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Show Summary
In this conversation, Dr. Amir Baluch shares his unique journey from a medical career to becoming a successful fund manager in the real estate sector. He discusses the thriving DFW real estate market, his early investments, and the strategies he employs in acquisitions and development. Amir emphasizes the importance of understanding market trends, particularly in the context of inflation, and outlines his current projects and future plans for growth in the industry.
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Investor Fuel Show Transcript:
Amir Baluch (00:00)
So we have a 10 to 14 % income fund that pays quarterly. A lot of times people invest in real estate because they want cash flow. There’s no really good cash flow option. So we’re doing that back by our real estate, which we underwrite to basically, if we did it as a cap rate, it’s a 12 % cap.you know, versus multifamily, which is six.
Dylan Silver (01:51)
Hey folks, welcome back to the show. Today’s guest, Dr. Amir Baluch is a Dallas based fund manager for the private equity backed Baluch Brothers Development firm. They specialize in high growth, built to rent projects throughout the DFW Metroplex. With over 700 million in transactions and a notable zero capital callous, the firm combines medical grade analytical rigor with institutional financial precision. By leveraging a vertically integrated team of industry experts, they providepositions and high net worth investors with protected asset backed opportunities to diversify beyond Wall Street. You can find them at BaluchCapital.com. Amir, thanks for taking the time today.
Amir Baluch (02:30)
Hey, thanks for having me on.Dylan Silver (02:32)
Now, when we talk specifically about DFW development, new construction, I know you’re involved in both single family and multifamily. For my money’s worth, this is one of the best real estate markets in the country and there’s a lot of investors there and there’s so much opportunity. How’d you ⁓ end up in DFW?Amir Baluch (02:55)
Well, the reason I moved here actually is because it was my parents dream to live in DOW when we were growing up. They could never make the move out of Midland, Texas, which is like a hundred thousand population place in West Texas. It’s kind of famous for football and things like that and oil.but they tried to make a move here and they couldn’t make it happen. So when I finished my anesthesia residency in 2010, I made it happen for them and I just moved here and within a few months I moved them here too.
Dylan Silver (03:28)
Now, I mean, you’ve got a whole career as a medical professional. When did the real estate start coming into play?Amir Baluch (03:36)
Well, actually, even before I got into medical school, I was doing real estate because a lot of people don’t know this. I got six rejection letters from six different med schools the first time I applied. So I didn’t know what I was going to do with my life. So started researching. Back then, I think it was like.Netscape or something like they didn’t have Google back then. was like, hey, how do I, you know, make it big? And I saw some statistics saying that a majority of millionaires make their first million in real estate. So I was trying to think, okay, let me get some rentals or do something like that. Just hitting my head against the wall. But ⁓ eventually staying persistent, I was able to
eventually get into multifamily while I was a medical student. was in 2005, I guess, know, a couple of decades ago.
Dylan Silver (04:24)
Now, as a medical school student, are you looking at deals at that point in time? Are you, you know, underwriting deals and you’re also going through medical school? That seems like a lot of work.Amir Baluch (04:25)
Yeah.⁓ It is a lot of work. So this is actually pretty interesting. This never came up in any other podcast. But so my roommate at the time, ⁓ the year I didn’t get into med school, I moved in with my roommate who is comp sci and something else. He was a double major in something, owned business finance. He got a job with a ⁓ private REIT in San Antonio. So as I was applying to med school, he was already doing multifamily.
back when they were getting deals like cap rates were like 11, believe it or not. This is in the year 2000, 2001. So every day he comes from work and he’d tell me what he’s doing. I’m like, okay, well, I tried to do the single family home. I don’t have enough money to buy an apartment complex. But he was showing me the numbers. He’s like, hey, Amir, why are you even dealing with stocks? Look at what I’m doing here. Look at how I analyze the deal.
Dylan Silver (05:07)
Yeah.Amir Baluch (06:15)
And we were living in an apartment complex. I’m like, okay, so I paid this much in rent and they’re taking this much in the management and okay, so maybe one day I should invest in this thing. And then of course I’d still keep in touch with them over the last 25 years. So when he had a deal coming up, was friends and family and employee deal in this REIT. They actually didn’t allow it to outside investors. It was such a good deal. Small multifamily in San Antonio. So I went there.I did the property tour with them. They gave me the pitch. I’m like, okay, this makes sense. And they told me cap rate like five times. I still didn’t really understand it. I invested anyway without understanding what cap rate was. But over time, since I lived with my buddy, Jason, who now works for another REIT, but he explained all the numbers on my, hey, this makes a lot more sense than the stock market.
