In this conversation, David Ensley shares his journey from being an orthodontist to becoming a passive investor in real estate and small businesses. He discusses his early experiences with investing, the lessons learned from his first syndication deal, and the importance of communication and risk tolerance in investment decisions. David also emphasizes the need for due diligence when dealing with influencers in the investment space and shares insights on balancing passive investments with personal expertise.

Saying “Yes” to a Capital Call with LP David Ensley
Pat Zingarella (00:00)

All right, awesome. David, thank you so much for joining me. It's really cool. I think you were the first person I ever actually connected with in real life off Twitter, so it's cool to have you join me. Before we get started, why don't you take about 30 seconds to tell us what you do and we can get rocking from there.

David Ensley (00:08)

Very cool, yeah. I’m glad to be on here. I'm an orthodontist by trade. I actually started my career in the Army. It turns out that you can get your dental school paid for if you do an Army scholarship. When I got out of the Army, I started a practice. I work with partners as part of a group called Celebrate Dental & Braces. We build a network of clinics, so I just have fun doing braces and building dental clinics.

Pat Zingarella (00:26)

That's awesome. For what it's worth, I follow you on Twitter; I never thought I'd know as much as I do about the dental and orthodontic space. Do you own your own practice? Is it one location, or multiple locations?

David Ensley (00:50)

Yeah, I own a practice with Celebrate Dental & Braces. That's our specialty—all the people in the organization own their own practices. I have one location that we started four years ago and we're starting a second location here in Austin, Texas this coming summer.

Pat Zingarella (01:21)

Great stuff. Did your journey into passive investing start to pursue supplemental income, or is the goal to be a full-time investor at some point?

David Ensley (01:33)

My story is that I actually started investing when I was 15. My mom was listening to Clark Howard on the radio in Georgia back in the day, and he was telling people to invest passively in the S&P 500. I owned a lawn mowing business with my brothers—it was actually pretty legit; we had 70 customers our best summer.

I was making money and started investing in the 2000s, right after the 2000 crash, and then survived the 2009 crash. Once I got into business ownership, my first introduction to LP syndications was through a business partner who introduced me to my first deal. The driving force behind it was diversification. I figured if I’m in the S&P 500 making 8% to 12% a year, the hope was to make a higher return doing syndications.

Pat Zingarella (02:54)

When was that first syndication deal?

David Ensley (02:59)

The very first deal I did was in June of 2022. It was a multifamily value-add deal in Irving, Dallas. The sponsor has a really good track record, but unfortunately, my timing was pretty bad to dip my toe in the water.

Pat Zingarella (03:18)

A lot of people are saying the same thing. Tell us about your portfolio. Are you strictly multifamily, or are you diversified across asset classes?

David Ensley (03:32)

There are a lot of people just like me—doctors, lawyers, dentists, and other high-income professionals—who want to diversify but don't have a background in real estate. You’re stuck deciding whether to stay on the sidelines or find a way into these syndication deals. I’m still not an expert; my day job is straightening teeth. I’ve probably made as many mistakes as good decisions.

Right now, I've got four real estate LP deals going. I bought the first in 2022, the next two in 2024, and the latest one just a few months ago in 2025.

Pat Zingarella (04:44)

I'd love to hear about the deals and the experience of each one.

David Ensley (04:50)

The first deal was in Irving with an experienced sponsor. Dallas was crushing it at that point, showing 8.6% rent growth. Cap rates had been compressing, and people were really winning in 2020 and 2021. This was supposed to be a two-to-three-year value-add hold. The cap rates were really low—about 3.75%—and they were trying to be conservative by projecting a 4.5% exit. Well, cap rates went up even more than that.

The sponsor has done an incredible job of communicating with detailed updates. They hit a perfect storm. The market got flooded with new supply and other apartments in the area started struggling with vacancy, so everyone offered rent discounts. They spent a lot of money on the value-add to improve units, but rents barely budged—if anything, they went down. They are currently 30% to 40% behind budget on rent growth, so the NOI hasn't built the way they wanted.

The big lesson is: Interest rates matter.

Real estate investing in the last 30 years was influenced by a massive bull run of dropping interest rates. I don't feel like I can take what worked in the last 30 years to the bank for the next 30. We asked the sponsor how the deal would do with inflation, and he said, "Rents will grow; you're hedged." They had a great rate cap and several years of runway, but I think we both underestimated how much interest rates would blow cap rates up. You might not get killed with debt service, but you won't get your projected cap rate on exit.

That deal had a 5% capital call this summer. I did participate. They are trying to buy enough of a rate cap to ride the storm out, salvage investor capital, and transition to holding the property longer to cash flow it.

