089 – Rookie Mistakes Physicians Need to Avoid When Buying Their First Home

Are you a physician ready to dive into the world of real estate but unsure where to start? What if there were ways to navigate the tricky housing market and secure your dream home—without the headache?

In this episode, we'll discuss the crucial insights you need to know as a physician entering the housing market—especially when juggling student loans and demanding work schedules.

By listening to this episode, you will:

1. Discover how physician-specific loans can provide financial relief without the usual PMI requirements.
2. Learn about key strategies for buying homes in fast-growing areas like Tampa Bay.
3. Understand the benefits of renting versus buying for newly graduated physicians or those in residency.

Don’t miss out—press play now and uncover how real estate can help build your financial future while you focus on your medical career!

Chapters

00:00 Introduction to Home Buying for Physicians
03:09 Understanding Physician Loan Programs
06:12  The Importance of Location in Real Estate
09:13 Navigating the Real Estate Market
12:04 Renting vs. Buying for Young Physicians
15:11  Rapid Fire Questions and Personal Insights
19:52 Conclusion and Key Takeaways 

Discover how medical graduates, junior doctors, and young physicians can navigate residency training programs, surgical residency, and locum tenens to increase income, enjoy independent practice, decrease stress, achieve financial freedom, and retire early, while maintaining patient satisfaction and exploring physician side gigs to tackle medical school loans.

Transcript

Coach JPMD (00:00)
By end of this episode, you'll discover the number one thing you must know before buying your first home. Welcome back to another episode where I help younger physicians decrease stress and increase income by transitioning from corporate to independent practices, even without any business experience. In this episode, you'll discover three things. Number one, the most important thing to consider when purchasing residential real estate.

Number two, a physician program that could help you decrease your monthly payment when buying your home. And number three, why buying a home is not always the best option as a younger physician. So welcome to the independent physician blueprint where we help physicians decrease stress and increase wealth or generate wealth in this crazy world that we're living in. And today we're with John LaRocca.

My dear friend, John LaRocca, known him since 2014. And it's been a long journey for both of us. And we met, think I was searching for someone to help me sell my family home in 2014. I think it was around and you were plastered all over the everyday market. I'm out there. So tell me what you do and tell us what you do. I know what you do.

I know that you are into residential real estate in the Tampa Bay market. Yes. And like I said, we were considering selling our family home and you were just a great guide for me and especially through my processes. So, so what are you doing these days and how are things going? 

John
Well, things are going well. I appreciate you having me on. Very honored to be here and I get a chance to talk about what I do. But yeah, in 2014, I remember I think you had, you had reached out either

through like Zillow or the Dave Ramsey or one of those different platforms that I was on. you know what, my approach is a little different than most. think, you know, I try to really just treat people the way that I would want to be treated and not look at somebody like a number. You know, so when you reached out in 2014, you know, you were looking at me for advice and, you know, I was just trying to give the advice that, you know, I wouldn't want to give to myself as far as what that goes.

And so we had some things that we both could relate to and obviously the market's constantly moving and changing. So at that certain time, was certain things you had to look out for. So that's the kind of advice that I gave during that timeframe. And then I think you know the rest of the story from there, which I'm sure we'll cover. Yeah, we're going to cover a lot because John has not only helped me understand when not to sell, because as a physician, think that we

have a nice home and we can sell anytime because a house, you know, we've put a lot of a lot of things into the house and the markets up, but sometimes it's not the right time. And you guided me in that process because I ended up keeping the house, but always asked questions. You were always available to ask questions, which I thought was really, really cool. And you're pretty busy. I know I see your your name on the billboards on bus stops all over town. And so how's business? How's things going? Well, you know what?

considering everything we have going on, very busy. know, lots of folks have been putting their houses up for sale. You know, we had quite a big amount of growth in value through COVID. Things have kind of calmed down a little bit due to inflation. You know, the interest rates had had gone up trying to get that inflation under control. But there is some good news on the horizon with that.

You know, so the rates have actually started to come back back down a little bit. So we're seeing a little bit more buyers come back to the back into the race, getting off the sidelines kind of thing. So it's been a very good year overall, really. I don't know if you focus on a group of people, but you know, our podcast is about physicians and helping younger physicians understand how to.

