From Active Income to Financial Freedom: Real Estate Lessons with Dr. Jeff Anzalone

Dr. Jeff Anzalone (00:00)

Yeah, it was actually really scary because my kids were relatively young at that time. You know, you could think about having an eight and six year old and the only thing that you really know how to do is fix teeth. And if you physically can’t do that, how would you provide income for them? Cause it’s, it’s a, you know, with a pre dental degree, there’s not a whole lot of people that are going to hire you, you know, out there if you can’t practice as a dentist. So I realized

that I had to rethink the way that I was making money.

Dylan Silver (02:04)

Hey folks, welcome back to the show. Today’s guest, Dr. Jeff Anzalone is a dentist, real estate investor and the founder of debtfreedr.com He began building passive income after a wrist injury forced him to rethink a career dependent on active income, leading him into real estate investing and alternative wealth building strategies. He focuses on helping high income professionals, particularly doctors and dentists, build income producing assets through real estate, including mobile home park investments via Perdido Capital.

through debtfreedr.com and his YouTube channel where he teaches how to transition from earned income to financial independence. Dr. Jeff, thanks for taking the time today.

Dr. Jeff Anzalone (02:44)

Yeah, thanks for having me on. Looking forward to it.

Dylan Silver (02:46)

Now, when we talk about making this transition, walk me through what was going through your mind when you realized potentially your earned income and your career as a dentist could disappear overnight.

Dr. Jeff Anzalone (03:02)

Yeah, it was actually really scary because my kids were relatively young at that time. You know, you could think about having an eight and six year old and the only thing that you really know how to do is fix teeth. And if you physically can’t do that, how would you provide income for them? Cause it’s, it’s a, you know, with a pre dental degree, there’s not a whole lot of people that are going to hire you, you know, out there if you can’t practice as a dentist. So I realized

that I had to rethink the way that I was making money.

And I started getting out of my lane and instead of just going to dental meetings, going around other people. And I noticed that literally everything that I learned about money from the time that I was young was completely wrong.

And that, unfortunately, that’s why there’s one percenters and that’s why there’s 99 percenters. know, the majority of the people did the same thing, you know? So, mean, I could, I could sit here and talk to you for hours and hours about it, but that was the main thing that I had to do something differently besides trading time for money. And then I started down the road and then.

Here we are today being able to work as optional to be at age of 50.

Dylan Silver (04:26)

Now mobile home park investing, when I think of going from a career in the medical field into real estate investing, mobile home wouldn’t be the first thing that comes to mind. But of course, we were talking in the green room and there’s so much momentum right now in this segment. How did you get into the mobile home park space?

Dr. Jeff Anzalone (04:45)

Yeah, that’s a great question. I did it by from trial and error because I started off thinking I was going to do single family and I didn’t thinking I was going to be an active investor and I wasn’t and I learned about syndications group investing started off back in 2020 and 2019 2020 investing like everybody else in multifamily. And then you know what happened.

Shortly after that time frame, know, rates were what? Three, three and a half percent. And then they went to eight, eight and a half insurance rates skyrocketed. And I still have deals that I both am an LPN and a GPN that aren’t paying, can’t pay. It’s just, you know, and people ask me, how’s that happen? And I said, one of the things you can think about, let’s say your mortgage payment is 2,500 a month for your house.

somebody knocks on your door and they say, well, unfortunately things have gone up. now taxes, insurance, your mortgage payment is now 10,000 a month for no reason. There’s not a whole lot you can do. And of course you can’t pay a lot of your bills. So that’s a very simplistic way of putting it, but that’s what happened to a lot of people. And I started doing some other asset classes and

Dylan Silver (05:52)

Yeah, what do you do?

Dr. Jeff Anzalone (06:08)

connected with a guy that I was in a mastermind with who actually lived like five minutes from my house. He was started doing mobile home parks. So he came over, we started talking about syndications. He had never heard of that and he was doing great. I looked at the numbers, but he was handcuffed because he was using his own money and he ran out. So we started investing together. We bought four or five mobile home parks. The returns were incredible. It’s like,

I’ve got to get this out to my investors. Started raising capital and then now we own 14 together and we’re scaling this business. And so it’s unbelievable the tax benefits, the monthly cash flow you get compared to what I came from with multifamily.

Dylan Silver (07:43)

Now, multifamily, I think everyone can relate to this, especially if you’re in the sunbelt. I’m in Texas, you’re in Louisiana. It seems like there’s multifamily complexes going up everywhere. But I’ve spoken to a number of mobile home park investors and there’s not new mobile home parks being built everywhere. And so they’re becoming more and more valuable. But also there’s a lot of people, especially younger people who might now be looking at…

getting into a mobile home versus living out of an apartment. If they can’t get into purchasing a home, maybe they may be looking into purchasing a mobile home. And so I think we’re also seeing maybe the demographic shift of who is a mobile homeowner, mobile homeowner.

