Doctor Turned Investor: How Benjamin Aaker Built Wealth Through Multifamily

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In this episode of the Real Estate Pros Podcast, host Micah Johnson speaks with Benjamin Aaker, a physician and real estate investor, about his journey in the real estate market. Benjamin shares his experiences as an accidental landlord, the challenges he faced, and how he transitioned into multifamily investments. He emphasizes the importance of education, mindset, and community in navigating the complexities of real estate investing. The conversation also touches on current ventures and the future of real estate investment strategies.

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Benjamin Aaker (00:00)
It’s way harder to use other people’s money and way more worrying because I would I would rather lose 10 of my dollars than one of an investor’s and how that feels. So we got this. We ended up buying a 16

And, know, after about two months, they started dropping people off their program

And we got down to 50 % occupancy. And that was just the worst feeling.

Micah Johnson (01:57)
All right, here we go.

Hey everyone, welcome to the Real Estate Pros Podcast. I’m your host, Micah Johnson. And today I’m speaking with Benjamin, who’s been making some serious moves in the real estate space now for about 10 years. Benjamin, welcome in now. Welcome in, man, glad to have you.

Benjamin Aaker (02:13)
Hey, Micah

Hi, thank you so much for inviting me. I’m glad to be here.

Micah Johnson (02:18)
Absolutely, I’m pumped for it, man. We just had an incredible pre-recording call. So I think the folks that are listening and watching today are gonna get a ton of value, one just out of your journey in real estate and some really great insights that you’re bringing along the way. So let’s dive in there. For folks who may not know you yet, tell us a little bit more about who you are, what you currently have going on in the markets you operated.

Benjamin Aaker (02:41)
Yeah, well, my day job is I’m a physician in emergency medicine around here in the Midwest, live in Sioux Falls, South Dakota. Probably not many of your listeners know the area right in the middle of the country and up in North and the cold land. But started investing about 10 years ago, as you said, and really was an accidental landlord. And that was it was difficult, but I learned a lot and it was great. And then I found the value of multifamily and the economy of scale that it has and

Micah Johnson (02:51)
you

Benjamin Aaker (03:10)
That’s what I’ve been doing now and I just really have never looked back since then.

Micah Johnson (03:15)
All right, I love that, but we got to back up then. So the accidental landlord, take us through the journey. How’d you end up where you are today? What happened?

Benjamin Aaker (03:24)
Yeah, so part of ⁓ moving to Sioux Falls area was we needed to buy a house. So my wife and I look for a place and I wanted to have some land. I love having that land to be able to go and walk on that and do what you want in your own land. And she wanted a beautiful house and we could not find something that had both of those in the area. Just bad timing, I guess. And so I ended up finding a house that was just like a cave. It was old and not very nice.

And I could probably live there, but my wife definitely didn’t want to. ⁓ but I convinced her by doing a deal with her. And the deal was we would put everything we can to pay off that house. And then once we got it paid off, we would demolish it and build a new house. So I made my handshake with my wife. And a few years later, we just had put any, every money into the, everything that we made into that and demolished it. We needed a place to live during that and found a real estate agent, to help us to.

rent a house and we ended up finding a REO property real estate owned, which is a bank owned property and bought that because of the recommendation of the real estate agent.

Micah Johnson (04:33)
Okay, so you got this REO, you’re renting a house and you’re building a house at the same time, along with being an emergency room physician, which is awesome by the way. Thanks for doing that. ⁓ Then what? What was next? So keep going.

Benjamin Aaker (04:49)
Yeah, so that house, know, the bank owned house had a lot of problems and you can do an inspection, but they don’t really negotiate with you. At least they didn’t when I bought that. And, ⁓ you know, I turned on the water and the water’s turned off up here because you’ve got to winterize these places. They’re not in, or if they’re, if they’re vacant, they’re going to be

drained of water. So you turn on the water and spraying happens in the basement. that’s like, no, what did I buy? And so.

