Doctors owning their medical property?

Read rich dad poor dad.......

Interesting, I read that years back, and thought it was very helpful. Though, not sure what your reference is specifically.

Please explain. Thanks.

http://www.forbes.com/sites/helaineolen/2012/10/10/rich-dad-poor-dad-bankrupt-dad/

True, one of his companies for speaking went under. More concerned with his real estate than his speaking. Either way, it doesn't pertain to this discussion.

Does it make more sense to BUY or RENT a medical office. Assuming 10 yr rental of the office, build-out, VS. buying and building out.

If you buy, you won't have to worry about how much the increase will be after 10 years. The increase can be substantial. I personally know of at least two business in the city whose lease ran out and the increase so was huge they closed shop. The other side is if you buy, you have more control over the space but if the practice doesn't grow as you anticipated or ten years later you want to join another practice, then you are faced with having to try to sell not just the practice but the space as well. Good luck. There are pros and cons on both sides.

I appreciate the comments, and I tend to agree that it's not always prudent to own the practice and land, because in the end, you'll have to sell both. However, I look at Manhattan as a different real estate market( opposed to owning the property in a suburban area, with less upside for property values).

Any suggestions for brokers who specialize in healthcare properties would be welcome. Thanks.

aren't you better off funneling the money out of the practice so that if the practice gets sued the apartment asset won't be reachable?
honestly i have no experience in that tho, so am just speculating.

I was hoping w67th would weigh in in detail on the "price controls coming for healthcare" discussion. Taking his statement that he is married to a physician as true, I would have expected more from him than the single provocative comment he made to Riversider on that thread.

Does healthcare involve Sprint?

JP78:
In the Manhattan condo building where I owned a unit, one of the professional off-the-lobby units was owned by a doctor who was also on the condo board.
He received the usual better treatment than the other doctors that rented:
Quick repairs for broken pipes and that sort of thing.
The condo board also turned a blind eye to his patients using the lobby as a waiting room.
The other doctors' patients had to wait inside the unit or outside the building.

Thanks Truth. Also, debating the Condo vs Coop issue. I know there are some specific medical condos/coops.

Any broker recommendations?

JP78, it depends on your specialty.
If you are cash based, I would say buy.
If you are dependent on insurance, I would say rent. With all the changes coming from Obama care implementation, probable 30% cut in medicare, our income (I am doctor) will likely be drastically reduced, so I would not commit to any property.

Obama care is very anti private practice, so I would not commit to any property unless you were cash based.

JP, this is not my thing but I do know that there are brokers who are quite knowledgeable about medical spaces ... maybe try Nikki Field of Sotheby's?

ali r.
DG Neary Realty

Good advice, pencap.

Ali Rogers (front_porch) may have a recommendation for a good broker for JP.

Thanks, Ali and Pencap.

We are a fee-for-service practice (thankfully avoiding insurance companies). That said, is the ole' "Park Avenue" address what it used to be, where most of these offices seem to be located?

The only reason this even is an issue, is because it's Manhattan real estate, or else, I'd be a renter all-the-way.

Thanks again!

JP78.
If you are fee-for-service and your practice is financially sound and well managed, then I would buy.
Take advantage of low mortgage rates.

From a marketing standpoint, I think patient's still view "Park Ave" docs with high regard.
You can be a total quack but an average pt will assume you are a good doc if can afford Park Ave rents.

ali r. and I were typing our comments at the same time. Very ESP.

Park Ave. is mostly co-ops and some of the buildings there have private entrances for each doctor's office.
This is especially preferred for plastic-surgery practices.

It's also good in general if you have a celebrity patients. They want quick entry and exit into the waiting limo.
I don't blame them.

I have a doctor at 30 Central Park South which seems to be an (almost) all-medical office building.
It's also preferred by celebs because the side-walk outside is narrow so it's a quick walk to the curb and waiting car/limo. Even though there are tourists on CPS. that quick walk to the car factor is preferred.

JP78
Depends on the type of doc and type of hospital affiliation. These days things are changing. If you are a doc that will need a private office then owning is the only way to go esp. in NYC. My biz operated out of rented commercial space for over 20yrs. until I purchased. Now, effectivly my overhead is 80% fixed for the next 20 years (life of the SBA loan used for the purchase and build out).
In the end (assuming I make it to the end) I'll own the space which will deeply influence the value of the business for resale. There is a Gov. loan program for this call SBA-504 program. It loans $$$ for Building Purchase
Land
Renovation
Furniture and Equipment
Soft Costs
All this and ONLY 10% out of pocket expence
I wish I was in a position to have done this 15 years ago.

Thanks Falco.

The SBA is an option I will consider. The mortgage brokers I have spoken to have seemed hesitant because most of these properties are in residential Co-ops. That sticking point has been an issue, because of only buying 'shares' in the property, and not actual property. Condo would be better, I think.

Additionally, a hold-up on the mortgage broker side, was I would need a Commercial loan to buy in to a residential property(which most of them are).

Doc-Owned Hospitals Thrive
http://on.wsj.com/17YneJQ

What type of doctor are you? If you practice internal medicine than I would be very cautious even if you are a fee for service practice. Due to radical changes going on with large medical group practices, hospital net work services etc you can easily lose many of your patients quite rapidly and without any warning. Rather than focusing on whether or not to buy a medical condo you may want to keep updated with medical economics and health care policies that can change the nature of your practice in a heartbeat(no pun intended)