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This Dental Specific Podcast is dedicated to the Dental "Entrepreneur" Michael Dinsio, Founder of Next Level Consultants, delivers #TRUTH when starting up a dental practice. From the very first step to getting the keys of a dental practice, Michael shares his raw & unscripted playbook with you. Not only does this podcast provide you with "What To Do" but more importantly "What Not To Do". With over over 15 years of experience & over 150 past clients, Michael delivers an educational and informative program in a real and genuine way. Start w/ Episode 01 - as we go through a STEP by STEP process.
00:03
That question is so low to John, I don't even know where to start with that. I guess the problem is, and by the way, I love that question. Interesting, interesting. This is an interesting topic. What's the solution here? Show up, understand your part, and just crush it. Paper, click, social media, we can talk about all this stuff, but what really matters is patient experience, that wow factor.
00:33
Please are you listening to yourself? Come on! What are you talking about? Yeah exactly, so sit back, take notes and listen. Oh, oh, I love this. This is gonna be...
00:49
Startup Unscritped. The questions you have with the truth you need to hear. And now your hosts, Michael Dinsio and John Bertagni.
01:09
Hello, hello everyone. This is Startup Unscripted. Thanks for joining us again. Guys, this was a big week for John and I and Startup Unscripted. We are finishing Shark Week and I don't know about you, John, but I'm exhausted. We have covered real estate from top to finish or top to bottom rather. I think, this is just gut feeling. I feel like we're gonna end on...
01:38
on the best one, I don't know. I mean, this is the crescendo right here, no pressure. We've got Andrew from Crown Tenant Advisors who represents six of our Eastern seaboard states. If I could geographically pinpoint those. But man, he's built an absolute machine for dentists, young and old alike.
02:07
I know he's gonna drop some huge pearls for us in our listenership. So he's got 10 great advisors and Andrew, thanks for being with us. Yeah, thanks for having us. Happy to be here. I appreciate the opportunity to spend the time with you all. Love it. Tell us about Crown, Andrew, like what you guys are all about, what you stand for, what your vision is over there.
02:35
Yeah, we are a commercial real estate firm that works exclusively with dental and healthcare providers in real estate transactions. Different from most other firms, and that's all that we do. We're completely conflict free. We never represent owners, landlords or investors. And what that means for our clients is they're getting unbiased advice at every turn and it usually results in better deal terms. help them through whether they're leasing or purchasing. I'm helping them through the entire process. Our sole goal is to make sure that
03:04
whatever the practice goals and objectives are, they align to the real estate, right? We choose the results again, and it's working in a better deal terms and help them create a competitive advantage for their practice. And that's been the overwhelming theme, John, right? Like all of the folks that we interviewed represent the tenant and not the landlord or ever the landlord. And so I think that's what really differentiates all of these guys that they've got our doctors back.
03:34
and they're not in it for a dual representation type situation, right, bud? mean, it's not only that, it's the expertise, knowing that healthcare arena. And I'm jumping in, I'm jumping straight in enough pleasantries. you're going. You're on stage. Here's a question. And actually it's a scenario. And what Mike and I like to do is we like to build scenarios, so it's real life situations. As our listeners know,
04:03
I've been in a lot of different facets. Right now I work for a manufacturer of equipment, but I've been through it all. A doctor came to me, a tenured doctor in his 50s, and he was saying, hey, I can't get my lease signed because there's terms of it that I don't like. And Andrew, the term is that he, the landlord is not willing to assign the lease to the next individual. Remember, he's in his 50s.
04:32
He's not sure how long he's going to go, but that's the holdup. What is your take on that as a healthcare professional? Yeah. You brought up a great point, right? So there's, um, there's a financial aspects. Hang on, hang on, Andrew. Hang on one second. Let me explain. The actual individual is a commercial, but mostly residential realtor. we'll go. Excellent. Excellent. So.
05:00
I think you hit on a couple of good points here. One, it is important to work with a healthcare specific real estate advisor, right? Cause there are things like the assignment clauses that matter more to dental and healthcare providers than your regular office tenant who may or may not be for that company in five years. But for a dentist specifically, he's going to likely transition their practice at some point during their career. They have absolutely have to have the ability to assign the lease, right? To a new
05:30
purchaser of their practice. Now, landlords are going to have some heartburn maybe over the release clause part of that, right? Because they want to make sure that, if I'm signing it with this well-established doctor, that when I agree to transfer, I want to just make sure I'm getting someone that's going to pay the rent, right? Because I agree to deal with X. I don't know anything about Y at some point in the future. However, there's ways around that. There's negotiation tactics that we go through.
