The $200M Nashville Hotel Strategy Built for Group Travel and Real Estate Investors

John Bogdasarian (00:00)
In my view, it’s that we sort very, very quickly. I would say 99 % of what we get is an immediate no or pass because it doesn’t fit our wheelhouse or doesn’t have the element that we need. And if you notice when you get a packet from a broker or a deck on pretty much any deal, there’s usually one piece of information left out.

like the asking cap rate or the real financials or whatever, the lease term. And you know that that’s like your hiccup point. So oftentimes brokers send you this thing. They want you to get invested. They want you to fill out an NDA.

Scott Bursey (02:12)
Welcome back to the Real Estate Pros podcast powered by Investor Fuel. I’m your host Scott Bursey. And today we are absolutely fired up to bring you a guest who is operating at the peak of the industry.

We’re talking about a true heavy hitter who has been recognized as a top 1 % agent nationally and has built a massive platform in real estate private equity. John Bogdasarian of Promanas Group is here and he is bringing the high octane fuel we need to level up our investment strategy today. Get ready to go big pros. John is in the house. John, welcome to the studio.

John Bogdasarian (02:50)
Thanks, Scott. Thanks for having me.

Scott Bursey (02:52)
It is wonderful to have you here. And for our listeners who may not be familiar with your journey, John, please tell us how did your career begin and what is your main focus now?

John Bogdasarian (03:03)
Well, I’ll go relatively quickly. So graduated from college, waited tables for a little while, got my real estate license, worked for a developer selling condominiums in a golf course community, learned a little bit about a sales program, went out on my own, very quickly became proficient at for sale by owners and expired listings. I think my third year in the business, I did about 120 transactions and was one of the top.

100 agents nationwide for Prudential, which had about 40,000 agents at the time. I was about 28, 29 years old. Did that for a few years and then started doing my own little sort of development deals, land splits, condo office building, office condo building. I did some residential condominiums, various things like that that were relatively small. Then started doing bigger stuff, bringing on some investors, doing some acquisitions.

And, you know, things just snowballed. So 20 years later, as my old mentor, Mike Ferry used to say, about 20 years to become an overnight success. Right. And ⁓ so, yeah, it’s, it’s been a good journey. It’s been fun.

Scott Bursey (04:19)
That is incredible. And John, what really caught my attention about you was the way you’ve been able to build a platform like Promanas that smoothly transitions from traditional agency success to large-scale diversified real estate private equity management. It’s a master class in scaling.

John Bogdasarian (05:30)
Well, it’s, ⁓ it might look smooth, but, ⁓ it wasn’t always smooth, but yeah, I did not take a traditional route. ⁓ I was not really. Educated in school. I didn’t really even know if they taught, you know, this type, what I do, you know, real estate syndication and all this. I I’m more of a vocational learner. So everything I learn, I almost kind of have to do myself. If I want to pick it up, I’ve got to just go do it. And then.

you know, figure it out. There are some excellent books I found along the way, obviously, that certainly helped. I had great mentors along the way that I sought out and learned a lot from. But yeah, I mean, there were always, it’s like you’re battling a constant chicken and egg problem, right? You got to go from making commissions to pay the bills and your overhead to how do I, you know, do a development and, you know, there’s just a of chicken and egg all the way through. But yeah, I would say not a traditional route.

A lot of the younger generation that I speak to today, I often go in ⁓ twice a year, usually to the business school at University of Michigan and speak to raw students. And it’s a great privilege to be able to go in there and talk to them. However, I mean, these kids are so far ahead of where I was in college. I did not go to college for that purpose. I went to University of Arizona for sunshine and fun. ⁓

Yeah, I mean, these they’re, so sharp and they are so far ahead. But I think that sometimes that’s almost a detriment because you have all this information and knowledge, but you don’t necessarily have any experience. the real smart ones just, you know, they’re going out to do, they just want experience and they’re just saying, and that’s the primary advice I give to people of that generation is don’t do a job for money.

