Practice Valuation with Passive Income

awesome i'm gonna i'm gonna go ahead and start and we'll start welcoming welcoming people to the web okay here we go okay sounds good three two one just getting started hey everyone welcome those of you coming in we're just getting set up hope you're having a wonderful evening at least this evening here brady hit it in utah yeah it's it's it's evening is here as well pacific time i bet we've got some coasters here probably probably a few sure so we'll wait a few minutes here

while people are getting on we're just going to check our settings and make sure things are set up critically for us but give me one yeah yeah yeah there's people rolling in i'm gonna get the chat going all right and we've got a few folks we got michael jones here emily miller is here got a guy i've seen hammy yeah we got a few i i noticed somebody's names here we got yvonne lee trang nguyen uh we also um let's see here we got emily miller

uh so we got some people hopping on we're gonna folks we are gonna kind of hang out just a little bit while other people hop aboard here and uh and uh if you wanna try the chat out if you haven't used zoom before um i'm gonna go ahead and click back a couple uh a couple thumbs up just to uh to get it rolling in the chat get used to using the chat because i'll tell you what if you want to kind of customize this to

your situation type in your questions in the chat because we're going to be talking about like the top five passive streams of income for dentists today right unless unless everybody on here wants to use their two hands their full occur right maybe there's some that want to do that jordan what do you think yeah there may be yeah yeah but even if you want to use your two hands until you're 80 years old or 90 you know what it still is nice to have other streams

of income coming in increase the value of your practice we're gonna be going over practice valuation techniques and specifically you know we'll tie it into uh membership plans how subscription-based revenue is valued differently than just revenue and dental practice so that'll be really fun we'll kind of build up to it with some other kind of cool strategies um all right so we've got let me take a look at our participants now oh we've got some new folks here um uh anatha uh prasanna uh if i'm

pronouncing that correctly we got jonathan richter here joshua bratt oh we got a few more robert uh menza uh oh i know robert hey how's it going and uh so um people are are trickling in trickling in trickling in we're just gonna just gonna hang out here once again type something in the chat whether you know to say you don't like brady's hair or say i should get my hair cut like jordan or something so say something in the check it used to you know using

that function here because when we start getting hot and heavy jordan i think people are gonna have some questions oh yeah that's good so um awesome awesome awesome and we'll probably start in about three to four more minutes yeah get a few more it seems like a few more people are coming on and you may be finishing up your day in in dentistry and maybe had a longer patient so we're going to give it a few more minutes uh but just a quick introduction for people

that don't know who we are i'm sure most people know who you are brady uh but my my name is jordan comstock i am the ceo and founder of boom cloud which is a software company that helps dental practices create organize and automate a dental membership program and create passive income for your office and uh brady why don't you give a little introduction well i i mean i've been in dentistry for 15 years i started out on the clinical side managing a dental lab so i

i love this industry my whole family has been in this industry and brady tell us a little bit about yourself man yeah so i recognized some names in there so hey i may have been with you you might have attended a lecture of mine or sure at one of the dental meetings the greater new york or something but yeah so those that you don't that don't know me i did uh i was a junior in dental school and uh i was doing some sports doing some

golf and uh my wrist popped out of place and it stayed out of place for two weeks and i couldn't do any clinicals as a junior my right hand my real working hand went to a risk surgeon he said you might not want to choose dentistry as your career and i was like oh oh i'm past the point of no return right i had over a hundred thousand school debt by my junior year and all that so i started prepping teeth with my left hand in

the evenings and i also started studying okay what other careers can you do with a dental degree if you can't use your hand well it turns out there's not a lot you can do you can't really you know they don't hire you for office jobs if you're a dentist they train you to do one thing do dentistry and so i started learning about other streams of income that you can earn while being a dentist but without using your two hands so you're in luck if you're

watching and you felt certain days at the end of your day you feel strained and stressed and you're like i don't want to do this for decades more uh you're going to be happy to hear some of this information if you have said to yourself man do i have to deal with managing a staff the rest of my days you know for some of you that are saying man they now say you've got to save up five million dollars in cash to retire and you've only

got 500 000 in your retirement account you might be interested in knowing that you don't have to save five million you can develop multiple streams of income and have the same effect as three percent interest off your five million total so so anyway so you're this is going to be good so what i did is i ended up buying seven practices in the first five years out of dental school and i learned the hard way how to make those into assets rather than liabilities right how

to train teams how to how to market effectively how to add owner doctors not associates how to reduce my debt and then eventually eliminate my debt and so this goes hand in hand with our topics today which are we're going to start out talking about passive income streams and then we're going to kind of end it with jordan talking about how to incorporate one of the easiest passive income streams which is a membership plan jordan and i do a lot of these because i added boom

cloud to my practice many years ago and in pretty short time added thousands of patients to it and so hey uh which was tens of thousands eventually hundreds of thousands of dollars a month and that increases the valuation so jordan i'm going to shout out a few more names see who else i know on our list oh we got a few more here um uh uh megan uh everett uh if i'm pronouncing that correctly michael jones hey welcome welcome welcome steve what's up yes how's it

going how's it going tom yan uh we got yen uh lou and a few others on here so what we're gonna do is i think we're gonna should we start out with our content for tonight jordan what do you think let's do it let's do it let's go yeah let's go for it we are recording this so there will be a replay so all those people that registered um we'll be sending a replay out as well so we're good man okay awesome awesome so here's the

deal uh i can go several different ways with some of this content but i want to know who owns their practice or group of practices versus who doesn't own a practice so in the chat if you could and you don't have to if you could say i own a practice or i'm an associate or i'm a partner something like that because i really want to give you actionable strategies that you can start doing right away so um if anyone uh would care to do that i

own a practice joshua awesome love it love it just go ahead and click click in there i'm gonna start with really hitting strategy okay christine now hammy uh hey beautiful robert just so this is this is super awesome thank you guys for uh participating there i'm gonna make an assumption on that ratio that you guys are practice owners not associates and and just so you know most people that registered our practice owners we ask that question so you do a lot of practice owners yep everybody

