment sales to lease and sale lease back.

We talk about a lot of this in the interview, uh, private business consultation. Buy side representation and, and you know, even things like maybe you want to potentially sell your practice and the real estate together, they also can help with practice sales and [00:01:00] the combination of practice and real estate sales, which is, it's common, uh, if, if, if the seller, uh, does own their, uh, real estate.

But we dive into a lot of the nuances of. When it's a great idea, you know, oftentimes it's a great idea to own your office, real estate for your practice, but not always. We dive into some of the things to look out for. Sometimes we get. Narrow focus on really, really wanting to own our real estate because it can be great.

Uh, but then we end up sacrificing the health of our practice to do so. So we dive into some of that as well. Uh, some different topics around investing in real estate. And he's just a, a wealth of knowledge. And again, this is, uh, Brian Wine from the wine group spelled WINE. Just, uh, really enjoyed diving kind of deep into the real estate side of, uh, of, of a healthcare practitioner, you know, that owns a practice and wants to own the real estate, and then getting to maybe a point, [00:02:00] and I ask certain questions around that of just investing in other real estate properties.

And so we dive into all things real estate today. Uh, before we do dive into that, I just want a couple mentions of things. I've got a. A student business course coming up in Boca Raton in my office. Free for the first 24 people we can hold. 24. And we're going to, it's gonna be a Saturday morning, November 22nd, where we're gonna dive pretty deep into, uh, all things business.

Uh, you know, as it relates to being a, a chiropractic student, probably more on the second half of your. Student career or if you are an intern, a chiropractic intern, uh, the stuff we'll talk about will be apropos for you. And that's gonna be on Saturday, November 22nd from 9:00 AM to 1:00 PM in my office.

You can go to Bitly b.ly/student chiro biz. That's a Z at the end biz. I'll put that in the show notes [00:03:00] as well. Uh, you could sign up again, it's free. Uh, we do, we do, uh, ask that we're gonna put a credit card on file and not charge it unless you don't show up, unless you give us notice. Like if you just don't show up, we're gonna charge a hundred dollars.

'cause we, we do have a limited seating on this and we want people that are committed to coming to this now. Dcs paye a good amount of money for this type of information, and so we are offering it for free. It is a high value for you, even though it is, uh, free, so it's not gonna be fluff. We're gonna really dive in and try to teach you, uh, business as much as we can.

So check that out. B ly slash student, Cairo Biz, uh, that Boca Raton, Florida, even if you're not in Florida, but it might be worth a, a couple ho a hotel night in a flight. To come hear this information and work through certain things, uh, like the business of practice, practice analytics, content marketing for chiropractors, strategic community outreach, and all kinds of other things [00:04:00] on what to consider if you're gonna be an associate partner owner.

After graduation, we will dive into all the pros and cons and details of that, so check that out. Alright, without further ado, here is my interview with Brian Wine.

 Excited to have Brian Wine on the show today to discuss all things, uh, commercial real estate and a as a private practice owner. Obviously, most of our audience is chiropractors and, uh, he works with all different types of healthcare providers. But before we dive into the, the thick of real estate today, Brian, tell us a little about yourself personally and professionally, and we'll get into it.

Brian Wine: I been in the business about 10, 11 years now. We help doctors sell their business and or real estate across the country. The main specialties today are veterinary, so animal hospital, business and real estate, dental and behavioral health. We also do some chiropractic slash physical therapy, and we also do a couple others as well, but we're really dominant in those [00:05:00] three.

When it to real estate, though, I've sold it all. So anything and everything we help our clients achieve whatever their, their, their goals are is really the goal here. Um, you know, I always say ask any question and we're here to help you answer those questions because a lot of doctors, they're very good at what they do.

They don't always know, you know, the other parts of the business, meaning the real estate and or the practice sale, what you guys all worked really hard for. You know, it's either to make a better business or it's, hey, one day I might transition or retire. And really that's where my team and I come into play to help you guys get to wherever that goal is.

