JF2442_ From Baghdad to Boston_ Combining Dentistry and Real Estate With Dr. Bender

JF2442: From Baghdad to Boston: Combining Dentistry and Real Estate With Dr. Bender

Coming from a family of medical professionals, Dr. Bender studied to be a dentist. Originally located in Baghdad, Iraq, his family had to move to Dubai, and that’s where he got introduced to the world of real estate.

After the 2008 market crash, Dr. Bender had to go back to dentistry to support his family. They moved to Canada, and then to Boston. In 2019, Dr. Bender got back into real estate by purchasing a 45-unit multifamily house in North Carolina. He’s now in the process of acquiring a 200-unit together with two other investors.

Dr. Bender  Real Estate Background:

  • CEO of American Dental Group with 5 dental offices, real es
  • Real Estate investor, e-commerce, and day trading
  • 3 years investing in Abu Dhabi and 2 years in the USA Portfolio consisting of 45 units, in process of selling to buy a 200 unit asset before the end of 2020
  • Based in Boston, MA
  • Say hi to him on www.benderscapital.com 
  • Best Ever Book: Best Ever Syndication book

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“Even if you do not have the money, you probably have friends who believe in you” – Dr. Bender.


TRANSCRIPTION

Theo Hicks: Hello, Best Ever listeners, and welcome to the Best Real Estate Investing Advice Ever Show. I am Theo Hicks and today we’ll be speaking with Dr. Bender.

How are you doing today?

Dr. Bender: Good. How are you doing, Theo?

Theo Hicks:  I am doing well. Thanks for asking and thanks for joining us today. A little bit about his background—he’s the CEO of American Dental Group, with five dental offices. He’s also a real estate investor, as well as into e-commerce and day trading. He has three years of experience investing in Abu Dhabi and then two years of investing in the US. His current portfolio is 45 units, but he’s in the process of selling those in order to buy a 20-unit asset by the end of 2020. He is based in Boston—

Dr. Bender: 200.

Theo Hicks: I’m sorry, a 200-unit.

Dr. Bender: Yes.

Theo Hicks: I was getting ahead of myself with the 2020.

Dr. Bender: It’s no big deal. It’s not a big deal.

Theo Hicks: I was getting ahead of myself with the 2020. He’s based in Boston, Massachusetts, and his website is https://www.benderscapital.com/.

So Dr. Bender, do you mind telling us some more about your background and what you’re focused on today?

Dr. Bender: Sure. So first, thank you for having me. And basically, I started dental school – as you see Dr. Bender, but I have a love of real estate; that’s what we’re here for, talking about real estate. But I’m born and raised in Baghdad, Iraq, and moved after; I went to dental school there. I’m from a medical family, my dad is a dentist, my mom is a gynecologist. And after the war in 2003, we had to move to Dubai, and then I found a job in real estate actually in Abu Dhabi. And then I started to sell real estate in order just to stay in the country safe, basically. And we started to invest actually, at that time; I was in my mid-20s. And then I saw something really interesting and fascinating – you buy real estate, you sell real estate, you have to have a great reputation, you work hard and you do a really great job with people, so people will trust you and do business with you… And it was really nice to do that.

And then we started to invest more and more. But then the financial crisis came in, and we saw in 2008 everybody’s starting to lose money. But then I went back to the dental field in 2010, started to go back to school. So I went to Canada, I lived a couple of years there, studied a little bit. And then I went to Boston University here in Boston. I’m still in Boston, I love Boston. But I went to dental school, and I didn’t go back to Canada with my family, because everybody moved there. So I stayed here and wanted to do some work in terms of dental work.

So I started working seven days a week after graduation, then we opened the first office in 2015 after I graduated here in 2014. And then opened another one and another one,,. It became like a kind of nice habit, adding more. And basically, we see good people everywhere, so we could find the ones that have energy, that would love to be joining the team, and we’re adding. Actually today, this morning, I was actually talking about adding office number six. And we created a plan to add 10 more locations in 2021, 10 dental offices; we could end up by 2021 with 15 locations.