Do it for the education. I always did things because I wanted to learn something. That’s what I do. I became a pilot because I wanted to learn how to not be scared flying an airplane or being on an airplane for that matter. So I went and said, I’ll get my pilot license and that should solve the issue. And it does actually, because you know a heck of a lot more and feel a little bit more in control. Like that with anything. Just do something to learn something basically.

Scott Bursey (07:54)
John, is some high octane fuel for our listeners right there. Now, we like to keep the energy flowing and the conversation direct. Let’s go underneath the hood and see how the engine actually runs. Please walk us through. What’s your biggest advantage in sourcing off market deals right now in your view?

John Bogdasarian (08:16)
In my view, it’s that we sort very, very quickly. I would say 99 % of what we get is an immediate no or pass because it doesn’t fit our wheelhouse or doesn’t have the element that we need. And if you notice when you get a packet from a broker or a deck on pretty much any deal, there’s usually one piece of information left out.

like the asking cap rate or the real financials or whatever, the lease term. And you know that that’s like your hiccup point. So oftentimes brokers send you this thing. They want you to get invested. They want you to fill out an NDA.

They want you to do all this stuff. My system automatically responds to all of these and says, we don’t do any of that. You send us the information. If you want our money, if you want us to buy it, you send us the information. We want 100 % transparency, no BS.

And if they won’t do that, see ya. Cause guess what? You’re never going to do those deals anyway. Right. And so don’t waste your time on that. I’d say we’re very, very efficient at getting rid of the BS. And then when we do find something that has substance, we move very quickly. We give an honest and straightforward analysis of it and say, this is what we can do. And it’s not a negotiation. It’s a take it or leave it. And if you want to shop us against other offers,

go ahead, come see us in a while, but our price might be lower when you can’t find something better. And so that’s kind of how we’ve always gone about acquisitions or potential development deals where we’re gonna put capital in.

Scott Bursey (09:54)
That’s a key distinction right there and that’s a blueprint for our listeners. What do you have on the works here as far as deals now?

John Bogdasarian (10:38)
Right now, our main project is a hospitality project in Nashville. It’s a $200 million, 11 story hotel that we designed specifically ⁓ to fill a need that doesn’t, it’s never been done before. It’s basically a hotel designed specifically for group travel. So bachelorettes are, Nashville is the bachelorette capital of the world. I mean, United States for sure. Two to one over Scottsdale, which is the second highest city for bachelorette parties.

My contention was where the bachelorette goes, the bachelor goes and where they go, they know it’s milestone birthday parties. It’s couples trips. ⁓ lots of groups traveled to Nashville, right? ⁓ my wife was just there this past weekend with, I think nine girlfriends. ⁓ you know, their age range 45 to 60 and you know, they had an absolute

blast. She’s like, now I see why you’re doing stuff in Nashville. I mean, I’ve been doing stuff in Nashville for seven or eight years and she hasn’t really been there taking advantage of it. So now they go, now it’s going to become an annual trip. I’m certain of it. And that’s what happens to most people that go to Nashville. It’s clean. It’s fun. It doesn’t have the seedy gambling type Vegas feel at all.

The buildings are not designed to contain you like a casino indoors and keep you on site. It’s really designed more to walk the city, get out and go to other areas of town. So it’s, I looked at that and I said, well, we’ve been doing these condo projects there. This is actually the last one we did. It’s 83 condominiums that we sold out as individual residential units, but they’re all being used as like Airbnb, VRBO. And so we looked at this product and I said,

And I kept some in the building. That’s where my wife stayed with her friends. And it’s fine. We have these four bedroom units. You can put 10 people in there relatively comfortably, but they’re designed as a residential unit. They’re inefficient. They walk in closets. They, they have these huge kitchens with tons of cabinets. Nobody needs that. You don’t need a full size washer and dryer. There’s no back of house laundry in the building. There’s no food and beverage operation in the building. There’s a, there’s a very small pool.

a very small fitness center. The amenities just aren’t good enough. The lobby is tiny and we have 400, 500 people coming in there on a Thursday and you know groups of 10, 12 in a lobby that’s maybe you 800 square feet. I mean it’s it’s tiny even smaller probably it’s just a you know it’s meant for residential use. So what I did was I looked at that and I said we need to create a better mousetrap. We need to create something that like will become the place for group travel. So it’s we