Dr. Kevin Christie: Yeah. We recently, in our medical building, had a dentist sell the practice and the real estate. What, what does a loan like that look like? Two different loans. Um, what are some of the details of that?

Brian Wine: Yeah, I mean, if you own your own business, you obviously can get an SBA loan or an owner user loan. [00:06:00] And you know, rates, those rates depend on who you're working with.

I normally outsource that to different loan brokers and make the loan brokers have all the banks compete with each other so the client makes more money, or really in fact saves on their rates. And typically I'd say, you know, it could be anywhere from 10% down all the way up to 35% down, depending on your credit history.

And I'd say rates are anywhere between, you know, if you're really good. Very good credit and have a lot of cash in the account, and you maybe bring some deposits over to the bank I paid you. It's anywhere from seven to 9%. Obviously some banks are really gonna get you on some of these SBAs, but it, again, it really depends on the situation to each borrower

Dr. Kevin Christie: and typically the bank, obviously, let's say the, the, the, the buyers in good financial standing, they, they typically do like that combination of buying the practice and the real estate.

Brian Wine: Yeah, I mean again, if the real estate, so you [00:07:00] have to also occupy let's, uh, most of the time 51% or more of the real estate to get one of those FDA loans. Yeah. There's also these owner user or conventional financing that you can do, you know, if the real estate, I actually had this conversation with a fellow chiropractor last week and he is like, Brian, should I buy this deal?

Well, this client of mine owns, I dunno, 15 locations in the northeast. And for him it makes sense because his goals are one day to sell down the down the road. And so for him, he wants to really build out the business, have several locations, and when he sells his business, he then can put awesome leases into place on the real estate.

So, you know, it really depends on the circumstance and where you're buying the real estate at. I mean, if you're, if you're 30% above market. I'd say maybe think about relocating or maybe it's just not the time to buy [00:08:00] it. And again, every situation is different based on what's being thrown at you in the circumstance.

And having a broker like myself or an advisor who actually cares about your best interest, not about just the paycheck, will really benefit you, the client.

Dr. Kevin Christie: Yeah, it's, it's important to, to know all those details we're, we'll get to the surface level of it today in a, in a podcast episode, but obviously it gets deeper and it gets, uh, the nuances of everybody's unique situation.

But I want, I want chiropractors to start thinking about this, and one of the things I guess would be right outta the gates, and this is, you know, a lot of people. Maybe know this, but obviously be surprised as, as doctors, we, we spend so much time trying to be a doctor. We don't, we don't know the pros and cons of certain things regarding real estate, but what would be some of the positives or the pros for a chiropractor to buy their, their office real estate,

Brian Wine: I mean, pros are that you own the, the facility so your rents not just jumping to whatever [00:09:00] number you or whatever landlord wants, inflation.

There's also sometimes in a lot of the chiropractor, physical therapy space that I've seen, they have units. Mm-hmm. And so the HOA or association kind of dictates where you can go or can't go. You know, obviously it doesn't dictate, but some doctors have issues getting permits or sometimes you wanna do something, but you have.

I'm always a big fan of paid freestanding building. It's way better than having a condo association. But again, you know, the condo way of life in some of these major markets, sometimes it's cheaper to get a condo unit than it is freestanding. Um, but again, it's, it's just really preference. I mean, you charge your own rent one day if you're really building a business, meaning I'm sure you have a great business as a one unit [00:10:00] location, but if you're going to.

Add way more locations over time. There's ways to make even more money on, on your business if you're open to those ideas. The one location unit as well, there's, there's opportunity. It just really depends on what makes most sense for you. The problem with buying a property is it takes a lot of cash out of your business or out of your personal.

You, but you know, if you the right way and you get the right loan in place, that really doesn't matter and you just have more control. There's no one bossing you around. There's a reason you started your own business in the first place.

Dr. Kevin Christie: Mm-hmm.

Brian Wine: So the real estate part I think is a great piece of the puzzle .

Dr. Kevin Christie: Yeah, I think, you know, I've owned mine for 12 years now, and some of the positives that I know of is, is obviously it's a big part of my, fortunately I bought it 12 years ago. It's appreciated quite a bit. It's a big chunk of my future, uh, retirement. There's, you know, my accountant tells me there's tax, uh, good tax [00:11:00] benefits of owning.

