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Today, we have the privilege of welcoming a trailblazer in the fields of Image may be NSFW.
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entrepreneurship, private equity, and real estate, Dr. Hesham Baky. Dr. Baky, a multifaceted professional with a background in engineering and dentistry, has ventured into the world of professional investing and fund management, crafting a remarkable path to success. As the mastermind behind a rapidly growing dental business, he shares how strategic thinking, timing, and calculated risk-taking played a pivotal role in his journey.
In this insightful episode, Dr. Baky delves into his extraordinary transition from engineering and dentistry to becoming a leading figure in private equity and real estate investing. He emphasizes the significance of medical real estate as a robust wealth-building strategy and sheds light on how he used innovative approaches like heat mapping and data analytics to identify high-growth areas, ensuring a thriving business and lucrative investment opportunities.
Listeners will gain firsthand knowledge about the strategies that propelled Dr. Baky to the top, from scalable dental businesses to prosperous real estate ventures. His latest endeavor, the Blue Ridge Capital Fund, opens the door for accredited investors to partake in high ROI, cash-flowing assets.
In This Episode
- Dr. Baky’s journey from dentistry to strategic high-yield investing
- The potent wealth-building approach within medical real estate
- The use of heat mapping and data analytics to forecast growth areas
- Insight into the launch of Blue Ridge Capital Fund and investment opportunities
How’s it going, everyone? And welcome to another episode on Wealth Strategy Secrets of the Ultra Wealthy. Today, we have an absolute powerhouse of a guest, someone who has mastered the intersection of entrepreneurship, private equity, and real estate, and built a business empire through strategic thinking, timing, and calculated risk-taking. Joining us is Dr. Hesham Baky, an engineer turned dentist turned professional investor and fund manager.
His journey is nothing short of extraordinary, from scaling a multi-location, high-growth dental group to leveraging private equity, real estate investing, and medical office development to create incredible wealth and recession-proof opportunities. In this episode, you’ll discover how he built and scaled a high-growth dental business from the ground up and exited at the perfect time; the powerful wealth-building strategy behind medical real estate and why it’s one of the safest, highest-yielding investments; how he used heat mapping and data analytics to pinpoint high-growth areas before anyone else; and why the current market is presenting massive opportunities in office real estate.
Finally, we’ll discuss the launch of his latest investment fund and how accredited investors can take part in this high ROI cash-flowing asset. Dr. Baky is the perfect blend of engineer, operator, and investor. And today, he’s breaking down exactly how he scaled, exited, and reinvested into high-yield assets. Stay tuned to the end where you can learn more about how to participate in this exciting opportunity.
And now for the show. Dr. Baky, welcome to the show.
Thanks for having me, Dave. Really appreciate the time and the opportunity, buddy.
100%. Really great to have you on the show and looking forward to this discussion, as I’m sure the listeners are going to get some great pearls of wisdom from you—your entrepreneurial journey, your transition into becoming a professional investor, and how you’ve done some really massive scaling. I thought that would be a great start, really, for folks who aren’t familiar with your story. Could you tell us a little bit about your origin story?
Sure. Awesome. Would love to. So I did computer engineering at NC State, and that’s where I started. In the third year of engineering school, I was doing a co-op at Cisco. Now, Cisco was really, really hard to get into at the time. It was like the job that everybody wanted.
You’re an intern at Cisco; you’re setting up your career for an engineering trajectory going higher and higher. I sat there, and I was like, man, I’m not enjoying working behind a desk. I’m really kind of—I’m more of a people person. So I sat there and I was like, you know, what can I do? I already spent all this time in engineering school.
At that moment, I remember I was literally lying in bed at home, and one of my good friends was talking to me. He was applying to med school, and he was like, “Hesham, do you ever consider medicine?” I was like, you know, I wanted to do biomedical engineering in high school. I’ll think about medicine. So I sat there and contemplated. I’m like, well, I’m a people person.
