This is episode #431, and my guest today is Dr. David Phelps.
David is a good friend, someone I have a great deal of respect for, and a voice of inspiration for real estate investors and entrepreneurs.
There is a shift coming in the real estate market. I’m not saying there’s going to be a crash, but there have always and will always be market cycles. Truthfully, there’s more opportunity in down markets than up markets, if you plan ahead and prepare.
Today we talk about preparing for the market shift, the importance of surrounding yourself with the right people in your business, and how to stay principled in your business so you can thrive in up and down markets.
Ready? Please help me welcome David Phelps to the show!

Highlights of this show

  • Meet Dr. David Phelps, professional real estate investor, mentor, mastermind leader.
  • Learn how to prepare for the next shift in the real estate market.
  • Join our discussion on the importance of surrounding yourself with the right people.
  • Listen in as we discuss staying principled, avoiding getting sloppy with decision making that won’t cut it in a down market.

Resources and Links from this show:

Listen to the Audio Version of this Episode

FlipNerd Show Transcript:

Mike:This is the “Expert Real Estate Investing Show,” the show for real estate investors, whether you’re a veteran or brand new. I’m your host Mike Hambright, and each week I bring you a new expert guest that will share their knowledge and lessons with you. If you’re excited about real estate investing, believe in personal responsibility and taking control of your life and financial destiny, you are in the right place.
This is episode number 431. And my guest today is Dr. David Phelps. David is good friend and someone I have a great deal of respect for and really a voice of inspiration for real estate investors and entrepreneurs truthfully worldwide. He’s right here in my backyard by the way too in the Dallas Fort-Worth market. There’s a shift coming in the real estate market now. I’m not saying that there’s going to be a crash, but there have always and will always be market cycles. Truthfully, there’s more opportunities in down markets than in up-markets if you plan ahead and prepare.
Today, we talk really all about preparing for that market shift and the important of surrounding yourself with the right people in your business. We also talk about how to stay principled in your business so you can thrive and both up and down markets. David has a wealth of information and a great guy, has a lot to share. Ready to get started? Please help me welcome Dr. David Phelps to the show.
Hey, David, welcome to the show.
Dr. Phelps:Mike, hey. It’s good to be back. I always love talking to you.
Mike:Yeah, yeah. We were just talking for a little bit there. I mean, I think the world of you. You’re such a great guy and so inspirational. And we live in the same general market, but lots of travel. Everybody is busy, and we don’t see each other much. We kind of just that we actually see each other more on podcasts and social media than we do anything else. So, yeah [inaudible 00:01:48].
Dr. Phelps:Yeah. We have our people talk to each other so we can schedule a time to meet. That’s right?
Mike:That’s right. That’s right.
Dr. Phelps:If that’s what it takes, that’s we’ve got to do, you know?
Mike:Yeah, yeah. So, awesome. Well, hey man, I’m excited to talk about this topic today because there’s starting to be some buzz in the air about market shift and, you know, without being like Chicken Little here, you know, what you and I know because we’ve been through some cycles is there’s always opportunity in a down-cycle. In fact, there’s more opportunity for us generally in a down-cycle with real estate investing if you prepare for it, right? So, we’re going to talk about some of that today. And I think a lot of people think very highly of you in terms of, you know, just your wisdom of how to think about market cycles and how to plan your business. And truthfully, we are doing all this for lifestyle reasons anyways. Right? So how to like not get too carried away. But before we kind of dive in, tell us a little bit about your background for those of you that don’t know you yet.
Dr. Phelps:Yeah. So a lot of people know me as a former or recovering dentist. I chuckle about that a little bit because when I say recovering, well, yeah, I was a practicing dentist for many years. And it was my key goal profession when I was a kid. My father was a physician, so I decided the lifestyle of a dentist was better than a surgeon who was, you know, on call all the time, so I figured that out pretty quickly.
But what people don’t know about me, Mike, is that I actually was a real estate investor before I became a dentist. And it’s not like I had to make a choice. It’s just when I was starting four years of dental school right here in Dallas where you and I are both from, I had read some books about investing money, which I hadn’t and I had student loan debt. But I still knew someday, I’d have some money and I needed to know how to invest, so I read books on the stock market, and I read a few books on real estate.
Now, back then, in those days, unbeknownst to a lot of people, Mike, there was not a thing called the internet. There was no Facebook forums or communities. There was Kiyosaki or Robert Allens running around the country. No. Literally, it’s before that time, pre-historic times, actually. And we had these things called library cards. You actually kept it . . . it’s kind of like a credit card, you know, but they weren’t plastic. They were actually paper, and they had a little . . .
