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[00:00:00] ANNOUNCER: Welcome to The Real Estate Syndication Show. Whether you are a seasoned investor or building a new real estate business, this is the show for you. Whitney Sewell talks to top experts in the business. Our goal is to help you master real estate syndication.
And now your host, Whitney Sewell.
[0:00:24.1] WS: This is your daily Real Estate Syndication show. I’m your host Whitney Sewell. Today, our guest is Cherry Chen. Thanks for being on the show, Cherry.
[0:00:31.9] CC: Hi, Whitney, really glad to be on your show. I listen to it every day so really happy to be a guest myself.
[0:00:38.1] WS: Wow! Thank you for being a listener every day as well and I appreciate you being on the show, I know you, from your experience, you’re able to add some great value today and I know a lot of the listeners are going to enjoy this show. But a little bit about Cherry. She is an internal medicine physician in the Dallas-Fort Worth area and has experience with commercial real estate syndication across multifamily, self-storage and manufactured home parks as a limited passive investor.
She raises private equity, the capital through The Real Estate Physician which she founded to empower her colleagues in commercial real estate investments. It now provides value to over 400 plus physician investors. That’s impressive. Cherry, thank you so much for being on the show again.
But tell the listeners who you are and let’s dive in to this amazing thing you’ve built?
[0:01:28.4] CC: I started The Real Estate Physician platform last year. But that was only after I myself have invested in syndication for the last four years. You know, like many people, I think at some point you realize you want to stop trading your time for money. For me, when I started, I love my job. I’m still a full-time physician. But at the way to diversify from Wall Street, diversify for tax and manages and mainly for source of passive income is how I started out. And I realized that it was really powerful and that I think for everyone to consider alternative investments and certainly building multiple streams of passive income is a good idea.
And so I took that in my experiences and really realizing that you know, other people want to do this too, not just physicians and so that’s why I created the resource and really just helping reach out to share about syndications just like you and then to really guide and inform investors along the way.
[0:02:23.7] WS: You invested passively for a while, you had a much better understanding about thee business then, right? After four years, making numerous investments, working with numerous operators. But then you decided to start The Real Estate Physician?
[0:02:36.4] CC: Yeah, it’s really pretty organic the way it came about. I had invested in multiple syndications myself. I really like the passive income, check coming in every month or every quarter. And because I hang around physicians all the time. You know, some people would ask me, “Well, how do you do it?” One, most people have not heard about it so I created a platform to share. And secondly, people have, just like any field you’re in, I think, do they trust you and t hen do they know what you’re talking about and do they want to invest with you?
You kind of have to overcome all those hurdles and that’s why I built a platform. To have a more uniform and strategic approach to that, everyone gets the same information and we can help as many people as possible.
[0:03:19.3] WS: Great. I know there’s people listening probably that would love to do the same thing. Maybe you can talk about your journey a little bit more in depth and moving into a building, that platform and just really the organic growth that you talked about and then we’ll move on.
[0:03:31.3] CC: Well, I started out with my natural network which is the people I work with other physicians. And luckily, I’m very grateful, most of them are credited and have capital to this, not everyone has that, that’s understandable. You have to niche that you naturally have, your friends or family or W2 job that you can reach out to. But first, you know, the hardest part for me is for people to even know that you’re doing this, right?
I think when you start out, you think, “Oh, I’ve got a great deal, I’ve got to learn all the numbers of how to explain all these terminologies.” But really, I think the hardest part starting out is one, people have to know this is something you do and then they naturally probably like you, if you’re in that circle already and then you build your credibility so that they can trust you, right?
We always hear, you have to know, like, and trust people before you’re going to invest with them. And for me, I always think about this quote that nobody cares how much you know unless they know how much you care, right? I think that kind of is a good quote that kind of encompasses that know and I can trust factor. And we all have a circle whether we know it or not and I didn’t really realize that until looking back that you do have influence.
You do have a circle. You have to be aware of it and then to realize that you do have some value when you can provide to your friends.
[0:04:43.6] WS: Tell me about the conversations you were having with your peers about real estate before you started your platform. And maybe you hadn’t even thought about doing your own platform at that time but what were the conversations like around real estate. You know, you said four years and so I would imagine, it probably came up in the break room or somewhere. You know, that you were like investing in this new thing. What was that like and were they interested? Yeah.
[0:05:07.4] CC: That’s good because I think a lot of people are scared to, “Oh, well, this is what I’m doing. Or do you want to invest with me?” And certainly, was never a conversation like that but I actually was – didn’t really share about any of it. But just like I think, these conversations should be pretty organic. So, people would ask me, “Well, what did you do this weekend?” Or, “What have you been reading?” And I’d share, “I just actually went to a real estate networking conference. And they’re like, “Tell me more about that.” It’s mostly more organic conversations. And so, it’s things I was doing on my own but didn’t really have an avenue of sharing in like a podcast tor I hadn’t really built my platform.