I love helping people. I was like, maybe let me consider a path in medicine. So what I did is, with my engineering mind, I looked at and made a little spreadsheet. Alright? And I said, alright, so what things can I do in medicine that’s entrepreneurial where I can work with people? I made a list. I was like, well, I can become a surgeon because I love working with my hands, but that’s eight years in school. Right?
And I was like, alright, what about an eye doctor? Right? And I was like, okay, I can be an optometrist, but there are no schools in North Carolina. And I already had a woman I’m chasing at Chapel Hill, so I’m like, I gotta stay local. So it kinda ruled that out. Then I was like, what about dentistry? My aunt was a dentist in Egypt, and she loved her profession. I was like, what about dentistry?
So I went and observed, and I said, let me do dentistry. Right? After several observations with several of my close dentists that I actually saw as a patient. Growing up, I had a sweet tooth. So it was candy after candy, and I always had cavities growing up.
So I literally lived in a dental office. So I said, let me go actually watch what a dentist does. And I was fascinated. You work with your hands a lot, right? It’s one of the very few medical professions where you’re actually building things, which was really cool. It’s very aesthetic, which I love. And you’re working with people all day long, seeing several patients throughout the day.
And Chapel Hill was the top school in the country, and it was in my backyard. So I kinda put all those things together. I was like, man, in-state tuition, a profession that’s really cool. So I did dentistry, and I graduated from Chapel Hill in 2007. During engineering school, I did my pre-med, still finished in four years, worked the summers, did the nights, did twenty-one hours a semester, just trying to wrap it up. And then I got into Chapel Hill.
Once I got into Chapel Hill, I loved it, man. I loved the profession, loved the people, loved the knowledge, loved everything about it. I graduated from dental school in 2007. So after that, alright, dentistry at the time, you had a couple of different options.
You could either start your own practice, right, or you could work for somebody for a couple of years as an associate. So I was like, well, let me learn. Alright? Let me learn from some of the bigger players in the area. So I got a job with Dr. Riccobene, who is still a mentor of mine.
He has multiple offices across several states now, but he was a great mentor for me. I worked with him for a couple of years, and I said, alright, what is his model missing that I can do better? Right? Again, my engineering mind kinda took over. Alright, what can we do to build bigger, better dental operations? And my mind went to, okay, what’s different? Right?
So part of it was, well, all these dentists are sitting behind all these little areas, all these office parks. They’re small little dental offices that you don’t see. None of them, when I was applying, had really any opportunities to buy in. None of them worked Friday, Saturday. None of them did anything.
Right? It was just a cushy little eight-to-four job. So we wanted to disrupt it a little bit, at least in this area. So we ended up opening eight to seven. We ended up offering a partnership model where dentists could actually buy into the office where they worked.
We were in-network with several of the insurance companies. We tailored a lot of our approach to the patients themselves. We were all about the “wow” factor—what they hear when they walk into the office, what they smell when they’re in the office. And if you come to our offices, Dave, they don’t feel like a dental office. They feel more like a spa. We don’t call our treatment rooms “rooms.” We call them “suites.” We don’t call them “operatories.” We call our patients “guests.” It’s really important for that ambiance.
So we were able to open this office, and we had no clue how successful it was going to be. We opened our first office in February 2009 in Mooresville, North Carolina. Now remember, this was the Great Recession. Right? So we’re opening a dental office in the middle of the financial crisis. It was so hard to get loans from banks. It was a really difficult time to open. We thought, man, the economy is so sour. Are we gonna get patients?
We opened our doors, Dave, and we were averaging 450 new patients a month for the first year. To give you perspective, if you get 40 patients a month, you’re doing awesome as a dentist. So we literally took off like a rocket, and we were like, man, this is incredible.
Within a year and a half, eighteen months later, we were like, alright, why is this location so good? Why are we getting 450 new patients a month? It felt like we struck gold. Right? It’s like, holy moly, this is incredible.
We went from working two days part-time with Dr. Riccobene to going full-time within three months of opening. My partner, Dr. Jonathan Bose, did the same thing. He was working two days somewhere else. We both started working full-time within six months, and this thing was just blowing up. Within twelve months, we already hired our first associate. The growth was just insane.
