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Investing With Dr. Stewart Levine

Investing with Adam and Stewart

I’m here today with my father and mentor, Dr. Stewart Levine. I want to share the valuable knowledge that he’s shared with me. Everything from sports and wrestling moves to hiring personal tutors and sharing valuable life lessons with me. 

Along with the valuable life skills he shared with me, he’s motivated me to invest in myself and encouraged me to get into real estate. After over 30 years of successful real estate investment, he owned a successful dental practice, received a full-ride scholarship to the University of Conneticut, and eventually went to the University of Pennsylvania dental school. 

During Your Dental Education, Did You Ever Learn Valuable Life Skills That Would Later Translate to Success in Real Estate? 

They taught me how to do the procedures correctly, but I never received any practice management courses, business courses, or investment courses. No financial advice or anything like that. I qualified for continuing education courses, and there were a couple of practice management sessions, but nothing like the real world. 

They don’t teach you financial skills; balancing a checkbook or running a successful practice isn’t in the curriculum. Eventually, you’ll need these valuable financial skills, but they just assume you’ll learn these skills in the real world with trial and error. 

After applying for a job working in a dental office, I was employed for three months before the lead dentist became ill. I ended up taking over the office’s operations and completely reinvented the practice. We improved the financial situation significantly and set all kinds of financial records in his office. 

After acquiring the practice, I knew I could run my practice better than he could. Even though I had nothing at this point, I knew I had an opportunity to build the practice from the ground up. We weren’t running the dentistry like the previous owner and eventually grew into a highly successful practice.

I took a couple of practice management courses, and I knew how I wanted to do it. I wanted to run it like a business, not a candy store. I had someone for x-rays, a secretary, an accountant, and hired assistants for all of our doctors.  

My business was built entirely with word-of-mouth advertising. Also, I went to a prestigious Ivy League dental school, and the other doctors appreciated that. They knew and would regularly refer clients to me. 

Building the practice taught me valuable life lessons about finding your way to achieve your goals. The squeaky wheel gets the grease, and you always have to speak up because no one will speak up for you. This is an important life lesson to remember. 

What Motivated You To Begin Investing?

I worked long hours to manage the practice and dealt with constant headaches paying the bills. I worked evenings and weekends, but I quickly realized you can only make so much with your hands. 

I needed to find a way to let my money make money for me. Eventually, I would begin investing in real estate but started out investing through stockbrokers. I was never taught how to speak with financial advisors and quickly learned that brokers are solely after the highest commissions possible, not for the betterment of your portfolio. Brokers make you broke. 

I didn’t do well and quickly learned that the stock market is a dangerous game. The brokers don’t know as much as they say and are restricted on what they can advise. I knew I had to step up my financial game and learned how to invest in and begin buying real estate. 

If You’d Followed the Advice of Financial Advisors During the Financial Crises, Where Do You Think You’d Be Today? 

I wouldn’t have been so successful. You must learn to take control and hold yourself accountable for your financial future. I would never have had the kind of success I’ve realized or enjoyed the lifestyle I do now if I had followed their advice. They were trying to sell me something in support of their commission. 

Instead of relying on a broker that doesn’t have your interests in mind, the best investment is an investment in yourself. I continued studying real estate investment strategies and discovered several ways to build true wealth with better investment opportunities.

I eventually found a company that enabled the start of my success in real estate. With this company, I currently own six of the properties I’ve purchased through them, and they’ve successfully helped me invest in multiple properties throughout Brooklyn and Brownstone. 

Before that, I started buying houses and privately investing with good friends. Also, I bought some land and started learning about the construction process. Eventually, I had a contract approved and built an entire office building. I learned how to work with an architect, the city planning committee and completed the property while learning valuable lessons along the way. 

What started as active investing and eventually transitioned into passive investing. Essentially, with active investing, the headaches, issues, and tenants turned out to be a nightmare. Good tenants came along, but the bad ones were difficult to deal with. 

