Join host Leo Damasco on Telemedicine Talks as he welcomes Jonathan Spitz to explain why private commercial real estate is exploding in popularity among doctors, how a 38-year-old, $12B institution is now opening its institutional-grade deals directly to individual investors, and the exact questions every physician should ask before wiring a dime. This episode explains why Physicians doing telemedicine are becoming high-income 1099 earners overnight but most have no plan for the money or the taxes.
This episode is sponsored by Lightstone DIRECT. Lightstone DIRECT invites you to partner with a $12B AUM real estate institution as you grow your portfolio. Access the same single-asset multifamily and industrial deals Lightstone pursues with its own capital – Lightstone co-invests a minimum of 20% in each deal alongside individual investors like you. You’re an institution. Time to invest like one.
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You went from making residency peanuts to six- and seven-figure clinical income practically overnight but medical school never taught us what to do with it.
In this episode, Leo Damasco sits down with Jonathan Spitz as he reveals why more telemedicine and 1099 physicians are using institutional-grade real estate to create tax-efficient cash flow, slash volatility, and build true diversification outside the rollercoaster of public markets. He pulls back the curtain on Lightstone’s new direct-to-investor platform, explains the massive alignment that comes from the firm putting its own money in first, breaks down the current 2025–2028 market opportunity (20–30% valuation resets + disappearing new supply = rent-growth tailwinds), and shares the red flags and green flags physicians must know before investing passively in private deals.
Whether you’re looking for 6–8% tax-deferred distributions, mid-teens IRRs, or simply a way to stop writing huge checks to Uncle Sam every April, this is the roadmap.
Three Actionable Takeaways:
About the Show:
Telemedicine Talks explores the evolving world of digital health, helping physicians navigate new opportunities, regulatory challenges, and career transitions in telemedicine.
About the Guest:
Jonathan Spitz is the Head of Capital Formation at Lightstone Direct, where he connects individual investors, especially physicians, to institutional-quality real estate opportunities. With over a decade of experience spanning brokerage, lending, and private equity, Jonathan has navigated multiple market cycles and capital-raising environments. He focuses on transparency, education, and aligned incentives, helping professionals understand how private real estate can diversify portfolios, reduce taxes, and build long-term wealth.
Website: https://www.lightstonedirect.com/dpn
About the Hosts:
Email: leo@telemedicinetalks.com
Website: https://www.telemedicinetalks.com
[00:00:00] Hey, welcome back everybody to telemedicine talks. I have a great guest here and, a conversation that is actually close to my interest and dear to me. I have Jonathan Spitz. He's the head of capital formation at lifestone Directing. Before we get into it why are we doing this?
we talk about telemedicine a lot and starting your own business, and we know that telemedicine has changed how we deliver care, right? I think it's gonna change and continue to change how we deliver care. And, a lot of this is direct to customer. Care. Right. Today we're gonna talk to a director investor platform, doing something similar that we're doing telemedicine, but in real estate.
And we're gonna try to connect the dots between digital medicine and digital investing. And before we get started, just a quick note. Yes. This is an episode sponsored by a sponsored conversation with Lightstone. Which is a commercial real estate platform that is bringing more tech and transparency to investing.
But we don't take sponsors lightly. we want to pick sponsors that actually relate to us and, bring a lot of value to [00:01:00] what I think, to our listeners, right? So we're gonna feature a company, we're gonna feature somebody that we think is gonna provide a lot of value.
So thank you so much. Forward joining us. I totally appreciate it. welcome to the show. Yeah. Yeah. Thanks for having me. Appreciate you, looking forward to the conversation. Yeah. So tell us a little about yourself. just a little background. You know, you have a lot of experience in digital, commercial real estate, right.
Yeah. Let us know you. Yeah. So, I've been in the commercial real estate business for over a decade now. I cut my teeth coming outta college in the real estate brokerage industries in 2011. I mean, we were really still coming out of the great financial crisis, so it was certainly a bit of a grind.