And somewhere around that time, I actually took a 10 % penalty and liquidated all my mutual funds and everything. just went all in in real estate around 2005. So that’s how I got it.
Dylan Silver (07:18)
What was that? What was thatfirst investment? five. What was that first deal?
Amir Baluch (07:23)
It’s an apartment in San Antonio called Chisholm Trace. probably still exists. It was such a good deal when they refied in less than a year. I got my principal back plus 50 % more. So I put in 10 grand, right? So I got 15 grand back in less than a year. And I still had my ownership in there giving me 20 % cash on cash return for like the next 14 years.Dylan Silver (07:50)
Unbelievable.Amir Baluch (07:51)
Yeah, they don’t make deals like that anymore, right? People are, know, cap rate of five and six these days, but nobody was chasing multifamily. You don’t have these multifamily masterminds. Hey, you can do multifamily too. There’s really not that much competition. So you’re buying from mom and pops that just want to get their money out. You know, they’re talking about five years ago.Dylan Silver (08:12)
You know, that’s really whata lot of people in multifamily and you were you were before this time, but I would say that the time period post, you know, the global financial crisis. So like 2013, 2014 up until 2020, it felt like you couldn’t buy a deal wrong, like a specifically a multifamily deal. Like even if you did everything wrong, it would end up appreciating so heavily, it would still work out. But you were in an old five and you were experiencing some of that
At that point in time, what was the thought process like while you were going through medical school? Were you thinking, okay, well, this is something that I’m gonna do passively or were you also thinking down the line like, hey, this is gonna be maybe a career path?
Amir Baluch (08:56)
So I’m a pretty active guy. Like I like to get my hands in things and, and, and like to operate as much as my, as much as I can. And I like to do high level strategy. So usually in all my companies, I’m the, I’m the visionary, but if I need to do some ops, I can run ops also until I, you know, in the interim, until I hire an ops guy or a manager, that’s usually, uh, you know, how I roll, but for a multifamily, mean, you know, the ops is so heavy. We can’t handle it. I’ve done some.9 unit and 27 unit, me and my brother handle that ourselves. Quad here, there, a triplex, it’s not that big of a deal, especially we have our own brokerage. But these bigger ones, once you get to 40 units and up, you need to have somebody pretty dedicated to that property. So ⁓ for those higher up, I’m gonna be passive or I could be maybe part of the team, but not run the whole show.
Dylan Silver (09:55)
Let’s talk DFW Metro. So I lived in Denton for a little under a year and I saw just how much development, it was unbelievable, was happening in all the areas, in the urban sprawl of ⁓ DFW and Denton and Prosper and Salina. Just every direction you go, there’s subdivisions popping up. And Frisco, although already developed, is becoming more developed and you just had unbelievable level ofgrowth and development. And I know you’re active both in ⁓ subdivisions and single family and the multi-family space. What type of deals do you have going on right now?
Amir Baluch (11:12)
Well, let tell you right now, nobody’s buying land. So it’s really easy to negotiate good deals on land, pretty much anywhere. And we know we always want to be risk averse and all of our deals have to make sense if we rent it. Because plan B, if you can’t sell the home you’re building, you got to be able to rent it for a year or two and at least break even on the cash flow. If you break even on the cash flow, I mean, this is still, you know, a home run deal with the appreciation and capital pay down. So I’m not worried about it.So all of our deals had to be underwritten for BTR and we only do infill developments. So let’s say, know, a lot of people are out here in North Dallas, Salina, Prosper, and there’s so much empty land. Imagine if you bought land there, there’s nothing stopping somebody else from building right next to you and dumping a bunch of inventory on the market. And now the price has come down and days on market go up.
