494. The Power of Diversification: How Real Estate Can Protect Your Portfolio with Bharat Kona

Can diversifying your investment portfolio with real estate help protect you from the volatility of the stock market?

In this insightful episode, Suja sits down with Bharat Kona, a seasoned real estate investor and former tech professional who shares his compelling journey from the Silicon Valley to the world of real estate investing. Bharat discusses his motivation for diversifying his investment portfolio after experiencing significant losses during the dot-com bubble and the 2008 housing crash. He explains how he discovered his passion for real estate and the benefits it offers, such as cash flow, equity multiplier, and tax advantages. Bharat also delves into the various types of real estate investments he has been involved in, including value-add multifamily, ground-up construction, and land entitlement deals. Throughout the episode, he shares valuable lessons learned and strategies for navigating the current challenging market conditions.

Bharat is a dedicated full-time sponsor and operator in commercial real estate, with a proven track record of acquiring and managing 650 units across the South and Midwest regions. Well-connected capital raiser, having successfully secured over $6.5 million to date. Proficient in asset management, financial underwriting, capital raise, and investor relations.

00:00:00 - 00:03:00 | From Silicon Valley to Real Estate: Bharat's Transformative Journey

• Bharat shares his background in the tech industry and the painful experiences that led him to seek diversification

• He discusses how friends and mentors introduced him to the world of commercial real estate

• Bharat highlights his current portfolio and the capital he has raised across his deals

00:03:01 - 00:08:00 | Discovering Passion and Purpose in Real Estate Investing

• Bharat explains how he found true passion and enjoyment in working with investors and sharing the benefits of real estate investing

• He discusses the decision to transition from his tech career to full-time real estate investing

• Bharat shares insights on how his investors, primarily from the tech industry, are attracted to the diversification and tax benefits of real estate

00:08:01 - 00:14:00 | Navigating Different Asset Classes: From Value-Add to Ground-Up Construction

• Bharat discusses his first full-cycle deal, a 45-unit value-add property in Kansas City, and the lessons learned

• He shares his experience with ground-up construction projects in Sioux Falls, South Dakota, and the importance of demographics and partnerships

• Bharat touches on his involvement in a land entitlement deal in Austin suburbs and the challenges faced

00:14:01 - 00:20:00 | The Excitement and Challenges of Real Estate Investing

• Bharat expresses his passion for sharing knowledge and enlightening others about the benefits of diversifying through real estate

• He emphasizes the importance of patience and the long-term nature of real estate investing

• Bharat discusses the current market challenges, including high interest rates and the difficulty in finding good deals

00:20:01 - 00:28:00 | Strategies for Success in a Volatile Market

• Bharat shares his experience with using fixed bridge loans and successfully refinancing into agency loans

• He highlights the importance of consistent hard work, maintaining high occupancy, and controlling expenses

• Bharat discusses the advantages of investing in Midwest markets, which offer slower but steadier growth and less volatility compared to hot markets like Phoenix and Austin

Quote:

“This is not something to get rich quick. Patience is very critical in investing.” - Bharat Kona

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