I don't, I couldn't tell you what that is. Uh, yes, my. Go ahead.

Brian Wine: Sorry. Sorry to cut you off. I mean, there's depreciation and all these different things you can do with your accountant. Obviously I'm just an advisor, but I'd always say talk to your accountant or financial advisor, CTA, they can probably break down an even more depreciation that you write off off your business.

Mm-hmm. You know, anything you put into that property and or business. Probably lowers your income, but again, talk to the specialist about that. Sorry to cut you off.

Dr. Kevin Christie: Oh, no, it was good. I, I, we needed clarification on that, you know, and obviously I think, you know, owning the real estate provides a lot of stability for your practice.

You mentioned that, you know, your rent's not gonna go up, you don't have to worry about moving. You don't have to worry about, uh, I have chiropractors I, we coach where their lease is ending and they want to bring someone else in there. Uh, so it definitely provides a long term, uh, stability Now. On the, on the other end of the spectrum, I, one of the things I'll mention that I've heard before that [00:12:00] can be a, a, a con or a bad idea to buy something and we can kind of piggyback off that.

Is that in the same way that office real estate, if you own it can provide stability in your business. If you're not careful and you bite off more than you can chew, it can really drain your, your main practice. Um, have you seen scenarios like that and then. Any other types of bad ideas that it is to buy something for your practice?

Brian Wine: Yeah, I mean, doctors, clients of mine all the time, say, Brian, what is a good price point to purchase a new property ad? And we really look at your gross revenue because we also sell practices. So we really take a deep dive into one your goals. And then also your, your practice. How well is the business doing?

What is the revenue and what is your net profit or ebitda, let's call it? Yeah. Um, you know, we really wanna understand what the, the financial situation is before you get into a new property. If you said, [00:13:00] Hey, look, I have inheritance money and I have $500,000, great. But you know, if, if the business isn't where it needs to be, or if the goal is, Hey, I wanna own a property like this.

It's really looking at the financials and making sure you can actually afford the payments every month. If you can't afford the payments every month, you know it, it costs a lot to get into this. You could lose your livelihood and, and a lot more if you overextend yourself. I've seen some clients do it by not listening to some of the advice I gave, and I've also seen some clients, you know, I've seen clients do it and be successful because it really pushed them.

I've also seen some clients where they had to sell more assets and kind of exit some things because they overextended. So I just say to that, just be super cautious before you make too many, you know, decisions. Because, I mean, we recently worked with a client where at first I was like, Hey, this isn't the best [00:14:00] idea.

But once we figured out their loan situation, the write offs and. The lease term, it, it's not even a lease term anymore. They have their own property. So it made sense. But again, if it doesn't make sense or you think you're not gonna hit that monthly nut, it's probably not worth it today. I, I'd say just take your time, wait a year or two, save more money or get your business to the next level, and then.

You know, go for it, is what I said.

Dr. Kevin Christie: Yeah. I wanted to make sure we talked about it because, you know, there's a really, really good picture to be painted of why you would do it. And it, and it's sexy and, and it can be a really good, uh, thing for your long term, but it can also, you know, be a problem. And you gotta, you gotta be right.

Fit 'cause, 'cause frankly, it could be a really good real estate. Purchase or deal, but it could be a, be a bad business decision for your overall. Um, and you and I. Correct. And that's where I know you probably help doctors [00:15:00] make sure that both of those boxes are checked before you make a move.

Brian Wine: You're spot on.

I mean, it's, it's all about how well their financials, how well their business is doing before you decide, Hey, let's just jump and, and own a property. Because if you can't afford the payments, unless you have all cash, which most clients, they rather. Save their cash for their business because there's more opportunity, more return on their actual business than the real estate.

So again, it, it's just gotta make sense before you make that big decision and big leap going forward.

Dr. Kevin Christie: And I know it's tricky, you know, like if you're a chiropractor in San Francisco, real estate's a a different ball game than if you're in Missouri, right? And correct. It's just something you have to take into consideration and maybe it just never makes sense.

