real estate investing as a pharmacist

YFP 365: Millionaire Theme Hour: From $0 to 7 Figure Pharmacist with Mike Byers

Posted on June 27, 2024June 27, 2024 by YFP Media

Mike Byers, PharmD shares how he was able to achieve financial freedom and replace his retail pharmacist income through savings and real estate investments.

Episode Summary

In this episode, Michael Byers, PharmD shares how he was able to achieve financial freedom and step away from his job as a retail pharmacist at age 42. Mike outlines how he went from a position of financial weakness to a position of financial strength through frugality and real estate investing. A father of two young boys, Mike talks about the importance of having options and flexibility in this season as he and his wife raise their family.

About Today’s Guest

Mike Byers is a 2008 graduate of the University of Pittsburgh School of Pharmacy. He spent 16 years as a retail pharmacist for Giant Eagle where he worked as a staff pharmacist, a pharmacy team leader and a floater. After successfully investing in real estate for over 10 years, Mike decided to take a break from pharmacy in 2023 to spend time with his wife and two young boys. He loves his family, houses, outdoor adventure, and trying to find the right balance between YOLO and delayed gratification. He can be found on Instagram @DIYrentalGuy.

Key Points from the Episode

Pharmacist’s financial journey to seven figures, early retirement, and mindset shifts. [0:00]
Financial journey after graduation, including materialism, divorce, and saving for retirement. [5:59]
Saving money, investing, and finding balance in life. [13:58]
Real estate investing, personal growth, and overcoming setbacks. [23:17]
Building wealth through real estate investing and managing cash flow. [28:54]
Financial independence, real estate investing, and career development. [33:12]

Episode Highlights

“You have to be honest with yourself and say, what am I doing now? What is the result going to be? If I’m saving so much that it’s driving me crazy, the result is you’re going to go crazy. But for me, the end result was adventure.” – Mike Byers [20:51]

“I mean, just because you go down a path of a certain savings rate doesn’t mean you have to stay there, you can make adjustments.” – Mike Byers [21:41]

“What I’m looking at is that I have this money saved because I was diligent in being able to save, what does the next 10 years look like? Am I going to sacrifice weekends with my family and nights in order to have one or two extra million dollars?” – Mike Byers [32:07]

“And that’s something that you think about when you turn a certain age and you start wondering how much more do I really need to be comfortable after 65. I don’t want to be self-insuring myself if there’s an insurance product or an annuity that you can buy that would serve that same purpose.” – Mike Byers [32:52]

Links Mentioned in Today’s Episode

Episode Transcript

Tim Ulbrich 00:00

Hey everybody, Tim Ulbrich here and thank you for listening to the YFP Podcast where each week we strive to inspire and encourage you on your path towards achieving financial freedom. This episode we have a millionaire theme hour featuring Mike a 42 year old retired work optional pharmacist living in Pittsburgh, Pennsylvania. We discuss the highs and lows of his journey as he looks back, including how he felt trapped by big fixed expenses as a new graduate, why his early savings paid off big 20 years later, how his mindset shifted over time, why his real estate investing played an important role in his journey, ultimately replacing his pharmacist income, and why patience and short term frugality and sacrifice were key ingredients to his success.

Tim Ulbrich 00:41

Now, before we jump into today’s episode, I have a hard truth for you to hear. Making a six figure income is not a financial plan. And we’ll hear that on today’s episode. Yes, you’ve worked hard to get where you are, yes, you’re earning to get income. But if you ever wondered, Am I on track to retire? How do I prioritize and fund all of these competing financial goals that I have? How do I plan financially for big upcoming life events and changes like moving, having a child, changing jobs, getting married, or retiring? And perhaps why am I not as far along financially at this point in my career, as I thought I would be? The answer may be that your six figure income is not a financial plan. Yes, as a pharmacist, you have an incredible tool in your toolbox and that’s your salary. But without a vision and an intentional plan that good income will only go so far. That’s in part why we started your financial pharmacists back in 2015. At YFP we support pharmacists at every stage of their career to take control their finances, reach their financial goals and build wealth through comprehensive fee only financial planning and tax planning. Our team of certified financial planners and tax professionals work with pharmacists all across the United States and helps our clients set their future selves up for success. While living a rich life today. You can learn more and book a free discovery call by visiting yourfinancialpharmacist.com/learn. Again, that’s yourfinancialpharmacist.com/learn. Alright, let’s jump into my interview with Mike.

Tim Ulbrich 02:11

Mike, welcome to the show.

Mike Byers 02:13

Hey, I’m happy to be here.

Tim Ulbrich 02:14

Before we jump into your financial journey and the path of becoming a seven figure pharmacist, tell us more about your career in pharmacy. What led you into the profession? Where do you go to school? When did you graduate and the type that you have work you’ve been doing since?

Mike Byers 02:28

I think I started off like most folks going from high school to college, I went to the University of Pittsburgh. I started there. And of course, I was thinking about medicine, dentistry, pharmacy as my options and I was thinking about the path to get there. I don’t quite know what I wanted to do. My life kind of hit a roadblock sophomore year, I have a condition called ulcerative colitis. And I had to drop out of school at that time. And for a semester I was in the hospital for 16 days. And after the end of it and being in the hospital and experiencing things firsthand, I said, I think being a doctor is too hard for me. I think it’s it’s just not in the cards for what I have going on. And I didn’t know at the time that this disease wouldn’t be a huge part of my life. I found medicines over the years to control things. But I was also still dating my high school sweetheart at the time. And oddly enough, her father was a pharmacist. He owned an independent pharmacy. And I thought why not. So I finished my undergrad, I got a degree in economics and also a minor in engineering. And I went to pharmacy school from there.

Tim Ulbrich 03:54

And after graduation, those that are native to your area or where I lived for 10 plus years in Northeast Ohio, they’ll recognize the name Giant Eagle, but others will not. So tell us more about the work that you’ve been doing with Giant Eagle after graduation.

Mike Byers 04:09

Sure. So that was an exciting time to be in pharmacy school. I mean, you were going to school, you were learning things that were helping people and developing these skills and it was very fulfilling and the whole time, salaries were going up and you hear you would hear interesting things like the Alaska deal and all the things you’ve probably heard about it that time. But I did graduate and I worked for Giant Eagle. I was an intern there and stayed on as a staff pharmacist. I had some experience leading three different stores, which I learned a ton from and I was also floater and then staff again. So it was about 20 years from the time that I signed on as an intern to last year when I did resign.

Tim Ulbrich 04:59

Mike is a fellow 2008 grad. I graduated from Ohio Northern, I remember those times, right? It was the sign-on bonuses with the cars and classmates showing up with new cars in the parking lot and the Alaska deal, which I never saw on paper, but I heard of it as well. So we’ll share with our listeners, what is that all about? What I remember if it was, it was a big retail pharmacy chain that was offering a three year deal in Alaska for a million dollars. That’s what I remember the deal.

Mike Byers 05:28

The only thing I remember is sitting in class and hearing somebody turn around in their seat and say, I heard this. I heard a million dollars, three years. I’m gonna do it. And then I’m going to retire. Yeah, so maybe that planted the seed for some kind of early retirement financial independence at that point.

Tim Ulbrich 05:46

Nonetheless, it’s a very different time right here in 2024. So we’re going to dig into your current state of being a seven figure pharmacist achievement, financial independence, getting to this point of being work optional. We’ll talk about how you did that, and how real estate and traditional investments played into that. But I want to go all the way back to 2008 when you graduated with a net worth of zero, clean slate, no mounds of student loan debt, right, our listeners today are graduating $150k, $200k, you know, smaller debt loads, some might look at that and say, Hey, net worth, is your graduation, smooth sailing, but not so fast. Right? Tell us more.

Mike Byers 06:23

Yeah, before you throw tomatoes at the podcast, I did have a little bit of student debt. Which it was I mean, the difference between what I was making what I was spending, I can’t even remember how I paid it off. It was about $20,000. But I did go through a divorce, which cost some money, and I did have a real estate deal go south where I lost a lot of money. So I have had to dig myself out several times since 2008. But yes, I did. I did graduate with roughly a clean slate. And worked my way up to now where my passive income through real estate pretty much replaces my salary at 30 hours a week as a pharmacist.

Tim Ulbrich 07:13

What were some of the decisions, and we’ll dig deeper as we go throughout. But what were some of the decisions that you made early on as a new practitioner, you know, as it relates to car purchases and other things. You know, one of the things you shared with me prior to recording was that quote, “I became obnoxiously materialistic, which I partly blame for my marriage falling apart.” What do you mean by that? And how did this ultimately, you know, play into not only the financial plan, obviously the relationship but what would be the beginning of of, you know, that trench that you would eventually dig yourself out of.

Mike Byers 07:44

So like, like we mentioned, it was exciting times to graduate with bonuses. And we I graduated and I was married, we got married the last year of school during rotations. And we were living in her parent’s basement, not because we needed to financially, but because we weren’t sure where we were going to end up for her job. But I bought an Audi. A luxurious Audi. While it wasn’t even three months after I graduated, still living in my in-laws basement, bought this fancy new car. And it just seemed like the thing I was supposed to do. Long story short, I mean, we eventually moved. She got a job north of the city, we moved into a nice townhome rental. Not much longer after that, I’m on Zillow shopping for a nice, big, fancy house. So the fancy house came not much long after that. And I did become obnoxiously materialistic. And it wasn’t long after I moved into that house where I saw the house on the next street. He said, Gee, I wonder when or what it would take to get that bigger house. And that was just the way I was operating and had we not gotten divorced, I could still be operating that way. But it was just a mindset where I blame being really materialistic 10%. 90% we were young and ultimately not right for each other. But it wasn’t much longer after living in that house a couple of years where the bomb went off and divorced, trying to pick up the pieces again.

Tim Ulbrich 09:34

So you don’t go from that point to becoming a seven figure pharmacist by continuing that mindset and continuing those behaviors. So something shifted, something happened from a mindset and a behavior perspective. It sounds like that was the divorce. Tell us more about that.

Mike Byers 09:50

It absolutely was. I realized that I didn’t need a big house and a fancy car to be happy. I said the exact opposite – how little can I survive on? Or how little can I have material wise in order to live a happy life and I somehow found a studio apartment in the city, it was 350ish square feet. When my mom first saw it the first time, took her breath away, because it was just that small – the bedroom was in the kitchen. Yeah. And those were those were happy times. I lived that way for a couple years. And it felt really comfortable. But I still wasn’t saving. A couple years goes by and I’m like, well, kind of on this path where my rent is relatively cheap, my salary is relatively high. Why don’t I have a savings goal? Because I didn’t feel like I was doing the right thing at the time. So my goal that year, I think this was about 2012. So a couple years after divorce four years after graduating, I decided I wanted to save in addition to 401k, I wanted to save $2,000 a month. And each month I would play the game, if I wanted to buy something I worked extra. If it looked like I wasn’t going to hit my goal I cut back. And that’s what I did for that year to in addition to maxing out 401k to build up some cash savings.

Tim Ulbrich 10:11

So if I’m following correctly from jump street, you’re maxing out your 401k. So you’re leveraging the tax advantage account. And then you hit this point, shortly after the divorce four years into your pharmacy career. You’re in this studio apartment 350 square feet, and you realize, Hey, I’ve got an opportunity to more aggressively save. And so you set this target, which you know, to be on, I mean, $2,000 as a percentage of one’s take home pay, that’s a big chunk of money. And you see this a lot in the financial independence, retire early the FIRE community where there’s very aggressive savings rates, right, you’re in your early 40s. So to get to a net worth of seven figure plus, it’s going to take a substantial amount of savings to do that at an early age. So did your savings rate stay there? What did the trajectory look like as you were building that over time?

