How To Build Freedom With Active & Passive Real Estate With Dr. Chirag Chaudhari

🎙️ Welcome back to another eye-opening episode of The Physicians and Properties Podcast with host, Dr. Alex Schloe.

💡 What if your path to financial freedom wasn’t choosing either active real estate or passive syndications—but designing a portfolio that uses both for cash flow, tax efficiency, and time freedom?

In this episode, Alex sits down with Dr. Chirag Chaudhari—an emergency medicine physician and multi-asset investor with holdings across multifamily, short-term rentals, hotel-to-multifamily conversions, land, oil & gas, and preferred equity. Chirag unpacks how he used 1031 exchanges to scale, why he chose Clearwater STRs (hello, mother-in-law + legitimate write-offs), and how he now co-invests in institutional deals—bringing physician capital together to negotiate better terms and de-risk execution.

From the short-term rental tax loophole (with material participation and cost seg) to energy deals that can offset active W-2/1099 income, this conversation is a blueprint for physicians who want freedom to practice medicine because they want to—not because they have to.

🔥 What you’ll learn:

• Active → Passive playbook: How an ER doc grew from LTRs to STRs to 20+ LP syndications
• 1031s, simplified: Rolling equity from a paid-off $150K LTR into a $600K Clearwater STR—without paying taxes on the gain
• STR tax advantages: Material participation + cost segregation = potential six-figure paper losses against clinical income
• Oil & gas 101: IDC credits, targeting 80–90% first-year deductions on W-2/1099 income, plus front-loaded cash flow
• Hotel → Multifamily conversions: Inside a 787-unit studio housing project in Olympia, WA
• Land deals for growth: Why some investors trade cash flow for 3–5× equity multiples in 3–5 years
• Co-investing edge: Pooling capital via an LLC to win better splits, lower mins, and cleaner investor relations
• Diligence that protects you: Vetting sponsors > vetting deals; background checks, third-party feasibility, sensitivity analyses

🔥 Key Takeaways:

• Freedom is the goal; real estate and entrepreneurship are the vehicles.
• Compress timelines with education, masterminds, and community (borrow belief until you have your own).
• The sponsor is the jockey—bet on them first, then the deal.
• Mix assets for resilience: STR cash flow, land appreciation, energy tax benefits, and institutional ops.
• Use the code legally: 1031s, bonus depreciation, STR material participation, IDC credits.

⚠️ Friendly reminder: none of this is legal, tax, or investment advice. Always consult your CPA and attorney (preferably with real estate and cross-asset experience).

🔗 Connect with Dr. Chirag Chaudhari:

• LinkedIn
• Website

If you want to learn how investing in real estate can give you the freedom to practice medicine and live life how you want then check out the links below:

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Transcript

Dr. Chirag Chaudhari:  For me, what attracted me to Clearwater is my mother-in-law is in the Tampa area, and so we're down there a lot.  And we love to, my family loves to go to the beach and spend time down there. We love Clearwater. And so for us it just made sense to be able to, you know, go to visit. My mother-in-law be able to stay at our place when we're there.

It becomes a tax write off going to visit mother-in-law now because you're taking care of your properties and visiting them and,  and so, you know, there's some additional benefits there.

 Dr. Alex Schloe: Welcome to the Physicians and Properties Podcast, the show where we teach you how investing in real estate can give you the freedom to practice medicine and live life how you want. Doctor, doctor, doctor, doctor, doctor. Now here's your host, Dr. Alex Schloe.

 Hello everyone. Welcome to another episode of the Physicians and Properties podcast.  As always, I'm your host, Dr. Alex Schloe, and I am so excited to be joined here  by Dr. Chirag Chaudhari.  This is gonna be a fantastic episode. Dr. Chaudhari is an emergency medicine physician and a multi-asset investor. He's built  a diversified portfolio spanning multifamily, short-term rentals, oil and gas, and preferred equity,  which we haven't yet talked about on the podcast.

So looking forward to that. We're diving deep into how one ER doctor turned his clinical precision into a framework for evaluating deals, mitigating risk,  and building true financial freedom. Dr. Chaudhari, so glad to have you on the podcast. How are you doing today?

Dr. Chirag Chaudhari: Doing great Dr. Schloe. Thanks so much for having me. I really appreciate. I be in here.

Dr. Alex Schloe: Absolutely, absolutely. Feel free to just call me Alex, and I'm looking forward to,  to get started. So how did you first get interested in medicine? Let's talk a little bit about your journey into medicine, if you don't mind.

Dr. Chirag Chaudhari: So so sort of interesting story. I went in, you know, sort of graduated high school, was  my dad was an engineer. I was gonna be an engineer. I got into University of Illinois  as an electrical engineer and was sort of. Doing the first year of, you know, basic engineering level classes. And it was great.

You know, no, no arguments there or anything, but I had three roommates at the time and all three of them were pre-med.  And so, you know, that's all they'd be talking about. They'd be talking about their classes and they just seemed so much more energized and than, than I was with my engineering stuff.

