Real Estate and Passive Income, What the Gurus Aren’t Telling You with Jeff Steinmann

by Coach Jill Farmer | Money and Finance, Physician Side Gig, Podcast

What physicians need to know about investing in real estate to start generating passive income.

Learn the tips to investing in real estate and generating passive income.

“Obviously you want to be cash flow positive and a little bit more than positive is great. That’s more attainable in some areas than others. That’s easier to do in St. Louis than it is to do in New York, right?” -Jeff Steinmann

In today’s episode, Master Certified Coach Jill Farmer talks with Realtor and founder of Essential StL, Jeff Steinmann about the truth about real estate investing. Have you been looking for another source of income or does the idea of passive income really appeal to you? Have you been considering investing in real estate in order to realize your dreams of financial independence? If so, in this episode, Jeff gives us an honest look at what we are getting ourselves into as real estate investors, and gives us his top tips for real estate investing. We learn about the multiple ways to start investing in real estate. Tune in to find out which one may be right for you. 

Jeff is the founder of Essential StL and a Realtor. In 1999, Jeff moved to St. Louis. He immediately fell in love with the city, but saw the problems…. bad press, bad reputation and lack of pride. When he got to know his neighbors, he saw a vibrant community of wonderful, loving people who care about each other and look out for each other. 

He eventually combined his passion for St. Louis with his passion for architecture, love of people and corporate background to start Transform StL officially in 2016, which would become Essential StL in May of 2021. 

Jeff and his son live in the Shaw neighborhood and when not working, he enjoys the bars and restaurants of St. Louis, Minecraft, reading, watching documentaries and everything outdoors.

Learn more about Jeff Steinmann or contact him here

Books mentioned in the show: 

Rich Dad Poor Dad: 20th Anniversary Edition: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!  By Robert T. Kiyosaki

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Podcast produced by: Amanda Taran

Please enjoy the full transcript below

Jeff: Obviously, you want to be cash flow positive and a little bit more than positive is great. That’s more attainable in some areas than others. That’s easier to do in St. Louis than it is to do in New York, right?

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Jill: Hi, everyone, and welcome to DocWorking: The Whole Physician Podcast. I’m Jill Farmer, one of your co-hosts on the podcast and the lead coach at And today, we are talking about what physicians need to know about investing in real estate as a possible additional source of passive income. I am really excited today to be joined by an expert in this area, who I think we’re going to be able to learn a lot from, on the subject of this, somebody who has a lot of experience in this area. He is Jeff Steinmann, the Founder of Essential St. Louis and a realtor. Way back in 1999, Jeff moved to St. Louis, and he immediately fell in love with city but he saw problems. Despite the fact that there were a lot of problems that were being laid out about the city in the press, when he got to know neighbors, he saw a vibrant community of wonderful loving people. 

Eventually, he combined his passion for St. Louis with a passion for architecture and love of people as well as his corporate background, and he started a company called Transform St. Louis, which has now become Essential St. Louis. And Jeff, for a long time has been my guru for all things, real estate, and related to real estate investment into thinking about real estate as an additional source of income for people. So, as physicians, and conversations we’ve had with physicians around investing in real estate as a way to generate additional income, I really am excited that Jeff is here to give us ideas and insights around this subject. So, Jeff, thanks so much for being with us.

Jeff: Thanks so much for having me, Jill. Thrilled to be here.

Jill: Let’s first talk about the very precious commodity for physicians, which is the commodity of time. 

Jeff: Yeah. 

Jill: When I hear experts, who are supporting physicians’ intention of creating multiple streams of income or getting more financially literate, and I hear some of those advisors saying, “And physicians, go invest in real estate, it can be a great way to generate additional income which can give you more options for making work-life decisions.” Certainly, I’m all for those additional sources of income, but I do get a little nervous, because I also know a little bit from the back side how time-consuming real estate investing can be. Especially, if somebody doesn’t have experience and decides they’re just going to jump in and start flipping houses or buying properties to make them into Airbnbs or buying rental properties to generate income. So, can you talk a little bit about those time constraints that can come up and what people need to be thinking about before they make those investments?