Mike Byers 12:21

So I hit that number, okay. And I was able to save about $25,000 that year. So I built up my cash savings. When I after going through the divorce, I didn’t have that cash savings. And I built that up and again, I kind of felt comfortable like, Hey, I hit that goal for that year, and I got a new apartment, that apartment had one bedroom. Not necessarily more happy in that apartment, but it was more expensive. And it seemed nicer. So at that point, it was a little more rent, and I wasn’t saving money and about a year had gone by and I said to myself, What am I what am I doing now? I mean, I had this surplus, and I was on a good path. So I for whatever reason started Googling. I figured it was taxes. I said I typed into Google, “single high earner how to save on taxes.” Okay, so real estate comes up. And I’d always been interested in homes. I love home remodeling and you know, watching a little bit too much HGTV at the time. But the next day, my friend came over to watch a football game. Oddly enough, he says my mom was thinking about selling the duplex. I had known him in college. And my ears perked up because why not? So, long story short, I fell ass backwards into owning a duplex.

Tim Ulbrich 13:58

Little house hack.

Mike Byers 13:59

Yeah. House hack. Yeah.

Tim Ulbrich 14:01

How did that one work out? Tell us about that is an investment property?

Mike Byers 14:06

I mean, it was it was a huge learning curve. So I said yes. I said I contacted his mom. We did the whole thing without an agent. It needed a lot of repairs and the whole thing flooded while we were in escrow. The pipes burst it was during winter the heat wasn’t on. So I had to jump into renovating and immediately kind of learning how to increase the value of the property. So I did that. And you know, I went from a studio apartment to half of a duplex even though it didn’t have air conditioning. It felt I mean, I felt amazing. I renovated it. It was nice. And I was just living in the duplex I was charging downstairs rent that mostly covered my mortgage. And it was shortly after that time when I discovered Mister Money Mustache. I’m sure a lot of people that you’ve talked to have started that or had that at some point in their journey. But that’s when things really started to go pretty quickly and I’d love to talk about that experience.

Tim Ulbrich 15:25

Yeah, and we’ll dive into that deeper and we’ll link in the show notes and Mister Money Mustache. For those that aren’t already familiar, I suspect many people are, great resource great blog will also link to other episodes, we talked about house hacking for those that that’s a new term. The idea is that you typically lots of different ways to house hack but you know, the most common we live in a duplex triplex or quad, you live in one unit, and you rent out the remaining units, obviously trying to generate income streams and hopefully cover a portion or majority of your mortgage payment in turn your what you think of often separately, your primary residence and then investment properties, bundle those together. And there’s some creative financing strategies of ways that you can, you can do that. And I want to come back in a little bit to talk more about real estate because I know it’s been such a big part of your plan. I do want to go back to the savings rate piece because I know you started with that $2,000 month goal. You shared with me in advance that eventually you’re pushing that up closer to $4000 to $5,000 a month. A lot of pharmacists hear these aggressive savings rates. And they’re like, how? Right, how? You know, you think of a typical pharmacists income, take home pay $7000 to $7500, maybe $8,000 a month, depending on what they do. You look at large fixed costs, like house, cars, student loan payments, daycare, childcare, other expenses. And we work with many pharmacists where there’s just not a whole lot of margin, at least in current expenses. So give us a little bit more of the behind the scenes of how you were able to actually allocate a large percentage of your income? What sacrifices did that require? And then where were you putting that money? I heard early on it was cash savings beyond the 401k. But was that in IRAs? Was that brokerage accounts? Where were you putting that money?

Mike Byers 17:13

As far as stocks and retirement accounts, it’s just 401k. The Roth and the traditional just, I was saving so much at the time, the income limits, and then the limit that you could put in just seem too small for me. So how do you save? I mean, you mentioned that the three biggest things housing, transportation, and whether or not you have kids, I guess your third one would be food? If you don’t have kids, that third one, if you do is day care. Yeah. So house hacking. That’s the big way to save on your housing costs. So at one point, my housing costs were zero, because the rent went up. And I was saving at that time, I had paid off the loan on my car, and I kept it. So a lot of folks will pay off one vehicle and buy in the next or keep buying new vehicles that are pretty, pretty frequent pace, but if you keep your vehicle eight, nine, ten years, when you get to that point, it’s paid off. You can save a lot of money. So I was saving probably in the realm of $5,000 a month. So that included a paid off vehicle. It included rent from downstairs, a little bit of overtime manager salary. And saving on food. I mean, just not going out to eat a lot. That was a big thing for me. I mean, you can play the game where you get pretty extreme. And it was too much for me. I mean, there was one point where I was calculating the cost of the extra food I would have to consume to walk to work versus the cost per mile of gas if I had driven so what I was doing with that $5,000 a month, I was putting it all in my checking account. Okay, fine. It was just building out pretty quickly. I called the mortgage company and I said, hey, this PMI insurance. I have, you know, a certain amount of equity at this point. Can we make that go away? And they said no. I said why? And they said, Well, this is an FHA loan.

Tim Ulbrich 19:26

Yeah, right. Did it. On my first home. Didn’t know that.

Mike Byers 19:30

Yeah, blame myself. I blame the mortgage seller, whatever. I was so angry by that. And I was saving so much money that I paid off. I think it was $100,000 loan balance relatively quickly, like within a year and a half. Just because I was mad about that. And I wanted to make $120 a month go away. So I was putting it back into the real estate.

Tim Ulbrich 19:55

Got it. Okay. You mentioned something really interesting. You talked about of extremes, right? And you see this sometimes in the FIRE community and and let’s, let’s say out there and everyone’s on their own journey, everyone’s situation is different. You know, everyone’s cost a living expenses are different family situation is different. So everyone has to figure out what is the journey and pathway that allows them to achieve the goals that they want to achieve. But those that are on this financial independence, retire early or retire optional journey, you know, there is what you call the potential for this frugal fatigue. Right. And I love that term, because it’s real. And there’s a time and season for it, for that grind. And there’s a fatigue that comes with that as well. And so, my question for you is, how did you combat this? When you recognize that? What did you do to say, Hey, this is real, and I’m achieving all these great goals, and I’m saving a lot per month. But this fatigue is real. How did you combat that fatigue?

Mike Byers 20:51

I mean, you have to be honest with yourself and say, What am I doing now? What is the result gonna be? I mean, if I’m saving so much that it’s driving me crazy. The result is you’re gonna go crazy. But for me, I would. For me, it was adventure. So when I got pretty fatigued with the daily saving, and it wasn’t like I was living this life where I was, you know, things were relatively scarce and I wasn’t having fun. But at time, like I bought an Airstream when you’re holding back so much, and you’re just kind of yearning for adventure, you see a commercial for the new Airstream. You just buy it. And you can adjust. I mean, just because you go down a path of a certain savings rate doesn’t mean you have to stay there, you can make adjustments. I ended up selling it a few years, a few years later. And the money that I lost, I guess you could say last was a great experience. So you just keep adjusting yourself and you have honest conversations with you or with your spouse if you’re married on okay. What are we saving? What experiences aren’t we having? Right? What is that going to result in in the future? Because you could have two different ends of the spectrum. You could have YOLO. And I know people like this and they’re happy. You only live once, they’re spending their whole paycheck. They’re not thinking too much about the future and holding back on some things. They’re just living life now. But there’s the other end of the spectrum, which is deferred gratification. Yep, either one of those two, seems a little extreme. And you could get screwed either way. So if you’re YOLO, and not saving anything, and leveraging all your salary and income to have fun today and you live to 100. I mean, you could be screwed. Sixty-five When you start to not have energy and ability to work, I mean, yep. But if you defer everything and you die at 50, you’re screwed as well. So you have to find your balance in the middle and continually be honest with yourself and have the conversations with your spouse on what the right balance is.

Tim Ulbrich 23:17

Ton of wisdom there, Mike. And there are several resources that are coming to mind that I feel like of what you shared. You’re kind of pulling from, you know, some different philosophies and putting it together. What we often say is, hey, we’ve got to figure out how we can save and invest for the future to take care of our future selves, but also live a rich life today. Both of those things can happen and be true. While that looks different for everyone. And, you know, I’m thinking of some of the resources that have influenced my journey. Rich Dad, Poor Dad, The Millionaire Next Door or Die with Zero by Bill Perkins.

Mike Byers 23:45

I just read that.

Tim Ulbrich 23:47

Bigger Pockets. Like, I kind of hear a little bit of pieces of these. And what I love is you’ve taken these teachings, and probably many others, and said, Hey, this is what is ideal for me and my journey. And I think the way you articulated that is beautiful, and I want to talk more about the real estate. So 2012 You buy the duplex sounds like that was a good move in the house hack. You weren’t a one and done real estate investor. 2019, you decide to do a deep dive deeper dive into real estate beyond that initial house hack, which ultimately, when we talk about current state would allow you to cut cut back your work altogether to replace that income, but initially go from that full time to less or full time 30 hours a week. Where did that motivation and drive come from? Do that deeper dive in real estate and tell us more about that second investment, the one that you you kicked off in 2019.

Mike Byers 24:41

So I had lived in the duplex for about five years 2013 to 2018. I had gotten out of a four year relationship at the time and I’m driving to visit my brother in Sioux Falls, South Dakota. It’s pretty long drive so I’m doing a lot of podcasts listening and I discover some things was about real estate. So again, I was kind of on the path. But I listened to some information on podcasts that said, well, you have another opportunity to continue down this path. I mean, I was sit still saving a bunch of money living there and earning a good salary. By the end of that trip, I decided that I wanted to buy another property. I wanted to continue, there was no, there was no reason not to grow this. And at that time, I felt like I had a little more tools and resources and experience to go down that road. So I bought another house, I was able to pay cash without a loan because of my savings rate over those last five years. And I lived in it, renovated it. I rented it out for a decent price. And I hit a certain number that I wanted to hit. And I thought I was the King of Real Estate in Pittsburgh. I bought another one. And before I was finished with that one, and ultimately ended up in another low point in my life where I just had too much going on. And I ended up selling that for a loss because it was just too overwhelming. But I, you know, these are the things you think about long car rides and long bike rides. It’s like what is the purpose of what I’m doing? And I had said to myself, I have this duplex, it has the opportunity to give me two rents. And I have the opportunity, because nothing’s really tying me down, to buy more real estate. And I think in order to do that, I need to cut back hours. So eventually, I asked to be cut down to 30. I got a really great store where I work three days a week, every fifth weekend. So that gave me the time and the freedom to eventually build more real estate. And the salary that I’ve lost over that amount of time, it’s, it’s really not a big deal. Because what you’re able to build with your time, or the freedom that you’re able to have is worth the cost.

Tim Ulbrich 27:17

In terms of your portfolio, you started with the duplex, you buy another one in 2019. Sounds like that goes well. The one after that not so much. You mentioned a low point, what what did you do to kind of pick yourself back up and say, Hey, maybe I’m not the king of real estate in Pittsburgh, but I also have something here to offer. And I think I’m on to something in terms of building some real assets here. How did you get out of that trough and really get yourself back in the game?

Tim Ulbrich 27:46

And then that portfolio, the current day portfolio you just mentioned, has gotten to the point where work is optional. So you went from 40 hours a week to 30 hours a week. And now that portfolio is generating income such that if you need to, want to work in the future great, you can or if you want to pick up extra hours, but you’re not in a position of needing that income.

Mike Byers 27:46

I mean, thank God, I met my wife at that time. Because she gave me the confidence and believed in me. And I’m the type of person that if someone believes I can do something I could, I could climb a mountain pretty easily. Amazing, amazing luck that I found such an amazing person. And she believed. She knew what I had done in the past with the single family home and the duplex and the skills that I have built and the knowledge that I had built during this time. And sometimes all you need is a partner that can believe in you and do it with you. So we basically went on a buying spree and use the equity in those two homes to buy four more homes and rent those out. And that’s what our portfolio looks like today. Four single families and a duplex plus our primary house.

Mike Byers 29:14

Exactly.

Tim Ulbrich 29:15

Okay. Yeah, man. That’s awesome. Congratulations on the journey all the work.

Mike Byers 29:20

Yeah. So that was a goal. And things change when you have kids. And we had two children born pretty close together. And we were coming towards the end of my wife’s maternity leave for our second child and we were deciding what to do and it was a decision for me to stay home and not work. And the investing in assets and growing those assets and having those assets give you a return to buy more is what allowed us to have a one income family.

Tim Ulbrich 29:58

And your boys are how old now?

Mike Byers 30:00

They’re one and two.