I never really imagined building one and it really is kind of looking back and realizing people start asking me all these questions or, “How do you do it?” Or, “I’m so overwhelmed I don’t know where to go to,” and kind of putting all that information together.
[0:05:56.2] WS: Then you decided to build this platform so you’d have a place to direct them to, right? And be able to provide this value for them. And obviously, you know, your niche is something you’re passionate about.
[0:06:05.7] CC: Right.
[0:06:06.9] WS: Maybe you can elaborate on understanding your niche and why that’s important?
[0:06:11.3] CC: I think that’s probably the most important part for anybody who wants to even stay passive. But if you want to be more active and looking at deals or raising money for deals is there’s always deals. You know, everyone always says, “I’ve got this good investment.” Or, “I’ve got this other investment.” It’s not about the deal per se, it always comes back to the person, right?
Why I think it’s so important to understand your niche is one, then you really actually know their problems or what they value, what are they looking for. Sometimes they don’t know what they’re looking for. But to really understand, “Well, what are their struggles? What are their obstacles?” Then you can build your whole platform around what values or services you can provide to them. Because in the end, it’s not about you, it’s a long-term relationship business. It’s about the investment but it’s also, we’re just all humans and so really having that connection and identifying who it is you’re really speaking to.
For me, it’s my physician group and for you, it can be your group. But to really identify exactly what they’re looking for is more important than going out first and analyzing a thousand deals or et cetera.
[0:07:15.8] WS: I think it’s interesting like obviously, your niche is something you’re passionate about and you can relate to another physician just immediately, right? You’re going to have a much better understanding and I agree with you completely, it’s so important to understand your niche. And that connection – or maybe you can elaborate on or go a little deeper on how that’s helped you connect to these people where I’m sure there was another layer of trust there.
Not only have you already been probably working with a lot of them, you know, long before you had your platform but still, there’s just another layer of trust there or a relatability or a connection because you’re in the same profession.
[0:07:50.3] CC: The people in my network now are people I have never met, people that I don’t work with. And so just like anybody else, you still have to let people know that’s what you do and I like to focus on two parts just like in business, in life, in investing, it’s the same thing. And certainly, if you’re trying to share opportunities with investors is there’s an art component, there’s a science, there’s art and science of medicine, there’s art and science with investing as well.
I mean, it applies to everything because you’re dealing with humans, right? It’s kind of having that balance or trying to figure out what that is for your investor, it’s very important, the art is a non-tangible hard work. They have to know and like you and that a lot is not tangible, you can’t really study it. It really involves really identifying your niche and who they are, what their struggles are.
And then for them to trust you, well then, how do you become credible so they do trust you? That’s the science part where you then learn the IR, cash on cash, how a deal goes together, how to explain to an investor what the investment looks like. That’s a tangible part you can learn. What I like to tell people, because people say, “Well, how do you reach out to people? Or there’s too many people in this space,” it’s really that art and science part, it’s pretty irreplaceable.
Technology can’t replace that for you. Your role and I see my role to my investors is I’m to guide them from understanding, “Okay, real estate is a good investment,” to all the way through their fears, their anxieties, the obstacles to making that investment. Your job is to be a guide and that really is irreplaceable by technology, by other people.
So, I think that’s really both pretty empowering and comforting to know that you know, everyone has a niche and everyone can reach and access that and provide value to their special niche.
[0:09:35.8] WS: How did you become credible to your niche? What was it that you did? Maybe even to outside of people that you already knew and work with. You probably already had a lot of credibility with a lot of them. But maybe, you know, as your network has grown, how have you built that credibility?
[0:09:49.2] CC: Yeah, I think for one, that everyone can follow is that one, like we mentioned, I was already a passive investor in multiple deals. I had experience and it was through those experiences that I met other sponsors, other people in the area. I went to conferences. I took other courses. And so that had my own portfolio to go off with. And then I then took all the information basically I learned and tried to synthesize that.
I tell my investors I’m their ears and eyes and I want to make it as easy as possible for them. So, one, if they understand syndications and for them to pull the trigger, right? I try to do all that information due diligence for them. Can’t replace your homework but I try to do that as much as possible so then you feel as comfortable making that investment.
[0:10:35.2] WS: What’s been the biggest ways that you’ve grown your network?
[0:10:38.0] CC: I would say podcasting actually. I personally love podcasts. And so, there are also podcast out here for physicians, not just for investing. And so that’s my niche and so that’s where I go where my investors don’t really go to this real estate conferences. And so I have to be pretty solid about those. But physician podcasts or physician forums and so for other people who are in this field, there are certainly a specific niche for your field as well.
