Debt and alternative financing
Investor Mandate: Private Lending and Alternatives for Doctors
Healthcare, Private Lending, & Alternatives Investor Mandate Interview
Capital raisers, sponsors and lenders who want to understand what an advisor serving doctors and dentists looks for in alternative investments.
Said on the call
"Do private lending in any market. The private lending rates are going to be even higher going into a crisis like this."
"Focus on a group, hit them between the eyes with value consistently, follow up with that group, and over a long period of time you'll stand out because you're not trying to attract everyone."
The short version
Forest runs an investment advisory firm that operates as a multi-family office for doctors and dentists across the US. His mandate leaves public markets aside and centers on alternatives. The main areas are real estate, private debt and private equity. His firm mostly looks at private syndicated offerings. Core holdings are multifamily, self storage and senior living. He also mentions precious metals and life settlements.
Forest says he believes private lending can work in any market and expects rates to be higher going into a crisis. He recalls 5 origination points plus 15 percent interest in the global financial crisis. He says his community still sees 2 and 13 or 3 and 13. His top piece of advice is for high earners to explore tax planning with their professional advisors. He also explains why community matters for doctors who often work alone.
Facts from this talk
- Forest's venture capital allocation is usually five to ten percent of a portfolio, with the other 90 percent kept in safer holdings.
- Forest says private lending in his community still pays 2 and 13 or 3 and 13, meaning origination points plus interest.
- Forest names three core syndication sectors, which are multifamily, self storage and senior living, mostly in private offerings.
Sources
From Richard C. Wilson's Centimillionaire Strategies YouTube channel: Healthcare, Private Lending, & Alternatives Investor Mandate Interview. Quotes come from the video captions, lightly edited for readability. Figures are the speakers' own estimates and experience.
General education only. Not legal, tax or investment advice.
Talk to a securities attorney to explore options around private offering rules, retirement account lending and tax strategy structures. Do not use AI to write your own legal agreements.
What stood out
- Alternatives over public markets. Forest's firm puts most of its time into real estate, private debt and private equity. Clients may still hold 401k and stock portfolios, but that is not the focus. He says clients were glad to have less exposure to the market during the coronavirus crisis.
- Private lending as a first skill. Forest teaches clients private lending early. Some clients explore lending to borrowers in the firm's network across the US, often with guidance from their own advisors. Much of this is residential fix and flip lending.
- Private syndicated offerings. The firm mostly looks at private syndicated offerings. Core holdings are multifamily, self storage and senior living. Other options include hospitality, industrial, workforce housing, student housing and RV parks.
- A small venture carve-out. Forest uses a venture capital allocation of five to ten percent of a portfolio. The other 90 percent is meant to be solid and safe. He describes the venture slice as a place to swing for the fences.
- Tax planning comes first. Forest talks with high earners about tax planning topics they may want to review with their tax professionals. Examples of operating businesses include ATM machines, water filtration machines and ice machines. He advises doing careful due diligence on sponsors.
Related questions
- How do I raise private credit for my business?Start by deciding which side of private credit you need.
- What is mezzanine financing and when should I use it?Many sponsors look at mezzanine financing when senior debt does not cover the whole gap and they want to avoid selling more equity.
- How does a bridge loan work for a real estate deal?A bridge loan is short-term money that covers a gap in a real estate deal.
Questions about this video
What does Forest's firm invest in?
The firm focuses on alternatives. These are real estate, private lending and private equity syndications, plus precious metals, life settlements and a small venture allocation.
Which deal structure does he use most for syndications?
He mostly looks at private syndicated offerings. Core holdings are multifamily, self storage and senior living.
What private lending rates does Forest mention?
He says rates in the global financial crisis were often 5 origination points plus 15 percent interest. His community still sees 2 and 13 or 3 and 13 today.
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