My wife and I are both pretty handy so I can get out there with a blowtorch and put in some copper and did that and it turned it on again and then it went down to the next place and there was another sprayer. And so I did that about five times and then I ended up saying I’m done with copper and I ripped it all out and put in pecs. But got that done and learned a lot and then I ended up getting the house,

the new house done, built through a contractor and we needed to get rid of that other house. So went to my same agent. said, will you help us sell it? And the agent said,

Yeah, I sure can, but I’ve got this couple who’s looking for a house and they unable to buy it just because their credit is just a little bit too low. Would you consider renting to them for a little bit? And then we, you know, make a little money that way. We had never thought of being landlords. That was crazy or doing anything outside of our current jobs, but our agent convinced us to do that. And that was, that was kind of ridiculous that we did that because we didn’t do any kind of background check. We didn’t know any better, but they were good tenants and we had that house for two years.

We ended up selling it to them. They got a good deal and we got it sold and just so, man, what a great feeling to be able to get them into a house that they wanted for many years and, great for us because we made a little money on that. And I, know, single family was what I started doing. So bought more and more and more. And then I found, I became a real estate agent because I thought that was what you had to do for real estate investing, which you do not have to do that by the way. And we bought.

Micah Johnson (07:27)
Gotcha.

Benjamin Aaker (07:30)
⁓ We ended up finding on the MLS a multifamily property and that got me turned on to multifamily and I’ve been really happy with that.

Micah Johnson (07:40)
Now you got a story about Jack Hammer and I think it’s through a sewer pipe. So before we move on to like the glory days of multifamily, take us through that, man. I like folks to hear just the nitty gritty of it.

Benjamin Aaker (07:54)
Yeah. So, you know, when you’re doing multifamily, I think you start small. mean, you really should. You don’t know what you’re doing. You’re learning. And it comes up pretty quickly that you want to buy a place that’s bigger than what you have the money for, and you need to start using other people’s money. And so I researched a lot of different ways to do that and ended up doing a syndication where I was the operator, the general partner, and brought out investors, all ⁓ coworkers, colleagues in the medical field. And that

was a big change from what I did because you think, wow, it’s going to be easy to use other people’s money. there’s you can find gurus out there tell you how to do that, right. Because it’s just so easy because it’s not yours.

It’s way harder to use other people’s money and way more worrying because I would I would rather lose 10 of my dollars than one of an investor’s and how that feels. So we got this. We ended up buying a 16 unit, which was two eight plexus side by side, a little playground for the kids in the middle.

And this was owned by a nonprofit organization, which is an unusual kind of a thing. And their mission was to get people in from, it’s kind of like, it wasn’t a halfway house, but it people that were down on their luck, maybe out of prison recently. And so they were subsidizing these people, but they ended up getting into the ownership business and the landlording business. And they must not have enjoyed that, or they must’ve thought that it really wasn’t their mission. So they, they sold, they wanted to sell that. And I thought, that’s a great deal.

I can get this and they also subsidize the rent and I’ll just get a check at the start of the month. And then, you know, just to be a landlord and just kind of get to cash in the money. Isn’t that great? That’s what everybody’s dream of real estate investing is. Right. So I totally did that. And, know, after about two months, they started dropping people off their program and it was, you know, always, there was always some kind of reason like the tenant or the client is making too much money.

And we started to lose tenants because of that. And we got down to 50 % occupancy. And that was just the worst feeling.

And again, it was other people’s money that I was at risk of losing.

And I started waking up at night, 3 AM. I’d wake up and I’d just be circling around thinking of this stuff. And it was horrible. I had luckily had an extra aside ⁓ plan B for it, which you got to have multiple plans.

raise an extra $40,000 to renovate a garage that was part of the property. And I was going to rent that out to tenants who needed a garage space. Well, I ended up just using that to pay the bank at the monthly as we were at 50 % occupancy. was just a horrible situation. I let the investors know they were all very kind. It was nice. They weren’t upset and never had to get a capital call. But in the end, my wife found, ended up finding she and I own a little

four-bedroom motel as well. And this contractor had said, had asked her if he could rent for all four units for his people coming up to build ag buildings here in South Dakota. And she said, no, we don’t have any vacancy, but we do have this apartment in town. Maybe you’d want to do that. And so she sent them over to me and we negotiate. He wanted all eight of the 16 units. So that would have filled up all to a hundred percent occupancy, but something I just, I don’t know what.

I just, and maybe in my 3 a.m. thoughts was, you you don’t want to rent all eight of those to this guy because he’s, not going to be here long-term. And then when he leaves, you’re going be back to exactly the same state. So yeah, I, so I, I’m so glad I did that because he was there. He signed a six month lease. He needed to be in by Monday. We signed it on Friday. This was right at the start of the pandemic. I could not get a contractor out of there. And this one unit

Micah Johnson (12:05)
All right.

