A real estate fund driving value through community betterment

Sarmaya Capital CEO, Alex Yamini, discusses the company’s acquisition philosophy on Market One Minute.

The Vision of Sarmaya Capital Corp. is to revolutionize the Real Estate Investment and Residential Tenant experience simultaneously, by aligning the interests of investors with those of tenants to do well and to do good at the same time.
 
With the belief that safer, nicer, and better managed communities improve lives but also improve returns in the long run, Sarmaya Capital Corp. strives to be on the forefront of active investment and to change the landscape of Residential Real Estate.
 
They are custodians of their clients’ investments, while allowing their clients to become custodians of better, safer, thriving communities that will transform neighbourhoods and cities in which they exist. Sarmaya Capital Corp. will set the standard for what the essence of Real Estate investing should be.
 
https://youtu.be/9UZVRet9ZJA
 
Hannah Bernard: Hi, I’m Hannah Bernard. You’re watching Market One Minute. Joining us today is Alex Yamini, CEO & President of Sarmaya Capital. Thank you so much for being with us.
 
Alex Yamini: Thank you for having me.
 
Hannah Bernard: So as a real estate investment fund investing in the U.S., what is your mandate for your investors?
 
Alex Yamini: Our mandate is rooted in the belief that the U.S. residential real estate sector is strong and will continue to be so. We look for undervalued assets, that through our program of rehabilitation, community betterment, and refinance, we can provide provable long-term returns for our investors, allowing them the ability to participate in the over $100 billion residential real estate market in the U.S., with a professionally managed portfolio, a tax efficient portfolio, and to avoid all of the complications and additional costs of direct investing.
 
Hannah Bernard: And what really differentiates you from other similar funds?
 
Alex Yamini: What differentiates Sarmaya Capital is threefold. Community betterment, perpetual ownership, and specific asset class. Community betterment is simply based on the idea of creating thriving communities based on the notion of doing well while doing good. Perpetual ownership only means that we’ve set up our funds in a way that as our investors take their initial capital off the table, they’ll be able to maintain their equity position in perpetuity. And finally, specific asset class, the asset class or subclass that we’re targeting, we feel is one, neglected and number two, positioned for greater than average long-term returns for our investors.
 
Hannah Bernard: And where are you looking right now?
 
Alex Yamini: In one word, Atlanta. We love it. Our focus is more demographic based than geographic based, but all of our demographic indicators keep pointing to Atlanta. We look for things like the density of post-secondary institutions, hospitals, medical centers, airports, and most importantly, infrastructure. That’s what allows communities to grow and thrive, and Atlanta has all of those. It’s got over 15 Fortune 500 companies. It’s really an education hub in the southeast, and it’s just positioned to grow on all sectors. That’s why we love it.
 
Hannah Bernard: And you talked about thriving communities, so what is your idea of community betterment?
 
Alex Yamini: Well, really the cornerstone of Sarmaya’s investment philosophy is based on the notion of community betterment. As I said before, the idea of doing well while doing good. The idea that people have the right to better, safer, nicer communities, not only helps our tenants, but it actually increases the bottom line. When we create additional services and amenities for our tenants, that actually increases the intrinsic value of our investments. Really, we’re creating a brand on two sides. One, a brand for our investors because they look to us for above average returns and knowing that they’re helping thousands of people along the way, and our tenants look to us because we provide a best in class product that they know that the landlord has put their wellbeing into his bottom line. And that’s really what differentiates our notion community betterment.
 
Hannah Bernard: It’s a refreshing take.
 
Alex Yamini: I think so.
 
Hannah Bernard: So why multi-family?
 
Alex Yamini: Well, as I said before, I think multi-family in the U.S. is still positioned to do very well, but more specifically, the asset class that we’re targeting. What some people call the “renters by necessity” asset class is something that we feel is both neglected and has huge potential to find undervalued assets. Going forward, the class A, let’s call it, structures, there’s a huge amount of them on the market now. And we feel that that also gives us an advantage in the class B and C to provide above average returns for our investors. Finally, the way that we’re managing them, and we hope to manage them, we feel that it makes them somewhat recession proof, and that’s why we like that asset class.
 
Hannah Bernard: And what do you base your due diligence and evaluation process on?
 
Alex Yamini: Well, this is something that I’m most proud of actually, because our team, with the lead of our CFO, Chris Ross, have developed an in-house proprietary analysis software called SAM, the Sarmaya Analysis Model. And so we take current and previous existing data information on any asset, plug it in, and we can forecast into the future on the necessary metrics that we need to invest. So, what it does, it allows us to take a look at things like net operating income, rent rolls, taxes, CapEx funding, into the future. And it doesn’t select an investment for us, what it does, it actually disqualifies investments. So, of the universe of investments that come across our desk, SAM allows us to kick out the ones that actually don’t meet the metrics maybe three years down the road, even though they may today.
 
Hannah Bernard: Wow. Just another degree of intelligence there, right?
 
Alex Yamini: Exactly.
 
Hannah Bernard: Well, thank you so much. That’s so interesting. You have a very refreshing take. Thanks so much for sharing all that with us.
 
Alex Yamini: Thank you very much.