Jeff: Absolutely. I do this full time. I do this all the time and it keeps me quite busy. It certainly is not a side thing. I think that there’s a lot of stuff that you’ll see out there on YouTube videos or TV shows that oversimplify it and make it seem like it’s something that’s simpler than it really is. For example, if you look at flipping a house, and I don’t want to use that word. I like to say, rehabbing. Flipping just sounds so cheap. But if you’re going to do that, you’ve got a whole lot of things that you got to figure out. Even if you have a great general contractor, you’ve got to be in tune with the numbers, you have to really understand your market, you have to understand the finishes and the things that are saleable and the things that aren’t. I think the one really big thing that people don’t think about when they’re rehabbing houses for profit is that, there are certain things that people will pay more for in a house, and there are certain things that they won’t. 

For example, right here in St. Louis, we don’t pay any more for decks. You can spend as much money putting a deck on a house. But number one, you don’t get to use it very often. We have a small window of nice weather, but folks just don’t pay for them. There’s a lot of things like that, that it’s just important to know. And also, if you’re doing rental property, you also have the situation of, “Okay, what can I do here? I can put in a new kitchen that might help. I can put in a higher efficiency furnace and air conditioner.” That’s probably not going to make a difference. It’s great and it’s going to save your tenants some money, but is it really going to make a difference. But there’s a lot to know and then there’s a lot to coordinate and manage on a regular basis. I’ve never managed an Airbnb. I’ve only stayed in many of them, which is really fun. But that’s the regular every couple of days turnover. 

It’s also important to note that, there’s a lot of regulation that is coming about around Airbnb that’s different depending on where you are, but just a lot of different things that I think you need to know, and you have to spend a lot of time researching, and you can bring experts in to help you with all of those things. A good real estate agent can help you understand answers to all of those questions. But you still have to manage it and you still have to be the one that’s in charge of the whole thing. So, I think it’s really important to your point, Jill to just not underestimate the amount of time on a regular basis. I think the short way to say it is, it’s not something you’re going to carve out a couple of minutes or an hour or two a week, and be able to make any serious headway with.

Jill: Thank you for that, and then, that’s not to say, certainly, Jeff and I know myself are in no way trying to discourage anybody from thinking about creating some income through real estate investment. It can be a fantastic way to diversify your investments and to grow wealth, and to give yourself income options. Those are all great things. It’s just understanding at a little bit deeper level. So, when you make decisions for yourself, you do it from a place of wisdom. Speaking of that, based on your experience, you’ve really put together some meaningful ideas, or highlights, or key points that I think physicians need to understand before they do get into investing. One of the things I love you say, first of all, is avoid the hype. What do you mean by that?

Jeff: Well, there’s a lot of stuff out there. There’s a lot of folks who have YouTube channels, and TV shows, and all sorts of different social media presences where they’re good people, and they’re excitedly explaining to you what’s possible in real estate. Sometimes, they gloss over some of the uglier details, because they may have another agenda, another product to sell or something like that. I’ve had many people come to me and I say this in the kindest possible way, “Bless their hearts.” They’ve read Rich Dad Poor Dad, and then they decided that they want to be a real estate investor. Then, we started to look at that, and then the reality really sets in. It’s like, “Oh, gosh, I could buy this building and rent it out, but what if the roof needs to be replaced? That could be 5 grand, 10 grand, 15 grand.” 

When that reality piece sets in, you just have to think about that going into it and think about that upfront and realize it’s the sort of thing where you’re going to have to have capital available, you’re going to have to have time available. Even if you have a great management company managing your rental property, you’re still going to have to get involved in that decision making stuff. So, I just think that it’s important to remember these folks out there on YouTube and the TV shows where they definitely have great information and you can learn a lot. But just remember, there’s more to it. It’s not an overnight, or a quick, or easy thing.