And so I ended up, you know, sort of. Auditing a bio class and loved it. And so ended up switching majors halfway through sophomore year,  and then did did, you know, a double major in bio and psych, and then realized, you know, medicine, did some shadowing and  volunteering and sort of maybe came to a decision a little bit later than some other folks.

But yeah, it, after that it was sort of, you know, my, my heart was set on medicine and you know, being, being a doc.

Dr. Alex Schloe: That is awesome. Feel like it was the right decision for you.

Dr. Chirag Chaudhari: Yeah, absolutely would not change a thing. You, you know, oftentimes people ask, you know, if you had it to do it over again, what would you do differently? And, and honestly, nothing. It's been  it's been tremendous. I think you know, just being able to practice, being able to live in sort of, you know, the, the area of medicine that we live in and, and we know things are changing and it's sort of not the same practice as when we got into, but.

But I wouldn't change any of it. It's been a tremendous experience.

Dr. Alex Schloe: That is awesome.  What did things look like after undergrad, going to med school, going to residency? What was that path like for you?

Dr. Chirag Chaudhari: Yeah, so so undergrad, finished up at U of I and then you know, kind of born and raised in Chicago suburbs. Kind of wanted to stay close by and so I ended up doing med school at Rush in the city.  Met my wife there who. Like you is actually a northern Virginian by birth. And so she wanted to sort of head back out east.

And so we we matched at the University of Maryland did residency there in emergency medicine and then stayed, put, you know, one of the community hospitals  as part of the University of Maryland network. I've been there, you know, PGY 21 this year. And so 21 years at the same place, which  again, is a little bit unusual and a little bit of a unicorn, but but it's a, a terrific system,  a terrific hospital, terrific group.

And so, yeah, I've been there a long time.

Dr. Alex Schloe: That is awesome. Well, congratulations on this 21 years. That's really impressive.

Dr. Chirag Chaudhari: Thanks. Appreciate it.

Dr. Alex Schloe: Yeah, absolutely. Was there a a moment for you when you realized, hey, maybe I need to pursue some other asset classes or investment opportunities to create financial freedom, or how did you kind of get bit by the real estate and investing bug?

Dr. Chirag Chaudhari: Yeah, I think so. You know. Unfortunately in, in sort of medicine and medical school. And I think times are changing a little bit with,  with some of the education that's out there, but we don't get a lot of financial education. We don't get taught sort of investing strategies.  You hear a little bit about contracts and what those look like and you know, how not to get taken advantage of, but I don't know that we do.

As good of a job with our finances and financial ed education, and a lot of times we become prey to financial advisors and other folks that are sort of selling, you know, permanent life insurance and other things to residents who are gonna have, you know a pretty good net worth down the road. And so they get you when you're,  when you're vulnerable, when you're young and sort of uneducated.

And so, you know, having some of those discussions, learning a little bit but being cautiously, you know, fearful of some of those folks I think was, was healthy.  And then  fast forward to attending Hood and sort of, you know, getting some of that larger income now that you're maybe not used to as a resident.

Where do you put it? You have, you know, the usual 401k, 4 0 3 B 4 57, depending on, you know, your employment. That sort of, you know, a lot of folks will describe as money jail.  And I, and I think it's a perfect description because you're sort of, Hey, you get, you know, these six to eight options of what to do with your money and then you can have it at 65 and enjoy.

 But there's not like. If you wanna enjoy it before you're 65, what if you know, those you want to try alternative  assets and maybe something that's not particularly offered. And so  we were always a little risk averse with the market and so we would get a bonus at work and  we would buy a home.  And so we would get.

Different investment properties early on. And so by the time we're probably a decade into sort of attending hood, we'd had,  you know, three, four properties and that was gonna be the retirement plan and just cash flow those and. Yeah, interestingly,  we we got into investment properties, which were by a nationwide home seller that really didn't want to own model homes.

And so they would sell out of a community, for example, and instead of owning those model homes,  they would just sell them and rent them back to an investor. And it could take 'em 2, 3, 4 years sometimes to sell out an entire community of homes. Which is perfect because I didn't have to be a landlord for 2, 3, 4 years.

I had monthly checks coming in.  The, the owner of the home is me, but my renter is the builder.  They're not even living there. If something goes wrong, they're gonna fix it.  So it was perfect. It was great cash flow, great for an early investor. No headache, no fixing, you know, no getting light bulb calls and fixing toilet calls in the middle of the night kind of thing from from tenants.

Dr. Alex Schloe: Awesome. Yeah, that's really unique. I've never heard of, of that opportunity, but it makes a whole lot of sense and  yeah, it you know, gets rid of the toilets, the termites and the, the tenant issues that exist there, so that's great.  Do you mind kind of walking us through the evolution of your portfolio from that, that first investment property to your current holdings?

And then from there we'll kind of  digress into talk about some different strategies and what that looks like for you.

