Why Residential Assisted Living is The Future With Dr. M. Craig Moffett

🎙️ 𝗪𝗲𝗹𝗰𝗼𝗺𝗲 𝗯𝗮𝗰𝗸 𝘁𝗼 𝘁𝗵𝗲 𝗣𝗵𝘆𝘀𝗶𝗰𝗶𝗮𝗻𝘀 𝗮𝗻𝗱 𝗣𝗿𝗼𝗽𝗲𝗿𝘁𝗶𝗲𝘀 𝗣𝗼𝗱𝗰𝗮𝘀𝘁 𝘄𝗶𝘁𝗵 𝗵𝗼𝘀𝘁 𝗗𝗿. 𝗔𝗹𝗲𝘅 𝗦𝗰𝗵𝗹𝗼𝗲.

🔁 Today, we’re bringing back a replay episode that is packed with practical wisdom on real estate, purpose-driven investing, and one of the most compelling opportunities in senior housing. 

Welcome back to another episode of the Physicians and Properties Podcast! 🎙️ Today, Dr. Alex Schloe dives into an incredible conversation with Dr. Craig Moffett, a family medicine physician from rural Mississippi who’s making waves in both healthcare and real estate.

Dr. Moffett’s career is nothing short of inspiring—he balances his work in the clinic, hospital, ER, and long-term care facilities while also serving as the director for three nursing homes. But that’s not all—Dr. Moffett has built an impressive portfolio of 11 properties over the past six years, including a residential assisted living (RAL) home.

In this episode, Dr. Moffett shares his journey, from starting in real estate to managing a thriving RAL business, and provides actionable advice for physicians looking to enter the world of real estate investing. If you’re curious about how doctors can successfully manage care homes and build passive income streams, this episode is packed with insights you won’t want to miss!

What You’ll Learn:

➔ Balancing Medicine and Real Estate: How Dr. Moffett juggles his busy medical career and a thriving real estate portfolio.
➔ Residential Assisted Living Insights: Why RAL homes are a fantastic investment opportunity and how physicians can provide exceptional care while generating income.
➔ Building a Network: Tips for finding like-minded individuals to partner with in real estate ventures.
➔ Lessons from 11 Properties: Dr. Moffett’s biggest takeaways from six years of real estate investing.
➔ Physicians in Care Homes: The unique advantages doctors bring to owning and operating residential assisted living homes.

Key Takeaways:

➔ Residential assisted living is not only a lucrative investment but also an opportunity to make a real difference in the lives of residents.
➔ Networking is key—building relationships can help you find deals, resources, and partners to grow your portfolio.
➔ Balancing real estate and medicine is possible with the right strategies and team in place.

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Transcript

Dr. M. Craig Moffett: I did a lot of research. I met with a bunch of owners of local homes that I've worked with, either home health hospice companies. One of them who actually didn't want to sell ended up being the one who sold to me. She was my mentor for a couple of years and she actually saw me I posted on Facebook, my baby and Elvis at a nursing home. And she called me that day and she was like, I want to sell to you. It's like, I wasn't ready to sell, but I just saw what you posted and how you interact with these older people and how passionate you are.

And she's like, and I'm 62 and I just, I'm just gonna go ahead and sell it to you.

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, Dr. Alex Schloe here with another episode of the Physicians and Properties Podcast. I'm so glad you're here and thank you for taking the time to listen to another episode. This episode was fantastic. Before we get to it, though, do me a favor, leave us a five star rating and review and subscribe to this podcast.

It helps other physicians hear the good word about real estate and entrepreneurship so that they can learn how that can change their life and lead them to have the ability to practice medicine and live life how they want to. Today's podcast guest is Dr. M He practices family medicine in rural Mississippi.

He sees patients in the clinic, the hospital, long term care, and occasionally in the ER. He's a certified medical director, and he's the director for three nursing homes. He's doing so many things in the medical space, but get this. He's also an owner of 11 different properties. And it's been investing in real estate for six years.

He comes on the podcast and shares all about his real estate investing experience. And we talk about doctors in care homes, of which he owns a residential assisted living home. We talk a lot about residential assisted living and how you can find network and lead to providing great care for residents going forward.

So without any further ado, this. Episode is packed with some incredible knowledge. I will say the sound is not the best on this podcast episode, but stick with us because you will learn. So without any further ado, let's get started with today's episode with Dr. Craig Moffett.

Dr. Craig Moffett, welcome to the Physicians and Properties podcast. I'm so glad to have you on the show today. Thank you for taking the time to record this episode. How are things going?

Dr. M. Craig Moffett: Going great, man. Happy to be here.

Dr. Alex Schloe: Awesome. Awesome. Where are you calling in from?

My home in Mississippi in particular Madison, outside of Stouffville, so university town, Mississippi State University. I live right next to it.

That's awesome. Well, really glad to have you on the podcast. Excited to learn more about your journey. Do you mind telling folks a little bit about your journey into medicine and then we'll hit your journey into real estate and some of your business ventures as well.

Dr. M. Craig Moffett: Absolutely. I guess the cliched part is I kind of always wanted to be a doctor. That is, I feel like a common theme, although there are people that when they're 35 decide they want to be a doctor. But I had several medical issues as a child. I was in, I had multiple surgeries. I was in the hospital a lot.

So I kind of was around healthcare a lot. No one in my family worked in healthcare, but I was around it as a patient a lot. And I struggled in school initially due to some dyslexia and dysgraphia undiagnosed that we didn't find out how to later, but I always did good in math and science.

