[Webinar] Kiss of Death Locations – 2019 Edition

Transcript:

Ladies and gentlemen, boys and girls today, we have one of our annual broadcast this one is going to be the 2019 sites in the United States with the cast of death not to give you a little orientation on this site is at believe it or not, one of the more popular of these annual podcast topics that we do that and here’s why this topic is on places that you really should think twice before you go to, but I also need to say something and I’ll repeat this if you really are trying to find a place that has a low of cost or you get a discount on the type of practice. These locations that you really should look for because they’re not doing that well and typically the sellers are motivated bad news is these are not good locations when it comes to doing startup. So welcome to this 2019. Kiss of death. Let me go ahead and jump right into sharing my screen and using as you get started. Scott, what we really have to say that you always make somebody mad. Every year the yeah okay let me just stop the service I get guys, this makes so many people angry so I thought about because some brokers going to wait a second you’re trying to make it seem like I’m not a good place at this practice. I’m representing is going as I will Dr. just wanted you most of our viewers and listeners on this podcast for people who are buyers there, not the sellers right all I’m sorry we may have a little bit of a disagreement. My job is to give the people who are viewing this idea. Places that are going to show promise and that’s what this whole thing is about, and this is the one on cautionary tales. Now before you two for the long next week were doing the places with promise and were going to talk about I and I believe many go to 20 of locations throughout the United States that are showing a pretty good possibility with a particular emphasis on a startup, not just to purchase but if you can find a practice for purchase in this area, so much the better. So I hope everybody understands that I’m really kinda on your side and I’m trying to help. That’s the purpose of this. So we go to my PowerPoint presentation on this topic, you know, I know that these are such beautiful graphics everybody’s just amazed, and yes I do have maps. Unfortunately this may go just a little long, don’t be mad because I’ve got a lot of stuff to share. So now what do you remember back lost in space. The old show there is a robot who run around in your Will Robinson danger and I was supposed to be this big money every time you do the same thing. Well, I just want to say danger because there are some sites within almost every state you really ought to know this is going to be tough. Now let me explain why it is that I’ve what it takes to join this particular august group in almost every case, a location that has the kiss of death is losing population. Now that doesn’t mean that the whole state is as a group, losing population, but it means that certain parts are losing, and often is the demographic population that you want to keep the tenants to leave so to give a quick example California as a state is growing. How are the parts that you want in the kind of people moving in or not to disturb the people you want it means that within California you have to be careful now why a place is losing its population is one of the more important things to think about the reason that the place might be losing is not to be the same in every case and I’ll explain as I go through these there is typically with a place that has a kiss of death. It’s got a higher than average risk. I want to to let you know if you are not risk-averse. Sometimes you can make a lot of money when there’s a place that other people are scared to go so I’m not trying to say. Don’t take risk, but there also going to generally be higher risks because of the costs and the regulations for setting up a practice of any type are going to be riskier that somebody say oh you know his work with Dennis look at say this is true for veterinarians for physicians for optometrists for all of the these are the states that everybody’s going to have a risk. Also, you probably know that I have a lot of friends were brokers and professionals and demographers were in my you might might posses my peaks and we talk about places all the time that are not doing well or places that are in these often are the ones that come up with. People say in hand this. This place sucks those it is in the in the body and its already starting to swirl counterclockwise. If you know what I mean. So let’s get to go on I want to understand a couple of things in and I always have to bring this up because people forget just because it’s a kiss of death site doesn’t mean you can’t succeed just because you have a practice in the kiss of death site doesn’t mean you can’t sell, but it definitely means doing startups that’s going to be tough sell that said third point. So ultimately if you want a good deal of place that might have potential. The places with the kiss of death are often locations that you want to consider just because you’re saying it’s on the list. It doesn’t mean you’re doing okay I just want to mention that earlier in the middle of a of a purchase. It doesn’t mean you’re in trouble, but it does mean, especially that if you want, find a practice, you really have to get a practice site viability report. You gotta know the risk of that particular part of the marketplace. That’s why were bringing it up okay so please we don’t have anything against you how I made you something no answer area we’re going to talk about and take these are there. Basically 