YFP REI 119: House Hacking with the House Hacking MD

Dr. Ayush Gupta, founder of MD House Hacking, shares his journey into real estate investing and how it has helped him pursue financial independence.

Episode Summary

In this episode of the podcast, hosts Nate Hedrick and David Bright welcome Dr. Ayush Gupta, a pediatric emergency room physician and seasoned real estate investor and founder of MD House Hacking.

After witnessing his colleagues lose their jobs and investments during the COVID-19 pandemic, Dr. Gupta felt prompted to explore other income opportunities, specifically in real estate investing. Dr. Gupta illuminates the concept of “house hacking” and its financial benefits, drawing from his own experience of purchasing a four-unit building with a minimal down payment and renovating it for profit.

Dr. Gupta shares his journey of acquiring multiple properties, including invaluable tips for negotiating with contractors, finding and financing deals, scaling investments and navigating market conditions.

About Today’s Guest

Dr. Ayush Gupta, is a Pediatric Emergency Medicine Physician. He was born and raised in India. He moved to the US in 2012 to complete his Residency and Fellowship. Soon after Fellowship, he moved to New Orleans where he works Full time in the emergency department. But he isn’t your average doctor. Witnessing COVID burnout, he started investing in real estate through househacking, living rent-free while empowering other healthcare heroes with house hacking and financial freedom tools. Now, he shatters the “just a doctor” label, advocating for multiple income streams and crafting an identity beyond medicine.

Key Points from the Episode

• Real estate investing for pharmacists with guests Dr. Gupta. [0:06]
• Becoming a physician, from India to residency in the US. [4:01]
• Real estate investing for medical professionals. [6:32]
• Buying a four-unit building with a 3% down payment and renovating it for profit. [11:23]
• Real estate investing, collaboration, and finding contractors. [17:10]
• Aligning incentives for renovation contractors and setting emotional boundaries. [19:35]
• Real estate investing strategies, including finding and financing deals, rehabbing properties, and scaling investments. [23:52]
• Buying a second short-term rental property for tax benefits and appreciation. [29:12]

Episode Highlights

“Why do you think doctors become the best entrepreneurs or have a potential whether it’s pharmacists or physicians? Why do we become the best? I think there’s like so many things to say to the point that you were saying we do a great job at collaboration and teams, I run a code in the ER, I can never do that alone. You know, I need a pharmacist, I need a nurse, I need my residents, my fellows, RPs. Everybody. So we have that instinct set up in us. And then the other thing is we are hard working. We have so much grit. We have gone through 8-10 years of training, studying for like 14-15 hours a day. So we have a lot of capabilities and skills that are needed in being a real estate entrepreneur to be honest.” -Dr. Ayush Gupta [18:15]

“So those things helped me a lot, just getting the emotion is the biggest thing I figured out, just take the emotion out of it. Think about it as a business, when you start investing, even if it’s house hacking, you are trying to run a business. Try not to make it your perfect home because you’re not, you’re not trying to live with it. So think about this as a business and take the emotion out of it. That’s how it works.” -Dr. Ayush Gupta [23:07]

“So one piece of advice is find the person that you admire the most. Like, suppose you want to buy real estate, find the person that’s buying a lot of real estate that you want to go through that. Take them out for coffee, you know, most people who are ahead of you, as much as you fear it, they will be so happy to give you any kind of advice in a very nice way without asking you for anything.” – Dr. Ayush Gupta [41:30]

Links Mentioned in Today’s Episode

• MD House Hacking
• MD House Hacking on Instagram
• Dr. Gupta on LinkedIn
• YFP Real Estate 113: Short Term Rental Tax Loophole
• Bigger Pockets Podcast
• Subscribe to the YFP Newsletter
• YFP Disclaimer
• Your Financial Pharmacist
• YFP Real Estate Investing Facebook Group
• Nate Hedrick on Instagram
• David Bright on Instagram
• YFP Real Estate Investing Website
• David Bright on LinkedIn
• Nate Hedrick on LinkedIn

Episode Transcript

Nate Hedrick  00:06

Welcome to the YFP Real Estate Investing Podcast. I’m Nate Hedrick.

David Bright  00:09

And I’m David Bright. We’re both pharmacists and real estate investors that believe that real estate investing does not have to distract from a meaningful career in pharmacy.

Nate Hedrick  00:18

Each episode we share stories that educate and inspire pharmacists to leverage real estate investing as a part of your financial plan. Hey, David, how’s it going?

David Bright  00:29

Good. Thanks. Hey, how you doing, man? 

Nate Hedrick  00:30

Good man. I just got back from a little Florida sunshine, spring break action with the kiddos and doing good. It was nice to get away from…I love Cleveland. But it was nice to get away get a little sun for a little bit.

David Bright  00:41

Yeah, those of us that deal with the Midwest snow, gray winter. Yeah, definitely nice to get out of town and see a change of scenery here and there. I hear you on that one. Yeah.

Nate Hedrick  00:50

And you know, that trip coupled with the conversation we just had with the guests we had on today, talking about where someone might be living. And I thought about when I got out of pharmacy school, and we were trying to determine where we were going to live, again, picked Cleveland, which not everybody would do. But it made me think about that. Like, where do you live? How do you live? How do you afford it? Do you house hack, which we’re going to talk about? Do you buy your own place? And it was just it was a good reminder of that conversation and how those conversations can come up.