Everyone was like, Oh, you know, you're doing good math and science, you know, you should be a doctor. And So that's kind of, you know, I enjoyed it. I knew that I liked being around people. I liked the typical math and science thing. But I think honestly, at a young age, it also was safety for me. Like, you know, I grew up with I think the biggest privilege of two loving parents.

I think that's the biggest thing you can, possible privilege we can have, but very little means. We didn't have much, we struggled a lot. And for me, I was like, well, you know, if I go to college and study this, you know, it may be secure. It may not. I may get a job. I was like, I mean, I like being a doctor and they seem to have good jobs.

So I think a lot of it was just, you know, I enjoyed it, but ultimately I think I wanted that security. I think it's part of why I did it.

Dr. Alex Schloe: Yeah, absolutely. I think a lot of us probably have kind of that similar experience. I know myself as well. We struggled a bit financially as a family growing up and, you know, you kind of saw especially at the time, like the doctor mentality of like, Hey, you know, doctors are rich.

And those sorts of things certainly come into play. Of course, the beauty of the profession is like being able to take care of patients. But as we know now, not all doctors are rich and it is a whole lot of work, but it is really gratifying. Awesome. Well, tell folks if you don't mind a little bit about your journey into medicine in terms of, you know, where'd you go to med school, what are you practicing? What's the job look like for you now?

Dr. M. Craig Moffett: Oh, yeah. So I went to University of Mississippi, Ole Miss. A lot of people probably have heard of Ole Miss for either Lane Kiffin treating stuff, or, or the blind side, or whatever it is. Great school, loved it. And then I did not get into med school the first time I applied. They told me I should retake physics, and I said I would rather die.

So I went to get a master's degree in biomedical sciences the next year because I didn't feel like I was ready. I went and got a job as multiple jobs, but I actually worked as a CNA. I was actually offered a higher paying job as a farm tech, but I was like, if I can be a CNA. then I know that I really want to help people cause those people work incredibly hard.

It's probably the hardest job in health care. So I did that for about a year on that shift. CNA on that shift on the message floor. And then I went to med school at the new deal school in the state. I was one of the first classes at the new osteopathic school in Mississippi that started in 2000 11.

I think is when the school started. And graduated there. I always knew I wanted to go to a small town. Originally, I was kind of anti family medicine. I think because, unfortunately, as a profession, I think that we have been like, oh, you need to be a cardiologist or you need to specialize. But I went to a conference in med school and I met all these family medicine doctors that lived in these underserved areas.

And I'm like, yeah, I deliver babies. You know, I do orthosounds. I do, you know, this and that. I was like, oh my God, that's awesome. You know, and they were needed. So I started talking to small communities that I wanted to go serving undeserved communities like, man, we just want you to get here. You know, we don't need a heart doctor.

We just need a doctor. Like we just need someone to be here. See the patients. Will you see kids, women and adults like then please. So you know, went into family medicine. I had a scholarship for that too, because I went to a small town and convinced my wife to move to a small town. She's from Jackson, Mississippi, which is the largest city in Mississippi.

Convinced her to move here with me. I practice traditional family medicine. So I do clinic, I do hospital and every morning I go to hospital, then go to clinic. I do nursing home. I was doing er originally, although I'll come back on that as I've increased my nursing home job. I'm medical director of three nursing homes now and probably have about 100 nursing home patients in addition to, you know, 1500 clinic patients and then my hospital patients.

So that's kind of what I'm doing a little bit of a little bit of everything. I don't deliver babies. I do not do that, but everything else.

Dr. Alex Schloe: That's awesome, man. Yeah. Totally full spectrum family medicine, I guess, but besides the delivering babies, if you're delivering babies in a nursing home, we got, a better we got a bigger problem to deal with there. That's awesome, man. Well, how do you have the time to balance all of that and the real estate investments that you have in the business opportunities that you have? How do you balance all that?

Dr. M. Craig Moffett: You know, I, a great wife for one probably and good support system. But I think, you know, I'd love to give some business self help book type answer, but I think I'm wired that way not necessarily more productive, but I enjoy it. And this is not to be arrogant or anything, but I don't watch TV shows.

I don't enjoy them. I don't really watch movies. I don't enjoy them. I don't play golf. I mean, I, you know, don't really enjoy it. I mean, I like hanging out with my kids and I like reading real estate books and going to work and I just, I enjoy it. But, I still do have to, so I try to, from 5 p. m to 8 p. m every night is family time. So I scheduled this podcast right after 8 p. m because I try to have my protective family time. I get up early in the morning. I'm up at 5 5 30 going to the hospital. So for me, it's just grinding out, organizing it, but then also setting aside that time every day is like, Hey, this is family you know, time.

And then on the weekends, I try to set aside time for me, my wife and me and the Children as well. So

Dr. Alex Schloe: Yeah. The, wife is that's the right answer. Well done. Yeah. I'm, very grateful to, to have such a caring wife who is understanding of the demands of the job and also, you know business ventures, real estate investments, those sorts of things too. So Steph, if you're listening to this, thanks for that for sure.

But yeah, you hit the nail on the head. Isn't it kind of crazy to how much time you can find that you have if you cut out some of those other distractions like TV time, social media, those sorts of things, you really realize like, Hey, I've been spending hours watching Netflix, or I've been spending hours on TikTok Instagram.

And you dial that back or you get rid of that. You're like, wow, I do have time to build this business or learn about this real estate investment. And for me, it's turned into you know, real estate investing and some of our business ventures. That's just a passion. I really love doing that. I don't love it more than spending time with my family.

There's nothing I love more than that. that's become my hobby basically, and I'm grateful for it. And so I think it's really cool that we can be passionate about medicine, but we can also be passionate about real estate investing and entrepreneurship as well.