Navigate the world after residency. So are you seeing I know that USF is a pretty big medical school here Yes, are you seeing any? Residents or any physicians coming into the market that you hadn't seen before you're seeing any growth in the medical, know I actually have seen quite a bit actually that over this last year. Actually, I was even driving over here. It's so funny the timing of it all but I had a decline of mine that I sold a home to five years ago and Her daughter just isn't finished residency and it had just

relocated from Arizona. So she actually just called me and was actually asking about the the physician's loan or that there's a couple you know products as well that you could use but she was asking me about that and so I was I was giving her some details but to answer your question yes there is a lot of people starting to to influx over the last couple of years you know we have multiple you know

Medical facilities as you will know between Tampa General, USF, Moffett I've seen actually a lot of people Go down to the downtown St. Pete area for some of the children's hospitals over there. So what locations are they looking to buy? they looking in South Tampa? They're looking in This area, you know, it's it's all relative to to where they land, you know I helped a couple about four months ago They had gotten a position at one of the new Advent centers up in Lando Lakes

You know, so they were looking for something up in that neck of the woods, which was, you know, the Lando Lake, so Dessa, even Wesley Chapel area, you know, so that market Tampa is actually small but big. it just depends where, you know, they're landing for, you know, where they're landing their jobs. They're basically looking for where they're going to be closest to the hospitals. Right. Or that or access to a highway.

I've had some that have been a little bit more experienced than others or, you know, have been a little bit further along in their career and they've looked for some water fent property right on Tampa Bay, more in the South Tampa area. And, you know, you know, they are more concerned with how close like 275 and the veterans is to get that shot downtown to Tampa General or wherever they're working. OK, so, it's a bit of a mix. It's location. mean, it's always location, right? Location because as like me, I just.

If we fast forward to how you helped me, I was looking for a property and because I had just gotten or gotten engaged and looking to move and family was growing. Family was growing. And ended up you end up helping me sell the caroed residence. Yes. Yes. And then I bought this property. Right. Which I'm surprised you had not seen before, which is kind of crazy. Right. Because we built this two and a half years ago. It's been too long. Yeah. We've both been very busy, think. And we're supposed to actually have a glass of champagne.

That's right. Yeah, there was there was some bubbly involved with all this that went into that when it went down We may have some after this but we'll see. Yeah, we'll see the night is young But you know, I had to find a place that was close to my job right to where the kids were in South Tampa, so I Definitely understand the importance of location But you mentioned something about doctors loans doctors financing and I know I've I've had some issues because I actually borrowed probably too much money when I was

when I had first graduated and doctors are offered 100 % financing, down.

What are your thoughts on that? Well, I they're really great programs that it would be a shame not to take advantage of really. I really focus on it recently just because I had some folks that had called me. So I got a great partner and there's several banks that you can use, obviously, but I have a great partner, Frank Cotto with Lincoln Lending. And he just informed me that the the new guidelines is you can actually borrow up to a million dollars with zero percent down now. And there's no PMI attached with that.

which is wonderful. The other thing is, is they don't actually hold your student loans or your school loans against your debt to income ratios, which really helps the approval process and getting approved for the loan. So is that a good program? guess I'm going to. I would say yes, because there's no PMI on that either. Typically folks who are not in the medical field, for instance, if I wanted to get that same loan, I would have to put down 20 % not to have to pay that PMI. So the fact.

Private mortgage insurance. So that's an additional fee that the lenders take to govern the loan and securitize the loan. So that can be anywhere between $200 up to $1 ,000 a month, depending on your price point. So the fact that you don't have that monthly is a huge savings. So is that a government program or that a private lending program? I think there's both. But typically the options we run with are the private lending ones.

I know that you can even do up to 1 .5 million with only 5 % down. And then I think actually even, yeah, you can go up to 2 million now with just even 10 % down. Yeah, but isn't that putting you at risk? Suppose you have another 2008. Well, you know, it's all based on location, you know. And we've already experienced, I feel like, a stabilization of the market because COVID really gave us a

anywhere between a 20 to 30 percent increase very quickly. over the last few years, I think things have stabilized. think values have settled down a little bit. So if you're buying in the right area, I think you'll be totally fine. And and there is no writing on the wall of what happened in 2008, which was a bank problem. And, you know, there's that wave of foreclosures that we don't believe is going to be happening anytime soon. So what would you say what would be some of the red flags for young physician coming up in?

buying real estate. Well, you want to buy something obviously in a good area. Location is always it. You know, it's it's it's also important to to get something in good condition. So maybe for somebody young starting out, maybe considering something that's a little bit of newer construction where you know that some of the four major points of the home are going to be integral, you know, more integral as far as structure goes. Roof, AC, things of that nature.

you know, less out of pocket, hopefully, as far as that goes. And what's a what's a, you know, budget for? Would you push rentals for the first three, five years? Would I push a rental for for a physician coming up? You know, absolutely. It just all depends on what their financial picture looks like, though. They're trying to get more passive. There's there's a lot of great programs out there right now. There's programs even called a DSCR loan, which

basically counts the actual market rent of what the property will do to make sure that it covers what the monthly expenses of the principal and interest will be and that's the way they actually derive the market value. So you're saying for them to buy the rentals, I'm saying for positions to rent property instead of buying. I'm sorry, I misunderstood your question. You know what, if there's maybe some question marks on their position and maybe they're new to the area,

You know, I think a lot of agents will say it's always better to buy versus rent. I think it's OK to test drive the car a little bit, make sure this is somewhere maybe you want to, you know, plant roots down in, you know, your journey is your journey. It doesn't have to go at any particular speed, you know. But obviously, the longer term option after you know that this is an area that you'd like or if it's more of a starter home even, there's lots of variables. If it was more of a starter home, Tampa Bay is always a great place to take that starter home and turn it into a rental.