[0:11:03.5] WS: You’re finding a podcast to be interviewed on that’s related to your niche, right?
[0:11:08.2] CC: Correct, for physicians, yeah. It’s not necessarily about real estate or investing. It’s just physicians doing something outside of medicine or physicians learning more about finances, it can be anything. But, for me, it’s the physician, right? That’s kind of where I go to really understand, well, that’s where they hang out or that’s what they like to read and look at and not to go to a conference because they don’t have time.
[0:11:30.4] WS: You know, I think for you it’s obvious what your niche should be, right? For others, I think sometimes it’s difficult or somebody might just say, “Well any high paid professional. You know, I want to take money from anybody,” right? Well, you may. But if you can focus on a group of people like you have, I just think that’s really playing the long-term game and it’s going to pay off so much more long-term because you’re going to relate to them a lot faster. You’re going to learn more about who they are and the type of people.
[0:11:56.1] CC: For other people, it doesn’t have to be related to your career. Maybe for families, for fathers for single moms, for anything. There is definitely somebody out there who you can connect with or somebody who has done what you’ve done. Or certainly, people who want to learn how to be where you are, right?
I think especially in today where there’s so much accessible information, everything is out there. I find it no excuse to not go and try.
[0:12:21.4] WS: How did you get on those podcasts to be interviewed on?
[0:12:24.0] CC: Reaching out. And then once you’re on one podcast and gives you credibility but certainly, I think the website or your platform is the best way because people have to have a way of understanding what you do.
[0:12:35.4] WS: I get that question often, “How do I get interviewed more?” I agree, once you start or you get interviewed a couple of times, all of a sudden, other people are reaching out to you as well to be on their podcast. But I like how you focused on your niche though. You found podcast relating to people you’re connecting with.
What would you say has been the hardest part of this capital raising or business or you’re partnering with quality operators and providing value? But what’s been the hardest part of building your own platform?
[0:13:01.1] CC: I would say, different phases. It’s been a year and it’s been really great in building it so I think when you first start out, the hardest part certainly is to just start out, especially for people if you have your job that you’re working still full time. “Where do I find the time or is it worth it?” I think when you’re starting out, the hardest part is just one, it’s either not analysis by paralysis or going too far too fast, right? To really at first identify your why and really then identifying your lane. That’s what looking back, I guess I did now.
And to really stay right now, then the hardest part is to stay in my lane, right? I think a lot of people who get I not this one either, you go from being a passive investor to, “I want to put up the whole deal together,” which is great and it’s not right or wrong. But should realize to answer a question, your strengths, your weaknesses and I always go back to really – is it the highest and best use in my time. And secondly, if not that, then, is it worth the opportunity cost, right?
Kind of looking at that in terms of staying in my lane and doing what I’m good at and providing value to my investors and the operators that I have to choose very selectively for my investors. And not to say,” Oh, well go put a deal together.”
[0:14:16.0] WS: 400 plus investors and I think you said, in a year or less? That’s really fast, I think. I don’t know if too many people that have that many investors you know, in that amount of time. Congratulations to you. You said, the biggest way is they find you is through being interviewed on a podcast. So, kind of walk me through that process, okay, they hear you on a podcast, how do they eventually get connected to you or what’s their path to investing with you?
[0:14:38.0] CC: The website. The Real Estate Physician. That’s where you know, all the information there as far as why we do what we do, how we do what we do. When people come to my website, they already may be interested in commercial real estate investing, right? I’m never in a position to convince anybody or to push anyone into this kind of investment.
So, one, if you’re already on my website then you probably have some interest. And then two, then I have to build that credibility or trust and that come through podcast or the blogs I’ve written for other physician’s site and then my portfolio there and then of course, it still comes down to connecting with people one on one and going from there.
[0:15:16.5] WS: How do you, Cheery, prepare for another downturn, the thing everybody’s worried about?
[0:15:21.8] CC: Gosh. I wish I could predict it, right? I can’t, I’m not that smart and I certainly don’t understand, there are so many variables because my investors ask me that every day too. The best answer I can give is there are good deals in bad times and there are bad deals in good times. Just like now where I’ve heard stories of people who have not gotten their expected distributions or pro forma. And there are people who have and right now, they say you know what? Rising tides lift all boats and everything should be gravy, right? But it’s not.
I think it’s too generic of a statement. And so, really, one thing I heard from somebody else’s podcast, it’s not something I made up, you’re investing in people, not the pro forma. What it comes down to is really valuing your partnerships, finding the right people. And of course, you do your due diligence, you stick to your principles and stabilize value-add opportunities and so, am I going to look at a property that doesn’t cash flow? No, right?
You still have to do your homework, do your due diligence, kind of put everything on the right side of the equation, there’s all sorts of risk factors, it’s not a risk-free investment.
