October 9, 2017

JF1133: Struggling With Student Loan Debt, A Periodontist Schools Himself In Real Estate Investing with Jeff Anzalone


Jeff was cutting grass while being a full time periodontist just to make ends meet. He started learning real estate and investing passively through different platforms. Now he is wanting to be a landlord mostly for the education it can provide for his children. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!

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Jeff Anzalone Background:
-Periodontist in a solo practice in Monroe, LA
-Dental Specialist Consultant at JeffAnzalone.com
-Investor Mentor with Dentists Based in Monroe, Louisiana
-Say hi to him at http://www.periosuccessacademy.com
-Best Ever Book: Think and Grow Rich

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Joe Fairless: Best Ever listeners, welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast. We only talk about the best advice ever, we don’t get into any of that fluffy stuff. We’ve spoken to Barbara Corcoran from Shark Tank, Robert Kiyosaki, the author of Rich Dad, Poor Dad; Emmitt Smith – he’s a former football player, hall of famer, and he’s also a real estate developer (go listen to that episode) and a whole bunch of others.

With us today, we’re gonna be speaking to a periodontist who recently got into real estate mentor, has a full-time job and was trying to figure out how to invest in real estate, and we’re gonna hear his story. Jeff Anzalone – how are you doing, Jeff?

Jeff Anzalone: I’m doing fantastic, Joe. Thanks very much for having me on the podcast today.

Joe Fairless: Well, my pleasure. Nice to have you on the show. A little bit more about Jeff – as I mentioned, he’s a periodontist, he has got a solo practice in Monroe, Louisiana. He’s also a dental specialist consultant at JeffAnzalone.com. He is a real estate investor, and as I mentioned, he is in Monroe, Louisiana. With that being said, Jeff, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?

Jeff Anzalone: Sure, Joe. I’ll try to make this as short as possible, because it’s kind of a pretty interesting background how I got to where I am now, which probably many of your listeners have probably had situations or setbacks or things in their past that have put them where they are now or made them better.

So long story short, about a week or two before I graduated from my residency program at LSU, the group that I was supposed to join here in my hometown let me know that for whatever reason they were not going to be acquiring a partner, even though I had been speaking with them probably for about the last three years.

As I hung up the phone, I kind of started thinking in my head, “Well, several hundred thousand dollars in student loan debt between my wife and I, I’ve got a two-month-old, I already purchased a home back home…”, a friend of my was a banker and he allowed me to purchase an interest-only loan for this house, bearing the fact that I was gonna be joining this group and he knew them, so that was kind of back when you could just do deals like that, just kind of a good ol’ boys deal. But probably the worst part about it was I had no clue how to start a practice, how to hire people, anything like that, because we’re not taught that in dental school and residencies, and probably many of your listeners out there that are in jobs, maybe they own companies or whatever – you’re just not taught that.

So needless to say, I started to network with people back home. Luckily, I had another specialist in [unintelligible [00:03:58].16] kind of took me under his wing. He allowed me to rent space from him, use his equipment, and he started introducing me to the other dentists in the area, and slowly but surely I started to build my practice.

One of the things that kind of inspired me along the way was that group told me that there was way too much competition in my area, and there was no way I could make it. That kind of inspired me to definitely do everything I can to prove them wrong… I’m not the type of person that likes being told what to do or take no for an answer, so that really inspired me along the way to do that, but I’m probably one of the few board-certified periodontists in the country that could say that I also used to mow yards at the same time I practiced dentistry.

Joe Fairless: Wow…!
Jeff Anzalone: I used to have a lawn service in high school and college, and man, when I got out, I had to make ends meet. So I was working in other offices, I was working at my office, I was cutting grass, doing everything I could to make the mortgage payment, to keep the student loans current. That’s kind of how I got started.

Looking back on it, it’s probably the best thing that happened, because that whole experience I went through me allowed me to write my first book, “What They Don’t Teach You In Dental School.” It’s kind of my journey of what I went through, and all the little things that I learned and I was taught along the way about building a practice; it’s basics about building a practice, because we’re just not taught any of that stuff.