Dr. Jeff Anzalone (08:30)

Yeah, for sure. There’s a local college here and there’s a couple of mobile home parks near there. The majority of them are college students and they just wanted something bigger than an apartment. But you know, I’ve lived in an apartment for like eight years, 11 years when I was doing my training and the worst has been on the bottom floor and people are walking above you. You can hear every, you know, footstep. So they were just tired of that. So yeah, you’re right. The demographics are shifting depending on what area of the country that you’re in.

Dylan Silver (08:58)

Now, when we look at acquisitions in the mobile home park space, one of the things that I’ve often heard is it can sometimes be challenging to determine exactly what’s happening because the person might not be keeping the best books. They might not have raised rents in however many years. You’re not exactly certain really just what the overall scope is of their cashflow on a.

month to month or quarterly or annual basis, is there some level of almost like forensic triage that happens when you’re evaluating a property like that?

Dr. Jeff Anzalone (09:34)

Yeah, that’s a good question. And yeah, most of the parks that we’ve acquired are like that initially from just mom and pop owners are in their 60s, 70s, sometimes 80s. You know, they keep stuff just on a piece of paper, know, Julie on lot 72, you know, $200 hasn’t paid and five, you know, it’s just stuff’s all over the place. So you just, but that’s, that’s like the best ones to get.

you know, because there’s so much potential. Majority of them haven’t raised rent and forever. They’re not even keeping up with the local lot rents. And so we, if there is one that we are truly interested in, we will, you know, physically go to the park, meet with some of the residents. We’ll, you know, we’ll count up, you know, this is say it’s $200 a month. They’re supposed to be charging for lot rent. There’s a

100 lots, know, just multiply that and then just kind of then look at what is he saying his profit loss is. We know that the kind of the average expenses, for instance, is 40%. And if we start looking at things and, it’s in a lot of times they run everything through their profit loss, like all their personal stuff, and it may be 70 or 80%. So then we know, you know, he’s there, they’re rolling everything through the business. So again,

We kind of know the parameters and we can look at what’s going on to see whether or not it’s worth pursuing.

Dylan Silver (11:41)

Now, are there value add opportunities that mobile home park investors undergo to add value to these mobile home parks or is it all in the operations? Like, we’re going to make this acquisition and we’re going to do a more effective job of having books and of collecting rents and so forth.

Dr. Jeff Anzalone (12:02)

That’s a good question. I think it depends on the area, the country that you’re in. What we kind of consider value add is we don’t want to go in and just raise rents 50 to $100 a month day one without doing something, without making some sort of improvement. And most of the time it’s going to be like improving the roads. There’s a lot of potholes in the roads where there may be dirt or gravel. So we may asphalt the roads. People love that. We had one park here in town.

that there were, you didn’t notice it because we’d always go there during the day, but we would go at night and they just, was 87 lots, big park, pitch black. So we went in and had the local energy company put LED lights all throughout and wasn’t that expensive, but just it was the tenants loved it because now they’re like, that is going to help decrease the crime. Their kids can play in the street or walk, you know.

Dylan Silver (12:43)

Yeah.

Dr. Jeff Anzalone (13:02)

Walk down the street at night, not knowing where things are. One other thing you may not think about are dumpsters. Usually there’s a dumpster, so we always take the dumpsters out and make each tenant get their own cans, garbage cans. You would think that they would be mad because now they’re having to pay for the garbage cans, but now they love it because, not all of them love it, but most of them love it because there’s not all these people coming in the parks dumping.

Dylan Silver (13:10)

Hmm.

Dr. Jeff Anzalone (13:31)

crap, mattresses, furniture, that don’t even live in the park. So the park is a lot cleaner, safer, and then they can justify, well, they increased our lot rent, but look what they’ve done. So that’s our version of value.

Dylan Silver (13:48)

Now pivoting a bit here, Jeff, when you’re looking at the mobile home park space versus some other emerging spaces that have some similarities in common, one of the things that comes to mind is like built rent communities and even like modular home communities that I’m seeing come up. Do you think that there’s any similarities there or are these, you know, distinct segments entirely?

Dr. Jeff Anzalone (14:15)

⁓ I think it’s some similarities, the way that we’re buying.

mobile home parks. We’re just renting the land. And that’s different with some of the other things. And we just collect lot rent. Why? Because we don’t want to deal with the maintenance.