[0:16:25.2] WS: Tell me about your follow up process when somebody signs up on your website?
[0:16:29.5] CC: Yeah, When somebody signs on the website, there is a welcome email and so that further explains you know, who I am, why we do this and what our value in platform is for you, right? It’s not about, “I have X amount of doors or assets under management.” I only talk about, “Hey, why we created this platform and this is what we can do for you and provide value.”
Welcome email, scheduled call, get to know you. And I leave my investor calls very open ended. Some people would say, “Oh, you don’t have a question list or formula.” And I’d leave it open because one it goes back to your investor, right? They might be completely new to this or they might be in their 10th syndication. Some people straight off the bat just have 45, like I spend an hour and a half phone call like answering 50 questions, just that question by question by question.
Some people, they just really want to get to know you, right? I leave a very open and then I think that provides stuff like stability but also for you to just understanding your investor and you don’t have an agenda for them.
[0:17:33.7] WS: Tell me a way that you’ve recently improved your business that we could apply to ours.
[0:17:37.6] CC: I’m actually finishing up and going to release a physician’s guide for commercial real estate. That’s something I’ve been working last couple of months, it’s not out yet but I think that kind of just supplements what we’re doing and provides another avenue for one, like I said, in a really uniform representation of information so we’re not biased towards anything and all the information is out there.
When it comes down to it, I see what I do in the space really like a parallel to what I do in medicine, actually. I get as much of the objective information and I help you make an informed decision. And so, in that way, I feel very comfortable because I am sharing as much information as I can and not being biased about it and being objective and then helping you guide to see if that is a good decision for you.
[0:18:22.6] WS: And that is a book that you are writing or what was that?
[0:18:24.8] CC: Yeah it is a book. It is going to be called The Physician’s Definitive Guide to Commercial Real Estate Syndication.
[0:18:30.2] WS: Awesome, that is a great way to reach people and to build your credibility like we were talking about as well. And so Cherry, what is your best advice for caring for an investor so they return to the next deal?
[0:18:40.9] CC: The best advice I think besides what we talked about is the other part we focus I think online platform is that we want to make sure they understand the process that it is a clear and simple as possible. So, you know, you and I have been in it for a long time like “Okay you sign up.” And you know you think it all makes sense, right? But for first time investors sometimes they’re like, “Okay what do I do next?” so really outlying, “Okay you can expect to hear this. You can expect to hear this.”
So that they don’t have to wonder what the next step is and they don’t have to wonder, “did somebody get my money?” Or etcetera so making it a simple and clear as possible I think is what my responsibility in terms of taking care of an investors too.
[0:19:24.2] WS: You don’t want them wondering about much do you?
[0:19:26.7] CC: Right and when we are in it all the time you don’t think about it. It is second nature. But you can imagine when you invested your first time, you’re like, “What is PPM?” you know just all sorts of what seem like basic question can throw people off and when you are making an investment like this, you don’t want them to have all sorts open ended questions like that.
[0:19:45.7] WS: What would you say is the number one thing that’s contributed to your success?
[0:19:49.3] CC: I would say I am always learning. And then also not scared to take action. So, I look to learn a ton from your podcast and podcasting is actually one of favorite ways of learning besides meeting people and going to conferences. But really always learning something because there is always going to be another perspective you have never thought of. There are people out there much smarter than me but it is all about perspective and experience.
And really the only way you can do or gain more of that is learning from other people, right? So, I think learning but then also really understanding when is the right time to take action and not to be scared to do it.
[0:20:27.0] WS: Before we have to go, how do you like to give back?
[0:20:30.2] CC: Right now, I mean there a couple of charities that I do contribute to. but I am also building this business in a way where you know we have plans to use this income to supplement our giving and our charity. That is a field where I am learning where you don’t want to give just to give but also there is something I have been learning like where sometimes giving is the wrong way or you are actually hurting somebody by giving.
So, trying to educate myself on what it means to give but also how to give very intentionally and I intend to do that through education and that is my focus.
[0:21:02.5] WS: Most importantly though at the moment, tell the listeners how they can get in touch with you?
[0:21:05.8] CC: www.therealestatephysician.com that’s our platform in the World Wide Web. So, anybody can find us through there.
[0:21:13.4] WS: Thank you so much.
[0:21:14.8] WS: Don’t go yet! Thank you for listening to today’s episode. I would love it if you would go to iTunes right now and leave a rating and written review. I want to hear your feedback. It makes a big difference in getting the podcast out there. You can also go to the Real Estate Syndication Show on Facebook so you can connect with me and we can also receive feedback and your questions there that you want me to answer on the show. Subscribe too so you can get the latest episodes.
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[END OF INTERVIEW]
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