And that's okay too. As long as you're getting good. Lease deals, and I know you work with that with people and you're, and you're getting good space and you're, you have a thriving practice and just sometimes real estate just, just doesn't make sense for, for your scenario.

Brian Wine: You're, you're [00:16:00] spot on again. I mean, again, it's what makes sense.

We can also look at, you know, if you have a good broker advisor in your corner, they should look at what the rent rates are today, what your lease looks like. Are you getting the best deal? Because I, I also work with other brokers that specialize in new opportunities. We're really a cure for the seller or for, you know, people exiting, but there's brokers out there that just specialize on the new building or the new location.

You know, again, it's, it's really understanding what the goals are and then what the monthly. Expense. You know, there are insurance, there's triple net expenses that go along with all these buildings, just like the apartment or house you live in. There's property taxes, insurance, there's maintenance, sometimes common area maintenance.

There's, there's a lot of different things that make up just, not just your rent. It's that triple net or modified gross, however [00:17:00] you see it today in your, in your current setup. But, you know, looking at all of that, figuring out what the market rents are. Advisor should do that for you. And if they're not, obviously you can call me.

I'm here to help, but you should really think about all of these factors before jumping into the next opportunity or or building that you own.

Dr. Kevin Christie: Yeah, it makes sense. And then, uh, you know, a little story and then kind of all worked together. When I heard you on a, a different podcast and it was just very informative, uh, a couple weeks prior to that, I have a patient, he's not a healthcare provider, he is a successful, uh, entrepreneur, and he's, he's, he's.

He's done very well for himself. And one of the things he does now is he buys real estate that have leases attached to it, but he deals, he, he's like, I think one of 'em he mentioned was like Verizon Wireless store, Starbucks, some of the bigger companies that, uh, you know, they lease the space from somebody else and then he goes in and buys the space and he is got a lease attached to it.

Now, [00:18:00] uh, with that being scenario, a non-doctor or anything, do you have any. Doctors that do that, like they own a practice or they, and they own their real estate and they're doing, you know, they got money to invest. And, uh, are you working with some that are just going to maybe buy, uh, real estate from other types of private practices that are being leased?

Brian Wine: Yeah, I mean, we have doctors buying all sorts of, uh, properties. I mean, like you said, client, friend of yours. You know, bought Verizon and Starbucks properties because it's leased by a major corporate. There are major corporates in all of our fields as well, in, in the three verticals, plus the chiropractor, physical therapy, they're out there.

There's great credit behind it. And then to your question, you know, yes, there, there are doctors who sold to private equity, so they have a bunch of cash and they see what you guys see. A great business that's not going anywhere. [00:19:00] So they start to invest and have investment property. Uh, typically they're more interested in, in corporate tenants, but I have a, a client recently a physical therapist who, who bought into, they had a, there was a physical therapist selling her real estate.

He saw the opportunity on the return and said, you know, this is a great small business. I'm gonna go buy that property. If she ever goes out, well, I'm just gonna replace it with me. So, you know, there's a lot of different ways to look at it. Um, yes, there's doctors, there's, you know, just investment, uh, buyers who wanna buy into these deals.

I mean, it, it really spans across, across the country of every type of person out there. I mean, I mean, we see it all wealth managers, financial advisors. Uh, all different sorts of doctors, lawyers. I have seen it all at this point. People buying into deals. It just really depends on the deal itself. Mm-hmm.

What kind of returns [00:20:00] there are, what kind of loan you can get. Those really the basics I'd say. And obviously location.

Dr. Kevin Christie: Yeah, no, that makes sense. And it, you know, it helps with a diversified portfolio for folks and, and I'm sure you enjoy getting on calls like that and with some creative ideas with, with people that are looking to make those types of investments.

Brian Wine: Yeah, I mean, I have a fellow doctor, he sold private equity, he's a veterinarian, and he said, Brian, why don't I buy just one deal? I've got, you know, 2 million of cash. Why don't I just buy one? Let's call it five, $6 million deal because I can lever and get more. And I said, look, I don't think that's the best route.

