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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 do
00:48
Startup uncensored. The questions you have with the truth you need to hear. And now your hosts, Michael Dinsio and John Bertagni.
01:08
All right, welcome, welcome. This is Startup Unscritped. We've got a special guest today, but first, before we introduce him, I'm exhausted. Freaking Shark Week literally took everything I had in me, John, my co-host and partner, welcome to the show as always. Thank you, yeah, it was exhausting. And, you know, I've got to say we did a lot of work for the preparation of that, but enduring it, but, you know.
01:38
Our team did a great job. You did a great job of getting it out there. So I appreciate that. And yeah, I'm in Chicago Bears' garages because I'm just tired of it. I'm, Hey, we're taking this week off, but kind of not really by doing this. And I thought I would dress down. You dress down, Tyler. You're in the normal attorney gear. And I guess that's a perfect segue to introduce you. My friend, Tyler Jones with Hellsell Fetterman, good friend of mine.
02:06
a guy, it's my go to attorney for most deals. Welcome to the show, friend. Hey guys, thanks for having me. So yeah, Shark Week, you know, I will say this, right? So if our listeners, our audience screw up real estate, they are the worst because we literally interviewed six people across the country that gave us dozens and dozens of tips. so you have
02:34
too many resources now when it comes to real estate. But it does set the tone though of kind of the flow of how we're going through this, right, John? Like we started with this. What it does is if you do screw up, you hire an attorney to figure this stuff out in the red line forecast, right? But this is the flow. You know, and I'm gonna just jump in because I think our listeners, know,
03:02
Everyone has ideas of how this process goes and you everyone thinks they know what's happening. But what I want to talk to Tyler about right out of the gate is, hey, I'm a dentist, I'm coming out of school, I need to do what? I need to set up a legal entity. need to do, you know, if you're going to get a loan, you need a legal entity. So can you walk us through this process for these guys? Yeah. So I think
03:32
Probably one of the first mistakes I see people make is that they reach out to an attorney when they get a copy of their lease from their broker. And the reality of it is that's probably six to eight weeks too late. It's really nice to have the relationship with your attorney shored up. You've talked to them. You've interviewed several attorneys, presumably to make sure you found one that you want to work with. But to your point, John, the first step is usually making your business entity. And that can take
04:00
It's not hard. doesn't take a long time, but having that ready to go is super helpful when it comes time to review your lease for one, some procedural reasons. The lease already has the entity put inside of it and it's correctly reflected, but it also just helps these guys on all aspects of their startup, right? Their loan paperwork is papered with the correct business entity. They're, you know, presumably working with you guys on.
04:27
making sure that that entity is the one who's taking out the contract. Just having it ready is super helpful and there's really no harm in doing it early. It can always sit there if you don't find a space. I have clients who reached out to me a year ago and they still haven't found a space, but their entities sitting there and the second they're ready to go, you can turn it on and they haven't lost a beat. Well, and that's to that point. You're also, yeah, you're going to start the clock. Let's let's.
04:56
Be frank here, but you're also going to let them know the rules of engagement, when to engage you and when not to engage you to utilize some other facets of their team, correct? Totally. I'm the first to admit is my least favorite thing to do is send bills that surprise clients. And the best way you can do that is during your initial meeting, you know, establish some boundaries. best thing I tell people to do is
05:24
Hey, if you've hired a real estate broker to negotiate your lease or you have a consultant helping you negotiate your lease, you don't need me. Don't pay me an hourly rate to double dip or be a part of that negotiation. Give me a fully signed LOI and we'll go through it. And that's kind of my skeleton of the deal to review your lease. Make sure there's no gotcha stuff in there. Educate the client on maybe some things that they may not be aware of, some technical parts of the lease.
05:54
And frankly, my job when clients hire a real estate broker pivots more from negotiation to just making sure that the lease properly memorializes the deal that they actually negotiated. Let me jump in on that because we just came off Shark Week. Right. And so you had all of these professional negotiators and that's what I'll call them. Professional real estate negotiators. They take real estate negotiation courses. They they're dealing with
06:24
bullish landlords, they're very good at understanding the market and who they're dealing with across the table. so, I mean, it's no surprise that we have legal next, right? Because Tyler, I'm just assuming, bills out a little higher per hour than a real estate person. I'm just gonna go on a limb on that. And so, guess I love that we're kind of going to fees here.
