CrowdStreet’s Darren Powderly is joined by Dr. Bharat Sangani, Chairman and Founder of Encore Enterprises and CEO of Life as a Business, to discuss why Dr. Sangani made the transition from the medical field to commercial real estate, how his firm is doing, what opportunities he sees in the market and how he’s starting to focus his time and energy to helping others as a life coach.
Darren Powderly, Co-Founder & VP Capital Markets
CrowdStreet
CrowdStreet
Darren founded CrowdStreet in 2012 after identifying the need to radically improve people's access to commercial real estate investments via technology. Over his 20+ year career, Darren has transacted billions of dollars’ worth of commercial real estate investments and enterprise software contracts. Darren is a driven leader who loves building relationships based on mutual success. In addition to building businesses, leading teams and advising a prestigious list of national clients, Darren has personally owned commercial real estate, syndicated investment groups and developed properties from the ground up.
00:00:04 Hi everybody, this is Darren Powderly. Welcome back to StreetBeats. Today I'm here with Dr. Bharat Sangani, uh, from Dallas, Texas. He is the, uh, chairman and founder of Encore Enterprises down in Dallas, Texas. And he's also the CEO and founder of Life as a Business. So, uh, doc, as he is informally known, uh, Dr. Barat Sun, welcome to CrowdStreet. It's great to see you.
00:00:27 Well, thank you, Darren. It is always a pleasure to acquaint and reacquaint with you.
00:00:33 Well, why don't you, why don't we get started by you telling us a little bit about yourself. You definitely have an interesting, uh, life story, uh, that encompasses, uh, you know, quite a bit. I won't tell your story for you. Why don't we just jump in with you telling us your story?
00:00:46 It has been a very, uh, fortunate run. Um, I was born in India and came to United States and, uh, finished my cardiology training, uh, started a cardiology practice in, um, Gulfport, Mississippi. Uh, developed up to, uh, 70,000 patients in the practice, and the town's population was a hundred thousand. So we were very fortunate. We were in the 99 percentile in the entire country for cardiology practice, uh, for that size of, uh, doctors. Then from there, I knew that, uh, cardiologists were working 24 hours a day and you just can't do it for the rest of your life. So, decided to go back to my original roots, uh, which is business. My entire family has been, uh, uh, a business coming from a business community. Mm-hmm. <affirmative>. So we started, um, a real estate business, and that's what Encore Enterprise is. So today we pr we have more than about 4,000 employees across the nation. We have about couple billion dollars worth of assets. A lot of them we owe own a hundred percent. Some of it is owned in syndication, which you have helped us syndicate in the past, and I thank you for that. And then the last phase of my life, uh, since all of this is on, uh, uh, autopilot is, um, to go and, uh, uh, share my experiences with others and hopefully it'll be helpful to others. And I call it life is a business project.
00:02:16 You did go full-time into the real estate business, I believe in 1999 when, when you and your business partner Pat, got together and, and created Encore Enterprises. And, um, you know, just kind of quickly, I know you've done about 2 billion of real estate acquisition and development, and CrowdStreet has worked with you on a few of those projects. We've been a small, very small sliver of your success there. But, um, you know, tell us a little bit about where you are today with Encore Enterprises and, uh, where you see opportunity in the future.
00:02:48 Uh, it's a very interesting, uh, situation today. The announcement that the virus, um, vaccine will soon be available, uh, gives a little bit easier perspective to talk about today than I could have two weeks ago. Mm-hmm. <affirmative> and being a physician, I'm at a very distinct advantage of truly understanding how this vaccine is gonna work and how much comfort is gonna bring to the, to the people. So here is my overall view, and then if any of your, um, uh, viewers or you, anybody who needs to know more, they can always reach out to me. I personally believe that if I had my last dollar in my pocket, I would stay away from investing in office sector. If I had my last dollar in my pocket, I would probably stay away from investing in a retail sector except probably very unique last mile radius circumstances, uh, et cetera.
00:03:48 If I had my last drug in my pocket and if I knew how to build multifamily, then probably that is the best place to be in this market. As I was telling you before we started this conversation, we about three to 400 million laws worth of multi-family development going on across the nation and her being our major debt lender, we have a 40 per 40 year non-recourse, um, two to half percent interest rate, fixed interest rate loans available almost up to 75 to 80% of the project. Um, so that will be a good, good place to be in. I would also would look into a multi-family acquisition, class B and class C also. They are now becoming far and few in between, but there are still some areas where we can probably make a difference with a significant, uh, internal rate of returns. Uh, and the last is hospitality.
