122 - Finally Making Real Money? Here’s 5 Things NEW Physicians Should Know Before Dropping It on a House

Thinking about buying your first home just after finishing your medical residency or fellowship? You might want to press pause before signing that mortgage.

In this episode, Coach JPMD opens up about his personal home-buying journey right out of training—sharing what went right, what went terribly wrong, and the key financial lessons every new physician must learn before making that first big real estate move.

• Discover the 5 essential financial and lifestyle factors to weigh before committing to a home purchase.
• Learn why 100% financing may feel like a win—but can destroy your wealth if the market turns.
• Understand how renting (temporarily) can fast-track your path to financial freedom.

Hit play now to avoid common financial pitfalls and make smarter, stress-free decisions about your first home as a new physician.

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)
Welcome to another episode of the Independent Physicians Blueprint where your host, Coach JPMD, that's me, will help you understand how to decrease your stress, generate wealth, and ⁓ live powerfully as a physician in this crazy world we're living in. So the question I have for you today, for our new residents or new grads or ⁓ physicians that are looking to purchase a home, do you think you should have a home right after you graduate out of residency?

Don't do it is my advice until you review these questions.

So today we're going to talk about five things to consider before buying your first home and you may already have a home. So this may not pertain to you, but I'm going to share some of the things that I went through when I was starting out and things that I could have done differently that could have put me in a different situation 25 years after ⁓ graduating residency. And so I'm going to share some stories.

because it all started in Miami where after after medical school and at Einstein I

matched at Jackson Memorial Hospital in Miami, Florida. And luckily I had my best friend's mom who was living in South Florida. I was living in Pembroke Pines at the time and she offered to house me for the first year. And that was one of the best things that could have happened to me because I was able to live with my best friend's mom, ⁓ had home cooking sometimes and a great place to stay.

And although it was a little bit further away from residency, I was able to save some money ⁓ to purchase a home, the second year of residency. So that's my story. So I purchased my first home in Miami in Pinecrest, which is a suburb of Miami, a pretty affluent suburb of Miami now, I hear. I haven't been down there in while, but near Coral Gables. And I was able to get a deal and the deal was,

a condo conversion that was an old apartment complex that they converted and they were giving out massive deals. And, you know, one of the, one of the mistakes was that I was able to purchase that condo. I think at the time it was like $85,000 in Miami, in Pinecrest, insane off of US one great deal, but I didn't put any money down.

So I don't recommend that. And I'll talk about that later on in the third thing I would say you shouldn't do. that was I put no money down and I was able to move into the condo in the second year of my residency. And it was great. I was right off the metro rail. So location was great. It was Dadeland Mall right in walking distance from me. And so that's something that

you know, although I don't recommend it, I think with a good deal, ⁓ it's possible to, ⁓ to make money in real estate, obviously. And, so although I did it, I don't recommend it because it was a risky move. ⁓ but that said, I think one of the things that you have to consider is where you want to live. And because I have had the opportunity to save some money,

the first year out of medical school, I was able to do that. So if you're a resident or you're a fellow graduating and you know that you're gonna stay in the area, that's something that you should consider. And location, location, location. So number two, the second thing I would consider is your debt load. Now, if you come to out of medical school with no debt and you're able to save a little bit of for down payment, then go for it. You should consider

buying a home because buying a home in a good area, a good location with a good down payment allows you to build equity in that home, but be careful because you really don't know where you're going to live after ⁓ residency because you may take a job that you don't like and then you have to move. So I say, because you have such a debt load, like most people, ⁓

the average now debt, the average medical school debt is now over $250,000. I owed $150,000. So buying a home the first year out of medical school was really a bad idea, but I did it and it actually turned out okay. So that's why you should definitely consider your debt load because if you owe a lot of money and adding a home to that is not a wise thing to do.

The other thing is that these down payments that these banks will give you as a physician, there are banks that are throw money at physicians, 100 % financing, ⁓ low interest financing, because they feel as though physicians are going to be able to pay back those loans because we are high income earners. But my recommendation is always to consider having at least 20 % down payment so that if the market takes a downturn,

you'll have equity in that home or that condo or that townhouse. And you won't stress out as much as if you did not have that equity. that's something that happened to me when I moved and left Miami and purchased a home and actually built a home in Spring Hill, Florida. And I put no money down. And 2008 came and

it crashed. And as you know, most people who were into real estate could not sell their home because I had no equity in the house. I was upside down and I actually had to short sell that home. It's a beautiful home, but I had no equity and you know, things were difficult around that time. I couldn't make those payments and ⁓ we had already moved. So that's a story for another podcast. But that said,

Given my experience with 100 % financing, I definitely think that's a bad idea. And for sure, you should have at least 20 % down. And if you owe money, if you have a large student loan debt, if you have car payments, credit cards, gotta get rid of the debt first before you consider buying your home. So that's why I say in number four, the fourth thing to consider is to consider renting. And it's okay to rent for a year or two. It's okay to rent for three years until you figure out where are you gonna live or what.

⁓ what you're to do. So it may be that you live closer to where you're to work and that allows you to commute less. And as you are working and renting, then you can try to pay off your debt as quickly as possible. Student loans should be a main priority in the first couple of years after residency. So that comes to number five and that is pay down your loans.

Pay down your loans as soon as possible. you know, I like to tell my clients and my coaching clients that, you know, if you have someone that's willing to give you an 8 % return on investment guaranteed every year, would you think that that would be a good investment? So if I gave you 8 % return on $10,000 or $20,000, $50,000 with no risk of loss, is that a good investment?

The answer is yes, it is an excellent investment. There's nowhere you can guarantee an 8 % return. Well, if you have student loan debt and that interest on that student loan debt is 8%, 7%, 10%, if you pay down that debt, that's an automatic 10 %

10 % return on investment because you're not paying the bank 10%. You're actually keeping that 10%. So that's where those numbers come from. So that's my recommendation. Those are the five things I would consider before buying your first home. Make sure you have enough equity in the house, at least 20 % down. Don't do the 100 % financing. Try to pay off your debt as quickly as you can. It's okay to rent. It's okay to rent for the first year, for first two years, for the first three years.

And when you're buying that house, make sure you buy it in a good location. That's how you're going to be able to...

almost guarantee that you will have an increase in the value of your home. It's not guaranteed, but it's a problem, most probable that you will.

So doing these five things or considering these five things before you buy your home after residency and or fellowship is something that will help decrease your stress and ensure that you are able to thrive in your practice and be able to really generate wealth as quickly as you can. Because if you have a lot of debt, it's going to be hard to save and hard ⁓ to build that wealth.

So let me know what you think about this episode and the five things that you should consider before buying a home. There are other things to consider obviously, but these are the things that I think were impactful to me. And ⁓ hopefully it'll keep you from making some of the mistakes that I made.