Commercial real estate was long thought of as an “alternative investment,” but it is now more widely accepted. Most people can only own tiny multifamily or small commercial properties due to the significant costs involved with owning them. However, those wishing to invest in commercial real estate have another entry point in the form of real estate investment funds. They are incredibly tempting to people who wish to own commercial real estate but prefer to delegate day-to-day management tasks.
Their mission is to get hard-working medical professionals and others the highest returns for their passive investment.
Blue Ring Investors is one such organization specializing in asset management and raising capital, helping busy professionals from healthcare and other industries invest in commercial real estate. Starting in 2021, Blue Ring Investors now has over 360 multifamily units under management and 700 self-storage units under construction. The company partners with an established network of vetted, successful real estate acquisitions teams in whose deals it invests on its clients’ behalf.
Sanjay Hegde, President & Founder of Blue Ring Investors, was with the CEOViews team to share insights about the industry and their journey.
Story of inception
Commercial real estate investment was never a prevalent business. Answering the question on what inspired them to venture into this business, Sanjay said, “when I was helping my friend who is a dentist grow her business. I noticed the challenges medical professionals who have a bread-and-butter medical practice go through and wanted to help them achieve time freedom and financial freedom. The journey has been exciting, and we have scaled up quickly, all thanks to my partner Dr. Jeannette Birnbach. The process that has made us successful is we find and vet experienced and successful real estate acquisition teams and invest in their opportunities. We work directly with these teams at the management level to safeguard our investor’s investment.”
Vision and Mission
Blue Ring Investors was established with a vision to be a trusted partner for medical professionals and others who want to invest passively in investment-grade commercial real estate but don’t have the time or ability to do it on their own. This one-of-a-kind service reduces stress and frees up valuable time for investors.
Their mission is to get hard-working medical professionals and others the highest returns for their passive investment. They put together small groups of sophisticated and smart investors who, with their leadership, can invest in recession-proof multifamily, senior housing, and student housing properties. The management finds and vets experienced and successful real estate acquisition teams and invest in their deals as a unified group, thus yielding more power than a single investor could have on their own. They work directly with these teams at the management level to safeguard your investment.
Trust is the key factor in why people choose Blue Ring Investors. They put their investors’ interests first, Always. They adhere to the highest standards of transparency, integrity, and trustworthiness. They work with investors by educating them about the opportunity they will be investing in. They feel comfortable and knowledgeable going into the opportunity knowing who they are partnering with and how they came up with the expected returns. Blue Ring Investors work with experienced securities attorneys to provide the best liability protection for investors allowed by law.
They take a very conservative approach to the process of Underwriting. They don’t make the numbers work to win an opportunity; the numbers need to work on their own. They not only work on mitigating risks as much as possible but also take a realistic approach while taking Rent and Expense Growth, Vacancy Loss, Property Tax Increases, Interest Rate Hikes, Cap Rate Expansion, etc. They believe in underpromising and over-delivering.
What’s in it for the investors?
Rather than taking on all of the work and finances needed to invest in multifamily real estate, investors get to contribute a portion of the cost while gaining passive income. It gives individuals who are interested in commercial real estate investments but cannot devote the time needed to manage the projects on their own an opportunity to own a real estate property without the hassles of dealing with the tenants and the issues related to owning a real estate property. There are many other advantages to investing in Multifamily Syndications, but one of the main ones is the tax benefits that come with this type of investment property. You may take advantage of the full depreciation or paper loss of a property if you have direct ownership in the LLC (which you receive through syndication).
Challenges are an integral part of the business. There isn’t any organization that has survived without going through a tough phase. Sanjay spoke about the challenges they had to face in the initial days, “As an active investor, a great deal of effort goes into finding the property, negotiating the price, managing all of the financings, finding the investors to make the deal actually work. In the beginning, no broker took me seriously and didn’t want to spend time with me as they would rather work on bigger projects with experienced operators who have closed deals before. When I was learning about syndication, many said if the deal is good, investors will come; not true. It takes time to earn an investor’s trust. We took the time to network and work with experienced operators and trusted partners to build a good portfolio. Our professionalism and transparency with our investors helped earn their trust, and targeted marketing helped overcome these challenges.”
Depending on the size of the opportunity and how competitive the opportunity is, they decide to partner with either a private wealth management advisory firm that serves ultra-high-net-worth individuals or do traditional syndication. This helps one to stay competitive. The future vision for Blue Ring Investors is to continue to scale up in the Multifamily space but also invest in senior housing as there is a huge deficit in this asset class.