Kimberly Hoyt: Investor Evolution- Elevate
Welcome to Investor Evolution- Elevate, the podcast, designed to help busy professional women like you, rise higher in every area of life.
Whether you're looking to create financial freedom, reclaim your time, or find harmony while you're thriving in your career, this show is for you. Join me each week. As we uncover strategies to grow your wealth, nurture your personal development, and elevate your life to new heights. So you can live with purpose, joy, and confidence.
Kimberly Hoyt: Investor Evolution- Elevate
Leveraging Real Estate for Financial Freedom: Dr. Dan Grove's Story
Welcome to Investor Evolution, Elevate the Podcast designed for professional women seeking financial freedom and work-life harmony. In this episode, we introduce Dr. Dan Grove, a critical care physician who achieved financial independence through creative real estate investing. Dan shares his journey from traditional investing to leveraging creative financing strategies under the mentorship of Pace Morby. Discover the challenges, strategies, and motivation behind Dan's transformation from doctor to real estate investor. Gain insights into co-living strategies, the benefits of subject-to deals, and how busy professionals can diversify their investments. Dan emphasizes the importance of mindset, time management, and continuously evolving to achieve your goals. Join us for an inspiring discussion that bridges healthcare and real estate, and learn practical tips for elevating your financial and personal life. For more information on Dan's investments, visit grovefamilyinvestments.com.
00:00 Welcome to Investor Evolution
00:32 Introducing Dr. Dan Grove
01:46 Dan's Journey to Real Estate Investing
03:48 Challenges and Realizations
06:08 Discovering Creative Financing
13:43 The Co-Living Strategy
20:29 Understanding Subject-To Deals
27:41 Understanding Investor Preferences
28:30 Exploring Self-Directed IRAs
32:07 Private Money Partners vs. Private Money Lenders
37:59 Investing in Different Markets
38:57 Balancing a Busy Life and Real Estate
41:43 The Importance of Focus and Time Management
44:56 Future Goals and Continuous Growth
47:24 Conclusion and Contact Information
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Disclaimer: I am not a CPA, attorney, insurance/real estate agent, contractor, lender, or financial advisor. The content in these videos shall not be construed as tax, legal, financial advice, or other and may be outdated or inaccurate; it is your responsibility to verify all information yourself. This is a podcast for entertainment purposes ONLY.
Welcome to investor evolution, elevate the podcast, designed to help busy professional women like you, rise higher in every area of life. Whether you're looking to create financial freedom, reclaim your time, or find harmony while you're thriving in your career, this show is for you. Join me each week. As we uncover strategies to grow your wealth, nurture your personal development, and elevate your life to new heights. So you can live with purpose, joy, and confidence.
Investor Evolution:Welcome everyone to today's episode. I am thrilled to introduce you to our special guest today, Dr. Dan Grove. He is a critical care physician who took an unconventional path to financial independence while still practicing medicine., Dan recognized the limits of traditional investing and boldly turned to real estate, leveraging. creative financing strategies that he learned under the mentorship of Pace Morby. His journey from doctor to investor is one of determination, resilience, and vision. Today, Dan is committed to helping hardworking professionals like himself achieve better returns, greater diversification, and true independence. Dan, welcome to the podcast.
Dan Grove:Okay. Yeah, no, this is exciting. I'm apoligizing in advance. There's some noise. I'm actually in the middle of doing the thing, which you just described. We're at, I'm at one of the houses now and they're, they're installing some door locks. Um, so that's, that's, it might be a little bit of background noise. I apologize.
Investor Evolution:This is perfect. This is all good because this is life, right? This is why we got into it. This is what happens. And I love being able to kind of peel the curtain back and see what, what this is like. So let's start with you as a physician. What led you to want to invest in real estate, like what were the motivations, the motivating factors that led you to this point?