Dr. M. Craig Moffett: And really, if you need something that's really interesting, something I've been trying to shift in my career, I want to always see patients. I do love my patients, but I am shifting my career more because it's hard for me to take, I've taken my daughters with me to nurse homes before, occasionally, but it's hard to take them to like clinic or the hospital with me.

But when I go do a flip, or when I go do my personal care home that we own, I take them with me all the time. I take them with me to see the process. I get to take so I get to do that work or that business with my family, which is something that's very unique and important. So

Dr. Alex Schloe: Yeah. And what a cool opportunity for your kids to like see entrepreneurship in action and get to experience that with you. And they're learning so much, I'm sure by going to see a flip or going to see a real estate deal that they're going to take those. You know, take those experiences and hopefully, you know, use that in the future to grow their own businesses or take over your business in the future.

Who knows? And so it's just really cool for them to have that experience as well. And we talk a lot about, you know, on the podcast, how real estate and entrepreneurship can give you the freedom to practice medicine and live life how you want to. And so I feel the same way as you, like, I don't think I'll ever stop seeing patients, But I would like to have the opportunity to see patients when I want to, where I want to, and how I want to, and that is what financial freedom, if you will, can really offer.

And so it's, it's really cool.

Dr. M. Craig Moffett: Yep, absolutely.

Dr. Alex Schloe: Yeah, man. Well, let's talk a little bit more about real estate. So how did you get into real estate investing?

Dr. M. Craig Moffett: Awesome, man. What do you want? You want to start when I started or where do you want to go?

Dr. Alex Schloe: Absolutely, man. Let's talk about when you started, how did you get interested in it? What did you do when you first got started and how things grown from there? Yeah.

Dr. M. Craig Moffett: I think it all kind of goes back to what I was talking about earlier. I think for me, businesses, entrepreneurship, diversification, investing is all about security and safety. When I was in college. I started really wanting to make sure I was gonna be screwed in the future.

I think one of the first books I read was actually a personal finance for dummies which was actually very well written. Do not knock the four dummy books. And the author of that book actually authored personal finance real estate for dummies. So my second book I read after that was real estate for dummies.

He actually had authored some other real estate stuff as well. And that got me into it. And I found after grad school, when I was in med school, I found bigger pockets back in the early days of bigger pockets. I cannot say good enough things about them. I've listened to every podcast on almost every channel.

Read almost all of their books. So, you know, just really enjoy that. And then so obviously being a med student and a resident, you don't really have a lot of time. I don't know if you remember those days, but you're a little bit limited. My talking about my angel of a wife that I mentioned earlier.

So I convinced her to have us flip a house where I'm doing my second year of residency when she had a baby and just found out she was pregnant with a second one. So she was, and we, we did this together. So she was like painting with a baby in a pack and play in the house, you know, cause I was walking 12 hour a day.

So I would get there like early in the morning and go do something. And then me and her would go there late at night with the baby and she was pregnant. Doing stuff and we flipped that first house. Did well on it. Actually, I think a little bit was luck. Because my, that was the closest I've ever been to an estimate on renovation.

Ever since then I've been off, but somehow I hit that one on the head and actually had it correct. And we netted about 30, 000 after taxes and holding calls and everything, which my very first flip. And this is back when I was a resident. So, you know, we weren't making 30, 000. So, you know that so, and then I started moonlighting a lot during residency.

So all that extra income, I started saving up for homes. I bought a long term rental my third year of residency that had a spare room up top, turned it into a duplex. Then I turned my single family home that I purchased with a physician loan, which if you're any of you on here or physicians, think about the physician loan where besides the VA loan, what about the only people that can get a hundred percent financing?

I'm not saying that's always the right thing to do, but it can be very awesome. So I took a house that I'd never put any money into and I converted it into a long term rental that was in cash flow and made pretty good because I had a super low interest rate because it was personal residence.

You know, so I still have that house today. And then COVID hit and I decided to build my own house about two years. I didn't do anything. So I started being a I was a brand new doctor in the area when COVID hit. So for two years. I was locked in the hospital taking care of dying people. I mean, it was very intense, so I didn't really do anything for that two year period.

I saved money, obviously, and, we were building a home that went over budget, and so I used some of my funds for that. And then I kind of felt bad about not doing anything for a couple of years, was really looking at some things. I made a bunch of connections. Now I started doing some partnerships.

So we got into I think I wrote down on here. So I have 11 roofs total. Personal, I have me and my wife have four, and then in one partnership, we have six roofs. And then another partnership, we have one. So met with some partners and they are much older and educated and have more money than me, but they wanted someone young energetic with ideas.

One of these properties have been sitting, they've been holding on to it for a year and a half, not making any money on it. And then I was like, why don't y'all do this? And they were like, okay, well, why don't you partner with us? You know, and so that's done well. And we have a couple of longterms.

We have a warehouse that we went we built, we've done some new construction. We built a couple of cottages. We built some tiny homes recently that we're very, very proud of luxury tiny homes right by the university. The first little tiny home village in this town. I feel like everyone has a tiny home village now, but this is the first one in our area.

We produce these very, very nice went over budget, but that's okay. And we're very proud of those. And then we can go into any of these. And then after that I started doctors in care homes, which is where I'm very, very passionate about. We started that this year and we have our first care home and it's a 19 bed personal care home, residential assisted living personal care home. And then we plan to scale that and do a few more. So.

Dr. Alex Schloe: Man, that's awesome. A lot to hit on it. Really cool to see your journey. And I guess about six years or so, you know, how you went from no real estate deals to now 11 doors really, really, really cool. And, you know, a few things that really stuck out to me and things I was thinking about. So one just getting started in residency.