I wanted to enjoy life, and I didn’t want the headaches. At some point, you’ve made your money and simply want to experience the freedom that passive investing can provide. Some of the tenant issues I was dealing with that eventually motivated me to pursue a more passive investment strategy include:  

  • Not receiving rent payments
  • Costs of a private attorney
  • Filing for evictions
  • Judges are not landlord friendly

I tried leasing a property with a section eight tenant; it could have been the biggest nightmare of my life. Section eight threw this person out since they weren’t paying rent. The tenant was going to court with free legal aid, while I was paying expensive private attorney fees.  

This woman had four kids, and the judges weren’t going to throw them onto the street because of missed rent payments. But, you’re still paying the mortgage and the bank. Many tenants don’t understand the entire financial picture, and it’s one of the main reasons active investing can be problematic. 

I began investing in real estate to let my money work for itself, not to deal with constant headaches. Ultimately, real estate made the most sense to me. I’m not one to buy gold; why would someone sell me their gold if the price of gold is going to increase? You can’t eat it, you can’t drink it, you can’t sleep with it; what’s the point? If it’s so valuable, why aren’t they keeping it? 

Why Do People Invest in Real Estate? 

There is more wealth to be made with real estate than any other investment vehicle. If you look at the richest people in the world, most people have made their money through real estate. 

Real estate has many benefits besides collecting rent. You receive depreciation and cash flow tax benefits, which are keys to this great investment option. Many people don’t understand the tax benefits associated with property investment, and the many tax benefits lead to long-term success with these valuable investment vehicles. 

When you use the tax code in your favor, as Trump did, you stand to benefit in the long run. The more successful you become, the more money you can borrow. The art of borrowing money is another key feature of this investment strategy. Once you own real estate, your credit scores go up, your portfolio goes up, and you have access to the financial world of your dreams. 

After retiring at the age of 51, I’m glad I didn’t listen to the financial planners but instead challenged myself to pursue lucrative opportunities in real estate. I reconsidered what was going on in the world after 9/11, and shifted my perspective towards what was truly valuable in life. 

Also, my dental occupation was very stressful. Everyone thinks you’re making a fortune, but you’re working hard. Instead of continuing to work with my hands, I decided to pursue true wealth. 

Eventually, the wealth-building from the appreciation of properties and cash flow contributed to my success. Unlike stocks, which don’t include many tax benefits (only a $3,000 write-off every year), real estate maximizes your available tax benefits.

I’d suggest you stay out of the market. You might get hurt, but sometimes you have to learn the hard way. The stock market can be a sucker’s game; you might as well just go to the casino and put it on red. 

Through a certain investment company, I learned how to invest in funds. I would buy properties through this company, and they would manage the deals. It was like buying properties wholesale, and their management team would handle all of the management logistics. 

This company introduced me to the world of private lending, which involved multiple real estate investors pooling their resources. This changed my life because hard money lending through this company was paying out very nice returns.  

We realized we could do this on our own, and decided to begin lending independently.  We were originating loans to people and learned a lot of hard lessons along the way. After some bad deals and severe investment losses with unscrupulous partnerships, we shifted our focus and began prioritizing the vetting process to ensure better real estate investment partnerships. 

Just like you wouldn’t trust an unlicensed doctor to work on your teeth, you want to find a reliable investment partner with a proven track record of success. When you’re lending money, it’s a full-time job. These are generally short-term loans, and once they’re paid back, you have to go through the entire process of finding a reliable investment partner and deal with a variety of other logistics. 

If you’re looking to relax, enjoy life, and spend less time worrying about finding deals or partners, passive investment opportunities are the preferred investment vehicle. With passive investing opportunities, you don’t have to worry about finding partners, deals, or understanding complicated information. All you’re focused on is how much money you need, how much is the investment made, and when am I getting it back.

For more details check out Part 2 with Adam & Stewart!