10. The first will you take about talk about is in Ohio. There are two separate locations that are on the kiss of death. They have lost close to 50% over 20 years of their population. It was much bigger and now it’s gone much lower. And what’s even worse is the amount of money that they’re making it so much less than it was before. Ironically, it places on the kiss of death site often have the better reimbursement rates because they can’t find enough providers in the area in the gotta bribe him to do it. So two of the locations were talking about an Ohio Arkansas centered around Youngstown Warren Sharon Youngstown are young as I turned by the way, is not in Ohio will surely on the map just second, but it’s right within that cluster cities the other one which is really tough. It is the the area between Cincinnati and Dayton Ohio now Columbus Ohio is not on this list and that’s because it continues to grow and do well. But these particular metropolitan areas are doing badly. So let me explain this is Cincinnati and Dayton and as you can tell there is a lot of infrastructure between the towns of Middletown is right in the middle and Hamilton is close by. These are locations that are having a problem. All of the more, and for the same reasons it’s the counties themselves are kind of averse to allowing new growth and whatever the community has the idea that work is not going to take some of those scummy people and allow them become you know you have problems. The other problem is when there’s a large number of stressed businesses and residents. What’s happening is the government is decided, hey, you don’t need to pick up the bill for those poor people you know and what they’re doing is they’re raising taxes so these are some of the higher placed taxes that you go to find in the United States. Now I’m going to tell you that these are not the highest of on the list of places that that have danger, but it represents the kind of closing in on itself that I’m saying guys I really want you to be careful Muncy by the way, you can see up in the upper left also is having a problem to an much for the same reason. It’s more of an attitude that exist among the government types who are in the taxable bodies that are not really allowing new growth and I probably now someone is going to say wait a second I was just in Cincinnati. It looks fantastic. Yes I know there are places within each of these communities that look good. I’m going by the regional challenge so trust me, as we look at data. These are places that are distressed. Now here’s the other place that I first started off with, which is kind of out Youngstown and Warren again. They’ve lost a lot of their population is a low Sharon is right above Youngstown off to the east, suffering in a similar way. It’s as though the state of Ohio just doesn’t want growth, they made it hard for large employers to step in and I got a problem with. Now let’s go on to the next area so we don’t lose our time. This is Scranton, Pennsylvania, Wilkes-Barre and Pittsburgh but these are not all write together either their regional problems. They’re going on with Pennsylvania overall. So, just to show you on the map that that’s the Scranton and Wilkes-Barre. Let me explain something to you that happened in Pennsylvania and is true of the region and I’m not going to pick on the the people in these two communities. Because actually I think the reasonably well governed the county administration and the city administrations are doing a pretty reasonable job. The problem here is the federal government decided to wage war on coal. Coal has long been a major employer and it really is the. The reason for these places. Being where they are so up it when we talk about the Rust Belt people seem to forget that the thing that made the rest was steel and steel and iron was was able to be mind and processed here because of cool. It it wasn’t very far to carry that the fuel out well as: Coke became more difficult to what keep as total green technologies. The area suffered now. Originally people were saying oh you know this is a Democrat stronghold well owners say the Osgood is truth Donald Trump to Pennsylvania and everybody was surprised what this is supposed to be a Democrat stronghold well Hillary Clinton kind of ignored Pennsylvania and some other states that are in the Rust Belt and what he did is kinda came in and said no we need to put more money into clean coal and to be able to sustain the employment base here and people have not. It is frankly a very large union location whenever you strive to find unions if you happen to be in a unionized industry excoriate because it just means that everything is going well for you. The bad news is if you’re not in one of those industries that is unionized it can make small business and professional practices have a much harder time now II want to know that the places that I’m mentioning and here’s Pittsburgh in Pennsylvania. I like II personally believe they have a much brighter future than perhaps what the numbers of reflected in the last two or three years. But what we need to be able to do is to look loosen up and particularly the county level to allow more practices to come in and hire people at a lower wage when the wages are artificially inflated. It put you right in the middle of the kiss of death locations that you probably all know this, that when a doctor is hiring staff sometimes will try to find people they don’t have to pay a ton of money to don’t do that by finding a bright young moderately well educated person that they can train but as the minimum-wage increases have gone up so much it made it so that that model