Mike:Yeah. I remember those.
Dr. Phelps:Yeah, remember? And they had a little metal plate on them. And you would to these brick and mortar buildings in most decent-sized communities, and they were called a library. And you would go in and actually they would have these shelves of books kind of like behind me. I mean, that’s kind of what, you know, library this thing called books and you would go and you would present your card, and you would check out a book, and they’d let you have it on loan for like two weeks, and you would go read the book and then you’d take back. So, that’s how I did it.
Mike:It was all essentially the honor system even, right?
Dr. Phelps:Pretty much. I mean [inaudible 00:04:27].
Mike:Imagine that.
Dr. Phelps:I don’t know if they had really like cops, you know, library cops that would chase you down or, you know, put a lien on your property if you didn’t take the book back. I was always good about them back eventually. But yeah, it was kind of on the honor system. You had to be like a real person to get a card, that kind of thing. But being on fastidious.
But the truth is, yeah, I read books about both like stock market financial products, right? Which is the traditional investing retirement plan Wall Street sets all that up. I’m not going to bash that. I’m just saying it is what it is, right? And when I read books on the stock market, which back then, which back then one of the key books I had . . . in fact, I was doing a talk the other day and I had it. It was in my stack over here. I don’t know if I still got it. But it was a book by an author named William Nickerson. I’ve still got that book. In fact, I’ve got one with his autograph in it.
So William Nicholson was one of the pioneers that wrote books about investing in real estate, and as I thumb through that book today, you know, 40 some years later, it’s still very relevant. It’s still very relevant. You now, the key core concepts of why investing in a tangible asset, like real estate, makes a lot of sense. And the different ways you can add value and you know, dah, dah, dah. You have the whole nine yards.
So I read the two books . . . two kinds of books, real estate and the stock market and real estate made all the sense in the world. So I told my dad, “Dad, hey. You know, I’m going to be living in Dallas, Texas for four years going to school. I can either pay rent or, you know, because I’ll do that, or,” I said, “we,” now the keyword was “we,” “we can invest in real estate.” Because I had no money, and obviously I needed some access to some kind of capital, right? Because I couldn’t go sign a loan or that kind of thing. I didn’t know anything about creative financing back then. It was just real estate makes sense.
So dad trust me, believed me. Flew down to Dallas. So I would spend a couple of weekends with a realtor. Did one thing right that I read about in the book and that is buy, you know, the worst house in a good location. Right? Worst house in a . . . and fundamentally, that worked. I bought a structurally sound house in East Dallas on the M Streets. You know what I’m talking about?
Dr. Phelps:And that house we bought back then in 1980 for $83,500. Interest rate back then, Mike, was 16.5%. So, you know, people were like, “How could you make money off of that?” Well, everything balances. It all balances. I’ll just say that. Long story short, I managed . . . dad put up the money and the credit. And we split a little over $50,000 in capital gain profit after holding that property for four years. Beginners luck? Well, maybe a little. I mean, hitting a market cycle right and that kind of thing.
But what it told me was this, Mike. You know, I waited tables all the way through college in dental school and made pretty good money. I worked as some pretty good restaurants. I made some pretty good money. And then when I figured out my dollar per hour working at the restaurants, it was a little over $20 per hour, you know, with the tips, obviously, the tips. And when I figured out what my hourly was on my capital gain profit of managing this property four years, my hourly net was about $260 per hour. That’s a . . .
Mike:If you are an active real estate investor already doing deals and looking to double or triple your business, you should consider joining the Investor Fuel Real Estate Investor Mastermind. We are a small group of investors that share our best practices, tips and tricks with one another in an effort to all win. We limit our membership to only one to two members per market, so everyone shares their knowledge, tips and tricks openly and honestly. Our members include some buying one to two houses a month, up to some of the most respected investors and leaders in the real estate investing industry, some of which have personally done over 1,000 deals. If you would like to be considered for our invitation-only, world-class mastermind, please visit to request your personal invitation. Our next meeting is coming up quickly. Go to now to learn more.
Dr. Phelps:So I managed . . . Dad put up the money and the credit. And we split a little over $50,000 in capital gain profit after holding that property for four years. Beginners luck? Well, maybe a little. I mean, hitting a market cycle right and that kind of thing. But what it told me was this, Mike. You know, I waited tables all the way through college in dental school and made pretty good money. I worked as some pretty good restaurants. I made some pretty good money.