Jill: I think you bring up another really good point, that it isn’t an overnight thing. So, if you’re looking to generate an additional source of income, this isn’t necessarily something you should do if you need more income for instance, in the next month or so. Let’s talk a little bit about the patience needed for real estate investing.

Jeff: Yeah, let’s start with a little bit about needing income next month. I think that’s a great example. If you’re a physician, and you have a family, probably, you’re going to have to put that under management. So, remembering that, you’re going to spend probably 10% of your rent revenue paying a management company, because that’s just kind of a no brainer thing that’s almost a necessity for a professional who’s doing this sort of thing. That will eat up a lot of your regular profit. Obviously, you want to be cash flow positive and a little bit more than positive is great, and that is more attainable in some areas than others. That’s easier to do in St. Louis than it is to do in New York. So, I think generally speaking the strategy with long-term rental property is to acquire it, fix it, get it to where it needs to be, and then have monthly income that pays off your loan. 

So, using numbers, an 80% loan on a $100,000 property, you’ve got 20 grand into it, and you’ve got an $80,000 loan, and maybe you financed that over 15 years, and whatever that monthly payment is plus your expenses, your water, and your trash, and all the things that you pay for, repairs, assuming some vacancy, and your management fees. The idea is you want that to be less than the total amount of income that that property brings in. Then the idea is that it breaks even or maybe a little bit better over several years. Let’s say, it’s a 15-year note, and then at the end of the 15 years, you own that. You own it outright. Hopefully, it’s appreciated and hopefully, it’s now $120,000 or $130,000 property that you only put $20,000 into. 

So, generally speaking, that’s sort of a long-term vision, and it works, people do it all the time. If you’re looking at passive income, and you want passive income on a monthly basis, you need to have a whole bunch of those suckers. You need to have dozens or maybe more of those, because you got to be able to ride the ups and the downs, and the highs and the lows. One of those is the roof, or the furnace, or the air conditioner. Everybody thinks, “Oh, my God, the furnace went out. I have to replace the furnace. I have to replace the air conditioner.” Those are really important things. 

You can’t make it through a winter without furnace in most parts of the world. But you also have to remember that, if you’re owning a rental property for 10 or 15 or 30 years, you’re going to probably put a couple of furnaces in there over that period of time. So, when you’re looking at passive income, you could definitely have a year where you replace the furnace and that year might put you in the red. The beautiful thing is, if you’re working across 15 or 30 years, then you’ve had some other years that have been in the green that have offset for those. Does that make sense?

Jill: Yeah, it makes a lot of sense, and the same thing when you’re thinking about investing in rehabbing properties to sell at a profit. I know for friends that have kind of jumped into that business, a lot of times, they’ve discovered that they weren’t as patient as they wanted to be. They wanted a return on that investment faster, the reality was able to deliver that to them. Has that been your experience as well?

Jeff: Yeah, absolutely. Patience is not something that is one of my strong points. I work on that. But yeah, it’s a very timely question, because I’m in the middle of a couple of projects that are all taking so much longer than I would have hoped that they would have taken and very few people do rehabs with all of their own money, thereby, not paying any interest. So, we’re always paying interest, and that adds up, and our holding costs certainly add up. But yeah, patience is definitely something that is important to have in any aspect of real estate or anything really. [chuckles] 

Jill: Right, exactly. So, great tips so far. Avoid the hype, be patient, I think you’ve given us a couple of different examples where that’s really meaningful. Let’s talk about a third key point that we want people to walk away with today, and that is risk. You have to have an appetite for some risk if you are going to look at being a real estate investor. Talk a little more about that.