is much more difficult. Some saying that’s that’s a problem. Now this is the first time that I’ve put in such a large region but I’m seeing something here in this is upstate New York not New York City and and not even the extreme eastern side of the state is going to be Western New York right up to Albert Melanie kind of explain what I’m saying here Buffalo is right next to Canada and that some of the major of places to go Rochester and Syracuse are very different economies, but each one of them has had the industries that they’re in regulated almost out of existence. Now like I am one of the first to say that I love the Finger Lakes region. I mean it is a great place for outdoor entertainment that the justice is gorgeous and the people by the way are fantastic. But what’s happened within this region is the cost of housing is become very expensive, which means there’s a lot of older people over 50 poor in this area and they are just lovely people. But the younger people can’t afford young families to move in these areas and they haven’t done anything for the jobs in order to make this so that it is a reasonable place to find work now as you can tell Alvin is right there. The and and the the bottom line is this, Syracuse and Utica are lovely college towns. But once people graduate they leave to degree this is also true Buffalo and Rochester. The problem is hanging on to those young families once they form their families graduate from school. They leave because they can’t afford to stay you don’t blame them, but it’s just a reality, and until such time as major employers are welcomed into this area and are necessary given incentives, but rather that the state and the counties get off their back is not going to change and so when I talk about being on in a in a poor place place for the kiss of death. That’s really what is caused it here now you’ll notice that’s not the same thing. It was going on in Ohio and what infected any of these other locations. This is a little bit unique to upstate New York, New York is it is unfortunately ruled by New York City of the voters elect all the people who in the state capital about money and they got tell him what to do and these other cities in upstate New York are sort of dragged along kicking and screaming, and they’re not given much of an opportunity to change things. This is also a problem in other states, especially in the West Coast. Now let’s talk about Detroit, Michigan definitely on the kiss of death. Now here’s the thing. It understand Detroit when it was considered a region was dying. It was having a terrible time in the 90s and in the early teens of of the century. But what’s happened is Detroit it’s self is no longer the region that was having problems. It’s more the local area. Detroit it’s self however still smacks of the kiss of death. On the other hand, if you look at Royal Oak in Ann Arbor and Troy. Those are communities that are in the outlying sites that actually are doing better. I was surprised to look at the data on Flint Michigan and realize it isn’t just an old Rust Belt auto town Flint is got a research component to it and it’s doing reasonably well. So what happened is that area right around in her Detroit is still suffering terribly. And because the city and the county management, it doesn’t look like that’s going to change. So what the they have done is rather than say we need to increase the attractiveness of our area there trying to penalize employers thinking somehow if we just raise taxes on the wealthy well that everything will be faxed and it isn’t so that’s why doctors when I’m I mentioned Michigan as being a problem for doctors. It’s not every part of it. You can have a practice, it’s that you as a taxpayer have got a target on your back and that is making things a little scary so moving on this is one of the golden oldies of the kiss of death, Chicago, Illinois know what was hard to put in words is just how many people have moved out of Chicago. It used to be of net target for employment that started in the 1950s and 60s went into the 70s but then as the 80s came along and the 90s and then it just got worse and worse look. There has always been corruption, it’s always been a machine city and therefore there is a a large population that is just happy as punch not to let the area change, but the problem is there are alternatives now their work before I keep in mind a lot of people moved to Chicago from the South Georgia Florida South Carolina North Carolina they moved up here and now those people, begin to say you know it really is freaking cold here, it’s freezing I don’t want to be here anymore and it’s super expensive and even people who make a lot of money are kinda reevaluating why am I the one who is trying to support all the school districts here. Why are we allowing crime and thereby the way in Chicago is the lot of crime. Now, ironically, the American dental Association, the American Medical Association, there are several of them based in Chicago and they’ve always kind of been the friendly place to bring people for conventions, but the convention business in Chicago is beginning to suffer as well. Not as many people are saying GEF that I convention in January will maybe that’s not where I want to be and so people are beginning to think why am I doing things the same old way of not so the challenging the assumptions the two statistics for U-Haul and writer trucks. That really woke me up to this. The cost of getting a rental van so you can move out of the town is so much higher than what it is to bring a trike in this town. That’s where the data the demographer using now right at the bottom