I don't tell just physicians that I tell everybody that if they have the, you know, the ability to, to hold onto their first home and always makes a great first rental. But, again, just depends on what your picture looks like. And that's kind of how I do it. Right. I sit down, nobody has the same story. So you have to put everything out there and just see what makes sense to the individual. That makes sense. Because, I know that some physicians, you know, they studied at least the research that I did. most physicians.

end up landing in their long -term job after the second or third job. So I think if you're moving into a new area, it might be wiser to just rent, but you know, like you said, if you can get a good deal on a property and then you're not there anymore, then you can.

Absolutely, absolutely. You know, and I think people find their dream home or their forever home probably in their second or third home, right? Because the first home is typically anywhere between three to seven years for most folks. And then they normally try to upgrade and go through the progression. And then, of course, I always get the call when it's time to downsize as well. So it's a it's a vicious cycle that we all probably go through. But Tampa Bay's are doing very well in the real estate market in general. Right now, I think we're still a top 10.

sitting the entire nation. So values have had very steady. Well, mean, gosh, just an influx of a lot of medical, a of a lot of tech jobs have been coming into the area for quite some time. I know Amazon's made several big splashes, bringing in big plants. I mean, and just look at our growth. I mean, you could drive up to Land O' and Wesley Chapel five years ago and you're looking at cow fields.

I mean, now that we look at it, it's very well developed and the area is continuing to explode. And you know, they're trying to expand the Suncoast Parkway north of Van Dyke. Every other year, they're announcing new plans. They're going further and further. I don't get it. Well, the West Coast is a great place to be. I mean, we have world class beaches, great medical, as you well know, great downtown sports teams, great schools if you're looking for that. So good place to be.

So what would you say is your sweet spot deal? what is your, a realtor, what do you look for in a deal? As deal for, as far as to me live in or as an investment, what scope am I looking through? As a realtor, as someone who is selling a property. As selling a property, the right deal. Well, location is always important to me. Location and you know, maybe with that location, depending,

Again, there's a scope I was mentioning, but you know, if it's a rental, right, if I'm looking through the scope, knowing that maybe there's some future growth coming to that area. There's a lot of areas that have, you know, been a little bit older, maybe Ybor City, Seminole Heights, some of these areas that are slowly transitioning that, know, that the growth is continuing to push a certain direction. anything like that, that's got great bones that I know rents well.

off of a major highway or something that's got to pull as far as that goes. There's several good school districts as well that make great rentals as far as that goes. So, it goes back to location. Yeah, location definitely in our area. And then really, you know, sometimes even if you can buy the house at the right price, you know, in certain areas that, you know, was grandpa's house or, you know, it's a strong structural house. But if you could put some some, you know, sweat equity into

you know, and not too long amount of time, you'll be sitting on a pretty good equitable position as well. So it just depends what's important to you. Some people like new construction with the tall ceilings and the turnkey outlook and others, you know, like to put their own stamp on it. So it just depends what's important to you again, you know. Well, this is great, great insight and intel for young physicians. think, you know, I think what we need to do is present physicians with the understanding of what they need to do.

when looking for a house, when looking to move and location comes first, I think. And so what we like to do sometimes is do rapid fire questions. Rapid fire. Rapid fire. So some questions, easy to hard. And we'll try to see what your thoughts are. All right. Let's let's see what you got. What's your favorite movie? Favorite movie? I would say a toss up between Godfather or Bronx Tale. OK. Yeah.

I'm from New York originally. So, you know, moved down to Florida when I was five years old. So definitely in Floridian at this point. But just grew up watching those movies. a little bit. It's a little still there. Still got some still got some family up there. You know, got a couple of cousin Vinny's couple of cousin Polly's things like that, you know. I'll be nice to today. Yeah, yeah, please. Yeah. You don't want me to make the call. Yeah. Last book you read? Last book I read.