And then when I figured out my dollar per hour working at the restaurants, it was a little over $20 per hour, you know, with the tips, obviously, the tips. And when I figured out what my hourly was on my capital gain profit of managing this property four years, my hourly net was about $260 per hour. That’s a 10 fold increase. And, you know, that struck me. I was like, “Wait a minute here. You know, pretty good waiting tables. I made some good money, flexible hours, you know, good stuff as a student. But 10 times that with a capital asset? Hello.”
And so, obviously I never looked back, meaning I graduated school. I took my 25 grand a little bit plus and I went and I re-leveraged that into more properties. Again, I had to leverage because that’s all I had, and I knew the power of leveraging, so I had to buy, you know, a lot of subject-to stuff, which is something we could a lot of back then because there was no due-on-sale, so I went to town with my 20 . . . and I parlayed that in to over about two, two-and-a-half years. By 1985, I had approximately 13 or 14 properties. And then, I parlayed that further in to a total of about 35 properties.
And because I did have a business, a profession with cash flow, I took the extra cash flow and amortized or pounded down snowballed down those mortgages on those properties. So, in 15 years, I had about $15,000 per month of I say “passive” I was managing. But these were the properties “passive.” You know what I’m saying? It’s not totally passive.
Mike:Yeah. Never is passive.
Dr. Phelps:Never totally passive. But here’s the thing, that $15,000 that was coming in from these properties that I, you know, managed with a few hours on my side was equivalent of what I was taking home out of the darn dental practice where I was going there four-plus days a week, working 10-hours a day, you know, taking a call on the weekend, having all the risk factors, dealing with staff and patients and insurance. And I’m thinking, “My gosh. The tradeoff here,” you know. And I did the real estate really on the side.
Now, you know, I put time in there, no question about it. I put time, but I’m thinking, “I’ve built up all this equity and cash [flow 00:10:49] in real estate during the same time in the practice.” Now, the practice had a value to it, but my real estate, Mike, my equity in real estate was starting to exponentially grow like this on a curve. You know, I’m showing you the curve right now. And the practice while it had grown, it was kind of leveled off here. And the only way to pump that practice is I’d have to expand, bring in more doctors or do multiple practice locations. And I [inaudible 00:11:12].
Mike:Or work more hours, right?
Dr. Phelps:Right, yeah. And the real estate for me at that point was a whole lot easier because well, one, I had studied it. When I had gotten into the game, I had learned. Obviously, I had coaches and mentors, which is very important. I still made some mistakes, but never a huge mistake, never a big mistake that would take me down because I’m involved in that time single family, which I think is really safe for people who are getting started. You just can’t really blow it with a lot of single-family houses.
And so, I saw my point of freedom now what pushed me over the ledge to say, “I’m getting out of dental practice was not just an easy decision, but I know I’m going into this right now.” Because we’ve talked about before. My daughter, Gina, has a lot of health issues and the one that really took it to me and made me think really hard about what I was doing in life was when she had to have a liver transplant when she was 12 years old. I had almost lost her before with a high-risk leukemia, epilepsy. And I was always struggling with trying to be that breadwinner provider for the family that we all feel, right? But also, this lack of having time to spend with my daughter, who at the point I realized, you know, those days could be numbered.
Now, she lived, she survived. It wasn’t easy. And I’m very, very blessed and grateful that she is with us today, but I’m more grateful that that wake-up call hit me then and I had the ability to let go of a practice, let go of my profession and have at least a basis of income and wealth in real estate. And I thought, you know, I can survive on this. I can still provide if I don’t earn another active dollar in my lifetime.
Well, here’s the dirty little secret, Mike, is what I realized in hindsight is that once we as entrepreneurs, business owners, real estate investors, once we can get clarity and focus and quit running on that hamster wheel, which we have to do for a while, we get clarity. And that’s where, like, mastermind groups are just the key, is we get to focus. And the focus allows us to leverage. And so, my wealth, at that point in time when I left practice, was enough that I could leave practice, but it wasn’t like substantial. It wasn’t like I could live the rest of my life in “retirement years,” but it grew faster.
Why? Because I was able to use the connections I had built, but multiply on those, because now I had time to connect with people that I had worked with previously, but I’d never had the time to really leverage in mutually beneficial ways those. And now I could do it and still spend time with my daughter. That was the whole thing. Is like now, I’m living the dream, my daughter is alive, she’s doing well, I’m adding to my wealth, I’m having more fun because I don’t have to look at the schedule every day and see Mrs. Jones or Mrs. Smith, who I just want to put a bullet through my head. Now I get to choose who I get to work with.