of this area. You see I eat Chicago and Gary Indiana. Gary was always a joke, people going out Gary it’s terrible but northern Indiana has always got woken up and it’s now an alternative so that reasonably you can live in one and work in the other and do really well with that trade imbalance on taxes, but the property values have become such that having a nice place in the Chicagoland area is much more difficult than it’s been before. Plus, there’s a serious conflict with the people down in Springfield, Illinois, where the state capitalist. They are not happy with what’s going on Chicago and we may yet see that tension overboard by a boil over. I think could be interesting to see so start about another multiple state location that’s having the kiss of death Connecticut and Rhode Island that here’s something ironic about it when people don’t seem to recall this but Connecticut has one of the highest median household incomes in the United States. So as Rhode Island and yet people are leaving Connecticut and are leaving Rhode Island and then one of the people to spare and they’re leaving why because the property and the cost of living costs are so high there forcing people out and the truth is, it used to be. There was a time in which you can take a train from Connecticut down to Manhattan and you could live in this nice suburban area under review member of the Dick Van Dyke show the used to live in Connecticut and New Rochelle well that train ride is become so much longer, more expensive and really a pain in the neck, the people can’t easily commute like they used to. Yet another not hooked up to that major metropolitan area. So what’s happened is. The practices have had to rethink where they are, they have to set up in Connecticut and in Rhode Island to serve the population that there all throughout the day as we look at the actual towns. Hartford is always been the big insurance center. New Haven and Bridgeport always had a nice young middle-class white collar population Providence and something similar. However, because of the financial stresses of the states and counties they so raise their taxes that Connecticut is one of the highest tax states and union and Rhode Island is right there with them. We used to have a joke about taxa chooses see what I did there that’s Massachusetts with one of you realize the humor that goes in this podcast, but that’s all right. Anyway, the point is, it’s made these places much more difficult. So rather than stay here a lot of people have decided to move north into New Hampshire and and the and in the even Massachusetts is less expensive to do that and there’s every infrastructure benefit that the river was. I think if anything, Rhode Island and Connecticut are slowly putting themselves out of business. Now that the practices that are here are generally in a word, something you can certainly tell and it’s not that everybody here is poor. The problem is growth. The growth is gone and the growth is likely to come back anytime soon. And that’s what worries me about this region. However, I know this may get me some hate mail. It may even get me a couple of death threats but one of those places that has the kiss of death is New Jersey all of New Jersey. No, not all of New Jersey but New Jersey is stressing itself to death and it’s showing very little, if any, of benefit in social discipline and financial discipline. Now Hudson County which is just across the river from Manhattan is one of the only places in the state doing reasonably well if you go south toward Philadelphia and you look out at Long Branch and Asbury Park which is on the shore by the way, as you probably know New Jersey doesn’t have a coast. It has a sure and remember the gambling whole thing that went in there and truck lost his shirt, but it to it’s a serious problem and that’s because people that use to enjoy the Jersey shore or the consider the more rural suburban nature of New Jersey are realizing as soon as they step out in the New Jersey there being tax in fact if they say you’re leaving with any money in your pocket. You either have visited our casinos or pager taxes. Now there are exceptions, like I said New Jersey has a few places, but this is again one of those places that if you’re thinking I’d like to go there. You better get a practice site, viability report, Trenton used to be a middle-class place. Well it is no longer I love filling but remember Philadelphia is actually across the river in Pennsylvania and while it may come back. There’s not a reason for New Jersey to invest in greater Philly on the Jersey side. So yes the land as their Atlantic City still there but it doesn’t have that the national or that the benefit to keep people coming. So you’re looking for a place in New Jersey that can be found. I’m just saying boy so much. The state is in the kiss of death. That’s one reason why so many people are leaving New Jersey. Now let’s talk about something else that may get in trouble and that is coastal California high used to name the cities I’m not doing that so much anymore because people is and yeah but what about X, Y, and Z now which is talk real briefly about the state of California. Obviously, there are two parts, primarily that have the greatest population density and that’s going to be the San Francisco Bay Area and Southern California. The problem that were seeing in to the counties in Northern California is San Francisco and the say of San Mateo County. Now, obviously, Santa Clara County, where San Jose is is crazy expensive median house value is a million to a million to and don’t even begin to think about owning property within San Francisco. So