White Coat Investor Podcast #453:
Common Real Estate Questions from High-Income Professionals
Date: January 8, 2026
Host: Dr. Jim Dahle

Episode Overview

In this episode, Dr. Jim Dahle addresses some of the most frequently asked real estate investing questions among physicians and high-income professionals. Drawing on questions from a recent real estate webinar and his experience, Dr. Dahle dives into due diligence for passive real estate, the mechanics of debt vs. equity investing, detailed tax implications (including Real Estate Professional Status and the short-term rental loophole), the role of REITs in a portfolio, investment vehicles (syndication, funds, debt), and important considerations for adding real estate to an investment plan. A featured interview with Eric Goodman of Goodman Capital offers an industry expert’s perspective on debt-side investing and market cycles.

Key Discussion Points and Insights

1. Real Estate Market Context and Rationale for Discussion

• Recent Performance: Real estate hasn’t been “sexy” lately, underperforming stocks in the last four years due to rapidly increasing interest rates.
• Investment Philosophy: Dr. Dahle cautions against “performance chasing” and encourages listeners to consider cyclical opportunities:

  “You’re not supposed to buy what’s done best in the last few years. That’s performance chasing.” (12:25)

2. Due Diligence in Passive Real Estate Investing

What is “due diligence” and how do you approach it, especially as a passive investor?

• First Steps:
  • Read the offering documents: operating agreement, Private Placement Memorandum (PPM) — especially fees, risks, liquidity sections.
  • Investigate the people behind the investment: Google principals for lawsuits or scam associations; check their track record.
  • Talk to other investors about norms (fees, liquidity, structuring).
• Diversification: Essential to avoid overexposure to single managers or markets, especially with leverage risk.
• Education: Dr. Dahle recommends WCI’s “No Hype Real Estate Investing” course for structured due diligence guidance.

  “A lot of people asked about a company with syndications that went bad recently…if they’ve never done it before, we’re not taking them on as a sponsor.” (12:45)

3. Interview: Investing in Real Estate Debt with Eric Goodman (Goodman Capital)

[Segment starts: 14:32]

Debt vs. Equity Investing

• Protection & Risk Profiles: Debt (as lender) is typically senior in the capital stack:

  “When things go bad, the first people to lose their money are the equity investors…the debt investors not only got all their principal back, but got all of their expected return back.” — Dr. Dahle (16:58)

• Loan-to-Value Discipline:

  “At Goodman Capital, we primarily focus on sub-50% loan to value. So the property value gets cut in half, we are still protected… the equity loses everything, we lose nothing.” — Eric Goodman (17:33)

• Return Expectations: Debt investors should expect 10–11% annualized, not “equity” level returns:

  “If you’re coming to some place like Goodman Capital, you’re looking to hit returns of 10, 11% net annualized with monthly cash flow, tax efficiency.” — Eric Goodman (18:39)

• Geographic Advantages: New York and Northeast offer high barriers, resiliency, and less competition, balancing risk:

  “In New York, we’re a very finite little island… very high barrier to entry… that’s what’s keeping vacancy rates sub-2%…” — Eric Goodman (19:50)

Investing in Changing Rate Environments [22:02]

• Equity investments’ returns suffer as debt service rises with rates, especially in overleveraged markets.
• Private debt has become more attractive as rates climbed (healthy returns, less volatility, and more stable risk profile).

4. Tax Benefits: Real Estate Professional Status (REPS) and the Short-Term Rental Loophole

[Segment starts: 24:24]

• REPS
  • 750+ hours/year in real estate and more time in real estate than your “other” job.
  • Allows you to use passive real estate losses against active (earned) income (e.g., your physician salary).
  • Most commonly, the non-physician spouse qualifies.

  “If you get your 750 hours, but you also spent a thousand hours practicing medicine, sorry, you’re not a real estate professional.” (25:50)

• Short-Term Rental Loophole
  • Different structure: Not classified as typical rental business, so 100-hour minimum applies.
  • Enables use of depreciation to offset earned income, even without full REPS.

  “The rule that tends to be applied if your rentals are short term rentals… is not 750 hours, it’s 100 hours.” (26:50)

• Syndications/Funds and Tax Benefits
  • Passive role in syndications/funds (limited partner) doesn’t count for REPS hours.
  • Real estate losses from such vehicles generally remain passive unless you qualify via REPS or the short-term rental rules.