I personally think you buy two to three or four deals with the $6 million of cash. Because then you diversify your risk. If you buy one deal and that tenant has an issue, then you're on the hook for all of it, which hopefully at that price point, you won't really have many issues. [00:21:00] But if you buy three or four little deals and diversify the risk, if one goes out, well the other three pay for that one.

So it just, again, it depends on your risk tolerance and the goal. There's a lot of different opportunities that client today owns two properties and he is on his way to buy another one. So. Um, there's just, again, it just depends what you're looking for.

Dr. Kevin Christie: Yeah. And I guess, you know, there's, I forget the term, but like obviously someone will want it to cash flow and so if you have to take out a loan on something or they like, is it, isn't there like a number?

It's usually in the single digits that you look at for if, if something is gonna cost this much to buy the lease that it's got on it right now for rent, it will kind of be able to show if you're gonna be able to cash flow that.

Brian Wine: I mean, there's different things we can look at. There's rent to sales ratio, which is your rent versus the sales that you do.

Mm-hmm. For a business, if the rent in different spaces, you know, in the restaurant space, obviously this isn't geared towards [00:22:00] restaurants, but restaurants are eight to 10%. I think in medical, in, you know, BC office buildings, or even on your own, it's probably more like below 8%. The three to eight. Every niche is a little different, so I'm kind of vague here.

Yeah. Obviously we can talk, you know, about different niches in the future, but I'd say, you know, the rent to sales ratio, if you're way above that number, then you're probably having issues. Another thing to look at is your cash on cash return. Everyone's got different visions of what kind of returns they should be getting on their cash.

Mm-hmm. You know, I'd say an older client of mine. Above 65, they probably are okay with more of a, a safer return, something in the, let's call it seven to 10%, guys under 40. I've seen a lot of them just say, I'll risk it all because I don't have that much going on. And those can get up, you know, 10 to 20%.[00:23:00]

Again, it's each individual, what they're looking for. There's obviously some more, um, different percentages and things to look at. There's also a cap rate. Which is a capitalization rate. That might be what you're speaking of. Mm-hmm. That's your return on your investment if you bought the property. All cash.

Yep. Um, there's a lot of different metrics, so you know, obviously if you get a new loan, you have to bring the new loan in based on how much leverage and what the rates are. Obviously, again, every situation's different, so I don't wanna say, oh, this is the guarantee, but in today's day. You could probably get a pretty good deal for anywhere from a a seven and half to about 9.5% returns because again, the rates are high today, so mm-hmm.

Rates are anywhere from, let's call it seven to six, seven five to 7.5%. I mean, I've seen as low as six, 6.14%. That client of mine has [00:24:00] a couple million in his bank account. Cash. So I'd say, you know, the best rate is probably 6.5%. If you're a good borrower, have good credit history and then typically 6, 7, 5 to seven point half depending on what's going on.

But I, I think back to that loan situation, make the banks compete. If you don't make them compete, you're not getting the best deal.

Dr. Kevin Christie: Now, do you, um, a lot of times work with, say the doctor's financial planner as well to tie in the whole thing? Like just this, say someone's got 500 K to invest in something, and it's like, okay, do you invest it in the stock market you invested in buying real estate?

Is that a conversation? The three of you would have.

Brian Wine: I mean, typically the financial advisors are not that involved. Some of them are the doctor, um, specific ones who know me in the space. They all are like, Hey, you should talk to Brian. He really knows what he's doing and his team. Mm-hmm. Um, you know, it, it really depends how involved these financial advisors are.

Some of 'em get white glove service. [00:25:00] They're on top of it. And they wanna do three way calls, me the client and the financial advisor. Some situations the clients are like, look, I need more real estate. I'm too stock, market heavy. Mm-hmm. And I want more diversification. Everyone's got, again, I keep saying this different goals, but it's the truth.