David Bright  01:19

Yeah, it brought me back to my college days, because in pharmacy school, I lived with two different roommates that owned the house, they did the house hacking, they bought a single family house, and they rented it out the bedrooms to to other folks that were also in college. And so I don’t know why I didn’t do it then because I’m seeing their success with that as well as folks like our guest today that were able to acquire a lot of rental units really early on in their career and with really low downpayment mortgage strategies. 

Nate Hedrick  01:53

Yeah, so we were lucky enough to have a conversation with Dr. Ayush Gupta. Dr. Gupta is a pediatric emergency room physician. He also is a real estate investor and started basically an online community called MD House Hacking, where he teaches doctors and other medical professionals all about the concept of house hacking. And now someone can do it in a really positive and helpful way. And they just I really liked what he has to say.

David Bright  02:20

Yeah, I know, we’ve talked before about that ability to use the rent of roommates or focusing on other units in the property to offset the mortgage and how that can be really positive. He gets into a lot of strategy by how they can snowball into multiple properties in a short period of time knowing that you can buy another one of these, essentially every year, in some cases faster with different strategies. And so he’s been able to acquire a lot of units quickly and do it in really creative way.

Nate Hedrick  02:46

Yeah, what I particularly like, too, is that he’s not somebody that goes in like a lot of the guests we’ve talked to, who put sweat equity in, right? It’s all about I bought this place and needed a ton of work. I lived in it and dealt with it while I while I fixed it up at eight o’clock and on the weekends like no, he hires it all out, he gets it all done professionally, he doesn’t have to worry about doing it himself. And the model still works, which I think is really telling and really impressive.

David Bright  03:10

Yeah, I think it’s a much more tolerable approach and a much easier lift to get into a property. You hear about a lot of house hacking, that’s maybe a small unit, maybe it’s a rougher neighborhood, it’s there can be a lot of things that are just not as enticing about that strategy. But hearing how he was able to jump into a nice neighborhood, a remodeled unit, and then do that again and change neighborhoods and change everything about that with frequency. So it didn’t become this like life sentence to live in this house hack, right. But he was able to do this in stages and have it play really well into his financial plan.

Nate Hedrick  03:49

Yeah, well, hopefully you guys enjoy it.  Again, we had a great time talking to Ayush. So hope you guys enjoy the episode. And with that, we’ll jump right in. 

Nate Hedrick  03:58

Hey, Ayush, welcome to the show.

Dr. Ayush Gupta  04:01

Thanks for having me, you guys. Great fan. So thanks for having me on the show. 

Nate Hedrick  04:06

Yeah,we’re excited to talk to you. I mean, we don’t get to talk to too many docs on the show. It’s usually just the pharmacist scene. So it’s really cool to I feel like we’re on the collaborative hospital team right now bringing in the physicians. This is great.

Dr. Ayush Gupta  04:19

Yeah, absolutely. I don’t know why. I did a podcast with one of the pharmacists recently and he recommended me to you guys. And I have no idea why docs and pharmacists don’t collaborate a little more because you know, we’re saying a lot of things I think, from what I’ve heard in your podcast, a similar similar thought process similar boat going through long years of training and just doing nothing about finances.

Nate Hedrick  04:43

So yeah, I couldn’t have said it better myself. That’s precisely we wanted to have you on today because you’re in the same boat as us right? It’s that same kind of situation and you’re doing the same kind of education that we are so we thought why not share your story get more than that message out there and and learn some from you. So why don’t you jumped right off, tell us a little about just your background, your story, your journey to becoming a physician, and then we can get the real estate from there.

Dr. Ayush Gupta  05:07

Yeah, absolutely. So I’m gonna start from being born raised in India. So I was I’m not from here I was born raised in India. I went to med school from high school. So in India, you decide what you want to do in, in, like, in middle school, because while you’re going into high school, you want to know that. So for me, I was I was six when it was decided for me that I’m gonna go to med school, because my brother was six years older than me. So for him, it was decided at that age. So it was very early, that I knew my parents gave me a stethoscope, knowing that I’m going to be going to med school or pretty early on. Eighteen is when I got into med school, and they’re like, super competitive to get into med school, I did not enjoy the competitive environment. So for example, when I got into med school, 100,000 people applied in 1000 got in. So basically, it’s it’s a high high high ratio of not getting into med school. And it’s a lot of like cutthroat competition. It’s not like good competition. It’s like, I’m going to push it down so that I get in it kind of that I kind of did not relate to that. Fast forward 2012 I mean, I took my steps while I was in med school. And 2012 I moved to New York. In New York, I did my my three years of residency in pediatrics. From there, I moved to Michigan, but I did another three years in pediatric emergency medicine fellowship. And you know how it is in in med school and pharmacy school it you just go through training for a long period of time. So 2019, I moved to New Orleans and that’s where I work as a pediatric emergency medicine physician.

David Bright  06:46

Very cool. And so obviously you’re on this show talking about real estate so at some point in there real estate entered into the picture and amongst these 80 hour plus weeks of residency and everything else like where did you find time and how to real estate start to fit in?