Dr. Chirag Chaudhari: Yeah, absolutely. So we had sort of a, a series of. Homes and initially we're in Maryland, we had,  you know, small amounts saved up, but nothing to sort of, you know, typically you're putting 20% down on properties and things like that. And so we looked just over the border in Pennsylvania where the properties were significantly less.

And so our first investment was, you know, in Pennsylvania. And we. Just sold that one last year. So we own that for probably almost two decades. And so you know, and then 10 30 won that into sort of a larger asset, but we owned it outright. We,  you know, our tenants over, you know, a decade or so paid down our mortgage and we had cashflow, we had rental income  and what was sort of $150,000 town home in Pennsylvania that we put down?

Maybe 20, 25 K  has now purchased a short-term rental in Clearwater. You know, that's a 600 K home. We didn't put a dollar down for that home, it was just whatever we put down 18 years ago. And we've just used that to sort of grow.  And that's, I think the property, the, the power of real estate and what you can do you know, with a small amount upfront and sort of grow that for years to come.

And so,  same strategy. We did that multiple times with a number of other. Long-term rentals and so we have another short-term rental there as well in Clearwater. And so we've 10 31 to few of our homes into short-term rentals. They tend to cash flow significantly better than a long-term rental would.

 And so we, you know, each one that we did that with, we 10 x the cash flow  that the long-term rental was doing compared to what the short-term rental does.  And so same, same plan is to eventually 10 31 those into potentially larger short-term rentals or potentially multifamily properties.  And so we still have a number of those holdings.

Then in 21 we, we changed our strategy, did a bunch of masterminds you know several different courses that sort of taught us how to be a little bit more intelligent in the real estate we were doing.  And so that's what really led us to sort of converting those properties and 10 31 them.  And then brought us into passive real estate investing, which you know, was, was a completely different animal, if you will.

Dr. Alex Schloe: That is awesome.  I wanna hit on a couple key points before we talk a little bit more about the passive investing, but one thing that I, I noticed you said was, you know, 18 years later you sold this home and you  bought the short term rental in Clearwater, and we're kind of talking about that snowball or velocity of money. Real estate is not a get rich quick scheme. But you've done it and you've done it right. And it's really cool to see,  you know, kind of how that progression has gone from that $150,000 townhouse  free and clear sold, bought a $600,000 Clearwater short term rental. It's cash flowing like crazy.  So that is really, really cool.  For folks who aren't familiar with a 10 31 exchange do you mind kind of explaining briefly what a 10 31 exchange is and what the benefits may be to doing that?

Dr. Chirag Chaudhari: Sure. Yeah, absolutely. And and I would say in hindsight we would compress that 18 years now into something much, much smaller, just given the education and the learning, which we didn't have back then, which is why I think your program is so terrific because I think it offers that education to folks that are looking potentially to do something similar.

You know, looking back, we would've taken that equity and 10 31 much sooner, probably as soon as the community was fully built out and sold. We could have then sold the model home, which was sort of the cream of the crop property in, in the community. And 10 31 much earlier. And we'd already had significant equity built up, but we still did it and it was still a great play.

And so a 10 31 is a, like, exchange of property. And so it allows you, there are certain timeframes that you have to meet but it allows you to sell one property. Purchase another one. As long as you use all of the gains from your first property without sort of taking any of the gains yourself. And so it's handled through an intermediary that holds onto the cash from your sale and then puts it towards the cash and the down payment on your next purchase.

So you have to identify a new property within 90 days of sale.  You have to close within 180 day 180 days of sale of your first property. So there are some time constraints you have to stick within. But what's great is you're not paying a penny on any of your, on any of your earnings, no tax. And so you're able to sort of kick the tax can down the road  and buy bigger.

Properties that theoretically will cash flow even better for you. And you know, it depends on what you read and who you listen to, but eventually you, you get into a large enough property and then you just pass that on to your heirs. And that, that's a step up in basis is what it's called to your heirs, which means they get to take it at whatever the current property level is and whatever it's appraised for, and nobody's paying any taxes because you've now passed.

Your heirs have the asset and you've not paid taxes at all on, on the history of that money, which is pretty amazing.

Dr. Alex Schloe: Yeah, it is absolutely incredible. It, it is such a valuable tool that you can use to defer those taxes down the road and, and maybe forever. So yeah. Thank you for sharing that. And, and thank you for mentioning the, the compression of time. You're, you're exactly right. That's the true benefit of podcasts and masterminds and communities and courses is, hey, how can you take that  18 years that it take, that it took you for that, that deal?

How can you compress that time to. Two or three years and, and continue to use that velocity of money where you're making that money work for you faster and faster and faster in generating more and more returns. That's gonna continue to snowball down the road. So thank you for pointing that out.

That's a really important point.

Dr. Chirag Chaudhari: Absolutely.

Dr. Alex Schloe: That's awesome. Well let's talk a little bit briefly about short-term rental. So what, what drove you to the Clearwater market? What drove you to short term rentals? What do you like about short term rentals at this point?