Again, my engineering mind took over. I thought, alright, why is this location really fruitful? So we started looking at a lot of data. Right? We looked at who our patients are, where they’re coming from, what the average household income is.
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Why is Mooresville the area we opened? Why did we have such astronomical growth? And we realized population growth was a big factor. When people move to an area, they need a dentist. If I’m the most visible, most convenient, with a strong brand, and we’re modern and patient-focused, they gravitate toward us.
We took these metrics, and I’ll tell you about some of the heat mapping we did later, but we took them and said, alright, what’s another location? We found a location 20 miles away in Wake Forest, North Carolina. We replicated the model, and the same thing happened. We opened and had 400-plus new patients a month. Within six months, we were hiring our fourth doctor. It was amazing.
Between 2009 and 2019, we opened eight locations. These weren’t your typical dental offices—they averaged 10,000 square feet, had multiple dentists, offered all services in-house, from root canals to wisdom teeth extractions, and operated nights. We disrupted the industry. One time, a dentist from Cary sent me a letter saying, “You’re ruining dentistry for all of us.”
You’re doing all these things, right? You’re opening late nights. You know, we’re not supposed to work on Fridays. Right? And I was like, you know, glad I made somebody’s list at the time. But that was alright. I disrupted enough where one of the head leaders here in the area is writing me a letter telling me that we need to kinda stop what we’re doing. So I knew we were hitting a lot of people’s radar.
And again, our locations aren’t just one dentist working in an office. Each location has four or five dentists working in it. We had multiple specialties in one location, so it worked really, really well. By February 2019, every other week, I was getting some kind of letter asking, “Hey, are you interested in selling your company?” And I was like, not really. I mean, this is going really well. Along the same time, I was buying all the real estate up, and I’ll get to the real estate here in just a minute. We were doing really well cash-flow-wise. Everything was going great.
But then, one of my best friends—he had a group of offices in Fayetteville, his name is Dr. Roman—he’s like, “Look, you really should just look at the numbers that are out there. Just see what’s out there.” And I’m like, what the hell is a dental office even worth? For me, you know, I’m not a sophisticated financial guy. I’m an engineer who became a dentist, who built an operating company. So I’m like, what’s it worth?
Once I started looking at what EBITDA was—our earnings—and then you get this massive multiple on EBITDA, I was like, holy moly. This thing’s worth tens of millions of dollars, right, that we built over the last few years. So I was like, well, numbers are big enough. Alright, let me at least look into this.
So I opened the door and met with several private equity groups that are consolidators. But the most important thing to me was I didn’t want to lose our culture. I wanted to stick with what we do, which is having dental partners who can buy into the offices. We wanted to be able to control where we were going. I wanted a percentage to own the real estate.
So I said, these are my non-negotiables. Any office I open, I own the real estate. And you guys pre-sign leases with everything that we do, right? I need to own a big portion of the top company, and I need to own joint-venture interest in any office that I open up. Check.
At the time, money was free, right? In 2019, if you remember, interest rates were very low, and private equity was going ballistic. So they threw stupid numbers at me, and I still said no. I remember the head of the PE firm calling me up at the time. He’s like, “Look, man. What do we need to do to get you on board to do this?”
I was like, well, my trajectory is this. I’ve been doing this for years. I’ll just wait a couple of years and make tens of millions more dollars. Why would I not just keep doing this?
And somehow, man, I just get lucky. I don’t know what it is with timing, but this was 2019, and I was like, okay. They presented all the data. They said, “What will it take to get you on board?” I said, I want full payment for the next two years of the value of what I’m creating. They were like, “We’ll give you an opportunity to do it. If you can do it, we’ll pay you the same multiple that you got.” And I was like, alright. Done. Done and done.
So in 2019, I joined a group called Lightwave. We were their biggest platform. We still are their biggest platform. That’s kinda where this whole private equity journey started. And I’m the kind of guy where, once I try to learn something, I have to learn all of it. I have to be good at it. So I started learning this whole private equity world.