Dr. Ayush Gupta  07:03

Yeah, my my dad was a real estate mogul. I’m kidding. No, we had no real estate background. Never heard about it, you know. And the funny thing is, it’s probably the same in pharmacy school in med school. We never talk about it, you know, med school residency fellowship, like what 12 years zero talk about finances, you know, zero talk about real estate. It was I was going through the same path as anybody else graduating and becoming an attending or getting a job is trying to buy a nice single family home in New Orleans. You know, like everybody does after you use finally start getting a paycheck and you’re like, Alright, let’s go splurge. That’s the first thing you want to do you want to buy nice car, nice house. I was on the same path in 2019. I was looking at single family houses in New Orleans is beautiful, like architecture wise, they have tall ceilings, big windows, I was trying to look at one of those historic homes. Fortunately for me, or unfortunately COVID hit in 2020 in March, and New Orleans was one of the most rampant cities because it was right after Mardi Gras, we had a lot of patients. And it kind of stopped everything. You know, you can’t go and buy real estate at that point. There was no showings, there was nothing going on. So that’s when I actually that’s when I started thinking about real estate. But what made me think about real estate was seeing my my colleagues, my attendings, my mentors in Michigan, that I came from losing their jobs or being furloughed. And it’s tough to think that for me, it was fresh, like I just finished 12 years of training, and I’m like, Okay, this is live now I’m going to be doctor for the next next forty years. And I’m going to make money, I’m going to retire at 65. And I’m going to live off my retirement, you know, that’s like the usual herd mentality that we all think and that’s how I was told, okay, this is what everybody else does. So I’m going to do the same thing. But then I saw people who were like 20-30 years older than me who like 40s, 50s, and 60s, and they were either their 401K was cut into half because the stocks crashed during that time as well. And they were trying to retire and they couldn’t, or they were retiring with half of what they thought they could retire on. Or people were getting furloughed, not getting paid. So that’s when I’m like, I need a second stream of income. If something happens, at least I need to have a shelter at my at my place. And that’s when real estate came came about.

Nate Hedrick  09:23

I love that because I think most people assume and I think this is assumed on the pharmacy side, too, right? Like, oh, you’ve got a great job, you may get a salary like, you don’t have to worry about anything like your finances are basically just taken care of on their own. But that’s obviously not the reality, right? And especially somebody that’s getting close to retirement if you’re at a bad time, and everything’s stuck in stocks, like you’re at the mercy of the market at that point. So I love I love hearing that from somebody on your side of the field because I think that that’s a common misconception. It’s good to keep putting that out there. So you obviously got into the world of house hacking though. So tell us a little about we’ve talked about house hacking on the podcast in the past but give us the kind of the 10,000 foot view, and maybe why, you know, that felt like a good fit for you and that was the world of investing you wanted to get into?

Dr. Ayush Gupta  10:07

Yes, so the 10,000 foot view was basically house hacking is you are living in a portion of the building, whether it’s the same house same unit, and sharing your space or units with somebody else. So I like to define it like, you know, you can be a med student sharing a room in the in the house, and the others are helping you pay for the for the mortgage, or you can be an attending or resident, who’s just starting out, and you have a unit in a three unit or a two unit building, and they’re cutting down your mortgage to have by getting the rent, or you can be like a later stage in life in which you have a big house and you have a artificial dwelling unit or something in the back. And, and that’s how you’re, you’re offsetting a mortgage. So that’s basically house hacking. You know, most of us during training or med school, shared rooms with people, you know, that’s basically sharing rooms, and just giving them money to rent at that point, if you own the place, and the and you were collecting money from your colleagues that the house hacking. So that’s like the 10,000 foot view of it, you basically get a property, you try to cut down your mortgage, you try not to pay rent, and you get all the advantages of house hacking. So basically, you still get your loan paid down, you get your appreciation, you get the tax benefits. So bunch of benefits. For me, like I said, in COVID, when I saw that people were having trouble for the next mortgage payment, because they’re like, I don’t know, if I’m gonna get a paycheck next in two weeks. So that’s when I was like, I need to be at a place where at least I know I can live somewhere, doesn’t matter if I get a paycheck or not. And I did not have a lot of money, I just became an attending, I did not have a lot of savings at that point. So I was what can I do in which I have to bring least amount of money, and I can figure out that I do not have to pay for mortgage. So that’s what I did. And I’m happy to go into the numbers. But basically, I bought a four unit building. And I made it in a way that I had to put least amount of money down or whatever I had to put it down and then pay no rent or no mortgage ever after that.

David Bright  12:11

Yeah, I’d love for you to go into the numbers on that. I think that’d be great to hear. Because it I would imagine that you’re using like low downpayment strategies that come with an owner occupant building, and and other people are paying the rent. And I know that Nate and I have talked about that kind of ethereal concept. And we’ve had a couple people share those examples. But examples make it really real. So yeah, if you could share those numbers, it’ll be great.