It's hard to, you know, I'm on calls with some of these advisors, but also some of the advisors, I hate to say it out loud, but some advisors most. They make money on how much money you invest with them through the stock market. So, you know, there's some really good ones who will say, Hey, yeah, you, you have too much with me, and they're really looking out for your best interest.

But there's also others who, hey, just keep loading more with me because they make a percentage. So again, it, you know, it's, it's hard to say what these advisors are or are not doing. I think most of the time they're great guys, but at times [00:26:00] they obviously want more investment to make more money.

Dr. Kevin Christie: Yep. Now, we mentioned private equity.

That seems to be a trend in healthcare, not just this year, but obviously over the last handful. Uh, is there anything else that's trending last year or two? I mean, obviously we know that interest rates have climbed. We know that real estate in a lot of areas have increased, but is there anything else you're seeing as far as trends?

Brian Wine: I mean, you know, there's more private equity in these niches, you know, chiropractor, physical therapy spaces than ever. Yeah. I think, you know, some of the other doctor verticals have been tapped into and not as much yet in our space. Mm-hmm. They keep going more and more, and the returns, you know, they keep buying 'em up.

I wouldn't say there's trends, but I just say if you are selling the private equity. It was a direct offer to you. I, I would just say, look, typically direct offers aren't the best offer. They're not competing [00:27:00] against anyone. Yep. So I'd say use a guy like me, someone you fully trust as an advisor. And even with our fees, people are always like, Hey, you, you make so much money on the sale.

But pretty much every time, I'd say 99% of the time we make our feedback and more. There's once in a blue moon where maybe we don't make the feedback, but we help clients really understand what's going on, which I still think is worth our, our fee payment because, you know, if you have this direct offer and you don't understand some of these terms, you could be in for a long employment agreement with a boss that, well, you never thought you gonna have this type of, didn't do.

You're double. Mm-hmm. You thought it was a great deal from the front, but on the backside, you know, two, three years in, I have clients who say, Brian, I, I wish I used you. I wish I knew about you upfront, because I wish I never signed that deal. Yeah. [00:28:00] So that's something I would just be cautious of, you know, upfront.

Every direct buyer really, every buyer wants to make a good first impression. They wanna make it seem like everything's great. People who are you And. I, I would just be super careful because it might not be the, the marriage you were looking for.

Dr. Kevin Christie: Yeah. I had, uh, chatted with a private equity firm at one point, not about anything in particular, but they did mention the real estate side of it and even something, and I kind of brought it up before we recorded, but they were looking at, at some point putting together a real estate consortium of, of some, you know, some doctors.

It's like, okay. What Dr. X is selling a real estate, 10 of us are gonna all chip in and buy that. Have you done any work with groups like that, that, that invest in uh, different spaces?

Brian Wine: Yeah, so I have a couple of groups today where they don't so much buy it with [00:29:00] cash. They more so say, Hey look, I'm gonna give you units just like, let's call it the stock market.

Yeah. You own a mutual fund, let's call it. Mm-hmm. You get units inside that business. So for example. Let's say, uh, I was selling a chiropractic business, or let's call it property today.

Dr. Kevin Christie: Yeah.

Brian Wine: The client, Dr. Joe, let's call it, he sells. They typically offer less than what the market really is, and they give you units.

So let's just say you got $700,000 on your, you think it's worth a million, the market's probably nine 50, let's call it. They offer you 700,000. Some of these groups will offer anywhere between probably a six and 9% return on your unit that they call. You know, that they give you, so for example, if you sold or gave them $700,000 of units, you would get an [00:30:00] 8% or 6% return.

If it was 8%, it'd be 56,000 a year. Then you own a piece of, they typically say, look, we have X amount of properties, let's call it 50 properties. The good reason, or a very thoughtful reason to do this is if you've got a couple years left with a, a tenant that you're not the, the user. Say it's a another business, it's corporate credit, and there's a couple years remaining and you know that they're not doing as well.

Well, if you have a piece of, let's call it 49 other properties and they don't renew their lease, well, you still get your income typically. Again, every situation in the documents show differently, but a couple of groups I work with today, they say even if the tenant leaves building, then we will still pay you your.