Dylan Silver (14:36)

Right, right. And so it’s a comment upon the tenant in order to figure out everything with the mobile home. One question that I have as far as acquisitions goes, there’s a lot of talk recently, seeming in every segment of the real estate space and seller financing. And I understand that there’s an opportunity there to be had in mobile home parks as well. Do you have a preference seller finance versus cash offers when you’re making offers?

Dr. Jeff Anzalone (14:40)

Right.

Yeah, it’s a good question. Some of our best parks are seller financing because these are, you think about it. These are, most of them are 60, 70, 80 year old people that are just tired of dealing with their park and they’re ready to ride off into the sunset and retirement. And they really liked the idea of having an income stream coming in so we can bypass the bank.

The park that I was telling you about that we added the lights to was actually Three Sisters and we did a 3 % seller finance. I mean, you can’t get any better than that. So we did that and then now, so now they’re getting paid every month for the next five or six years. And they like that because now they can transition knowing that, this person lives close to us and they’re gonna be sending me a check every single month.

Dylan Silver (16:37)

Bonus question here for you, Jeff. When you’re working with other dentists specifically, what are those conversations like and are they thinking about the potential risk that they might not have access to their income as a dentist? God forbid if something happens in the future.

Dr. Jeff Anzalone (16:57)

I think, and unless you’re a dentist ⁓ or whatever your field is, you really don’t know the pain and the trials, tribulations that you deal with. Most people, I never thought dentistry was stressful, because I would go get my teeth cleaned as a kid. The hygienist would clean my teeth. The dentist would come in and go, hey, how’s it going? Everything looks good. See you in six months. I’m like, how is that stressful?

And, but then you get into it and then you got to deal. Now I got to deal with staff. got to deal with patients that say, I hate coming to see you doc. No offense. I have to think about, I have to deal with being hunched over for 20 years, neck pain, carpal tunnel back. It’s very physically demanding. So I know how to relate to dentists because they’re dealing with the same issues and they’re looking for other streams of income, not so much that they can retire.

and not so much that they’re worried that something’s gonna happen to them, they wanna cut back. They wanna go to part-time. They won’t work to be optional. They don’t wanna work five days a week. They wanna work two or three. If you don’t have any other income streams coming in, unless you marry somebody very wealthy, it’s hard to do.

Dylan Silver (18:16)

Do you see that there’s more dentists who are owning their own practices? I remember, I feel like growing up, I saw a lot of that in New Jersey, but it also feels like medicine in general is becoming more corporatized. Is there any type of movement for more dentists to own their practices?

Dr. Jeff Anzalone (18:34)

When I got out, I think that was when the decline was starting. People aren’t opening or buying their own practice just because it’s so expensive and student loan debt is going up. So when you graduate, if you have five or $600,000 of student loan debt, you don’t want to go buy a million, million point, $1.5 million practice. Just, so because of that, a lot of these DSOs of private equity groups,

They can offer sign-on bonuses when you get out of school. They can do 401k health benefits and usually two to $400,000 a year starting off. So it’s like almost a no-brainer when you’re coming out, you wanna work, you just wanna go to work, start paying off those bills. So that is what the big trend is now. People just don’t wanna deal with the ownership. Again, they have that in.

And they don’t know about this until they start on it, but they’re just now they’re a glorified, highly paid employee. And.

Dylan Silver (19:39)

as

well that there’s a huge opportunity, especially with private equity coming in to sell these dental practices if you do build a practice and have the ability to have clientele in a location. So how often is that conversation being had that, you can build a sellable business. It’s not just something where you have an equity share for now. It’s something that will appreciate and have more value over time.

Dr. Jeff Anzalone (20:09)

I think that’s a, that those conversations are going on with people in their 50s and 60s. They built the business, they built the practice and now they’re selling versus getting out of school. It’s just so much debt. like, I just want to go to work.

Dylan Silver (20:24)

We are coming up on time here. Any new projects that you’re working on and then as well, what’s the best way for folks to reach out to you or your team?

Dr. Jeff Anzalone (20:33)

Yeah, they can sign up for our email list debtfreedr.com. That’s where I do most of my educational articles, YouTube channel. Same thing. It’s on our website. I do most of mostly focus on videos just because I learned with videos and we turn the videos into articles. Projects we’re working on now. We’re always evaluating new mobile home parks. We’re actually looking at

to as we speak. We’re mainly we’ve been in Louisiana, but we’re actually going into the panhandle of Florida and there’s some very lucrative opportunities. If you if people are signed up to our list, if you’re a credit investor, you can do that too.

debtfreedr.com Passive Investor Circle, and you want to see the projects we’re working on to potentially invest alongside of us. You put in your contact information and then we will email out the specifics once we do get projects under contract.