It was like nirvana, right? But I never knew that, Mike. And I wouldn’t have known it had I not been pushed through a difficult, challenging time. I probably would still be through guilt, not because I have to, guilt still in my practice because, “Oh, well, David, how could you quit being a dentist? You put all this time and money into your education?” I would be feeling that today.
And what I’m telling people, what I’m telling you, Mike, and you know this, because it’s who you are, because you’ve done come through the same transition, but if you’re not living your dream, when are you? And you’ve got to sometimes take a little bit of risk, step out and surround yourself with other people who have gone there to help give you a hand-up. And when times get a little tough or challenging or you question yourself because other people point a finger at you and say, “What are you doing that for? You are crazy.” That you’ve got people saying, “No, you are not. If really want to live the dream, step up, keeping going down the path.”
Mike:Yeah, yeah. There’s a lot of people that . . . you know, it’s easy to . . . I have a . . . I actually have a . . . I went to grad school, which in hindsight, that degree does . . . I don’t say it doesn’t help me in my business, but definitely I didn’t need it, right? I mean, there’s plenty of people that are successful in this business that don’t have a formal education, college education at all. No, I’m not saying that I didn’t develop some critical thinking and things like that, no doubt. But I didn’t go to school for this, right? For real estate investing.
And I actually have my grad school reunion down in Austin. It’s coming up here in a few months. We are going to go back. Hundreds of my classmates that I get together with some of them sometimes here. And they just feel . . . some of them might be listening to this, so I don’t want to like say anything specific, but just this is general feeling is we spend so much time preparing for corporate America that a lot of time people have a hard time taking that leap to leave because they are like, “Well, this is what I trained for.” And so one of the things you also learned grad school, I went to business school, is the not the concept, but just the concept of some cost. Right? I mean, you made some decisions but that doesn’t mean you can never pivot.
Of course, as an entrepreneur now, I promise you, and you know this too, we spend a lot of time pivoting, right? It’s like [crosstalk 00:15:54], that doesn’t work, I’m going to go this way. So, anyway, I think more of our corporate friends, dentists friends, people that are working for somebody else or have their own business but largely are self-employed, not really necessarily business owners yet, because there’s a distinction, have a hard time making that transformation over into, “I’m going to bet on me and build something bigger than me here, right?”
Dr. Phelps: It’s almost, Mike, like you have to unlearn what we’ve been indoctrinated into. And again, like you said, there’s nothing wrong with higher education at all. But there’s a mindset that goes along with it that says, “This is who you are. This is your path. It’s already been determined for you, so just follow the path.” And one of my mentors has always told me he said, “You know, David, when in doubt, don’t follow the majority because the majority is usually wrong.” So when in doubt . . . so, you know, everybody, you know, so you watch, you know, people in society are a lot like lemmings. I mean, seriously, everybody is running over here. They are running over here. They are doing this, doing that. And it’s like whenever you see that, just step back and go, “I’m going over here.” And, you know, that’s usually the pretty darn sound advice.
Mike: Yeah, yeah. So, let’s talk about . . . one of the things that we were talking about before we started here today was that this time in the market cycle, I know we’re maybe going to talk a little bit about where things are . . . not necessarily where things are going, but just how to prepare for whatever might come next whenever it comes, right?
But what happens right now is some of the people that are jumping into real estate investing have been thinking about doing this for a long time, and they see the real estate market is hot and they . . . there’s more people that get in at the top than get in at the bottom. And the best time to get in is at the bottom, right? But there’s a lot of people that just have this mindset of, “It’s risky to jump in.” And then, they jump in at a time like now when I’m not saying we are at the top of the market, we are definitely not at the bottom, right? But they get in and the principle goes out of the window. They are just like start making decisions based on just wanting to be successful instead of kind of principle decision-making on what the right investments are.
So let’s about some of those people and maybe try to give them some guidance. Like, if you are getting into this market now, which there’s nothing wrong with getting into this market now, just how to prepare them for a shift that might happen in the market.
Dr. Phelps:Yeah. Well, and there will be a shift, nobody can say when that will be. You know, some people have been predicting it for, you know, a little while. I talk about it to my Freedom Founders members and again, just in preparation, not to take any wind out of their sails. I’m a big fan of, you know, when the opportunity is in front of us, yes, take it. But still, we’ve got to use principles, you know, criteria of success, in this case, of investing. And a lot of people that are new to this, coming in for the first time, they don’t have any backdrop, no history in knowing what does that mean. You know, how can you get in trouble when it seems like everything sells quickly, you’re getting multiple offers, you know, on a market for sale? You know, everything just keeps going up. Rents go up and prices go up. And we have no context there, then I think it’s easy to get in trouble.