I mean, I could go on and on about it because I’ve been working on it for two years. We’re about to break ground in 60, 90 days. We just released the 132 suites for sale privately to just my group and my sphere of investors. ⁓ And I have 20, I’ve sold about 25 million worth of ⁓ units in the building. That’s 20 units. There’s different sizes and prices. ⁓

I have a broker reveal tomorrow to 75 of the top REMAX agents in Nashville where we’re offering a pre-construction incentive there. I limited them to an allocation of 30 units because I also have a broker reveal next week to Compass agents. There’s a thousand in that market. I anticipate we’ll get 100 or 200 at the reveal party and we’ve given them an allocation of 30. And then we’re holding the rest, you know, to the end.

Essentially what we did was we changed the whole model and this was the brilliance of it. We said, ⁓ we’re not going to sell these units to buyers at the traditional ⁓ splits that they’re used to, right? Like if you’ve ever looked at a vacation rental to purchase when you’re on vacation and you run the numbers, if you have a brain in your head, they’re the worst thing on the planet, right? It’s usually like.

The developer gets 50%, you get 50 % and then they start taking expenses out of your 50 % and you end up buying the thing at like a three cap, you know, or 3 % yield on an all cash basis, maybe four. I found one in Turks and Caicos that would give me a 4 % yield on an all cash basis. ⁓ But so what we did was we said, we’re not going to do that. We’re going to create a rental management program. So someone can buy a unit, put it in the rental management program and we’re going to give 80%.

of the net revenue from the management program. So we’re to take the expenses off the top and then we’re going to, and then we’re going to give 80 % to the owner and 20 % will stay with the developer essentially, or the owner of the rental management program to run it and facilitate it and manage it. And then, and then to price the units and we’re not trying to make a profit on them. We’re trying to sell them at or close to cost because the reality is,

We’re still gonna own my group, the general partner, if you will, we will own the rooftop restaurant. It’s a high end concept. It’s really nice. There’s a huge rooftop pool and deck, ⁓ lobby bar and restaurant, two floors of underground parking that’s monetized.

We also have a 20,000 square foot venue space that we designed into the first floor and mezzanine level. ⁓ And we leased that on a 10 year lease to T Squared Social.

which is a joint venture between Tiger Woods and Justin Timberlake. And it’s kind of like, it’ll have a stage, there’ll be performances, but there’s also these oversized simulators that you can play games on, hit golf balls into, but you can also turn them into these virtual reality, like party spaces. And it’ll be a huge draw to the building. And so we own all of that. So we’re like, well, you don’t really need to make money on the rooms. Let’s give all the upside or 80 % of the cashflow upside and a hundred percent of the sales price upside.

on the individual units to people who purchase the units. And then essentially what we’re left with is a project where we have no debt because we put in our general partnership money of 30 million and we sell the units out at 170 million and the unit owners, if they finance them, will have some debt, but we don’t carry any debt. And so we’ve essentially eliminated the risk. ⁓ Now the risk boils down to selling the units.

But like I said, in the first two weeks, we’ve sold 20, which is more than I would have anticipated. And they’re just, I’m having a hard time following up with people, which is great. I mean, I know we’re doing the right thing here. The market’s indicating that it’s a good product and a good investment vehicle for them. mean, people have to do their own analysis. I can’t say you’re going to make X number of dollars. ⁓ anyway.

That’s what we’re doing now. You can tell I’m pretty passionate about that.

Scott Bursey (18:16)
What are you?

Well, rightfully so, John. What a tremendous niche. I’m excited for you. Elaborate just a little bit on your long-term vision on this.