there okay cool so i'm gonna go a little deep here and i'm gonna start with uh probably the hottest topic okay what i'm gonna do is i'm gonna go to multiple streams of income first okay the dentists are crushing it with right now they were to work into the valuation side of things then we're gonna work into how those streams of revenue uh are valued and then and then we'll finalize it with kind of our spawn uh who you know our our our wonderful uh dj

right jordan and his company boom cloud that i've known and used for so long so i want to give you a lot of content that is kind of unrelated to boom cloud at first which is going to lay a framework for if you guys aren't using boom cloud yet kind of how that works so we're going to go a little bit off today folk you're gonna say where is brady going with this where in the world is he going with this so only in the last

two weeks have i started teaching people what my most profitable business has been a lot of people say well brady you've owned all these groups many groups and you've trained eight you've got 88 different groups in your study club and you're helping them go from 15 locations to 20 locations uh and uh oh someone tried to call me so if there was a glitch in my video i'd say decline okay and so here's the secret folks um real estate real estate they say that mcdonald's their

their real estate's worth more than their franchise right um the largest group practice owner in the u.s recently came out with a statement he said my real estate holdings are worth more than my practice um myself i started investing in real estate the day i first met bought my first practice in 2001 almost 20 years ago and i never stopped i kept going and i look back now and boy i've done a lot with practice stuff and i know you guys have too with some great

practices on this but i look back and and i've made more money equity wise and cash and more income with real estate so why would i bring up real estate right now why is it a unique time into in in history number one who can attest in your hometown do you have a lot of vacancies who has a lot of vacancies you see four lease signs all over uh guess what has caused those vacancies in retail space there's four types of commercial uh um commercial real

estate retail industrial office and multi-family there's actually a little fifth one called medical dental which is the highest value of all that healthcare real estate triple net leases nicer buildings all that now the retail sector has been hit the worst these are buildings in high exposure locations selling goods it happens to be the type of real estate that most dental practices would love to be in high exposure yeah absolutely so what has happened is this retail segment is now undervalued there's too much supply because what

are these companies doing they're selling online not bricks and mortar so you can buy this these on average at about 75 discount beautiful strip centers beautiful strip malls beautiful retail centers that are 30 vacant and here's the deal folks real estate watch this real estate this is all the only equation you need to know we're starting real estate with our passive income equation yeah the value of real estate equals the noi net operating income divided by the cap rate okay value of a real estate b

you can you can know the value of your real estate before you buy it if you do this equation take the existing leases coming in that building that'll give you the net operating income which is basically your profit or your ebitda divided by capitalization rate most medical dental buildings sell for between a five percent and a seven percent capitalization rate if you have those two numbers the leases coming in and the cap rate that'll give you what the building's worth okay and so so here's the

interesting part you can buy these at 75 less cost than normal okay when you add your own practice into there or a periodontist practice or your oral surgery buddy or your orthodontic buddy um and you get that building from 60 percent occupancy to 100 occupancy that increases the net operating income and it's worth a whole lot more okay we just closed on a building a group of buildings last tuesday eleven buildings on the main drag eleven separate buildings seventy four thousand square feet whoa wow you

know how much seventy four thousand square feet that's a lot it's a lot and we bought it for 54 bucks a foot and it's already half filled with medical dental the day we closed so bought it for 4 million the day we closed it was worth 12 an estimated 12.5 million dollars wow that's that's crazy and so so you can do this with smaller buildings medium buildings larger complexes like i do now and so uh when you buy real estate what you're doing is setting it

up for passive income to give you a great retirement plan so if you have a solo practice right now and you're like hey someday i'm going to grow out of this when you do your next practice make sure you buy the real estate and buy a very inexpensive retail strip center or or retail center and then your practice goes into 4 000 square feet you bring a couple other dental buddies in there from different specialties make build that building into a medical dental building and the

value will be double triple or quadruple what you paid for it and it'll give you passive income so before we get going to the next topic real estate uh uh get office any questions in the chat about you know hey brady how do you get started looking for real estate or um and so i'm gonna give you guys my email if you wanna look for projects in your area this last building we had a million dollars left over cash so we paid cash for all the

real estate no debt nice we had a million extra left over and i've got millions of dollars from very successful dentists that are in our study club that want to invest so if you find a good deal you do not need any money to do the deal once again if you find a good deal there's plenty of private lending dentists who want to invest in that deal so does anybody out here want to want my top three resources to find buildings just put it in the

q a if you want them i'll tell you how to find it i mean yeah i i do i'm not ex i'm not excluded from this right and i'm i'm actually being serious so jordan can i go over a couple examples in my life instead of just starting with these huge deals can i do that real quick yeah okay i think we had a couple people putting the in the chat i'm just gonna say how do you buy real estate without having much cash right yeah

beautiful question uh josh a hundred percent right i'm gonna go over that so and then someone else said hey where do i uh uh how do i find it so loop net go to loopnet okay just go to loop net billions and billions of square feet of real estate and i'm sure that right yep yep you you nailed it maybe put that in the oh i just did oh man okay so let me go over two deals that i did just real this i was when

i was expanding my dental practice my my six op practice went to adopt and i needed a building so i bought a 9 000 square foot building for only 575 000 and i put down 150 000 down payment it was appraised last week at 2.2 million right four times what i paid for it another strip center strip mall that had a blockbuster in it i paid 330 for it it was re appraised at 2 million uh um uh i shouldn't say appraised had a broker opinion

pinning no value for 2 million last week so uh obviously the real estate market is really good right now and so how do you do it without any money into it so here's here's the way it looks usually there's an ownership llc this is the llc that buys the building okay and then if you have other people coming in with money you either set up a lending a lending llc or you have those lenders be actually a part owner of the project if it's a bigger

