Dental Dilemmas in Real Estate

When Buying Commercial Property, Dentists Should Think Ahead

dental lease advocate Lewis GelmonSpecial Lease Feature by Lewis Gelmon

Should you lease or buy? This debate often arises from the same question that motivates people to buy a residence: “Why am I paying rent and not paying down a mortgage instead?”

The realities that drive residential property values are very different from those that create or eliminate the value of owning commercial property. Consider this: banks (being risk-averse organizations) typically won’t lend money for the purchase of commercial real estate with less than a 40% down payment. Compare that to as little as 5% for residential purchases.

The main difference is that commercial property, unlike residential property, is valued primarily on a capitalization rate of its rent-producing tenants. Despite a strong revenue stream from a building’s tenancy, there are other social, geographic, and infrastructure issues that can greatly affect a commercial property. These include:

  • construction of new roadways,
  • changes in traffic patterns,
  • opening of new commercial developments that shift retail markets,
  • access restrictions or reduced visibility to the property, and
  • changes in purchasing demographics.

There are three typical property ownership scenarios that dentists seem to purchase. They are:

  • buying into the ownership group occupying space in the same building,
  • purchasing an office condominium, or
  • purchasing a free-standing building and converting it into a dental office.

Buying into the ownership group of an office building can be problematic. Due to the split ownership, you probably won’t be able to control your investment. As a result, it will be more difficult for you to liquidate your ownership or even borrow against it.

Ownership groups of medical buildings can also be fraught with politics of the tenants. As an example, consider the dentist who became a minority owner of the building he was in. This dentist was denied dividends (and even the right to sell) because the other majority owners, who happen to be orthodontists, felt that they did not receive enough referrals from the dentist over the years.

Purchasing a dental or medical office condominium is the most risky because it is unlikely you will be able to sell the property to anyone other than a dentist or other doctor. When you are ready to sell, the volume of your potential successors is lower compared to tenants looking to lease. The outcome is that your property could be at risk of devaluation.

Purchasing a free-standing building and converting into a health care practice is the least risky route. If you buy the building in the right location, you’ll be more able to sell it to others unrelated to medicine or dentistry. Stand-alone buildings also have much greater appeal to retailers and other businesses due to visibility and parking.

If you’re truly interested in purchasing revenue-generating property, you will probably do much better owning a residential apartment, duplex, triples etc. where you receive simultaneous benefit from revenue generation and property appreciation.

Looking for more information on the topic? You can reach Lewis Gelmon at (760) 479-9704 or lewis@lewisgelmon.com. For only $495, he will personally review your lease. Plus, get a $200 discount until October 31 just for mentioning The Wealthy Dentist. All reviews are guaranteed. If you don’t feel you have received the value, he’ll give you a full refund, no questions asked.

Lewis Gelmon is a former landlord, lease negotiator, and shopping center manager. Now a dental tenant advocate, he regularly lectures for dental groups across North America and the UK. He is the most published author on the subject of dental lease negotiations. His Good Leasing Guidelines for Dentists have been critically acclaimed by numerous dental groups. His mission is to raise awareness among dentists on the risks hidden in their office leases.

Dentist Salary: 2 Out of 3 Dentists Say They Are Not Wealthy (video)

Dentist Salary: 2 Out of 3 Dentists Say They Are Not WealthyAccording to the ADA website, the average dentist salary for an independent private dental practitioner who owns all or part of his or her practice in 2009 was $192,680 for a general practitioner and $305,820 for a specialist.

Considering the state of the economy, we wondered if this is still an accurate financial assessment of dental incomes.

The Wealthy Dentist conducted a survey asking dentists if they think that they are wealthy. Two out of three dentists said no, they are not in fact wealthy.

“The idea that all dentists are wealthy is absurd,” wrote a Minnesota dentist. “The public has no idea what it costs to run a dental clinic. Lab bills are $12,000 a month. Salaries are $20,000 a month. Add in equipment, rent, liability insurance, and of course, endless supplies, and now you have some very serious overhead. In reality, dentists must produce so very much revenue before they pay themselves that very few dentists are truly wealthy.”

Click on Play to watch the video and hear what dentists are saying about being wealthy –

Do you feel that most dentists are wealthy? Leave us your thoughts in the comments.

Dentist Offers Dental Care for Trade

Uninsured Patients Invited to Barter for Dental Care

Dr. Harry Rayburn of Tupelo, Mississippi, experimented recently with a “Trade Day” at his dental practice. He offered fillings, extractions and cleanings in return for traded items. The event was more about helping uninsured patients than bartering for the actual value of the dental work involved.