I was, working predominantly on, in retail, so shopping centers, triple net lease properties. So think of Walgreens or a seven 11 or something like that. then I was living in Tampa, Florida where I'm from, and moved to Chicago shortly thereafter. and what that experience taught me, because when I [00:02:00] graduated college, it seems like most physicians that I've worked with in the past, so many of you guys know exactly what you wanna do, being in the field of medicine.
But that was certainly not the case for me. I had absolutely no idea what I wanted to do coming outta college, but. What, this experience taught me was that I wanted to be in real estate. I loved it. So I moved to Chicago shortly after that, with my then girlfriend, now wife, and started working for a company called Invitation Homes.
And, really worked in various aspects of the real estate business. I worked on the financing side, that's where I spent a lot of my time. So I was a bank lender lending to real estate investors that were developing both small and larger real estate projects throughout the Chicago land area.
And then I joined another real estate private equity firm in 2020. So March 16th, 2020 was my first start date, which. If you rewind the clock, what was going on March 16th, 2020? It was really the first week that COVID took cold. And my first day in the office, there were three people in the office.
'cause work from home had already [00:03:00] started, the point was no one was in the office my first day. except for three people. So that was a really interesting time to be working in real estate especially to be working in capital raising, which is what I've been doing ever since.
And then at that time, commercial real estate was going to, implode. To what was then from really mid to late mid 2020 through the beginning part of 2022, which was one of the craziest times in, real estate and fundraising specificallythat we've seen.
So it's been an interesting journey. And, so I worked with that firm for about five years, and then, about six months ago, Lightstone reached out to me and explained the platform That we're building, which is, you know, Lightstone is this really unique firm, right? We've been around since 1986.
there's not a lot of firms in the space these days that have been around for 40 years. we managed $12 billion in assets. But what's so unique about Lightstone is that we've never really worked directly with individuals. at my previous firm, that's all I worked with, I worked with physicians, I worked with registered investment [00:04:00] advisors business owners that were wanting to.
Get exposure to private real estate. but we were a smaller firm, relatively speaking and,Lightstone is, this really large firm that wanted to work directly with individuals. when I met with, the head of our platform, Greg Fink, he really gave, and, really explained his vision for what they wanted to do, which is really building.
Long-term partnerships with individual investors with this understanding that this is where the space is going over the long term. And so, which is, a feeling I shared deeply is that, you know, I think individuals should get to work directly with individuals. Again, especially if you're investing in real estate because it is such a long-term investment.
And yes, you can still work with great managers through your advisor, but. Individuals should also be able to have a direct relationship with the investment managers that they're doing business with. And that's what we want to do, is to build long-term partnerships and do great deals with individuals.
And so then, I came and joined Lightstone, in June and we've been building the [00:05:00] platform for the last six months. I mean, they've been working on it longer before I got to the firm. And yeah, here we are. Yeah. No, that's amazing. And let's rewind a little. 'cause. there's a lot of our listeners that have invested, and are doing the real estate thing and there's even more that are interested in.
I think, going to telemedicine, a lot of the doctors are now becoming their own employers. They're becoming, 10 99 employees or 10 99 contractors, and now they're figuring out, hey. what do I do, how do I protect my income? So forth and so on. So let's rewind and like, why is it important?
You've dealt with doctors decisions before, right? What do you tell doctors? Why is this, why should they listen? why do they need to think about investing real estate an option? Yeah, so I think the first conversation I always have with any investor and specifically in, physicians is, what do you want?
What are you looking for in an investment? The reason why real estate in general seems to be the [00:06:00] commonality that seems to get uncovered through these conversations as it relates specifically to physicians is really One of tax efficiency and one of diversification, and one of wanting to reduce volatility within a more diversified portfolio.
So, you know, physicians especially, I mean, there are a lot of physicians that do telemedicine and still work in whether primary care or radiology or whatever it is. So they do both. And so they're high income earners, right? So a lot of it's, I don't wanna pay taxes. So one of the benefits of private real estate is that you get the tax benefits that real estate provides, even if you're investing passively.
then it becomes of, well, what is your risk tolerance? do you want income? Do you want tax efficient income or do you want long-term capital appreciation? Or both? Like, do you want to do ground up development, which is inherently a bit more risky, but can yield much higher returns?