Dr. Ayush Gupta  12:34

Yeah, absolutely. So I bought this house in New Orleans, it was listed for $650,000. It sounds a lot, right at $650,000. It’s very expensive. And then I could not afford 20 to 25% down, that would be around $120 to $150,000. And that I did not have in savings. But what I did, and this was a four unit building, each unit was two bedroom, one bathroom. And I was starting out after being an attending, I did not have family, no kids. And I bought the place with a three and a half percent FHA loan. That’s what I did. At that point, I knew a lot more creative strategies. And the current house hack that I live in, I moved from there to a new house hack. I paid 0% down. But that time, I did not know that there’s 0% down possibilities as well. So I paid I use the FHA 3.5% down, so that after all closing costs, and everything I was at $25,000, is what I brought to the table. And then I got access to the building, I got access to building the four units already had tenants living in it, my overall expenses for the property, the PID of the principal, interest taxes and insurance, basically was $3,300. Because I had you know, it was 2020, there was like amazing interest loan loan interest rates going on. So I had a 3% loan. So $3300, then an add 1000 bucks on property management, all that vacancy capex that I calculate. So full total total $4300 was my expenses. With the four units being occupied. I used to make $6000, obviously, I moved into one unit, and then I used to start, I still made $5300 to live with it. So I was making and before that when I was renting for like nine months approximately after I moved to New Orleans, I was renting for $2295. So just by doing that, I mean I invested $25,000 However, my spread was somewhere over $3000-$3,200 a month after saving the rent and taking the income that I was getting to live there. I mean, I think I got lucky with a slam dunk and a house hack to be honest that time, right market, right interest rate. Property was great. It worked out but I think that just spread that I had or even if I cut down to $2295 to $0 or even like $500 to live somewhere that would have I was just looking for that honestly. So those were the basic numbers. I went through a lot of prices after that, eventually what I did was I took private money. And I, I didn’t again, I did not made a lot of money that time. So I took private money, renovated the property one unit at a time, increase the rents over there, and then REFI it and got all my $25,000 and the private money out the $650k became $950k in a year. That was the new appraised value of it. Again, I think I rode the market a little bit. So I got all the money out, I was living there for free, I had 1000 bucks coming in. And then I got a line of credit. So apart from REFI, now I got a 25%, because I got out of the FHA loan, I got to convention 25% to 75% loan to value loan. And then I got a HELOC because I lived with up to 90%. So that HELOC money I took and bought other properties. So that was the overall process of what I did for the first two years. 

Nate Hedrick  15:52

I love that you just boiled it down in like three and a half minutes. And most people are just like there’s no way. But it’s like you took every little step and just walked through it. And you know, obviously had a good timing right, like the timing worked out. But it was also just taking the initiative. And even if you hadn’t ridden that market appreciation, like it still would have worked out in a really good job. So yeah, I just I That’s awesome. Thank you so much for going through those numbers like that helps a ton.

Dr. Ayush Gupta  16:18

Yeah, and it’s basically doing, you know, strategic renovations and just having mentors. I had zero background in real estate, again. I have my first few months of buying real estate, I mean, I had the worst experiences ever. It’s you always go through failures, you always go go through the everybody thinks, you know, whoever your audience is listen to Oh, it must be easy for him, you know, but honestly, you go through a lot of stuff, anybody who’s gone into any kind of entrepreneur journey, real estate, business, podcasting, coaching, I realize it’s a lot of downs. And then a little bit of ups and little bit of downs, a little bit of ups. So that’s what I went through. And just having the help over there help and the help, basically, the mentors helped me figure out that, you know, this is the renovation you do, which is going to have your maximum value, this is the outside paint you need to do that’s going to have your maximum when you go to appraise the property. So those things helped a lot.

David Bright  17:10

Yeah, I think that there’s something there because as you mentioned, there’s done a lot of financial training in either one of our programs. I also didn’t learn how to do drywall in pharmacy school, you know, I didn’t learn any carpentry in pharmacy school. So there’s not a lot of this that I could do myself, right, that didn’t come with a pharmacy degree. That’s probably a good thing too. Because as I’ve tried to teach myself, it’s not good. But one of the things that I think we do learn in our programs is collaboration with people of other disciplines and putting good heads together. So I really love this, this mentorship, and then presumably finding contractors to do some of this work as well. I feel like that’s one of the scariest parts for people because I can understand raw numbers and I can look at a spreadsheet and say, well, if we invest $20,000 In this unit, it’ll rent for more, but how do you figure out that $20,000. That feels really intimidating people that have not done some of this rehab work before. How did you approach that kind of mechanically and bringing people in and all that?

Dr. Ayush Gupta  18:11

You know, somebody asked me a question like, Why do you think doctors become the best entrepreneurs or have a potential whether it’s pharmacists or physicians? Why do we become the best? I think there’s like so many things to say to the point that you were saying we do a great job at collaboration and teams, I run a code in the ER, I can never do that alone. You know, I need a pharmacist, I need a nurse, I need my residents, my fellows, RPs. Everybody. So we have that instinct like set up in us. And then the other thing is we are hard working. We have so much grit. We have gone through this 8-10 years of training, studying for like 14-15 hours a day. So we have a lot of capabilities and already skills that is needed in being a real estate entrepreneur to be honest. So for me, the to go into the tactical part of it, like how did I figure it out $20,000 would work is anytime I get a rehab done, when I have rehab or a flip I need to do I get three quotes. The best places at least currently that works for me is now I have a big team but what I do is Facebook marketplace locally of real estate investor groups. That’s a really good place to try to find contractors or even handyman or a plumber if you’re trying to go because those are guys that use these guys all the time rather than you can ask you realtors you can ask your lenders you can ask a lot of other people for references, but I think that is a very genuine group because people are using it for them. Then you get three of them come in, create a very same scope of work. Like suppose  you want to add one bathroom one kitchen, do paint, write it down in a Google Doc, give it to them the same paper. And then ask them Okay, can you come walk through the place with me? What do you think about it? Can you give me a feedback on what your costs and your time is going to be? Interview all of them. There’s some questions you can definitely ask and then see what they come up with and, and that’s how I think that’s what’s helped me apart to be very onpoint. I don’t think any renovation I’ve done has been exact dollar amount. To be honest, it’s always gone over. So anybody who says I’ve gone under the renovation – that’s never gone under, it’s always gone over. And then just I think setting up incentives has helped a lot. So for example, if somebody comes to me, and they’re like, Okay, I can do this work for $25,000. And I’ll be like, and they will, and I’m going to ask the next question how long it’s going to take you? And they’ll be like, I’ll do it in six months, I’ll be like, okay, so what if I, if you finish in five months, and I’ll give you $2,000 extra for them every month early, you finish? And they’re like, sure, yeah, $27k, I’ll finish in five months. But to the caveat that if you take seven months, I’m going to cut down 500 bucks every day from your time. Obviously, this is an arbitrary thing. But that that is a great strategy that has helped me a lot to figure out a good negotiation with the contractor, get them on board with the time.