Patients started lining up before 6am. Not long after the office opened at 9am, 60 patients had signed in, and the rest had to be turned away. Though that’s three times as many patients as Dr. Rayburn sees on a normal day, he was committed to treating every last one.

Traded items include artwork, bicycles, cakes and pies. Some will be divvied up among the practice’s team members, and the rest will be donated to charity. Dr. Rayburn (who cites the movie “Doc Hollywood” as his inspiration) says he’s considering making “Trade Day” a regular event.

Read more

Dental License by State Drives Many Dentists Crazy (video)

universal dental licenseAs we all know, dentists are licensed by state dental boards and they can only practice in the state where they are licensed.

And this drives a lot of dentists crazy like the one who complained, “This is SUPPOSED to be a free country where people can relocate as desired. this current system is just regional protectionism. It sucks!”

The Wealthy Dentist conducted a survey that asked dentists if once a dentist is licensed in one state, should he or she be allowed to practice anywhere in the U.S.

Watch this video to hear what dentists had to say on universal licensure

What are your thoughts on universal licensure? Should dentists be allowed to practice anywhere in the U.S. under one license?

Dental Headlines Sometimes Make Dentists Look Bad

Dentists Make the News with Tax Evasion, Prostitution Rings, and More

Perhaps you don’t have time to search Google News every day for the latest dental headlines. Not to worry! That’s what I’m here for.

You’ll find press releases (Dentist completes veneer training), local news (Local dentist rebuilds after fire), consumer information articles (Conscious sedation eases dental fear), and business updates (3M buys dental products maker Imtec). Most of this information will be of little value to you.

However, if you look carefully, you’ll find some fascinating bits of dental news. The news is always filled with scandalous tales of people doing shocking things. If anyone involved in the story was a dentist, you can be sure Google News will let you know.

So, without further ado, here are this week’s most scandalous headlines!

No Diplomatic Immunity for Tax-Evading “Ambassador of Heaven”

A Louisiana dentist found guilty of tax evasion has been sentenced to two and a half years and ordered to pay $155k in restitution. And with the verdict, I’ve lost two of my favorite tax-avoidance strategies!

Dr. Louis Genard has not filed a tax return in 12 years. In 1997, he filed an affidavit declaring himself a “sovereign citizen of the Republic of Louisiana,” renouncing his US citizenship, and declaring that the IRS had no authority over him.

The IRS, however, disagreed with the doctor’s assessment and filed suit against him. He tried to have the charges dismissed due to his diplomatic immunity as an “Ambassador and Citizen of the Kingdom of Heaven under its King Jesus the Christ,” but the court was unsympathetic.

Unfortunately for Dr. Genard, the US justice system doesn’t give points for creativity.

Prostitution Ring Funds Dentist’s Retirement

Chicago dentist Dr. Gary Kimmel allegedly pocketed at least $372,000 in cash for his role in a prostitution ring. The doctor’s saga began several years ago, when a man who turned out to be a pimp responded to his apartment rental ad. The doctor leased cars for and rented apartments to at least three pimps. He also performed dental work for cash on the pimps and prostitutes, but never reported this income.

Dr. Kimmel is pleading guilty to conspiracy to commit money laundering. The plea agreement will require the dentist to pay $400,000 and serve several years of jail time.

X-Rated Soundtrack Courtesy of Dentist’s Sexy Girlfriend

Dr. Victor Patacchiola  has a steady stream of patients in and out of his London dental practice. UK’s The Sun began investigating his practice after multiple patients claimed to have heard groans and other raunchy noises. “It sounded like someone having sex. It was really off-putting,” The Sun quoted a patient as saying.

It turns out that the dentist’s girlfriend (a blonde who goes by the name of “Tiny”) works upstairs from the dental practice, performing strip teases and sexual performances. The doctor defends the setup, claiming that Tiny is a therapist and everything is completely legal.

Legal? Maybe. Distasteful? Definitely.

Variations on Classic Themes

Every week, dental stories pop up in a few common areas…

Unlicensed Dentist Gets Busted
This week: Ottawa Man Pleads Guilty to Unlicensed Dentistry

Dentist Accused of Shoddy Work
This week: Bungling Dentist Left Woman Looking like ‘Bride of Dracula’

Dentist Accused of Misconduct
This week: CA Dentist Accused of Sex Assault on 19 Male Patients

Dentists Face Stress
This week: Dental Surgeon Takes Suicide Leap, Blames “Tremendous Stress”

Somewhere, A Dentist Does Something Stupid
This week: Dentist and New Wife Face Charges for Wedding Night Brawl

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