00:04:41 There is no debt out there. Uh, and 40 to 50% of the, uh, hospitality CMBS debt will be in the market, either in some kind of restructuring or some kind of foreclosure. Mm-hmm. <affirmative>. So if you truly have the guts, um, and then want to take a significant amount of risk, then hospitality investment would be a great investment over six to 12 months. But if, uh, if you are safe player, I would say stay away from it. Uh, line last in the final thing is the warehousing and, and if you can get in the data warehousing, uh, Amazon, Microsoft, all of those things, they, they do very well, but you just need a special niche for it, special understanding for this. Uh, so if you know that, then I think that sector will also serve you well. So this is my overall, uh, 32nd or a one minute version.
00:05:34 And you have, uh, you've put your own dollars to work at, at Encore by developing multi-family, and you're still very active in that space. Is that you believe that will be where you continue to invest into 2021?
00:05:48 Uh, certainly, uh, again, uh, I want to give out a secret. Uh, just don't tell anybody. Okay. Okay.
00:05:54 We won't.
00:05:55 There you go. Watching this one. There you go. Exactly. The, the secret is very simple. People think I like, you know, I, we were talking, we, we liquidated six, 700 million worth of stuff before, um, the covid and during Covid, and we sitting on, um, a significant amount of cash then. And people say, how do you figure out all these times? And I said, it's a secret, but here is a secret. Go with what the lenders are doing. If the banks are lending, then just stay there. If you look at right now, the banks are not going to lend you in office. Banks are not gonna lend you on, uh, hospitality banks are only going to lend you on, um, um, multifamily. That's, that's common sense tells you, let's just go and do that and then come out before banks come out. So if you just follow the banks, I think it'll guide you where to, where to invest.
00:06:48 Yeah. Yeah. That's interesting. Unless you're a very high risk investor, right? Oh, yeah. Like you're saying, all the hospitality, my
00:06:55 Very true. But my dad told me when I was growing up, he says, uh, son, uh, I don't care what you show it to me. Most important thing for me is you should never, uh, lose your principle.
00:07:10 Right.
00:07:10 And if you are like me minded not to ever lose principle, they're gonna stay away from very high risk investments. But you are right. If somebody wants to take a significant amount of risk, hospitality would be the best place to be. I mean, this things are being sold even today. Uh, 30 cents on a dollar. 40 cents on a dollar.
00:07:30 Yep. Yeah, exactly. Let's kind of turn our attention to, you recently have, uh, formed a new business and you have multiple businesses. Uh, in fact, you have, I think, dozens of businesses. It's fair to say not only that you own and operate, but you also have, you have minority interested in as a limited partner. But you know, this new business, I know you're sort of rebranding yourself personally. So it's a, it's a big move for you. And it did catch my attention. I'm a fan of personal development and constantly learning and, and constantly reading books about successful people and, and how they were able to be successful. And I just love that area of knowledge and education. So tell us a little bit about how you decided to create this new business. Life. Life is a business based on your experience, and why do you wanna share that with others to help them, uh, have some of the, the same experiences in life that you have?
00:08:26 Life is a business is business second, and number one is my desire to share my experiences with others and hoping to bring them the value. As I was saying before, I've done a lot of things in my life that probably if I had a proper mentor, I might not have done it. That, that the same way, although I've had good outcome, does not necessarily mean that it'll happen to everybody if I, they did it my way. So I collected over the last three decades a huge number of experiences. So I said, why don't I share these experiences, uh, that I sh uh, that I have, and now I learned what to do and what not to do. So life is a business, is a program that is primarily designed to tell you what not to do, because most people, if you remove what not to do with their own energy, they'll get where they need to get mm-hmm. <affirmative>, uh, on, on what to do. And then that's what I've come up with. And it's based on health, wealth, and wisdom of relationship. And that's my next journey.
00:09:32 And that is a, an important job. I mean, maybe your most important work is the, is the work that you are just beginning, even though you have saved countless lives, uh, in your cardiology practice and your other healthcare related businesses, and you've built these grand buildings all over the place and helped, you know, make wealth or create wealth for a lot of different people. But Doc, how do, how do people find you again? Uh, tell us your website and if you want to learn more about your, um, life as a business.