06:53
you know, everybody's got their fee, is it flat, whatever. But before we go there, it's really smart to really utilize and maximize that real estate relationship, have them grind it. Even me, I don't do real estate negotiations because I don't have that license. But you know, you want to get the big deal points out of the way before you engage someone like Tyler that's more expensive hourly. I mean, is that what we're talking about here? Totally. I mean, one,
07:22
Any attorney who says that they keep a pulse on what the fair market value of rents are and whatever suburb of the major city they're looking, they're just lying to you. We just, that's just not how we're wired. And we just don't have that insight into the marketplace that real estate brokers do. Right. So there's no, in my professional opinion, every once in a while, I'll have a client who wants me to really negotiate and hammer the landlord, but
07:48
It's just lighting money on fire. Hire a tenants broker to represent you. Get the best economic deal you can baked and then hand it off to the lawyer. Your lawyer bill will be cut in half. And frankly, you'll mitigate kind of the deal fatigue that often sets in on these lease negotiations by kind of parsing out the different roles that the people in your team make. Let me ask a question here because. Mike, you brought up a point there that flat fee lawyer.
08:17
And not to go back to fees, but I want to know this. I want to know this personally too. That flat fee lawyer versus hourly. What do you think about that? Because there are guys out there, hey, I'll do this for X amount of dollars, or I'll do this for X amount of dollars per hour. How do you feel about that? I'm kind of agnostic about it. I'm not a huge flat fee guy just because I think it ends up being
08:44
I just see it too often in the marketplace when I'm on other side of deals where I feel like clients get underserved lawyer has a flat fee in their head. They've assigned some marginal value to their time. Right. And so they're going to in their head go, well, I'm upside down on this flat fee. I've committed more time to it than I estimated or that I booked out for it. I'm upside down. And you really do see the foot come off the gas.
09:12
a lot of time because I'm almost thinking it becomes like, hey, I've got a template for this and you're going to fit in this template because that's what this flat fee is about. I don't know if I'm right with that. I, you know, there's a time and a place for flat fees. Like there's a building in Anchorage that I do that holds a ton of dentists. And I've seen that lease a hundred times and I know where the
09:41
pressure points are and know where there's movement, that's a good place for a flat fee where you can make the client feel comfortable. I would encourage anyone to, instead of doing a flat fee, just say, hey, I'd like an estimate, or I would like you to review this lease and give me your top 10 concerns and let's cap your lawyer time at two hours, three hours, four hours. Okay, but there's a thing there, Tyler, and you and I have worked a lot of deals, this, frankly, which is why you're a guest today.
10:10
this doesn't happen with you. But I've been on deals across the country here. And you're right, like throwing out a flat fee gives the other side a baseline or something to get to. It's a number of predictability is kind of what I'm getting at. Where I feel like attorneys kind of go and make sour grapes is they...
10:35
they don't really say how much this thing's building up to throughout the process. And then all of a sudden, boom, you get a fee or they say, Hey, normally these are, you know, X to X range, but, but they never, let's say it gets to be a complicated deal. The attorney never jumps in and says, Hey, by the way, we've kind of hit that mark. This deal getting crazy. It's going to be more, it's just about setting expectations. And I feel like attorneys don't do that. Totally.
11:04
I see that all the time I think there's probably two things you can do to. Why do people hate lawyers so much that's what I. By the way you know I hate lawyers so I don't. I think people get resentful lawyers because they just feel like there's a barrier to entry right especially dentists they're so smart they're do it yourselfers they can.
11:31
do over not over research, but they like to learn everything they can about everything they do. And then they get to the end, they've been on dental town, they've been on every blog site, they're in the dental deep web. And they feel like they know about a lot about leases. And they just get resentful of the attorney part because they go, well, I'm paying this because I'm being told I should. And they don't really understand how to maximize the value of their attorney. There you go.
11:59
They feel like they know everything they're supposed to know. And so they become resentful of like, this is just some gating issue or next step where I have to stroke a check to someone and I'm not, and you know, the end result is oftentimes not always. If you get a bunch of red lines accepted on a lease, what I'm trying to say is that doesn't always equate to a dollar sign. Your lawyer didn't save you money. They mitigated risk. Maybe they made something more palatable for you.
12:28
And when it doesn't equate to a dollar sign, a lot of times people struggle to find the value in that. I'm responsible it. to that point then, so let's let's take away, let's get off the fees. Where do you get the value with the attorney? mean, we weren't really planning for this to go here, but this is a great topic, a great conversation. Yeah. Where do you get the value in attorney? I know, but I want you to communicate it a little bit better than I might.
12:57
I think the first thing you do is hire a dental specific attorney and you're going to get the value that you need in these startups. You know, putting aside the economics of it, you know, what you're paying for base rent and tenant improvements and what rent abatement you got. You know, oftentimes the value is probably three things. It's one.
13:20
Avoiding gotcha stuff, you know, the most common thing I see is people go Oh Tyler, I got a hundred thousand dollars of tenant improvements How great is that and you go to the end you go? Well, geez champ, it doesn't get released until a month after you open you're probably gonna want that money when you're building it You know, so let's you know, let's release that in tranches I've seen that work well for my other clients throughout the buildout process or you know, COVID-19 has been a kind of a game changer.