Dan Grove:So what I had done was, when I was sort of in my training, so I was in my training and I had a friend who was very successful in investing in real estate and he, had gotten me involved, right? So what he did then was he, he helped me get into a house. This was in 2010. And in 2010, if those of you who are old enough to remember, you could buy, this is, I lived in Atlanta, you could buy a house in Atlanta for 35, 000 because of the financial crash and the housing crisis and all that thing that happened. So he helped me by fronting the money and getting me started. But at the time I was finishing my training, I had, three small children. I was planning on sort of transitioning and so I I wasn't prepared to deal with all the stuff, right? The, um, you know, like the property management, the people trashing the house, and stuff like that. So I sort of panicked, right? And I was like, dude, I'm like, sold on my left. It still worked out well for me, but from that point, I was like, Especially when I saw what those houses are worth now in Atlanta. Anybody who's studied Atlanta Market? When I stopped looking after a point because it was just too depressing. So I'm, I'm an intensive care doctor. So, I was part of a private practice, uh, that was, had a contract. So we were a separate practice, but we had a contract to work in the hospital. So the hospitals gave us a contract to be the doctors in the ICU, but we did not work for the hospital. And so we had a pretty good practice. I enjoyed it. We were building other business, the fact that other businesses do, we had us a billing company, a collections company, a sleep medicine supply company. And so I was kind of part of that. I was a junior sort of on the level, but I was still seeing this, the mindset of all the people in the group was let's build something right. And then right in the middle of the pandemic, when, um, for those of you who were not ICU doctors, it was a very challenging time to be in medicine. Um, we got a letter from the health system that we had a contract with saying that you have to become our employees. That either you work for us or you can't be in the hospitals anymore, which sort of it kind of put dropped a bomb on our practice because even though we had these other businesses, it wasn't enough. Our main source of income was from our work in the I. C. U. And to lose that we wouldn't be able to stay in the only option we had. So the only option I had was to join them or to move essentially because find another job, another place to work. But, um, so I really kind of. Didn't have a choice, you know, and so I really didn't like that feeling. I didn't like the feeling that You're fine. Everything's going along and then bam, some, somebody makes a decision. Um, you know, like the, the system is not like, they're not evil. They're not bad. They're just making a financial decision. That was what they felt was best for them. But now I have to then like sort of continue. My career wondering, well, when's, when's the next time going to happen? What if a new vice president of this or chief operating this decides, Oh, we need to cut costs. So we're just going to slash salaries. We're going to make you work more hours and it could happen at any time. So this like freaked me out. Cause I need, this happened like out of the blue, it was out of the blue. And it was in the middle of when we're all, you know, getting killed in the ICU. So it wasn't even. Sort of mercy, like it was, they gave us six months. Like they didn't even give us time to sort of make plans. So I started saying, okay, well, I want to build something that I can have a second level of income that if they cut back my hours or if they say you need to do this, so they cut my salary, wouldn't hurt. Right. And then eventually, listen, I, I'm not one of those people that wants to quit my W2. Like I love my job. It's an important job. Um, I always wanted to be a doctor. This is what I want to do. I just didn't like that at any point, right? It could all be taken or somebody else was controlling it. And I wanted to have the flexibility to make, you know, decisions that fit for me and my family. And so that's why I started getting into this real estate thing. And I did, I think what a lot of people do, which is go to bigger pockets, go to the internet, YouTube, and, and start learning. Now I had enough experience by experience in Atlanta, Tommy, that you, this time you better know what you're doing, right? So I was much more sort of. learn, learn, learn, and then do. And so then I got into the sort of traditional investing. And then I, I learned about the Subto mentorship about creative finance, and that's what I've been doing since. And so now my goal is I'm just sort of trying to build right. And, um, what I learned is over a period of like three years, like I essentially got a graduate degree in this, essentially. So now I said, well, there's a lot of people out there who are in a similar position to me, or maybe they have a different need. Maybe they just want to be sure about the retirement. Maybe you don't want to be sure about. I don't know, whatever they want, like people have all kinds of reasons for liking for needing the freedom, but they're not as sort of hyperactive as me and they don't want to like jump into a hundred things all the time. And so they don't have the time or the knowledge. And so that's what I've been doing. I've been finding people who want to get into this sort of investment. And I have people who are looking to like one lady, she's just looking to learn, right? She wanted to learn about real estate and, but didn't know anything. So by connecting with me, we partner on a house and then she's learning along the way. And then I have another person who he just wants to diversify his retirement. So he didn't want it all in mutual funds and exchange funds. He wanted a little bit in something else. Just to have stability and I, and he actually gets a higher return than he does from the stock market. And so that's sort of what I've been doing now is trying to help find people that were, we could create a one plus one equals much more than two kind of experience. And, uh, help, you know, find the houses and work together and see how we can, you know, if we can build this together.
Investor Evolution:There's a lot to unpack in all of that that you just said. No, and it's interesting and why I'm so grateful to have you on today is because there are so many parallels. Between your career and my career, where we're at and what we're doing. the area I've been in, I've been here for 20 years. And so I've watched this. Hospital complex start accumulating and acquiring all the different practices. And I've seen great things come from it, but also, you know, the loss of freedom for, for the physicians. And so I could understand how that impacted you wanting to make sure your financial future, your future is secure in your own hands on your own terms by means and that someone else can't just come and squash it. So that resonates with a lot of us for sure. So when you, as you've moved into starting to invest and I call it Pace Morby World. So as you came in to Pace Morby World, what were some of the things that, got you excited? What were you wanting to work on? What did you try that didn't work out? Like, what was your journey as you started figuring out different investment types?