obviously we know that the prices are going up what’s also going down is the quality of life, literally. You cannot walk from one side of the street to the other without stepping in human poop or making sure that there’s not a needle sticking out of it demanded that it is the quality of life in the urban areas is getting bad now in Los Angeles are saying the same thing in the urban parts of Los Angeles. The quality of life is going down but in both areas. That’s not really why there on the kiss of death list is because of the cost of practicing here has gone up dramatically with a very high starting minimum wage of $15 an hour just river that’s the starting wage. So if you have someone who is earning $13 an hour and was not a bad way. Just a year or two ago and all and they were your staff person. Now the minimum is going to be $17-$20 an hour because they are not to go back to the minimum-wage readers hire anybody the kid just weeks before it’s that so it’s making all of the wages go up go up dramatically that that’s having the effect of making it more difficult for practices but it also is making it more difficult for any business to come here because the cost of the doing business cost per employee is crazy high if you look at Los Angeles County growth is almost stagnant. And that is amazing is what I grew up in Los Angeles County was a big place to go places like Orange County were also consider the alternative to Los Angeles, but there are few facts are now playing in there is a movement in California to stop urban sprawl, meaning that I want to build houses. This is true in Southern California is becoming a big problem, especially in places where the demand is high like in Riverside County and northern San Diego County. They just don’t want, but the build and they’ve added things like solar panels that every new house that raises the price of the house by $10-$20,000 on top of everything else that’s gonna therefore it’s a yeah a recipe for disaster and one little thing. I’ll tell you, you also know that the new governor Gavin Newsom is a promise basically Medicaid here at Medicare Medicaid for all. I mean this this idea. Everybody gets insurance everybody gets benefits, including dental benefits. When that happens. Everybody, the state is going bankrupt. Trust me now. I think the Central Valley is the exception, but the problem is they’ve gone through so many problems because of water and the state has built no dams since the water has come back. There’s still going to go to the farmers and take that water from. That’s the scary thing. So just saying looking at problems couple of other places before we wrap up Seattle. Now I want you should there’s a distinction between Kings County, which is the county that Seattle is in and in greater Seattle and urban Seattle now. Greater Seattle is actually a very large area that is built around sound and goes into Eastgate’s and Hazelwood and of the high-tech areas of weather’s manufacturing but also goes down to Tacoma guys. I think that greater Seattle. The outlying communities still have serious hope, I think are desirable places to live in the employment is certainly favorable so that’s good. The cost of housing has become a very big problem. The other thing is getting around in Seattle’s becoming burdensome so people from outside the area are having a very hard time trying to get it now. That is why Seattle and talking about the city itself, but the whole region is on the kiss of death. So, therefore, are there is a potentially I suppose. Just make sure you know that neighborhood urine is viable. The last one is Hawaii hey Bo doesn’t want to go to OIA nowadays who can afford to make a living in Hawaii. Nobody is one of those places that is so expensive, in which to live. Now remember there used to be a time in which he just chose the right island like a Wahoo you can make a living and there is always nice little islands like Maui that you can vacation and the island of Hawaii was one of those places that you just had everything you wanted the problem is. It used to be that Asia was supporting Hawaii a lot of Asians moved here about land developed it promise right now Asia is not doing well and therefore Hawaii is fallen on hard times or should have, therefore it’s more expensive more difficult to set up a practice and maintain it. And of course one of the little cultural things is they hate you. I mean they hate anybody who’s not Hawaiian they call you a haole which, if you really look it up. Is not a compliment. Okay, I just want to say. So next week were going to the places with promise. Don’t miss that episode is going to tell you where to go. That is a reasonable place to start. Mike I’m sorry I’ve gone really long area. That’s okay that’s okay II think I think will interact. There will just tell people. Of course we still have the student report offer out there if you want to get information that is that a lot of the people there watching this are going to be students are trying to plan out the next five or 10 years go to dental practice and.com/student get more information and request for that report really popular, especially the same year was students in Scott is the D had a head guy to go to the Bakken formation in the end. And by the way We won’t be so depressing. So if I’m I’m really sorry telling you I’m sorry your grandma second is about favors are so either way, thank you so much for watching my thanks for sitting by making sure I didn’t offend too many people will really appreciate your help. All right, everybody, thanks so much and tell your friends and neighbors to come visit us@dr.demographics.com