Dr. Chirag Chaudhari: Yeah, so I think short term rentals is just a, it's a, it's a niche market. It's sort of, you know, the, the next big thing. Everybody's staying in Airbnbs. Everybody's staying in vrbo, and, and you know, it just provides a little bit of a different experience for folks and. Given, you know, people do short-term rentals for different reasons.

Some people want it at a location that they enjoy vacationing, that they're able to enjoy their, you know, vacation home, if you will, while also having the home essentially paid for many times. By folks who are staying there. And people offer amenities for their short-term rentals. Sometimes they're seasonal based on ski vacations or beach vacations, so it could be a lot of different things.

For me, what attracted me to Clearwater is my mother-in-law is in the Tampa area, and so we're down there a lot. And we love to, my family loves to go to the beach and spend time down there. We love Clearwater. And so for us it just made sense to be able to, you know, go to visit. My mother-in-law be able to stay at our place when we're there.

It becomes a tax write off going to visit mother-in-law now because you're taking care of your properties and visiting them and,  and so, you know, there's some additional benefits there. But what was nice once we started the first one, we sort of had our team there. We have a property manager that, you know, handles our bookings for us and everything.

We have general contractors. We have folks that we know. We have a pool person for each of them. And so. It just became easier to do a second one there because we sort of had that infrastructure in place and made it easier to set up a second one. But yeah, that's, that's what drew us down there.

Dr. Alex Schloe: That is awesome. Yeah. What, what a cool way to make visiting a mother-in-law tax write off. So that is, that is awesome. Short term rentals, certainly more active in terms of investing and, and managing and run that. Of course you have a manager who helps  streamline that, but you mentioned that you. In 2021, started doing some more Mastermind, some more courses, and you started to pivot more towards more passive investing or more of a limited partner situation.

What has that looked like for you as you've made that transition?

Dr. Chirag Chaudhari: Yeah, so I think that's, that's been a really good transition. Just one other thing in the short term rental, which, of not only does it allow for higher cash flow annually than you would get through a typical long-term rental but one of the masterminds I went through really concentrated on the short-term rental tax loophole.

And as long as you meet again, certain criteria around material participation. And the amount of time that you put into the property, you have to get a, what's called a cost segregation study done, which is an engineering study of all the improvements that you made through the home.  And you're able to bonus depreciate those and take a lot of those, which would normally be written off sort of 20, 30 years depending on the particular asset.

You could bonus depreciate that all within one year, and that actually comes off your active income, so your W2 or 10 99 income. So. The first year I did it, I had a 200 k loss almost off of my active income. And to imagine like not paying taxes on 200 k of clinical income, it's dramatic. And that is a very large check back from the IRS fully legal, you know, it's all in the tax code.

But it's it's a great business play to be able to do and offset, you know, some of the hard work that we're all doing. So just, sorry. I know that was a little bit of a tangent, but I think important for folks to hear.

Dr. Alex Schloe: No, that's a, that's a perfect tangent. And, and I would encourage folks to go back and listen to what Dr. Chaudhari has been talking about. 'Cause we've hit multiple really cool tax strategies. And I think sometimes the benefits of real estate, we kind of overlook how massive of a benefit from a tax perspective it really is.

But when you're talking about. A $200,000 loss that's written up against clinical income. I mean, we're talking 40, $50,000 in, in tax savings from that perspective, perhaps more.  But it's a, it is a really, really awesome opportunity from that perspective. And I can tell that you've been very diligent and analytical.

I, as you've. Thought through, Hey, how can I figure out these tax strategies that are gonna benefit me, not only from an investing perspective, but also against that clinical income? So  that's probably a little bit of that engineer brain that is that is working that out. But that's a, that's a really, really important point for folks to think about, especially making a little bit higher income as, as, as physicians.

So we're grateful for that, but we pay a lot of taxes and so it's great to be able to offset that and do it legally. So that's awesome. Well, yeah. Let's pivot now towards towards more of that transition to a limited partnership arrangement or more passive strategy. What's that look like for you?

Dr. Chirag Chaudhari: So I think, I think with the act of things, you know, at some, at some point. A lot of active takes a lot of time, and depending on how clinical folks wanna be and how much they wanna be active in their real estate, a passive component to a portfolio is great because it's sort of, you know, it's, it's a lot of your, your money working for you as opposed to you sort of working for your money.

And as long as you do it thoughtfully with a good strategy and you do the appropriate due diligence getting into these limited partner deals. Are great because you're still investing in real estate or not, but you could do multifamily, you could do land syndications. There's storage, there's, you know, you name it, there's so many different asset classes one could get into.

And you're basically a partial owner of that asset. And so you're pooling a lot of funds and you can be a part owner of a very large apartment building. There's oil and gas, which, you know, I'm a limited partner in a. Over 22 syndication deals currently. So it's a lot, but it's also very risk stratified and sort of diversified in the sense that there's so many multiple asset classes that they're not sort of correlated to market.