Quote, there is can, right, but there's more risk associated with it. Or do you want something that is stable [00:07:00] and just delivers tax efficient income that you can use as a supplement to what you're doing in telemedicine and what you're doing and maybe your primary what you do on a day to day?
very much depends on what. They want. And so from there, the reason why I think most physicians should have exposure to private real estate is because as an example, we're working on a deal right now where we deliver, distributions of six to 8% a year over four years.
But investors and physicians get to benefit from the depreciation benefits of owning real estate. So what that means, and I think this is a really important point to emphasize. Is that when you're getting six to 8% and we use depreciation to offset income, you are effectively deferring the tax on that income.
Until the asset is sold. So for investors, that are being taxed at 30 to 40%, if you can defer the taxes on that income a couple of years and pay a lower tax rate, that's something that's usually very, very attractive. [00:08:00] Additionally, and this is really where it becomes a preference,
and I'll put myself in this camp. I really don't like public market volatility. When I see my portfolio going up 15, I don't know how people do it in things like cryptocurrency. Butwhen I see my portfolio gyrate 20 to 25%, even though I know I've been in the investment business for 10 plus years, even though I know I should just hold, like I will be that guy that sells some part of my portfolio at the absolute bottom and every decision I've ever made.
Has come from acting emotionally or thinking irrationally and making poor decisions. but again, you should absolutely have exposure to the public markets. It's like, for me personally, it's a large portion of my overall investment portfolio, but I also like private real estate because as an example, I have big allocations to multifamily and some industrial.
But again, like we've actually been through like a three year bear market here in private real estate, but I can't sell at the bottom right. So that's one of the benefits and it doesn't keep me up at night [00:09:00] because there's nothing I can do about it. And so that's one of the benefits is that it kind of saves me for myself and it does also reduce volatility within my portfolio.
Yeah, I think it's super important, right, ed? Just to, diversify and again, it hits close to home. You know, I just paid out a whole bunch load to the federal government and the Hawaii government was like, oh how do I protect myself? So we don't get these lessons, there's none of these lessons in medical school.
Mm-hmm. So it's super important to educate yourself and to know your choices. Now you're talking about Lightstone creating this direct to consumer, this digital platform. Right? Tell us about that. we've seen the telemedicine boom and seen a lot of direct to patientservices and, this kind of parallels that. So can you describe how this is paralleling what we see in telemedicine and the advantages of that? Yeah. I mean, I would say it's a little bit because telemedicine, from my understanding it's still fairly new, right?
Yeah. Yeah. Relatively, I would say, private real estate investment firms, working with individuals is not new. [00:10:00] And real, but what has gotten us really interested in the space is. as I alluded to earlier, from about the middle of 2022 to really now, it has not been a good time to invest in real estate.
Generally speaking. it has been a bit of a bear market and what catalyzed that was a massive spike in interest rates, In 2022, We went from 0% interest rates or what we call the zero interest rate environment. To, federal funds rate being at four to 5%.
and that's really tough to articulate to someone that's never invested in real estate before, but that is massive. Andthe effects that that has in commercial real estate are significant. And so because of thatthe valuations in the space have been adjusting to a higher interest rate environment for the past several years.
Now, what we've seen as a result of that is a lot of. Asset managers get caught flatfooted during this time. Meaning that they weren't managing risk appropriately. They were buying assets during the massive runup in [00:11:00] 2021 to 2022. buying properties
That didn't make sense. And so once those valuations change You saw valuations come down. Investors weren't getting distributions. And there was just a lot of horror stories that we were hearing. And then, once we started to kind of peel back the onion in the space and say, okay, what do all of these things have in common?
What we learned is that the higher interest rates definitely a wrench in many people's plans. But what we saw is that many of the people that were raising capital directly for individuals really should never have been doing that. They were newer, inexperienced managers or they were.