project i recommend having a separate lending llc if it's a smaller one you just use that one llc directly so this memphis deal we rounded up 5 million in cash actually 6 million we only needed five million that lending lc led that money to the ownership llc and we didn't even use debt we just paid cash at the auction for it we won the won the bid on that um and then the lending lc lended loans the money to the ownership policy okay typically however what

will happen is this let's say you find the building and let's say brett or one of you got in here says i'm gonna open a second location in this building okay um you will typically be the 60 or majority owner in that building and then some of the people that bring some cash to the table okay will be a part owner so you won't have any down payment and these wealthy dentists bring in the money they bring in the money to have a part of the

deal and so therefore you have it yes yes jordan so you may you make sure you your majority share the 60 is what you're saying yes okay that's right for you folks on the phone if you're going to be leasing having your practice lease in that building you should effectively own the building don't you agree but you can let some minority partners in who are to cough up a bunch of cash which will renovate suites uh it will give the down payment right and so then

what typically happens is okay sometimes you want to pay these people back that money okay and with retail to medical dental conversions the value of those buildings can skyrocket so much that after six months you basically have the building refinanced and what happens is everybody who contributed money they get their money back and now you have a 100 finance deal where no everybody gets their money back and sometimes in those deals your 60 goes back up to 90 ownership and the people that brought the money

in they would just own a little piece of the equity and they have their money back and they had a nice little interest rate of return at six percent nine percent whatever that may be now if you're on the phone call right now and you have a hundred thousand dollars cash that you saved up like many of you do you can find a a a building that has a replacement value of three million i'm gonna do the numbers right here this is this is how the

good deals typically shake out okay you will want a building that it might be 20 000 square feet so this is about 20 000 square foot building it cost four million dollars to build but it's lost some tenants because you know amazon's out there and cobit happened right yeah so so in los angeles and now the net operating income is lower but you've got a dental practice and you can open another location in there okay so they'd sell this four million dollar building let's let's save

for 1.5 million okay you can buy it for 1.5 but you know you're going to go ahead and put your practice in there and your orthodontist buddy is going to go in there as well ah great so you know that after closing based on you signing your own lease in there that it's going to be worth 3.5 million and once you get one more lease it'll be worth four million and once you get one more lease it'll be worth more than the replacement value at maybe

five million so if you buy it for 1.5 million right you might need uh you know 100 grand down 200 grand down okay and uh and now you've got a retirement asset that's going to pay you once it's worth 3.5 to 5 million it's going to pay you about 12 000 a month and that's after you get your money back who could live you could almost live off 12 grand a month right i mean some people you know but so if you do this two or

three times over like i've done many times last 20 years that passive income stacks up and you've got tons of equity in there and you've got not only a real estate asset but you've got a practice asset that has value as well so i'm going to move off of this real estate topic but if you want more um info on that or go to total totaldentalfreedom.com and you'll see stories down below about how folks have used real estate as a component of buying practices acquiring other

locations um and so and then many of those dentists that are on total yeah thank you jordan any of those dentists that are on there they use boom cloud because of the uh the passive component so jordan what i want to do is before i talk about the next passive stream of income i want to talk about how boom cloud directly affects valuations or practice could i do that or a subscription plan yeah it's good let's do that okay so okay okay so i'm one stream

of income i'm going to talk about leverages off of these older dentists who have not started practicing again after covert okay yeah and so i'm going to talk about creating passive income with that but first i'm going to talk about how a subscription plan like like boom cloud that of course utilizes a software to manage that how a subscription plan affects your valuation in your practice okay here we go so let's say your practice right now does a million bucks a year okay it does a

million bucks a year um the average dental practice is worth about 72 percent of last year's gross revenue right so 720 000 is what your dental practice is worth but dental practice is because of this dso component today a lot of them are valued at a multiple of ebitda sometimes six times uh ebit does okay ebitda is basically the profit margin in the practice after the doctor gets a modest salary and so one cool thing about subscription plan revenue every dollar that comes in is counted

as ebitda so what's cool about that is your subscription plan revenue is not subject to the traditional way that you value practices subscription plan revenue every dollar that comes in on your savings plan goes directly to ebitda which is how we've been transitioning into valuing dental practices so so isn't that cool jordan how that works yeah so the first the first one you said the 72 cents uh or the 720 thousand dollars uh uh typically a million dollar practice is worth that much that's called the

discounted cash flow valuation is yes what i've been told and then the the what you're with the 6x there that's a multiplier evaluation and that's you want to be in the multiplier evaluation with anything that you do because well it's going to make you more money yes yes yes and here's one more thing jordan and it ties into our next topic usually as you add another location and maybe another and have three locations you transition from valuing your practices from this uh discounted uh a cash

flow methodology yep to a multiple right right like heartland and all these big groups sell for multiple so what's cool is is this if you get ahead of the curve and get subscription revenue coming your practice and then you multiply that in other practices you know if your ebitda number is way higher and you're getting an 8x or a 10x multiplier now you've double whammied it you've taken that subscription revenue and you've got a higher multiple as you grow so so uh it it can mean

not just hundreds of millions of dollars but hundreds of mil hundreds of thousands of dollars but millions of dollars in the future by starting early yeah right so there's a there's a quote from uh there's a book that i recommend everyone here read brady it's called the automatic customer it's a it's a building uh recurring revenue uh in any business and it's written by john warlow i can put a i'll find a link here in a minute okay um i highly recommend getting that book because

it talks about everything we're talking about here in regards to valuations and what how recurring revenue through a membership plan in in this case um how that uh increases the value of of a business over dental practice i think john warlow says the recurring revenue can be valued between 24 times the monthly recurring revenue up to i think it might be 40 times i do have a slide on that so it's like 24 times the mrr so monthly recurring revenue so if you had like 45