5. REITs and Real Estate in Your Portfolio

Public vs. Private Real Estate Investment

• REITs in Index/Target-Date Funds: “If you value simplicity, just invest in that.” (38:40)
• Downsides of Only Using REITs:
  • Misses privately held real estate categories.
  • Less direct control, smaller tax benefits, and higher stock-market correlation.
• Private Real Estate: Offers more control, potential for higher returns, and greater diversification via direct ownership or syndication/fund involvement—but adds complexity to taxes, planning, and management.

“If you just want easy diversity and liquidity, that’s where publicly traded REITs… is probably a good move.” (42:16)

6. Asset Location for REITs

Where do REITs go: Taxable, IRA/401k, Roth, HSA?

• REITs are tax-inefficient due to unqualified dividends.
• Best placed in tax-advantaged accounts (Roth, 401k, HSA) if possible.
• The real question: “Which asset class do you move into your taxable account next?”

  “REITs tend to be best in some sort of a tax-protected account.” (44:45)

7. Do You Need Real Estate? Are You Leaving Money on the Table?

• Not necessary for millionaire status:

  “You are highly likely to retire as a financially independent multimillionaire without ever investing into real estate in any specific way…”

• Why add it? For:
  • Diversification (lower asset class correlation)
  • Return potential (in low stock-return decades)
  • Tax efficiency (with proper structuring)
• Warning: Private real estate adds complexity to taxes, admin, and estate planning.

8. Paths to FI (Financial Independence) via Real Estate

• Short-Term Rentals as an “Escape Hatch”:

  “Building that short-term rental empire is probably the fastest way out of medicine.” (48:40)

• But…: Requires significant hustle, work, and commitment; may not be preferable for every professional.

9. Investing Vehicles: Syndication vs. Fund vs. Debt Fund

[Segment starts: 52:01]

• Syndication:
  • Pros: Greatest control, ability to diligence a specific property.
  • Cons: Lack of diversification—a lot of money into one deal; higher risk if it goes bad.
• Private Fund:
  • Pros: More diversification (many properties for one investment).
  • Cons: Less control—trust in the manager’s property selection.
• Debt Fund:
  • Pros: Senior position in cap stack, less risk, steady returns (6–11%).
  • Cons: Tax-inefficient (interest taxed at ordinary rates), less liquidity than public REITs.

“The beautiful thing about a real estate debt fund is you’re in a different position in the capital stack, a much more favorable position… A much less risky way to invest in real estate.” (54:20)

Notable Quotes & Memorable Moments

• “You’re not supposed to buy what’s done best in the last few years. That’s performance chasing.” — Dr. Dahle (12:25)
• “When things go bad, the first people to lose their money are the equity investors… the debt investors got all their principal back, and their expected return.” — Dr. Dahle (16:58)
• “If you get your 750 hours, but you also spent a thousand hours practicing medicine, sorry, you’re not a real estate professional.” — Dr. Dahle (25:50)
• “Building that short-term rental empire is probably the fastest way out of medicine.” — Dr. Dahle (48:40)
• “If you just want easy diversity and liquidity, that’s where…publicly traded REITs…is probably a good move.” — Dr. Dahle (42:16)

Timestamps for Important Segments

• [12:25] – Avoiding Performance Chasing in Real Estate
• [13:00] – What Does Due Diligence Mean for Passive Real Estate?
• [14:32] – Interview: Eric Goodman, Goodman Capital, Debt vs. Equity
• [19:50] – Advantages of the New York Market, Real Estate Debt Safety
• [22:02] – Impact of Interest Rate Hikes on Equity vs. Debt Strategies
• [24:24] – Real Estate Professional Status and Short-Term Rental Loophole Explained
• [38:40] – Should You Rely on REITs/Target Date Funds for Real Estate?
• [44:45] – Best Accounts for Holding REITs (Tax Location)
• [48:40] – Using Real Estate as a Path Out of Medicine
• [52:01] – Pros and Cons: Syndication, Funds, Debt Funds

Conclusion

This episode is a masterclass on the real estate investing spectrum for doctors and other high-earning professionals. Dr. Dahle provides both the pragmatic and tactical “how” (due diligence, investment vehicles, tax implications) and the strategic “why”—helping listeners understand when, how, and if real estate investments fit their long-term plan. The interview with Eric Goodman gives listeners a rare look at the logic and risk management behind debt-based real estate, which may be especially appealing in uncertain markets. Comprehensive, candid, and practical, Dr. Dahle keeps the focus on education, risk mitigation, and aligning investments with one’s lifestyle and financial goals.