With the stock market at all-time highs, many investors look to other avenues to diversify their portfolios. One of the major ways to do that is through real estate. Doctors are no different in looking to real estate as a way to put their money to work in the smartest way possible. However, doctors are a unique class of investor, for a couple reasons.
First of all, they work a ridiculous number of hours for a high salary. So it just doesn’t make sense for a doctor to follow active real estate strategies like “flipping” houses or strange strategies like turning containers into short-term rentals. While these things might make sense for someone working in real estate full time, most doctors will tend to favor more passive options.
Second, because of their high salaries, most doctors are accredited investors (someone with a net worth over $1 million or who makes over $200,000 per year in income), which gives them access to investment options most investors aren’t eligible for.
Given these unique characteristics of doctor investors, what are the main strategies for doctors to get involved with real estate?
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Has your mortgage loan been declined by another lender? Josh Mettle explains the steps to take to ensure a flawless home purchase.
A disability insurance policy is crucial to helping anyone protect their ability to earn an income. A true Own-Occupation policy can help professionals protect the significant investment they made in their education and training. It can provide a benefit when you are unable, due to injury or sickness, to perform the material and substantial duties of your own occupation.
If you have limited your occupation to the performance of the material and substantial duties of a single medical specialty or to a single dental specialty, that specialty would be considered your regular occupation. This is extremely important, because this enables you to continue to practice medicine if you want. You would need to simply modify the field that you practice. For example, a surgeon may consider working as a pediatrician, if disabled as a surgeon, and still be able to receive his or her disability benefits.
More than any other occupations, physicians and dentists need a true own-occupation disability insurance policy with a specialty specific definition. The following is the best definition of disability and is the most favorable to the policy owner and is generally only available within select individual plans and rarely found within employer group plans.
Looking over a physician’s contract I was reviewing the other day I came upon a single sentence set into the “benefits” section:
“After twenty four (24) months of continuous employment employee will be eligible for consideration as a partner of group.”
I’ve seen this language in countless contracts. Many of my clients, especially those looking at an employment agreement for the first time, have found it extremely enticing, as it seems to hold out a carrot of great value, one to strive for.
My question is always: What does that sentence mean?
There are different ways to obtain loans. Getting one can sometimes be easy or hard, depending on the loan you want. Getting a loan for some can be easy, especially if you are a professional or a physician you need to borrow from money lenders. Follow these steps to help you increase your chances of getting the loan.
Apply For A Job
What sets physician loans apart from other types of loans is their ability to pay-off the debt. Money lenders have a guarantee that they will be paid a moment’s notice because the profession of the borrower is highly profitable. Moreover, physician loans are highly enticing because you can obtain a significant loan, unlike others. Something to keep in mind, however, when applying for physician loan you should also start looking for a job.
One of the considerations some moneylender looks at is if you are already looking for a job, or if you already have one. Having a job may serve as the basis for you to qualify for a physician loan. Getting a job or applying for a job is a guarantee that you will be able to pay your debt through your income.
Young physicians have some of the highest mortgage underwriting decline rates of any professional seeking real estate financing. This should not come as a surprise as most residents have a negative net worth (typically loans far exceed assets) and many coming straight out of medical school have not filed taxes in years.
How does one qualify for a mortgage with a negative net worth and little if any documentation of income?
To solve these challenges, the physician home loan or doctor mortgage as it is also called, was created to overcome the challenges physicians in training and newly attending face when trying to qualify for home loans.
What is a physician home loan?
According to HousingWire, Amazon is preparing to move into the mortgage space by seeking out a new head for that division. From HW:
Earlier this week, we reported to the LendingLife community that online shopping giant Amazon may be looking to get into the mortgage lending business, or at least that's the rumor among mortgage lending professionals.
While limited in scope, Amazon's plans are to start with offering checking programs first, then maybe move into the debt product space after.
Well, after reporting that, we’ve received information that Amazon is currently looking to hire someone to lead their newly-formed mortgage lending division.
Due to non-disclosure agreements, we probably shouldn’t reveal their identities. After all, with Amazon planning a move into mortgage lending, it’s best we work with them and not against them. Am I right?
We can say that if you look at the top 10 HMDA lenders and pick out the nonbanks, that’s where Amazon is recruiting their talent.
I, for one, welcome our Amazon overlords.
I’m not a big fan of buzz words, but when I ran across this one—intrapreneur—I was intrigued. As organizations have grown larger, intrapreneurs—persons within a company who promote innovation within the organization—have become the new movers and shakers, and company executives are on the hunt for this new type of employee, for people who can lead on important internal issues and, where possible, effect internal change that’s positive and, in many cases, ground-breaking.
In my work with new docs, especially those coming right out of residency or fellowship, I tend to see three distinct types. There’s the new physician that just wants to practice medicine, and not be bothered by operational issues. There’s the new doc that is only interested in those operational matters that have a direct impact on his or her bottom line. Finally, and more rarely, there’s the intrapreueur, the one that looks at a bigger picture of healthcare and is looking analytically at their practice, the group’s practice, and the immediate healthcare environment, finding ways to make very productive changes that benefit their practice, group, patients, and hospital.