Tim Ulbrich 30:01

All right. All right. So you’ve got options for time and flexibility schedule with them. That’s cool. If we zoom out for a moment, and look at your pathway to becoming a seven figure pharmacist, and now looking at your asset base as a whole, not specific numbers, but just general percentages, if you were to break that down between, you know, more traditional, right 401k types of dollars versus the assets that you have in real estate, or potentially others that I’m not yet aware of, like, how is that net worth broken down?

Mike Byers 30:36

I would say 60 to 70% real estate. Probably 60% of real estate. And then the rest is in 401k.

Tim Ulbrich 30:46

Okay. Okay. And we haven’t even touched on obviously, a whole nother aspect of the real estate, you know, you’ve got your cash flow you’re generating now there’s future appreciation, there’s tax advantages, if anyone wants to dive into that deeper, Tax Free Wealth by Tom Wheelwright, great resource to kind of just open your eyes a little bit if, if that’s not something you’ve you’ve considered before.

Mike Byers 31:08

I mean, for our real estate specifically, I mean, if you think about it, there’s three, three or four different ways where you make money. So there’s cash flow, there’s appreciation, and there’s loan pay down. So what we shoot for with our properties is $1,500 a month. $500 is $400 or $500 is cash flow. $500 is being paid down by the tenant and then above $500, is appreciating, and when you multiply that by several properties, you get that automatic savings in those two parts, you get the automatic savings where the tenant is paying it down, and it’s appreciating in value. And then you can use the cash flow to reinvest or if it’s a different season of your life where you need to live on cash flow, you can do that you can take a break from work, you can take a sabbatical. And it’s it just provides you options. Right now, what I’m looking at is, what kind of options has what I’ve built in the past, giving me to live a great life with like I, like you mentioned the book Die with Zero, you get to 40 years old, and you start thinking, Okay, I have this money saved because I was diligent and being able to save, what does the next 10 years look like? Am I going to sacrifice weekends with my family and nights in order to have one or two extra million dollars? You know, maybe your kids and your spouse they want you home? So that you know you can you can live a different life with experiences. And that’s something that you think about when you turn a certain age and you start wondering how much more do I really need to be comfortable after 65. I don’t want to be self insuring myself if there’s a maybe there’s an insurance product or an annuity that you can buy, that would serve that same purpose.

Tim Ulbrich 33:11

And options is the word I hear. Flexibility is the word I hear. And it’s interesting when I polled our community about the idea of financial independence, whether or not they want to retire early. You know, some people love what they’re doing. Some people don’t like what they’re doing. Some people might want part time or to pivot. But the goal of financial independence, I think, is one that resonates with people as a whole. And when I asked that question, you know, what excites you? What motivates you around that concept of financial independence? It’s options. It’s flexibility. It’s being able to choose and to have choice in those things along the way, which I think your story is such a good example of that as well. Mike, when you look back on this journey, and one of the things I appreciate is in the transparency and the vulnerability. You know, we could look at the current state and say Mike is crushing it, and you’ve done incredibly well. But there’s been highs and there’s been lows along the way. And there’s been a lot of learning that’s happened. As you look back on that journey from net worth of zero to becoming, you know, well into a seven figure pharmacist, what lessons do you take away as you reflect back on that, that you can share with our listeners?

Mike Byers 34:20

I think a good lesson to learn is have honest conversations with yourself about the alternatives. So if you’re on the path, and you’re making and not saving, if you’re making a certain amount and you’re not saving a whole lot and you get to the point where maybe you’re thinking there’s something more I can do. Maybe I can save a little bit more or maybe I can make investments outside of my 401k, they’re gonna be a good return and give me cash. flow like real estate. Just have honest conversation about what the alternative is. Because sometimes the alternative is you get stuck for a long period of time in what you’re doing because you didn’t take those five years to save diligently, or to pursue something that you’re interested in as far as a side hustle or take that job. So I sit down, evaluate what you’re doing and what path you’re on. And where that’s gonna lead to 10, 20, 30 years down the road. Five or 10? Whatever.

Tim Ulbrich 35:44

Yeah, and I hear a lot of patience in your story. I hear a lot of, you know, seasons of sacrifice, but also seasons of perspective, and kind of reevaluating where am I going? What are we trying to do? I’m curious, as you look out, you mentioned this time window into the future, as you look out, where do you see your real estate portfolio going? You know, now that it’s gotten to a point of replacing your income, do you see yourself kind of staying put in this model where you’ve got a duplex and several single family homes? Do you see an expansion within that same investment category? Are you interested in, you know, commercial or short term rentals? Like, what? Where are you envisioning the future of the real estate portfolio?

Mike Byers 36:23

So I’m envisioning, I mean, my, my vision is to work on it three to four hours a day, from a coffee shop and manage the investments. So I wish I could give you a better answer. And part of stepping back from the pharmacy job and trying new things is this level of uncertainty and really uncomfortability like, things aren’t amazingly comfortable right now. I mean, I’ve really had to unwind some of the programming that 20 years of retail pharmacy put in me, so it’s tough, and I can’t tell you exactly where I want to be in this is a period where I am. But I mentioned the word sabbatical. So it’s, it’s a period of time where you’re not forced to work, where, you know, thank God, my wife is just so amazing and understanding. You can take the time to figure out your next path. And instead of working nights and weekends for the next 10 years to figure out how to have your kids experience and watch you live an amazing life. So that’s an evolving thing. And maybe we’ll catch up in five years, and I can tell you what it evolved to. I you really have to think about what your passion and purpose is. And sometimes you look at 100 jobs on on LinkedIn or Indeed, pharmacy/medical related and you just can’t see yourself doing that. So I’m trying to find my passion and purpose right now. And I really think it is in real estate, whether it’s rental real estate, commercial, vacation rental or flipping. I’m trying to figure that out.

Tim Ulbrich 38:19

And what excites me about that is I sense this is a season of, you know, some of that deep reflection and figuring out the next steps. You use the word sabbatical as well. But you know, another tip of the cap to the work that you’ve done, you’ve put yourself in a financial position, with the support of your family to be able to take the space to think and think strategically, right? And that’s an amazing opportunity, but it didn’t fall in your lap. You worked incredibly hard for that to happen. So congratulations, Mike on on the journey. I do look forward to following up and following your journey. Along the way. I know it’s been an inspiration to me, I’m sure it will to our listeners as well. So thank you so much for taking time to come on the show.

Tim Ulbrich 39:01

As we conclude this week’s podcast, an mportant reminder that the content on this show 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 the 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 a financial advisor with respect to any investment. Furthermore, the information contained in our archived newsletters, blog posts and podcasts is not updated and may not be accurate at the time you listen to it on the podcast. Opinions and analyses expressed herein are solely those of Your Financial Pharmacist unless otherwise noted and constitute judgments as of the dates 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 Is yourfinancialpharmacist.com/ disclaimer Thank you again for your support of the Your Financial Pharmacist Podcast Have a great rest of your week.

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YFP 342: Replay – How Two Pharmacists Paid Off $250k of Student Loan Debt

Posted on January 18, 2024January 18, 2024 by YFP Media

Kristen & Nate Hedrick share their journey paying off $250k student loan debt from the motivation to the role of side hustles and real estate investing.

Episode Summary

How do you go about aggressively paying off a $250,000 student loan debt without feeling overwhelmed? To help answer that question, YFP Co-Founder & CEO, Tim Ulbrich, PharmD, is joined by fellow pharmacists Nate Hedrick, PharmD, and Kristen Hedrick, PharmD, BCACP. The Hedricks tell us how they successfully paid off over $250,000 in student loan debt, their motivation for tackling that debt, the pivotal moment that sparked making repayment a priority, and the role a side hustle and real estate investing played in their journey. After a brief history of Kristen’s background, listeners will hear what motivated the couple to take an aggressive stance on their debt repayments, how a life-changing event and one book altered their financial philosophy, and how the pandemic helped them focus on their strategy. Nate and Kristen share their reasons behind paying their debt off now instead of putting their money toward investments and how they found an additional $3,443 per month to make their goal attainable by reducing expenses and increasing their income. This earnest conversation takes us through the possibilities of working full time, raising a family, making investments, and paying off a huge debt, all at the same time. Nate and Kristen talk about their life after paying off this debt and share some advice for pharmacists who may be struggling with a similar debt situation.

About Today’s Guests

Nate and Kristen Hedrick met at Ohio Northern University and were married in 2013. Nate is a pharmacist with Medical Mutual and a real estate agent with Berkshire Hathaway. Kristen is a pharmacist with Bon Secour Mercy Health. Together, they graduated with over $300,000+ in student loan debt. They enjoy visiting National Parks as a family. Today they live in the suburbs of Cleveland, Ohio, with their two daughters, Molly and Lucy, and their rescue dog Lexi.

Key Points from the Episode

Kristen’s background, how she ended up in pharmacy, and what she’s doing now.
What their student loan debt looked like at its peak.
How student debt can creep up and surprise you.
The initial feelings the couple had towards their debt and their plans to pay it off.
What motivated our guests to come up with an aggressive plan for paying back their debt.
How a life-changing event (and a book) in 2016 changed everything.
The global pandemic as a moment of inspiration.
What they had to change in their lives to be able to make the monthly repayments.
Paying off debt now versus investing for the future.
The way the couple used ‘double motivation’ to reconcile an age-old debate.
How our guests were able to raise a child, invest, and pay off a huge debt at the same time.
Nate’s decision to pursue real estate investing and what that meant for their debt repayments.
The approach the couple has taken to make real estate investing work for their family.
Other strategies that helped to pay off the debt aside from cutting expenses and real estate investments.
The benefits of receiving objective, third-party advice.
What life is like now after paying off their massive debt.
How paying off the debt helped Nate make an important career decision.
Kristen’s advice for the pharmacist struggling with debt.
Nate’s parting words of wisdom.

Episode Highlights

“That was the worst that it got and, that same month, for what it’s worth, we had a negative net worth of $306,000. We had about 10k to our name and a bunch of debt to add on to that.” — Nate Hedrick, PharmD [0:03:44]

“I had no plan early on until we developed the ‘why’, which was getting our financial house in order so that we could live the way that we wanted to.” — Nate Hedrick, PharmD [0:06:23]

“The expenses were the catalyst, and then it was the extra income side of the equation that really boosted everything to actually make it possible.” — Nate Hedrick, PharmD [0:13:37]

“Spending more time with the kids without having that student loan debt, and being able to do more things and travel more, it feels like it’s definitely paying off in the end, with making some of those sacrifices.” — Kristen Hedrick, PharmD, BCACP [0:17:16]

“One great thing about real estate investing is even if something happens, you still own a building.” — Kristen Hedrick, PharmD, BCACP [0:22:00]

“Find something that is going to supplement your life that the more effort you put into it, the more reward you get out of it. That is a really great way to set yourself up for success.” — Nate Hedrick, PharmD [0:29:32]

Links Mentioned in Today’s Episode

Episode Transcript

[INTRODUCTION]

[0:00:00.4] TU: Hey everybody, Tim Ulbrich here. Thank you for listening to The YFP Podcast, where each week, we strive to inspire and encourage you on your path towards achieving financial freedom.

This week, I had the pleasure of sitting down with Kristen and Nate Hedrick to discuss their journey of paying off $250,000 of student loan debt. In this show, we discuss their motivation and why, for aggressively paying down the debt. What the pivot moment was that motivated them to make the debt repayment a priority, how they were able to come up with more than $3,000 per month extra to throw towards the loans, and the role a side hustle and real estate investing played in helping them pay down the debt.

Before we jump into the show, I recognize that many listeners may not be aware of what the team at YFP Planning does in working one-on-one with more than 240 households in 40-plus states. YFP Planning offers free only, high-touch financial planning that is customized for the pharmacy professional.

If you’re interested in learning more about working one-on-one with a certified financial planner may help you achieve your financial goals, you can book a free discovery call at yfpplanning.com. Whether or not YFP Planning’s financial planning services are a good fit for you, know that we appreciate your support of this podcast and our mission to help pharmacists achieve financial freedom.

Okay, let’s jump into my interview with Nate and Kristen Hedrick to learn how and why they aggressively paid off $250,000 in student loan debt.

