Mastering the Global Real Estate Market: Tips for Confident Investors

Stephen S. (00:03.086)
Welcome to the show where normally I say we interview the nation’s leading real estate entrepreneurs, but we’re now turning into the globe’s leading real estate entrepreneurs. I’m super excited for our show today. Welcome back. If you’re joining us for the second, third or hundredth time, it’s your host, Stephen Schmidt. And today I’m here with Vijay Selvaraj and we’re going to be talking about global investing and the climate that is going on all over the world right now in the real estate investing space. Vijay.

has a master’s in mechanical engineering and MBA, has been in real estate for over five years and is a part of the Chris Group, which is the family business. They specialize in luxury hotels and hospitals all over the world. He’s currently based in Dallas, Texas, and I’m super excited to get into our conversation today to expand our audience to something that we don’t hear very often. just remember at Investor Fuel, we help real estate investors, service providers, and real estate entrepreneurs, 2 to 5X their businesses to allow them to build the businesses they’ve always wanted.

to allow them to live the lives they’ve always dreamed of. that, DJ, welcome to the show.

Vijay Selvaraj (01:07.952)
Thank you, Steve. It’s great to be a part of this. I know you’ve been doing an amazing thing. I’ve been following your podcasts and videos. It’s truly amazing. Yeah.

Stephen S. (01:17.646)
Well, thanks so much for that, BJ. I’m really excited to talk about today’s topic. But before we get started, could you just for our listeners share a little bit about yourself and how you got here?

Vijay Selvaraj (01:27.632)
Yeah, for sure. So I’m Vijay as I got an introduction already been done. So right now I’m in Dallas. I do land development and so on. I’ll just quickly dive into what we do in Chris groups. In Chris groups we build luxury hotels, hospitals, and we only get into the niche areas where we can multiply our investments and even the investors amount. We have done lots of deals where we have done three X to four X returns in two to three years. And we always

always use the model of built to transfer model where we get into get investments and we just get in where we can multiply our growth. For example, we build a hospital and then we put in operations and then we exit out. We know there is a demand for hospital right in that location and then we tap into that, put real estate and then exit out of it. Usually real estate will multiply by 2x and then EBITDA multiply by another 8x.

the end we will make like three to four X and so far we have done three to five exits that we on hospitals and in hotels we have done three exits so we are right now we don’t want to add one two or more we want to do exponential we want to do five or ten together so we are working with equity funding and hedge funding and other family offices and excited to be a part of this group as well

Stephen S. (02:55.042)
Yeah. So now getting into this type of space, I think a lot of our listener base is single and multifamily, you real estate entrepreneurs. Some people maybe haven’t gotten into it and some people maybe you’re doing 750 plus thousand plus deals a year. And when you start playing in the space that you’re playing in with that real heavy commercial high end, you know, big properties, what are some of the biggest differences for success that you find in that space versus

you know, a smaller, not to be diminishing, but like maybe a less challenging, less complicated real estate deal. What are some of the things you have to look out for when you start playing in the field that you guys are in?

Vijay Selvaraj (03:35.226)
So typically one thing that we get into is when we work in America, in global standpoint, US and Canada, it’s already like a developed nation. It’s already reached to that point of saturation or it’s hard to tap into ungrown area. But if you look in nations like India or Africa, where there is infrastructure is still growing, the technology is still growing, and wherever you jump in, there is a multiplication in real estate market.

That’s why, if you look at healthcare projects that we do, it’s already, we have three beds for thousand people in the US, but in India, or in China or other nations, it’s less than one bed for a thousand people. So there’s a big demand in there. And even if you build another hundred hospitals, there’s still demand in there. So that’s kind of an area that we try to tap into. And there is definitely 3x, 4x, 5x,

6X returns if you really manage the operations well. So that’s why there is less risk compared to deals that we work in the US where I mean you need to be really having the right team, right crew, right strategy, right property that you invest into or you know it’s gonna burn your hand.

Stephen S. (04:58.252)
Right. Yeah. And, you know, with larger projects, it all comes down to people, systems, leadership. What are some of the tangible things that you’re working on right now within the Chris group to set up that infrastructure in a proper way to keep doing this at even a higher scale in the next decade, let’s say.

Vijay Selvaraj (05:18.126)
So yeah, mean, you you brought up a really good point where people skills that really matters. You know, when I, you know, it all starts at hiring. Now you hire right people have the right team in place. And whenever we bring in people, we look for two things, character and competence. You know, character means value they carry and honesty and humility, you know, skills can be trained and also competent. If you’re not competent enough.

you cannot handle bigger tasks. It’s not just experience purely, it’s just the knowledge and the willingness to learn and work as a team. So that’s what I look at competence. So what we do is we hire right people and put them into a meritocratic group and then give them an audacious goal.

and then give them equity return. For example, we make this year, if it is a 20 million is what you’re making and our net profit stands at, I mean, 5 million, we’ll take 10 % of that and we’ll give it to our top 10 people. For example, if it is half a million that’s been distributed, you know, to the top, I’m talking about the top 10 people, top 20 people, you know, that way we get our target being done on time with quality results and, you know, and also a good net profit.