John Bogdasarian (18:32)
So the parent company I created calls GT hospitality, very original group travel, GT hospitality. And so that’s kind of the flag that doesn’t exist out there. You know, there’s a Marriott, there’s a Hyatt, there’s a whatever. We created GT hospitality and this model that we, that I designed is called GT social. ⁓ And it’s built, you know, specifically for places like Nashville, maybe Miami, Scottsdale. I mean, it could go in other markets.

and we tweak it to other markets. And then we have two other concepts that we’ve developed under the brand that we’re not out with yet. But as soon as this one breaks ground, we’ll go to another concept that I have that will blow your mind. It’s just funny that no one thinks of these things. But ⁓ if you think about it, I mean, it’s not that difficult, right? You could even ask Chachie Petien and probably come up with these ideas, but it’s just in life.

wandering around no matter where I am or what I’m doing and it drives my family crazy, absolutely crazy. I’m always saying how could this be better? What could be done better here? ⁓ We just had dinner at the country club which reopened after a major renovation. My son and I went and we’re sitting up at the bar stools tables. ⁓ He can’t sit at the bar. He’s not old enough, but I’m just the side tables and then there’s a booth.

type situation and I’m sitting in it and the boost kind of high up and the bars kind of high low and my feet are like dangling like I’m a little kid. I can’t quite get them down to the bar and I’m not a short guy. I’m you know, normal height probably five 11 and and so I’m sitting there going well they they’re going to have to move these bars. They should have you know plan this higher and then and then I’m telling my son I’m like look over there. How could they do those glass racks better so you could see through out to the golf course, you know, and I’m

why are the lights so bright? hope they put dimmers in, you know, it’s just like, I mean, I don’t critique all the time. try and look at it as positive, but anytime I go anywhere, I’m like, well, why are we dealing with this? You know, why are we getting 10 hotel rooms when the baseball team goes to travel to a travel tournament? You why are we, why are we doing that? We don’t need 10 hotel rooms. Every parent and kid doesn’t need their own hotel room. So we could design something that accommodates, you know,

use sports and travel. could design something that accommodates classroom trips to Washington DC and Chicago and Boston and you know the cities that all these classrooms go to to have field trips. So you know a lot of opportunity there and it’s endless.

Scott Bursey (21:09)
I loved how you framed that. And John, I’m really curious about this. What market trend is most likely to expose a current weakness in portfolio diversity?

John Bogdasarian (21:24)
well, ⁓ certainly we’ve been stuck in this situation for a long time where prices are really high. Interest rates are actually reasonable. People think they’re high, but you know, when I got into the business, anything sub 8 % on a mortgage rate was seen as a great deal. ⁓ I remember when they went below seven and, ⁓ I was only, you know, in my mid twenties when I bought my first,

condominium. I bought a two-bedroom condo for $50,000 and sold it a year later for $55,000 and thought I and I only put five grand down when I bought it. So I doubled my money in a year and thought I was a genius. And then I bought, you know, something bigger and something bigger. And that’s how I got started. I as a residential agent, I kind of had access to stuff. And just started, I’d buy something, move into it, then find a tenant and then, you know, move on to the next one and the next one.

One point in time I had 30 single family homes. Anyway, the answer to question, you know, we’re in this sort of weird log jam and it’s one, hard to find opportunities. A lot of people complain about, can’t afford to buy a home. I’m like, well, I don’t know about that. I mean, I think you can’t afford to buy a home in the neighborhood you want in, you know, five minutes from your school maybe.

But there are plenty of opportunities. There are opportunities, you know, a little further out, a little on the edge, you know, there’s, there’s stuff you can do. There’s always a way. And so there’s a big victim mindset in this country. There’s a big blame game mindset in this country. We’re bombarded with news.

that isn’t always so pleasant. It’s designed specifically to grab your eyeballs. So clickbait and all that stuff. I mean, it’s nuts. We struggle with our kids having their face in the phone 24 hours a day. I mean, this isn’t new to anybody. Everybody knows this. The problem is, and the challenge I’d say is, what are we doing? What are you doing to overcome this? To not let this sink you into a problem? To not let this…

you know, affect your life in a negative way and bring you down. And so, you know, time limits on my phone, I’ve screened time limits for myself. I don’t want to doom scroll the news or reels all day long. Sometimes it’s good for entertainment, but I’d rather just do a Sudoku puzzle. You know, I get the easy and the moderate every day and that’s it. That takes usually about, you know, nine minutes, 10 minutes, and that’s good, you know, and I feel like whatever, I’ve gotten a little break, but.