[INTERVIEW]

[0:01:23.4] TU: Kristen and Nate, welcomed to the show.

[0:01:24.7] NH: Hey Tim, good to be here.

[0:01:26.1] KH: Hi.

[0:01:27.0] TU: So Nate, obviously, you’re a frequent flyer. You’re old news so I’m not even going to spend a whole lot of time focusing on you. Many folks have heard you on the podcast before, whether it’s this show, talking about home buying, whether it’s the Real Estate Investing podcast on Saturday mornings, of course, Nate being the cohost of that show.

So, we’re going to focus a little bit more on Kristen’s background as we get started, and we’re going to jump into more about your debt-free journey and how ultimately, you guys were able to knock out $250,000 of debt, and what that has meant to you guys personally, to your family, as well as also the financial goals and plan that you have going forward.

So, before we jump into that debt payoff and that journey, Kristen, let’s start with you. Tell us a little bit more about your background, what drew you into pharmacy, where you went to school and the work that you’re doing now.

[0:02:13.0] KH: Yeah, thanks. I had some extended family members in pharmacy so I just thought it would be a good career path, and looked at the different pharmacy schools and found my way to Ohio Northern in the middle of cornfields, and no cellphone reception and for some reason, that’s where I wanted to go. I think we all know it’s a great campus and community there.

So went to Ohio Northern and that’s where Nate and I met. I completed my residency here in Cleveland, Ohio. Now I work for a large health system doing population health on clinical pharmacy, and following patients with their chronic disease states and helping them with their medicines, and helping in here in Cleveland.

[0:02:50.8] TU: Kristen, it’s funny you mentioned the cellphone reception in Ada Ohio, Ohio Northern University. I remember, I maybe as a P3, P4, just a few years ahead of you guys, but it was a big deal that they added a tower on campus, and I think we got one bar, maybe two bars, but not a whole lot going on in Ada Ohio. I had the chance to go back recently and take Jess and the boys. It was so fun to see campus and really relive some of the memories in that place.

So Nate, tell us about the student loan debt at its peak? What were you guys working with and then, from there, we’ll get into more of some of the motivation and journey of paying it off.

[0:03:26.4] NH: Yeah. So, when we graduated and totaled everything up and, I think it was even a month or two after we graduated that I even wanted to look at it. Because it was the initial plan of, “I just won’t look at it and then it won’t be a problem.” And when we totaled it all up, looking back at our highest count, we were at $316,000 in student loan debt at one point.

So, that was the worst that it got and, that same month, for what it’s worth, we had a negative net worth of $306,000, so we had about 10k to our name and a bunch of debt to add on to that.

[0:03:54.8] TU: I’m curious, did that surprise you guys? One of the stories I often share is that, it’s somewhat embarrassing, but when I was in pharmacy school, it felt a little bit like monopoly money, and it was all of a sudden when I crunch the numbers and I was like, “I owe how much, and how much interest, and what’s my net worth?” It just caught me off-guard, and it shouldn’t have. Were you expecting that or was that number somewhat a surprise at that point?

[0:04:15.4] NH: I agree, it was just totally like made up funds, you know? Every quarter or every semester, I’d have to go and submit for what I needed, and it was the tuition plus a little bit of living expenses, and I would just submit for it and it would get added into this imaginary pile of money somewhere, and I don’t think I ever checked the balance while I was in school, I don’t know why, I don’t know why I would have.

[0:04:35.7] TU: You’re dating yourself Nate, when you talk about quarters by the way. So that ain’t a thing anymore.

[0:04:40.7] NH: Old school, how I work.

[0:04:42.7] TU: Kristen, tell us about the plan that you guys had for the student loans after graduation, after you got married in 2013. How did you feel about the debt overall and then, what was the thought in that moment about how are you going to pay this off?

[0:04:55.7] KH: I think our main thought was it’s overwhelming. It’s just such a large amount that it feels so ambiguous that we thought that we had this plan. We had always wanted to try to pay it off within 10 years. I think I was a little more on track of, “Oh, I want to pay this off in 10 years” and we had some advice from a previous financial advisor that had said, “Oh, it’s just student loan debt, everyone has it, it will be okay.” We changed it to 30 years so we could have minimum payments but always pay extra if we wanted to and, ultimately, we just found that that eventually did not work as well for us.

We needed a more targeted plan to get us on track with what we were doing. We had always been paying the amounts, but I think it was how we were planning to target to actually pay it off. It always felt like this end date that we were never going to get to.

[0:05:44.4] TU: One of the questions I like to ask folks, and we’ll talk more in a little bit about how aggressive you guys were to really get a chunk of this paid off, but I like to understand, what’s the why? What’s the motivation behind it? It’s one of these things, as you mentioned, you can take them out 25, 30 years if you want to. Obviously, you guys made a good decision to be much more aggressive. Tell me more about for the two of you, for your family, why was that important?

[0:06:08.2] NH: It’s funny you say that because I think until I had a why, it wasn’t important. Like I said, I didn’t look at it, I barely wanted to check it. I think at one point in residency, I put myself on the graduated repayment plan and my only motivation was because the payment today is lower and that seems like—that seems better, right?

I had no plan early on, until we developed the ‘why’, which was getting our financial house in order so that we could live the way that we wanted to. Travel, work less, work in the capacities that we wanted to, all the things that have led us to this point. Until I had that in place, there wasn’t a why and it didn’t matter.

[0:06:42.7] TU: Yeah, I think that’s such a good encouragement for folks that are in the midst of their journey, or maybe have wondered into the repayment or for that matter, the financial plan at large, and feel like, “Hey, maybe I’m progressing but not as quickly as I would like to. I’m a little bit stuck.” Really going back to what gets us excited, right?

The topic of money, money is a tool. So, what gets us excited, why do we care bout this topic of money, why do we care about debt repayment, why do we care about saving/investing for the future, why do we care about giving? And then using that as the motivation to drive some of the action and the plan going forward.

So, Nate, what happened in 2016 that was really a motivation to say, “Hey, we’ve got to do something different?”

[0:07:22.0] NH: Yeah, that really is when it changed for us and, again, we’d been paying on them and, every once in a while, we get the idea that, “Hey, we should throw in some extra money because these loans are huge.” We would do it for a couple of months and I feel like we just were inconsistent. But in 2016, we got pregnant with our first child and, again, I tell this story on the podcast several times, but I read Rich Dad Poor Dad and it completely changed my mindset about money and what I wanted to do with money and what I wanted to do with my life and work, and just how I looked at finances.

It’s crazy it took that long to figure that out but I had no formal financial education. We go through pharmacy school, not business school, and until I read that book and changed how I wanted to approach finances in general, again, I didn’t have that why behind it. I didn’t have that motivation, so that’s what really jumpstarted us. I think it was a combination of, “Oh crap, we have a kid on the way and we have to pay for a lot of stuff” and again, this mindset shift that occurred, at least for me.

[0:08:16.1] TU: Kristen, I’m curious. I can just see Nate, because I know him now, I could see him like this totally nerding out over Rich Dad Poor Dad and coming to you with all these ideas and, “What about this, what about that?” Were you equally on fire in that moment or was there different motivations that really led you to say “Hey, we’ve got to do this differently?”

[0:08:34.4] KH: Yeah, I think I had always wanted to pay off the loan. Again, it was just so—it was a large amount that I think I didn’t know how to get there. When Nate said he read Rich Dad Poor Dad, he kept talking about it and talking about it. I think finally, in 2019, I read it, I said, “Oh, this is a really good book, I should have done it sooner”

So, I think we are a really good team together, in trying to work together and get those payments down, and Nate was very much more into it. I think at the time, I was like, I’m growing a human, I’m just going to keep doing what I’m doing, and that was the time that Nate entered real estate. He’s told this story before but, I’m six months pregnant and he goes, “Oh, I think I want to get my real estate license.” This is a time most people would have been getting board certified.

He’s like, “I’m going to go get my real estate license.” He had classes multiple times a week and I’m pregnant, trying to take care of the house and do all these things, getting ready for a baby. So, it paid off in the end and I’m glad that he did it, but I think in the moment there was also that stressful situation for me, but he’s a jack of all trades. He does lots of things and keeps busy, so it’s good.

[0:09:36.0] TU: We’re going to come back to that in a little bit, of what role did that play, Nate, for you, in terms of pursuing that, as you call, a side hustle. It’s much bigger than that, the work that you’re doing now, obviously, but why was that so instrumental, and not only to the numbers but also to some of the mindset and the motivation behind the financial plan and the journey that you were on?

I want to first talk about, though, Nate, walk us through what happened in the pandemic that really allowed you guys to say, “Hey, we’re going to get specific about when we’re going to payoff a big chunk of this debt, what it’s going to take each month.” Talk to us about what happened during the pandemic that led you to the decision around how you were going to pay off a huge portion of that debt.

[0:10:15.5] NH: Yeah, so, like I said, 2016 is where we started getting pretty serious, but even then, it wasn’t truly resolute plan, right? It was just, “Okay, we really got to be focusing on throwing extra money at this” and we did a lot better. But in 2020, we had a month or two in the pandemic and realized, “Okay, we’re not traveling as much, we’re not going to be going out to eat as much, everything shut down, let’s use this time to take the extra money that we’re not spending and really attack that loan.” At one point and, again, we were talking this morning, it was right at the end of the year, we said, “Okay, this thing is not going away, let’s really use next year to just get rid of this loan.”

So, right in December of 2020 and going into the beginning of the New Year, we said, “Let’s figure out a number. What is it that’s going to take to get this loan knocked out at the end of the year? Who cares of the balances right now, we’re going to do it in a year, let’s make sure to get it done.” So, we did some crunching of some numbers and basically said, “Okay, if we can pay everything we’re paying today but also throw an extra $3,443 at the loan every single month, mine will be gone by the end of the year and it will be just knocked out.”

So, that number, I wrote it on the big note card over here and it became like—actually got it here, I’ll grab it. Here you go, so there’s the evidence, right? 3,443. So, that became—I put that everywhere and it became the mantra of like, “If we can do that every single month, this will be gone” and that was such a huge motivator for us.

[0:11:32.8] TU: I don’t want to brush over that, because we’ll talk about it, I mean, that’s a big number, so we’re going to talk about the how of that, but tell us more about how you were able to get to that conclusion and get on the same page with that conclusion? What I’m specifically getting at here is, was it a, “hey budget status quo and we’re going to find ways to grow our income”? Was it a, “we’re going to cut some expenses”? How did you guys work through the details, Kristen, to ultimately say, “Yup, it’s $3,443 and this is how we’re going to do it.”

[0:12:04.5] KH: I think it was a little bit of a combination of both. During the pandemic, we had a little bit more interest. I think also, in doing some real estate investing and had an opportunity, we said, “Okay, do we take this money and do we put it towards real estate or do we pay down the loan more?” and eventually, we decide real estate, but we said, “Hey, like, maybe we should aggressively pay off our loan a little bit more if we are traveling and doing these things.”

So, I think in December, we had a lot of discussion about it and both of us just decided yes, we both want that to be our goal, that starting January 1st, we really start cutting back on what we’re spending. I think, really, from any area that we could, we went thorough our budget, we scrubbed it. We said, “What are we spending money on, what are the subscriptions we have, what can we cut out, what can we save money on?”

“Which of those little purchases can we just stop doing? Which things do we think that we need, can we actually hold off on buying?” and then, certainly, Nate’s side hustle helped with that as well. So, I think it was both a combination of, let’s cut back to really bare minimum spending. We weren’t eating out, we weren’t getting the extra cups of coffee from Starbucks, we weren’t doing the purchases at Target that said, “This is what you need, and this is in the dollar spot.” We just stopped all of that. And Nate worked as hard as he could with his real estate; it really is a motivator to keep putting that extra money towards it as well.

[0:13:22.3] NH: Yeah, I think we quickly realized that trying to find for an extra $3,000 in the budget. We weren’t over spending by three grand every month, that was not it, so it became my challenge to say, “Okay, well, how can I work at this side hustle to really get us the rest of the way?” So, the expenses were the catalyst, and then it was the extra income side of the equation that really boosted everything to actually make it possible.