I think a lot of people are like, Hey, how the heck can I do this? You did two deals at least in residency. And I think back to when you mentioned your wife is pregnant and you had a kid in a pack and play and you're flipping a home. We, we did the same thing except our kid was born, but I remember bringing my son Jack and we would like put them in the carrier and be like painting the walls.

You know, if an Airbnb we were working on or painting the cabinets or putting them in this, the, the little, I'm blanking on the name of it, but it was like this little chair. He would just sit in and just watch us work. And so it was cool. And at the time we were like, man, this is, such an amazing opportunity.

We think back and we like laugh about it now and how cool it was that we were able to do that, with a baby and still make things work. And so I think, you know, if you're listening to this and you're a resident or you're in a different situation, it may be, worthwhile and still completely reasonable to find the time to do your first deal or to do a flip or to utilize the physician loan and put no money down and get jumpstarted on your journey.

So it's just, yeah, a lot of great things that you hit on there, Craig, which is fantastic. And then of course, educating yourself first with bigger pockets and some other resources can, can certainly make a huge difference as well. Well, let's talk about first, if you don't mind, kind of that, deal in residency, what was it like with no time, a little bit of money. What was that like flipping? And then of course you had a pretty substantial profit with that. So that probably made things a little bit better and kind of got the ball rolling.

Dr. M. Craig Moffett: One thing that helped is My father, my dad had recently moved a little bit closer to the area. So when he was walking, but he helped me a little bit. So I knew I was going to have him to help you know, go fix a toilet or something like that. So I knew I had that. And how I found the deal was actually just telling him and all the other people I know is like, Hey, I want a real estate deal.

So I just started telling everybody I knew. And then after someone mentioned it to my dad, it was like, hey, this, it was a situation that someone had passed away. They had five children. They couldn't figure out what to do with it. It needed a bunch of repairs. They couldn't, they were scared they couldn't sell it on the thing.

And I kind of solved the problem for them. I found an attorney to help them with like the probate stuff. And we got a clear title. And I definitely paid well on the market value, but they all walked away with some money. And you know, they wanted it to be nice again and they couldn't make it nice again because they had good memories there.

So I even kind of asked them like what they thought about colors and stuff, you know, and I kind of let them get involved in that. But you know, it was I didn't really think much about it. I was like, look, I'm going to do this. I ran the numbers. I followed all the bigger pocket stuff and analysis to a T, you know, 70% after repair value, it was like, this is how you estimate but this in there, I felt really good about the numbers.

Knowing what I had known now, I probably wouldn't have done this, but I actually financed the first purchase with like a 25 percent down loan, and then I funded the rehab with money that I'd saved, and then I went back and sold it. I probably would have done things a little bit differently with the knowledge I have now.

Maybe I would have borrowed it or something like that, but it's fine. I made money and it was a good experience. Yeah, I mean, I told my wife she was cool with it. I was like, hey, I think this is gonna help us in the future. We decided we were gonna do it. I just followed my ABCDEFT plan. I stuck to my numbers and just did it. So, I

Dr. Alex Schloe: And yeah, a lot of folks get stuck in that analysis paralysis and they feel like they have to know everything about a deal. It sounds like you spent time to get the education, you networked, which is really important, telling folks what you're looking for, what you were going to do.

I tell folks all the time, just tell everybody, you know, that you're investing in real estate, whether you have one deal or whether you've done a hundred deals, because you never know what's going to come out of that. And then you took action and that's the biggest thing. and you had enough information to make it seem like, Hey, this is going to be a scenario that most likely works out, but you're willing to take action, which might have been imperfect. I think being willing to take imperfect action is huge or else. Who knows? Maybe you'd still be kicking the can today instead of having 11 doors. And so really awesome, man. Really cool to hear that.

And just so cool to hear that you did that in residency. It's awesome.

Dr. M. Craig Moffett: It really is. I think it's only one of those things. There's probably the, I've told it a couple times but I've went in detail about it, but it's kind of one of those things people think you're crazy when you're doing it. I don't know how I convinced my wife to do it, but she's always been awesome.

But Looking back, like you said, I've got memories of my little daughter in that little pack and play. You know, I mean, it was fun. You just, like you said, you have your general information, you know, like, hey, worst case. I looked at my, I always look at worst cases. I was like, look, worst case, you know, here.

And I was like, I think I can do it. I'm moonlighting to make a little bit of money. I can cover the mortgage if I have to, you know, if I can't sell it, I can hold on to it. Like, you know, so I had all of it planned out. We just gotta, you just gotta go.

Dr. Alex Schloe: Yeah, absolutely. Well, that is awesome. And then, you know, super cool to hear about the partnership and how did you find partners or what recommendations would you have for folks who are looking for partners? I think a lot of times folks are worried about finding a partner cause they want to keep a hundred percent of the deal, a hundred percent of the control.

But I look at it from the aspect of like, if you can find A partner that's complimentary has a different skillset as you, that's like putting fuel on the fire. And I'm really grateful to have two incredible partners and we've grown way faster in our business than we could ever do on our own.

So what are some things that you looked for in a partnership or what are some benefits to partnership that you've figured out?

Dr. M. Craig Moffett: First off, I still struggle with that. I've got great partners but, you know, every few months I look through it and I'm like, I feel like I should have more on my own. Because I'm like, you know, I enjoy, like, so it's all really something you struggle with. And I actually am trying to, I bought another one for me and my wife that we just sold ourselves a few months ago because I felt like I needed to get something else, just me.