On whatever that percentage is. So if it was 8% in this [00:31:00] scenario, you would get that until they decide to exit their, typically these funds say, Hey look, we bought it at such a, they don't typically say steep discount because they wanna make it look good, but they'll say, look, we got it at such a good deal, we brought you in.

And as the market evolves and changes and gets better. You know, pro forma numbers that we can maybe two x or two and a half x our initial investment. So some of these groups on the front end will say, Hey look, we're buying it for 700,000 units and we'll exit at, let's call it, you know, 2.1 million.

Mm-hmm. For that property. Do I fully believe that's gonna happen? It say it. Track record. If they've done it before. Mm-hmm. If they're overbuying some of their properties in this fund, meaning spending too much on units at not the [00:32:00] exact worth of these properties. Yeah. Then I would be super cautious if your property, if you say to them, Hey, I wanna see your portfolio and if your property is in your opinion, I mean, most sellers, they always say there's just the best.

Let's just be honest. If you think at all, yours is the worst one and they're overpaying for yours, then again, I, I would just be cautious because if yours is the worst one, when you look at all the other beautiful properties and they're overpaying for yours and wonder what they're doing on the rest, yeah.

Again, it, it's gotta make sense. Will they show you all of that? I don't know. There's a lot of great groups out there, and obviously they wanna do what's best for, for you and for them. On the exit, if they keep overspending, it's gonna affect everyone in the group. Yeah. So that's, that's one way to look at it.

It's just, again, it depends on, on the, the backers, the main managers running this fund.

Dr. Kevin Christie: [00:33:00] Yep. So let's fast forward. We're, uh, we're a doctor, we're looking to exit, and let's say, let's, let's make it independent of the practice. Right now we're looking to exit from the realist. Well, let's, uh, let's reword that a little bit.

Let's say we got two options. We're exiting, I'm gonna sell the practice, um, or, and I'm gonna lease this space out, or I'm gonna sell the whole kit and caboodle and get outta my real estate. I know it's a loaded question, but should the, the, the seller chiropractor, should they sell their real estate, take the money, and then reinvest in other things?

Or should they keep the real estate and rent it out and have that income coming in? Let's say this person has paid off the note, they own it outright. What, I know it's a tricky one and there's a lot of variables, but what are some things that you would talk to that client about?

Brian Wine: I know you said it was independent, but

Dr. Kevin Christie: mm-hmm.

Brian Wine: Let's just say, let's say the business was apart because there's, there's so [00:34:00] many different situations here. Yeah. If the business apart and you're thinking about selling your business one day, I would say, no, no, no. You're not selling the real estate. I, I would highly recommend not to. So a lot of real estate brokers will cold call you or talk to you and say, Hey, let's do a sales effect.

Typically, those real estate brokers do not know. How well the actual business is doing. Yeah. And so it might sound really good on the upfront, Hey, I'm gonna get 3 million for my real estate that I can then pump into my business. But if your rents are too high or you don't account for certain things, or you have a bad market or a bad year, well you could be upside down in three.

It depends how the stages go and your lease and your annual increases.

Dr. Kevin Christie: Yep.

Brian Wine: So that's one side of it. Back to the business. I know you, you didn't fully bring that in, but. I would focus on selling your business first. Get that sorted out. You get one shot. That's it. If you have a bad lease in place by doing one of [00:35:00] those lease back, or Yeah, selling to anyone for that matter.

Some of these private equity shops aren't gonna be interested in your deal because they're gonna have to relocate you because you spent too much money. Yeah. Because again, your business might not be profitable. Right. They're just looking for profit. Making sure in five, 10 years that they can make more money on your business.

Their goal is to grow it right when it comes to the real estate. Your other side of the question, look, if you're exiting the business, you own your real estate. Sure. You, you've exited and it's vacant, you know, at lease that that puppy up right away or get a leasing. Um, broker who's the best in that area, who can give the most amount of time towards leasing the building If it's, Hey, I really wanna sell, I paid it off.