Jeff: Yeah, I hate to be cliche, but they say no risk, no reward, and that’s exactly how it works. The greater the risk, the greater the reward. The less the risk, the less the reward. One of the things that we’re dealing with right now in the rehabbing world is, we’re all kind of punched in the gut with the extreme lumber prices. Not just lumber, and lumber was the big one, but everything. Concrete and appliances, and everything, the prices just went crazy. Then we also had a really tight labor market. So, that is something that has pinched everybody who is in real estate in any way, and none of us saw it coming, and none of us like it. [laughs] But it’s a timely example of the thing that you got to be prepared to ride out over the long haul. As long as you’ve been in for the long haul, you can ride it out. I mean, it kind of sucks right now, but I know that we’ll ride this out. 

Then there’s all kinds of things that can happen. You generally are really well protected with real estate, because real estate, if you got a $250,000 asset, you’re going to have a $250,000 insurance policy on that obviously. So, that is certainly helpful. But then you can have just crazy things happen like, maybe you own a four-family building, and just the things in the universe line up and everybody decides to move out in the same month. And maybe it’s December when it’s really hard to find tenants. Those are the sorts of things that happen. I don’t like to get into all this negative stuff because we talk so much about it, but it is the reality. 

You can have a situation where someone– and this is really common, we’ve all probably heard of the TV show, Hoarders, and that can reach an extreme. It would require two hands for me to count the number of times I’ve seen this, because I’ve had it happen to me, and then, I’ve also come in and done a rehab after. But you know, that can reach a point where it destroys the real estate. So those things can certainly happen and you mitigate those by screening and all the normal things that you would do to maintain your property, but you gotta be ready for those things. The great thing is, when you’re in it–, I love how these are sort of dovetailing together because when you’re in it for the long haul, then you’ve got the time to make up for those things.

Jill: Yeah, really good points. Again, it’s not to try to dissuade anybody or to say, this isn’t a good idea. It’s just going in with a full breadth of information. I think it helps us be informed about the positives and the potential challenges. So, one of the positives that I’ve seen happen, and I know you have too, Jeff, when it comes to real estate investing is to recognize that it’s a really good place to team up. [laughs] 

Jeff: Yeah.

Jill: Because of the aforementioned reasons related to risk and some of the unexpected things that can be out of your control that show up, teaming up can be a really good strategy for being successful when it comes to investing in real estate. Talk more about that.

Jeff: Yeah, absolutely. If you have a certain amount of money, say you’ve got 100 grand that you want to invest in real estate, and you want to leverage that by borrowing, what if you had two or three friends or partners who also had 100 grand, and then you start with 300 grand. If you leverage that at 80/20, then you can go way higher, you can do much more, much faster. Now, you’re going to be sharing in the reward as well. But you can also share in the risk, and you can share in the time that it takes, you can share your resources and your knowledge, and the things that you bring to the table with other folks. 

I think the most important thing to remember there is that when you are partnering up or teaming up with other folks, you got to make sure that you got the same goals. So, if you’re 60 and you partner up with somebody who’s 30, you’re going to have different goals, particularly, 30-year-old might be looking at having that money available for college education, you might be looking at it In five or 10 years for retirement. So, you got to make sure that your goals are in alignment. 

A lot of times in business and particularly in real estate, we talk about exit strategy. So, is the exit strategy to own it until you die and pass it along to your kids as an asset? That could be an exit strategy. Exit strategy could be like looking 15 years, we want to use the rents to cover the mortgage, and then in 15 years, we want to sell the sucker and have a bunch of cash. The important thing is just to make sure that you and the folks that you’re working with are in sync and are wanting the same thing.

Jill: Oh, that’s really good advice and a really good option, especially, for a physician who has full time work and obligations to be able to think about partnering and spreading out some of the things that make it challenging and also pooling resources that can create a real upside too for being able to invest in bigger projects, etc. I know another option for real estate investing can be to look to somebody like you, who is a real estate developer, who has experience in rehabbing and in a variety of different areas, people can invest often with someone like you to not be the person who’s in managing the rehab, you don’t like the term ‘house flip,’ but other people might call it that. 