Dan Grove:I like Morby World would be a great amusement park, right? I know, right? Go up and down, right? You know? Perfect. It's like Dollywood. So, what am I working on? So, the thing that kind of got me was my, my, I got two houses. I had money saved and I had a home equity loan. And I got two houses in Detroit through the traditional kind of, bigger pockets, Burr Method. And, I got them and they were fine. And I realized though, that I now have to wait 12 months to refinance or whatever the period is. Right? And so if I do that, then I could probably do like two a year, one or two, maybe three. Right. Which is awesome. Like there's nothing wrong with that, but I had a couple of problems. One is, is that that's going to take a long time to get to sort of a point where it's more feasible to have that Freedom. Two, is that I had to look in markets like Detroit because the right I, you know, listen. Anybody who invested in real estate in 2015 is a genius, right? Because you just rode this wave of record high appreciation, record low interest rates. So it's really, I, I, like it's really hard not to succeed in that because no matter what you did, it worked, right? So I always tell people, it's like the stock market is the same way. When the stock market, you look, the, the stock market, when you find the financial advisors or financial planners, That did well when everything was going down or when everything was hard. That's a good planner. Whereas The guys who show good returns when everything's going up, right? So, but I joined it probably, when we had sort of record high appreciation, but also very high interest rates. And so the only way to find houses that would make money in cash flow, you had to find houses that were really cheap with high rents. You had a high price to rent ratio. Right. And so the problem is, is that those usually exist in markets that are challenging, either their low income markets or their markets that don't appreciate very well. And so there's the two issues. One is that wasn't my favorite market. These weren't my favorite kinds of houses and it would be very slow. So that's when I heard about the idea of creative finance, which is where for similar investment amounts or even less sometimes, now you can start opening up to more markets. You can have markets that are appreciating faster and you can have nicer houses that and the nicer house means better appreciation, but also usually less headache, right? If you find a sort of a newer house that doesn't need as much is also going to be need less repairs and less maintenance and stuff like that. And so that's where I got into it. And then I just started, my goal was to try to do like one of everything, right? So I wanted to, you know, I wanted to try, because I thought that every house or every type of like, once you do it once, it's clear how it works watching videos and, um, And just kind of taking notes, it's important to start, you have to get an idea, but you're never going to really learn how to do it to the point where you feel confident doing it again without actually doing it, right? That's why, like, the lady who was, the lady who has helped, who was, who was investing with me, this is a, you know, we gave her, uh, she gets a monthly payment and some equity. Is that now she's on all the email chains. She saw all the documents. She has now connections with property management and she has Connections with transaction coordinators so that if she wants to do this again She has done it on her own but Doesn't hasn't taken on all the headache and the risk like I I had that ulcer. It's healed and now I can You know, move on to my next ulcer, right? Right.
Investor Evolution:In true physician fashion, right? You see one, you do one, you teach one. So that is your model. And I love that. So you've tried a whole bunch of different Investment types or asset classes. What has been your favorite and what is your, your buy box or do you still have multiple?
Dan Grove:Well, so far though, the one that's been, um, my favorite has been the, um, acquisition. It doesn't matter to me. Sub 2 seller. I mean, seller finance is, is. is easier in many, many ways. Um, but the, the exit strategy that's been really good that I like the most has been the co living exit strategy. Um, and so like my last, the last three that I've done have been co living houses and those have, I think, the best potential in a high It's really, uh, uh, co living is amazing for a number of reasons. For the investor, it's great because usually the revenue is higher. Um, the total revenue is higher.
Investor Evolution:Explain, explain to our audience what co living is and what that means.
Dan Grove:Right, so co living is, is, um, like I'm in a house right now that this is the one that we're turning over and going to be a co living. It has six bedrooms and four of those bedrooms have their own bathroom. Okay. So if I were to rent this house out, to a family, right, a six bedroom house is a big house for a family, right? And so maybe I could get 2, 100 a month for rent, which would mean I would probably break even on my, um, PITI, uh, and costs. Um, as a co living, I can rent each room individually. And, um, so therefore each room then will make 700 bucks. And if you have six rooms, you can do the math, right? So the revenue is much higher. My expenses are higher to you, right? Like I have to pay for utilities and I have to pay for fees for the, like I use, this house is going to use PadSplit. So PadSplit takes fees and then I have an extra, another property manager because PadSplit doesn't fix the toilets and check the tenants. They just have their, their matching and marketing. And then you have to pay for the internet and all that stuff. So the, the expenses are higher. But the net is, is higher, so it's, it's much better for me as an investor. It's better for tenants for a lot of reasons. One is because a lot of these cities, the rent rates have gone up so much that if you're a single guy or girl, right, and you have a regular job, right, then you have to now find an apartment and then you're going to have to then sublet and lease out to roommates. Right. And commit to a one year lease in order for you to be able to afford a house to rent even apartment, right? Even an apartment, which a lot of times they won't let you sublease, right? And so it's, it's not affordable. So then your only option is now you got to go to a really sketchy part of town or, or, you know, make major compromises. Also, if you have, when you lease an apartment, you have to commit to a year and what if you have something which is transient, if you're not sure about what your job is going to be, like you just moved to town or you haven't gotten, you know, you haven't gotten settled in and you started a new job, you don't know if it's going to work, right? A lot of question marks. And so it's very difficult for people in that situation to find housing. So, if they're able to rent by the room, and the room is month to month, essentially. Where the cost is lower so they can get a nicer house, better neighborhood and pay less. And the only downside is they have to share a house with other people, which most people would definitely make that compromise if that was their choice. Right. And they do. Right. And so it's providing a huge service to individuals. So like, for example, I have another Pat's, but There is, uh, the, the house, the house has its father, the house father, Russ, right? Russ is in his sixties. He got divorced, right? And um, and is in sort of in this sort of transient sort of position. He's trying to figure out what he's going to do next. Um, and so he didn't want to commit to a one year lease and he couldn't afford or it'd be too hard for him to afford a full apartment by himself. So for him, it's a huge benefit. He gets his room and then he now is the guy that calls