So one of the first things I would say is, you know, you should be around other people or use advisors that can be true to you, give you sound advice whether you work with them, whether you just ask them, you know, to be, you know, within your circle of influence that you can just, on a regular basis, check-in and show a few of your deals or before you strike the next deal, just run it by some people who have been there and gone through the last downturn and say, “Hey, am I in any way pushing the margin here? Am I speculating at all?”
Because you see that’s where I see a lot happening. And I know you see it too, Mike, in every asset class is that people get excited and we all get excited, right? Because it seems like I just did that deal, Bam. Knocked that one down, that one went well. And I sold that one, or I put it in my rental portfolio, and it’s great. But I want to get another one. And the margins are getting tighter, it’s harder to find those deals that we could get, you know, five or six years ago that really had big margins. So, now, people start saying, “Well, I can get by with that. I can by with this. You know, even if I have some negative cash flow, hey, it’s going up. I’ll still sell it in a few months.”
In fact, I saw somebody the other day and on a personal basis, not in front of their group at all, I would never do this, but I just went as a friend, I say, “Hey, you know, the deal you put out recently about paying 12% on a multiple property acquisition including multi-family, single-family in multiple states. You’re going to pay 12%, and your holding period is 24 months. So I’m guessing you’re thinking you’re getting, you know, value buy and you’re going to flip this portfolio in 24 months and carry interest at 12%.” I said, “I hope you know that you’re getting a really, really super-solid discount.” And this person didn’t even have a clue. I said, “You know what? Don’t do it. You don’t need that in your life. Stop,” because people get crazy.
So, you know, get in the game. If you are in the game right now, and it’s a great time to be in the game, but don’t let your exuberance or the excitement of the market have you push margins because that’s where we saw a lot of people and the same thing back in 2007 and ’08 and after the downturn, people that got too excited, you know, ended up with, you know, overleveraged and they lost, I mean not all, but they lost a lot, had to recover. It’s, you know, it can be tough.
Mike:Yeah. Talk about as real estate investors, as business owners, you know, I’m sure you do the same thing, am constantly investing in, you know, real estate and other deals obviously. But also just in my business, like, should I bring on staff. I’m like constantly doing things to figure out how to grow or what we are doing in FlipNerd or masterminds, all the things we have going on. You know, those are . . . we’re investing in a number of things, right?
But you and I both know that the good thing to have going into a down market is cash. We also know as real estate investors, you want to stay as invested as you can because if you are investing in what you believe in, then it seems silly to sit on cash, but cash is king always in this business so certainly in a down market. So, just talk about that balance of having . . . because we all know in a down market basically there are some great opportunities to be had if you have cash or if you have access to credit, which a lot of that starts to dry up. But maybe just talk about kind of preparing for that in terms of the shift.
Dr. Phelps:Yeah. So probably everybody listening to this, you know, has a business. And a lot of people that we are talking to today, you know, have a real estate business. And then probably they are also investing on their own behalf and their own portfolio. You know, a good thing to do business income, active income, and your investment portfolio. In the business, no matter what business you are in, I realized that when we have a downturn, even though your business is running well right now and you have, let’s say you have good profit margin and you’ve got a good team and, you know, that’s good. That’s great, awesome, awesome, good for you.
But I realized that in a downturn, it’s not just us, you know, controlling what we have, you know, we are dependent upon our customers, customers that will want to buy our product and our service. And when the market turns down and credit is constrained, the economy can come to a lurching stop almost overnight where there’s no velocity of money. No one’s buying anything. No one’s investing in anything because everybody is scared and credit is tight.
And so, everybody is, you know, doing this kind of this capital call, you know, and kind of hording whatever they’ve got, right? Whether they’ve got . . . and so you are right, there’s no access to capital. So two things, running your own business, make sure that you’ve got you’re able to be flexible or nimble. So I would be careful, even though it seems like it’s a great time and I know a lot of companies are expanding, and that’s fine.