David Bright  21:07

Yeah, I like that a lot in aligning incentives. I feel like in healthcare, oftentimes, that’s very natural for us, because we want to see the patient get better, right? Like, that’s very clear for us. But aligning incentives, here it with a contract relationship, that can that can be our adversarial times unless you can find those win wins. So I like that a lot. I feel like I love the Google doc tip and getting that very clear scope of work. One of the things that I personally struggle with at times is I always want to make the property may be nicer than it needs to be because I see something on TV or I see something on social media. I’m like, Oh, we could do this shiplap wall. And we could do this and it would look so cool. How do you how do you set limits there, so that you’re making good business decisions along the way. And it sounds like part of that may be mentors that you’ve engaged as well.

Dr. Ayush Gupta  21:57

Yeah, it’s outside people who helping me out. And that to be honest, my fault, I’ve got better with that. I actually wrote an article on at one time, my first property, I was so emotional about it, I would walk past it every day, I would drive past it every day, even if the renovations going on, the contractors doing work, I would want to go in every day of that. So emotional, and that’s what you know, all the wins I had, there was some losses and to like I was saying, I set up a budget for $25,000, it went to $30,000. That’s a loss. And getting emotionally attached is very common, when you try to buy your first property or you try to rehab. I think it’s like, it takes reps like anything else, when you go through the process. And then the other thing with how sad it cost you little more emotions, cause you basically you’re going to be living in that place. So you choosing what what kind of property you want it to look. However, you have to understand is it’s, one, it’s not your forever home. Second, you have to think about it investment property. Third, for for myself, I think about when I was a tenant, what was the guy giving me when I was living over there, you know. So those things helped me a lot, just getting the emotion is the biggest thing I figured out, just take the emotion out of it. Think about it as a business, when you start investing, even if it’s house hacking, you are trying to run a business. Try not to make it your perfect home because you’re not you’re not trying to live with it. So think about his business and take the emotion out of it. That’s how it works. And then the outside mentors, they obviously help because if you if you talk to somebody, suppose if somebody is coming to me, and they’re like, this is my first renovation I’m doing and I want to put like you were saying, I want to put shiplap on it. I want to have a crazy drywall, I’m gonna have some crown molding. I’ll be like, does it help? Will you get more rent than you do that? No. So that’s it. Yeah, yeah. That’s an example.

Nate Hedrick  23:52

There’s some great tips. And I think that’s it gives you a clearer picture of just how to approach things from a very stepwise approach. I think a lot of our audience can resonate with one of the things that that always comes to mind, like you talked about finding this steal and like you hit a homerun, right. And again, some of that was timing, but some of it was just like finding a great deal. How do you source these deals? Like what are some of the process that you use to find properties, especially in the pretty competitive and niche multifamily space?

Dr. Ayush Gupta  24:21

Yeah, so you know, things have changed from 2020 to what it is now. There’s so many properties out there right now that I don’t have to go through the process of what I usually have to go through, but this is, this is what I do. So, again, I use the Facebook groups, but I also use the local realtors group. There’s so many online realtors, you can reach out to. What I do is I make first my deal criteria. So everybody’s different is gonna be different. You know, for you, David, for you guys. It might be different. So maybe somebody wants to buy a single family house and one house hack, buy a room or buy a duplex and and go to that so I make very specific these criteria. So I’ll give you the five things were. So one is going to be your location, your zip code that you want to buy in. Second, your cost. How big of a property you want to buy and how many beds and baths, whether you want a single family, duplex, triplex, fourplex. Those are the big criteria and how far for us specifically medical professionals how far do you want it from the hospital. So that encompasses the zip code as well. So I make the deal criteria, and then I throw it out to like maybe 5-10 people. I’m gonna give it to the realtors, I’m gonna give it to the wholesalers. One thing to know, the caveat is once you try to get wholesalers to come give you a deal, you probably have to do some renovation work to it as compared to a realtor when they bring the deal, which is all done. Stick to the deal criteria. That’s the biggest thing I didn’t tell anybody is like if you have decided that a two bedroom, two bedroom duplex works for you go stick to the deal criteria, doesn’t matter what comes to the market. If you think that $500,000 is your upper limit, stick to the criteria because there’s only so many ways to like sway from from one one portion to the other. So sticking to the deal criteria, and then giving it out there to the realtors is the best best way. Like when I teach anybody how to house hack, one of the first things we talk about is don’t worry about looking at anything yet just make this five or seven points of these criteria and go from there.