At the same time, I was building and buying all the real estate along the way. Now I’m starting to learn about financial markets. I got a big check in January of 2020, and that’s when this transaction happened. Now, Dave, what happened in January 2020? People started talking about COVID. By February, people were talking more about COVID. And by March, the whole world shut down.
So I literally had an exit in January 2020. They wrote me these massive, massive checks. Now I’m sitting on a lot of cash, and the whole world is shutting down. And I’m like, okay, what the heck am I gonna do now? So that’s how I joined Lightwave. That’s kinda how I started my journey in the private equity space.
I’ll get back to real estate in a minute. I’ll finish my dental journey and then go back to real estate, but they kinda go in tandem. So at that point in 2019, we joined. From 2020, we went from eight offices to 25 offices. Now, just four and a half, five years later, we’re at 21 offices. We’re opening our 21st here in a few weeks.
They did what they said they were gonna do. They helped us exponentially grow, and we’re on track to open up four or five offices a year. My goal has always been for this accelerated growth. So that’s really kind of the dental journey.
Now, what’s even crazier is that we made all this money in dentistry, and I’ve been blessed. We were super happy, super lucky with timing. But every office we opened, Dave, we started getting more and more analytical. Why are these offices doing what no other offices are doing?
Now we’re in a consolidation group. We have groups that have dozens of offices. We have over a hundred offices in this consolidator, and they’re looking at our metrics like, “What the hell are you guys doing?” I’m like, I don’t know. Here’s our process. Here’s what we’re doing.
Some of the things we developed along the way included something called heat mapping. This was pretty cool because it was unique to the market at the time. Now you can use tools to predict where growth is going. A lot of people look at census data or predictability curves to determine where growth is happening. But you know what we found works the best?
The most amazing thing was looking at permitting—housing permits coming up in a geographic region. You consolidate that data and overlay it on a map of where you want to go. You can literally color-code a map to show a whole area where growth is based on roads. And it’s not just now; it’s predictive for three to five years.
So we started doing this. We said, okay, we know how many people we need—3,000 people moving to an area per dentist. Let’s look at areas where there’s not much dental access but a lot of growth. Then we started buying up land in these areas. Now the reason we bought land was because there wasn’t much there yet. We were three to five years ahead of the game.
So we’d buy a piece of land and put a big sign on it that said, “Triangle Family Dentistry and Carolina Orthodontics and Children’s Dentistry—Coming Soon.” People knew our brand in the area, and that would scare away a lot of competition. By the time we started developing it two years later, the land had often doubled or tripled in value. Houses were being built because we were ahead of the curve.
We were buying land super cheap, getting it in a couple of years before everybody else, and riding that curve. Once the equity was built in the land, that was all the equity I needed to build the medical building. We started constructing these buildings for next to nothing, only putting in what equity we had in the land.
This real estate venture was going just as well as my dental operations. But again, I wasn’t looking at it like a financier or a private equity guy. At the same time, I was learning this private equity world. Sitting in all these meetings, I realized they were looking at data even more deeply than I was. So I started thinking, how can I extrapolate what I’m learning in the private equity world and bring it into my real estate ventures?
By 2021, I decided to take it seriously. I wanted to figure out exactly what was happening in my real estate world. That’s when I started my own property management company.
This was during COVID. There really wasn’t much going on, just sitting at home doing nothing. I thought, let me be productive with my time. Let’s open up a property management company to at least manage the properties that we own.
Right? So, at this time, we had about 20 locations—20 medical locations. Some of them were office buildings; some of them were retail centers. And I thought, okay, let’s build infrastructure around this. Right? Again, it was more of a side hustle.
Now, if you want to know why I picked real estate, I can tell you later, but I’ll continue with the story of how we got to what I’m doing now. So we started building it, and then, in 2022, I hired a CFO. It was actually a part-time CFO at the time, and I told him, alright, help me organize all this stuff. Here’s the data I want to see. Here’s how I’m looking at everything in the dental world. I want everything based on the NOI. I want to look at all my progress, how we grew, everything.
