Hi everyone, today's interview is a pretty fascinating and interesting one. Many physicians I work with and those that I know personally, are looking for various ways to create and invest their money so they can work towards building long-term assets and generating additional and/or passive income. While I don't think everyone's goal is to retire early and stop working entirely, we want to have the choice to change careers and find new passions and, most of all, I think we want control in our lives, so that our livelihoods aren't determined by external forces outside of our control like politics, acquisitions, mergers, etc.
I've been quite interested in real estate investing myself, but haven't really taken a big step towards it because, honestly, I don't know very much about it and I'm afraid of doing something wrong. So in attempt to learn more, in this last month, I joined a new Facebook group for physicians looking to learn about creating passive incomes, one of which is real estate investing. It was to my delight when I spoke with Dr. Thomas Black, a physician and real estate investor who cofounded his own company to help other physicians grow their personal wealth through real estate investment.
So I knew I had to pick his brain to learn more! Hope you enjoy the interview!
1. Can you tell us more about yourself and your journey?
I’ve had a rather circuitous journey in both my medical and investing careers. After barely graduating high school, I joined the Navy, where eventually I decided to become a doctor. So, after I left the Navy, I went to undergrad and medical school where, to everyone’s surprise, I graduated at the top of my class. I then did my post-grad and residency in Indianapolis and bought my first house with my wife. As we discovered three years later, we had purchased our home at the peak of the real estate market, and by the time his time in residency concluded, the housing market had changed drastically. We were unable to sell the house at the price we required and decided to mitigate our loss by renting it to an incoming resident. This is when my fascination with real estate and the passive income it generates began.
Following residency, I began practicing in an extremely high-volume trauma center in East Texas, and although the income was good, I was working incredibly long and stressful hours, rarely saw my family, and was very quickly getting to a point where I was completely burned out. In fact, I had started to question whether I’d made the right choice in becoming a physician. I owned several single-family homes in Houston at this time and for whatever reason, decided to develop an apartment complex from the ground up on some land I’d purchased in town. This project is what gave me the idea that I could reduce my workload if I could create enough passive income from my real estate investments. Thankfully, my wife was a huge support and we decided to aggressively pursue this financial path. I resigned my partnership in the practice to move to the Dallas/Fort Worth where I could easily access what I was not focusing on, which was commercial and multifamily real estate.
Right after that, my brother Tim retired from his 32-year career. His most recent position had been with Great Wolf Resorts as their Chief Operating Officer. He had led them in opening eight resorts during his tenure there, so he had and still has a phenomenal mind for operations. Once Tim understood the benefits of multifamily and the cash flow it creates, we decided to put our skills together, and we founded Napali Capital. Our hope is that we can provide physicians with diverse, strategic, tax-incentivized investment opportunities to help them create the cash flow and sustainable passive income to create wealth and allow them some flexibility in their professional time commitments. We’ve been up and running as a company for two years in December, and we currently own more than 1200 doors in 3 states. We’re proud of our company and team.
2. Do you currently actively practice?
Yes, I do currently practice and I’m also a Regional Medical Director for eight Baylor Scott and White Emergency Hospitals. When I’m not working my “day job,” I’m investing through Napali Capital. The structure of my day is a little hard to explain because, thanks to the cash flow I’m generating and reinvesting through the company, I have flexibility when it comes to how many shifts I take. I still enjoy practicing medicine, so I do a few shifts per month.
3. For someone who is investing and generating passive income, was this something you always wanted to do or how did you get into it?
It was a gradual shift for me. As I mentioned, it was out of necessity that we rented out our first house but that was the catalyst for me to really think about real estate in a different way. Once I had that shift in thinking and started applying what I’d learned through experience (and some mistakes), and realized the potential, it became more exciting. That’s when I got really aggressive with seeking out opportunities.
4. For those interested in real estate and assets, how much cash flow would someone need before they can start investing in real estate?
There’s not a right amount. There are so many different types and classes of real estate that if it’s something you want to do, just find what fits your budget and knowledge base. And if you don’t have that knowledge base, find someone who does who can help. So often, we hear form our investors that they put off real estate investing because they either a) thought they didn’t have enough money to start or b) didn’t know enough about it. And honestly, that’s one part of why we started the company: to allow for people to jump in with someone who’s done it and can help get them invested. You just have to jump in – responsibly, of course - or it will never happen.
5. What were some ways you made passive incomes?
My passive income has been primarily through my real estate investing. I’ve done both single-family and multifamily, NNN leases and development. I’ve also authored a book, “The Passive Income Physician: Surviving a Career Crisis by Expanding Net Worth.”
6. What are the major challenges you face now, given that you’re at a high level of investing/passive income?
I think the challenge is managing the time to find that next opportunity that meets all the requirements we’re looking for. And now, I invest through our company alongside many other individuals who put their trust in us. We take that responsibility seriously, so there is a certain amount of pressure to make sure that what we invest in, what we offer our investors, is going to be profitable for everyone. To do that, you have to look at many, many deals before you find the right one—and that takes time. Fortunately, we have a team who is great at narrowing the options, though, and that helps a lot.
7. What’s the next step for you?
The next step is to continue to grow my personal wealth and the wealth of my peers through Napali Capital. As a company we have some really exciting developments coming in the upcoming months, so I’m eager to continue pushing those to fruition with the team!
8. What’s one piece of advice you can leave our physicians with?
Easy. Change your mindset, and you’ll change your life. In speaking with other physicians, the most common obstacle I come across that limits their ability to achieve financial freedom is that they can’t make that shift their mindset to get past thinking that after years of training, they need to just stay the course and focus on working as hard as they can until they retire. It’s amazing to see the transformation once they can look beyond that and think of how to create a stable, continuous, additional source of income that allows them to call the shots. Financial freedom and the freedom of professional choice go hand in hand.
The more I speak to physicians doing all sorts of different careers, side hustles, etc, the more I get the resonating message that improving one's mindset is the first step to making any change. This is very powerful. Your mind will truly be your biggest enemy or friend.
Dr. Thomas Black was also so kind to send me a copy of his book. I'm awaiting it anxiously so I can read and learn more. I'll let you know what I learn from it in a later review :). You can check out his website at Napalicap.com.