In this episode of How to Lose Money, we interview a successful full-time surgeon who looked to real estate investing as a way to earn passive income. Anyone looking to earn passive income through investing will learn what to avoid and tips for success in this sector.
Mark Wolgin is an orthopedic spine surgeon who has been investing in real estate since 1996. Through aggressively paying down the mortgage balances and using 1031 exchanges, he ended up with several rental houses in Texas, Nevada, and his current location Georgia. While pursuing real estate investing, Mark has kept his day job.
Time Stamped Show Notes
[3:28] Without having a background in real estate, Mark was presented with an opportunity to invest in two houses through a 1031 exchange.
[4:50] Being a doctor doesn’t make you rich. To Mark, investing in real estate to have another income stream sounded appealing.
[7:22] Real estate guru 2006, San Diego 2004.
[7:55] After listening to a podcast with a ‘real estate guru’, Mark decides to reach out and do a deal where a group of people bought a property that was expected to have great returns.
[10:17] The relationship with the syndicator was going well and his credibility was growing. So when a second opportunity came up, and then a third, Mark invested again.
[11:30] After two years of the deals, the first building began to show poor income, because supposedly a gang member was living there.
[13:03] Solving a problem in the first building took longer than it should and it took Mark a long time to figure out something was wrong.
[14:15] One of the 43 investors drove by the first building and noticed it didn’t look good. Buildings 2 and 3 seemed to be ok.
[15:00] Mark then talked to another investor who had a different story from the guy, numbers weren’t adding up, and the building was in disrepair. He then decided to confront the ‘ponzi’ guy.
[18:08] One day Mark woke up realizing the guy is lying. Talked to a lawyer, and did everything he could to unfold this. Until someone talked him that that was a ponzi scheme and he would not get his money back.
[20:30] Lives were ruined and the ponzi guy was ok with that, it didn’t affect him. He wound up declaring bankruptcy, his insurance didn’t cover criminal suits which he had.
[22:55] Over 8 million dollars were stolen from a total of 43 investors. Mark got almost nothing back compared to what he had invested.
[27:47] Failing Forward Segment
- What is the bottom line reason of this failure? – “I don’t know if I was a little greedy or just naive.”
- What is the single most important lesson they and you learned from this? – “Whatever they tell me I just imagine double the price and double the time. I don’t believe things until I see them.”
- What are the major ways you protect yourself from future failures? – “I think it’s almost, to some degree impossible. It’s either right or wrong. Just not put all the eggs in one basket.”
- Who do you turn to when you need help? – “That attorney who helped me and I think this experiences make you more conservative.”
- What advice would you give to someone in a similar position? – “It’s more a matter to ask more aggressive questions and look for other verifiable sources.”
[36:43] Mark’s final thought: “It’s sort of an internal struggle to be careful not to repeat it but to also not talk myself out of another opportunity.”