Joe Fairless: Help me understand this – you’re practicing dentistry, but you’re mowing lawns to make ends meet. Was your mortgage payment way above your means, or were the loans just that much that you had to do that?

Jeff Anzalone: I would say a little bit of both, because we had several hundred thousand dollars worth of student loan debt. For people that had student loans – or at least they did back then – they give you about a six-month grace period to get on your feet, and then after that they automatically start sending you bills. And I just wasn’t used to having bills that large, because when you’re in residency, everything is deferred pretty much… But that really inspired me to work hard and to do whatever it took.

Looking back on it, what I’m learning now about real estate, I really wish I would have started the process of learning about real estate and maybe starting to acquire some properties at that point, or at least doing something at that point, so as I’ve gone along the way, I could have a larger real estate portfolio. But that wasn’t the case, and we’ll get in a little bit into what I’m doing now. But for listeners out there that are kind of starting to want to dip their toe in the water or they have kids — currently, I’m encouraging my kids to do everything they can to learn about real estate, to network with people that have properties, just to go and work on-site if you want to, to start with construction maybe, if that’s what you wanna do, and kind of go from there.

Joe Fairless: When you say you’re encouraging your kids, what are some things that they would do? Because you have a 12-year-old, right?

Jeff Anzalone: I have a 10 and a 12-year-old, and they’re very curious, very inquisitive, they’re always asking questions. A lot of times they’ll ask about money questions, or they’ll ask about different things, “What should I do for a living?” or this or that, and I say “You need to do whatever you wanna do for a living, whatever God calls you to do, and whatever you like to do, but consider having real estate or having houses or having apartments or doing something like that.” We’ll ride around town and we’ll say “Hey look, you see that apartment complex?” I did this to my 10-year-old the other night… I said, “Look, there’s 12 families, there’s 12 doors on that, so that means 12 people are paying rent every month to whoever owns that.” He said, “Well, what does that mean, dad?” I said, “Well, let’s say all 12 of those people are paying $1,000 a month. How much is that?” He said, “That’s $12,000 a month.” I said, “So just think about it. You’re wherever you are and you own that, and somebody’s paying you $12,000 a month. Is that pretty nice?” “Wow! Can I do that now, dad?” [laughter]

Joe Fairless: Start mowing some yards.

Jeff Anzalone: Yeah. Little conversations like that, because everybody’s always talking about “You’ve gotta stay in school. If you don’t go to these big schools, or do this or that, you’ll never be successful or make money.” I was always told that; I don’t know what you were told, Joe, but I wish somebody would have started a conversation, at least piquing the curiosity when I was younger… But just to kind of open their eyes now a little bit.

Joe Fairless: With your practice – it is a successful practice… And then a year ago you started looking at real estate. What was your approach and what was your first investment?

Jeff Anzalone: Probably many of the listeners on the call right now have a full-time job, or maybe a couple part-time jobs, and you may be considering, as I was, learning about real estate. Also, you mentioned a little bit earlier about my consulting job. I started helping other dentists and periodontists several years ago and I formed the PerioSuccess Academy. And as I started acquiring clients, a part of that whole process, people wanted to know about retirement, about investments and that sort of thing, and some of them started asking me about real estate. Well, I didn’t really know much about it, because I didn’t really have much investing, so I started to read books, network with people, I started listening to your podcast, which is fantastic, and all the information you give out…

Then I was to the point where I wasn’t ready to jump in and buy houses or buy apartments or anything like that with having a full-time job, with having a consulting business and a family. So I have a lot of my plate, which I’m sure many of your listeners do as well. So the issue of crowdfunding, which I learned a lot about from your podcast, especially Patch Of Land and Realty Shares, and also some of the deals that you do as well, Joe – that really piqued my interest.

So about a year ago I did my first debt deal with Realty Shares, and since then I’ve done several debt deals, several equity deals with not only them – with Patch Of Land, and then the deal that we’re currently doing now with yourself, Joe, and your company… So that’s what I did last year. Now I am starting to network with local people, friends of mine that have real estate currently, or they work for somebody that does, and getting ready to dip my toe in the water, so to speak, and get into some local properties here in the area that I live in.