Buying deals again, with really aggressive debt assumptions. And just like the more we learned about it, we were like, wow, we know we can deliver investors a better experience and a better product than what they're being served today. And so that's when we decided, okay let's jump in, dive in really head first here.
and put out the product that we would all wanna invest in. Right. And that's [00:12:00] really what we've spent the last year doing is, we invest across different asset classes. We invest in apartments. We invest in an industrial real estate. We're looking at life sciences space actually quite closely right now.
So we play across a number of different food groups, which is also a core differentiator of ours. But more importantly. We're also investing a significant amount of our own money alongside clients. So again, when we look back at what a lot of these managers were doing and where they got into trouble, the one thing that we saw is most of them didn't have any of their own money or very little of their own money invested alongside investors.
So you just have really poor incentives. So the moment a project goes upside down, they don't have an incentive to try to fight for investor capital. But for us at lightstone, we invest a minimum 20% of the equity in every single deal that we do. And we manage $12 billion, 90 plus percent of that has been capitalized using our own proprietary capital base.
So what's unique about what we do is [00:13:00] all we're really doing is opening up our deal pipeline to individual investors. So as an example, we just closed on an industrial deal, a multi-tenant industrial deal two weeks ago. We already closed on it with 100% of Lightstone capital, and now we're gonna start raising capital.
But if we don't raise, let's say we raise no money, we're still gonna do the deal and we will own 100% of it. So these are the same deals that we will do regardless of how much capital that we raise from outside investors. So it's a very different dynamics than somebody that is saying, okay, I want to go buy this deal, but I need to raise 99% of the capital.
For me to actually do the deal, and they can't actually close on it until they raise all that money. So it's very different when you have somebody that invests the amount that we do alongside our clients. No, absolutely right. it's way different when you have somebody advocating for you that actually has skin in the game, right?
Because, yeah. Like you said, it goes south and then you just bail and what's a loss to the person that you're doing it? Nothing, [00:14:00] all the loss goes to the actual investors. So that's actually very, very reassuring. And so now let's talk about the platform
It's what, six months now, Wayne? or even longer than that, right? You've been in there for six months. So what makes Light Stone's platform, different from, all the other platforms, what can somebody expect looking to the platform? And, you know, just piggybacking on that question is, what should people look for when you go in and start, if you're looking at different investment firms, different companies, what should you look for and what are the red flags? Yeah. well, let's work backwards a little bit, right? So let's just say that I'm a physician.
I'm doing telemedicine. Maybe it's something I'm doing on the side. Maybe it's helping me earn an extra a hundred grand a year, Of investment income stuff that I'm using to supplement my current or maybe it's my primaryand I have disposable income that I'm looking to invest and private real estate is an alternative that I'm looking to pursue.
The first decision is do I wanna own private real estate directly or do I wanna own it passively? Some physicians [00:15:00] and investors like to be able to touch and feel that real estate and go in and meet the tenants, right? Some people like, I'm too busy, right? I wanna invest passively. So let's just say you make the passive investment decision.
From there, you can decide, okay, do I wanna invest with a, what we would say direct to sponsor, which is like what Whitestone is, meaning you are talking and dealing directly with the manager, the person that is making all the investment decisions. Or you can go on platforms. So Cloudstreet would be an example, like where you have a menu of different investment offerings from a whole host of different managers.
So you know where that you can choose from. now againat Light Zone you're dealing directly with the manager. Which means you're able to. Do your due diligence by talking to someone directly at the firm. In this case, you'd be talking to me. So then what questions should you ask?
Because the part that oftentimes when I'm dealing with any investor that's new to this is most people in [00:16:00] investing, you're used to like going on Charles Schwab or going to your advisor and you own some ETFs or you own some Apple stock. You know, click the buy button.
You click the sell button. Mm-hmm. Very easy frictionless experience investing in an alternative investments. Unfortunately for now there is a bit more friction, right? Like we will give you an offering memorandum, we'll give you a deck that highlights the property that we're investing in.
But these offering memorandums they can be long. it's a long governing document that's long with a lot of legalese in it. That in general, if people don't like to read and you know, maybe it's tough to read, and that's really where my team comes in, is you sit down with us on a discovery call and we talk to you about both what are the opportunities in a deal and what are the risks.