But, I think that networking is the absolutely best skill you can have. It didn't matter what you want to do. I think a lot of doctors don't think about that, but even when I got to that small town, I called the superintendent, the mayor, the principal, I called everyone's like, Hey, I want to meet with you.

I'm a new doctor in town. I mean, for everything you're doing, just meeting with people and making connections is absolutely important. So, Throughout that COVID period, it was kind of a weird time to make connections, but every opportunity I did, you know, I met people, talk to people, I followed up with them.

If I met someone in person and they seemed cool, I found them on social media. I'd be like, hey man, enjoy talking to you at lunch today you know, Let's meet up or whatever. And I just kept doing that and got to be some good friends with some older guys that owned their own businesses.

So one of my partners one of my partnerships is a real estate attorney, which is, always good to have a real estate attorney as a partner. And then the other partner is a business owner and very like accountant minded persons. He does a lot of our kind of day in numbers And I met him through networking.

I'm actually really good friends with one of them. And then I kind of am I'm kind of a vision, more of a visionary type idea person. And then kind of like a get things done person. So like, I have a lot of the vision and then like, if something really needs done, like I'll hound someone until it gets accomplished.

Whereas one of my partners kind of keeps it from all the money and he has all the like connections with the water departments and the permits and all that. And then my other partner is a real estate attorney who gets our deals. mean, that's where we, cause he's got people that comes to him. And so that's where we get the deals from.

And then Dr. Zinn is a separate thing. We'll talk about it in a moment, but I did all that. I actually found my apartments myself. So we can talk about that in a moment. But on the just pure real estate side, You know, I think that you've got to leverage. I think that you do give up some stuff on a partnership, but also realize what you brought went to the table.

So I actually, they actually gave me some equity for free. I put money in, I put a lot of money in, but they were in a deal. They had been in for a year and a half. They had not been able to monetize and I had a bunch of ideas. And I was like, ah, I just don't know if I can come in there. And they're like, well, we're not making any money right now.

What if we give you a little bit of, you come in at a lower number and we'll still give you an equal one third. And it was worth it to them because they weren't making anything. You know, so I got a little bit of equity. Still put some money in. And now they're making money on it where they haven't been.

And then, you know, so it's just networking, putting yourself out there, bringing value. My value was kind of the ideas I had. I had all this real estate knowledge from reading a thousand books, you know, and things. But that was kind of chaotic, but that's kind of what we did.

Dr. Alex Schloe: Awesome. And really to be successful in real estate, you already hit on this. You really only need three things. You need the money, the knowledge, and the hustle of Brandon Turner's deal triangle. And so think about that. If you're listening to this money, knowledge, and hustle, you only need two out of the three of them.

Or in your case, you only need one out of the three of them because you had two other partners who are filling in those other roles. And so if you're listening to this, you're like, man, I have the money and some knowledge, but I don't have the ability to go find deals. You just need to find somebody who's got the hustle and that would be a good partner for you potentially.

And so it's a good way to think about it. and what a cool way to, for you to come in, add value and get part of a deal that you otherwise wouldn't have the to have. And so there's a lot of different ways to do this. But networking, I agree. Networking is just such a crucial thing, such a key thing in real estate investing and just life in general.

The more people you network with, you never know the opportunities that are going to come out of that. So really cool. Well, Craig, let's pivot to doctors in care homes. Let's talk a bit about residential assisted living, doctors in care homes, and go from there. So what is doctors in care homes?

Dr. M. Craig Moffett: First of all, I feel like that you should be given this lecture because if you don't follow Alex on social media, if you're a doctor and you want to invest, he does a great job with these residential assisted living facilities. And this really is, I think one of the most undersold investments in the future, but doctors in care homes.

So I do a lot of work with nursing homes and with care homes as a physician. That's I'm a very heavy geriatric. I also do hospice. I'm a hospice medical director as well. So I've been in a lot of these homes and two years ago I was listening to a BiggerPockets podcast and I think they had Silver Tsunami Lady I'm doing her a disservice.

I hope she probably didn't listen to this anyway, but and she was on there talking about her home. I was like, Oh my God. Yeah, correct. I was like mean, I love real estate and like, I like medicine and I treat the geriatric population, like how I need to make this work. So I started I made the decision that day pretty much that I was going to do this.

I did a lot of research. I met with a bunch of owners of local homes that I've worked with, either home health hospice companies. They opened their books and showed me stuff and I reached out to a whole bunch. One of them who actually didn't want to sell ended up being the one who sold to me.

She was my mentor for a couple of years and she actually saw me I posted on Facebook, my baby and Elvis at a nursing home. And she called me that day and she was like, I want to sell to you. It's like, I wasn't ready to sell, but I just saw what you posted and how you interact with these older people and how passionate you are.

And she's like, and I'm 62 and I just, I'm just gonna go ahead and sell it to you. 

Yeah. So anyway, so doctors in care homes is. I want us to be a provider of some of the best personal care home for what I would call your average person. If you look at personal care homes, a lot of them are going to be very expensive or either very not good.

So you're either paying seven, 8, 000 a month for a high end one, or you're paying maybe 2, 500 for a place that you would, you just, I mean, absolutely horrible. I wanted to figure out how to provide a place at a little bit less than the median for my state and my area. but above median quality and care.

And that's what my goal is. And the first one we purchased was in line with that. So my goal is to get these medium sized ones. I'm talking, you know, 15 to 20 personal care home. That's a pretty good number for us. Although we would look at some other ones. And provide just a excellent place.