000 monthly recurring revenue it can technically be valued at uh a little over a million to 2.4 million roughly is is kind of what i've seen according to this book here so automatic custer go automatic customer go grab that book it's it it's uh if you like what you're hearing now you'll you'll love that book you know you you make a good point jordan not only just from the most empirical sense does recurring revenue increase that but in reality if you're going to value that as

a almost a separate asset class which you should right and your accountant should or your valuation expert should absolutely absolutely then you're going nuts right with that right and just just to say it even more simply folks with your dental practice when you cut that crown you do that crown you're doing it once and it's done right that's that's how we value it either with the discounted cash flow methodology or the multiple but with that recurring revenue right they know it's there every month and so

it minimizes their risk right it does it minimizes their risk that's why they pay such a high multiple for that yeah if you and if you think about it any business owner or or if you if a court you know a dso is buying your your practice let's say they want i mean technically they're buying it so they can make it a multiplier that's why most most corporate debt you know dental offices buy you know discounted cash flow and offices because they know that they can

turn it into a multiplier but if you think about it if you think of real estate you were talking about real estate earlier um the beautiful thing about real estate is you get monthly cash flow coming in so recurring passive income plus the increase of valuation of that of that building right over time typically real estate goes up and at least as long as i've been alive it's just kept going up and up right with some dips every once in a while but it still goes

up nonetheless so that's a very good financial model now if you want to do this to your practice you need to build a recurring revenue cycle in the practice so you get that predictable recurring revenue coming in and then that over time that valuation increasing so it's very similar similar to real estate once you get that you know i i think what you're saying is huge because when i first made the decision to put boom cloud in my practices and to start a dental savings plan

i was just thinking about the monthly money coming in right yeah correct and and and with real estate investment a lot of times we think of yeah the passive income that's great i can live off that sure yeah but but when it comes time to sell an asset and you get a big check for two million dollars right or more then then that's a that's a that's a huge benefit and then you take that money okay and put that into another asset or two or three

that produce more passive income and uh and so i i love it okay so all right let's go to the next topic this one's this one's super fun uh for me and it ties right in with what we're talking about with membership plans as well and i call it the mentorship practice real quick real quick we got a question uh josh hi josh uh he said are we gonna get uh the bullet points uh for the resources um i'm happy to put a bullet list together

yep yep that'd be awesome yeah that'd be super cool i'll have one of my team members put some together have them watch it and and and do this there will be a uh a recording josh so you're gonna go all right brady go ahead i love it i love it so i'm only sharing with you guys like not the pie in the sky you know x y or z new fad and dentistry i'm only sharing from the hundreds well by now thousands of dentists who have

actually done it they've reached financial freedom of dentistry it's like what do they do what did they do that caused them to do this so real estate that's number one uh uh the underlying foundation is to have things like a dental savings plan in the practice and like i said at the end jordan's gonna get into the numbers and that's going to be going to be huge so so we're going to kind of save that for the end but what are these other folks doing um

how are they creating income besides just their practice real estate well it has to do with this um buying low selling high is a is a common theme with stock trading right with real estate um if you look at uh your dental membership plan if you start a dental membership plan and you've got no revenue coming in from from a a plan yet if you start that you're basically buying low at zero right you've got nothing in your absolutely right and you're building an asset a

secondary asset your practice so right now what's happening is there are doctors spoke to one last night 80 years old he's not coming back to practice he's done because of coven he's in that high risk range right 80 years old yeah and he's like i've got it made i don't want to die from covet and of course you know the media has been freaking us out about it and all that good stuff right and so uh so he didn't start his practice back up yet and

he's got a gorgeous building six operatories he converted a house into this and uh you can buy the practice in the house for just a few few hundred thousand bucks and and almost immediately you know he has 4 200 patients two full-time hygienists a lot right yeah almost immediate and the practice part of it's just 80 grand 80 grand for the practice and it'll probably do about 800 the first year very easily okay at 800 using traditional methodologies six hundred thousand dollar valuation if you buy

it for 80 then how much equity do we have at the end of year one so bought it for 80 does does 800 by the end of the year 60 600 000 evaluations so we're looking at it's worth 520 000 in equity not bad over half a million dollar equity component um equity is kind of your valuation gauge on how much income you have coming out of the practice so on a practice that's doing about 800 000 if you do it with another dentist okay you

allow another dentist to buy in at the same time then typically here's what it looks like so i don't recommend that you guys watching this with a practice go out and buy a practice and start working two practices that's not a great recipe right but we have tons of practices for sale that are really good deals right now okay and we have tons of young dentists that want to buy yes jordan i have a question because i'm actually interested in buying a dental practice um because

i i've been on the clinical side and then obviously started businesses oh what's the best way to find uh a practice i'm sure you'll you'll talk about this but i'm just curious how do you find a good opportunity by practice and then i'll leave you with that and then you you'll finish what you're doing i love it i'm going to give you like five ways okay i'm gonna start with one just to as a teaser for everybody right like you know this will be fun call

your local um supply reps okay and say oh hey oh it's unbelievable just say hey uh doctor hey mr henry shine um hey i am looking at buying another practice and i'm also thinking about switching my account over to henry shine right you know that's a great idea oh it's really good and and what i would do is here's what i'd commit to do if you help me find the practice for sale i will i will commit that i'll do the new practice right keep it

on henry shine and switch my account to henry shine and of course i pay a two thousand dollar finder's fee oh so now he's out there because you know dennis they get to know their staff get to know the rep right yep yep so now you have somebody actually personally talking to them about you as a person and as an opportunity and they're going to say things like this oh well there's actually five guys that have been threatening to retire for years the two right now

are dr jordan and probably dr brown that was for you jordan and dr brown that would that want to retire right now but there's three others that if i talk to him they probably would so that that's an incredible strategy you will for sure get a great deal right just by doing that one in your area and uh so anyway um we'll get into more old doc young doc and you the mentor and mentor so what you do the mentor is basically you're the guy or