Nate Hedrick  26:16

I really like that, again, it shows the stepwise process and the team approach, right? You’re not just like, I’m going out, I’m sending out letters and I’m pounding on doors and driving the neighborhoods like no, no, you’re like I’m working at the hospital. And then I send out the people that are actually good at this and I have them bring the deals to me. Like I just think that’s so important. Because I think so many people get overwhelmed the idea that like I have to do everything. And it’s like, no, you just have to be in the middle and then send everything else to everybody else. So I think that’s, I think that’s great. I think you know, the other thing that you mentioned, too, is that your first place right? So you talked about doing some of these bigger, bigger rehabs, but even the first place you bought, it was tenneted all four units ready to go didn’t need a rehab right off the bat, like that was the eventual process, but you don’t have to find something that needs to be worked on. 

Dr. Ayush Gupta  27:03

Right. Yeah, yeah. 100%, you don’t have to, like some people don’t have time, you know, if I, if I had to do something in residency or fellowship, when you know, you’re working 60-80 hours a week, I and I also didn’t have money, I would never do a rehab or I would not think about it. I’m not a handy guy, I’m putting a nail, like, we just had to put a like a bracket in the wall. It took my fiance like two months to get me to do that, because I don’t like to do that. So just being honest, as a resident or a fellow I would not have been trying to go into rehab process, it’s just that you can get increased the value of a property. And that’s the advantage of doing a rehab strategically. So but people who are busy like, you know, a pharmacist, y’all work so much like this, you guys do like seven in a row sometimes I hear sometimes you guys have seven and a half this all the crazy shifts that we guys do. So sometimes you don’t have time to that. You can buy there’s so many like just in my market. Right, I can see so many duplexes or fourplex or three plexes that’s out there, which people can house hack, I think the biggest thing that I see is like, and I see that among people who are my colleagues for the last four years, and what we’ve five years with working together and they like really, we want to buy a house, we want to buy a house, we want to buy a house, we want to buy an investment property. Five years have gone by they haven’t taken this step, there’s always gonna be a problem, you know. There’s always going to be either the markets too hot, or the interest rates too high, or the insurance has gone up, there’s gonna be some reason that people don’t want to take the step, you just have to decide what your goal and go from there. 

David Bright  28:38

I want to talk about scaling for a minute also, because you’ve you’ve not just done the one property, you’ve done others and you described how you know, buying something that was relatively turnkey helped you to get started. And you’re able to fix it up in order to drive some appreciation of the property which allowed you to borrow against that equity that you created to go buy more properties. And I think that’s a relatively common thing that we hear is once you get that first one, it just gets so much easier to go to the next one because there’s more opportunity to drive value and create that equity. So what did what did that look like for you to buy that second property?

Dr. Ayush Gupta  29:17

Yeah, so it basically stemmed for from the other big thing. So this, so this was in the middle of 2021. So 2020, August or September is when I closed on the first property. And then around February of 2021, I saw my tax bill as a physician, you know, it stemmed from that. I was again, lack of financial education, no education and taxes at all and you realize that 50% of the salary is going to taxes. So stem from that. I did research and I figured out there is a STR loophole for taxes, short term rental loophole, when you are trying to buy and try new have to be managed. We can go into details if you’d like to. But I basically the next deal was, I gave myself one quarter. I was like dabbling with stuff. I’m like, What am I doing? I know how to set a goal. I gave myself a quarter. And I’m like, Okay, this quarter, I’m going to buy a short term rental. And that was like the third quarter of 2021. Yes, third quarter. And then that’s what I did. I bought a short term rental outside Asheville, North Carolina. Again, not in my neighborhood. It takes like, if we have to fly, we have to take two flights. There’s not a direct flight to Asheville from New Orleans. So we have to take two flights to get there. And I have never been to Asheville. I have been to that property one time before buying it. And yeah, that’s what I did. I basically ended up buying a short term rental. I, we did a little bit of we did maybe like two months of rehab. And that property increased the value as well. Whole basement we converted into a living playroom. Bunk space. So it was a lot of fun. And yeah, I still have it. It’s basically a short term rental. That was the second property that ended up buying.

David Bright  31:03

Yeah, and we did talk a lot

Dr. Ayush Gupta  31:05

of taxes on it, because of course, second one is appreciation. 

David Bright  31:09

You know, that’s a super powerful strategy. We back on episode 113. We talked with Amanda and Matt, two accountants that kind of walk us through that, especially after having a few other pharmacists that have have worked that loophole and super powerful strategy for for building and scaling. Because you’re right, when you when you can take your when you can delay those taxes and have more income that allows you to do more things. So that’s that second property, what what’s the next couple steps and kind of the near future looking like for you that

Dr. Ayush Gupta  31:42

In the future, so after, after that I bought, I would say like you were you were saying after you buy the first one, you know, you get a lot of confidence. It kind of it kind of snowballed for me a little bit more. I again, I’m a medical professional, I think we have a very common kind of mindset of being risk averse. And I think I have the same kind of mindset, anything we do, we feel like, we’re going to lose everything that we learn, or everything we earn very, like we’ve worked so hard for it.  I don’t want to give my money to anybody. You know, forget about the syndication, forget about it. So I’m very similar that I’m I want to control it. So I basically started buying one to two properties every year since then. So since then I bought like, six properties. And 2023 was last year is when I bought two more properties. I haven’t bought anything this year, we just went under contract for a property, but I don’t think that’s going to work out. In the future, you know, I have, you know, one of my visions that I have, like I have a vivid vision thing that I wrote for five years and the book amazing book, right?