I don't need this anymore. Sure, that's another great idea. Um, you could sell to an owner user where there might be more money because [00:36:00] someone, a doctor, can probably pay more than just a investor for that space. Typically when they're vacant. If they're not full, if they were built out, you probably have a better shot at getting someone in there for that particular use.

But again, it, it can be tricky on the situation. I mean, in my opinion, again, it's, it's about your financial situation. So if, if you need the money, sure. So. But if you don't need the cash that it provides today, I personally think the way you build long-term wealth, even though I'm a broker, is you own as much real estate passively as possible.

The mentors and clients of mine that are the wealthiest, they own a lot of real estate and a lot of 'em, because they buy so much, they don't even pay taxes because you can do a cost segregation study. You can [00:37:00] fast forward the time of your depreciation. Again, I'm not a financial advisor or CPA or accountant, but if you work with the right broker and the right team lawyer, CP, a advisor, and you fast track your depreciation.

I mean, I have a client who buys $20 million worth of real estate a year, just so he paid zero in taxes and he's in California. So taxes there are super high. So, you know, again, there's a lot of different tax strategies you can use and I'm all a, I'm a huge fan of look, bring the building to the highest and best use, lease it out to whoever you can.

If you're like, look, I can take the money out of this and go exchange to a 10 31 tax deferred exchange and go into another property that brings me more value faster, then, then that's a great idea. But if it's to cash out. I'm, because Uncle Sam is, [00:38:00] is probably gonna get some money from you, depending again on this situation.

Just so you know, 10 31 tax deferred exchange for you guys out there. You can sell your property and not pay taxes if you would, if you, if you sell your property or once you sell your property, you get 45 days to identify the next property. You get three properties to identify. 45 day window from you, from when you last sold the property, and then you get 180 days, six months to buy one of those three properties.

So if you buy one of those three properties, again, they have to be like kind or better. So a million dollar deal, go buy a million dollar or more. Gotcha. If it, if it's less than a million dollars, they call it, it's a deal. I or Uncle Sam, however you wanna look at it, can tax you on the boot. Boot is the difference.

So that's a quarter million dollars, [00:39:00] 250,000. The IRS can tax you on that amount. But again, I would talk to your, your CPA accountant, because there's all different things going on from depreciation and your cost basis. Mm-hmm. So there might be ways to get out of that depending on what they suggest. But again, if you're selling and not cashing out, I highly recommend doing the 10 31 exchange.

Dr. Kevin Christie: Yep.

Brian Wine: If you're like, look, I, I wanna cash out, I don't wanna deal with real estate anymore, you know, then, then you'll end up paying the tax, which, you know, again, every situation is different, but in my opinion, long-term wealth is built on passive income and building it up.

Dr. Kevin Christie: Well, Brian, this has been great and very informative.

Uh, I think a mark of a good podcast is when we got more questions that we keep on going, and I'm hoping that our audience will, uh, reach out to you to ask some of those questions and if they need [00:40:00] help in any of these things we talked about that you could help them out. And, um, they, I just, like, anytime I have a guest on and I know that it's like, look, you can only dive into so much you, you need to.

Hire someone that's an expert when you're gonna make these big decisions. We're not talking about, you know, a hundred dollars decisions here. Like these are big decisions for your future. Uh, I got lucky I didn't have someone like you in my corner in 2013, but it worked out that it, it, it, thankfully, but I looked back.

There were definitely were some mistakes, but it didn't, uh, hinder me too much. Knowing what I know now. I would want someone like you in my corner. So how could, uh, our audience reach out to you?

Brian Wine: You guys can look me up on LinkedIn. My, uh, my name's Brian, last name's wine, just like the drink, WINE. Um, you can also find me on the internet anywhere.

Just Google me. Uh, my company's called the Wine Group. Uh, we sell both practices and real estate. So the wine group, r e.com or tw gpa com, [00:41:00] and my phone number is (323) 609-4405. But again. No matter level, if you're a beginner to intermediate to advance, I welcome all, all questions. There's no stupid question.

That's what I'm, here's what brokers are here for. So to end.

Dr. Kevin Christie: Perfect. Thank you, Brian.