At the end it comes to the people. I mean that’s the main thing where I feel like hire the right people in the bus. That’s what I say, the key people in the bus. So that’s what matters at the end. The result completely depends on how you treat people, how you hire people and the result automatically follows.

Stephen S. (07:02.486)
And then ultimately what you said right there, it’s not just about how you hire them and how you train them or whatever else. It’s also how you keep them. Like what’s the incentive for their own lives, their families, their dreams, et cetera, because why else would they keep doing it? Right. So it’s performance based.

Vijay Selvaraj (07:18.976)
yeah, I mean, right.

Vijay Selvaraj (07:25.732)
Yeah, I completely agree with you. It’s completely performance based and also, you know, as an employee, if he wants to stay with you, work with you for long time, long run, what they expect you is what are they getting out of it? And secondly, is it value if I’m learning out of this and what is a future prospect?

And also, is a, you know, the way you treat people. These all matters. These four things work together and you set up a great, you know, if you have a good team, good relationship that you maintain, and I mean, just a multiplication growth after that.

Stephen S. (08:05.614)
Absolutely. And I love what you said about how you look to hire people. You hire people with character and competence because you might be a real good person. You might be a little dumb. And so ultimately that competence still is super important on top of the character. When you have the blend of the two things together, that’s when you can really make magic happen within business. Tell me if I’m wrong there.

Vijay Selvaraj (08:28.338)
yeah, that’s 100 % right. mean, you you cannot, you know, it’s always I say that, know, Jockey, you know, it’s like a horse race where horse is the business and Jockey is a person that you hire. Even if you have an amazing business and if you give it to a person who cannot handle it, it’s gonna just go to the steep slope. You know, that’s what my, lot of friends of mine who work for Goldman Sachs, you know, in Goldman Sachs, the day one they tell them like, hey, the amount of, you know,

can bring bad name to the company than good name. Don’t make our company to be in the Wall Street Journal. That’s how it is. You need to make sure the companies, people that you hire are competent enough to keep your, whatever you have built so far, they are able to keep, maintain it or take it up. You should not go down.

And then another thing is if you have, you know, incompetent people at the top positions, the smart people will keep leaving. That’s another thing, you know. So that is one thing that I’ll also keep, you know. There is two ways, you know, should I keep people or, you know, should I get rid of people? I used to read a lot of books and I found out from Beyond Entrepreneurship 2.0, like there are seven steps where you can, you know, consider if you want to keep

person or are gonna get rid of that person?

Stephen S. (09:55.264)
Absolutely. Higher slow and fire fast too. With what you’re currently focused on, why do you think there’s such importance to be looking at different markets, not just…

Vijay Selvaraj (09:59.024)
That’s right.

Stephen S. (10:12.556)
within the United States, but like on a global scale, why is it so important to go to those markets other than just the fact of the demand? Is it because the money there when it’s deployed correctly just gets you a consistent safe return or what are some of those things that people just don’t know?

Vijay Selvaraj (10:28.164)
I mean, the one thing is I’ve seen a lot of investors like I met with individuals who are lot of money sitting. They don’t want to invest. I’ve seen them. They’ve been doing it for like 20, 22 pre-COVID. They haven’t done any investments. But if you look at countries like Dubai or in India or even in other Indian subcontinents in Africa, there has been a lot of potential returns out of they invest on stock markets, bonds,

and every December they exit out of it. And that’s a game they keep playing. But instead of just holding onto the funds in the US, it’s definitely worth to invest in India or other parts. And I’ve seen in dollars or markets in Texas, even if you put invest in multifamily, it’s a really good returns. to get a two X return, it may take an average of five years or seven years. But if you can get a three X returns in

five years, imagine and that is sustainable and you do all the due diligence and you also have to make sure the fund logistics or the funds going to the out of US and getting back. And if you do all the proper due diligence and get into a proper steam of investment. And even if you know the Trump organization, they are planning to build five Trump towers in India. So imagine if that level of reputed companies are jumping into

the market, they’re not going to go just for expanding, but also to making money or returns out of it as well. So there is definitely a potential.

Stephen S. (12:08.366)
Right.