And I want someone who worked as a teacher for 40 years and has a pension to be able to afford it. You know, I don't want to price out all these great people that have worked their whole lives and need a place to stay. I mean, obviously we can't charge nothing, but I wanted to find a way to make money while also letting your average person be able to afford it. So that's kind of what our goal is.

Dr. Alex Schloe: That's really cool, man. Yeah. And there's such a huge need for assisted living. You know, right now we're already a million beds short to 1. 3 million beds short, depending on what research you're looking at and there's 70 million baby boomers and seven out of 10 of them are going to require long term care.

So 59 million boomers that are going to require long term care. And so I agree, man, I think that residential assisted living or assisted living investing in general is the best opportunity in real estate now and for decades to come. And so it's really cool to see folks, Like yourself who are doing, they're doing it right, man.

And I think there's definitely a wide spectrum of residential assisted living you could have like the super boutique, very luxury assisted living experience and charge a lot more, you can have more reasonably priced homes like yourself. and then there's just so much in between. And so it's just a really cool opportunity to provide an incredible service to invest in something that's really fulfilling and to provide way better care for the seniors.

Dr. M. Craig Moffett: Absolutely, man. I mean you have to still from the so it's now me family and a residential assisted living academy, you know, to do good and do well was their motto. And I really think that's a great one. I think this is an area that you can do that and I think that you can, do a great investment for yourself.

I think you can make a lot of money. But at the end of the day, it is a huge need because, you know, I've seen, The conditions that some of these elders are living in sometimes it's even at home because they don't have anyone to care for them. And you can, if you do it correctly, you can provide a phenomenal place for them to spend what is possible in the last years of their life to be cared for in a way they deserve while also making a good investment. So I think that that's just, it's just a win win for everybody.

Dr. Alex Schloe: Yeah, absolutely. As a physician, of course, you know, taking care of a lot of geriatrics, you have a lot of insights into what these residents need and what is a good, care home and environment for them. What are some things that, you've learned kind of through your practice and working in some of these nursing homes that you've incorporated into your homes?

Or what are some things that you recommend, or maybe a better question would be, why do you think residential assisted living is a better place for residents and some of these big box facilities?

So one, a lot of people think 

Dr. M. Craig Moffett: that their family member would just be better at home or with them, but you're going to have caregiver burnout. You want to be able to enjoy your mom or your dad and not be angry at them after you've been caring for them for, you know, and it sounds horrible, but just like with your children, if you're with your child without your wife for a whole week, you're going to start probably being a little bit more aggressive with them than you would want to.

So I think that trying to keep your family member in your home with you is if you're working a full time job and everything, you're going to have some burnout and you're not going to enjoy your mom, your dad, your grandmother, your mom, you know, as much as you could have. Two, so I think that's why the home is not always the best option, is that caregiver burnout and just not having activities and socialization because what I know from being a doctor is if you look at the studies of dementia patients, socialization and activities and sunlight exposure are pretty much the best things you can do.

If you can socialize them, you can give them activities. And if you can put them out in the sunlight, they're going to have much less symptoms of dementia. And they're going to do much better. So I'm trying to incorporate that into my care homes. I'm actually, since I purchased, we're increasing our activities. We'll add some outdoor features so they can do more stuff outside in the sunlight. You know, and just a little caveat really the most important thing is the staff, because I mean, you can have the best facility or whatever. So my main, when I first took over this was having the best, I've been a CNA before, it is the hardest job anyone will ever do.

I don't care what, I've done construction, I've done roofing being a CNA, you get paid not much, and it's the hardest job. So I've worked hard to give them pay raises, pay them as well as I possibly can. Treat them well, respect them and appreciate them so that I can keep the best staff because who's taking care of that person 10 o'clock at night when they need to go to the bathroom is what matters.

So getting a good staff. And then to answer your question of why kind of the medium size, I think the things that me and you focus more on than a big 200 bed assisted living facility is because of that staff. You're gonna get that same staff member. It's going to get to know you. I mean, I've had staff at this one that's been there for 10 years and they love those people, but they do not want to leave.

We only have like three different shifts and we'll have like two different people for those shifts. I mean, it's a smaller environment. They really, really become a family. And if you're in these big box stores, not stores or facilities with 150 beds, you're not going to get that. Not that you can't get good care, but you're not going to get that personalized.

Like, I feel like she's my daughter. type of attention that you get at these 10, 15, 20 bed homes you're just not going to get that at one of those big box homes.

Dr. Alex Schloe: Yeah, absolutely. I mean, there's some of those big box homes. You got a caregiver ratio of like 1 to 30 which is unbelievable. And I agree with you being a CNA would be is such a challenging job. I can't imagine doing it. Super grateful for our folks that do because it's much needed.

It's, rewarding, but it is hard work. That's for sure. And yeah, I agree that personalized care approach mean, Patients are going to do, or sorry, residents are going to do such a better job in that environment of personalized care than they're going to do at one of these bigger box facilities and probably going to live longer, certainly going to live in a cleaner home, a more community like environment.

And, their last years are going to be lived much better than they would be in some of these bigger box facilities. And there's some good ones out there, not knocking all of it, but it's hard to argue with the fact that like your mom or grandma could be taken care of By a CNA, who's taking care of five other residents, or they could be taken care of by CNA is taking care of 25 other residents.

You know what I mean? And so it's just, I would want that personalized care approach for my family member.

Dr. M. Craig Moffett: The food's better too. The food, like the food in my home is good. You know, it's, fresh cooked. I mean, at least these smaller homes, I think tend to have a lot better food too, which is really important. In our early population, weight loss, appetite loss is a big issue. So we don't always think about it, but I also think they have better food.