Joe Fairless: So a couple questions… One is how did those deals go with Realty Shares and Patch Of Land? Or how are they going, if they haven’t completed?

Jeff Anzalone: I’ve got three right now that are currently paying me, two of them monthly. One of the equity deals is paying me quarterly, and then I have a couple that have just recently closed and they haven’t started paying yet. So it’s pretty cool… I opened up a separate checking account that I do the real estate deals through, and it’s pretty neat just watching the account slowly but surely start to grow… Just the 8%-10% returns that I’m getting from those deals, for many people aren’t getting near that in the stock market. So I wanted to diversify, because pretty much 100% of my money was in index funds. So my goal last year was take 10%-15% of that money and invest it in some sort of real estate. I thought that crowdfunding, after I learned about it and spoke with enough people about it, was where I wanted to start, learn about and educate myself about. Now I’m more educated as I move forward with regular properties.

Joe Fairless: Since you’ve invested in two crowdfunding platforms – Realty Shares and Patch Of Land – I’d love to know if you’ve done an assessment, or just your thoughts on pros and cons of each.

Jeff Anzalone: I would say probably the main pro would be with Patch of Land it seems like because I believe they’re pre-funded, when you invest your money there’s not a big long waiting period to start getting paid. I really like that. Versus Realty Shares and maybe some other platforms as well, you’re having to wait several weeks, sometimes several months for the deals to close, and a lot of times they’re larger deals, so your money is just kind of sitting there. And it seems to me like Patch Of Land has smaller deals, around $100,000 or less, or a little bit more than that of course, but it doesn’t take as long to fund that, versus a million dollar or a five million dollar deal that Realty Shares is doing. So I would say that’s the main pro of both, and then the con would be just taking longer to start the payment process with Realty Shares.

Joe Fairless: So as you’ve mentioned, you’re an investor in one of my deals, and I ask this so that other Best Ever listeners who are putting together deals and they’re looking to build relationships with accredited investors, I wanna ask why did you invest with me and my company in one of our deals – and it’s not to hear compliments about me, it’s more so that we can learn your thought process, so that other Best Ever listeners who are doing this can know what one accredited investor thinks through before they invest.

Jeff Anzalone: Sure. I reached out to you after I had done several deals with the other crowdfunding platforms, so I kind of knew a little bit about the process and how it worked. And what I really liked about your company was 1) you talk with people before you do deals. That was completely different. All these other crowdfunding platforms – you can just go, sign in, most of them you need to be an accredited investor, of course, and then you can just start doing deals. Of course, I like that, but that was something that stood out to me, that you were different in that aspect.

I was able to ask you questions about the process, and you explained that very well, and probably the best thing that I like that differentiates you from the others was you actually are putting your money in as well to the deal, so you have skin in the game. I was really impressed with that, with not only taking time out to speak with someone that you didn’t know, but you’ve got skin in the game… Whereas these other companies – I don’t know if they do or not; maybe some of them do, but these are bigger companies, where you’re throwing your money in there. So those are the two main things that I really liked.
Then I liked the whole process – we spoke about the deal, the apartments, what you were trying to accomplish, kind of the short term and long-term goals that you had… I really liked that, and I was really comfortable with that, and just decided to invest.

Joe Fairless: You made me wonder about crowdfunding platforms like Patch Of Land and Realty Shares, I don’t know the answer to this – I wonder if they do invest in their own deals. I think it’d be a no-brainer to do that. I mean, making 8%-10%, just put in whatever percentage they want per deal, and then I suspect they could grow their money as fast as they do within their current business model of charging whatever fees they charge in the deal. I’m gonna have to ask them that the next time I talk to them.

You mentioned something earlier – you said that you’re now looking to buy local, and I wonder why are you taking that approach, given what you’ve mentioned previous to that, which was you’ve got the full-time job, you’ve got the consulting thing, you’ve got two kids… Why now are you wanting to be  a landlord?

Jeff Anzalone: I would probably say the number one reason would be for my kids, because this is gonna be something now – and I’ve talked with local people that have real estate and they have kids, and I watched something about how Donald Trump was raised with his father in New York, and how he started in real estate… There’s so much that you can teach them and learn from that. Let’s say you’ve got a single-family home, your kids can pretty much be involved in it from day one. They can start mowing the yard, they can help with painting, they can do as much or as little — that was gonna be, for me, a great way to expose them to it… Versus it would be really hard to try to expose them to crowdfunding.