David Bright  32:48

 Yeah, absolutely. 

Dr. Ayush Gupta  32:50

So one of those things was I have like five vacation rental properties and five of the destinations where I like to stay and travel a lot. And one is a mountain where we have a property already. And then all of the properties that are bought was mainly in New Orleans, which is a mid term rentals and long term rentals or multifamily buildings. And so my next is to buy another vacation rental in Mississippi. So that’s what we’re looking at right now. 

Nate Hedrick  33:19

That’s awesome. I do want to touch on too, because I think you’ve alluded to it a couple of times. And I think it’s relevant to what’s going on right now is like you’re still buying right now. I think there’s a lot of people talking in the market about oh, it’s not a good time to buy. There’s there’s interest rates too high inventories to like, fill in the gap with whatever problem right? What what are you seeing out there? Like? Is it a is it a time to sit back and wait? Is it a time to buy like what what is your assessment on the current market conditions?

Dr. Ayush Gupta  33:46

Oh, great question. So we had this call yesterday and part of this mastermind group and we were doing this call and the current state of affairs and real estate market was just yesterday, just fresh off. It is very market specific. So if you look at New Orleans, you look at Austin, these are like two markets that I follow a lot. They have the worst markets like worst kind of drops in the price, or home sales that we’ve seen in the last year or so New Orleans or nine or 10%. Drop in hold. But over here over here. It’s taking up a little bit. But then if you look at specifics of it, you look at the fact that those are all homes. Those are the ones which are sitting on the market, new homes are still flying off the shelves. If it’s done right, you have good renovation, they’re still flying off the shelf. It doesn’t matter what the interest rates are doesn’t matter what what the insurance is. In California and West Coast, it is, they’re having a bidding war. My friend just put a property up for $1.25 and they’re a bidding war over there in the Bay Area for that $1.25 non renovated property. So like I said, it’s very market dependent. It depends on where anybody is. So that’s the big thing that I’m seeing. I think even if even in my market if I like narrow down to New Orleans, I can see people buying every day, And transactions are happening every day. You just have to work a little harder. For example, if I was analyzing five deals, and I was thinking, Okay, this one worked for me, now I have to do a little more harder work. And I have to analyze 15 deals and be like, okay, based on all, insurance, tax insurance is a big cost for us. Insurance and interest rates, this property works for us. That’s what I’m seeing a little more. Now, there’s a lot more inventory out there that’s sitting on the market for a long period of time, the sellers are coming to grips a little bit more about the interest rates and what the property value should be. So those are the couple of things that I’m seeing and it again, anybody who’s listening to this, I would say it’s very market specific, your market may be completely different from my market, you can get your data from your local real estate, NAR even the Fred data from Missouri, those are like good places to get the data and see your local market, what what is doing. And I can just say like, I make like a game plan on what I want to do. So if you make a game plan on what you want to do, like your quarterly growth goal was purely code, you go through that, and you just have to do your inputs. Don’t worry about the outputs to your inputs. Suppose you want to buy a property by the end of the quarter. And you think that you instead of doing the output, hey, and worrying about it, oh, I want to buy a property, I want to think about what inputs you need to do, I need to analyze 10 deals a day, just do that. Or I need to make 10 offers just do that. And that’s how you will get the property the next one you’re looking for. And I think that works for anything in life. You know, I’m doing fitness for that right now. It works for that, too.

Nate Hedrick  36:35

I really like that. And I think I’ve heard others say that. And it’s, it’s something I need to practice for myself. Because it’s so easy to focus on the output, like you said, the the result of what you’re trying to achieve. And like, if you don’t hit that, it feels like a failure, right. But if you could just focus on the actual thing you can control and do that day in, day out, you’re gonna build success from there. So I think that’s a great tip. I hope everybody was paying attention for that. I want to, I want to shift over then to our final infusion questions. So these are three questions we ask every, every new guest on the show, get your get your hot takes on these. So number one is what’s one tangible strategy that you use to make sure you’re investing is working hand in hand with your career as a physician.

Dr. Ayush Gupta  37:20

Okay, one investment strategy that’s working. Okay, so I would say, there’s so many I can think about, and I’m trying to give the best answer for it, I would say velocity banking, I don’t know if if you guys have heard about it. But that’s something that I’ve been doing now. And that actually works really well for if you have student loan debt, if you have high interest home rate, I can explain you more about it, if sure if you guys want to. But velocity banking is the one thing that I’ve been doing, that’s working pretty good for me. So give it give you like a brief one minute scenario on it. So you have most of the student debt or home home insured home mortgage, our compound interest, when you take a line of credit, or a personal loan from a bank, all of them are simple interest. So just an example, if you have $100,000 loan from a bank, on compound interest at 5% interest, you’re going to pay $5000 this year. The next year, that amount will be based on $105,000. So for example, that will be 5% of 105,000. So it’s going to be 51 of the 200. Simple Interest is 5000 every year. So velocity banking is basically I take a line of credit on my house, and I pay off the high interest debt that I have, whether it’s a loan, credit card, mortgage, and then what I do is I get all my income into the line of credit. And the line of credit supports depleted by 100. And then it goes up and that I just have to pay a simple interest paid on daily balance. And that is that you can save hundreds and 1000s of dollars helps a lot of us like it’s medical professionals when we have student debt. My real estate investment is actually tangibly helping to pay student debt or any kind of loans that I have to by doing that. 