and he'll fix this and he'll tweak that and he'll make sure everybody's taken care of and you know, he's great. And then there's another lady in the house is who's also an older lady. I think she's in her sixties also. And, um, she doesn't want to live by herself. She can afford apartment by herself, but she's nervous to live by herself. Right. So for her, it's a huge kind of comfort that there are other people around that if she needs something, you know, she's not alone. Right. And, and, and if you had to choose living in a part of town where it's scary, right, but now you can live in a part of town that's not as scary and you, and you have this feel like you don't have to feel as insecure. Right. So it's a huge benefit for her. And then we have some young people who are, like I said, they're sort of between leases between jobs. And so there's, they don't want to commit to a full lease. It's good for the tenants. It's great for the city, right? It's great for the city that I'm in city of Baltimore because you know, there's a huge housing shortage everywhere and it's an affordable housing shortage. So the only way to fix the affordable housing shortage, Is to increase supply.'cause the, the reason there's a shortage is'cause there's not enough units, there's not enough places to live, right? And most of these cities have made it so difficult to build, right? Mm-hmm. It's, so there's like, in terms of the, you know, the permits and the, the, all the stuff you have to go through the whatever, the people you have to bribe to get permitted, whatever it is. Right. Then it's so difficult to build that the big companies that would build an apartment building, they don't want to deal with it. And so they're not coming in. And so you have this affordable housing problem where you can't build, what do you do? You need to increase supply without having to build. So co living solves that problem. I take a house that would have been one family. And now instead, it'll have six. Single people. So now that's six units that are no longer needed of whatever studio or one bedroom apartments now that it's okay. So it'll, it'll, it'll decrease the demand, which will lower the cost of living for everyone else. Right? So it's like everybody wins.
Investor Evolution:Right. I love, I love the way you explain it because it's, it's a very diverse group of people that you can serve. I talked to another physician and she was in a co living situation when she was in med school. And so she loves it because it helped her through that situation. So this is good for students. This is good for divorces, single people, you know, people just trying to get back on their feet. Like there's so many people that you can serve with the strategy. And. Very beneficial in so many ways that you explained. So thank you for that. So let's talk about creative finance. Creative finance can be kind of a, an interesting subject, and there's a lot of nuances, but explain how that helps people get into real estate, especially in a current market where interest rates are high. You know, prices are coming down, those profit margins are maybe not looking as good. How does that help?
Dan Grove:Oh, it helps in so many ways. So let's say you're a doctor, nurse, PA, NP, whatever. And you have saved up, I don't know, like 50, 000, let's say, right? And so what you would have to do is you'd have to go to a bank. And then you'd have to get approved for, uh, uh, an investment mortgage, like a second mortgage for an investment, you would then have to go find an agent or start searching for the properties, um, that agent, um, and then. And you have to then do essentially for the bank, by the way, to get approved, you need to do the whole financial colonoscopy, right? And so you'd have to tell them like, you have to know every house you ever lived in in your life and the address and whatever. And then now you have to find, find the house and then you have to deal with the whole sort of back and forth with the, with the seller. And usually the houses are more expensive. So now if you have 50, 000. Then you can buy a house that's worth, you know, cause that's 20 percent down, right? So you can buy a 250, 000 house. So you can buy a house for 250, 000. Now, if you've been doing any market research, a 250, 000 house will buy you You know, either you're in a rural area or you're going to be in an urban area. That's sketchy. Right. And you now, and you've sunk 50, 000 in the deal. Okay. So, um, and then you can only do that once, right?
Investor Evolution:Right.
Dan Grove:Yeah. Okay. So now let's say you want to buy a house like the other house I did. Right. So the last house I did was a subject to so the story was. was his name, the seller, Al, um, has a fiance and apparently the fiance wanted a certain type of wedding, right? And that certain type of wedding required a heavy duty expense. Okay. So Al being the devoted fiance needed the money. So what he, but he didn't want to spend, he couldn't spend two or three months on the market negotiating, hoping that he gets the price So what he did was he, um, he actually was, was contacted by a wholesaler. It's a wholesaler, somebody who will like sort of lock up the deal and then sell it to someone else, which in this case was me, like just the way, you know, Walmart buys the stuff in China and then sells it to you at a markup. So the wholesaler buys, like gets under contract and sells it at a markup. So if this house, I think is probably, I think it's worth about like$350K right? So if I wanted to buy this house as a, as a. As a investor, I'd have to come up with 70, 000 as a down payment and get a loan from a bank, financial colonoscopy, probably the financial EGD also, and then the capital, the whole thing, they'll probably go top to bottom, And then, um, and then, and then make it work. So now, but what he did instead was this, is that he actually didn't really have much equity on the house. Because he had gotten it relatively recently, so it was nice. He had gotten it, fixed it up, and had rented it out for about a year and a half. It didn't have enough equity. Um, but, um, it had a little bit. And he would have had to pay seller commissions too, right? He would have had to pay 6%. Uh, so instead, what he did is he agrees to subject to deal. Which means, he will give, sell me the house. Which means the deed gets transferred, I own the house. But it's subject to the existing mortgages. That's why if you've ever heard of Sub 2, that's where it comes from. The sale is subject to the existing mortgage, right? In classic lawyer speak, they make it confusing, right? So then you have to pay another lawyer to explain it to you, right? Okay, so that's where Sub 2 comes from, right? Subject 2, that's why, I guess that's how Pace Morby came up with the name for his, um, his mentorship, Sub 2, because it's Subject 2. So that means that the D gets transferred, but now I'm responsible for the original mortgage. So the mortgage stays in his name, but I'm making a payment every month. It's on auto pay. And so we gave him, I think we gave him 30, 000. Um, and then it costs us about 8, 000 to make it okay for co living. Um, and then, so I think by all investment was about 40, 000, 45, 000, maybe with closing costs. Um, so instead of paying 75, 000, it was 45, 000. It benefits him cause he, he got actually more than he would have gotten at sale. After you take away commissions, it happened faster. We got it done, I think in like three weeks. Instead of two or three months plus delays. Plus you never know if the, if the buyer is going to back out last minute or if their mortgage is not going to get approved, whatever. Um, and then we can take that house now and, and I'm paying every month. I have the deeds, my house, and then I, um, fix it up and now it's going to be a co living. It's already co living. It filled up in like six weeks.