05:55
There absolutely has to be, right? So when we've seen this over and over throughout the years, when doctors get stuck, because they signed something 15, 20, 25 years ago with a different landlord. And that's an argument sometimes we get, we're reasonable people. Well, you may not be the landlord in 10 years. And guess what? That lease goes on. So I don't know about the future. Let's make sure from a perspective of getting off of this lease that I can do it. And it's written and binding. And it's clear.
06:25
And that's, you know, from the landlord's perspective, that's the estoppel, right? The individual does not have the ability to go to the landlord and say, here's my document, and here's this individual, and he's taking over my stuff, sign this document. Well, it depends. I mean, most leases will say the landlord has to give their consent to an assignment or a sublease of the lease. Now,
06:50
Most leases, if they're negotiated, also add in a clause that they cannot unreasonably withhold consent. Right. So they can't just say, no, I don't want to deal with this. However, because of the high stakes of a dental transition and what that means for the selling doctor, typically you want to be very clear in the event that the dentist or the doctor or the tenant for that matter, uh, sells his practice or his business. He's got the ability without landlord consent to assign the lease period.
07:19
Listeners take that note down. Yeah, I hate words like Unreasonable who who decide who decides what's unreasonable, right? Ultimately the attorneys in the courts right if two people can't agree that's Exactly, and I feel like it's it's us as professionals to unwind some of those ridiculous Words that are so am am big uetus I guess right that's a word but did you thank you?
07:49
Same, same, same, same. But the point that I think we should touch on this because the whole week we've been talking about startups and that is the theme and season two is startup, not startup acquisition uncensored, we're heading there. But this is a point we probably should talk about is the assignment of the lease and how important that is to acquisitions. I've had some hangups as well where their transitions don't happen because the assignment couldn't
08:19
or the landlord jacked up the price because they knew that this deal required an assignment. And you kind of have a situation there where, okay, I got to sign this lease and it's super unfavorable if I want this practice to purchase. So give me just one minute of this and then we need to move on because we are startup uncensored. Correct. And to that point though, some of these points are very important for startups too, right? Not today.
08:47
But 10, 15 years or five down, I mean, no one knows what the future holds, right? If someone decides they get into a lease and say, I want to sell it, I want to move, you still got to get some of these risk mitigation factors ironed out at least. But to your point on the acquisition side, we do work in that arena for those doctors that are acquiring practice. Oftentimes, depending on where that lease is, we're able to go in, renegotiate, lower rank, get money for renovations, et cetera.
09:15
in return for basically extending or renegotiating a new lease. So that's going to depend a little bit on where that existing practice is in that lease term. But absolutely, think leases do hold up. There's been horror stories here. At Lender, was one last year where a practice broker called me in a panic and said, can you look at this for me? Lender was not agreeing to this. And I read the lease. The doctor was out of renewal options. So all they had was the remaining three years, which doesn't work for most lenders.