gal that has been there done that you own a practice you guys own a practice these young docs they haven't owned a practice yet they need you they want you they want a mentor and so those are the three ingredients you need and in the middle is this gorgeous little sweet spot okay the old doctor sells the young doctor works full-time and has a dental license and you as the mentor basically bring the parties together you have a generally a real estate investment a practice investment

and oftentimes what it looks like is this maybe you the uh mentor own half the practice and the young doctor owns half the practice here's how the revenue is split at the end of each month there's expenses and profit so we take the profit and split it into two buckets the clinical bucket and the business bucket um they get a hundred percent of the clinical bucket if there's a new partner that's added to make a two doc practice they split that clinical bucket okay a dental

practice uh dental practice success is half based on the clinicians half on the business side so the business bucket is split up based on equity ownership in this particular case the mentor or jordan in that case it's 50 of the revenue and the young doc right the new dock gets 50 so so the new deck gets a sweet deal 100 of the clinical bucket and 50 of the business bucket uh on a practice doing 800 that equates to about 300 grand a year to that new

dock really great income more than they could make in a dso and then uh for the investor if you will or mentor if you will we're looking at about 7 500 a month in cash flow it with the practice and then if you buy the building which is a great idea more cash flow from that so usually it's an over a ten thousand dollar deal and that's just getting started the revenue increases as you add another doctor and oftentimes it would be a third a third

a third with a new doctor other variations this model include the new doc the young doc owning 25 or 33 and then the jordan person or the other dentist owning the majority interest which does give you all the control and john's like maybe i'd do that right right probably you know so he's young he's he's probably right so the majority of the ones i've done this last year the mentor owns the majority because here's because it's actually safest for the young doc you know what i

mean because if that young doc starts managing and they're not or do a stock a a stock or a bond i i didn't get that one read that off to me in just a second jordan but okay to protect them you should be the majority owner you've been there you've done that you found the deal right i would keep that majority ownership so what was that question you saw somebody ask jordan well uh let me let me i'm gonna add my two cents here because i've

owned multiple businesses and i i think obviously i'm pro majority share right if i'm going to do something i i like having majority share maybe i'm a control freak brady i i don't know no you're right you're good but uh here's the reason why i think there should be in business i think there should be one driver uh if you compare it to like driving a car there's never you know three drivers of a car or four drivers a car there's one driver and maybe somebody

helping navigate right or or siri navigating right but i think that's how i think of it i think it's really good for uh if you can i guess do this to own majority share of of the business um because well you can control it and also if you if you're partnering with a younger doctor like you said brady uh they they still may need some maturing to do in in terms of management and all that fun stuff so it's always good to be majority share i

like that okay so uh josh says or do us ace ace a stock and b stock do you know what it is by that yep i know what he means so let me give the definitions to that for folks so you could technically each have 50 50 ownership okay and then the class a stock is owned by this person right here okay and that that gives you all the voting rights even though you're equal is that is that like preferred stock it is yeah okay yeah

yeah i mean calling it performance yeah so so what i would do though i've done that before sometimes the dentist doesn't understand it and they still feel like they call the shots yeah so you you might consider you know just having him as a minority percentage but you are correct josh yup that is good very very very very very good point um so mentorship practices folks i'll say but there are more practices out there that are worth this that could easily be worth this and that

will positively affect your wealth building and your retirement strategy all that stuff so before i move on uh from the mentorship practices um and i'll give you a few more tips on how to find these bad boys um any any other uh questions about that how to buy the real estate with it or anything i think we're i think i've seen a little a different example brady where um some practice owners will take like their membership program and actually put it in a separate llc that's

partnered with the practice and let's say they own multiple practices and they they have a membership program in each practice but it's it's a separate llc from those practices and that could be i mean i i i've seen you know practice owner do that may be an interesting way to break things up if you if you don't want i guess others to get the recurring or passive income but yeah i know i've actually seen that a lot too because anybody that's going to own multiple practices

they're kind of an entrepreneur right yep yep and and what usually happens is they're like i'm going through all this trouble to start this plan why does everyone else get to you know receive the benefit sure so you're right and oftentimes that llc that receives it they might do a joint venture split so the practices get 30 right you know practices get a piece for doing the services sure but then there's profit on top of that plan so yep 100 100 um okay another tip how

to find these deals through me whoa this last one i was telling about i just got that through the grapevine i have probably five to ten deals that come across my desk every week just because of me being in transitions for 15 years yeah so i'm gonna go ahead and give you guys my personal email actually i won't write it up there i'll just have uh i'll do it and put it in there oh cool um so just say this say great brady do you have

any of those sweet deals real estate or practice in my area i'll answer you pretty quickly and there's a good chance that there's probably one or two in your area and i'd be happy to help you to figure out how you're gonna benefit from it as well um is this the webinar recorder yes it is recorded but i will also say that if you go to total dental freedom uh there's a webinar that gets more comprehensive totaldentalfreedom.com there's a free webinar that gets more comprehensive it's

a full hour that goes into a lot more detail so if you want more on each of these concepts i'm kind of giving you really teasers on the passive income streams uh as it relates really to one of my favorite subscription-based revenue boom cloud all that stuff but if you do want to watch a full webinar i do have it on totaldentalfreedom.com and you can go there and just scroll down and they'll say hey to watch the free webinar blah blah blah that might be a

good bet yes jordan do you want me to share your email as well yup go ahead yes brady frank 74 gmail you got it yup and if if you don't want to look up online the webinar just email me and i can get that link to you anything you need there um okay so um and if you're worried about filling these the real estate based on the the previous stuff i work with a lot of privately owned groups around the us celebrate dental and braces the

ceo is dave ferguson 15 locations 32 partners no associates all sorts of groups like that all sorts of them so that want to move into buildings um okay another tip how to find these how to find these i uh did a bunch of phasing out seminars about 14 years ago and i developed and i've kept up with it since then a database of old doctors so we send mailers out to these old doctors in my database so if you're in an area and you're like brady