Pat Zingarella (10:25)

What led you to participate in the capital call? Was it confidence in the business plan or just wanting to protect what you already put in?

David Ensley (10:43)

The communication built confidence. I knew two years ago that the deal was struggling. Here's a tip: AI is helpful for these things. I plug things like my K-1 and NOI numbers into Claude. You have to take it with a grain of salt, but you can get a decent feel for where your deal is. I knew the deal was underwater before they ever did the call. To me, it felt like an asymmetric bet. If I put just a little more money in, we might be able to get most of the investment back versus it being all gone if they are forced to liquidate.

Pat Zingarella (12:40)

How long did it take you to get confident in that? A lot of LPs find capital calls unfathomable.

David Ensley (13:38)

Knowing your own risk tolerance is important. You might have a 65-year-old doctor who viewed real estate as a safe bet and is now panicking. For me, my risk tolerance is super high. I'm young, and I'm at the height of my income-producing years. I don't rely on this for income.

Also, I invest in crypto. After you've invested in crypto and seen 90% drops, you're just numb to it. In 2019, I bought a 3X NASDAQ fund and "diamond handed" it through the 2020 drop when it was down 80%. It’s now up significantly. Losing the money would stink, but it's not the end of the world. It was a pretty quick, easy decision.

Pat Zingarella (16:24)

You mentioned a couple of other deals that came after this one.

David Ensley (16:49)

The next was in June of 2024—an RV park development. There was a two-year gap because I had just started my practice in 2021 and wasn't making much money. I was lucky to even be breaking even.

For the RV park, I interacted with the sponsor on Twitter. My belief is that the sponsor matters a massive amount. However, be wary of influencers. I recently lost confidence in an investment group that caters to doctors because I felt they were pushing bad deals with very little disclosure. There was a sponsor group that was underwater on deals and was trying to "buy their way out" by using acquisition fees from new deals to bail out old ones.

If you're an influencer marketing deals, you owe it to me to give me the straight scoop, especially if you're being financially compensated. This Nashville RV park is a ground-up development projecting 35% returns, which is high risk/high reward. I actually haven't gotten much communication on this one, so I don't know how it's doing.

Pat Zingarella (21:21)

How do you balance that? One GP is underperforming but communicates well, while the other might be doing well but doesn't talk.

David Ensley (22:07)

Going full cycle is important because I'll forgive a lot of communication errors if the deal performs. The point is to be passive; if you're making money, that's all that matters. But it will take more to build trust for a next deal if I haven't gotten solid communication.

Pat Zingarella (22:52)

Are you reaching out and they aren't responding?

David Ensley (23:00)

I’m not actively hunting them down. I’ve got a practice to run. I need you to just send me an email or provide a portal that’s easy to use. I shouldn't have to hound you for information.

Pat Zingarella (23:36)

Before we started recording, you mentioned a unique deal that isn't traditional real estate.

David Ensley (23:40)

Twitter is an interesting animal. If you’re disciplined, you can find a thriving community of real estate and small business acquisition people. I post about the business of dentistry. Through Twitter, I met a guy who does trade schools (HVAC, plumbing) and another guy who wanted to be an operator.

We put our heads together and built a trade school for dental front-desk administration—things like insurance and scheduling. I supplied the capital for a 30% stake. Technically I'm a passive partner, but since I have expertise, I lend a hand with marketing and networking.

In small business acquisitions, a bank typically supplies the majority via an SBA loan, but a down payment is still needed. An LP can provide that down payment for a 5% to 30% equity stake. The operator is almost the entire deal in a small business like that, so you really have to vet the person.

Pat Zingarella (28:41)

That's a cool story. What part of passive investing do you think needs to die?

David Ensley (29:05)

Deceptive influencer marketing. Unrealistic expectations and preying on "dumb money." As a doctor, we are often the stereotype of "dumb money"—the guy sponsors go after. I want to protect doctors from losing their money. Social influence is not social proof. You need to invest in operators, not marketers.

Pat Zingarella (30:03)

Awesome, David. If people want to follow along, how can they contact you?

David Ensley (30:13)

My handle on Twitter is @theDSOguy. My final thought is to use this as "tuition" in the school of hard knocks. Put an amount of money at risk that you are comfortable losing, and then force yourself to read dry books like The Lifestyle Investor or The Hands-Off Investor by Brian Burke. Once you have money on the line, you'll actually discipline yourself to learn so you're not "dumb money" anymore.

Pat Zingarella (31:30)

David, thank you so much. This was great.

David Ensley (31:34)

All right, awesome. Good talking to you.