00:10:00 Sure. It's just my name.com, so www.bharatsangani.com.
00:10:09 Perfect. Well, with my green smoothie, I wish you health, wealth, and happiness, uh, to Dr. Bharat and all of our listeners today. Thanks for tuning in and we'll see you again soon
00:10:23 And with my Diet Coke, I thank you very much,
00:10:26 <laugh>. Hey, there's a time for Diet Coke and there's a time for smoothies and, and for me, there's a lot of time for coffee, <laugh>.
00:10:33 Yes, yes. Thank you.
00:10:35 Okay. See you soon, doc. Thank you again.
00:00:27 Well, thank you, Darren. It is always a pleasure to acquaint and reacquaint with you.
00:00:33 Well, why don't you, why don't we get started by you telling us a little bit about yourself. You definitely have an interesting, uh, life story, uh, that encompasses, uh, you know, quite a bit. I won't tell your story for you. Why don't we just jump in with you telling us your story?
00:00:46 It has been a very, uh, fortunate run. Um, I was born in India and came to United States and, uh, finished my cardiology training, uh, started a cardiology practice in, um, Gulfport, Mississippi. Uh, developed up to, uh, 70,000 patients in the practice, and the town's population was a hundred thousand. So we were very fortunate. We were in the 99 percentile in the entire country for cardiology practice, uh, for that size of, uh, doctors. Then from there, I knew that, uh, cardiologists were working 24 hours a day and you just can't do it for the rest of your life. So, decided to go back to my original roots, uh, which is business. My entire family has been, uh, uh, a business coming from a business community. Mm-hmm. <affirmative>. So we started, um, a real estate business, and that's what Encore Enterprise is. So today we pr we have more than about 4,000 employees across the nation. We have about couple billion dollars worth of assets. A lot of them we owe own a hundred percent. Some of it is owned in syndication, which you have helped us syndicate in the past, and I thank you for that. And then the last phase of my life, uh, since all of this is on, uh, uh, autopilot is, um, to go and, uh, uh, share my experiences with others and hopefully it'll be helpful to others. And I call it life is a business project.
00:02:16 You did go full-time into the real estate business, I believe in 1999 when, when you and your business partner Pat, got together and, and created Encore Enterprises. And, um, you know, just kind of quickly, I know you've done about 2 billion of real estate acquisition and development, and CrowdStreet has worked with you on a few of those projects. We've been a small, very small sliver of your success there. But, um, you know, tell us a little bit about where you are today with Encore Enterprises and, uh, where you see opportunity in the future.
00:02:48 Uh, it's a very interesting, uh, situation today. The announcement that the virus, um, vaccine will soon be available, uh, gives a little bit easier perspective to talk about today than I could have two weeks ago. Mm-hmm. <affirmative> and being a physician, I'm at a very distinct advantage of truly understanding how this vaccine is gonna work and how much comfort is gonna bring to the, to the people. So here is my overall view, and then if any of your, um, uh, viewers or you, anybody who needs to know more, they can always reach out to me. I personally believe that if I had my last dollar in my pocket, I would stay away from investing in office sector. If I had my last dollar in my pocket, I would probably stay away from investing in a retail sector except probably very unique last mile radius circumstances, uh, et cetera.
00:03:48 If I had my last drug in my pocket and if I knew how to build multifamily, then probably that is the best place to be in this market. As I was telling you before we started this conversation, we about three to 400 million laws worth of multi-family development going on across the nation and her being our major debt lender, we have a 40 per 40 year non-recourse, um, two to half percent interest rate, fixed interest rate loans available almost up to 75 to 80% of the project. Um, so that will be a good, good place to be in. I would also would look into a multi-family acquisition, class B and class C also. They are now becoming far and few in between, but there are still some areas where we can probably make a difference with a significant, uh, internal rate of returns. Uh, and the last is hospitality.
00:04:41 There is no debt out there. Uh, and 40 to 50% of the, uh, hospitality CMBS debt will be in the market, either in some kind of restructuring or some kind of foreclosure. Mm-hmm. <affirmative>. So if you truly have the guts, um, and then want to take a significant amount of risk, then hospitality investment would be a great investment over six to 12 months. But if, uh, if you are safe player, I would say stay away from it. Uh, line last in the final thing is the warehousing and, and if you can get in the data warehousing, uh, Amazon, Microsoft, all of those things, they, they do very well, but you just need a special niche for it, special understanding for this. Uh, so if you know that, then I think that sector will also serve you well. So this is my overall, uh, 32nd or a one minute version.