[0:13:44.7] TU: Yeah. What I love about that is, certainly, cutting expenses, especially short-term, if you’re focused on a goal, you were talking about debt repayment, can be really valuable but it also can be a grind. I mean, it can be soul sucking sometimes, you know?

I think that one of the things I love about the approach that you took is that if you’re moving both sides of the equation, there’s a different level of momentum and mindset that come from that. Maybe the numbers aren’t as big for other folks that are pursuing ideas, but if you can both focus on, “Hey, how can we draw the income and how can we keep the expenses?” you all of a sudden feel like you’re picking up momentum in a significant way, but I don’t want to brush over that number.

$3,443 per month, that’s, for many pharmacist, if we assume, hundred, $120,000 of wage, it’s like, it’s about half of take home pay. I mean, for a lot of folks, we look at that at a monthly basis so that’s certainly commendable, and that’s a big number. Nate, I want to ask the question that I know the listeners are thinking, which is Nate, Kristen, you guys are smart. $3,443, why not invest that money?

Why not put that out so we could see that grow and compound over 20, 30, 40 years? Like, how did you guys reconcile this ongoing debate, which is maybe a little bit of a moot point right now because the administrative forbearance, but this ongoing debate of, “Should I pay down the debt or should I invest for the future?”

[0:15:03.9] NH: Yeah. This is something we struggled with for years. Should we go out and buy another rental property or should we just take this money and throw it at the loan? That’s been the back and forth. Like Kristen was saying, we were evaluating whether we should be doing real estate or paying down the debt.

We challenged ourself to say like, “Can we do both?” and so, for me, again, working and trying to add extra income to the equation. It became a game of, “Okay, if I can make $3,000 a month extra, that’s going to get us there. But if I can make 4,000 or 5,000, that’s another couple of grand I can put at the real estate investing budget.”

So what we have, we had a bucket in LI, in our LI bank account, that was the real estate investing fund and we still have that, we still use it, it is a great way to separate our money. I had to pull from that in any month that I didn’t make enough income to really make the difference, I had to pull out of that. So it was like this, I was afraid to give it up. So it became a challenge to myself and to us.

We need to cut our expenses and raise our income in a way where I can keep padding that account, that bucket, while also meeting our number. It was a double motivator of let’s get rid of the debt and I don’t want to lose sight of the other thing that I’m really passionate about. So, let us find a way to do both.

[0:16:09.8] TU: Kristen, we both know that kids could be expensive. We love them, but it can be very expensive. I think one of the challenges folks have that are raising young family, whether it is debt repayment, whether it is achieving other financial goals, is it’s an expensive phase of life, right?

The data suggested it’s multiples of hundreds of thousands to be able to raise a child, and I am curious of how you guys were able to reconcile this with young ones? I know you guys are so active and intentional as a family now. When you’re looking ahead to say, “Hey, this is a sacrifice now but it is going to allow us to really push our goals forward as a family later in the future.” Tell us about your thoughts on that.

[0:16:46.9] KH: For sure. I remember being pregnant in 2016 and just thinking like, “Oh my gosh, I already feel like we’re living paycheck to paycheck, how are we possibly going to raise a child and afford daycare?” We even joke now, our big expense is mortgage. Childcare and student loan debt was there, our mortgage was the least expensive of all of those.

So yes, certainly having kids is—we always felt like we knew we wanted to have kids and it was just figuring out how do we plan for that. I think, especially now, spending more time with the kids too without having that student loan debt and being able to do more things and travel more, it feels like it’s definitely paying off in the end with making some of those sacrifices or making those adjustments.

Really, that mindset change, I was joking this morning, like you said Tim, it’s mindset changing. In 2021, we actually kept a list of things of, what are things we didn’t buy that we’re going to buy when the student loan is paid, and I was laughing because I’m like, “I still haven’t even bought these things yet.” We just found that maybe we don’t actually need them.

[0:17:44.7] TU: Yeah and some of those behaviors. That’s what I always encourage folks, whatever goal you’re working towards, some of those behaviors you implement in that season will stay with you for the long run. Certainly, there’s a time and place to loosen the reigns a little bit and make sure we’re living a rich life today as well as planning for the future, but we’ll talk about what that looks like for you guys.

But some of those behaviors can stay longer, which I think is really an incredible part of the journey. I want to touch on two things we’ve mentioned I think play a really important role to this journey, which is, number one, that you talk about the side hustle you had working full-time as a pharmacist, as a real estate agent that allowed you to accelerate some of the goals and momentum.

Then the second being the investing in real estate, which much of our community already knows the work that you there on the Real Estate Investing Podcast but talk to us first about the side hustle as a realtor. When did you become a realtor, why did you become a realtor and you know ultimately, how have you been able to balance this while you are also at the time working full-time?” You are raising a young family, tell us about the decision to pursue that work and the role that it played and the debt repayment journey.

[0:18:51.3] NH: Yes, I mentioned that mindset shift that occurred in 2016. I realized I needed something else that was going to be able to supplement my pharmacy career, something where I could put extra effort in and get extra reward from doing that, real estate became a natural fit. Again, it is mentioned a dozen times in Rich Dad Poor Dad and I started reading other things about ways to diversify income streams and, you name it, right?

Real estate was in that conversation. I talked to my father-in-law who has been in real estate for years and he’s like, “You should just get your license.” At the time that felt like, “Well, that’s a different career. I can’t do that” but as I looked into it, it was actually a really reasonable option to supplement that. So I went, like Kristen said, to classes in 2016, got licensed in early 2017 and I assumed that everyone was all of a sudden coming to me, right?

All my family and friends were going to flock to me and say, “Nate, buy and sell me a house” and it was, I think, eight months before I had a real client and actually closed the deal. I mean, it was a long time, and that’s because I wasn’t putting the right amount of effort into it and I wasn’t targeting what I needed to be doing, right? I wasn’t niching down and, again, that’s what led to the creation of real estate RPH and all the work that I do with pharmacists and the real estate community.

All those things progressed down the road to the point where I am at today where, again, now I get to work with a bunch of active clients here in Cleveland. I help people all over the country with our real estate concierge service and it is a really cool way to put my passion for real estate into the world of pharmacy that I started out in and, again, it’s also been a great way for us to supplement our income stream just because it is something where I could put more effort in and get more dollars out as a result from doing that.

[0:20:21.6] TU: Yeah. I want to put a plug in, just so you don’t have to as well, but I think that service has really been so valuable to the community. So, if folks are looking to buy a home, sell a home, looking to buy an investment property and they’re looking for an agent that would be a good fit for them. It is okay if you’re not in the Cleveland area where Nate is, he’s built a network of agents all across the country that have supported other pharmacist.

So, if you go to yourfinancialpharmacist.com, you click on home buying, you’ll see a section for find an agent and from there, you can get connected with Nate further.

Kristen, I want to ask you about the real estate investing side just because Nate talks about this on the podcast every week but I know, because I’ve seen it offline through some of the times I am talking with Nate, you guys are crunching numbers on the property and you’re on the spreadsheets punching numbers, “Is this a good deal, is this not a good deal?”

Tell us more about the vision that you guys have had for real estate investing for you as a family, why that’s been a good fit, and the approach that you’ve taken thus far in your real estate investing journey?

[0:21:17.5] KH: Yeah, I think we always had an interest in real estate investing. You know, my family has some experience with that, like Nate mentioned, my dad is a realtor, so we knew its something we eventually wanted to do. It was just figuring out ,how do we put it in as part of our plan? But when Nate said he was interested, I was all onboard, but I was also that type-A risk averse pharmacist as in, “How do we do this? I have no idea.”

I vividly remember a lot of my commutes, listening to Bigger Pockets, reading a lot of real estate books just to fill my brain with the information I felt that I needed to feel comfortable with real estate investing, and we always knew that we wanted to have those properties. I think one of the biggest things I had learned from Bigger Pockets was, one great thing about real estate investing is even if something happens, you still own a building.

You still have something physical there that you could sell and we just—we always knew we wanted it to be something to supplement with one of our investments.

[0:22:13.4] TU: Yeah, so right now you guys have property, correct me if I am wrong, you’ve got property in Northeast Ohio and then you’ve also got property outside of the area, correct?

[0:22:22.0] NH: Yes, so we’ve got properties here locally and then some up in Michigan as well.

[0:22:25.7] TU: Awesome, love that. And folks can tune in to the Real Estate Investing Podcast for more stories of other pharmacists real estate investors. So, we’ve talked about really three main buckets that were instrumental in paying off this $250,000 of debt and that was, I categorize it as hustle, cutting your expenses that more than $3,000 per month, growing the income through the side hustle, and then also looking at how you’re able to build a real estate investment portfolio. We’re there other strategies that helped you along this way of paying off this debt?

[0:22:55.8] NH: There are little things. I think one that comes to mind for me is that we refinanced that loan, I think four different times, and a lot of that was because we were getting low interest rates every single time, and the other is because we were able to get big bonus. So, if you have been on any of the YFP resources for loan pay down or for loan refinance, you get cash bonuses depending on your loan balance.

A couple of times we would go out and refinance it, wait a couple of months, refinance it again, and we’d get a check and a lower interest rate, it just made a ton of sense. So, that was a little thing that helped quite a lot along the way.

[0:23:24.2] KH: I think another thing that really helped us was working with Tim Baker and the planning team at YFP. They were very much instrumental in guiding us through and helping us make the decisions. You know, I grew up putting my money under a mattress making sure it was nice and crisp and counting it every week. When we started this journey, Nate wasn’t financially savvy until 2016, when he got more into it after reading Rich Dad Poor Dad.

So, I think working together in having a third party objectively look at everything and give us some guidance was really helpful as well.

[0:23:55.9] TU: You don’t have to make Tim’s ego any bigger. No, I’m just kidding. I can see he is listening to that. So the question that I am begging to know the answer to is, you guys were throwing a huge amount of money at this debt. Obviously, at some point, you got that debt paid off and, all of a sudden, you’re not having to make that big of a payment anymore. I often think about this in the context of my journey and I often chalk it up to where did that money go.

Well, more kids, kids got expensive, other things come along the way, but I also know you guys have been really intentional as a family about what are we trying to do in terms of experiences and how we want to be intentional with the resources and the money that you have each month. So, Kristen, talk to us about this journey after the $250,000 of debt, where no longer making this massive monthly payment. What’s happening? What are we doing?

[0:24:43.5] KH: Well, we went to Disney World. I feel like that’s the most appropriate thing, you know? Honestly, in some parts, it feels like it hasn’t changed at all. We still have a lot of that mindset with being frugal and still saving for our future, but also trying to live in the moment, and we have done a lot of life planning as well and things that we want to do. I think we’re working on travelling more.

Like I said, we went to Disney, hopefully some other trips coming up, just being able to spend more time with the kids I think. People with children understand that the first five years before they start school is just hectic and overwhelming. We were just trying to take in all these moments before they head to school officially.

[0:25:20.1] TU: I love that. Right, it goes quick and everyone says that, but it’s real, and I think the intentionality around these experiences and making sure there’s the budget there to support those experiences and to be able to enjoy those moments along the way. Nate, you recently shared publically your decision to go from full-time to part-time work in your pharmacist role. So we’re going to officially call you a pseudo pharmacist now.

[0:25:41.7] NH: That’s fair.

[0:25:42.9] TU: How much of a factor was getting to this point of having this $250,000 of debt paid off, how much of a factor was that and being able to approach that decision and ultimately, feel confident in that decision.

[0:25:55.4] NH: Yeah, it was huge. I mean, I can’t say that when we stared off that was the plan but as we get closer, we realized that it was a possibility, and I looked at the timing and I looked at where we were at and I said, “Look, this is like the last summer before our oldest goes off to kindergarten and then it is just going to get crazier and crazier as time goes on” So I took a step back and said, “Now that this debt is gone, we really can take a step back.”

Kristen has been so supportive and helpful in allowing me to do that, but it’s been really cool because now I can just focus on them for the summer and those extra 20 hours that I found every single week is just, I’m on the kid’s schedule. Like the other day, it was raining in the morning and so we went to the movies and we saw a kid’s movie and then we got out and I was like, “Hey, it’s sunny. Let’s go to the playground” and so we did that.