But look and see how you are expanding. If you are using debt, particularly short-terms lines of credit debt to expand, be careful, be cautious, don’t go crazy because again, you can get caught short in that. If you can do it with cash and expand in whatever you call a reasonable amount, okay, great, do it. I wouldn’t lay out some big projects right now. I think it could, you know, especially with debt, that could be taking on too much in that regard. You need to have some cash reserves. It’s kind of Dave Ramsey talk. You know, even on a personal level, you should have some reserves, you know, three or six months basis to access cash.
Or the best way I think, Mike, is private capital. So institutional credit won’t be available when we have a downturn. It shuts off pretty much like it did 10 years ago, but there’s always people that have capital and they want to invest. You know, money doesn’t go away in a downturn. It just changes hands. It’s a transfer of wealth. So if you are building up connections or you have connections right now with people who have private capital, maybe they have money in retirement plans or just, you know, cash from businesses, and maybe you are already doing business with them, you know, they are investing in some of your deals, those are very viable connections to continue to build and maintain because when there is a downturn, those people their money doesn’t go away. I mean, if they are prudent, their money is still there.
In fact, the smart ones will say, “Hey, now is the time for us to go out of town.” So, Mike, if I’ve been investing with you and we have a downturn, goes who am going to be calling up? “Mike, I’ve got this money I’ve been kind of sitting on over here keeping it liquid, can I do some deals with you?” And you are like, “Amen, brother. You know, because I’ve got connections, I know the space here, we can go to town, and that’s the time to take advantage of the opportunity.”
So keeping some margin in your business, not over-expanding, not over-levering, being nimble. And then secondly, having access to private capital, those connections that you maybe have or could be building right now, now is the time to get those in place.
Mike:Yeah, yeah. Awesome. And you alluded to this a little bit, we talked about it a little bit about surrounding yourself with the right people, right? So I think a lot of times, specifically even people that have been in medical school or dentist or the people that you deal with or a lot of friends that I know that have a higher education, you know, they are like, “Well, I have already kind of invested in myself. Like, I’ve been investing in myself the whole time.”
But when it comes to more like personal development or learning the craft of real estate investing, things like that people it’s more of like informal education, right? It’s not a university per se. Or some people are, like, hung up on like putting a value on that. Like, they just say, “Well, I don’t want to invest in myself there.” Truthfully, the most I have ever learned in my life has been more informal education and experiences more so than the formal education I think. But talk about kind of issue. Surrounding yourself with the right kind of people and staying educated on kind of our craft, right?
Dr. Phelps:Yeah. You said it. You know, personal development. So, I think, you know, formal education, you know, there’s always milestones, you know, bars that are set, you know. It can be from, you know, kindergarten or grade school or middle school, high school graduation, and then you go onto whether it’s vocational school or college and maybe an advanced degree. So there’s always a bar in front that you can go and get that higher degree, and there’s an endpoint to it. And you get the graduation, you get the certification, you get the license, you get the pats on the back and there’s ceremony. And yes, absolutely. Job well done. Right?
And so, I think there’s a mindset that says, “Well, I’ve gone through that. I’ve reached the highest I need to reach to, you know, do my job, my career or profession. And I’m smart enough that I can figure everything else out pretty much by myself. There are no more formal courses for me to take that I really need to do. So, yeah. I’m just going to . . . I’ll figure this out for myself.
And you are right, Mike. I’m the same as you. You know, all the stuff I learned in college in dental school, the experiences were great and the friendships were great. I’ll never trade that for anything. But the actual didactic information, oh my gosh. The science, the physiology, the physics, the organic and inorganic chemistry, I’ll never use that in my . . . never, never, never, never. You know? So, yeah, it’s the informal education after you have that formal education that is everything in life.
And unfortunately, only a small minority of people get that. The ones who do, they’re like us. It’s like, you know, I can’t get enough of it. I have to, like, hold myself back sometimes because I try to do too much. That’s what moves the needle forward in life is that informal education that we get, which is a lot about how we think but then certainly, the strategies that we can use that are leverageable that we were never taught in school. It’s all outside of school that we learn those things from people that have been there that understand kind of the real game of life and business.
Mike:Yeah. And, you know, for me, the informal side—masterminds, coaching, all those things—another big thing that comes out of there that it’s hard to put a dollar value on, and you really don’t generally get informal education, unless you go to Harvard or somewhere else, is the relationships, the opportunities that come up to do things together. I mean, it’s not . . . you can’t see that at the face value where it begins, but when you get into it, you are like, “Wow, this never would have happened if I didn’t meet that person. Like, I never wouldn’t have been in on this deal. We found ways to work together.” That’s pretty amazing, right?
