Why take the Real Estate Risk? w/Sanjoy Dey
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Episode Description
Welcome to the Freedom Point Real Estate podcast! Today's guest Sanjoy Dey shares his story from engineering to real estate; his thoughts on risk, asset classes, and future trends; and the lessons he's learned through it all.
Sanjoy is a seasoned real estate investor with a background in telecommunications engineering. With over 16 years of corporate experience, including roles such as technical project manager, test lead, product owner, and program/team lead at Qualcomm, he has honed his skills in leadership, project management, and strategic planning. As the founder of Corfu Capital, a private equity company specializing in multifamily investments, Sanjoy is dedicated to helping busy professionals build passive income streams through real estate. With $100 million in assets under management, his focus is on acquiring and managing properties in high-growth areas, particularly in Arizona and Texas.
CONNECT WITH ATUL WAHI!
LinkedIn: https://www.linkedin.com/in/dey-corfucapital/
Website: https://corfu-capital.com/
CONNECT WITH JEREMY DYER!
Website: https://startingpointcapital.com/
Instagram: https://www.instagram.com/startingpointcapital/
LinkedIn: https://www.linkedin.com/in/jeremydyer
Facebook: https://www.facebook.com/startingpointcapital
Book a Call! https://calendly.com/startingpointcapital/discuss-investing-with-jeremy-dyer?month=2023-12
Summary
Tip #1: Understand the Differences Between Class C and Class B Properties
"Class C gives you a lot of challenges at the beginning… you may not get great cash flow, but if you fulfill your business plan, it gives you a good return. However, most first-time investors don’t understand that model."
Class C properties can be lucrative, but they often require patience and expertise to execute the business plan effectively. Investors looking for more stable cash flow with fewer operational challenges often shift their focus to Class B properties. Class B offers a balance between risk and reward, making it an ideal investment for those who want more predictable returns without the high-risk volatility of Class C properties.
Tip #2: Choose Investments That Offer Immediate Cash Flow
"I like investments that pay immediate cash flow from day one… if no value-add is provided, they should still continue to produce regular, consistent distributions to investors."
Cash flow is crucial for real estate investors, as it ensures stability even in uncertain market conditions. Investing in properties that generate income from the start minimizes financial risk and allows investors to reinvest in additional opportunities. While value-add investments provide long-term upside, ensuring steady cash flow from the beginning helps maintain financial flexibility.
Tip #3: Be Prepared for Market Fluctuations and Unexpected Costs
"The investments I made in 2021 and 2022 aren’t performing according to the proforma because people didn’t expect property taxes, insurance costs, and interest rates to skyrocket."
Real estate markets are constantly evolving, and unforeseen expenses can impact returns. Investors should factor in potential tax hikes, rising insurance premiums, and interest rate increases when assessing deals. Having a conservative underwriting approach and building in financial buffers can help mitigate these risks.
Tip #4: Recognize the Impact of Interest Rate Changes on Real Estate
"None of us knew in 2022 that the Fed would double interest rates in just 14 months… even the top economists didn’t see it coming."
Interest rates play a significant role in property valuations and cash flow. Sudden rate hikes can increase debt costs, lowering investor returns and slowing market activity. Staying informed on Federal Reserve policies and securing favorable financing terms can help investors navigate uncertain economic conditions.
Tip #5: Take Advantage of Tax Benefits in Real Estate
"Distributions to investors are heavily tax-advantaged through the power of depreciation."
One of the major advantages of real estate investing is the ability to offset income through depreciation and other tax incentives. Strategic tax planning can maximize returns and reduce taxable income, making real estate a powerful wealth-building tool. Investors should work with tax professionals to fully utilize these benefits.
Tip #6: Stay Committed to a Long-Term Investment Strategy
"Even in 2016, 2017, and 2018, people were saying a recession was coming. If you sat on the sidelines, you missed out on a bull run."
Trying to time the market often results in missed opportunities. Long-term investors who consistently deploy capital—regardless of market conditions—benefit from compounding returns and appreciation. Dollar-cost averaging in real estate, much like in stocks, helps mitigate risks associated with market cycles.
Tip #7: Be Selective About Who You Invest With
"Identify best-in-class operators who can execute a business plan even in the face of economic headwinds."
A strong operator is critical to the success of a real estate investment. Investors should vet sponsors by examining their track record, transparency, and ability to navigate market challenges. Choosing experienced and ethical operators ensures that capital is managed effectively.
Tip #8: New Construction Can Impact Market Performance
"From 2022 to mid-2025, we’ve seen one of the highest levels of new construction in the last 30 years… that slowed rent growth."
New supply can temporarily suppress rent increases and impact occupancy rates. However, as excess supply gets absorbed, rental demand typically rebounds. Understanding construction cycles and supply-demand dynamics can help investors make informed decisions about market timing.
Tip #9: Focus on Risk Management Before Profits
"Before making money, you have to keep in mind that you don’t want to lose your money… focus on risk management first."
Successful investing isn’t just about maximizing returns—it’s about protecting capital. Investors should evaluate downside scenarios, stress test deals, and ensure a strong risk mitigation strategy is in place. A well-managed risk strategy leads to sustainable, long-term success.
Tip #10: Educate Yourself and Diversify Your Investments
"Most of my colleagues are still only investing in the stock market… I tell them to diversify and not rely on headlines or fear from 2008."
Diversification is key to building wealth while reducing overall risk exposure. Real estate provides an alternative to stocks and can offer stable returns, tax benefits, and appreciation. Educating oneself about investment opportunities and maintaining a diversified portfolio ensures financial resilience in changing market conditions.