On a daily basis, physicians experience the fast-paced world of medicine. While their pursuits are noble and driven by the passion to help others, it often comes at a personal cost. Due to incredibly demanding schedules and high-pressure work environments, coupled with personal financial stress and little free time outside of their careers, real estate investing burnout among physicians has reached an all-time high.

Per the American Medical Association, about 63% of physicians claim that they suffer from burnout, a substantial increase compared to just 4 years ago in 2020 (38.2%). The burnout epidemic has had a detrimental impact on patient care and career satisfaction. While the majority of physicians (72%) are satisfied with their current jobs, this is a 4% decrease from the previous benchmark in 2020, marking the first time there was a drop in overall job satisfaction.

Adding fuel to the burnout fire, are the financial stressors that physicians face on a daily basis. A recent Harris Poll provides a troubling reality, showing that the majority of healthcare workers are losing sleep due to their current financial situations. Per the report, “52% of physicians are feeling less confident about their personal financial situation compared to a year ago, and 79% are somewhat worried that economic changes will have a negative effect on their personal financial situation in the next six months.” On top of that, despite being high earners, 65% of physicians claim that they live paycheck-to-paycheck, with 48% expecting to need a short-term loan in the next 6 months. Some of the common financial worries among physicians are the ability to pay for groceries, mortgages, gas, and utilities and that they don’t believe they have an effective plan for retirement.

Much of this financial stress stems from poor financial literacy, minimal financial and wealth-building education despite many years of schooling, high student loan debts, and little free time to properly craft a portfolio that fits their personal needs. With burnout on the rise, coupled with the various financial stressors faced by physicians, it’s clear that urgency is needed to address both components to find a comprehensive solution to the unique problems physicians face.

As physicians continue to face professional and personal struggles, we are seeing a shift in the wealth strategies used to combat these issues. Enter real estate syndication, a financial strategy that has quickly gained momentum among physicians due to its ability to address the unique problems they face, helping them regain their peace of mind.

Real estate syndication involves pooling resources together with other investors and syndicators to acquire large, income-generating, commercial real estate assets. In real estate syndication, we generally see two primary roles. The General Partners (GP), who are responsible for identifying, acquiring, and managing these large assets, and the Limited Partners (LP), who invest alongside the GP team, making the investment completely passive in nature, to achieve the benefits of real estate ownership, without the headache of being a landlord.

This investment vehicle is especially advantageous for physicians due to their demanding schedules, as it allows them to tap into the potential of the real estate market, without getting bogged down by the day-to-day operations. In turn, it resonates with these busy individuals that are seeking lucrative real estate opportunities, while balancing demanding careers.

One of the benefits of real estate syndication is the unique advantage for both passive income and equity growth. Due to the nature of the investment, it is a perfect vehicle for wealth building and financial security. Passive income, generated from the rents and other income-producing strategies, provides investors with a steady stream of cash flow, without having to take place in the day-to-day operations, making it truly passive in nature. On top of the passive income streams you can expect as an investor, you can also stand to benefit from equity growth as the value of the properties appreciates from both natural and forced appreciation over time. Commercial real estate has proven itself to be a resilient asset class that tends to consistently appreciated. With the collaborative effort from both the GP and LP side of syndications, investors gain access to larger, more lucrative deals that would otherwise be beyond their individual capacity. These benefits make real estate syndication a compelling strategy for physicians seeking to generate another income stream while enjoying long-term gains as well.

When COVID struck, many medical professionals questioned whether or not they wanted to continue running their practices. However, most were reliant on the income their practices produced. Those who had built up various income streams through different real estate syndication opportunities were able to take advantage of the flexibility they had due to the consistent passive income from their investments. Many of the physicians we work with are now able to practice medicine on their own terms and they state that the ability to control their time is what is most important.  

Aligning with physicians’ tendency to be risk-averse, real estate syndication is a powerful tool to diversify and mitigate risk within your portfolio. Through participation in multiple syndications, investors can spread their capital across different locations, markets, and property types to take advantage of a broad spectrum of projects. Doing so will enable investors to protect against localized risks that may impact a single market. Furthermore, real estate syndication brings together a team of experienced real estate professionals such as syndicators, property managers, and other experts. This collaborative approach helps distribute responsibilities and expertise throughout the project, significantly reducing the risk associated with individual decision-making.

The tax benefits real estate syndication has to offer act as a compelling benefit to physicians due to them typically being high earners. A primary tax benefit that syndicators look to take advantage of is the ability to leverage depreciation. Investors in these syndications can benefit from depreciation deductions on the property’s value, even though the asset tends to appreciate over time. In turn, the depreciation deduction often offsets the income generated from the investment, resulting in lower taxable income. Additionally, syndication structures often involve pass-through entities like LLCs. This means that profits and losses are passed through to the individual investors, who can report them on their personal tax returns, again, lowering their tax burden. Lastly, most syndications also leverage advanced tax strategies such as cost segregation and accelerated depreciation to provide substantial tax benefits for passive investors.

Real estate syndication acts as a powerful investment vehicle for physicians to achieve flexibility and time freedom in both their professional and personal lives. Given the demanding nature of a career in healthcare, physicians often seek investment opportunities that can generate passive income and build wealth simultaneously, without requiring they add to their daily schedules. Through real estate syndication, they are able to passively invest in professionally managed real estate projects, mitigating the need for active involvement. The passive income generated through these types of investments provides physicians with additional income, reducing their reliance on their clinical work. In the end, this affords them the flexibility to allocate time to personal pursuits, passion projects, or further development in both their personal and professional lives. The combination of passive income and equity growth, coupled with tax benefits and professional management, makes real estate syndication a strategic choice for medical professionals to achieve financial independence and combat burnout while striving towards a balanced and flexible lifestyle.