Investor Evolution:Nice. Perfect.
Dan Grove:Yeah. So that's the advantage of a sub 2 and there's a lot of reasons why somebody would want to sell sub 2. So he's an example, is he needs the money and he, and it actually benefits him. He gets more out of it than he would have otherwise. And he gets, or he gets it done faster. Or some people are desperate. Like sometimes people are behind on their payments and they're going to get foreclosed on. Um, I saved one family from foreclosure with a sub two. And so it's a lot of reasons why somebody would do it. It happens all the time for people in our profession who usually have never had a hard time getting a mortgage. It's like, seems like this crazy thing, but people doing it since the, since the beginning of buying houses, I guess, I don't know. So I'm like, whatever. Tuck Tuck sold his cave to Nuck Nuck and he probably used seller finance. I don't know what they did, right? You know, but it's been going on forever. I love it.
Investor Evolution:I love it. Awesome. And I love, I love that everything that you're doing. You can see this through, through line of how you're helping others, right? You're helping others with the co living, you're helping that seller get what he needed so he could have that beautiful wedding for that new bride, you know, you're, you're helping because I assume they're coming along with you. You know, you may be bringing money to the table, but you may be partnering with an investor to come in. So let's talk about that. Like what are the types of investors that you're looking for? What is your, or who is your ideal investor avatar to come along with you on this journey?
Dan Grove:So, yeah, so it's a, it depends. There's not an ideal bet. The only thing is That somebody obviously has to have the capital, but, um, the nice thing about the way these things can be done is we can be creative about that also. So it depends on what the individual wants, right? Some people are like, just take my money. Give me my monthly check. I don't care. Fine. You can work out something for that too. Some people are, I want to be 100 percent involved. I want equity in the house and we could structure it that way also. Some people. Can be in between or some people want more information. Some people want less, right? Like some people want to be constantly updated. Fine. Some people just, like I said, just as long as the check goes, they don't, they just see the check deposited and everything's fine. Right. Right. And so it really depends on, but, but I think the ideal, like the type of investor I think of is like me, right? I think of me five years ago, right? Where it's like, I'm, I'm investing, like I have money saving for retirement. I, I don't, I don't live extravagantly. So I always save, I always. Spend less than I make so I was saving for other things and then so maybe somebody wants to take They're that extra savings and do something other than exchange fund some people I actually have somebody who invested with a self directed IRA, which is really cool, right? You can actually take your own retirement money. You can't do this with like a 401 K or 43 B, but you can make an IRA. And then what you do is you then can direct that IRA into any investment you want. You could buy baseball cards if you want it, like, just has to be that you, um, yeah. That you set it up correctly. So I actually did this, right? I had an IRA that didn't have that much money, but I wanted to see what it was all about. Like, I'm a, again, try everything, right? And so I had this money and what I did is I found those companies that act as a custodian, right? Because the key is you have to make sure that it's everything's kosher with the IRS. Right, that you're not benefiting from this money. Okay, you can't like take this money and, you know, use it to buy yourself something because then you'll get penalized. So there's the custodians and what they do is they will take that money and they will transfer it into their account that they set up. Right. And then you just have to fill out a form, give them the wiring instructions, and you can then invest in a house with me. You can invest in a multifamily deal as a, as a, whatever, as a syndicate, like I said, you can buy baseball cards or I don't know, like whatever people are investing in these days. Like you ever you want, you can buy, yeah, Bitcoin, you can buy just gold. I don't know. Um, people were into Beanie Babies when I was a kid. That was a thing in the 90s. That was a big deal, right? I don't know. I don't think
Investor Evolution:that would be a good investment these
Dan Grove:days. Nah, I wouldn't rec Like, by the way, it doesn't have to be a good investment. It just has to not be something that you directly Like, for example, if you invest in an Airbnb, you can't Go there for free.
Investor Evolution:Right.