writing find me a practice email me and we can use my database and you just have to pay for the mailing to my to my people right to my older docs but it's like 47 cents per mailer so you can use my database if you'd like just email me and say brady let's send that letter out as well that's number two strategy that i like any questions on there jordan that we should be answering now or are we still okay we're still okay okay cool cool

um okay awesome um well jordan should i go into a few a couple more uh passive streams of income or shall we hit the subscription stuff how are we on time should i keep hitting some content and some kind of fun stuff before that what do you think yeah you can uh we're at uh let's see 5 48 mountain time right now okay i say go a few more minutes and then we'll transition okay i'm gonna do another one um and uh by the way i

want to get a little vote from folks okay i want to get a little vote which strategy would you folks be more likely to do convert retail properties to medical dental like earlier or do a mentorship practice i want to know so if you guys could vote and and tell me what you think there you can put mentorship or you can put real estate i want to do both oh we got a couple mentorship mentors whoa mentorship mentorship wins oh megan you're right mentorship won okay

so what i'm gonna do now is you're right uh so why did i do that because i've invested in real estate 20 years and doing these big 74 000 square foot deals are where i am at my in my trajectory right and um nice christine i see that that's awesome nice christine so so i i have a feeling and the reason you want to do the mentorship deals is because you can picture in your mind you see that there are old docs that aren't coming back

you see that people have you see how there's young docs that would you'd love to mentor you actually some of you actually say like i would like to mentor someone to do what i've done now that i'm successful so i think you're right to say that um so let me tell you what happened to me and how why did i come to the same conclusion that you guys did on the mentorship deal i had bought seven practices uh in my first five or six years out

of school and i was going to the dental schools i'd buy six pizzas and i'd do a lunch and learn and i say who wants to own a practice like i did out of school that's how i find my young docs to come in and i love it i love teaching them i love helping them build their first practice i loved it i loved it and it was a lot of hands-on work i was really busy doing that with my own group and whatnot and so

what happened in the year 2000 and oh it was 2006 uh is and that was five years out of dental school after i'd sold some of my first practices and i had basically finally uh achieved what i call total dental freedom clinical freedom i was just doing the procedures i loved lifestyle freedom i wasn't doing any clinical dentistry anymore um and i had financial freedom i didn't have to work again and that only that lasted one year and i was like i like clinical dentistry i

like dentistry and i i came out of retirement right at the age of 35 that would be and what i did when i was 35 is all i did were mentorship deals and folks i did 11 of them in one year and all walgreens wow very cool look at christine huh there we go and those are nice so so um so uh i did 11 of these mentorship deals let me tell you that the top five things that i've i've loved about mentorship deals um number

one i get to mentor dentists who are just one step behind me right if you own a practice you're one step ahead of a dentist if you own a business like jordan you're one step ahead of a dentist who's never owned a business before mentoring those into ownership number two the ability yes to buy real estate 85 of practices for sale have real estate and you can you can you can buy that real estate because that young doc probably isn't in a position to do that

yet number two number three passive income super fun passive income yes number four equity increase equity increase whenever you increase your equity which is kind of like untapped cash equities untapped whenever you increase your equity someday something's gonna happen and you're gonna get a big check right if if you're if you have a lot of equity in your house someday something's gonna happen you're gonna move you're gonna sell that house you're gonna get a big check so what i love about mentorship deals is you have

increased equity in both the real estate side and the practice side it's a double whammy growth right nice and then number five what do i like about it well if you invest in your niche deep and narrow and you don't buy pizza franchises right yeah and you don't join a multi-level marketing company right and you don't invest in russian oil mines right you don't invest in whale spearing operations in the arctic right which would be aoc's all over me right now wow don't do not give

her the recording but anyway what i found is the dentists that do not go off into doing this the ones that say you know what i'm gonna go deep into my uh my uh my niche in dentistry uh super super super high r oh i why is that you already did it once you know how to grow a practice you know how to talk to dentists right you know this stuff so you you have a very low time investment and a very high equity increase high

passive income you get the option to do real estate and i'll tell you what i have had so much fun mentoring dentists because here here's something there's a certain joy that comes from usefulness using your skills in dentistry that's great helping patients that's great there's a you know dentistry sometimes isn't the most fun career plan and spit blood you know the injections but when that patient says thank you doctor you were the only one that could have helped them i'll tell you what same feeling happens

at least for me when you're the only one that can help this young doc and hold their hand and get them into ownership right the joy of usefulness there's so much joy in helping a dentist to achieve that in business and watch this we're doing it in the face of corporate america these dsos right their only other choice is to go to corporate dsos and pick up the scraps if it's not you who's it going to be so it is one of the most satisfying things

um you can do to mentor someone to ownership one of the most satisfying things one of the most profitable things i did 11 of them in one year it was incredible and so and so basically i've helped probably 650 dentists do just this since i did those 11. uh in fact if you go all the way back to mark costa's first podcast i talked about the esp the entrepreneurial satellite practice um it's the podcast is called dentalpreneur and mark actually called me up when they said

brady can i have that name it cost me three thousand bucks i said you can have it i just gave it to you so that one podcast he told me is the most listened to podcast of any dental podcast so and that was on entrepreneurial satellite practice which is that's what it is it's the mentorship deal now a couple more things jordan the nuts said then let's segue into the guts of this and i'll turn you loose on boom cloud which by the way folks i'll

give a separate intro to that yeah you're good okay so so um uh [Music] i had a point and when i said that i lost it i think that's what happens when you're 46. oh i i got it i got it i got it jordan do you ever have that happen or does that not happen when you're it happens it happens to me too okay all right so many of you are thinking brady brady why don't i just buy the practice 100 me and add an

associate to that practice and then let them buy and once the values increased the problem with that is associate turnovers every 18 months yeah when you lose that associate oh no come on you new one and guess who works at practice now you have the horrible that's not total dental freedom when you're working two practices right and then they have this horrible word out there it's actually a series of words and it's called negative cash flow negative cash flow right we don't want that so you

