They are incredibly smart.
They work their butts off in school, some for more than a decade, so they can practice.
They apply their trade in a high-pressure environment, giving the oft-used term “life or death” real meaning.
Doctors deserve admiration in our society for all of those qualities. I know I appreciate them. And so do the banks and other financial institutions, where they are placed on a pedestal because of their high salaries and commitment to paying their bills.
But for some reason, these professionals remain an untapped resource in the private sector when it comes to enlisting them as financial partners. I want to change that. To that point, I have coined the term “DocVestors.”
Cliff Janke is the poster child for this movement. I met Cliff a couple of months ago when he approached Burn$ Funding to improve his credit and obtain unsecured funding. This is a very basic blocking and tackling thing we do at Burn$ Funding. Our real niche is helping entrepreneurs, investors and “DocVestors’” secure capital through a myriad of ways.
But back to Cliff. He is the classic “DocVestor,” who graduated from medical school almost two decades ago and is in the prime of his career as an emergency room physician. He has had good instincts in the business world, buying lots of real estate. He even invested related to his field, such as a free-standing emergency center. The only weakness in this was that Cliff had a (very!) full-time job and lacked the time to help his investments reach their potential.
That’s where we came in. Cliff’s interest in improving his credit and obtaining unsecured financing coincided with Burn$ Funding’s interest in the assisted living or Group Home space. We believe this was a massive opportunity ripe for immediate investment. And it was. In a matter of two months, Burn$ Funding’s Luxury Group Homes has accrued a deep bench of experts in the space as well as the initial capital from Cliff (Burn$ Funding loaned him) and some of his doctor associates too.
We have nearly a dozen properties in the Phoenix area, and soon Southern California, that we have acquired or are under contract to purchase. Some of these properties are already operational; some are in the process of being retrofitted by our expert builder, Tim Hurst, who has 50 years in the business. On the other side of the bench is Larry L. Miller, who has a decade of experience overseeing such properties, with an existing management team in place and a pipeline of customers coming from companies like Banner Health.
The only missing piece for rapid growth is the capital. Thus, we’re looking for other “Cliffs,” or “DocVestors.”
Here’s how a typical deal works:
To summarize the very simple yet powerful methodology we’ve developed to acquire these existing and additional properties in each vertical, below is our “quick and dirty” process:
Our builder/developer selects a single-family home that is suitable for redevelopment into a Group Home.
We then secure the property by placing a “hard money” around 70% of the property’s purchase price. Our investor is the “name” on the property LLC with our lender.
Plans are drawn up and estimates for refurbishing the property plus all costs associated with “carrying” the property until fully licensed as a Group Home are tallied.
An investor interested in the individual (or multiple) opportunities is pre-qualified by my lender for unsecured capital at preferential rates. This money can be used to provide the 30% “cash to hard” as well as the build-out and carrying costs.
The property is completed, licensed and appraised with the new value established — often at 50% or much more as a completed Group Home. One of my plans that has a special program for Docvestors will offer up to an 80%–90% LTV of the completed project, with the designated investor as the individual on the note for our property entity.
The new financing pays off the “hard money” as well as all of the capital provided by the investor to refurbish, license and carry the property until cash-flowing on its own with the tenants. The investor now has a cash investment of zero dollars, yet remains as an equity partner for both the real estate and Group Home operation.
With their initial capital returned, the investor repays my capital source and has his new facility intact to hopefully join us in the next property he or she is invited to invest in.
Dr. Janke has watched it unfold, first-hand.
“Peter Burns has brilliantly connected the dots between myself and his network of contacts, and has come up with a powerful new business venture in the Group Home space, which I am honored to be a part of,” he said. “He has endless energy, creativity and a tremendous grasp of the business world from decades of entrepreneurial adventures. Burns has the ability to connect many seemingly unrelated parties and ideas together, and to create new and lucrative business adventures.”
Peter J. Burns III is a serial entrepreneur based in La Jolla, Calif. He can be reached at firstname.lastname@example.org