Dan Grove:Right. You have to be careful that stuff like that. But as long as it's and usually the companies that you do this with, they, they know all the rules and they make sure and by and by them being involved, you're good. You don't have to worry about the IRS. And it's it's a pretty cool thing to do if you have that extra money, uh, set aside because Um, like you can't do it. Most people can't do anything with it anyways. In a while. The amount of money that you can make, um, in these real estate investments is much higher than you would make in just a mutual fund. And so, and then it's nice again to be diversified, right? If you have your 401k and stocks and bonds. It's good to have something else so that if you get close to retirement the stock market crashes you have another Kind of thing to buff it. Um buffer that if um, if there's a problem. Yeah, send it back to what you're saying. I like it I can talk about it. No, it's all good. What's the idea of that? So somebody who has that kind of income, right, that wants to put it in something, like I don't, I don't think it's good. I'm not looking for people who are looking to quit their jobs and then just be real estate moguls and I'm not looking for people who this is money they need to live on. I don't think that's a good idea. Like that doesn't make me feel good, but it's like somebody who has extra money in savings and they want to put it in something to diversify, to get more, to get more, um, more returns. Uh, or for, you know, for whatever goals they have.
Investor Evolution:Well, and I mean this, this is an investment. There are risks involved. Just as if you invest in the stock market, it's possible to lose money. That can happen in real estate also. So this is not something to be entered into lightly or just because we said, hey, you should do this. Don't do that. You do your own
Dan Grove:YouTube video. The guy was flying a private jet. It's got to be right. That's what it said on the YouTube video. He's flying a private jet. You said you can't lose,
Investor Evolution:right? Right. Yeah, don't do that. So let's talk about because we've kind of danced around it a little bit. The difference between a private money partner or a PMP and a private money lender or a PML. Um, what are the differences? I assume you work with both and tell us those nuances.
Dan Grove:Yeah, so a private money lender is like a bank, right? It means that they give you money, usually, like, the thing that we've done is like, they need the money, that's the money for the, uh, the repairs and the initial payment to the seller and the closing costs, all the money you need to get going. And then every month, you pay them whatever the rate and the term is. So they get a monthly check every month, sort of no matter what. Right. So like I, if I have a PML, I got to figure out how to pay them out of my own pocket if I have to, if, um, right. And that usually PML is, is, is secured against the house. So they have, they have, um, they have a lien on the house in case something terrible happens. Um, and that's a private money lender. They don't usually have a lot of, they don't have any really say about what happens with the investment. They're not going to tell me what, where to put a room here and what to do with this and how to, what access strategy. They're just saying. They will do vetting, they should do vetting to make sure that, you know, it's a good deal and they have to check with me, check me out, um, but they won't do anything like that and they get their monthly payment, usually at a set interest rate. A private money partner is a partner, right? So they usually will get, so there's a lot, you know, again, there's a million ways to do this. They could get, some people will get an interest rate that's lower. So they'll get a lower interest rate. So a lower monthly payment, but they'll get equity in the house. They'll get a stake in the house so that they're getting less per month in the cash, but the equity of the house is building. So that when the house sells or when the, whenever in the future they get, you know, whatever the house increases by 200, 000, they'll get 10, 15, 20 percent of that 200, 000. And so, and then some people will do a pure 50, 50 equity deal, which is. We both own the house, right? And so, um, we, you know, we, we're in this together. It's a, it's a marriage and it's actually, you think that it's like more commitment than a marriage, but I guess most marriages last about seven years. So it's about a marriage. It's, it's, it's your typical marriage,
Audio Only - All Participants:right?
Dan Grove:Right. So, um, yeah. And so, and those ones usually in the equity deals, the private money partners, then it's like, for me, when I have a private money partner, it's like. She's mostly deferring to me, but we're in this together. Like we're deciding, like we made, okay, this is the plans. What do you think of this? Do you agree? We have this problem. We need to raise this money. You know, like we're working on this together. Both people need to meet, people need to be approved and, and, and I can't pay off like a PML. I can pay off the balance. And then they're gone a PMP, I have to pay off the equity. So I have to, you know, I have to buy them out or we have to sell and they have to get paid off. It's, it's more because it's like more of a sort of a partnership. Right. And the advantage. So the advantage of each PML usually gets. There's a couple of advantages of, and disadvantages. The PML has the advantage of they're more likely to get paid if things go bad. They usually get a higher sort of amount of money every month. They get their money every month. The outside, um, is that they have, they don't get the real, the real wealth in real estate is with time and equity, right? It's like, I looked at it, like if you look at the cash flow, it's usually. PML, we had 10%, 12%, 8%, whatever it is like that they agree on. Um, and, but, uh, but an equity deal like that equity increases over a 10 year period, a lot, you know, it could increase a lot when you add in, you know, the house could be double in value and it could be a hundred thousands of dollars and it ends up being, you know, five, 600 percent on the, on the initial investment. So there's the advantage, the advantage of PML is it's more sort of. Passive like you don't have to do anything. Uh, the advantage of the PMP is you get the equity, um, which is usually if you're patient, right, um, patience is important, right? Patience is important. So, uh, the equity builds with time. You get much more money in the, in the backend. So like for people with self directed IRAs, this is perfect because you don't need the money anyways. Like, so just. Just let it sit. You're happy. You know, all the money that you get from the cashflow anyways is going to get put back in your account, right? So you can just, it's better. Like you almost want only equity, just let it build. And like, you don't need the money. Um, and so that's an advantage. You usually make more in the long run and you can also, the gains, the money that you make, uh, you can, um, offset by depreciation because you have some equity. So there's tax benefits. Um to it that you can that you can get if you don't have it in the like the ira Right if you just did it straight with your money um the The amount of the money that you get there's ways for you to offset the taxes
Investor Evolution:like
Dan Grove:lots of ways
Investor Evolution:Yeah, absolutely. And it depends on like your source of capital, as you said, right? If your source of capital is coming from a HELOC, you are not lending that for seven years or that you will not make money. Right? But if you're lending it from your IRA, beautiful. And then you don't have to move it, right? You make money when you move money. And if you're not having to move it through different sources, And it's still accumulating. It's working for you. It's a beautiful, it's a beautiful situation. And I know a lot of PMLs who do both, right? They have their short term capital that they're deploying, and then they have their long term capital, and they have different strategies based on the different amount of money, or different sources of capital.