You know what, I'm having trouble with the name right now. I think it was, it ends with us, actually. I think it was the name of it. And I'm ashamed to admit this, but my daughter, I have a 16 year old daughter, and she was into this little rom -com chick flick. And we went and saw this movie together. think Blake Lively is the main character in it. She's great actress. it's just talked about, basically the movie was about basically just.

you know, women or any person in a domestic relationship not to deal with domestic violence and, you know, taking a stand and being brave. So I thought it was a great message for a young 16 year old kid to hear. But there was a sequel to the movie that she prompted me to read. So I will admit that I read a rom -com. Yeah, that's a sweet, sweet story. Good book, though. Good book. Recommended to anybody. Favorite store, favorite store that you like to shop at? Favorite store. gosh. Probably lately, Travis Matthew.

been trying to get out in the links a little bit and they got some really, actually I'm actually wearing a Travis Matthew right now, but they just have some nice breathable professional shirts. You can take them right to an appointment and then get right on the golf course. So it's a great Florida wear for sure. What does your daughter like about you? Favorite thing that your daughter likes about you?

You know, I think that she thinks that I'm like more of the cool dad, you know, she might tell you something different, but, you know, I was blessed to have her at an early age. So maybe not as large of an age gap as some. But other than that, I think the one thing that she can always expect out of me is I always follow through with what I say. I'm dependable, consistent, and that's what I try to teach her to be. Awesome. I think that's big for kids, especially little girls. Yeah, consistently. Consistency is key. And they need their dads.

And dads are their first love. That's it. As well. Trying to trying to lead by example. We're not perfect, but, you know, we try our best. What time do you wake up? I'm a seven a guy. OK. Either alarm clock or not. It's seven a whether I like it or not. Favorite buyer type. Favorite buyer type. Favorite buyer type. So for me, you know, it's probably it's probably a little bit different. But I like actually somebody who just knows what they want.

And some people might take that as rude. I do not. I actually love the fact that somebody can just walk into a place and say it's not for me and turn right around. Or if I send them something, they tell me they hate it. That's fine. I'm a quick learner. would much rather somebody spare, like not worry about sparing my feelings and us getting down to the brass tacks of what they want. All right. What spiritual habit that you practice? Prayer every night before we eat. You know, that's one thing, one practice that

You know, I got into with my parents, you know, growing up and that's one thing that I've tried to instill, you know, with my daughter to, to be grateful at the end of every day and to thank the big man upstairs. Awesome. One thing that you would tell, a physician that they should do real estate. Just to buy real estate, invest in real estate. It's the most proven method to method rather to build wealth. It's been proven time and time and time again.

It's okay to test the market like we had talked about earlier, but the most proven way is to own assets That you can touch and you can feel that appreciate that you can write tax write -offs on there's just so many benefits Your superpower My suit that you would say someone else would say John is really good at this My superpower I think is just

maybe taking into consideration how people feel. And I've always done that and that's how I've treated everybody in my business is I always try to take a step back and put myself in their shoes and just try to make decisions based on that. And if it's something, and I kind of alluded to this earlier, but if it's something that I would want for myself, that's what I try to do for my client. And the golden rule, you can call it many different things, but yeah, that and just my ability, I feel like to pick up on

on what people are feeling or what's the what's the word help me out empathy. Just being able to really maybe read people a little bit when it when it comes to I have people that are on the fence of making a decision for instance on a house. Right. And I can maybe tell that maybe they're rushing into a decision and you know I shoot my own self probably in the foot sometimes by just having them step back slow down sleep on things make sure they're making the right decision for them. Who's going to be the next president?

gosh, after that last debate, I don't know, common answer. I don't know. It's it's so close right now. You know, and typically I don't talk to politics, you know, but. Gosh, I don't know, dude, that would be like a total total coin flip. There's still a lot of time left. And I've noticed, you know, between the assassination attempt, the first one rather now since there was a second. God bless him. Glad he's safe.

There is definitely no room for political violence in this country. We need to get that definitely under control on either side. Yeah. And I think there's a battle going on. think there's a spiritual battle going on and there's good and bad. Yeah. And so there's a lot of evil that's being put forth here and I think we need to kind of...

Look towards the other side. Because God doesn't say there's a middle ground. It says they're either good or evil. So you got to figure it out as a nation, as a people. I just hope whoever gets in, we're at a very pivotal time and whoever gets in, I just hope that they are making the right decisions because we have some things to deal with. That's for sure. So if I had to call it right now, I would say that Harris probably has the edge. Yeah. Yeah. So we'll see, though. We'll see. We'll see. Yeah. Time will tell. Time will tell.

Well, thanks for coming on. And if you have time, I'd to talk about commercial real estate and investing for physicians. I'd love to jump on with you. All right. Let's go. I appreciate it. All right. We'll be right back. So what you learned today is that the most important thing to consider when purchasing real estate is the location. You also learned that there is a physician lending program that could help you decrease your monthly payment when buying your home and why buying a home is not always the best option. Sometimes it's best to rent.

Thank you so much for listening to the podcast. If you'd to hear more, subscribe, follow on your favorite podcast app so you'll never miss an episode.