Now, some of the questions that I would say as more astute investors want to know from us immediately is, how long have you been doing this? How much of your own money you're investing, right? We've talked about this a little bit already. Mm-hmm. Have [00:17:00] you invested in this market before? Is have you executed this strategy before?
That's a big one. What you'll see some managers do is, Maybe they've only been investing in existing cash flowing multifamily investments for a while, and now they wanna do ground up development. Well, that's a totally different skillset, and the skills are not necessarily transferrable.
Just because you've bought an existing multifamily asset doesn't mean that you can go out and develop it. The second is maybe they're going into new markets, which can be sometimes just as risky. let's say that, at lightstone we invest in 26 states, so we have a pretty national reach, pretty much everything east of the Mississippi.
But let's say that would be like us saying we're gonna go invest in North Dakota right now, we don't invest in North Dakota, so you're not familiar with all of the risks. And so these all add layers of risk to the deal that are tough to quantify until you're in the deal.
Which is how much experience do they have in general, how much of their own money do they have invested alongside you? Have they done this strategy [00:18:00] before in the market before? So as an example, we have, the multi-tenant industrial deal I just spoke about that we just closed on.
We're investing in Greenville, South Carolina. We own in Greenville, South Carolina. We own over 10 million square feet of Shallow Bay multi-tenant industrial real estate. We've executed value add strategies with that type of asset before, right? Like, so you start checking off the boxes. Does this make sense?
Are they aligned with me? Have they done this before? And then it's, okay. So now that's really a lot of the manager risk, just to stop here, like what level of experience are you looking for? I'm so sorry. This is a burning question, Mike.
Yeah. Like what kind of level experience are you looking for? What's the standard mark? What number should a new investor be comfortable in? You know, I'm talking like, kindergarten knowledge of this, so, sorry.
Hundred percent question. No, no, no. I love that. I love that. Question. So, I mean, the experience level that we deal with really ranges and that is really like my team's job is we want meet investors where they're at on their investment journey, but as an example, the experience that we're looking for.[00:19:00]
Really is more of one of accreditation. So we work specifically with accredited investors. that is somebody that is making at least $200,000 a year individually or $300,000 a year jointly or worth more than $1 million. you don't have to check all three of those boxes.
You only have to check one. so that's really the requirement for us. But then from there, like I had a call this morning with someone who was two years out of med school, never invested in private real estate. And again, we're having to talk about what does cap rate mean when we say we're buying something below replacement cost?
What does that mean and why should I care? is the dividend yields that we're projecting guaranteed? The short answer, no, but here's why we think like, so it's just. Walking through each of these little details to make sure that, because again, like the one thing we don't want at Lightstone is for you to make an investment and then for you to be.
Having buyer's remorse or something like that. Because you don't feel like you're getting the communication that you need, or because you didn't feel that you were [00:20:00] properly informed about the decision or the investment before you made it, or you've maybe felt pressured into making it.
And I think that's something that we oftentimes our calls will lead to is someone will be very interested. They really struggle with the lack of liquidity of private real estate because if, when you invest in one of our deals as an example, you need to be prepared that money is gonna be locked up in a deal for four years.
and I'm like, look, if you're hesitant about that, this is not for you. and that sometimes is where the conversation leads and that's okay. That's good for the investor and that's good for us to make sure that,
You're only doing with what you're comfortable in. But yeah, to your point, as far as red flags are just things to consider, liquidity is a big one. yeah. when do I get my money back? what does that exit strategy look like? when do I see distributions?
All of these things are important parts of that investment decision framework. Yeah. and common questions from docs, In terms of their priorities, right. Dealing with physicians specifically, what have you seen as what they look for, is, kind of like FAQs [00:21:00] or what the priorities are, you know, are docs looking for more like efficiency, responsiveness, so forth and so on.
Yeah, I mean, communication's a big one, right? Yeah. because to your point, like, I remember I never really thought about it. Until one of my physician clients said it, like he was explaining to me, and you can tell me right or wrong, Leo, he was explaining to me how, what it's like to be a doc.