09:44
financing and acquisition. Yeah, to that point, to that point, Andrew, cold debt. Remember, listeners, most lenders want 10 years on a lease. Have to have the ability to get to 10 years, right through renewal options or extensions, et cetera. You're absolutely correct. They have to have it because they're because of the loan. But this poor doctor couldn't it didn't work for the buyer then. And it was a large hospital group that owned the building. It was more interested truthfully in having their
10:14
affiliated doctors in all the space in the building than they were for a non-affiliated dentist. So the dentist had to sell the practice and merge it into another doctor in the area in order to get out because they didn't have rights to the space beyond the three years. So that is a not a great situation. So these things are real life that happen. The more you know going into a lease and a legally binding document,
10:41
And the more you can negotiate renewal options, limit personal guarantees, get the assignment stuff correct, make sure maybe we can get a death and disability clause to protect you as well. Then make sure there's nothing crazy like a termination option. I've renegotiated leases over the years where doctors have had these crazy termination clauses in their lease that they didn't really know about. That the landlord could come to them in six months and say,
11:08
I'm going to tear down this building and build something better. You got to go somewhere else. that is catastrophic. you know what? That's summation right there. You know, that 45 seconds of some of the key points that need to be, you know, focused upon in the lease. mean, that's it, guys. That's what we're talking about here. I want to get into now a little bit about
11:33
You know, your geographic area, and I'm going to put a scenario because I love scenarios because this is what people can relate to. So we have, you know, let's say someone comes to you and says, Hey, I want to be in Knoxville. And in your mind, you're saying, Hey, Knoxville is a little saturated right now. However, if you go on the outskirts of Chattanooga, there is a practice there for you. Right. Is that something that you're willing to do? Or do you just say, Hey,
12:02
all right, you want to be in Knoxville, we're going to find a spot for you. Or are there little pearls that you have that you say, this is the spot, this is going to dominate it for you? absolutely. Our process when we meet for the first time or the first several times with our clients is we want to understand exactly what they're trying to do and why and understand the goals of their practice, how they like to practice the patient population that they serve. And that certainly then ties into
12:30
demographics and making sure they align with the type of practice you're going to have. But also your overall goals, right? Are you specialists, right? We map out competition and referral providers for every client that we work with. So when we go into an area of your point, if you're going into Knoxville, you should know who your competition is, where they are, what they do, how they practice, how you're going to be different if it is quote unquote, saturated in order to compete.
12:58
But yeah, if we know about an area, I just had a conversation with the doctor that I'm actually meeting this afternoon. She said, I generally want to be in this part, close to my house. And she started throwing out some properties and some new developments that we were aware of and looked at with other clients. I well, what about this? There's a brand new shopping center going up here at the intersection of X and Y. And she said, huh, you know, I know about it. What do you think? I said, I think it's killer. Here's the demographics we've done.
13:27
Here's the network efforts from the so-and-so. Here's the competition. It's in an emerging market. And so we're going to go look at it today. And it may end up working out. it's one of those things that I actually saw this property 12 months ago and it was kicked off. And I thought to myself, I mean, there's new homes going up everywhere. It would be great for a startup practice, 100%. So we absolutely, and I follow those things in the file and we track them because you never know, especially working with
13:57
with desks and health providers. You just never know when that information is gonna become important to have. The other thing that we do, we keep a database of second generation dental offices. So I've got a lot of clients with multiple locations and those sometimes can be good fits if they're in the right area. You can save a couple hundred thousand dollars on build out. We do, I don't know, probably five to 10 of those transactions a year where a doctor is either doing a second location or maybe it's a startup who's like, hey, this is the area I wanna be.
14:26
I just saved $200,000 on a build up. Yeah. So let me ask you a question, Andrew, about that. You know, you just dropped the word demographics like five times, kind of in a, in a five second period. And we interviewed a demographic company and you know, we, try it, we've in this program, we've tried to put pieces in place for people to call on resources. And so you've got that only do demographics, but
14:54
I say you got to use both professionals and you know, John, like as he was talking, you could tell he's got real world street knowledge on the ground level. Whereas these demographic firms have data. And to me, it's finding the intersection of the knowledge that the both companies have. Now there's been some times where the real estate firms demographic reports were probably good enough, but
15:23
big picture like and and our demographic firm David James would probably hate me for saying that but that being said it is it is so important to have your real estate specialist like Andrew and his his awesome company to really pull demographics and figure out the best the best spots based on them. It's it's an overlay. I mean there's there's there could be little nuances of that report you know that I think could even enlighten you know
15:53
Andrew and Andrew's team That's that's you know, I have a question here, know So you use those demographic studies and obviously in your area of the the country There's some rural dental practices, right? How do you especially for a young dentist that wants to be in Nashville or wants to be in Atlanta? You know, how do you paint this and frame this picture for these?
16:21
for these young dentists to say, hang on a second, there's this opportunity. And I'll tell you exactly, Chandler, 15 years ago, there didn't used to be a CVS and a Walgreens on competing corners. There was nothing there. Now there could be four pharmacies on those corners. So how do you help frame this for these young people or old people that are trying to put a practice in a rural area that could be emerging down the road?
16:53
Yeah, so I think the framework is, and I think the challenge that I've heard from other practice brokers, right, who have some of these great practices in rural areas. I know, for example, in Georgia, there's been a lot of difficulty for whatever reason, these are great practices, but getting a lot of young doctors to at least consider those, or consider startup in a rural area.