Dan Grove:Right.
Investor Evolution:Um, where, where are you investing? Are there certain markets that you're investing in? Are you kind of over the country? Are you in certain areas?
Dan Grove:When I started out, I didn't pick a market. That's another nice thing about career finance. You can be more flexible. And so what I've done is I've tried to find different markets and get houses. And then, and then in the, in the market, you develop, I develop relationships. And so the relationships. Then you have a good property manager in that market. Now that's the market. So like I feel confident in Detroit and I feel confident in Baltimore and I feel confident in Denver where I have houses. And so, and so that's kind of the way I do it. Once you have had a house and you feel like you know the team, then that's where I'll go. But I feel pretty comfortable setting up those teams. Because I've done it in these other places and kind of know, um, having learned a lot the hard way how to, um, how to like the questions to ask and what to look for and stuff like
Investor Evolution:that. Let's, let's switch a little bit from, uh, the real estate side of things to more of our mindset side of things. You're a busy guy. Yeah. I mean, you have a full time job. You have a family, you've got three kiddos, like, how have you pushed this into your life? And how are you managing that? How are you using time management skills to allow yourself the time and hopefully freedom? Hopefully you're gaining that to get all this stuff done.
Dan Grove:Right. Yeah. So for me, I, I. It's not, it's a little bit easier for me because I hate having nothing to do, right? I like being busy. I love being busy. For me, those, those, like, the vacations on the beach, I could do that for maybe two hours lying on the beach. Okay. And then it's like, I want to go for it, like, go run or do stuff, like, let's go walk Rex. I, I, I don't sit still very well. And so being busy is good for me. I like having things to do. But I think that it's important to, I try to choose what to do and to focus. And so, um, I think if probably most people did a little like journal every day and they kind of just tracked all the things they do and for how many minutes over the whole course of one day, I think you'd probably realize that there's a lot of time in the day where you could find. So I get, I don't have, like, I don't scroll on things. I don't scroll on social media. Um, I don't have a television. Because, um, I don't want to get sucked into that, um, like I guess you could watch stuff on the, on the phone every once in a while, um, I, uh, so cutting those things out probably for most people would give them two or three hours a day,
Investor Evolution:if not more, if not more,
Dan Grove:I don't, I, I, I'm not a foodie, right? So I don't spend a lot of time cooking, right? I'll eat a bowl of cereal and that's how I'm fine with that. Right. And so I think just that, like, and then, and then what I do during the day is, is so for, so, you know, if I'm working in the hospital. And, um, and, and there's a slow period, that's 15 minutes that I can do something, right? Um, whatever it is, you know, there's a lot of things that you can do, right? And so, um, if, if, if you have a day off, like, I'd rather just do stuff and, you know, sleep, get a little less sleep is fine. You know, I'm not gonna, I don't sleep 11 hours on the weekend and, right? And so, and then, and then. Multitasking, meaning if I can talk on the phone when I'm driving home from work, well, that's 20 minutes, um, where, you know, I can, I can, you know, make, make a difference that way. And so, so that's kind of the way I find, I find those things.
Investor Evolution:So little pockets of time that you're taking.
Dan Grove:Exactly, exactly.
Investor Evolution:Awesome. I love it. And have you found that with your days of working versus your days off and investing that you're better able to get in the flow because you're like, okay, this is the time I'm, I'm, this is what I'm doing and you can get into it a little bit better and then vice versa when you're at work, you know, that's, that's flow that you got to do. Or do you feel like multitasking both sides? Yes.
Dan Grove:No, I don't. I take that back. When I say multitasking, it's like I'm driving. I don't believe though. I don't believe in multitasking, actual multitasking. Okay. Like I think it's, I think it's much better that I should take whatever, um, you know, a half hour
Investor Evolution:and
Dan Grove:do something like straight and take an hour and do two things, which I probably wouldn't do as well either way. I think it's pretty, that's pretty clear. I think that that's not effective. So I, I do try, like, I think it's important and I, like, I know my, I also do sleep medicine. So I know my circadian cycle very well. And I, if I can have between like 9am and noon, right, I could get a ton done if I don't have distractions. Right. If I go to the Starbucks and just like hunker down, right. And so, um, yeah, so, so I think that that's. That's kind of what I do. So focusing when you're focused, so doing a lot of things, but only, but never doing more than one thing at a time.