you know, health, fitness, all that kind of all ties together. But I mean, from as far as the market standpoint, though, I mean, to answer your question, another covid would be a killer to a lot of things that I have going on, at least a temporary setback. had a hotel that we released right as covid hit in Denver. We we meant to sell it that spring and now we still own it. ⁓ But because of how we mitigate risk through structure and we always use more capital than we think we need.

and we have reserves on the sidelines, we’re able to make a payment to principal, keep an asset and see it through. And now it cash flows very nicely. We can’t sell it for the price we would have been able to sell it for had we gotten out of it when interest rates were three and a half, 4 % and whatever. But the reality is it cash flows nicely and it’s paying down debt and it’ll be a great investment long-term.

You know, that’s what happens with real estate. Sometimes it becomes a liquid. the only times I’ve ever, the only time I’ve ever lost money was a project I didn’t have complete control over and we were pretty highly levered. And that’s the one time in my career that I’ve lost. ⁓ I’ve lost capital and it was so awful. It was very painful.

Scott Bursey (25:33)
Thank you for that excellent breakdown, John. Let’s move to the money question. Given your success in building Promanas Group, what is the single best piece of advice you’d give to successful agents who are trying to make the leap from brokering transactions to becoming a principal investor who raises sophisticated capital?

John Bogdasarian (25:55)
⁓

Great question. I subscribe to what I call like a three bucket principle, both from a financial planning standpoint and an education standpoint. So I say, you know, always fund bucket one first. Bucket one is just your like ⁓ Dave Ramsey type bucket is what I would say. It’s sort of, you know, don’t have any debt, personal debt, don’t have, you know, high

Payments that are crippling you keep your life, you know relatively inexpensive save You know 10 % of what you make fund your IRA that kind of thing once you’ve satisfied that bucket then I’d say bucket two you can start working on and that’s sort of That’s what I did, you know, basically bucket one for me was having my residential License and going out and learning is a process where I could make pretty predictable

income and cashflow and start putting money on the side very quickly and fully funding an IRA. I had a ⁓ SEP IRA. I could put like 50 grand a year in it or something. And it was like, so I was saving a very high percentage of what I made early on. And I wasn’t cheap. I was still spent money and had fun. But at the same time, I was putting away well, well over 30, 40 % of my net after tax income. And so

Beck compounds, if you can do that in your twenties, you look like a genius when you’re older, but it’s hard to do when you’re in your twenties, because you’re not thinking about that. You’re thinking about, you know, the car you want, the fancy watch, the whatever. And I’ve made some of those mistakes too, but bucket too. I, that was when I got my CCIM designation, learned a lot about commercial real estate. I attended conferences, I went to events, I got mentors. I invested in myself.

So bucket two is about building a, I built a rental portfolio, as I mentioned, with single family homes. That’s all bucket two, bucket one’s taken care of, I’m funding it and you know, it’s not done, but each year you do that first and then you go to work on bucket two and you say, you know, hey, how can I get ⁓ from here to there? And then there’s a third bucket. I didn’t really start.

doing much in the third. I’ve always had something going in the third bucket, but I didn’t really invest a lot of money in it. That’s kind of like, you know, I had, my wife had a private personal training business called Coach Me Fit, for example. And I tried to franchise that model. was a one-on-one personal training concept back before those existed. And we had three locations and we got one franchise sold and then 2008 happened and we couldn’t really give any away.

And so we ended up, we ended up just kind of sitting on that for a couple of years. And then we sold the whole enterprise because we were having kids and my wife couldn’t take care of it a lot, but it was the education of it. And it was the thing that could have made us worth, you know, hundreds of millions of dollars. If you built a big franchise, well, it franchisor, the challenges is it’s not actually that easy. ⁓ It’s not like you just come up with an idea and whatever you’ve got to.