And depending on what the market does, these things are gonna do very differently. And so even if a number of them don't perform as well as one would expect if you're in 22 of them overall, you're, you know, very conservatively, you'll double, I will, I should say, double sort of my investment at that four to five year mark.

And then if you keep doing that and keep doubling every four to five years, not a lot of years, that you have to do that before you're sort of, you know, free from other things, from, at least from a cashflow point.

Dr. Alex Schloe: Yeah, absolutely. That's, that's a great point. And, and you know, kind of what we mentioned earlier of  just that snowball continuing to grow over time and before you know it, you've, you've really made, you know, a huge dent in your financial freedom journey. Probably already surpassed what you need from a financial freedom perspective.  But let's talk about those, those 22 deals. So you, you mentioned you're, you're pretty risk stratified.  How did you decide how you wanted to stratify your risk or what asset classes you wanted to invest in?

Dr. Chirag Chaudhari: Yeah, so initially I knew nothing about passive investing or syndications or any of those, so. I did a course and sort of learned and you know, the important thing is there's a lot of folks that'll take courses and then do nothing or not finish the course. And so, you know, I sort of made a very purposeful decision that I'm gonna do a course, I'm gonna learn the material, but then I'm taking massive action.

I'm gonna jump in and I'm gonna, you know, and so I took the course and within three months of finishing the course, I was in six different syndications. You know, and I, again, I, I did my due diligence. I did not what I do now because that was a few years ago and I know better. But it was also just my wife and I and so there wasn't, you know, the risk was just us two and, you know, so our due diligence looked a little bit differently than it does now, but some of those deals that have been performing really well and other folks that I've gotten to meet over the last couple years, just through masterminds, we now bring others into those deals. So you'll say, Hey, instead of taking my 50,000 or a hundred thousand, what if we gave you 2 million, 5 million? What does that look like for all of us now? Because we want better terms for all of us when we can come in collectively and so we negotiate, you know, nicer profit split or lower minimums or whatever it is, so that all of us, and I'm now bringing family members and colleagues and other folks into these opportunities, because we're able to come in at larger numbers and therefore get, get better terms in the long run.

Dr. Alex Schloe: Yeah, absolutely. I want to, I want to hit this 'cause I think this is a really important point. You know, personally, as someone who has raised capital for deals you know, largely in the senior living, assisted living space,  it gets you, you get limited when you have, you know, a 50,000 or a hundred thousand dollars. Minimum in terms of not only your network and your reach, but also how you can provide really good investor relations to those folks. Because of course, if we have 10 people who are each investing $50,000 for 500,000,  that's 10 people. We're sending emails to 10 people. We're communicating with all those sorts of things. So what Dr. Chaudhari is mentioning is, is pulling that money together and investing as a group, for example then we have someone come in, say, for a million or 2 million, and we're communicating with one main point of contact. We're oftentimes able to offer higher returns largely because it's, it's just easier in a more simple arrangement.  But also it, you know, it's just more flexible in that regard as well. So I just wanted to make sure we hit that point, 'cause that, that is really, really cool and a good strategy to do that. And then ultimately it juices the returns for you guys as an investor in the deal as well.

Dr. Chirag Chaudhari: Yeah, absolutely. I think it's spot on because you know, the, the folks that we partner with and, and the. Those partners are, are really great at operations and, and they do their own fair share of capital raising as well. But if you ask them which two do they love and would prefer to do all day long, it's the operations, it's running the asset.

It's being the experts at what they're experts at and allowing other folks to kind of come in and, and bring in the capital like you suggest. And, and therefore, they're not talking to a lot of investors. They're not talking to a lot of people. And our due diligence is just that we get to know the deal.

Inside, out and backwards, we spend four to five months doing due diligence. We have an economist that will help us kinda look at numbers and run all the different sensitivity analyses and downside risk and upside potential. We do criminal background checks on everyone that we work with you know, just.

Because when you're bringing in several million dollars, you know, of sort of family and friends money, you wanna be very careful with all of that. And so we try to take every possible step that we can, you know sort of doing the right due diligence.

Dr. Alex Schloe: Yeah, absolutely. Super important to be a good steward of, of people's hard earned money. And you know, a lot of, a lot of pressure that goes into that. But, you know, setting yourself up for success with the due diligence that you guys are doing is, is, is really important. Yeah. Well, I, I think now might be kind of a good time to talk a little bit more about the community and co-investing and kind of what that looks like.

I do wanna make sure, you know, we talk a little bit more about your involvement in that 787 unit hotel to multifamily conversion and some oil and gas as well. But let's talk a little bit more about kind of that co-investing or community. Aligned capital and what that looks like. How, how do you guys typically structure your deal?

Say a physician wants to invest with you and invest in a deal that you guys are doing due diligence on,  what does that typically look like? What's that structure look like for folks?