It's like you're in school and then you move to residency and you are just so head down into building this career. So singularly focused. Oh yeah. And then all of a sudden you go from making no money to making a lot of money right there. And like it happens like that. and then you talked about it earlier, then you, don't know what to do.
Like you're not taught that in medical school. So I think communication is a big part of it, right? Is how. can we help with the education process? That's really like our job capital formation's a very fancy term, and what we really are as an [00:22:00] educator, at the end of the day, we want to help. Take what is an overwhelming amount of information and distill it into something that is easy to understand.
So I think that's helpful. What I see a lot from physicians, is like it's all about tax efficiency. Tax efficiency. Are you generating losses that I can use to offset other income? And I think what's really important there is some managers, I think over promise and under deliver on that side because.
Just because something produces depreciation and losses doesn't necessarily mean that you as a physician can take advantage of all those losses. There are a lot of things that go into that, as far as it's called a passive activity loss without going down the rabbit hole.
But if you don't have other passive income, you're not necessarily able to just write it off against your W2, but some people promise that. And so again, like what we want to make sure, I think first and foremost is do you understand the investment? But then like, we wanna make sure you're managing your expectations accordingly.
Right? when can you expect tax forms? That's a big question we get from [00:23:00] physicians. Yeah. When do I get my K one, right? Am I gonna be able to file my taxes on time 1st of April, right? Yes or no? Just gimme an honest answer and like, that's what we want to make sure that we can provide at light zone.
the answer is yes. we're one of the few firms that do deliver on time because we're vertically integrated. We have in-house accounting, finance, et cetera. But I would say that's a lot of it's communication. What type of income are you producing? Am I getting the depreciation benefits?
What are the risks? But I think most importantly, physicians always want to know, how do I lose money? What is the worst case scenario, Right. You have to understand that situation, right? what is the worst case scenario? How do I lose money in this deal?
It's a fair question and it's one that We're never gonna be the ones that sit there and still tell you, oh no, you're not gonna lose money. there's always risks in every investment. And again, for you to be comfortable with that decision, we have to articulate and paint that picture for you and try to help you assign a probability to that scenario.
Yeah. No, that's amazing. 'cause you hit it on the head, right? going through [00:24:00] school, going through residency, just building up to the point where you're actually making money is a singular focus. It's, medicine, medicine, medicine all the time now. there's a few amazing doctors out there that have been able to carve time to do other things, but for most of us, it's just been that singular pursuit.
It's just, treating patients in your specialty and. Again, like you said, going out there and, now from making residency pay to, which is, peanuts to now making actual real big boy pay. You know, what are we gonna do with it? But we don't know. Right. So it's reassuring to know that,
you're willing to walk us through to educate us. 'cause a lot of times we don't know what we don't know. And, being able to say, Hey, these are the questions that you need to know is very valuable to us. And that's kind of what we need to hear.
And a lot of times too, once, become an attending, you don't have the time to figure it out. now you're just working, working, working, and you don't have time to figure this out and actually follow it as much as you [00:25:00] really want to. No, that's very reassuring
So now looking into it, where do you think, real estate and really this your tech is going what do you see in the near future, maybe, a couple decades from now? Yeah, I mean, I think that's, as I mentioned, right, where we go from here, I do think that we're nearing the end of this bear market kind of coming into the beginning of a recovery phase.
And, but like most things in the private markets, specifically private real estate, these things are slow. Like the bear market has been three years dealing with this. But we've seen what's been really interesting and why we're so excited. 'cause candidly, we have not made a ton of investments at Lightstone over the last several years.
I think we've bought one apartment deal in the past two years. this is like the least amount of activity that we've had. But we're starting to get really excited about what lies ahead because we've seen valuations pull back 20 to 30% across, most [00:26:00] asset classes.
Again, we play in what's called Class B, industrial or multifamily. All that really means is older assets that were built in like the eighties, nineties, or early two thousands. Right. That are well located functional buildings. So we've seen valuations pull back 20 to 30%. And we've seen fundamentals cool off, but because of the, higher interest rate environment that we've seen higher interest rates were only one part of the story in this draw down that we've seen.