Jeff: [laughs] 

Jill: But they hand over the money to say, “Here’s some capital to support the work that’s going on behind the scenes,” and then there’s a percentage of profits, it’s distributed out. That can be really great. But what are some ways that if people are considering that kind of real estate investment, what should they be looking for in terms of making sure that they are working with somebody who’s on the up and up, and that their money is as protected as it can be knowing some of the risks that are out there?

Jeff: There’s two main things that I would say, and the first one is, make sure that the person you’re investing with has experience, and has actually done it, and has seen success. One of the things that I think is fascinating and a little bit depressing and scary is, when I go out looking for projects, which I frequently am scouring the target area for houses that are in terrible shape that need a ton of work, what I see is many, many half-finished projects. There are so many people and I think, I’m just making this up, but nobody’s ever challenged me on it and a lot of people think that it’s probably pretty accurate, but I think 50% of the rehabs that are started are not finished by the person who started them. 

In other words, somebody gets into it, and they’re like, “Oh, my God, this is so much work. Oh, this is so hard. Oh, this is costing so much more money. Oh, I’ve spent all of my money in the wrong place and now I’m done.” The success rate is not great. So, be cautious about investing with someone who has watched a bunch of videos and is just gung-ho to get going. Everybody’s got to get their start somehow. So, I’m not saying don’t ever do that. But just remember that if this is really a financial play for you, make sure that you’re working with someone who has the track record and has shown that they can do it. 

Then the other really key piece and this gets really technical. But the technical pieces, make sure you have a deed of trust on the property. I’ll just relate this to your house. So, if you own a house, you have a mortgage with the bank, and you issue at closing, you sign a document that’s called a ‘deed of trust,’ and that basically means that the bank has an ownership interest in your property to the amount that you owe. So, if you owe $300,000 on a $500,000 house, then the bank has an ownership interest in there. That doesn’t mean they own it. It just means that they have an interest, and that’s called a deed of trust. The common term that we use is a lead, but anybody can get that on any property. So, if you’re investing, make sure that that is something that you have, because when you have a deed of trust, that is an ownership interest, and that person cannot sell a piece of property without you signing a document.

Jill: That is such a good point, and you don’t call it this, but I would call some of those, there’s kind of an HGTV effect I’ve noticed from people who watch flippers on TV or rehabbers on TV, and selling at a profit. So, they decide, I could do that too. I once fixed something in a bathroom. So, I should therefore be willing to do this as well and it doesn’t turn out so well. So, again, like you said, there’s some really talented people out there that are just waiting to get their start that might be a wise investment for you. You as an individual physician can determine that in your own situation, but also knowing that it is one of those things that watching it on TV doesn’t mean necessarily that you’ll be great at it.

Jeff: Indeed, and one of the things that is a little bit maddening, and I don’t watch the shows, because that’s not exactly where I want to spend my time at the end of the day. But one of the things– [crosstalk] [laughs]

Jill: I do watch them, but I’m not trying to become one of them.

Jeff: Yeah. But one of the things that is maddening is when at the end of the show, they always put up, here’s the numbers. Here’s what they pay, here’s what they spent for the rehab, and here’s how much profit they made, and there’re so many numbers that are missing from that. [laughs] They don’t generally show how much it cost to actually hold it, they don’t show how much interest you’ve paid, they don’t show the insurance, insuring vacant buildings is very expensive and difficult sometimes. But yeah, it’s frustrating that they don’t show you sometimes the real picture.

Jill: That’s again where it just goes back to partnering with somebody with more experience that’s trusted can be just a really good option, particularly, if this is new or newish to you. 

Jeff: Yeah. 