Benjamin Aaker (12:20)
had a sewer backup in there. It wasn’t just from the sewer from the street, but it was you turn on a faucet or you turn on the shower and the sink wouldn’t drain and the smelly stuff would come up. And I had to get these guys in there. I wanted them all in the four units on the basement floor so they could be together. And I ended up going out there myself with a jackhammer. I jackhammered that floor on a Saturday. I replaced the pipe. laid cement down. It went in on Sunday and

Micah Johnson (12:31)
Mm.

Benjamin Aaker (12:48)
and put in the toilet again and the vanity, put sticky flooring tile on there on semi-wet concrete and got them in on Monday and I had to work in the ER the next day. I washed my hands and took a shower and went into work to see my day job. I thought that, yeah, that was an experience. I learned a lot from that.

Micah Johnson (12:56)
Bye.

Man.

Well, it’s good thing you’re handy too. Like folks learn a lot about themselves when they get into real estate about their level of problem solving they didn’t know before. Cause if you had asked previous you or medical school you, Hey man, did you, do you think you’ll be Jack Hammer in a super

Benjamin Aaker (13:15)
Thank

Micah Johnson (13:27)
for a multifamily here in about 10 years? Nope.

Benjamin Aaker (13:27)
ever.

Yeah, it’s, know, like you look back and say, that’s dumb. If I would have gotten, if I’d been able to get somebody in there, I would have done that. But I, you know, nobody else. And so that’s good to have that in your back pocket, being able to do that.

Micah Johnson (13:44)
Well, that’s

Well, is. It gives you tons of confidence too. And that’s the thing. What I’ve really learned about the best investors is their typical response to a problem is, okay, so what now? It’s just, okay, so what now? Like that it’s okay. Like the problem’s not the problem. The solution is what they’re focused on. And it’s just an expectation of look, real estate has its up days and its bad days. Some days the toll is clogged, some days it’s working fine. And how you handle it.

really determines everything. And you can kind of touch on it with when you’re using other people’s money, the part that folks don’t warn you about when you’re using other people’s money is it’s other people’s money. There’s a pressure that comes with it that if you don’t handle risk well, if you’re not like prepared for that, it’ll wreck you. It starts keeping you up at night. And all of a sudden you’re thinking, I didn’t get in real estate for this. And this is what it was. You’re spinning out all of a sudden where it’s like,

Hey, take a deep breath. It’s okay. You’re on the way. You’re doing it. That’s why I’m very big on communities and having a good strong core group of people around you, because we all need folks to talk to when it hits the fan. But it’s just part of it. It’s not a reason not to do it. It’s a good reason to think or a good thing to know, okay, it’s going to be around the corner when I do decide to do that.

Because the opposite side of that is, man, when you got a bunch of money in the bank, you negotiate way better.

You have a way more confident position that you’re sitting in. You’re not like sitting there sweating in your seat trying, you know, I got to get it to this number and this and that. You can get it way lower typically because you’re sitting there with the money. You have this different position. So it’s it’s all these different things that come up in real estate, whether internal or external, that I find fascinating and that the best deal well with. They they adjust and grow. So take me through how how has education been an important part

of your real estate journey.

Benjamin Aaker (16:26)
I am just really big into that and learning. I think anybody who’s starting out, they really need to take that time to learn whenever possible. Now you might be an accidental landlord like me, but if you fall into that property that you own, you better start educating quickly. So, I mean, how do do that? You’ve got books that you can read. There’s all kinds of great books out there. And then there’s also podcasts such as this one that are great. you know, blogs and such, I have a blog ⁓ and networking.

you know, networking with people that’s around you, joining groups such as Investor Fuel and other groups that are out there that, you know, that they really give you so much and you, it takes very little for you to do that. So if you can take the time to start out with those kinds of things to educate yourself, you’ll be educating people as well, you know, teaching and learning at the same time. It’s such a great feeling. And that’s, that’s how you get started and you’ll be ready when that great deal comes along and it is just going to fall into your lap.