Just cause you have that cook that knows, like my cook knows what everyone likes there. Like, I mean, she knows exactly how to make it for them. So it's very personalized. Certainly.

Dr. Alex Schloe: That's awesome. so you mentioned that one of your mentors reached out to you and said, Hey, we want to sell to you. We love your passion. We love what you do. We love how you interact with the residents. How did you, initially find that deal or get some interest in that deal? And then do you mind sharing some of the numbers, purchase price renovations, you know, what your income like if you're willing to share it.

Dr. M. Craig Moffett: Yeah, let's do it. So I reached out to a bunch of people that owned them that I worked with. And then I asked them for contacts. I was like, hey, you know I think you do a great job at your home. You know anyone else that owns one. When you're networking, you always meet someone, but then ask them if they know anybody else.

That's just, you know so I found her through asking someone that owned one if they knew anybody else. And phenomenal lady she owned one that I hadn't looked at yet. It was only about 30 miles away from me which in Mississippi is nothing, like, 30 miles is like in my backyard, basically, because we're very rural area.

And it's been there for 25 years. Very good reputation. And she knew I wanted one because I was, asking her questions and everything. And she wasn't going to sell for like five or seven years. So she was like, yeah, I'll sell to you in like five or seven years. You know, well, I'm not ready yet.

But I stayed in contact every few months. I'd ask her a question. You know, I'd send her a thank you note. I would send her a little gift or something like that. And we just kind of stayed in contact. This was two years. I mean, this was two years of me asking her questions and things that wasn't really out of nowhere. And like I said, I do a bunch of nursing home work and they got me to dress up and dance like Elvis at one of them. And she called me after that. But yeah, it's just, you know, and, we're also partners cause I want also on doctor's end.

I want it to be, it's doctor's end, like iron end. So it's like doctor's end, like a hotel. I wanted to be a physician owned group. So I have some partners. I'm a 50 percent owner and president of both. So we have a real estate company and we have an operating business company. I got all the partners myself.

I, knew some physicians that were interested in investments. Reached out to them, went I actually ended up having more that wanted to join in that I wanted to accept because I didn't want 10 partners. I wanted less. So I actually had to kind of turn a few down because it's it's a great investment.

I mean, if you really look at it, it's good. And then we did get one account of the end. You've got to have somebody that knows accounting. So we've got a few doctors and one account that are owners. I'm 50 percent owner and president of both. And then my other accountant is also like he's our CFO.

So he's kind of me and him are the CEO, CFO and everyone else is more of a limited partner or a silent partner. So Most of the ones in Mississippi and Alabama that I've seen that are purchased are typically purchased in two transactions. You purchase the real estate and you purchase the business.

There are different ways to do this. It does not have to be done that way, but in my area, that's typically how it's been done. So she originally wanted, I think 1. 2 for the whole thing. So 1. 2 million for the business and for the real estate. After we looked over everything, we get that down to 1. 6 1. 16, so we dropped about 40 grand. So basically we did almost even split. We did 5. 80 on the business and 5. 80 on the real estate. The real estate appraised for like 5. 95. You know, so a little bit more, although I think it's really probably worth 6. 50 because a bank never appraises it much more than what the purchase price is but I had my own appraiser look at it and he thinks the real estate, so we probably got some equity there.

And then the business. There's a lot of ways to look at that. Ultimately, for me, like I told her, as long as I cash flow what I need, I don't even care what the purchase price is. You know, and you can sell it for a million if it's 0 percent interest and, you know, whatever. Now, so I hear more about the term.

So, she owner financed the business to me. So, the 580K that was the business, she owner financed to me on a 30 year amortization. 10 year balloon payment. So I'll owe her the entire sum up to 10 euros, but it's amortized for right now, over 30 euros, leading to excellent cash flow. She also gave me delayed payments with no interest for three months, which I wanted to build up my operating income.

So that was my idea and she agreed to it. So I didn't make her any payment for three months, which allowed me to build up some additional income streams. And in real estate, we did 15 percent down commercial real estate loan at 6. 5%. Which three months ago when we did it was about the best you could get.

It's still actually okay for now, even everyone was telling me seven and a half to start with. So I had to kind of, I had to fight to get that six and a half, but so we did that, you know, I own it when I purchased. So, I had been. She had recently reported about 18 to 19 KA month NOI.

However, the 2023 NOI was less closer to, to 16, although she had spent about $6,000 in the facility improvements the last year. But because the NOI was a little bit lower, we readjusted a few things. cause she had no debt on the property and you know, I was gonna have a 6.5% interest rate.

So I wanted to basically have at least 8,000 in potential. potential free cash flow. And that may sound crazy. Some people like, oh, that's way too much money. Like I said, money to me is safety and security. So I wanted to be able to make improvements. I wanted to be able to make sure notes were covered, bills are paid.

I was gonna increase everyone's salary from the get go because I've been a CNA before. It's important to me. So I knew I was gonna have those increased expenses. So I wanted to have kind of at least 8000 projected free cash flow. So that's the numbers that we base the bill off of. I also knew that they were under rented, they were about $350 under market rent.

So I've already instituted my strategy to get that up. I wanted to be respectful and do it not all at one time on everybody. So I sent a welcome letter and I, I gave 'em multiple choices. I was like, Hey, this is what we wanna do this, we wanna improve the facility to do that. We're gonna need a 5% increase here and a 2% increase here.

And everyone was fine with it. So within a year. Just on that alone I know I should go up about three grand. Also, inside the facility because you have to look at these regulations, because there's a bunch of state regulations on square footage, bathrooms, toilets for these facilities. I did my research, I knew that.