want to give them a part of the equity 25 is about average today 33 as well you want to give them because then they're signing on the loan for the practice folks that means they're give they're putting the gold in handcuffs not you yeah they're mad at the bank for putting the golden handcuffs on not you you can't do anything special to keep an associate there but if they buy in with you from the get-go look at this it's great for you and is it good

for them remember if they buy in 25 they're getting 25 of all the equity growth from that good deal that you found why would they do this because you found that deal right so some really really fun model i'm gonna go over one last time then i'm gonna give an intro to jordan and why boom cloud was so special for my growing group and why uh why why i have answered many many many dozens of people's questions about what uh software to use to manage their

uh dental savings plan or membership plan and i i always come back to boom cloud so so mentorship practice once again the five things that make this a winning investment opportunity for a dentist number one the joy of usefulness there's dennis out there and you you are the one combating dsos right you're keeping private practice dentistry to the private practice yes look at this [Laughter] she's right she said that because i said aoc i think you know i'm sure yeah yeah so number one it's good

for you it makes you feel like you're doing your part to save dentistry mentoring someone else is someone else to do i did 11 of them loved every minute of it in that one year real estate real estate folks these deals are going to drop on your lap doing the mentorship so even though you said real estate versus mentorship you said mentorship real estate's gonna come as as as a secondary investment right in there passive income right wow now you don't have to work with your

two hands in that practice there's a doctor who wants to do that right and then you add a second doctor to that practice so passive income equity increase right whenever you increase that business right you're increasing your equity which means you're going to get big checks down the road and that building you're going to put a new lease in place in that building you buy at market rate 23 bucks a square foot triple net whatever it is and that lease dictates your real estate value so

you'll get equity in the real estate too because the net operating income divided by cap rate equals what value that is so your building will probably be worth maybe a quarter million dollars more than what you paid for lastly r o i on your time deep and narrow in dentistry deep in there is going to give you i won't go over the percent returns but very very high returns doing this so mentorship deal is is one of my favorites so can i segue into your intro

jordan let's do it okay so you know i met jordan many years ago and he was just starting boom cloud many many many many years right and he said you want to try boom cloud i said i don't have a dental savings plan right now and uh you know what i uh i said let's do it so i started it and we got hundreds and hundreds of patients signed up it ended up being thousands of patients yep and that those tens of thousands and even more

more than that just came in every month and here's the side side benefit yes the the passive income's huge but those same people were some of our best internal referrals they'd say don't buy insurance use their plan and they refer people buy the droves right and so that's number two number three they would do more dentistry it's really weird it's like oh we're discounting our dentistry that means oh we might get a take a hit no no no they on average at 80 more dentistry than

the non-plan people in our practice so so it's been great for me i think it'd be great for you jordan's awesome his team is awesome i'm gonna hop off so i don't hog hog the airwaves and uh you guys will have a good time with jordan but um if you're not on boom cloud already i basically uh say give it a shot i think it's the best one out there so thanks jordan for having me tonight thanks brady this is awesome man all right so we're

going to get started have a good one man we're going to get started i'm going to show you guys how uh membership programs can be super successful in your practice uh for those of you that don't know me again i'm the ceo and founder of boom cloud been in dentistry for uh over 15 years i'm also the co-host of the navigating dental insurance podcast say no to ppos.com go check that out but today we're going to make it quick last few minutes here i'm going to

talk about membership programs 101 for those of you that does anyone here have a membership programs put m in the chats if you have a membership program or n for no in the chat just so i can kind of get an idea of what everyone's doing so put m if you have a membership uh n for no uh basically a membership program on on the oh awesome thanks perfect so membership program is an alternative dental insurance where patients pay your practice a monthly or or yearly

subscription uh to to get access to certain benefits in in savings your practice it's very very similar to amazon prime you know but built for your patients oral health care that's kind of how i define it there a good example of this is a membership program where patients pay you know a yearly or monthly fee so a yearly fee you're looking at 300 a year or more just it ranges depending on where you're at or 30 35 a month and the patients get these benefits here

so you can take a screenshot of this so you can see that and save it so you can kind of study it after but that's what the the typical plan looks like there's many pros about offering both a monthly option and a yearly option in fact i encourage both but here's what's going to happen here membership programs are going to help you build a patient loyalty system which no matter what will increase the value of your practice it'll generate predictable recurring revenue and as you heard

passive income and that cash flow coming in helps increase the valuation and the stability of your practice you're also going to it's going to help you reduce dependence on ppos which helps increase your profit margins which again all leads to building the value of your practice so uh membership programs are extremely powerful more powerful than i think most people realize um and and brady's a a wonderful example of he his practice that he used to own had used boom cloud to help manage their membership program

and i'll show you some case studies here in a little bit but wonder wonderful way to grow your practice get some pretty low hanging fruit of passive income coming in and and build wealth and valuation for your practice so uh this is the book that i recommended everyone get it was the called the automatic customer a wonderful read here so let's get to some stats about the opportunity um yeah you're good you'll you'll get the replay josh so make sure you watch it uh so over

the uh according to the u.s surgeon general over 108 million americans lack dental insurance in 2012. that's a lot of people it's now estimated that around 180 million americans don't have dental insurance and i believe that number will continue to rise especially with this the unemployment of of this year so real a lot of opportunities for prac if you don't have a membership program this is something that you should really consider it's the easiest way to create passive income or recurring revenue in your practice without

spending a ton of money buying real estate or other practices i encourage both i think they're wonderful ideas of what what brady has mentioned i've i'm considering buying some dental practices as well uh because i've been in the dental industry for a long time so it's really fun uh so think of a membership program the practices that think this way grow their membership program uh and are more successful they think of it as a marketing tool a patient retention tool a case acceptance increase tool and