Stephen S. (12:11.758)
Yeah, you know, there this is an interesting tidbit that I don’t think anybody else would would be able to bring up. But I heard a story of a really high level entrepreneur, real estate investor who was in India at one point and was talking to somebody local there. And this guy told him that an Indian correct me if I’m wrong here, but he said that the word for wealth in India is circulation.

Is that ring true and what does that mean?

Vijay Selvaraj (12:43.362)
Yeah, I mean, that’s about right. Because most of the business entrepreneur mind people are in one state in India called Gujarat. know, those people, that’s what they do. Even in the land. In India, you don’t need to build anything. Just hold some money in a land and then in two years, sell that and reinvest in another land and then reinvest in another land.

And I have seen people who have 50x returns in 20 years, last 15 years. know, time just flies, you know. There’s 15 years. I met a person a weeks ago, and he told me that I have a 40 acre land in one part of India, and right now it worth 50 million three years ago.

Now today it is 100 million. in 12 years it went from probably less than million to 50 million. And next three years it’s from 50 million, it came to 100 million. That’s how the real estate market grows. right now the whole Indian market is going up. It’s the right area to tap in. The next 15, 20 years it’s all the way up because of all the technology and AI.

and all the bigger companies moving in. I mean, that’s no wonder. That’s why people in India, they keep reinvesting even in the properties. Yeah, you’re about right.

Stephen S. (14:12.846)
Wow, that’s incredible. Now, what are you really focused on day to day within the business for yourself?

Vijay Selvaraj (14:16.816)
Thanks.

Vijay Selvaraj (14:22.948)
So I do look for, do like multi-flammable apartments. I look for those in the US. But mostly my target is we are planning 10 hospital projects in India in one city called Bangalore. That is like the Silicon Valley of India.

And we are planning 10 more hospital location. We already have two hospitals operational and we have done one exit in the past. And that one exit is three X returns and that we got it in two years. We have a proven exit and we have an existing project running and we are planning for 10 more.

in the same town. It’s a growing town. So I’m connecting with equity partners, family offices, other hedge funding teams. I’m looking to raise funds. I don’t know, I can get 10 investors for every hospital, but I wanna just…

try to tap into one private equity firm where I can, we are ready to put in half of the funds. The total cost is 32 million and we are looking to, we already have 16 million from our side. We are looking for 16 more million from our equity partner. So that’s what I do mostly. Going for meetings, conferences, and that is one part of our hospital and we also do hotels and other things. That’s already been operational.

Stephen S. (15:42.83)
That’s when I was actually.

Vijay Selvaraj (15:44.814)
Yeah, go ahead.

Stephen S. (15:47.778)
Yeah, that’s what I was actually about to ask on that side too was, is are you guys doing this all with your own money or how important is to be able to build relationships with other people that also have high purses to be able to actually fund some of these projects?

Vijay Selvaraj (16:02.16)
I mean, know, as of now, we’ve been doing it for the last 20 years. We’re doing it with our own funds and it has been, I haven’t seen an exponential growth. So, you know, if you look at a lot of big businesses, how they actually go from one location to thousand locations in two, three years, you know, it’s not just using your own money, but bringing in investors’ money, you know, and you have different buckets of sources and you have the right team in place and right channel of fundraising in place.

and then you can reach to different, bigger goals.

Stephen S. (16:39.96)
So with these 10 projects that you’re working on in Bangalore, how long until you’re expecting to break ground, build, and then exit on each of those projects?

Vijay Selvaraj (16:50.586)
So it’s three year project. first year we’re to build it. So that’s a build stage. And second is operational stage. And that is going to be the second year. So to be precise, the 13th month to.

28 months, so two and a half years. And the third year, we will start looking for bids. So first year we’ll do the construction and then we have a healthcare management team who will operate the hospital and we will rent it to them for around $30,000 per month. And they will run it for one year. And then by the time it’s operational, we’ll look for a private equity company to sell it. There are a lot of private equity companies like Blackstone, KKR, they wanna buy it.

Also bigger healthcare chains like Apollo Hospital and Moneyball Hospital, they also want to buy it. there are other doctors like two, you know, neurosurgeons or two cardio specialists, they combine together and they buy it. that’s a three years exit that we are looking at.

Stephen S. (17:57.038)
Now why do you prefer those short-term buy-build exits versus owning long-term? Why do you prefer that?

Vijay Selvaraj (18:07.364)
Yeah, perfect question. That’s amazing. So we are a real estate and a construction company and we know what our strengths are. We can build it and we have our own inbuilt crew. We have already done a few projects and we want to just focus on our strength, is constructing it and exiting it. And we make money out of that in that area and people, we, one hospital is 3.2 million and we exit at 11, 12 million and still we have

people who come and buy it for 12 million they make really good money in operations every year like their revenue is close to close to a million or million to three million yeah

Stephen S. (18:50.894)
So sounds like really what you’re doing is staying in your lane because ultimately like you’re great at getting in, getting the deal done, building it and then passing it to somebody else that’s gonna turn it into an actual fine operated business almost. that?