Dr. Phelps:It’s what I call the indirect ROI or return on investment. You know, as investors, we are all focused on ROI, right? I mean, that’s important, yes. So if I’m going to go invest in a course or a mastermind or get a mentor that am going to pay, you know, seems like a pretty solid investment. You know, so the question is, “Well, what’s my ROI?” Well, the ROI is going to be many times, you know, indirect. It’s really what you do with it. If you put yourself in the right place with the right people, you never know when you’re going to get that ROI.
But it’s always multiples beyond whatever you invested time or money at that point in time. You know, I would say you only really need actionable, solid idea to implement from any, you know, meeting, experience, mastermind, whatever it is. You need one actionable idea. You know, you probably have a whole list, but get focused on like the one or two that you know are really going to help you move the needle.
And many times, Mike, it being in those mastermind groups where we have all these ideas, because we always have ideas, right? We have ideas galore. It’s there where we get clarity because we have people around us who can see things that we can’t see about the opportunities in front of us, but also maybe because we do get off track sometimes. And sometimes, it just helps to have someone there who knows us and says, “You know, you’ve just mentioned, David, that, you know, you can do this, this, this, and this and you are telling us you’re going to do these two things. Let’s talk about those other two. Why are you leaving those off the table?” Probably because they weren’t like sexy and seem fun.
But when you really look at it and analyze it through somebody else’s eyes, you go, “You are exactly right. That’s where I need to go. Thank you so much.” And what was that worth? I’ll come back in 10 years and tell you. You know, it’s probably worth a ton. But at the moment, you know, what do you write the check for? Well, it’s going to do something for me either it will save me money, save me time, or leverage me into something else that is going to give me still what we really all want back, you know, it’s time, Mike. I mean, we do this stuff . . . we do crazy stuff, you know, and we are go, go, go because we are A-type people and yet time is something we can never buy back. But ultimately, why we do all this stuff is to get time.
So, many times, the ideas we have, we have to have someone else that gets in front of our face and says, “Wait a minute, David. You just told me yesterday or you told the group yesterday that you want to spend more time with your wife or more time with your father or more time with your kids, whatever it was, and today, now on your list of action items, you’ve got that, that, that, that. Hold on. Is that getting you what you told us you want yesterday?” And I go, “Oh, man. You know, you called me out. Thank you for calling me out. You’re right. I was heading down the wrong track. Thank you so much for that.”
Because look, when we get down to, you know, the end, whenever that is for us and many times people will talk about this, you know, about their regrets in life. And it’s never about, you know, doing that one more deal or spending another week, you know, day at the office or, you know, adding another $1,000 or $10,000 or $100,000 to their bank account. It was never it. That was never the regret. The regret, always, Mike, is I wish I would have spent more time with the people I cared about.
In fact, you know, John McCain just passed away. And in this last book, he mentions his family, he mentions being blessed by the seven great kids he had. And he say, “My one regret is I didn’t spend enough time with them.” Well, boom. And all the great things he did, you know, great things he did as a war hero and serving the country, served a lot of people, but what he realized at the end was, “Yeah, that’s all good, that’s good. I’m happy I served, but you know what, I wish I would have spent more time with those people.” Okay?
Mike:Yeah, yeah. Awesome. Well, David, hey, before we end here, I want to . . . we both run professional masterminds. And you focus on dentists and doctors and helping people shore-up their business there and then, of course, we focus on just straight real estate investors usually. Tell us a little bit about your Freedom Founders while we are here. I’ve been to it before. It’s a great event. Fantastic, no doubt and it’s inspiring. Tell us about it.
Dr. Phelps: Well, because I come from medicine and dentistry, that’s who I am and was for many years. So I know the struggles that, you know, high-income people have, professional practices. I know the struggles. You know, high-income does not mean freedom. In fact, usually the higher the income, the less freedom. And so many of my colleagues, you know, they get down the road a few years in to practice and they start realizing that this dream, this vision that they had, it’s not working out. And they don’t see their way off. They don’t see the exit ramp. It’s like, “Dang, I’m strapped to this life of earning income, but it’s not giving me what I want, freedom and time.”
And because I’ve been through that, because I understand that and I had to make the same decisions about what was important to my life, and I realized that real estate was really the core of what gave me that freedom. A little bit by luck, but a little bit because am always intensely curious and, you know, that’s why I found real estate early on and it worked well. So my job today is to take those, my people, my colleagues, in medicine and dentistry and connect them to the best people and therefore the best real estate that I can, you know, in the market. And that’s why I’m a part of many other masterminds. That’s why I know people like you, Mike, because we need each other.