Jill: Another thing that I think can be interesting, I was talking to a physician client not too long ago. In the early days of their career, they just decided kind of out of the blue to buy a two-family unit and then live in half, and the rental income actually paid their living expenses or the overhead on that, and that gave them a little bit of an opportunity to do some earlier investing than other people do, because instead of having a mortgage that was coming off the bottom line of their income, that was netted out by the rental income they had from the unit next door. What do you think about that kind of thinking ahead as for somebody who’s maybe young, newer in the profession, when it comes to real estate? What’s been your experience with that?

Jeff: Well, I think that it can be tough to find. Again, the markets vary widely, but it can be tough to find a piece of property that you can acquire for a price that actually works. But they’re out there. You probably won’t just go call your local realtor, and they’ll find you that perfect place in a week or two weeks even, it might be a long process or you may get super lucky, and you might stumble into some really amazing piece of property. But I think that’s just a fantastic way to go. 

When I was at that early age in buying my first house, I was more interested in having the house that I wanted, than having that. I knew that that was a possibility. In retrospect, I don’t have any regrets in life. But in retrospect that would have been great for me in so many different ways. I do know a number of folks who are doing that. So, I think it’s great. Just be realistic and remember, it’s probably not going to pop up right away, but great option.

Jill: Jeff, you’ve given us a lot of really great ideas about thinking realistically and meaningfully about real estate investment as an option, as a way to let money work for physicians as they’re looking for ways to look for possible additional income sources, and I really always have relied on your expertise in this area, and I appreciate you letting us tap into it for this conversation today. For folks who are interested in just kind of learning more, Jeff has a wealth of information on his website, So, if you want to reach out to him, even with a follow up question, he’s graciously said he’s happy to do that. The way to reach him is at But as always Jeff, rich conversation, and thanks again for sharing your expertise. 

Jeff: Thanks so much for having me, Jill. I appreciate it. 

Jill: Thanks to all of you for joining us today. Make sure you tell your colleagues and friends about DocWorking: The Whole Physician Podcast, and make sure right now you hop on over to, and check out Thrive for physicians. It will help you flourish. I promise. Until next time, I’m, Jill Farmer.

Jen: Why do we as physicians have a reputation for being terrible at managing money? Possibly because we’re saddled with debt. By the time we finish our residency training, we’re like modern indentured servants. We don’t get any financial training, we don’t have time to learn how to do that on our own, because we’re working all the time. When we finish our training, we have this societal expectation that we’re going to have a certain lifestyle. We’ve delayed gratification for years during all of the training. So what if there was an online community of like-minded physicians facilitated by experienced coaches who could help you weather the storm and sail right through to get to where you want to be, and plan ahead, so that you could get into a financial safety zone that would then allow you personally, professionally, and financially to arrive where you want to be.

If that sounds appealing to you, our program DocWorking Thrive, maybe just for you. Please check us out It’s D-O-C-W-O-R-K-I-N-G dotcom or email me, [email protected].

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Amanda: This is Amanda Taran. I’m the producer of DocWorking: The Whole Physician Podcast. Please don’t forget to like and subscribe, and thank you for listening.

Jill Farmer is an experienced physician coach who has been helping doctors live their best lives, increase their success, and move through burnout for well over a decade.

She has delivered keynotes, programs, and training everywhere from Harvard Medical School to the American College of Cardiology.

She has personally coached hundreds of physicians, surgeons, and other busy professionals to help them be at their best—without burning themselves out. Her coaching has supported professionals at places like Mass General Brigham in Boston, Washington University in St. Louis, Northwestern University in Chicago and too many others to list.

Jill wrote the book on time management for busy people. Literally. It’s called “There’s Not Enough Time…and Other Lies We Tell Ourselves” which debuted as a bestseller on Amazon. Her work has been featured everywhere from Inc. to Fitness Magazine to The Washington Post.

Nationally recognized as a “brilliant time optimizer and life maximizer,” Jill will cut straight to the heart of your stress to liberate you from its shackles. She has two young adult daughters. She lives with her husband and their poorly behaved dachshund in St. Louis, MO.

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