We built this really sophisticated model. Now, this was a part-time CFO. What’s crazy is that he looked at our numbers and said, do you know how much money you’re making in real estate? I said, I don’t know, man. I don’t think about money anymore. It’s kinda coming in. And he said, you’re making close to 40% IRR a year on your real estate. Do you have any concept of how good that is in real estate?
And I said, I guess that’s really good. It sounds amazing. My dental stuff’s going really well too. At that point, he said, look, I’m selling my company in a year or two, and I’d like to come work with you full time. That’s where Gearhart came in. I think you’ve met Gearhart before. He said, the numbers you guys are getting in this—you don’t see this in real estate.
At that point, I asked, well, how much worth do I have in real estate? We started looking at our numbers, and I had two times as much net worth in real estate as I did in my dental operations. And we’re talking about multiple dental offices trading at a huge EBITDA number. Then I realized, good God, this is the perfect mix. These medical leases—10,000 square foot medical leases—just me signing a piece of paper is worth $3 million in intrinsic value. I thought, we’re definitely on to something here, guys.
This was the moment. Holy moly, we’re doing better in real estate than in my dental operations, which were already doing really well. Then my engineering mind took over again. I thought, what do we do now? What data can I look at to expand this even more?
We started digging into the analytics further. Let’s get the big dogs in here. And again, I didn’t realize this—we’re one of the bigger regional players in the area. Why were we one of the bigger regional players?
During COVID, when the whole world shut down, I had a lot of free time, Dave, and I had tens of millions of dollars. I thought, what am I gonna do with all this money? I started reading everything on commercial real estate. At the same time, I was building my real estate company. One of my brokers, Yezin, a really good friend of mine, asked, what do you think of buying some retail? I said, retail? I don’t know. It sounds kinda risky. Isn’t everybody home right now? He said, well, I’m getting calls every day because all these REITs and companies are upside down, and they want to sell a lot of their retail.
At this time, I only had one retail center—it was my first dental office in Mooresville. We bought the retail center out of bankruptcy in 2010. Interesting story there as well. I can tell you another time. But we had one retail center.
I said, if banks will finance, let’s look at it. I went to all our banks—Wells Fargo, First Bank. I personally called all of them. Hey guys, here’s what I want to do. And they were all laughing. What do you mean you want to buy a retail center? I said, dude, everyone’s stuck at home right now. Then I realized, this is the banking world—banks don’t like to loan on risk.
My private equity cap went on. I thought, what can I do now? I want to buy retail, and my investment thesis was this: humans are social. We hate being stuck at home. I was going bonkers being at home—I literally couldn’t take it. I thought, I’m pretty sure I’m not the only human who likes to interact with other humans.
I tried doing the Zoom thing. We even tried Zoom dental appointments, Dave. It was the most stupid thing ever. Like, the guy’s saying, here’s my son, and I’m thinking, what the hell am I doing? This is so dumb. Some things you just can’t do on Zoom. People like human interaction. People like having coffee with friends, going to jumping places with their kids. I wanted to get the hell out of the house 90% of the time.
So, I thought, what can I do with retail? Remember, this was my exit year. Part of it is dumb luck, part of it is timing, part of it is going with your gut. I decided, let’s go heavy in retail.
I ended up buying three other retail centers during COVID. These weren’t small—they were 80,000 square foot retail centers, anchored by Kohl’s and grocery stores. This was all new to me. In 2020, no one would touch that debt. This was one of the riskiest things I did. I bought from a REIT. One of the REITs wanted to sell a plaza in Charlotte, near where your daughter is going. It’s called the Galleria Shopping Center. It was only 60% occupied at the time. To give you perspective, they had bought it for $30 million a few years earlier and renovated it.
I didn’t think they’d take my offers. I threw out a crazy number—I’ll give you $15 million for this location. But I can’t get financing either. I need you guys to finance it for me. The REIT laughed and said, wait, you want to buy it from us for pennies on the dollar and you want us to finance it? I said, look, I have cash right now. I’ll put $5 million up. If I don’t get financing in 24 months, you can keep it. You keep the $5 million, and it’s done. They wanted it off their books, so they agreed.