Dr. Chirag Chaudhari: Yeah, so typically we'll come in as as an LLC as. One sort of large investor that's coming into any opportunity.  And so all of our investors will come into our portal. They'll do all of their documentation. Most of our, our opportunities are for accredited investors, and you have to meet sort of the IRS definition of what accredited investor means.

And so. They'll come in, they'll show proof that they're an accredit investor. They'll sign all their legal documents and they'll wire sort of funds into, into that account. And then all of us collectively then invest as, as one investor into whatever asset it is that we're investing in. Yep.

Dr. Alex Schloe: That's great. Yeah, kinda like a fund to fund model. It, it sounds like.  From that perspective. Yeah.

Awesome, awesome. Yeah, so everyone invest in, and then one big check gets written to the operator for, for the deal.  That is awesome. And I'm sure it's certainly deals specific in terms of what returns, you know, look like and what you guys are investing in.

But is there an overall goal for you guys? Is it. Cash flow? Is it appreciation? Is it tax benefits? Is it a, a mix of all the above? What's that look like for you guys? Typically in terms of your buy box?

Dr. Chirag Chaudhari: Yeah, so I think that's kind of the really neat thing about us is we, our investors tell us what they're looking for and then we go and find it and we find those sponsors, we find those operators, and, and many times we've known sort of folks that we've, you know, thought about. You know, doing a sort of an a relationship with but haven't, sort of,  haven't had the interest or, or the need necessarily.

So there's, there's a lot of our investors that do have passive income from real estate and they're looking for opportunities where they can get some negative K one losses, you know, from depreciation to offset some of their active. Or their passive income where they're not paying taxes on any of their rental income, for example.

So we've done that. There's other folks that want monthly cash flow, so we found opportunities that we'll do that. There's other folks that say, look, I'm, I'm good. I don't need any cash flow whatsoever. I want you to take. This amount of money and grow it as quickly and as, as massively as you can.

And so there's, you know, there's an asset class. So for example, that's land. We do a number of land deals where we essentially buy the land, it gets rezoned and then sold to a developer. So there's no development, there's no ground up with those deals. But there's no cash flow, there's no depreciation.

It's just dirt that we're buying. But it offers three to five x returns within, you know, three to five years. And so that a hundred k becomes three to 500 K in three to five years. It's, it's, it's a pretty great return, but more so for folks who don't need that cash flow in between. And then others, you know, have asked for active tax benefits and so they don't want to do the short term rental tax loophole '  cause that's a lot of work and they don't have the time and they're not interested in actively running an asset.

And so they said, how else can I drop, you know, my active income and, and. And so energy deals will do that. So oil and gas, it has to be very specific type of oil and gas where you're, you're getting IDC credit, which is intangible drilling costs. And so as long as you do that, you can, the, what we're going in with sort of very large operators, so your, you know, your Exxons, your Conoco Phillips, just very large companies and buying less than 10% share of any well.

So that allows us to get 50 to a hundred wells to, again, diversify sort of that risk where multiple states but it allows us to then offset 80 to 90% of an investor's initial investment off their active income. So again, a hundred K investment, that would be 80 to 90 K off of a W2 or 10 99 this year.

Which is, which is great. It's just another way to sort of, you know, and you're getting an immediate return next year when you file your taxes. So it's a, it's a quick return on your investment within that first year as well.

Dr. Alex Schloe: That's really cool. I, I don't know much about oil and gas, you know, energy investing.  What are, what are some of the highlights? You know, you already mentioned a lot of the tax benefits with the IDC credit, but what, what does that typically look like? What's an energy deal typically look like?

Dr. Chirag Chaudhari: Yeah. So I would say it depends on the way the deals are structured. I'm in another one of them as an LP and I'm getting monthly checks from that one currently. And you know, that one is luckily performing to Performa. Ours is structured a little bit differently in that there's a very large sort of tax.

Advantage upfront. So, you know, let's say 30% of your initial return will come back via check from the IRS in the tax return. And then conservatively we're planning for a 20% cash flow. It, it likely will be higher, but we're saying 20%, but that's a 50% return on your initial capital outlay within one year.

We've never done a deal that will. Return 50% of capital within a year. You know, and, and drilling. And I know, you know, there's, there's a lot of sort of ethics and sensitivities around oil and gas. Our stance is it's here. Yes, we're looking at alternatives and we can't wait for that. I drive a vehicle that doesn't operate on gas, you know, and so, you know, in, in medicine where saline bags are made out of petroleum and artificial heart valves and there's so many petroleum based products, so it's not going away anytime soon.

So, you know, biases aside, the asset offers significant cash flow upfront and early. And it's funny, I talk about, you know, sort of wells and oil production as like draining an abscess, right? You sort of go in, you drain that abscess, you get this, you know, big sort of return. Product and then it sort of dribbles out and so that production trails off within, you know, 3, 4, 5 years or so.