Joe Fairless: I don’t know how you would do that, yeah.

Jeff Anzalone: So that, plus the tax benefits as well, because as somebody that is in a higher tax bracket, once you get to the point where a lot of your depreciation, and as you get things paid off, as people realize, you’re just getting taxed to death, so that’s probably my second reason – for more tax advantages.

Joe Fairless: Based on your experience as an accredited real estate investor, what is your best real estate investing advice ever?

Jeff Anzalone: Best real estate advice ever is to do your due diligence, to connect with people and network with people, read, listen to podcasts… Even though you’re gonna do deals, or if you’ve done deals, continue to educate yourself. Don’t get complacent. Continue to learn, because there’s so much stuff out there, there’s so much new stuff, so much stuff that’s changing… So just have that desire to continue to learn.

Joe Fairless: Are you ready for the Best Ever Lightning Round?

Jeff Anzalone: Sure.

Joe Fairless: Alright, let’s do it. First, a quick word from our Best Ever partners.

Break: [00:19:03].02] to [00:19:58].21]

Joe Fairless: Best ever book you’ve read? Speaking of continuing to learn…

Jeff Anzalone: Well, I would have to say that the best ever book I’ve read and I continue to read daily is the Bible, but also probably the second one that comes to mind is from Napoleon Hill, Think And Grow Rich.

Joe Fairless: Best ever deal you’ve done?

Jeff Anzalone: Hopefully it’s gonna be with you, Joe.

Joe Fairless: We just closed less than a month ago, that’s why you say that… For the record.

Jeff Anzalone: Probably my equity deal that I have going on right now with Realty Shares. They’ve been very good to me.

Joe Fairless: What’s a mistake you’ve made on a transaction, or the due diligence of a transaction?

Jeff Anzalone: I would say one particular deal I didn’t do enough due diligence – I was just kind of looking at the financials and just kind of got gah gah with the numbers, and didn’t really look at the sponsor as much, do my due diligence with that… And that deal got going through and was exited; I did get my money back, but hindsight, looking back on it, I probably shouldn’t have invested in it if I would have done my due diligence better.

Joe Fairless: And what would you look for next time, if presented the same opportunity?

Jeff Anzalone: Most of these crowdfunding platforms — sometimes they’ll have webinars, and I really like to look at those. I like to look at the sponsor who’s sponsoring this… Most of the webinars, they have frequently asked questions. For instance, Realty Shares will do a webinar on a sponsor… I think one of the ones that I looked at were doing some storage buildings, so they had a lot of frequently asked questions; I thought that was really good.
So I really didn’t take the time to do that and really learn about them, maybe do my own research on the sponsor to kind of get their history, instead of just kind of taking numbers on a whim.

Joe Fairless: Best ever way you like to give back?

Jeff Anzalone: With my consulting business… Because so much has been given to me, and pretty much I am where I am because of other people; that is the number one reason why I wanted to do consulting and coaching. So that’s kind of my way of giving back to others, whether they can afford my services or not.

Joe Fairless: And how can the Best Ever listeners get in touch with you or your company?

Jeff Anzalone: Two ways. My consulting business is PerioSuccess Academy (periosuccessacademy.com), or my practice website, AnzalonePeriodontics.com, or you can just google “Monroe Louisiana periodontist” and you’ll see our website.

Joe Fairless: And the Success Academy website URL is what?

Jeff Anzalone: It’s periosuccessacademy.com.

Joe Fairless: Jeff, thanks for being on the show, thanks for talking through your thought process when you’re investing in deals passively, what you look for, what you’re experience has been so far on crowdfunding platforms, what you look for when you’re investing with someone who is a sponsor (like myself) on a deal, and then the types of ways that you’re teaching your kids how to approach investing, and some tactical tips that you have in there as well.

I really appreciate your time today. Thank you for being on the show. I hope you have a best ever day, and we’ll talk to you soon.

Jeff Anzalone: Thanks, Joe! 


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