00:05:34 And you have, uh, you've put your own dollars to work at, at Encore by developing multi-family, and you're still very active in that space. Is that you believe that will be where you continue to invest into 2021?
00:05:48 Uh, certainly, uh, again, uh, I want to give out a secret. Uh, just don't tell anybody. Okay. Okay.
00:05:54 We won't.
00:05:55 There you go. Watching this one. There you go. Exactly. The, the secret is very simple. People think I like, you know, I, we were talking, we, we liquidated six, 700 million worth of stuff before, um, the covid and during Covid, and we sitting on, um, a significant amount of cash then. And people say, how do you figure out all these times? And I said, it's a secret, but here is a secret. Go with what the lenders are doing. If the banks are lending, then just stay there. If you look at right now, the banks are not going to lend you in office. Banks are not gonna lend you on, uh, hospitality banks are only going to lend you on, um, um, multifamily. That's, that's common sense tells you, let's just go and do that and then come out before banks come out. So if you just follow the banks, I think it'll guide you where to, where to invest.
00:06:48 Yeah. Yeah. That's interesting. Unless you're a very high risk investor, right? Oh, yeah. Like you're saying, all the hospitality, my
00:06:55 Very true. But my dad told me when I was growing up, he says, uh, son, uh, I don't care what you show it to me. Most important thing for me is you should never, uh, lose your principle.
00:07:10 Right.
00:07:10 And if you are like me minded not to ever lose principle, they're gonna stay away from very high risk investments. But you are right. If somebody wants to take a significant amount of risk, hospitality would be the best place to be. I mean, this things are being sold even today. Uh, 30 cents on a dollar. 40 cents on a dollar.
00:07:30 Yep. Yeah, exactly. Let's kind of turn our attention to, you recently have, uh, formed a new business and you have multiple businesses. Uh, in fact, you have, I think, dozens of businesses. It's fair to say not only that you own and operate, but you also have, you have minority interested in as a limited partner. But you know, this new business, I know you're sort of rebranding yourself personally. So it's a, it's a big move for you. And it did catch my attention. I'm a fan of personal development and constantly learning and, and constantly reading books about successful people and, and how they were able to be successful. And I just love that area of knowledge and education. So tell us a little bit about how you decided to create this new business. Life. Life is a business based on your experience, and why do you wanna share that with others to help them, uh, have some of the, the same experiences in life that you have?
00:08:26 Life is a business is business second, and number one is my desire to share my experiences with others and hoping to bring them the value. As I was saying before, I've done a lot of things in my life that probably if I had a proper mentor, I might not have done it. That, that the same way, although I've had good outcome, does not necessarily mean that it'll happen to everybody if I, they did it my way. So I collected over the last three decades a huge number of experiences. So I said, why don't I share these experiences, uh, that I sh uh, that I have, and now I learned what to do and what not to do. So life is a business, is a program that is primarily designed to tell you what not to do, because most people, if you remove what not to do with their own energy, they'll get where they need to get mm-hmm. <affirmative>, uh, on, on what to do. And then that's what I've come up with. And it's based on health, wealth, and wisdom of relationship. And that's my next journey.
00:09:32 And that is a, an important job. I mean, maybe your most important work is the, is the work that you are just beginning, even though you have saved countless lives, uh, in your cardiology practice and your other healthcare related businesses, and you've built these grand buildings all over the place and helped, you know, make wealth or create wealth for a lot of different people. But Doc, how do, how do people find you again? Uh, tell us your website and if you want to learn more about your, um, life as a business.
00:10:00 Sure. It's just my name.com, so www.bharatsangani.com.
00:10:09 Perfect. Well, with my green smoothie, I wish you health, wealth, and happiness, uh, to Dr. Bharat and all of our listeners today. Thanks for tuning in and we'll see you again soon
00:10:23 And with my Diet Coke, I thank you very much,
00:10:26 <laugh>. Hey, there's a time for Diet Coke and there's a time for smoothies and, and for me, there's a lot of time for coffee, <laugh>.
00:10:33 Yes, yes. Thank you.
00:10:35 Okay. See you soon, doc. Thank you again.