If we stay in these infill areas, so for example, really big in Bishop Arts, if you type in New York Times, Bishop Arts, New York Times three months ago said it’s the number one place for single family development in the whole Metroplex. And the Metroplex is pretty much number one for single family development in the nation. So this is like, this is like, you know, half a square by half a square mile hottest place in the nation and
You can’t just go out there and get land. Everything is off market from mom and pops. You got a door knock to get there. There’s nothing online. And so when we build something, this thing is going to sell. And it makes sense as rentals there because it’s a very walkable place. So we do things like that. Or like at Fort Worth, there’s a constricted area in the historic district or other places that are
might not make sense as rentals. So for example, since you lived in Denton, you know about Highland Park. So one of the richest neighborhoods in the nation, Jerry Jones, Mark Cuban, they all have places there. Believe it or not, we have places that make sense as rentals there too. But you can’t just buy land there. It has to be off market. We’re building a $4 million duplex. So 2 million each side is the sales price.
Dylan Silver (13:05)
Yeah.and fill.
Amir Baluch (13:29)
and it rents for 15,000 to 17,000 each side. If you do the math, you can get with leverage, you’re get double digit returns. If you buy it all cash, you’re probably making more than a CD and you get the use out of living there, which is what people think when they buy there. So that’s how we look at it, but it’s because we don’t have competition. People can’t just buy, build across the street and flood the market. So we’re protected and our numbers hit pro forma.you know, more than 95 % of the time.
Dylan Silver (14:00)
Now, you’re involved in so much. Are you personally doing acquisitions for these deals? And I know that it can be intensive for infill specifically, right? Because this is typically some type of distress that’s happened or someone who’s just sat on this project. Are you doing outreach? Do you have a team that does this? How do you handle acquisitions?Amir Baluch (14:20)
So a couple ways. So my brother pretty much runs our development company. He’s a developer. He didn’t start off as a developer, but over the years he’s learned to do it. We start off being coaches and a mastermind. And then people that couldn’t do their own deals partnered with us because we had the money and we had the ops. that would be a smaller, we’d let them be, they either wholesale the deal to us or partner with us and we’d structure some joint venture thing. So that’s how we got a lot of deal flows by coaching otherpeople that wanna do fix and flips and construction. And then a lot of it is once you’re in the neighborhood, the neighbor is gonna come talk to you. So, and then we could go talk to them and like, hey, I like what you’re doing. ⁓ You wanna buy my house? So we’ve gotten a lot of off-market deals like that, but a lot of it’s just door-knocking and letting people see that you’re working there. We rarely get anything on market.
Some brokers, once they see that over the last 15 years, you close on every deal you put under contract, all the brokers want the for sure close so they get the for sure commissions. So they come to us before something comes on the market. That’s the easiest money they’re going to make. If I say yes to it, it’s pretty much a wrap.
Dylan Silver (16:17)
I mean, that’s huge, right? So I’ve noticed that, because I come from the background as a wholesaler before being a realtor. And once you find someone who can transact, you’re like, okay, I’m going to go to them first, because I know how much relative pain I’m going to have to go through to find buyers and to have a bunch of people come through for a showing here. then their things are going to come up with an inspection or with their lender and so on and so forth. I know this person can transact.They’re gonna get first shot.
Amir Baluch (16:48)
Yeah. So what I did back in the day, since you mentioned wholesaling, we gave a bunch of wholesalers $5,000 check, just to just hold it. And when we find a deal that you like, just that meets our criteria, just cash it, you already have it, you don’t have to wait for the money. So that’s what we did. All these wholesalers were sending us all the deals we were, we’re the number one buyers from I forgot the name of the wholesaling company is big here in Dallas, you would know him, I can’t think of the name. But the other one, wait, no,Dylan Silver (17:13)
New Western?Amir Baluch (17:18)
What’s the other one?Dylan Silver (17:20)
Man, there’s so many. don’t just want to keep naming holes.Amir Baluch (17:22)
New Westernbranched off of Net Worth Realty. Yeah. So New Western branched off of Net Worth Realty, but we were one year we were the number one buyers for all their wholesalers. It was like 12 years ago or 15 years ago.
