Thinking About Starting a Practice? Here’s What You Should Know.

You don’t need to have everything lined up before you start.

You don’t need financing approval before you call us, and you don’t need to have your real estate search figured out before you call a lender. In most cases, those conversations should happen at about the same time.

What you don’t want is to find a great opportunity and only then start figuring out what you can borrow. In a tight market, the right property can show up quickly, and you may not have weeks to get your financing ducks in a row.

It’s perfectly fine to engage a healthcare real estate broker first. A good broker can help you understand the market, think through lease versus purchase, talk about likely costs and start narrowing down where you want to be.

Just don’t get too far along without understanding your lending potential.

The good news is that most healthcare-specific lenders aren’t going to ask for a mountain of information just to get the conversation started. Generally speaking, a one- or two-page credit application, a personal financial statement and tax returns can be enough to get the process moving.

And you may have more financing options than you think.

Depending on the borrower, specialty, lender and project, 100% financing opportunities may be available — including financing for an owner-occupied building purchase.

That surprises a lot of first-time owners.

It also means you should think twice before aggressively paying down student loans, your mortgage or other long-term debt because you assume the bank wants you debt-free.

Healthcare lenders tend to care a lot about liquidity. They know construction costs change, openings get delayed and startups rarely go exactly according to plan. Having cash in the bank can matter more than people expect.

High revolving debt, like credit cards, is another matter. You’ll want to eliminate that as quickly as you can.

Get the financing conversation moving early enough that it never becomes the reason you lose a great real estate opportunity.

Then we look at the real estate.

Once we have a sense of your financing and the areas you actually want to be in, the property search becomes much more focused.

Now we can look at buildings and spaces through the right lens:

Does it fit the practice?

Can it be built the way you need it?

Is there enough parking?

Can patients find it?

Does the signage work?

What is already there that might save you money?

What is missing that might cost you a fortune?

And be careful with “free rent.”

Healthcare build-outs can take months.

Plans need to be completed. Permits need to be issued. Construction needs to happen. Equipment gets installed. Inspections follow.

If you get three months of free rent but you can’t open for six months, that concession may not be nearly as valuable as it looked when the deal was presented to you.

The better question is:

When do I start paying rent compared with when I can actually start generating revenue?

The same goes for landlord construction obligations and tenant improvement dollars.

Terms like “turnkey,” “vanilla shell” and “landlord work” can mean very different things depending on who wrote the deal.

You want to know what the landlord is actually providing, what you are responsible for and what happens if costs or timelines change.

You don’t have to figure this out by yourself.

Opening a practice involves a lot of moving parts.

Your lender, attorney, architect, contractor, CPA, equipment representative and real estate broker may all be working on different pieces of the same project.

That is normal.

Our job is to keep the real estate side moving and help you make sense of the decisions as they come up — from market analysis and site selection through tours, negotiations, letters of intent and the eventual lease or purchase.

You don’t need to know all the answers before you call us.

That’s kind of the point.