What we've also seen is a lot of new brand new apartment buildings and new industrial space come online because there was a lot of development that happened during that COVID boom time. Oh yeah, yeah. Because developers could borrow two, 3%, 4%. You could develop for very cheap. So all of that supply came online.
It's gotten leased for the most part, but it took a long time. But now as we look ahead, there's really no development activity at all, and fundamentals are still really strong. And so we think that that sets up, a [00:27:00] really good backdrop looking ahead. Because if you don't have supply, kind of basic supply demand and economics.
If you don't have any supply, but you have strong demand, which we have been having, we've had very strong demand. What that generally means is you can charge higher rent and that generally means better returns for investors. And so that's what we expect over the next, you know, let's call it 12 to 24 months, 36 months at least, because even, let's say the demand starts to get really, really, really strong.
let's say interest rates go down. Again, development doesn't just like fix itself overnight, right? It's gonna take, two to three years for any new development to come online. So we think that the runway right now to be investing in existing assets, manage them with good, strong cash flow, capture that rent growth over the next couple of years is a great way for investors to just make a really strong, mid-teens type of IRRs at the end of the day, and I know IRR [00:28:00] is real estate jargon, but to make a, 15% annualized return while earning, six to 7% dividends on your money until you sell an asset, whether it is three or four years. So for us, what we focus on specifically at Lightstone is we wanna buy assets that have markets that are below rent, that have some type of.
capital improvement plan that we can do that will allow us to raise rent and then at the end of three or four years, we sell that investment for a profit. So investors earn cash flow during the life of the investment and then they earn a much larger check when the investment is sold and they get their principle back plus some type of profit.
That's what we look to target at Light Zone, and we think we now have tailwinds over the next couple years. We can execute that strategy. And a lot of the headwinds, like higher interest rates and more supply Are now in the rear view mirror. So we think that the backdrop is quite compelling right now.
So we're excited Now, 10 years down the line, who [00:29:00] knows, we don't look that far. What we do look for though, are when we're thinking about what asset classes we wanna be investing in. We do look at more secular trends. As an example, we like industrial right now, specifically multi-tenant industrial because you are seeing a resurgence in, what we would call reshoring
For those that don't know, reshoring just means, firms that are bringing manufacturing back to the United States. we had supply chain disruptions. It really started during COVID. But now there's actually a lot of huge tax benefits that came from the big beautiful bill that incentivize businesses to have a US-based domestic manufacturing presence.
So we're seeing that reshoring activity happen in a lot of the markets that we invest in. So that's gonna bolster demand. E-commerce continues to be a strong tailwind as delivery timeframes continue to tighten, Amazon used to be two day delivery now, same day delivery. and so when you speed up that delivery time, that has massive implications across the industrial sector that really, [00:30:00] again, bolsters demand as regional distributors and third party logistics companies want to be closer to their customers.
that's why we like industrial, because that is a longer term trend. Multifamily, same thing, the demand for affordable housing is stronger than it's ever been. It's one of the biggest challenges that our country faces right now is the need for affordable housing.
But because construction costs are so high, you can't build affordable housing. you just can't. Like, that's why most of the development activity in apartments has been. New brand new buildings that really are meant they're $2,000 a month plus to rent, but there's a large swath of the population they can't afford 2000, $2,500 a month to rent.
And that's where we focus on what's called workforce housing, which is, apartment units that are 1300 to $1,500 a month to rent, right? When we can still make a profit and provide affordable housing to people. So again, those are trends that we don't think are getting solved. Next year, the [00:31:00] year that's following or the year after, and so that we think have longer term tailwinds.
So long-winded way to answer your question, but that's how we think about that from a thematic standpoint. Yeah, no, it sounds like, what you're talking about is like the time is now, right? It's a good window to do it. The market's not gonna change in that sense, in a quick amount of time.
So, yeah. Yeah, no, this is a good time to do that. And now. Tech, right? We're seeing the rise of ai. There's always question, is it the bubble? But, it's booming. Right? How are you guys at Lightstone factoring that, in factoring the advancement of what we see in tech and ai in your platform and in your company?