I have the potential of adding up to two rooms under roofs which could be a substantial revenue. I mean, you're talking about spending 15, 000 to get an extra 3, 000 a month. I mean, that is Like, that's what insane math, insane return on investment. I'm not that yet, but that's my next phase plan. I've already contacted the state department of health to come out and do an assessment where they will come out and verify that I do have the space and the ability to do that.

And then I'll get a contractor to come down. So that's kind of my next phase there, so.

Dr. Alex Schloe: Man, that's awesome. What a cool deal. And, you know, and for folks who are listening to this and, Thinking about net operating income, these are commercial properties. And so the more you increase your net operating income, the more the property's worth down the road, it's all, mass and net operating income and cap rates.

And so, adding those two rooms adds an enormous amount of value to, to this property and, and for the sale or the refinance in the future it's enormous. So that is awesome. What a cool opportunity. To like one network and continue to have all those touch points with her over the two years and then get the sale and then be able to do, you know, seller financing on the business, which is a way that you can tweak terms and figure out what works for you and what also works for the seller to get an incredible opportunity that cash flows on day one, like there's just such a cool deal.

So thanks for going through that and doing a deal deep dive and talking about the structure of that and excited for you and your investors on that one for sure.

Dr. M. Craig Moffett: And I just want to point out real quick. This was, I mean, she is phenomenal. She's a very small business lady. She was not, it wasn't that, you know, this was not like she didn't get taken advantage of. It was just tax advantageous to her. Owner financing can be very good for her too. She gets to roll out her taxes over a multi year period.

You know, so it's not like oh, you're just taking advantage of someone. She knew what she was doing. You know, I proposed it to her and she was very kind to me and very easy to walk with. But this can be advantageous for the sellers as well, so.

Dr. Alex Schloe: Yeah, we've done some creative financing on on a few of our deals and it's an opportunity. It's a great opportunity for the seller, a great opportunity for us. And you have to figure out what works best. And for us, like for example, the last deal we did seller financing. And so essentially the owner or the seller acted as the bank for us. And we just got to know them and got to talk with them over time. And it turns out they all that they wanted was to retire. And so they wanted cashflow and they wanted 45, 000. And so that led to us paying 45, 000, which was 6 percent down on this property. And then we got a better interest rate than what the market rate was at the time.

We got 6 percent when it was about eight, eight and a half percent at the time. And, it's same thing, 30 year term. So it was just an incredible opportunity. And so. Seller financing, creative financing can be a great way to get into a deal with less money out of your pocket or adjust the terms how you want to, you know, they always say you can negotiate your price, but it's on my terms or your terms and my price.

And so it's a great way to be able to do that. And to get into a deal and add a lot of value and equity from the beginning.

Dr. M. Craig Moffett: Yeah, awesome, man.

Dr. Alex Schloe: Yeah, for sure. Well, what's next for you with doctors and care homes or what's next for you just in business and real estate in general?

Dr. M. Craig Moffett: So doctors and care home is definitely what I'm passionate about right now. I would like to have 3 to 5 of them in 5 years. I don't know that I necessarily want to have like 30 of them or anything. I mean, I think that we'll see. I definitely want to expand. I want to have 3 to 5 at least within, you know 5 to 7 years is kind of my time frame there.

And then also improve each one too. So like even though I'm not buying another one right now, I'm increasing the rooms and the one I have and trying to increase my NOI and keep good care of these people. For me really everything goes back to my other thing is the most important family is most important.

And after that, really, for me is an advocacy. So I do a lot of medical advocacy in my state. I'm on the state Medicaid board on state medical society board do a lot of advocacy for Medicaid and for underserved areas, rural healthcare that doesn't pay any money. But if I can own five personal care homes and then do clinic, you know, a few days a week, then I can go do these things.

So that's kind of ultimately, you know, 10 years from now, I would like to be a, you know, 80 percent advocate and a 20 percent in, you know, in clinic doctor is kind of what I would like to do. So.

Dr. Alex Schloe: That's awesome, man. Excited for that. Excited to hear that there's folks like you who like really genuinely care who are advocating for these patients. It's awesome. And you're changing the way that care is provided for them there in Mississippi. So super excited for you and doctors and care homes and everything else that you're working on.

And also really grateful to have you on the podcast today. If folks want to know more, reach out to you, connect with you. How can they do that?

Dr. M. Craig Moffett: Absolutely. LinkedIn is the absolute best way to reach out to me. It should be in the show notes. Happy to just network. I do have a little consulting thing. Not quite as extensive as Alex, but you know, if you want me to look over a deal for a year or anything like that I do that as well. Doctors in, we're always looking for properties in Mississippi, Alabama. Tennessee type area. And then if you want if you own a nursing home and you want to improve your quality scores, you can also give me a shout because we've, increased all of my nursing homes to five star where they were at originally.

So be happy to help with any of those aspects.

Dr. Alex Schloe: That's awesome, we'll include the links in the show notes but M Craig Moffett, they'll be able to find you on LinkedIn. So definitely reach out on there. That's how we connect it to, and really grateful for that. Awesome. Awesome. Yep. And we'll definitely put that in the show notes there.

Awesome. Well, without any further ado, thank you so much for your time. I want to be respectful of it. And thank you to folks who listened to the podcast. With that, it's been Dr. Craig Moffett and Dr. Alex Schloe with another episode of the Physicians and Properties Podcast signing off.

Hey, real quick. If you're still listening to this, I'm assuming you got value from it. So I need your help specifically. My two year vision with this podcast is to help 100, 000 physicians learn how investing in real estate can give you the freedom to practice medicine and live life how you want. There are two main ways that a podcast grows.

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