So the, it's, it's a deal that goes five to seven years, but you're gonna get the vast majority of your return very early on. And so, sort of the, the, you know, the. IRR, if you will. The internal rate of return is significantly high because of that quick return of capital, and then you can reinvest it, reinvest into another deal, a different asset class or something else.

Meanwhile, you're still getting monthly cashflow for the next five to seven years, you know, in your initial investment.

Dr. Alex Schloe: That's awesome.  Yeah. Well, we all know how gratifying it is to, to drain a, a really good abscess. So I'm sure it's more gratifying to get cash deposited into your account after you invest in oil and gas deal. But that, that is, that's really cool. Definitely something I wanna learn more about. I did not know about the. Active tax benefits with those IDC credits. So that's really interesting for folks to, to look into and see, well, hey, maybe an oil and gas deal that gets these credits might be something that's quite favorable from a tax perspective. And then of course, as you mentioned with the IRR being more time bound and having that return upfront really can make those IRRs quite substantial from that perspective. Well that is, that is awesome. I, I want to hit two, if you don't mind. I know you were working on a 787 units of hotel to multifamily conversion. Is that correct? How's that been? What's that look like for you?

Dr. Chirag Chaudhari: Yeah, so it's been great. That's a property out in Olympia, Washington. And it was a sort of a, one of these dilapidated hotels that was purchased and turned into studio housing, sort of affordable studio housing. And and that conversion's been done. It's getting leased up. And so. Working with a fund that does a lot of them, and that's their sole sort of niche, is turning hotels into multifamily properties.

And so hotel, you know, it's sort of a different asset. They can be bought. Sort of at a lower price point, and when they're turned into multifamily and converted that way they sell for significantly higher amounts. And so being able to get them leased up and, and ripe for sale is sort of that business model.

And so that's been great. Generates expected to generate a two and a half x equity multiple. And so two and a half times the return of the initial cash investment at the five year mark.

Dr. Alex Schloe: That's awesome. Yeah, I think it's a really cool opportunity as folks start to get more and more creative about, Hey, how are we gonna solve the affordable housing crisis? How are we gonna solve the senior housing crisis that that we're running into as well? And I think that this is a way to potentially do that is, Hey, can we take some of these? Older hotels and can we renovate them to be more effective properties, whether that's for student housing or affordable apartments or, or senior housing. So it's really cool to see how those properties are being repositioned from that perspective.

Dr. Chirag Chaudhari: Yeah. No, absolutely. It's been, it's been fun to watch for sure.

Dr. Alex Schloe: That's awesome.  Well, what is something that you look for when you are, when you're vetting an operator, when you're vetting a deal?  Are there any few, you know, like key tips or tricks that you may have for someone who's, who's looking at getting started investing in their first LP deal?

Dr. Chirag Chaudhari: Yeah, absolutely. I would say you know, there's, there's a lot of different things to sort of do and, and,  you wanna vet the sponsor, you wanna vet the deal. Vetting the sponsor is really important because you wanna know sort of what do their operations look like. You know, what is their, what is their.

Kind of reason for doing what they do. Are they, are they providing a social service? Is it about their investors? Is it, is there a charitable component to what they're doing? And, and those kind of things will align with different investors. But you wanna look at their track record, you know do they have a track record?

Are they just starting out? You know, and, and looking at,  not that, you know, past performance is gonna be indicative of future performance, but, but it sure as heck. Helps. Right? And so to be able to look at that track record critically,  see what they've done, see well, was that what you said you were gonna do?

Try to find out what their initial proforma and what their initial prospectus said.  They can say, Hey, we,  we gave, you know, two, two x returns to all of our investors.  But you look at the prospectus and they said they were gonna do five x, what happened, right?  And so while it may be nice just to look at it, you want to dig in and try to get some of those details.

The deal is very important. Obviously, you wanna,  you wanna look at how do they come up with their assumptions? How conservative are they being? What is the absolute worst case scenario? We all know what that is. It's zero. You lose all your capital. But but for their opportunity, what are the risks?

What are they looked at? What happens with tariffs? What happens with purchasing costs of,  you know, supplies and all of these kind of things? What happens if interest rates do what they did back in 20 and 21? You know, and have they thought through this? How many economic cycles have they gone through?  And I will say between the two bet on the jockey, right? Not on the horse, right? And the jockey is that sponsor. That's the operator.  If you have a good sponsor operator, they can take a bad horse and make it do better things, right? They can, they can squeeze out what they need outta the deal. So out of the two, if you had limited time, you wanna spend it.

On the sponsor, on the partner and, and spend a lot more of your time on that due diligence.  The deal is equally important, but of the two, it's, it's who you're,  who you're working with, and who you're getting into business with. That makes all the difference.

Dr. Alex Schloe: Absolutely. That, that was really well said and, and, and great advice.  What are some mistakes you've seen physicians make when they're chasing returns without fully understanding risk?