It was just really cool to be on their schedule rather than some work schedule or something else that I had to do or had to get done. There wasn’t a timeframe anymore and that’s been really cool and again, without that debt being gone, there is no way we could have done that.

[0:26:51.3] TU: Yeah, what I love is I think both of you are such a great example. Where yes, you’ve got a PharmD, yes, you’ve got residency training, yes, you could continue to climb certainly in various clinical roles and there’s the opportunities always there and will be there, but you also have some opportunity for flexibility in those roles and I think sometimes we don’t think creatively enough as pharmacist about how we’re going to use our time each week, and that can change season to season.

I work with other pharmacists who went through a season with young family and others where they pivoted to part-time roles or more flexible schedules and then that changed the game at a later point in time. So I think there’s opportunities to make sure that we are coordinating our work plan with our life plan and with the financial plan as well. Kristen, I’ll start with you and then Nate, if you have other thoughts as well.

I’m someone listening who, maybe I’m a student, and I am like, “Oh my gosh, thanks so much I feel depressed about the journey ahead” or maybe I am in the middle of the debt repayment journey and I just feel like, “When does this going to end?” or I feel like I am spinning my wheels. What advice would you have for pharmacists that are in that debt repayment journey as they’re trying to really navigate that path forward?

[0:27:58.8] KH: Yeah. Not to sound cheesy, but I think a really big player, at least for me, was the YFP planning team. We felt like we had a plan but we weren’t really sure if it was a good plan, and really it was after I had our second child and I was listening to a lot of podcast. I was walking everyday on maternity leave and I was listening to podcast every time I would go for a walk and I was like, “We really need to look at this.”

I feel like we need a more set plan as to what we’re doing, especially since you’re at such an integral point of your life where you want to be able to spend extra time with the kids, but you also may feel like you can’t financially do that, and so I think having that, like I said, that objective third party look at what you two are talking about as a couple can be really, really helpful, and also helped us look at a lot of our other financial plan with the investments.

Like, can we get into more real estate investing, are we contributing enough to our 401(k)? Are we doing things that seem like we should be doing? I think that is really, really been a big impact on us on being able to achieve this.

[0:28:55.0] TU: Nate, any other words of wisdom, advice you’d have to folks that are kind of in the thick of it, if you will?

[0:29:00.6] NH: Yeah, I think for me, again, just for me at least, what were just this mindset shift away from being stuck at, “Okay, I only have—this is my income” right? “If I make a $110,000 a year as a pharmacist, that’s all I’ve got and there is no other opportunities and I have to make it work with that money.” I challenge everybody out there, and there’s a thousand and one different ways to do this, but you should find something where the more effort you put in, the more you get out of it, and it doesn’t have to be money, right?

That can be just time, that can be time with your family, that can be things that you enjoy doing, whatever that is, find something that is going to supplement your life that the more effort you put into it, the more reward you get out of it ,and that is just a really great way to set yourself up for success.

[0:29:40.9] TU: I love that. To reiterate what we talked about a little bit ago, the dollars are one piece of that, but don’t underestimate the momentum that comes from that as well, and that momentum is so important as it relates to the financial plan. You’re related to the debt repayment but I always stick to the other parts of the plan as well. Again guys, congratulations on knocking out this huge chunk of debt.

Really incredible to hear the story and the why behind it and how you’re able to do it, excited for what lies ahead of you guys and thanks for taking time to come on the show.

[0:30:10.5] NH: Thanks Tim, we appreciate it.

[0:30:11.6] KH: Thank you.

[END OF INTERVIEW]

[0:30:12.3] TU: As we conclude this week’s podcast, an important reminder that the content on this show is provided to you for informational purposes only and it is not intended to provide and should not be relied on for investment or any other advice. Information of the 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 a financial advisor with respect to any investment.

Furthermore, the information contained in our archived newsletters, blog post and podcast is not updated and may not be accurate at the time you listen to it on the podcast. Opinions and analysis expressed herein are solely those of your financial pharmacist unless otherwise noted and constitute judgments as of the dates 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.

Thank you again for your support of the Your Financial Pharmacist Podcast. Have a great rest of your week.

[END]

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YFP 209: Three Real Estate Investing Lessons Learned from Fellow Pharmacists

Posted on June 24, 2021November 2, 2022 by yfpadmin

Three Real Estate Investing Lessons Learned from Fellow Pharmacists

On this episode, sponsored by Insuring Income, Nate Hedrick and David Bright discuss the growing interest in real estate investing among pharmacists, common barriers that pharmacists face that may prevent them from getting started, and three real estate investing lessons learned from fellow pharmacists who shared their stories and journeys on the YFP Real Estate Investing Podcast.

Summary

Cohosts of the YFP Real Estate Investing Podcast, Nate Hedrick and David Bright, return to the show, sharing some of the lessons they have already learned from their new podcast in the short time since its inception. Nate and David discuss three stories, in particular, lessons learned about real estate investing from those pharmacists featured on the show and running themes in the YFP Real Estate Investing Podcast that listeners will notice and can anticipate in the future.

As a guest on the YFP Real Estate Investing Podcast, in episode two, Jared Wonders shared his real estate investing story and how a foundation of financial strength enabled him to make investments by reducing financial risk. In episode three, Zac Hendricks and Blake Johnson provided insight on streamlining your real estate investing and rehab process for investment properties. Blake and Zac further highlight the power of partnerships and networking, leveraging their network to help turn difficult situations around and grow exponentially as investors. The third pharmacist investor story shared was from episode five, featuring Jenny and Myke White. Jenny and Myke’s journey demonstrates the power behind education in real estate, but equally important to learning is taking the leap and buying your first property. The jump from none to one can be intimidating, but having a great team around you will help reduce risks.

Mentioned on the Show

Episode Transcript

Tim Ulbrich: Nate and David, welcome to the show.

Nate Hedrick: Thanks. Great to be here.

David Bright: Hey, thanks.

Tim Ulbrich: Well I appreciate you guys taking time. I know you’ve been busy with your own show, with the YFP Real Estate Investing podcast. And really excited about the momentum that we have there and an opportunity here to talk about some of the lessons that I have heard as a listener of that show, some of the lessons that we’re hearing from fellow pharmacists around real estate investing and hopeful that some of these items we talk about tonight will be things that folks can take away, whether they’re thinking about investing, just getting started, or looking to continue to build out their portfolio. So I know that you’re just a handful of episodes into the YFP Real Estate Investing podcast, but very excited to see the interest from folks that we have in the community, activity that we have in the YFP Real Estate Investing Facebook group, and it’s really affirming of the initial thought that we had of the thirst that is out there for pharmacists to learn more about this topic. So Nate, why do you think we are seeing that growing interest among pharmacists that are interested in real estate investing?

Nate Hedrick: Yeah, it’s a great question. I think it’s probably a couple different things. One is probably just an awareness bias. Right? Like we are interested in, and so now all of a sudden more people are coming out of the woodwork. And I find that that’s the case because I’m talking to people that are 28, 29 units deep and they’ve been doing it for 10 years and it’s not like I thought of it first and just found them. They’ve clearly been doing this a lot longer. So I think some of it is that. The other thing is that I think as pharmacists start to get their feet under them financially, they get their student loans kind of in a good spot, they get a really steady job, really steady income, they start to pay down some of that bad debt, they start to look at well, what are my other opportunities for growing my finances and building wealth? And a lot of them are starting to turn to real estate as a great opportunity to do that. And so I think that’s part of where we’re seeing that community kind of flexing from.

Tim Ulbrich: It’s interesting to think of, you know, the time that you guys launched this podcast, so you know, mid-April, arguably we’re in one of the wildest real estate markets that many of us have seen, at least in our recent memory. And so not necessarily the easiest time to jump into real estate investing. And so the fact that we continue to see pharmacists that are active in their investing, pharmacists that are wanting to just get started or even use this season as an opportunity just to learn more, right, and absorb information and perhaps act when the time is right for them and their personal plan. David, with that in mind, you know, in terms of the interest that we’re seeing, growing interest among pharmacists, there are certainly barriers that pharmacists are facing as well that might be preventing them from getting started. One of them I mentioned might be the market right now. What else comes to mind for you?

David Bright: Yeah, I think the market is an interesting one because we haven’t talked about that as much on the podcast, but I know it’s certainly come up on the Facebook group. And I think that’s kind of a head-scratcher for a lot of people because you could look to almost any season and say, if you were to think back to like 2004-2005, ‘Oh, the market’s rising really fast. I don’t know if this is a good time.’ You could look at it in like 2010 and say, ‘The market just crashed. I don’t know if this is a good time.’ Like you could be suspicious of just about any market, and so I think that some of that is just market hesitation. Part of that is just kind of getting through that and knowing that you can never really time the market just like with stock market investing. So I think that timing is one factor that causes a lot of heartburn. I think another one is just time in general to learn about real estate investing, to feel like you’ve got enough confidence, particularly for pharmacists that spend a ton of time in school and a ton of time learning about our trade. And as we get good at what we do, it almost feels like you’ve got to put that much time into real estate investing to know what to do. But I think we’ve had a lot of guests on that have showed that you can get started a lot faster than that. It’s maybe not quite that complicated. And I’d say money or at least a plan with money is another barrier as people are looking at trying to save up for a down payment or something like that with a house, that does take a plan, and it does take some effort. And then once you’ve worked to save up that money, that can also cause some hesitation. So there’s a lot of these common hesitation pieces, but one of the things that I really enjoyed about the first few episodes is we got a chance to talk with several investors who were a little bit newer and all had taken that plunge, and so that was really, really fun to see folks that had just said, ‘You know what, I’m going to figure it out, and I’m going to dive in.’

Tim Ulbrich: Yeah, and I think that Nate and David, both of you have I think taught me this either directly or indirectly. But so much of this feels like momentum, momentum to get started. And one of the things I’ve heard among the guests was the importance of that first move, right? And we’re going to talk more about that as we highlight one of the episodes here in a moment. But I think one of the things I love about what you guys have done with this show as well as what we’re seeing in the YFP Real Estate Investing Facebook group is really holding true to the mission that you guys had for the show, which is pharmacist first, real estate investing second to that and making sure that we’re able to develop a plan around the careers that we love and around the careers that we invested a lot of time and money to do and obviously to be able to serve the patients that they serve as pharmacists. And I think the stories that you’ve featured — and we’ll talk about a couple of them here on this episode — of pharmacists that aren’t necessarily way off in the distance of massive portfolios but that took that first step or maybe that second step, and it wasn’t all perfect, and there was some learning and some growth and some development, and I think that makes it relatable. Right? That makes it to me as a pharmacist listening that is saying, ‘You know, I’m interested in this,’ to Nate’s point, ‘I’ve tidied up certain parts of my financial plan. I may be ready to dabble in this thing of real estate that really excites me for a variety of reasons.’ And hearing other pharmacists that I can see myself in their shoes and really see myself in their position where yeah, there’s some excitement, but there’s also some anxiety and some fear and some unknown. But at the end of the day, there’s a lot of learning to be had through the process. So kudos to you guys for I think a great start to this show and really holding true to the mission that you guys set out before you even recorded Episode 01. So I want to spend our time on this episode really highlighting three lessons that I have heard come through the show from fellow pharmacists that have been guests. And you know, I shared with both of you guys before I hit record, we hit record, and I meant it, like I’ve become a fan of the show. And I’ve been listening, taking away some key points and information as I suspect many of our listeners have as well. And so I wanted to hit some of the main themes and key points and use some of the stories that we’ve heard thus far on the show to highlight those key points. First one I want to talk about here is Episode 02. And I had the opportunity to interview Jared Wonders on the YFP podcast, you had him on Episode 02 of the YFP Real Estate Investing podcast where he talked about long-term versus short-term rental property investing and his perspective. Nate, give us a quick summary of Jared, his story, what him and Jess are doing, as well as what you guys talked about on the show.