You know, capital needs a place to go and people that are deal-makers and entrepreneurs and what I call catalysts out there are out on the streets lead generating, putting deals together, they need the capital. So I put the two together. I translate between the two. And I have a mastermind where I bring, you know, top-tier real estate people like you and my doctors, and I teach like all, just-in-time information. They don’t need an MBA, they don’t a commercial, you know, real estate degree, they need to know enough about, you know, deal structure, asset classes, buckets of money, due diligence. And we put that stuff together and it’s probably the most fun I’ve had in my whole life.
Mike:Yeah, yeah. That’s awesome. I would vouch for. With Investor Fuel, I do coaching and a whole bunch of other things obviously running your own business. There’s nothing I love more than being in Investor Fuel. We just had our meeting here recently, loved that. I just love being around entrepreneurs with a ton of energy that inspire each other and do deals, and everybody is building wealth and winning. So, yeah, absolutely.
So for Freedom Founders, where do people go if they want to learn more about it?
Dr. is a good place to go.
Mike:That’s what we call a softball, dude.
Dr. Phelps:Nicely done. I also do a podcast like you do, Mike. It’s “Dentist Freedom Blueprint” podcast. Now, the cool thing that I tell people is, it’s very entrepreneurial. We do not talk about clinical dentistry. I have some very cool people that I bring on. We talk a lot of real estate. We talk a lot about leveraging, about culture, about teams, about delegating. So it’s not just for dentists. So, you know, I’m not telling people I can give you an honorary dentist degree if you come on to that podcast. But it’s not about clinical dentistry. I promise you.
Mike:Yeah, yeah. Awesome. Well, we’ll add links down below in the show notes here for everybody that’s watching us on And we will add links for Investor Fuel if anybody is interested in learning about that as well. So, David, thanks for spending time with us today. Great to see you.
Dr. Phelps:So cool, Mike. Always good to see you. Thank you.
Mike:Yeah, yeah. And I’m excited, David, for those that are listening right now, especially those that are already Investor Fuel members, David, is actually going to be out keynote presenter at the upcoming Investor Fuel in November. So excited to have you there and I know you are going to inspire our room of real estate investors, no doubt.
Dr. Phelps:I can’t wait to be there. Thank you, Mike.
Mike:Awesome. Everybody, hey, thanks. This was show number 431. We are going to keep them coming at you. If you have a chance, please go out to iTunes, Stitcher Radio, Google Play, wherever you listen to that and give us a positive rating. We’ll appreciate the feedback. It’s the one thing that fuels us to keep doing hundreds of episodes. I love seeing my friends here. In fact, we just talked about, David, that often this is how I see my friends and catch up with a lot of people that I respect it’s actually doing the podcast. So, that’s one thing that keeps me going. The other thing is positive reviews and feedback that we are impacting your life. So, if you give us a review, that would be great. We appreciate it.
Everybody, have a great day and see you on the next show.
If you are an active real estate investor already doing deals and looking to double or triple your worth business, you should consider joining the Investor Fuel Real Estate Investor Mastermind. We are a small group of investors that share our best practices, tips and tricks with one another in an effort to all win. Real estate investing can be a lonely business for successful real estate investors. But it doesn’t have to be. Investor Fuel members meet four time a year, but we talk to each other 365 days a year, and we focus on improving the profitability of our businesses. Improving the quality of our lives, that’s why we do this, right? And making an impact on those around us so we can truly leave a legacy.
We limit our membership to only one to two members per market, so everyone shares their knowledge, tips and tricks openly and honestly. Our members include some buying one to two houses a month up to some of the most respected investors and leaders in the real estate investing industry, some of which have personally done over 1,000 deals. If you would like to be considered for our invitation-only, world-class Mastermind, please visit to request your personal invitation. Our next meeting is coming up quickly. Go to now to learn more.
Thanks for joining us for this episode of the Investing Show. If you are not yet an elite member of FlipNerd, you are missing out. We have tons of great training, including a new detailed master class published each month and live training webinars with experts twice a month. Plus you’ll get access to all of our archive, where we already have a growing library of master classes and other training videos.
Elite members also get membership in our incredible online mastermind group, where many of the top real estate investors from across the country, including many of the hundreds of guests I’ve had on the show in the past are already members. Whether you are brand new, looking to get started, or a veteran, you simply must join in today. I promise you won’t be disappointed. To learn more or join today, please visit That’s See you on the next show.

Copy link
Powered by Social Snap