And at the same time, we invested in real estate. So in 2019, we purchased that asset in Durham, North Carolina, because I wanted to go back to real estate, which I love, and apparently, a multifamily Class C product or maybe B is the sweet spot for me. That’s how I kept analyzing for the three years, just to study real estate and see, because I don’t want to jump into something without knowing, because knowledge is the most important thing in this game. But in general, we bought this one for 3.95, and now, we increase the NOI—I know that we’re going to get into details, but now, we’re selling it [unintelligible [00:04:01].17] It’s kind of like addictive process. Because in dental business for us, money is not the most important thing; the patient satisfaction and the treatment is the most important thing. So we don’t care about money.  But in real estate, if you want to talk about money, it’s totally fine; that you could invest for your investors, and also to improve the quality of your tenants. So it’s kind of like a different game. But in dentistry, we do it for more — it’s rewarding helping people. This way, using money to help people in real estate. So that’s what we’re doing right now, jumping to a 200-plus-unit, hopefully soon.

Theo Hicks: So the 45 units is one property right?

Dr. Bender: Yes, one address.

Theo Hicks: Okay. When did you buy that?

Dr. Bender: The closing was June 28, 2019.

Theo Hicks: 2019, okay. And then you said you bought it for $3.9 million, and then you’re selling it now. How much are you selling it for?

Dr. Bender: Between 5.8 to 6.1. So probably 6.1 is going to be the listing price, because the NOI went from 250 to 330 now, in one and a half years. And I didn’t know that we could do a great job with this, and apparently, we did a fantastic job.

Theo Hicks: So my next question… You owned at that point, about five dental offices, and you bought a 45-unit apartment, and you obviously are managing it… So how were you able to balance those two things? How did you make the time to acquire, to do all the upfront work and then the continuous work with that building?

Dr. Bender: What we do is basically — we always say “we”, because nothing can be achieved by one person. But in real estate, I have two investors with me, and they’re my friends. They believed in the project, and in me, of course, first. And that’s what we wanted to do together. But in terms of organizing the timing, it is really important that we give enough time for each subject. Let’s say, dental management. I used to do also dentistry with my hands, but this year, I stopped doing this because I didn’t have enough time. So I couldn’t serve patients, I had to hire more doctors. But now I have certain time in the day that I do the dental, some time of the day I do real estate, and some time of the day I do other things. So that’s how I would look at my time.

Theo Hicks: So you get three batches of time. How does that look on a week-to-week basis? Is it Mondays is dentals, Tuesdays is real estate, Wednesdays other things? Or is it each day is broken into three different categories? Or is it just you wake up and then you just figure it out?

Dr. Bender: A very good question. It depends on the phase of what I’m doing. So there’s some phases – the growing phase, and then some phase that’s the plateau… And then as business you grow and then plateau, hopefully there’s no down. But then you plateau, and you go up again.

So if I’m growing — let’s say, now I’m in the process of acquiring two dental offices now, hopefully the second one. But this one is not sure; we’re sure about one only, but even when we’re acquiring multiple ones and let’s say we’re doing the real estate… So this way I have to do everything during the day. So I do an interview probably with you, and then i do dental, and then after that, I’m going to talk to a real estate agent.

So during the day, I will do everything. But when we plateauing, just to maintain, I do let’s say Monday and Thursday is dental; Tuesday and Friday, real estate, and other things. It depends on the day. And we still have time to work out, so that’s good.

Theo Hicks: Perfect. There you go. That makes sense.

Break: [00:07:05] to [00:09:06]

Theo Hicks: So you mentioned that you’ve got your two investors who are your partners. So is this for the unit, is it a syndication, or is it a joint venture? Are all three of you actively involved?

Dr. Bender: Basically, it’s a GP-LP. Basically, I’m the general partner and they are the limited partners. But I do take their opinions; like, we have to give full attention to the asset and we discuss sometimes what we should do. But in general, I would say 90% of things – management company, talking to the lender and other things to manage the asset is done by me.

Theo Hicks: How were you able to grow the NOI by 100k, in I guess about a year and a half?