Investor Evolution:Good. When
Dan Grove:you can. Do some things at the same, you know what I mean?
Investor Evolution:Sure, sure. And I agree with you, like, driving, I'm, I'm listening to something. I am always listening to a podcast or a book or, or something. Uh, when, do you, do you find that, especially now, like, you're in the flow, you've learned a ton of stuff, you've accumulated all that knowledge, you're putting it into practice. Do you find now that you're working? Less but getting more done because you found that efficiency.
Dan Grove:I think I'm working the same and getting more done not because but that's not because That's because I like it. It's not because I'm, you know, I have to, you know what I mean? Because I like it, so like, I don't mind doing this stuff, right? I'd rather have something to do. I don't think I'll ever retire. It doesn't sound like it. Yeah, yeah, I don't like people, that sounds pleasing, like appealing to people. So like, what do you do? Like, you just stop working and then what do you do? You move to Florida and wait to die. That's what I understand about it. About retirement, right? Yeah. Let's just find a different career, or a different thing, or a different whatever, you know what I mean? Maybe I will, you know, maybe you do it less hours in the day, right? You know? And you do it if you want to, and you take days off to see the grandkids when you want to, but you're always doing something, you know?
Investor Evolution:We had a little battery die, so we're on the phone. We're gonna finish it out. No worries. I was telling Dan, it actually gave me a chance to reformulate this question in a little bit better way, and tell you a little bit more what I was thinking. So, I just started listening to a A book called 10x is easier than 2x by Dan Sullivan and Benjamin Hardy. And, you know, the premise is that what got you here won't get you there. And you have to change your thinking. And one of the things they talk about is as you 10x, Your, your vision, your goals and everything, you'll gain time back in order to pursue different goals and pursue different passions, maybe different purposes. And so I wonder if you feel like that will continue in medicine, you know, and obviously, you know, we don't have a crystal ball, who knows what the future may hold. But where do you feel like? That could lead you with being able to pursue a passion that's maybe more than what you're doing now or in addition to.
Dan Grove:Yeah, I'm pretty sure that, that what I love is that I can just come up with some crazy idea and then go try to do it. Like I got into research at the hospital just recently, right? And so, you know, be able to just, just do stuff like that. I have a list of things that I would want to do that if I had sort of more money I could do. So that's probably what it would be. It would be. Just get this running, right? And then transition to, you know, something else, you know what I mean? And then just get from there. Yeah,
Investor Evolution:right. And I think there's always our next level We all we all have that next level that we're looking to achieve. We never stop growing We shouldn't ever stop growing and I agree with you. I feel like some people just I don't want to, I don't want to do that either. So I, I'm looking
Dan Grove:forward to it. They're also just looking forward to the end. Like they don't, they don't live for like what they're doing now. That's just right. Oh, everything will be great. Once I retire, once I do X, Y, and Z. And I think that that's, that's a recipe for disaster because. And when you get there, if it's not what you wanted, what you thought it was going to be, because most of the thing that we most of the things that we anticipate in the future are not what we thought they're going to be either both for good and for bad. They're usually never as great as we think they're going to be and they're never as bad as we think they're going to be.
Investor Evolution:So, I mean, I think that's a huge point, right? You know, when I get there, then I will. No, if you're not doing it now, you probably won't do it then. So the things you want to be doing now, put them into place now, so you can enjoy them as you're going. I totally agree with that 100%. Dan, this has been amazing. I I'm just so grateful for you for your perspective. Tell us where we can find you for those who are like, I like this guy. I want to learn more. How do I invest with him? Where can we find you?
Dan Grove:So I have a website called grovefamilyinvestments. com and on that site I have, um, I have like just some blog posts, like explaining some of these things like creative, why creative finance and stuff like that. And then, um, and it has the links to all the social medias.
Investor Evolution:Beautiful.
Dan Grove:I post things on YouTube and I post things on Instagram and stuff like that. I had to learn all this stuff when I got into real estate. I'm a pre internet child, right?
Investor Evolution:All good. Same. The best thing
Dan Grove:about being my age is that you did all your embarrassing things before the internet. So there's My, those pictures are not on a Chinese server farm,
Investor Evolution:so they will
Dan Grove:never be found. That's
Investor Evolution:right. That's right. All right. So everyone go find him at Grove Family Investments. You can check him out. You can, he's got a lot of information on that site. You can see some of his projects. You can link to his socials. Dan, thank you so much. And we will have you back because this was great. And maybe we'll talk a little more mindset because I think we can go deep, deep on that. Yeah.
Dan Grove:Especially when I have like the background set up and I can be in my actual house. In my office where you know, it's a little less like you said, but this is multi tasking, right?
Investor Evolution:I
Dan Grove:have nothing to do. I'm not going to waste this time. Let's get let's get stuff done.
Investor Evolution:Exactly. Exactly. Dan, thank you so much for your time today. I appreciate you and everyone till next time. Have a good one.
Dan Grove:All right. Take care.