Go to conferences, you’ve got to, you so I think sometimes people underestimate, you know, how much work goes into becoming a movie star or, you know, a singer, or they don’t like see behind the scenes, right? They think, ⁓ you know, it’s just talent that was discovered. You know, Scottie Scheffler just hits golf ball better than anybody else because he was born that way. Not the truth, you know, a lot of reps go in. So, ⁓ you know, I think in that third bucket is.

That’s now become one of my larger ones. We have a venture capital arm and we’ve invested in some startups and they’ve gone crazy and it’s been fun, but it’s all again for education. We’ll invest in things that we want to learn about and there’s small amounts of money, but it’s kind of like your gambling itch, right? Like, you know, if you want to, know, and I don’t, it’s not as ⁓ important for me anymore. Now, as you get to be a certain age, you just kind of start thinking about what you want to.

you know, leave as a life lesson legacy for your kids and so forth, right? And start considering that stuff. And you know, I’m on the backside of this thing. So with limited time left, the last thing I want to do is being chasing, chasing the almighty dollar. So I’m only doing projects that I think are really fun, that I think I’ll learn something from, and that I think will provide value for the people purchasing them. You have to create value, right? Like I can’t.

sell these units out to people in Nashville think I’m going to rip everybody off. It has to be a good deal, right? Like why otherwise people are going to sniff through that, especially in this market. And so you’ve got to make it a good deal and you’ve got to create value. I mean, if the traveler coming in, if this isn’t a better product than anything on the market in Nashville, when it’s done, then I am totally missing my mark because that’s what I’m designing. I’m designing something that I think

everyone will want to stay in. And you’ll go to Nashville, you’ll leave Nashville, you’ll come back, you’ll post it on your social media channels. And it will not only be that Nashville’s great, it will be stay in at GT social Nashville or whatever we end up calling it. But right now that’s the placeholder. And so that’s, you know, a roundabout way of I think answering your question. But if I didn’t answer your question, let me know.

Scott Bursey (31:35)
You certainly did. And that is the kind of high octane fuel that truly unlocks a new level of thinking. Thank you for that, John.

John Bogdasarian (31:45)
Yeah, my pleasure. ⁓ Any other questions or anything I might be able to give you my two cents on?

Scott Bursey (31:54)
This has been such a valuable discussion. For those of our listeners that would like to follow your journey or collaborate with you, what is the best way for them to reach you?

John Bogdasarian (32:06)
⁓ I think so we have [email protected] IR is just investor relations @promanas.com. Certainly, you know, you can Google us, get ahold of us, email us, ⁓ call us. I’m always happy to answer questions and try and help where I can. ⁓ sometimes I’m really in the thick of things and I can’t get back to people for a week or two even, because I’ve just.

try and stay laser focused like we are right now actually, ⁓ and in the middle of these launches and so forth. And gonna head to the airport here after we get off. ⁓ at other times, honestly, I sit around and I have nothing to do for weeks on end. It’s really kind of a bizarro business if you think about it. ⁓ But so. ⁓

Yeah, I mean, we welcome people to reach out. Certainly happy to, you know, answer any questions or, and I’m sure if you Google me, there’s other podcasts and information that we’re at, you know, at a different slant or time in my life. ⁓ I really enjoy ⁓ speaking with the

people, the younger generation especially. But sometimes it’s not really an age related thing. It’s more of an experience in where are you in your journey thing. It doesn’t really matter how old you are. And I don’t, like I said, I love doing that. It’s probably the most rewarding part and it’s flattering honestly to even be asked. I I kind of assume everybody already knows whatever it is that.

that I’m doing because I don’t feel like I’m terribly smart in that arena. But I guess I do have some experience now, as you can see.

Scott Bursey (34:06)
John, this has been an absolute clinic. Thank you so much for joining us today.

John Bogdasarian (34:12)
You’re welcome. Thanks for having me, Scott. You have a great day.

Scott Bursey (34:15)
And to our listeners, we appreciate each and every one of you. If you got value from today’s episode, please subscribe. We’ve got a lineup of exceptional guests, just like John, who are making huge moves in the market. Until next time, keep your standards high and your vision clear. We’ll see you on the next episode, everyone.