Dr. Bender: I would say [unintelligible [00:09:43].01] growth, but in general, the main focus is the gentrification[unintelligible [00:09:48].14] I know there are a lot of people that are moving to these areas. Like, in Durham, North Carolina, it was chosen the best city to recover from Coronavirus hit, as financials. But there’s a lot of people coming in. So people are moving to these areas – Texas, Florida, North Carolina, and a lot of inflow and the young professionals who can actually keep their jobs, surprisingly—keeping their job, and just to pay less rent. And that’s why when you see a lot of young professionals coming in. If we provide the quality of living that’s acceptable by the new tenants, I think the vacancy could be something good for you to use.

Some people, they complain about vacancy. I look at it differently. I think it’s an opportunity; if we can turn over this unit into a nicer unit with the new touch-ups and making some improvements in terms of appliances and floorings and paint and all of that, then more tenants will be attracted. Plus, you change your marketing aspect from the “old school,” I would call it. So I do the marketing for example for the whole dental group. So that’s why I changed how the potential tenant is going to look at the property. And when they come in, they have to see what we actually promised them online, and that’s going to create trust right away. So people will act, and then you can increase the rent; they don’t mind paying extra 50 or 100 bucks if you give them something worth paying more for.

Theo Hicks: Sure. So did you know this going into the investment that it was an area where young professionals were moving into? And this business plan you explained, was that the plan beforehand? Did you research beforehand to figure all this out, or did you just buy and then on the fly figure it out? And if it’s the first one, what research did you do? Where did you look? What data did you gather?

Dr. Bender: This book is my favorite book, by the way, I just want to let you know… But this book, I read it—

Theo Hicks:  For people who are just listening to this, what book are you referring to?

Dr. Bender: Well, [unintelligible [00:11:37].20] Yeah, actually, I told Joe on Instagram that I listened to the audio, but then I bought it so I can write my notes, you can see here. I listen to it and I read, and I just put my notes were the areas that I probably should come back at, at some point in the process. But I didn’t read this book when I—back to your question, I didn’t read this book when I wanted to buy, so it took me probably longer time to pull the trigger. But I studied the markets; I live in a beautiful city and I love it, but apparently, it’s not as good as to be investing in it for a multifamily Class C product, what I look for. So apparently, we found certain locations… North Carolina was one of them, and Texas, Florida. But because we have one of the partners lives there, like 10-15 minutes from the property, we said, “Well, we know the area better.”

Plus, the exit strategy was discussed from day one, before even purchasing it; what are we going to do the whole period and how we can exit. So yes, we did study everything before we purchased the property.

Theo Hicks: Great. Okay, Dr. Bender, what is your best real estate investing advice ever?

Dr. Bender: The best advice I would say, you have to start early. Because the sooner you start, the better you are. So I spoke with many investors in Abu Dhabi and I pretty much told everybody in town. So these guys, all of them, they started early; even if you think that you don’t have the money, but you probably have nice friends who believe in you. So the sooner you start – even if it’s small, it’s okay; the sooner the better, because it’s a time game. The longer you have it, the better it appreciates… And also depreciates, which is a deeper subject. But my point here is you have to start early and don’t keep waiting.

Theo Hicks: Sure. Alright, Dr. Bender, are you ready for the Best Ever Lightning Round?

Dr. Bender: Sure.

Theo Hicks: Alright. First, a quick word from our sponsor.

Break: [00:12:28] to [00:14:05]

Theo Hicks: Okay, Dr. Bender, what is the best ever book you’ve recently read?

Dr. Bender: Well, talking about real estate, I truly think this is the best book, The Best Ever Apartment Syndication book by Joe Fairless and Theo Hicks.

Theo Hicks:  Love it. If your business were to collapse today, what would you do next?

Dr. Bender: I would just go ahead and do two things. Number one – go back, treat patients, work seven days a week. Number two – go to my people and think about how we can go and invest in real estate again.

Theo Hicks: So usually, I ask “what’s the best ever deal you’ve done?” So if you can answer that, great; maybe you can apply it to those dental offices. Which one of those is the best deal you’ve done?