13:48
know, let's add a clause in there that says if your construction has ever slowed down because of COVID-19 limitations, that your rent abatement period is told so you can stretch that out. You know, and then probably the third prong of it or second, depending on how you count it, is there's just an educational component to it. The brokers are great. I love working with them. I work with a few and they're fantastic. But it would
14:13
Blow your mind how many people have been negotiating a lease for four months. They walk it into me and they go, is this good? And you go, well, do you know what a triple net lease is? And they go, I have no idea. And so you walk through that process with them and get them comfortable and get them educated because it's not unthinkable. A 10 year lease, they're going to cut the landlord a million dollars of checks over that 10 year lease. Why wouldn't you want to understand it? And the third, this is definitely the third is
14:43
Think of your lawyer like an insurance policy. If you bought something for a million dollars, would you take out a couple thousand dollar insurance policy to make sure it's right? Yeah. All day, every day. If you buy a house for a million dollars, do you spend a little extra to get title insurance all day, every day? The lawyer's here. Here's the reality, Tyler. You these dentists are beautifying these landlord spaces, right? They're actually making in addition to the million bucks.
15:13
they're also beautifying a lot of these spaces. So that tenant improvement dollars is actually a reinvestment into the space from the landlord for that. For that space. So I mean, it's like, it isn't free money, nothing's free, but they're getting a great place to live for 10 years. So I love that point. I want to ask you this because you got into some fun stuff there. You know,
15:39
People love stories and that's what we wanna bring out on lot of this. Can you tell us not good stories? How about a couple horror stories that you've been a part of? You know, there's a lot. The theme for horror stories is, Tyler, I'm signing a lease in 48 hours. I'd like you to look at it for me. Usually.
16:03
the horror story. Tyler, just signed this lease. Can you look at it for me? You go, well, Champ, you just signed it. They're all champs. Yeah, champions. Or chumps, depending. I'm trying to think of a good horror story. Probably the biggest horror story you can come up with is usually the theme is a doctor's just uneducated about what they sign.
16:33
And it pains me so often clients will go, oh, I got this great space, 2,000 square feet. It's underneath these brand new condos next to a school. I'm a peed. And so I'm going to get all these referrals. It's great. My rent's only $2,000 a month. And you go, that doesn't sound right. And you just go, you look at the lease, go, it's 2,000 plus the triple nets. And they didn't even know.
17:00
And they've set this budget, they've been doing it themselves, and they have a bad pro forma now because their budget's off by tens of thousands of dollars in triple nets. Those are the ones that freak me out the most. I'm trying to think a horror story. Well, what happens too with those triple nets, especially with what's transpired in real estate, at least in the Denver market, Chicago market, some of these great urban markets, the valuation of those spaces go through the roof. And guess who's getting a
17:30
you know, a tax bill that for 10 grand, by the way, that happened to us. We had a huge tax bill for one of these shell spaces that got built out. It was a triple net. was beautiful. And boom, we had to pay this massive tax bill. was crazy. You know, Tyler, you just said like the value of your attorney and you said that your clients are just uneducated about the leases.
17:56
I find that triple net is one of those definitions. Let's get into it a little bit. One of those definitions that can be very all over the board. Can you talk about that a little bit? Because John, you talked about taxes. that one was in yours. Sometimes it's HVAC. Sometimes it's... Yeah. The definition is to think of triple net like a binary thing. This lease has these triple nets. This one doesn't. The reality of it is the triple net is the spectrum.
18:25
of different inclusions that a landlord is pushing on to you. The hallmarks of it for most leases are taxes, repairs, hopefully not to the shell of the building, but possibly depending on how pushed through and utilities and maintenance. are kind of an insurance, sorry. And those are the hallmarks, but within that, there's so much flex.
18:49
as landlords build out more and more first floor commercial with condominiums or apartments on top, the first question you have to ask in those spaces is, okay, landlord, how are you parsing this out so that the commercial tenants aren't paying taxes on the residential portion? How are you? That's probably what your $10,000 war story is related to. minimizing those inclusions, know, 20 or 30 years ago, if you had said, well,
19:18
A triple net lease definitely means that the landlord can't pass through costs related to the shell of the building, the roof, the walls, the subfloor. Now in hot markets like Denver, Seattle, Portland, even Phoenix, you're seeing landlords say, well, we need to be able to pass through some of those costs that historically have not been part of triple net. Right.
