Author Topic: Can I afford it? How can I afford it? Odd investment opportunity  (Read 988 times)

maz_phil

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Can I afford it? How can I afford it? Odd investment opportunity
« on: September 14, 2018, 08:38:35 AM »
Hello Mustachians,

There is a medical center in my hometown that allows physicians to buy a share of the center for $163k. They are allowed to buy a maximum of 2 shares, but they must sell the shares once they retire, die, or stop practicing medicine at this center. Also worth noting as these practicing physicians and the Executive center members are the only participants able to buy shares.

My father's partner is looking to retire, and will be liquidating his 2 shares and would like to sell them to my father (another physician). The shares have produced a net amount of about 20-25% a year for the past 13 years, and with the addition of about 12 new physicians in different field areas they will almost certainly hit or exceed these numbers for the foreseeable future. The shares payout quarterly.

Currently, my father has enough liquid capital for 1 share. I am looking to pick up the second share through him but only have around $35.5k in liquid cap. I am open to various means of raising these funds including helping cut other people in on the deal, but it seems tricky because the shares would be in my father's name and that is understandably a "hard sell." Any recommendations you mustachians have as far as means to raise capital for this sort of atypical investment opportunity, or any sort of borrowing methods that would be viable options?

Thanks for your time and I am looking forward to hearing from y'all soon.

Kindest,
Maz_Phil

solon

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Re: Can I afford it? How can I afford it? Odd investment opportunity
« Reply #1 on: September 14, 2018, 08:51:13 AM »
Following, because I have a similar opportunity. There is a small storage facility in a small town near here that is for sale. I've run the numbers 100 different ways, and it looks like a fantastic deal. But I don't have the money for the down payment. I've thought about bringing in a partner, borrowing hard money, owner financing, but there doesn't seem to be any viable option remaining. I'm desperately hoping this thread will help!

SubL stache

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Re: Can I afford it? How can I afford it? Odd investment opportunity
« Reply #2 on: September 14, 2018, 02:57:44 PM »
It sounds great but I wouldn't do that deal.  Too much mixing of someone else owning my asset, someone getting the K-1 and paying tax on my investment, and having to deal with transferring distributions.  Too much cross contamination imo.

Fishindude

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Re: Can I afford it? How can I afford it? Odd investment opportunity
« Reply #3 on: September 14, 2018, 03:00:56 PM »
If you can't do it with your own cash, don't do it.
Do not get others involved in partial ownership and don't borrow to buy a share of stock.

J Boogie

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Re: Can I afford it? How can I afford it? Odd investment opportunity
« Reply #4 on: September 17, 2018, 10:28:18 AM »
Seems like it could be a solid opportunity.  If you have some equity in your house, you could refinance and dedicate your quarterly earnings to your mortgage - or if you have great cash flow, you could use a HELOC and pay it off rapidly.

Goldielocks

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Re: Can I afford it? How can I afford it? Odd investment opportunity
« Reply #5 on: September 17, 2018, 10:57:29 AM »
I would not do it.  The reason is that most of these opportunities also have great tax advantages for those with high income, or self employment / business income, which is why they are sold to doctors and medical professionals looking for ways to balance their taxes over a lifetime.

You, however, likely can not take advantage of this secondary, but significant benefit, reducing your returns from this investment, which should be priced at the market rate that accounts for it.