Micah Johnson (17:23)
love that. I try to tell folks, step one is education, not the offer. I know we don’t feel like we’re really doing a lot until we make the offer on the property, but the moments before then that you spend studying what it is you’re trying to do, getting clarity on it, talking to other people, because real estate’s huge. It’s a huge term. And we were talking in the prerecording call about so many folks get in and their first deal doesn’t go well. You had a good experience where it worked out and

And it went and I love it when I hear those stories. But so often you hear it was a nightmare and it was this and it was that. I lost this and I lost that. And what breaks my heart is they end up out of the arena completely. The number one wealth generator in the world is the American real estate market. And you just take yourself out because of a bad experience where if you talk to anybody that’s been doing it long enough, they all have a bad experience somewhere. It may not have happened up front.

but it’s part of it. So I feel bad for folks that kind of get that rough go of it upfront. A lot of times it is due to lack of education. We invite our own problems into our life, but not letting it keep you down, not letting it keep you out of the game. So that’s for me is where the education part goes hand in hand with both where keep a good mindset on you that we all want them to work out. Hope’s not a strategy though, right? Know your numbers, know how to know it’s a good deal.

and you know it on the buy, not on the sell, right? Like it’s upfront, how much you’re digging in upfront teaches you, okay, this could be good, this could be bad. And then the more things that gotta go right for it to be a successful project, the higher the chance it’s not gonna work. You’re introducing like exponential probabilities of things going wrong. If this has to go right for this to go right and this goes right and then, man, we got a home run deal.

Yeah, you got to strike out, man. That’s what you’re looking at. Like it’s not good. And just, I’ve learned it myself to where we all want the home run, but as long as you stay in the game for the singles and the doubles, the home runs come around. That’s how they, that’s how you get to hit them is you were there for the rest of.

Benjamin Aaker (19:19)
something.

So true. that first deal, know, as you said, it’s so important for people, but it’s not, not everybody’s going to do great on that first deal. And if you just look at that as a learning experience, but the, know, the biggest tragedy I think is when it’s like a secondhand thing. Like you talk to somebody about real estate investing and they say, but my uncle had this horrible story about, know, a tenant that clogged up the toilet and he had to go at minute, you know, that, that cliche that we have a real estate investing and like that, that’s what turns you off to real estate. Like that’s all it took, you know,

Well, you’re probably not a real estate investor if you just take that one opinion. And that’s why a community is so great where you can hear different things. I always maybe they’re not going to say the same thing. You’re going to have to take that and learn from that and decide what’s the right way for you. But if you’re not there, you’re not going to get any of those possibilities.

Micah Johnson (20:23)
Exactly. And what I love about real estate is the best at it. Man, they got an abundance mindset for the most part. If you will get into the room with them and talk with them, they’ll explain to you exactly what’s going on, what the habs happened in their business, how to, hey, here’s how you avoid these mistakes I’ve made. You want to save five years of your life and about a million dollars? Hey, do this instead of what you’re thinking about. And those are the helpful things. And you brought up a great one there.

Benjamin Aaker (20:30)
Yeah.

Micah Johnson (20:51)
All it is was hearsay that kept you out. You don’t have to be a landlord, right? Landlord is just like the most common thought when it comes to real estate investing. And a lot of times you hear the terms passive get tossed around. Y’all want to be a passive investor and then they end up in single family. if you’re listening or watching, single family is not passive. It’s just not, it’s a whole nother animal unless you own enough to get them to the property management. That’s a different conversation than we’re having right now.

But there are ways for you to adjust. Like I’ve been in real estate for 14 years now. I do not do the same thing I did when I started. Because real estate is a huge umbrella. There’s so many different niches that you can get into. Heck, I heard of one the other day I’d never even heard of before. And I’ve been doing this a long time. I was like, holy cow, that’s a great idea, man. I never thought of that. They only rent their properties under government contracts.

but he was doing government contracts before he got into real estate. And then he found this little niche where, my God, I don’t even have to own the property. I can rent the property, sublet it to the government and make all the money I want to. And I was like, bro, way to go, man. Like way to think outside the box and find your lane in real estate that keeps you in it. That allows you to, I’m very big on getting my emotional paycheck paid and my financial paycheck paid.

very big and that’s kind of when I adjust when I can’t actually care about what I’m doing anymore or the person I’m doing it with. Okay, I need to shift in my own life. where do I want to go now in the industry that lets me keep doing the part of it I enjoy doing which is that actually caring part or whether it was a single family owner. I don’t particularly enjoy that conversation anymore and when I notice that, okay, who’s next? Because the thing about single family, they’re going through a hard time.