Dr. Chirag Chaudhari: Yeah, I think, you know, they're they're just looking at a deal deck. They're just looking at a pitch deck, and that's all marketing. That's created by people who know what numbers to put where and at what level of the document and in what colors so that they're,  you know, very appetizing to us. And,  you know, look at that, but, but you need to look at it critically.

And anybody can make numbers. We all know that with  any of the data and the, and the metrics that we're looking at, at hospitals, et cetera, we can make the numbers say what we want them to say. And so. Definitely look at that very critically. Don't just look at what a sponsor's telling you, but, but definitely dig into those details because  again, as you said, Alex, you're putting your hard-earned money into these deals and  you wanna do that wisely.

And if you don't have time, you know, find other folks that are,  that are doing podcasts like Alex and have him steer you in the right direction. And other folks that are doing some of this work and are super passionate about. You know, looking at deals critically and, and talk to them and ask them, have them, you know, look at a deal with you.

Dr. Alex Schloe: That is really awesome advice. It's important to, to take the time to dive deeper and I think there's, you know, fortunately we live in an age with, with ai, so that can be helpful as well. Of course, you get in what you put out in terms of,  or sorry, you get out what you put in to AI and analysis, but that can be  another way that you can kind of help, you know, check the, the marketing materials.  And so forth and see, hey, do the numbers make sense? And what are some things that I'm missing?  I found that's been a good way to kind of analyze the marketing materials and also come up with some questions that can be beneficial to ask the sponsor as well.  Utilizing, you know, AI and, and prompting it with like, Hey, I want you to pretend that you're a top real estate attorney in this  market.  What are the key things I need to look out look out for in this deal? And it can really help guide you from that perspective. So that can be a good first pass for people as well.

Dr. Chirag Chaudhari: That's a really good thought. And it's almost like you know, it's like getting a curbside consult, right? And just with a really good prompt and putting in a pitch deck and say, you know, look at this critically, what should I be worried about? And,  you know, tell me the pot, like you said, the top five things here that I need to ask about.

It's, it's great and it does it so quickly and efficiently and, and the questions it asks are, are actually pretty thoughtful a lot of times.

Dr. Alex Schloe: Absolutely. I wouldn't rely solely on ai, but it, it is definitely a helpful tool.  Man, this has, this has been awesome. This time has just, just absolutely flown by.  But I wanted to, to ask you, you know, what are you excited for? What are you working on right now?

Dr. Chirag Chaudhari: Yeah, I think, you know, it's been tremendous. Honestly, this started just myself as, you know, kind of getting into this and learning. And  so much of this is, I wish that somebody 10 years ago had tapped me on the shoulder and maybe 18 years ago for my first property. But  just saying, Hey, there's a better way right.

To, to sort of do this. And if there's anyone listening that gets even one iota or inkling of a,  of an idea, home run, mission accomplished, right? It's, it's just about  going back to our younger selves and saying, Hey, you know, there's, there's this whole world of opportunities out there. And I wish somebody had, you know, introduced me a decade ago because,  you know.

Again, I wouldn't change a thing that I've done. We talked about that before. I'm super happy, but I'd be in a much different place if I'd started this 10 years ago. And so I think, I think that's it. That's the strategy.  Go out and learn those things that, you know, that fill your cup, that give you passion that you're super interested in.

And then pay it forwards, right? We, we, we're all here, abundance mindset. We wanna help one another out. And you know, that's yeah, it's terrific. So I really appreciate everything that you're doing for for your listeners.

Dr. Alex Schloe: Thank you so much. Yeah, that means a lot. And I, I completely agree. I think  that's been something that's been so cool in the space to see how the willingness and the abundance mindset that other physicians  in the real estate and investing space have for others. 'cause we've all  had that experience. We've all experienced, you know, some degree of burnout and realized the importance of some degree of financial freedom as well.

And so we're just here and we want to, we want to help, you know, the community grow. We want folks to realize how.  Real estate and entrepreneurship can truly give them that freedom to practice medicine and, and live life how they want to.  So for folks that have felt inspired by this podcast, how can they reach out to you if they want know more, if they wanna connect, if they wanna potentially invest with you?

Dr. Chirag Chaudhari: Yeah, so my website is the syndication Dr. Dot com. And you can find me on there. I do a newsletter with mostly educational topics, and  if we have an offering or something like that, we'll, we'll put it on there.  My email is the syndication doctor@gmail.com. So I'm usually pretty responsive on email, happy to respond back and yeah, help out, you know, whatever questions or ideas that people have.

Always.  I, I'm at the point where I never say no to a conversation, and so you never know what you learn. There's so much learning to be had, so yeah.

Dr. Alex Schloe: Absolutely.  Well, awesome. Well, this has been fantastic, Dr. Chaudhari. Thank you so much for coming on the Physicians and Properties Podcast and I wish you a, a lot of great success going forward.

Dr. Chirag Chaudhari: Oh, thank you so much and thanks for having me. Really appreciate it.

Dr. Alex Schloe: Yeah, absolutely. Take care. Thanks for listening everybody

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