Nate Hedrick: Yeah, so Jared was our first true guest. And I thought he’d be a great target just because of the diversity of real estate that he’s involved in, right? He has a partner, and they own a multifamily together. He has a single-family that him and his wife bought by themselves. He just bought his first short-term rental. So like he’s dabbled in all these different areas that really highlight the various ways that you can get into real estate investing as a pharmacist. And so Jared is just a really great guy when it comes to explaining what’s going on, and he’s very eager to share that education with others. So he was a natural target for Episode 02 and just bringing on that first guest. He was great.

Tim Ulbrich: Yeah, and I really like what he shared, Nate, about — I had the chance to meet him and Jess when they were here in Columbus at a Buckeye football game and really could see the passion that they have for this topic and also their appreciation for the work that they do as pharmacists. But I think he said maybe three times on that show at least — I’d have to go back and listen — the importance of getting on the same page with your significant other or spouse, right? And I thought he did such a nice job of articulating that, and I know that’s something, Nate, that you’ve articulated as well, right? I mean, how important is that?

Nate Hedrick: Yeah, I mean, honestly, I never would have been able to pull the trigger on that first property without Kristen being on board and being able to talk through that. And still to this day, like we don’t do a deal without talking it through together. You know, I tend to be the overly excited one. I see a deal and I’m like, ‘Oh, we can totally make this work.’ And Kristen is the one that sits back and looks at the numbers and says, ‘Well, but hold on. The numbers don’t work and here’s why.’ So we need each other to balance each other out, and again, I agree. Jared talked a lot about how him and Jess do that together and how that makes them more successful, which is really cool.

Tim Ulbrich: The other thing I really appreciate about Jared — and I’ve had a chance to know him a little bit more on a personal level — is I feel like he very much has a passion and a heart for teaching others and helping others. And so that came through on the show, you know, in terms of his desire to help other pharmacists in this area and really appreciate the contributions he has made to the Facebook group and excited to see where his portfolio goes in the future. David, one of the things — when I listened to that episode, and I think you penned you guys right away, I also messaged Jared when I heard it because it resonated with me thinking about the financial plan and where this fits in — and this is our first lesson learned — is he talked I thought so profoundly about the importance of being able to make moves, speaking of real estate investing, from a position of financial strength. Tell us more about what he was trying to communicate there and why in your experience as well as what we heard from Jared, that is so important when it comes to real estate investing.

David Bright: Yeah, I think one of the things that we’ve seen in talking with a lot of different pharmacists, pharmacists are inherently wired to play it safe and in doing that, one of the best ways to invest with greater safety is to invest from a position of financial strength. And he talked a lot about that, how having cash reserves and having a plan for debt and all of that figured out just makes it so much less stressful so that when a water heater goes out or when there’s a roof leak or when there’s an eviction or when something happens, you handle it. You’ve got a plan in place. And doing that from a position of financial strength rather than I hope there’s margin left on the credit card or something like that. And so that can be really, really helpful and help particularly pharmacists sleep better at night in their investing. I think the other piece of that is investing from a position of financial strength, when you have your finances cleaned up and in order, pharmacists tend to have a much more solid W2 income, and that can be a real piece of strength for when you go to borrow money with a conventional lender for a mortgage. And so that can be a real just critical piece of purchasing property and having it go much, much more smoothly.

Tim Ulbrich: Yeah, and I know, David, our planning team here will be very happy to hear Jared’s advice and some of your comments here because one of the things I say on the show all the time is that every part of the financial plan has value and that it’s so important when you’re making a financial decision that you’re not making that decision in a silo, right? So here, we’re talking about investing as one part of the financial plan. We’ve got debt management, we’ve got insurance, we’ve got obviously a whole host of other parts of the financial plan. And within investing, we’re talking about one subset of investing, which is real estate investing. And I think that’s a theme I’ve heard from many guests and knowing the folks and their individual stories of you know, thinking about things like the emergency fund. Where is that at? What’s the game plan for that? What’s the debt position? You know, Nate, you and I talked about this recently on an episode related to buying a home with student loans is it doesn’t necessarily mean there is no debt. Obviously that’s an individual decision. But what’s the plan around that debt, right, in terms of being able to put this piece of the puzzle around that? And then the other thing I would add here that I heard loud and clear, guys, throughout all of the episodes we’ll speak about this evening as well as others is really having a purpose and a vision and a why for what you’re trying to accomplish when it comes to real estate investing. You know, what is the motivation? What’s the goal? Not necessarily because you heard a coworker or you heard it on the show and it sounds interesting. Hopefully it does. But what does that mean individually for you and your financial plan? And how does this ultimately fit into what you’re trying to accomplish with the rest of the financial plan? So that’s Lesson No. 1, which is really being able to make a move when it comes to real estate investing from a position of financial strength. And I think Jared did such a nice job with talking about that in Episode 02. Next one I want to move to is Episode 03, which was Blake Johnson and Zach Hendricks, two great guys. We’ve had them on the YFP podcast as well talking about some of their real estate investing journey. You guys did a nice job building upon that. They talked about in Episode 03 running the rental numbers and really digging deep into their individual roles and the partnership that they have. So David, give us a quick summary of Blake and Zach and their show. And what were some of the takeaways that you had being able to interview them for that show?
David Bright: I really had a great time talking with Blake and Zach that night. I know Nate and I ended up staying on after we turned off the record button, we stayed on to talk to them for awhile too. They were just a lot of fun to talk to. And you can tell that they are just, they’re just loving life as they’re doing this. This isn’t creating some major stress where they can’t sleep or anything like that. Like they’re just enjoying this. And so I thought that was just really encouraging to kick off with. But they talked about kind of how they get started, some different projects they’re working on, even with running the numbers, one of the things that impressed me so much as they were talking about running their numbers is they just have a really simple way of doing it. They’re doing advanced calculus pharmacokinetic kind of stuff. Like they just figured out some pretty simple math. And even when Nate and I threw some questions of thinking about it in a slightly more complex way, they’re like, nah. It was just the beauty of simplicity, and I feel like that can help get past that analysis paralysis. And they just had a really, really great model there. And I think the other thing that they hit on well is clearly, they have a partnership in doing this, which for their goals since you talked about that purpose and vision and why, for achieving their goals, they knew that they wanted to go bigger than just having one or two rental properties each. They wanted more than that. And so it just reminds me of that quote of, “If you want to go fast, go alone. But if you want to go far, go together,” how they just really found a great partnership opportunity and leveraged that in order to achieve their goals.

Tim Ulbrich: Yeah, and David, the other thing that stands out as you speak about partnership is how clearly defined their roles are. Right? So I remember Blake talking about really his value in being able to analyze the properties, find those that may be a good investment, and Zach really plays a significant role because of his background and what he does and a lot of the rehab, estimating those costs as well as overseeing that part of the project. So yeah, I think the value of their partnership stood out. I thought the clear purpose and vision and why behind their investing was a strength and certainly appreciate the comment you made on the value of that partnership. Nate, the other thing that I want to spend a few moments here on, which is the second lesson I want to talk about this evening that came out from this episode was the power of networking. And I remember Blake talking about this when we had him on the YFP podcast. He talked about it again on this show. It really seemed like they have been intentional in building relationships. Now, they’ve got a couple things going for them, right? They’re in a small town in Arkansas, Blake’s got some great relationships that are coming from his role of working with an independent pharmacy. But it seems like those relationships and the intentionality of building those and also conducting their business in a high integrity way that furthers those relationships really have played a big role in the success of their investing. Tell us more about the power of networking and what you took away from this episode related to that.

Nate Hedrick: Yeah, I agree. That’s a really powerful point for them that a lot of their deals, a lot of their — some of their best deals and some of their saves, things where it may not have been going right but they turned it around and kind of fixed it came because they had good networks and good individuals to speak with. You know, one of the main things they talked about was the first couple deals were MLS deals, meaning they were listed properties, anybody could see them. But as the market became tighter and tighter, they started finding new ways to find opportunities. And some of those simply became just because they knew somebody who knew somebody or they talked to the right person at the right time. And it just goes to show that truly building that network in advance and giving away things up front so that you can hopefully get back later in the future, it has really paid dividends for them. So again, they gave several examples on that episode, and I think again, like David said, after the fact we were chatting with them. It’s just incredible to hear the number of people that they interact with and how that helps their business.

Tim Ulbrich: Yeah, and I remember some of the relationships they talked about with agents, with obviously the lending and what that gave them in terms of they now have some of that smaller town relationship and being able to have some more flexibility and be nimble in some of those deals. David, I want to put you on the hot seat for a moment because this is one of the things I noticed when I started really getting into a little bit more about what you’re doing on the investing side of how valuable it was and is the team that you have built up around you. And I know this is a process that has taken time, but I think for somebody that is hearing whether it’s Blake and Zach’s episode or hearing stories such as yours or others that have really taken some time to build up these relationships, it can still feel overwhelming with like, where do I even start? Like is this a meetup of investors? Is this a Bigger Pockets type of thing or the YFP Real Estate Investing Facebook group? Like as you reflect back on your own journey where now you’ve got all these relationships with folks that you trust, that are looking out for you and your investing plan, like how did you get started with that? And what words of advice would you have for folks in this area of building up their team and then ultimately the power and value that comes from networking?

David Bright: Yeah, that’s such a good question because I agree, that’s a big thing that can get in people’s ways if I don’t have a trusted contractor, a trusted realtor, a trusted lender, like all these different people, that can be really stressful. For me, I know a lot of that started with a great referral to a great agent. And that agent knew great people who I was able to meet. From there, there was local networking with a meetup where I met more really good people. And so for me, it was a lot of just networking and trying to learn more from local people but all stemming out of some of those just natural first relationships.

Tim Ulbrich: So we’ve talked a little bit about being able to make moves from a position of financial strength. We’ve talked about the power of networking. And I want to shift gears now and focus on Jenny and Myke White, awesome episode, Episode 05 that you guys had them on the show, “None to One: How to Get Your First Investment Property.” And shoutout to Jenny and Myke, I’ve known Jenny for a couple years. I had a chance to interview Jenny and Myke on the YFP podcast. Love what they’re doing in terms of their investing but also love their passion for helping others and love their willingness to be honest with how they got started, some of the mistakes that they made along the way, some of the things that they’ve been learning along the way. And I think for those that are just beginning to think about what might be the first move, I would highly recommend you check out Episode 05 as I thought it gave a great insight into some fellow individuals that may be in a similar path to what you’re looking for. So Nate, give us a quick overview of Jenny and Myke, their background, what they’re doing from an investing standpoint, and how they got started that you featured on Episode 05.

Nate Hedrick: Yeah, what we realized early on, David and I just planning out some of the shows we wanted to have, we recognized that a lot of our audience is someone that has never invested in real estate before and may not have even thought about doing it up until this point. And so our thought was, you know, for both of us, one of the hardest things was getting that first property. And so how do you go from no properties at all to that very first one? And Jenny and Myke were in the perfect position to kind of share that because they had recently done it, and they have exactly one property. So they are about as relatable as you can possibly get while still being a real estate investor. And so Jenny and Myke’s story is amazing where they’ve really worked together as a couple to kind of figure out what is in their best interests. One of the things I love about their story is that Jenny talks about how it was kind of her idea first, this whole idea of real estate, and how she brought Myke along, which I think, again, a ton of people can resonate with where one spouse gets interested and then brings the other along for the ride and just how that worked and how they played that out. And again, I think overall, their story is about moving across country, relocating at where they were going to invest, and then leveraging their capital from that move into their first investment property and how that worked. It was a great story.

Tim Ulbrich: Yeah, I agree. And I love their passion, Nate, for learning. I know Jenny hosts a real estate book club on Facebook, and she talks so much about the learning process and for those that have ever met Jenny — and a shoutout to her — like she’s one of those people you talk to in a half hour or 60 minutes and you feel motivated and inspired to like get after learning more because she’s just so on fire with learning and also wanting to provide value to other folks and the conversations and the interactions that she’s having. David, to the point of learning, do your homework, this really stands out to me as the third lesson that I heard across multiple episodes, but really highlighting the interview with Jenny and Myke, and that is do your homework and learn, learn, learn, keep learning, but at some point, you’ve got to jump even if you don’t have all the answers. So talk to us about how important that is, when folks might decide when they’re ready to actually make that move, and how they ultimately avoid becoming paralyzed through the analysis phase.