Dylan Silver (17:26)
Okay, yeah.Wow
think there’s going to be a lot of people who are at least a handful who are going to take you up on that strategy. Hopefully no checks get cash without their knowing. But one of the things that I’ve noticed and hearing your story is the ability to pivot. Right. So I mean you started with ⁓ investing really through through what was it a syndication that you first invested in. And then you’ve gone into to infill and into to multifamily. So you’ve been active in
Amir Baluch (18:00)
Right, right. I was an LP.Dylan Silver (18:07)
multiple different spaces. How did you identify when the right time is to look at a different segment?Amir Baluch (18:16)
So in 2010 and 11.when I moved to Dallas after residency, I got my securities license and joined a boutique investment bank and they were pretty heavy on commercial real estate. So I worked with them for about five years and that’s what really accelerated my knowledge when it comes to putting together deals, securities and underwriting especially. And so we did about, you know, a little bit under a billion dollars worth of commercial real estate, private equity and hard money lending. And so when I saw
We have the weekly meetings, monthly meetings, and we just see the cap rates compressing, which means you’re paying more for the property. And instead of looking at 20 deals to invest in one, it became 50 deals and then 100 deals. And when it becomes ⁓ a bidding war, eventually some amateur that wants to just close his first deal will overpay, or sometimes some syndicators that just want fees upfront will…
Dylan Silver (19:11)
He’s gonna overbid.Amir Baluch (19:19)
also overpaid, but with other people’s money. So that was an issue. And then it doesn’t make sense to be in that space. And so I saw that around 2016. And that’s when I actually left multifamily. And then I had a non-compete. had to wait for two years. And then we started working on the single family. And then by COVID time, 2020, I was out of all my commercial real estate deals, which was almost the peak. I could have waited another two years or one year.to sell all my commercial at a peak, but we just sold out when cap rates, I mean, we’re selling at cap rates of four. So I’m like, yeah, let me just take that and let’s dump it into a bunch of land and start developing single family, which is not as sensitive to interest rates. And the valuation does not base off of cap rates, it’s based off of comps, always go up because we always have inflation. For the most part, we almost always have inflation, right?
Dylan Silver (20:09)
Yeah.Amir Baluch (20:17)
That was the trend I wanted to follow, is this inflationary trend after, know, because during COVID, 80 % of the nation’s money was printed that one year after COVID. So that means we got a massive inflation. And by the way, if you look at the market now, we’re just now seeing some of that as part of the reason the stock market isn’t tanking or correcting as much as it should, even though we printed, you know, four times the money after COVID. It’s just…It’s taken this long to actually see the effects of inflation on stock market prices and commodities and things like that. That’s a whole other conversation. ⁓
Dylan Silver (20:55)
Yeah, I mean, you mentioned the single familybeing based off of comps and multifamily really being controlled by cap rates and rents and so many other more complex factors. It’s two different worlds, right? So you had experience on both sides and in development. We are coming up on time here, though, Amir. Any new projects that you’re working on and then also as well, what’s the best way for folks to get in contact with your team?
Amir Baluch (21:23)
Okay, so for the new projects, I mean, we’re pretty focused on Bishop Arts right now. That’s like the hardest part in Dallas right now. A lot of people don’t know that. And then we are going to be going to actually Denton. There’s some land owned free and clear. We’re doing a programmatic JV with somebody up there where they contribute the land and we do the development and do like, you know, a two thirds, one third split. then we will have the next project we have is ana strategic yield fund where investors that want cash flow, it’s the biggest complaint from a survey I did last year is, hey, where’s the cash flow? It’s not that much in multifamily.
So we have a 10 to 14 % income fund that pays quarterly. A lot of times people invest in real estate because they want cash flow. There’s no really good cash flow option. So we’re doing that back by our real estate, which we underwrite to basically, if we did it as a cap rate, it’s a 12 % cap.
you know, versus multifamily, which is six.
Like if you did developments, all cash is looking at 12 % return, you know, so that’s, we like that buffer and we back it with a pref income fund. So if people want to do that, they can find me on LinkedIn. Just look at my name Amir Baluch. I should be the only one on LinkedIn named with that name. I think if there is, if there isn’t, then find the one in Dallas, cause that’s when that was me. You can also go to baluchcapital.com.
And there’s little Contact Us button there. Or if you’re in Dallas and you want to come by, we’re office at the Crescent and Uptown. And we’re not too far from the Goldman Sachs building. In fact, before we get on the call, I want to show you how close the Goldman Sachs building is to where I am. So basically, like, right there. Wait, hold on a second. That empty spot is going to be the Sachs building right out there.
Dylan Silver (23:17)
Look at that, what a view.Amir Baluch (23:19)
And then rest of Dallas is right there. So we’re expecting three to 5,000 people there and still 400 people a day coming to Dallas. So we don’t see this market slowing down anytime soon.Dylan Silver (23:31)
Amir, thank you so muchfor coming on the show today. Thanks for your time.
Amir Baluch (23:35)
No problem. It was great.