Dr. Bender: Obviously, the one we’re doing right now it’s really cool, because we’ve got offers over $5 million. So basically, it’s a 45-unit apartment complex, a 1965 Class C product, great location by the 85, right by the Interstate, and we purchased it for 3.95; we put $1 million down. And now, it’s going to go to the market at least above 5.5. So we’re probably going to double the down payment, which is $1 million, and everybody’s happy, including the tenants, because they have now a much better quality of living.

Theo Hicks: So this next question is usually “What’s the deal you lost money on?” I’m going to change that just a little bit and ask you what’s one of the biggest challenges that either you have faced or you continue to face?

Dr. Bender: I can answer actually that question, because we did lose in Abu Dhabi.

Theo Hicks: Well, perfect. Yes. Let’s talk about that then.

Dr. Bender: Yes. Basically, in Abu Dhabi, when the financial crisis hit in 2008 – our project there is different than the multifamily. But the reason I’m going to multifamily here is that I want security; so I have a cushion. If we basically have vacancy or something happens, we have the debt coverage ratio high, and that can actually secure the loan for a longer time, especially if we secure long-term debt. But there we used to buy something under construction or not even constructed yet; they didn’t start yet. And on the reservation, the paperwork or the contract to the ownership, you sell the property again. That was scary, because there was no rules specifically for this type. And when the financial crisis hit, the developers stopped the project, but they didn’t return the money according to the contract.

So a lot of people lost money, and I was one of them, but nobody from my clients did actually get angry at me, because I lost with them… But just an advice that, don’t ever buy a project pre-construction; buy multifamily, something that’s cash-flowing day one.

Theo Hicks: Yes, that’s sound advice. And skin in the game, too…

Dr. Bender: Totally.

Theo Hicks: …so your investors don’t get mad if the money’s lost. Okay, what is the best ever way you like to give back?

Dr. Bender: There are multiple ways. I used to do Meals on Wheels; I go and give food to people that they can be approached, and also feed them, and make sure they’re doing okay.  Second thing, I’m with the American Red Cross, I’m working for free, and a community leader in Boston areas. We’re in disaster management also, we want to be involved in that. So a lot of things. And also in dental business, for example, Boston Marathon; every year, whoever it is from the audience or anybody from participants, they get any toothache, we will take them for free; we will take care of them for free.

Theo Hicks: Nice.

Dr. Bender: And also for multifamily, we always try to help by understanding the tenants that are struggling with their payments, so we can give credit or understand the more people you service, the more opportunity you could actually get. What I enjoy the most is when I give things for free, whether it’s volunteering myself or just donations like what we’re going to do for the business, for the Christmas… And from the business that we have, the dental business, any employee that donates for the company, we will match it from the business, so it goes to Gifts For Kids.

Theo Hicks: That’s awesome. Last question is what is the best ever place to reach you?

Dr. Bender: Well, social media is really important. So I would go with Instagram, Doctor Bender, and my website is https://www.benderscapital.com/.

Theo Hicks: Perfect. Well, thanks, Dr. Bender, for joining us today and sharing your best ever advice. We went through a lot of detail on that first deal you did, the 45-unit deal. We went through the numbers, we went through the business plan, why you selected the market, we talked about how you were able to fund the deal, and then we also talked about your strategy for managing your time between real estate and your dental business, and then the other things that you need to do in life. Unfortunately, we didn’t get to talk about the 200-unit, but maybe we can bring you back for a separate time—

Dr. Bender: Yes.

Theo Hicks: —once that’s actually purchased. And then lastly was your best ever advice, which was to start early; the earlier, the better, the more time you have. And if you are not starting early because you don’t have the money personally, that’s okay. You can either invest your time, kind of like what you did when you were selling real estate in Abu Dhabi, or you could also use your friends’ money, or people that already know you and like you and trust you and use their capital partner up with, which is something you did in your first deal. I’m sure you’re continuing and going to do it with the 200-unit deal.

So Dr. Bender, thank you so much for joining us today. Best Ever listeners, as always, thank you for listening; have a best ever day and we’ll talk to you tomorrow.

Dr. Bender: Thank you.

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