David Bright: Yeah, I think that they had a really good balance there where Jenny in particular was doing a lot of that homework and learning and reading and all of that. Myke created a lot of accountability there in that coming on board together, kind of approaching this as a team. And then when it came time for them to jump, one of the things that they did that I really liked is they didn’t try for like crazy advanced strategies of they got a realtor, and they went on the MLS, and they found a listed property, and they bought it. And so they didn’t — by just jumping in with something that’s a tried-and-true method that you can read a lot about, you can learn a lot about, and it’s probably something very similar to what most everyone that owns their own home has already done. You find a good realtor, you go on the MLS, you find a house, you buy it. So jumping became easier because they had a strategy that helped for that. And by learning through that, that kind of decreased the anxiety and I just really liked how they were able to do that by surrounding themselves with a really solid team and a really solid strategy.

Tim Ulbrich: Yeah, again, that was Episode 05, “None to One: How to Get Your First Investment Property.” None to one, I love that concept, Nate. I think you mentioned it as well, but we should do more of those into the future. I think highlighting more folks because that is the biggest barrier, right? It was for me, I suspect for you guys as well and others that are listening. And maybe you go none to one and you realize it’s not for you. That’s OK. Likely you go none to one and you realize alright, I’m still on my feet, I learned some things, could have done it better, and what does that mean for the next deal going forward and also being able to help others. So “None to One: How to Get Your First Investment Property,” that was Episode 05 with Jenny and Myke White.

Nate Hedrick: And yeah, I would agree. The none to one story I feel like is the most authentic, right? Those people, they come on the show, they have just done this recently, and again, they’re the most relatable investor we can possibly provide. So I really like those stories. And you’re right, I’m hoping to bring more of those to light here with David as we go forward.

Tim Ulbrich: One other theme, David and Nate, that I’ve heard from guests throughout the episodes that you guys have done already is the value of community and learning from others, the value of community and learning from others. You know, that provides accountability, obviously it provides support, being challenged, making connections. We talked about several of these key points here tonight. And I think this is an opportunity for folks, if you’re not already in and aware of what we’re doing with the YFP Real Estate Investing Facebook group, I hope you’ll join us. We’ve got a few hundred pharmacists already that are engaging with one another, sharing some pretty awesome stories, the good, bad, and the ugly, connecting with other pharmacist investors in their community. That’s really what this is all about, hopefully that we can educate, inspire, empower, and ultimately be able to connect you with other investors that are pharmacists and also an opportunity to learn from one another. David, speaking of getting started, I think one of the challenges here is that folks that come on the podcast, even though you guys have done a nice job of asking them questions that may highlight some of the challenges along the way, we’re probably hearing some of the best of the best in terms of their deal stories or examples that they’re providing when you’re asking them to provide an example. And that might not be necessarily something that everyone listening looks at and say, ‘That worked out so well, I’m still nervous that it may not work out for me.’ So tell us about why that’s important folks consider that as they’re hearing guests come on the show.

David Bright: Yeah, I definitely want to caution when you hear things that are just like, ‘Oh, that was an amazing deal. I don’t know how I could ever do that,’ like I don’t want that to be this intimidating thing by featuring some folks where this worked out. Like it definitely doesn’t work out in every situation. Blake and Zach had a nice story that kind of showed some of the other side of that of how things don’t always work out but also how they were able to turn that around and still prevent it from being a disaster. Jared had a very similar story as well. So one of the things that when you have a good team around you, again, since pharmacists are so wired for safety, when you have that good team around you, they help you to not really get super hurt. And so you mentioned a minute ago this ‘none to one’ concept, and that’s one of the nice things about real estate is if you ever go from one back to none, it’s kind of like when you sell the house you live in. You go get a realtor, you put it on the MLS, you sell the house. So if you buy $100,000 rental property and after a few years it’s not really working out for you, hopefully if you’ve surrounded yourself with a good team and bought well, it’s not going to hurt so bad. It’s different than if you would have put $100,000 on Blockbuster 20 years ago or something like that. You could really be in trouble now. So there’s a lot of safety in team and in real estate in general.

Tim Ulbrich: Yeah, great reminder, David. And I know you and Nate have done a great job and will continue to of featuring the good, bad, and the ugly, right? I think it’s important as we talk about this as one option of investing that pharmacists may consider in the context of their financial plan, really understanding what is the benefits, potential benefits, what are the risks, who might this be for and who may this not be for and really trying to present a fair perspective on real estate investing. So Nate, I know we’re just a handful of episodes in, but am I itching as I suspect our listeners are as well, like what’s ahead? What should we expect from the show coming forward?

Nate Hedrick: Yeah, I think more of what we’ve already provided, right? I talked about sharing stories of people that are just getting started. We don’t want to move away from that because I think that is I think a lot of our audience. We’ve got some ideas coming away where we’re going to interview some members of those people’s teams. So property managers, contractors, maybe a real estate agent, financial planning, all the different pieces that go into supporting real estate investing. So taking some looks at that aspect. And then I think too, we’re just trying to share more stories of pharmacists doing this while being pharmacists. You know, that really was kind of the core mission that David and I looked at and making sure that our show was different and our show was relatable to specifically our audience. And so that is one of our big goals as we move forward is to keep sharing those stories of success as pharmacists but having that same success in the real estate side as well.

Tim Ulbrich: Yeah, and I hope you’ll join Nate and David each Saturday, new episode, what a better way to start the weekend, get a cup of coffee, put on the show. For those that are working weekends, you can listen to it on your car ride. Great opportunity to kick off the weekend. And if you have a question or story to share, feel free to reach out to [email protected]. We’d love to hear from you. Again, [email protected]. David and Nate, I’m going to put you guys a little bit on your own hot seat. So one of the things you do at the end of your episodes are some final infusion questions, which I love the pharmacy connection there. And a really cool opportunity to hear from folks about resources and things that are helpful among other things. Question I have for you guys — I do want to ask you for a resource or something that you’re finding value in right now — but first, I want to ask you, as you reflect on the journey thus far, you know, one of the things I share with folks is one of the greatest joys of doing this podcast has been able to meet so many different pharmacists and while I am helping to share their story, I feel like I leave each and every one of those learning something myself and hopefully finding an opportunity to improve. So as you reflect back on the journey thus far, David, we’ll start with you: One thing you’ve learned from the guests that have challenged or inspired you in your own real estate journey.

David Bright: Yeah, one of the things that has really hit me in the first several episodes that we’ve recorded is I’m realizing how most of my personal investing has really just been buy-and-hold investing, long-term rentals, kind of consistent and boring. And I like that because I’m able to do that without it interfering with my work as a pharmacist. One of the things that’s been inspiring to me is seeing pharmacists that leverage multiple strategies. Like I really thought I had to just do the one thing in order for it to be manageable. But seeing other pharmacists that are able to work multiple strategies at the same time and do short-term or medium-term rentals as well, and so it’s opened my brainstorming to maybe there’s other things that I could do, and if I follow in the footsteps of what some of these other investors have been doing, there’s got to be ways that I can also do that without distracting from my work as a pharmacist.

Tim Ulbrich: Very cool. And Nate, what about you?

Nate Hedrick: Yeah. To get really specific, I think it’s actually similar to David. I have not considered short-term rentals before as something that I wanted to get into. But after talking with both Jared and with Rachel, I thought immediately, like I’ve got to look into this more. This is something that I think is really interesting. You know, I’ve stayed at an Airbnb before, but I’ve never owned one. And so you know, again, taking that actual discussion and putting it into practice, right? Kristen and I within the last couple of weeks actually went out and looked at a property we were evaluating as a short-term rental. And that only happened because I had those conversations with Jared and with Rachel. And it was funny, an extra shoutout to Jared Wonders because I texted him the night before we were going to go look at a property, and I’m like, “Alright, man, I need to know everything about buying an STR like tonight.” And he was super helpful. He was like, “OK, well, what do you actually need?” And so he’s giving me all these great resources right over phone. So it’s just really cool to expand what I thought was possible and then have a community to go along with me for the ride. So again, it’s not like I have to go re-learn all this stuff from scratch. I can go right to people that are doing it, living it, and have a great relationship with me already and tap right into them, which is awesome.

Tim Ulbrich: And what a cool example there, Nate, right? I mean, that’s a great example of like going from textbook to application, right? I mean, you talk about short-term rentals, but you actually go out, you look at one, you run some numbers, you talk with somebody else about it, get another opinion. Like that makes it come alive, you know? So I think that’s a cool example of the value of making those connections. Another final infusion question you guys ask to your audience is, you know, what’s one resource, could be a podcast, could be a book, could be a guide, a quiz, a calculator, a form, whatever, that you’re currently drawing value from when it comes to your own journey as a real estate investor. So David?

David Bright: So one of the things that I think we keep making jokes about on the podcast because every week, at least once, “Rich Dad Poor Dad” gets mentioned, right, like if not multiple times. Like I don’t know, that book has changed so many people’s lives. And so kind of going through this, asking these questions and hearing that perpetually come up has actually caused my wife Heather and I to go back through that book —

Tim Ulbrich: Oh, cool.

David Bright: — as the two of us to just kind of talk through some of that, the fundamentals and foundations and mindset from that book because it is so good, and there’s a reason why everybody mentions it. So it’s one of those where I think you can go back and read it for the 13th time or whatever time you’re on, and some of that is just really helpful to continually get your mind in gear for where you’re trying to go.

Tim Ulbrich: Yeah, David, I think that’s one of those books — I haven’t read it 13 times yet, I think I’m only three times through — but it’s one of those books that hits you in a different place like where you are, you know, partly in probably your own personal investing journey mindset-wise. But I kind of have put that among some other books of like I need to revisit this book every couple years because it is that transformational. And I would even argue for those that are listening that are like, I’m not even sure the whole real estate investing thing is for me, I think it’s still that important of a resource just to get you thinking a little bit different in terms of mindset and money. Nate, what about you?

Nate Hedrick: Yeah, the resource that I keep going back to — and I’m stealing from my first answer — is the other pharmacists that we get to talk with, right?

Tim Ulbrich: Yeah.

Nate Hedrick: It starts with David and I, like David has been a fantastic resource for me, but also the other pharmacists that we’re talking to. And just being able to tap into that network, learning from people that are doing this, you know, I’ve always had some sort of community with Bigger Pockets and with my real estate activities, there are other agents I can talk to, but it hasn’t felt like this level of fit where I can just go to those people and we immediately connect and it’s on a different level than I’ve had before. So that for me has been a big change, and it’s a resource that I am fully tapping into. So apologies to all those I’ve already texted and bothered with questions, but it’s a great way to learn and again, we come at this as experts in what we do. But there are so many things that we are not experts in yet, and there are so many ways that I can still learn. And so this has been really fun for me to tap into that and continue to grow and learn.

Tim Ulbrich: Yeah, and the power of networking, right? We talked about it earlier on the show, but I believe that this is another great example, what you just said there, Nate, that there’s enough of this to go around, right, for folks that want to get — this is about other people helping each other, whether that’s in your own community, whether it’s in other communities, and we’re just a handful of episodes in, but I’m starting to see come to shape this concept of pharmacists connecting with other pharmacists in a variety of different ways, being able to encourage and motivate each other on their own journey and perhaps collaborate in some cases if that makes sense. So again, YFP Real Estate Investing podcast, each and every Saturday on this channel. If you have a question that you have for Nate and David or a story to share, please shoot us an email at [email protected]. And for those that are listening and thinking, where do I get started with real estate investing, Nate and David have written a great resource, “The Pharmacist’s Guide to Real Estate Investing.” It’s a quick read, a lot of tangible takeaways. You can get a copy of that for free at YFPRealEstate.com. Again, that’s “The Pharmacist’s Guide to Real Estate Investing.” You can grab a copy for free at YFPRealEstate.com. David and Nate, thank you so much for the contributions on the show as well as taking time this evening.

Nate Hedrick: Thanks, Tim.

David Bright: Thanks so much.

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