17:17
I think it's kind of twofold, right? I think it's got to be something that the doctor obviously wants. We can tell them about emerging areas, but I've had plenty of doctors that say, hmm, I don't want to live there. I don't want to commute an hour each way, even though that's a killer location, it's not for me. Okay, fine, right? So I think it's a, again, it kind of goes back to our process of understanding what their goals and objectives are, right? Telling them about, I'll get that conversation all the time, because there's a ton of people constantly moving to Atlanta, for example.
17:46
and to Georgia and they'll say, want to be somewhere north of the city. I'm like, okay, that's great, but we literally have 10,000 opportunities to look at. Like, how do we, let's pare this down, right? So I think that's where the demographic and the information comes into play. And there are some great resources, like you mentioned that, that help with that, that can help identify some of these things and some of these opportunities in some of these areas. But I think ultimately,
18:13
It's sort of doctor specific. I can name you some towns that probably mean nothing in Georgia that I've always thought, hey, there's one guy there. There's two people there. That might be a great opportunity, but a lot of doctors just don't want to go out there and that. But you're absolutely right. think, mean, so there's 20 dental offices. You you're the only game in town. want to very few. And you look at the area that you're serving, they can do very, very well and have great offices.
18:42
Andrew, what's your numbers? What's your KPIs? What's your what's your stats that you you go for? I you know, I've got mine growth, of course, Dr. Dr. Per per location. What's your stats for emerging markets? Yeah, no, I we look at all that I like population growth. Yeah, depending on the practice, you know, I still think the core demographics of age, income levels, housing,
19:08
All that's important, right? I think, you know, in some areas too that are highly, highly dense or there's a lot of people that move in and out of markets. I've had a couple of clients over the years that have completely bucked the trend and have had fantastic balance, right? So there's no one way to skin a cat, right? If you're that doctor that says, I'm going into area X and I don't care who else is there. I'm going to market. I'm going to do this. I'm going to do this. You can be successful.
19:36
Right? There's still a large percent of the population, general population that is not going regularly to the dental office. You think about what some of the corporate models have been. Yes, all that information, you know, and they spend, they spend money on their research because they don't want to miss a location. But they also know we get in there, we're going to do things a little bit differently, potentially. We may spend more on marketing, we may do this. Yeah, we're going to schedule a little bit differently. So,
20:04
I say that to get back to the point, location absolutely matters 100 % but there's oftentimes there's been some things over the years and I think what some of those doctors have hit on too, it's okay, I went into an area where there was a lot of quote unquote saturation but those were older practices, right? They didn't have technology. So if you do your research and you say I want to be in an area, make sure you understand what your competition is, who they are, what they're doing so you can be different, right?
20:32
And you know what, to that point, we had some practices that were in hot areas, emerging areas, young areas, really educated demographics in terms of income and education level. And then we also had some practices that were not in those type of areas. What the doctor said, and sometimes we'd bounce some of the doctors from one location to the other. And this is interesting. This has to be thought of.
21:03
The propensity for someone in those hot areas or highly educated areas, they're more likely to get a second opinion than people in the rural areas or maybe a little bit different demographic study. So I want our listeners to think about this because those second opinions, if you're the second opinion, it's great and it's consistent. If the other one's the second opinion and they're in that chair, guess what they're doing? Go ahead.
21:33
Our doctors would say often, hey, I want to work at the other location because my case acceptance rate was through the roof versus the other. Same technology, same everything. That's such an awesome point, John. Like everybody chases income, the generation tech savvy, but don't bite the hand that feeds you that those folks are going to do more research. They're educated just in general.
22:03
They know what a composite is, you know what I mean? Instead of a white filling. That's right. Let's switch this and go to the next topic real quick. I kind of want to end in this area with Andrew. Andrew, we've talked to all these real estate guys over the, and they have all been guys. We needed a little more mix, but it just turned out to be that way. But they all talked about the challenges that they had in their marketplace. So
22:31
Like the guys in Chicago, talked about the high rise issues that they have with those landlords. The guy in California talked about fractions of occupancy rates, like not even 1%, but even less. And you're competing literally against Starbucks. And so totally different game plan there in Chicago. You tell me, what is the mid Atlantic like those areas that you serve?
23:00
What's the culture of the negotiation and the challenges that you have in the coastal areas? Great question. Yeah, really good question. I think if there's a challenge in certain of the markets we're in, I'd say there's two big things. One would be if, for example, in West Midtown Atlanta, great opportunity.