Nate Hedrick  39:18

That’s great. Yeah, I mean, and it just shows how you can be a little smarter with the exact same money, and it can really be beneficial to you. So that’s that’s a great tip. Thanks.

David Bright  39:28

Yeah. Second question is what’s one resource that has been most helpful to you in your career and in your real estate journey? So whether that’s a book, a podcast, a person, author, website, whatever that resource would be.

Dr. Ayush Gupta  39:43

I have to say Bigger Pockets was a great resource when I when I started, you know, the first few years or yeah, definitely. I used to read them read the books from Brandon Turner a lot. I got into house hacking, he got into house hacking, and so it was very inspiring to see that. That guy is so far ahead of you and He started and he’s still house hacking in Hawaii, from what? You know, he’s got a billions of dollars under Asset Management right now. So I think that that was very inspiring to me to start with for real estate.

Nate Hedrick  40:12

That’s a good one. Yeah. And then third question, what is one piece of advice that you give to a pharmacist, physician, medical professional, one piece of advice that you’d give them if they’re contemplating a start in real estate investing.

Dr. Ayush Gupta  40:27

Okay, so one piece of advice I would give is, find a mentor. That’s the biggest advice I can tell you. So if I was a pharmacist, and pharmacy student, for example, you work with you, if you’re in residency or you’re a student, you work with other students, you work with your attendings. You work with people who are ahead of you, you know, see whose life you like the most like. I can tell you an example, like one of the attendings that I used to work with, like three years ago used to go on two months of vacation every year. And then he used to come back. And I’m like, and he’s like, the highest productive doctor, he’s always happy. He’s not burnt out. I’m like, What is he doing? And I just went up to him like, Dude, why are you so happy? Man? What are you doing? When you go for two? He’s like, I don’t know, I just go and refresh. And I take a mini vacation mini break every two months. I mean, I’ve two months in a year, I just traveled and I shut myself off. I’m like, How do you do that? How do you afford it? So that kind of conversation like then he became a mentor, I used to say, Okay, can I take you out for coffee and listen to like, hear you talking about this and tell me everything that you know. So one piece of advice is find the person that you admire the most. Like, suppose you want to buy real estate, find the person that’s buying a lot of real estate that you want to go through that. Take them out for coffee, you know, most people who are ahead of you, as much as you fearful of it will be so happy to give you any kind of advice in a very nice way without asking you for anything.

Nate Hedrick  41:51

I love that. I think there might be some really good advice of just find somebody whose life you like and go talk to them. I think that’s great. I love that very much.

David Bright  42:00

Yeah, and I love the part about doing that as a student or resident like really early in your career, because the that just has so much time to compound, right? And value is over over time. Kind of like starting with a house hack early in life. Starting this investing early just has so much time to compound getting that advice early is beautiful. So I love it. If people want to reach out and learn more from you and connect with you, where can people find you? And how can they connect with you?

Dr. Ayush Gupta  42:29

Yeah, so my website is MDHouseHacking.com. That’s my social media handle on Instagram as well. That’s on LinkedIn as well. So those those are the places so basically what I do is I have people come in, I just started YouTube, I don’t want to share a lot about YouTube. I’m kind of shy to be on video a lot of my videos after my life. I have like, I think one long and maybe like 10-15 short so I’m not promoting that right now. But on the website, they come they sign up and and have a conversation with me. That’s that’s a good way or just message me on Instagram.

Nate Hedrick  43:05

That’s great. Well, Ayush, thank you so much for coming on the show today sharing all your knowledge and just being an inspiration out there. I appreciate everything that you do and just the time that you spent with us. So thank you.

Dr. Ayush Gupta  43:15

Thanks for having me, guys. It was fantastic.

David Bright  43:19

Thanks for listening to the YFP Real Estate Investing Podcast. If you liked what you heard in today’s show, please leave us a review and subscribe to the show so you never miss an episode. If you have a question, know someone that would make a good guest or want to connect with us, head on over to YFPrealestate.com and join the growing YFP Real Estate Investing Facebook group.

Nate Hedrick  43:37

As we conclude this week’s episode of the YFP Real Estate Investing Podcast, an important reminder that the content of this podcast is provided to you for informational purposes only and is not intended to provide and should not be relied on for investment or any other advice. Information in this podcast and corresponding materials should not be construed as a solicitation or offer to buy or sell any investment or related financial products. We urge listeners to consult with their financial advisor with respect to any investment. Furthermore, the information contained in our archive newsletters, blog posts and podcasts is not updated and therefore may not be accurate at the time you listen to it. Opinions and analyses expressed herein are solely those of Your Financial Pharmacist unless otherwise noted and constitute judgments as of the date is published. Such information may contain forward looking statements, which are not intended to be guarantees of future events. Actual results could differ materially from those anticipated in the forward looking statements. For more information, please visit yourfinancialpharmacist.com/disclaimer.

David Bright  44:31

Thank you for your support of the YFP Real Estate Investing Podcast. Have a great rest of your week.

[END]

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