a cash flow or a predictable recurring revenue tool so with that said i'm going to go down to some example some case studies here we won't go through all my slides because i have a ton so we're going to go through a few case studies i'm going to show you what pre some practices are doing in regards to recurring revenue we also found that i mean i have the benefit of looking at practices across the nation thousands of practices that have membership programs and we found

that members spend more and approximately member patients spend two to three and a half times more than a non-member patient which also increases your your val valuation so this first example here this is a practice in california that actually started in the middle of the shutdown within a few months they signed up 281 patients to their membership program which resulted in uh in circle number one here on my screen resulted in in just under seven thousand dollars in monthly recurring revenue coming in and down here

in the yearly let me get here you can see my mouse in the yearly revenue here it generated about 82 a little over 82 000 in yearly recurring revenue and that's just a few months in the this practice in fact all the practices that i've that i'll be showing you uh started out talking to their existing uninsured patients and tapping into that revenue stream getting recurring revenue and increased case acceptance and this is a screenshot of what boom cloud looks like our software that helps you

manage all this uh systems help you scale is typically what i say all these practices you know we've been able to help them scale their membership program and generate a lot of passive income the second practice here they used both uninsured existing patients and facebook ads to get the word you know word about their membership program i believe marketing is extremely critical if you want to grow this passive income stream you got to market and get the word out so patients know that you have one

this practice if you look at circle number two on this this dashboard here this practice has a little over 1100 active membership patients that are providing over 26 000 in monthly recurring revenue for this particular practice again they use facebook ads and tapped into their existing uninsured patient base that they weren't getting much revenue from because patients weren't showing up i'm sure most of you here have heard you know this many times i i can't go to the dentist because i don't have insurance uh you

know that's a big problem with the mindset you know with of an uninsured patient so by promoting your membership program to your uninsured patient base you'll tap into this revenue stream uh this practice uh over three three hundred sixteen thousand dollars in annual recurring revenue uh for their practice that comes in whether they do dentistry or not you know which is a a wonderful benefit brady talks about working with your hands a lot and trying to minimize that as as you grow your practice or at

least build systems to help you do this this last practice here they have just under 2 000 patients in circle number two 2 000 just under 2 000 patients which generates almost 50 000 in monthly recurring revenue that automatically comes in whether they do dentistry or not whether they're in florida or hawaii or not right on vacation or hopefully not this but during a shutdown this practice was generating this revenue during during the shutdown so just just over a half a million dollars in in annual

recurring revenue uh for this practice they use direct mail marketing and their existing uninsured patient base so you can see that the power of your your a membership program can bring a lot of passive income in and this is i think this particular practice this is about two years in and all these practice started a membership program from scratch right like brady said you you buy low sell high right starting something and creating something from scratch is a form of buying low um and obviously this

provides a wonderful cash flow stream for your practice every month this particular practice every month they start their month with just under fifty thousand dollars in their bank account think about that most practice owners they close you close the month let's say you had your you you closed a hundred thousand dollar a month let's just say for just to keep it simple you close it on the the 30th of uh the last day of the month the the first of the month you start at zero

and you gotta build and work your way back up again the beautiful thing about recurring revenue through membership programs is that it gives it you start each month with whatever your your monthly recurring revenue base is or you start each year with the annual uh revenue here you can see this this practice over five hundred thousand dollars in annual recurring revenue when i say recurring revenue i mean it's automated coming in it's automatic coming in automatically right so those are some examples here of practices that

have done really well uh with their membership programs and utilize a tool like boom cloud to help grow um and scale their membership program keep key mistakes that practices make uh one not automating your membership program two putting it in a binder or or uh relying on an office manager to keep the the concept and management of the program in his or her head you know if if you let let an employee go or they they quit and they're the ones managing your membership program most

likely it crumbles and it does not provide a stream of passive income for your practice so this is why a lot of practices are using boom cloud so that they can have that reliable income and not rely on on on people to manage those systems or or automate those systems um so a couple things here i got a a book specifically on membership programs that i want to show you guys and we'll we'll let you guys go unless you have anyone have any questions about membership

programs i know i probably went real quick on it i have a ton of content and webinars that go real in depth with with membership programs and how how to scale them how to grow them how to how to everything from a to z uh but i wanna i want to offer this this book for you are there any for cosmetic facial surgeons great question uh christine uh do you have any type of maintenance that you do for your patients like hygiene or perio or anything

like that in your practice laser tightening how long is that that maintenance program for is it like a six months or is it is it kind of like a lifetime thing that they have to do the lifetime yes so you definitely could do some type of membership program based off of that i'd love to learn more actually on what what uh what you're thinking here and i can help you understand okay understand uh how to create a membership program that the t oh cool botox yeah

you definitely you could do a membership program as long as you have maintenance that you can that patients are coming back in um you know every every six months or every quarter or whatever the cadence is you can turn that into a subscription program that generates passive income uh yeah that's very true christine i love it but i what i recommend you guys do is check out boom cloud what we're doing in the dental industry i've been doing this since 2014 um for dental practices across

the in the nation uh this is my free ebook here you can get it at boomcloudapps.com forward slash book uh and then i recommend going to boomcloudapps.com and scheduling a demo with my team to understand how boom cloud can help you create passive income through membership programs and help you not only get that that passive revenue income stream in but increase the value of your practice and help you increase uh case acceptance by two to three three and a half times from your from your uninsured

patient base so this is my email it's jordan at boomcloudapps.com go download this ebook and schedule a demo on our site to learn more about our software you and again you're not just going to learn more about our technology my team is they're trained to be consultants and help you understand how to implement this in your practice and and get the details there so yes thank you christine congrats to both of you for making fun of profitable careers for yourself yes and you know what i

enjoy more christine is is helping others uh create profitable careers as well like like brady said the mentorship is always fun helping people with these business concepts um no you're not you're not the only one still on you're just the one that's chatty so those of you that are still on go check out this book here i'll be sending everybody a replay but i really appreciate you coming on brady appreciates you coming on uh to our webinar today and we hope you have a wonderful evening

rock on everybody you