19:41
Getting out in front of that, understanding the marketplace, understanding your landlord and how they're going to pass those costs on through you. It's huge for tenants. And a lot of times they just do a quick Google search of triple net and they think they've got it. It's binary. It's a spec. Hey Siri, tell me about. Yeah, totally. I always say that there's two attorneys on every deal. There's me and Google.
20:11
I can't hear you, I actually like it better when I couldn't hear him. Well, you know, John, that's why you don't have the mute button on your side. This is really interesting because it's come up a few times and I want to take take a minute and talk about this. So doctors just in general, I think this is why you need a team of professionals like Tyler, John, myself and all of the folks that we've really interviewed on the program. But
20:41
Doctors tend to go right to the number and compare that number. Like going back to Wells Fargo's interview, interest rate, interest rate, compare easy. But then there's all of these other terms, right? And I think of the lease is the same way as base rent, base rent. When I took a negotiation course, great course by the way, never split the difference, phenomenal book, great teacher. But sure, there's a...
21:10
there's things that you can compare that everybody compares. But once you get to that point, there's always these little things that make up just little wins that you can get. And that's where I think an attorney comes into is like, if you got taxes for whatever reason out of your triple net, that would be a huge win, right? Like, nobody's looking at that, right? And so if you get to those places on that lease, that's easy comparison.
21:39
okay, got it. Thanks, Mr. Real Estate Agent for putting that in perspective. But to me, that's where the real value is, is a guy like Tyler comes in like a dark knight and looks at wording, like wording, right? And changes the wording so it's not so generalized and boxes the landlord in, right? Yeah, take a classic example. I'm doing one right now. I would say there's no such thing as $1,000 HVAC problem. There are only $10,000 HVAC problems.
22:09
And so one way you can nibble at the edges of the lease is you just say, Hey, I'm not going to pay for any HVAC for the first five years. just, I just signed a lease with you. The least you can do is make sure that I'm not on the hook for some HVAC rehab in the first five years. Let's put this into perspective because when we look at a year's budget, right, especially for a startup and you know, it's going to be a hockey stick. I mean,
22:36
That $10,000 or $1,000, that means a ton to a startup business from a budgetary standpoint. So any of these give takes or as a mentor and I explained to me fair exchanges, right, which is what it is, a fair exchange of information or tangible items, I mean, that's ultimately what's gonna happen. That's why you need a lawyer. That's why you need a professional real estate agent.
23:05
or broker. mean, this is what it's about. It's about a fair exchange and making sure everyone feels good. And Mike, you're right. That book is fantastic. And it really brings a lot of light to giving credence to someone in order to get something in return.
23:25
Well, final thoughts, guys. Tyler and I exchange war stories literally every day. I got one. I got one. This is good. Scenario A, person B. Learn from this, right? And as we finish, I think that, again, Tyler, to emphasize your point, if you're doing something that's worth a million bucks, you're buying something, you're at risk for something,
23:55
over just call it 500,000. Like the cost of professionals is so minor. It's such a great insurance policy. mean, yeah, I always say it's a really great barometer to find someone who's going to be with you for the whole career of your practice, you know, hire an attorney and say, Hey, are you going to be there for my employee manual when I start hiring employees? Are you going to be there for that first fire?
24:20
Are you gonna be there if I wanna expand or take on a partner when I'm ready for my first associate? If anything, it's a good litmus test to make sure, hey, I had a good working relationship, a good experience with that attorney, so when I need an attorney now that my practice is up and going, I know who to call and I know that that relationship is already there. Well, I think it's, I love this segment. I wish you were wearing a cardigan instead of a V-neck, but it actually works.
24:50
I'll have the orders for a cardigan. So good. But this was, you know, we didn't want to be surface. We wanted to get a little bit deeper in various segments. I think we did so. But most importantly, you know, engage in your legal counsel early enough so you can get the right guidance. think that's the ultimate piece of this this segment that we talked about today. Mike.
25:18
Great questions, loved it, you know. Let's go back to fees. No, I'm joking. I'm joking. I'm have to go. It's not working. It's not working. Guys, as always, pleasure. We really got to the heart of it, I think. It's good stuff. Tyler's information will be below. He pretty much works nationwide and just a really good resource for me personally.
25:45
And now all of John and I's viewers and followers. again, fun reminder, quick reminder, follow us on MySpace, Facebook, Instagram, LinkedIn. We're on pretty much everything. MySpace account? Oh yeah, John's on MySpace. That's so cool. Justin Timberlake, he's trying to create another push at it. But... All right, guys, have a good one. Have a great holiday. Good crowd, you guys. Thank you.
26:20
Thanks for listening! Tune in next week for another truth-filled episode of Startup Unscritped!
26:30
Check out Startup Unscripted on Facebook and YouTube. Click like, subscribe, and interact with Michael and John.