Vijay Selvaraj (19:04.854)
Exactly. Yeah. Yeah, that’s exactly right. We are real estate. We’ll just focus on our strength and we want to exponentially grow and we’ll do 10 hospitals in one city and then we’ll do another 10 hospitals in different city and then once hospital business is saturated, we’ll just try to get into shopping malls or apartments or hotels. And we just try to look in, know, tap into the niche areas and look into business like this. Not a lot of people can

hospitals you need to have proper expertise construction permits from this you know Ministry of Health and the city to build it not a of people can jump into this maybe we are the only few real estate companies in India who can do this project

Stephen S. (19:53.774)
Yeah, I was going to say it sounds like the barrier to entry because that’s what I look at in every type of investment is what’s the barrier of entry, right? Because in some cases it actually keeps out the less serious people, right? If I’m going to go look at a flip property and get it a wholesaling, well, I can do that with no money, right? And so as a factor of that, it’s overridden with people that aren’t super serious. They don’t run real businesses, et cetera. Like you have to have people, structure, money.

like all of the things that hold people back from it. But when you get those things in order, it cuts down competition for you.

Vijay Selvaraj (20:31.312)
Yeah. And as I was telling again, in India, because it’s a developing country, don’t have a lot of, because wherever you get in, you make money. And in this area is completely niche. We don’t have competition as of now. I don’t know about next five years after that, but right now we are the only few people who could execute these projects.

And these are, 3x returns is easy possible, because I don’t want to over promise to anyone, and especially for this video, this phone called and yes, but I mean, we know that we can do it at 5x, 6x returns. That has been done in the past, but 3x is what we will stand to our word with.

Stephen S. (21:23.694)
Yeah, because ultimately too like, you know, it’s a whole lot cooler to hear 2x, 3x, 4x, because you know, I think on the single family side, a lot of people are trying to chase that 20 to 30x. I’ve heard some people getting as high as 34x, but it’s like 34x of a hundred thousand dollar project versus 3x of a 50 million dollar project. It’s still a very drastic difference and still something to be very excited about when you play at that scale.

Vijay Selvaraj (21:51.354)
Yeah, but we say that it’s 3X, but we have done lots of 3Xs before. this is not even risk. You don’t have to do anything. mean, it’s a safe money, and you invest in the real estate. And that still holds the value. And 3X is easy any given day possible. If any type of due diligence being done, that is easy possible.

Stephen S. (22:01.496)
Right.

Vijay Selvaraj (22:21.298)
for a safer return of 3x in two years, or 4x in three years. This is kind of a project where they can take the stress out of their mind and they invest. any day they exit out, the first year they exit out, they still make 2x. The third year they exit out, they make 4x. It’s still the same at the end of the day. The IRR is gonna be the same. Yeah.

Stephen S. (22:46.136)
Yeah, 100%. So Vijay, tell us this kind of last question before we wrap up the show. If you had to go back to when you were getting your MBA, your master’s in mechanical engineering, all that, and then like how you’ve gotten into real estate now, and maybe when you got into real estate, what would you do different and what would you do the same with all the knowledge that you now have today?

Vijay Selvaraj (23:09.168)
Yeah, I mean, whenever I went from engineering and MBA, always, every four years, I tend to change my goals and my visions and my long-term goals. I felt like I cannot work in a company forever. I’m working for someone else, building them the wealth. But for sure, I learned a lot of experience. I know different ways and procedures to do things faster and smarter. Definitely you need an experience, work for a bigger organization, learn.

that cool stuff and then apply to your own company. And I feel this education, this experience working for multiple companies of different domain like supply chain, construction, mechanical, automotive, this gave me a different wide angle. You know, I can think out of box different ways. mean, I mean, it’s mind is your limit. I mean, I feel like everything is possible. Anything is possible. This gives me to think out of box.

Stephen S. (24:11.598)
So if anybody wants to learn more about you, what you’re working on, where should they go for that?

Vijay Selvaraj (24:17.934)
I mean they can connect me in my LinkedIn. My name is Vijay Silvaraj. Our website is chrisgroup.in. It’s chrisgroup.in, not dot com. It’s chrisgroup.in. And they can also touch base in LinkedIn as well. they can connect me.

Stephen S. (24:40.59)
Well, Vijay, thank you so much for being here today. Everybody, I’m really hoping that if you got as much value out of this as I did, that you’ll be off to the races and we will see you in the next episode. Thanks again, Vijay.

Vijay Selvaraj (24:54.522)
Thank you, Steve. Nice talking. Take care.