Every person you’re buying a house from at a discount, life’s not being gentle to them. That’s why they’re selling at a discount. And when you understand that, awesome. You can help them and show up in a way where once you start to shift to more of the math problems, like multifamily is still very much people oriented, but it has an ability to interact with it. Like you’re talking about in a syndication where you don’t have to worry. Your phone’s never going to ring for the toilet. That’s just not what’s going to happen to you. And it’s another way in so that

All right, Uncle Timmy, I’m sure you didn’t like being a landlord, but I don’t have to be one. I can still go over here and do this in a way that accomplishes what I want for myself and for my family.

Benjamin Aaker (23:23)
And maybe Uncle Timmy would invest in you when you go to do your deal. Because you show Uncle Timmy how to benefit.

Micah Johnson (23:27)
Right? Exactly. Because

someone that did it once, they’re at least more inclined to do it again than someone that hasn’t. So always keep their phone numbers. Hey, yeah, let me get Uncle Timmy’s phone number here because I’ll call him up and tell him, hey, man, I know you hate being a landlord, but have you heard about syndications?

Benjamin Aaker (23:45)
Look at how well I did on this last one. Here’s where I was able to fix that toilet with somebody. I made a phone call before time, or I’ve got a property manager. What a great deal.

Micah Johnson (23:56)
Right, right, exactly. Well, I know we’re getting close to time, but I want to tap into what you’re currently doing right now and why that, you you’re in multifamily, you’re working on syndications, you’re also a doctor. Like, what does it for you? What keeps you coming back day after day in the real estate world?

Benjamin Aaker (24:16)
I’ve always thought ever since residency, which is what you do out of medical school, learn to be a physician, that burnout would be an issue for me. And I think it is in a lot of professions. And I luckily I haven’t experienced that yet. I still love going in and helping people in the ER, but I also love helping people by giving them a place to live. And I love helping investors by giving them the ability to have money for the future. And that’s what I’m looking at. And that’s what real estate is all about for me is that equity build. You’re building that for the future.

What I’m doing right now is working on multifamily. That’s I’m all in on that. And I just bought 226 units in North Dakota. Love and working on that. And it’s it’s great. got a good group of partners that are with me and a lot of investors with that. So I just keep on looking for those good deals. I’m really into value adds. Got to be, you know, be maybe a C class. And we’re looking for stress that the owner has, as you said, single families and stress multifamily, some stress happening right now. And if I can find that deal and.

Just like you said, you’ve got to do the numbers right up in front and you can find those deals anywhere. And that is where I’m at is doing that. Also writing a lot. got a blog at www.doctorequity.com. It’s all one word. And you know, you can learn more about me there. And I just like to educate people and it’s all about, you know, getting started in real estate investing.

Micah Johnson (25:36)
No doubt, man, doctors have that effect. love to, ⁓ most I’ve met love to help people, whether that’s one way or another. It doesn’t just stay inside the hospital most times. So again, man, thanks for doing that. Thanks for putting that information out there. If you’re watching or listening in, we’ll make sure that the link to Benjamin’s blog is in the show notes. As I always say, when you are listening to somebody that’s really doing it, you can tell that the right kind of person.

dig in on the information that they have. So make sure you check out that blog, learn from someone who’s living their own version of real estate, right? He’s still working as a full-time doctor, still doing these other things. Like that’s the beauty of real estate. You can make it look however you want to look. It’s a big world. So take that time to educate yourself. Benjamin, thanks again for being here, man. I’ve loved this conversation. Thank you for your time, your story.

Your perspective, I think we need more folks out there doing it like you with that same kind of heart. So thanks so much, man. For those out there listening and watching, if you got value out of today’s episode, just learning about multifamily, the journey and everything that Ben’s been through, like this episode, share it with someone else you think you get value out of as well. As always, please don’t forget to subscribe to our podcast. We appreciate every single one of you that follows along with us out there. We have more conversations coming up.

just like this one with real operators building a real business in the real estate industry. So thanks again for joining us. We’ll see you on the next episode.

Benjamin Aaker (27:07)
Thanks.

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Doctor Turned Investor: How Benjamin Aaker Built Wealth Through Multifamily

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