23:28
Growth in the residential sector is way ahead of where the commercial space is. Historically, that had been more of an industrial manufacturing area, and now it's become a great place to live. There's a bunch of high rises going up in apartments, and there's a lot of lost office, right? But the retail is coming. There just hasn't been enough yet. You could probably put two or three or four offices there in that general area, and they'd be successful.
23:57
The other thing, you know, I don't know, you know, in certain sub markets that we've seen, certainly, you know, in 2010, 11, 12, I could put a dental office anywhere in the city and they were begging for you to come to space. You know, we started seeing in 14, 15, 16, in town Atlanta, especially in the high rise office communities, a lot of those landlords have sort of shunned anything medical and they look at dental as falling into medical.
24:26
And so it's been harder to get some of those folks in some of those areas because also there's been a lot of redevelopment. Rents are sky high in the retail. There's a scarcity, so to speak, of it. There's not a plethora of retail space where you go, let's go see X, Y, Z. And it's going to make sense budget wise, but definitely in the high rise office buildings, you've seen a little bit of that and we don't want medical. I think that's going to start changing, you know, as, as we've started to see more subway space and a lot of these markets come on.
24:56
Uh, uh, offered as available and people, less people are probably going to return to work, right? So companies are trying to probably figure out right now, what are we doing with our footprint? And as more space comes on the market, right? Rents, rents are going to get depressed. Landowners are going to have to make deals. You know, I think, I think that pendulum has already started to shift a little bit. And the longer this goes on, know, as far as the, uh, the COVID-19 situation, you know, and what the vaccine looks like and all that, and the confidence.
25:24
you know, it's definitely going to create some opportunities, certainly for our dental clients, probably in most markets we're in. Well, that's a great synopsis of not only your area, but I think it encapsulates some other areas too. You know, the bottom line is get prepared, you know, get a business plan together, work with professionals within the industry, right? Like Andrew and his team. But, you know, Andrew,
25:52
This was exactly as I thought it was going to be, you know, approachable, but with absolute professionalism. And I can't thank you enough for what you're doing for your clients, but also our viewers who hopefully are going to be your clients. And I have a sense that there's going to be a lot of people going to the mid-Atlantic area along with Crown tenant advisors. So Andrew, thank you for your expertise and what you're doing for the industry. Yeah, thank you. This has been great. I appreciate the opportunity.
26:21
If you all, all the listeners, all of our followers, if you haven't figured this out, these folks are the front line of a startup. They'll introduce you to all the players, get you on the right steps. I, as a consultant, have found myself coming into deals where they just got themselves a little bit ahead of themselves on the process.
26:48
talked to the wrong person who got into the wrong network and next thing you know, you're signing a lease with a remax guy and signed with a contractor that doesn't even have a GC license. I mean, the stories go on and on. The reality is, as we finish up Shark Week, your real estate guy and gals just have it dialed in. It's like a tooth prep. You prep the tooth, step one through whatever.
27:16
That's what these guys do and they can get you into that process the right way. so, and the best thing is, is they get paid from the landlord. all they, you know, the fee is covered and they just want to represent you. I, you know, again, crescendo exactly right, John. We ended this week and it's been a powerhouse week. I'm exhausted. We need to take Christmas off, brother. I'm done. But Andrew, thank you so much for being on the program.
27:43
Yeah, I appreciate it. I appreciate the opportunity. And, you know, one thing that we are always willing to do, we're happy to provide a free lease evaluation to anybody who may have questions. No obligations, no strings attached. Obviously, if there's an opportunity or things that we can flag your market to say, hey, here's where you are against the market relative to your rate, your terms, critical dates that you need to be thinking about.
28:11
And anything else, you at that might be a flagging point, we're more than happy to do that. I love that. Obviously, our viewers and listeners, we have all of Andrew's information for you to get to him right below, right below. And thank you so much. This has been amazing, amazing. And thank you for your stories. Those are the best way for our people to listen and learn. All right, guys, let's sign off. Thank you so much. Have a great Christmas.
28:40
And we'll talk to all soon.
28:47
Thanks for listening. Tune in next week for another truth-filled episode of Startup Unscripted.
28:57
Check out Startup Unscripted on Facebook and YouTube. Click like, subscribe, and interact with Michael and John.