Yeah, I mean, I think for us directly, it starts from our ability to manage our assets in a more efficient manner. So you're seeing a lot of AI tools come out as it relates to how do you manage a 300 unit apartment building with less people, with less staff. So that's one way that enables us to manage properties more efficiently.
There [00:32:00] are other tools that. help us on the capital raising side, right? That enables us from a communication standpoint to be able to reach a much larger swath of our investor base and to do so more efficiently where maybe we used to have an investor relations team of 10, well maybe now you can do that with five.
So for now, I think, AI really helps from an efficiency standpoint. what is the second and third generation of this look like? We will see. I can't speak to exactly what that's all gonna entail, but I think for us it enables us to create a better investor experience and then even from an acquisitions perspective, right?
We're using AI tools to help us understand. What markets and sub-markets we should be focusing on. which ones have the strongest long-term tailwinds? So there's a lot of really interesting data science being done on that aspect from a forecasting perspective of where rents are trending, what markets provide the best opportunities, what markets we should stay away from, right.
And that's a big part of our investment decision when we even assets that we own. We do what's called hold sell [00:33:00] analysis, and we should, do we think the market's gonna be better in three years than it is now? Or should we sell, or should we hold? So AI tools are helping us on that front as well as just managing our investment day to day.
I have a feeling that, the use cases will be significantly more than that in the years to come. but right now it really helps with efficiency first and foremost. No, that's awesome. I know we're coming up to time in terms of educating themselves you know, is there a good source for doctors in addition to, contacting you, walking through, is there a good source of education where the doctors can go to turn to?
And lastly the one golden piece of advice that you could, impart, like, Hey, this is what you need to know and this is how to move forward. Yeah. the one piece of advice I would say is network due diligence. there are so many communities, physicians not physicians and like investment communities, especially in the alternative investment space, have sprung up everywhere.
there's plenty [00:34:00] of physician communities that focus on. doing due diligence. So I would say ask. Talk to other people that have been in this space for sure. I would also say vet other managers. Yeah, like, hopefully what I said resonated, but don't just talk to Lightstone, talk to other managers and see.
So I would say definitely talk to other managers, see what they have to offer, figure out first and foremost what it is that you want from an investment. mm-hmm. Get very clear on what it is that you want from this type of investment. Why are you willing to trade liquidity?
some people want to, reduce volatility in their portfolio increase tax efficiency, increase their yield. Some people just like real estate more, right? Maybe we're doing a deal on a project that you live in, you wouldn't believe how many people we've talked to so far that just live in Greenville so they know the market.
They want to be close to something. They invest and they can touch it, and it's just easier for people to understand. investing in the s and p 500. So I think it's just getting very clear on what you want to invest in, find these physician [00:35:00] investment communities. You can Google them.
There's plenty of them. You know, and talking about community, that's huge. I think especially specific physician investment communities, dropping good friends named PIMD with Peter Kim. I know you talked to him before as well. So real deepconnection and knowledge there.
SoI think that's key. I think that's great piece of advice. Yeah, a hundred percent. That's awesome. No. So, again, thank you so much for your time. We're running up on time. and just for our listeners, just a reminder, transparency matters and, the sponsorship helps us keep the show running, but it doesn't influence our questions or expectations.
I think this was a great conversation, honestly. Because yes, a lot of us, especially, myself included, thinking about going to this space, always talking about it, mulling it around, but doesn't necessarily know where to start. And I think talking to y'all and looking at your platform would be a great place to start since, it makes this passive investment easy and, straightforward and I love the transparency.
So thank you so [00:36:00] much. Any last bit? Before we go. No, I would say just stay curious, Yeah, no tech is changing medicine, so it's changing investing too. So definitely ask your questions. If you're curious about the platform or want to explore it further, you can visit lightstone direct.com/dpn.
So yeah, that's lightstone direct.com, all one word slash dpn. Thank you so much for your time. I totally appreciate it. And honestly, I think I'm gonna be talking you all pretty soon trying to protect my income. thank you so much and to the telemedicine talks folks out there. We'll see you next time.
All right. Thanks for having me. Appreciate your time.