So, they did this deal. I put $5 million into it. Now the clock was ticking—24 months to get financing. If I didn’t, I’d lose my $5 million. The whole time, I was thinking, I don’t know what’s going to happen in the retail world, but humans want to be social and get out of their houses.
That was one property. I did two more of those, but they were a year or two later.
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Twenty twenty-one, the market started thawing a little bit, and people started getting out of their house. Twenty twenty-two, I was able to get that thing financed, like, month 18 out of month 24, by a regional bank. And not just that, I refinanced and pulled most of my money out. So I got a 12 and a half million dollar loan at this point. So I cashed out.
So I’m only 2 and a half million dollars into the deal at this point. Paid off the REIT, and that pressure of losing all this money was now gone. Right? So that was the story of how we got Galleria, which is that shopping center in Charlotte. So we bought two more.
You know, two more, same kind of concept, but we were able to get financing from the banks at the time. But it wasn’t the best of terms. Right? This was 2021, 2022, trying to buy retail centers. But again, luckily I kinda had cash, and I wanted to do something with it.
And that’s what I decided to do. I couldn’t build enough dental offices fast enough to deploy all the cash. So we did all this, and then this was all part of our strategy. And then when Gearhart came on board and kinda built this fancy model and all our metrics to measure every little nuance of these plazas, again, it’s like, wow. We have so much value.
Now to give you perspective, Dave, we’re selling retail right now because retail is incredibly hot again because my theory turned out to be right. Right? People did want to leave. And you know what happened? No one built retail from February 2019 till now.
No one built any centers. So our vacancy rate for retail is pretty much nonexistent. Right? Every time somebody leaves, we have a list of people that want to come in. So we did really, really well with this retail sector.
So, that’s kinda how we started, and that’s kinda how we ended up building this portfolio between retail and these medical office buildings. So these medical office buildings—I didn’t know how valuable they were either until I took them to market. Right? I was like, okay, I have these stabilized assets right now. And this is what I realized, again, private equity teaching. Once assets are stabilized, so you can take an asset from here and get it stabilized, you’ve made a lot of money, right, from here to here. But once you get assets stabilized, you’re only gonna get the escalations after that if you have these long-term leases.
Right? It’s not gonna be as valuable anymore. So I was like, okay. Well, I just packaged and sold a bunch of dental offices. Let me package and sell some real estate.
Let me play this game. Right? So we packaged and sold three medical buildings in 2022. We sold them to a REIT, a different REIT—this healthcare REIT, I think the biggest healthcare REIT in the country. And we sold three medical offices to them.
And I was like, wow. This is just like packaging dental offices. This is super lucrative. We got a five-two cap rate at the time, and we bought these things at eight and nine cap rates. Right?
Because some of the best things you can do is take an empty building or a building that’s 70% occupied. We slap a dental office in it that’s 10,000 square feet. Now that asset becomes medical because we’re more than 80% medical, and we’ve significantly dropped the cap rate. So, again, I’m just learning. Like, all this is being fed into my brain.
Alright. Private equity, engineering, dentistry. Alright. How do you bring all this stuff together? So all of this stuff kinda started meshing together at kind of the perfect timing.
So we ended up selling these assets. And, like, if I tell you the numbers, you wouldn’t believe them. Like, one building only had 300,000 in it, and I had, like, 6 million of equity. And I was like, the guy was like, you just did a 20x on this deal. And I’m like, yeah.
Cool. That’s awesome. So I’m like, alright. These numbers are really good. But if you’re looking at this, I’m like, wow.
This is really well. So fast forward till now, I’ve learned so much along the way—from the private equity world to grouping and packaging and selling, to trying to time markets, to trying to figure out what to do together. But that’s really kinda how the process started. So right now, we sit on a property management company. We’re actually actively disposing of retail right now because retail cap rates have dropped significantly over the last couple of years.
And we’re 1031-ing that money into the new real estate fund that we have. It’s called the Blue Ridge Capital Fund. So that’s the next journey in my life. So dental operations, got into real estate, built my own property management company that manages all my real estate, and now I’m kinda moving into this fund, the new frontier of the fund life.
That was a long answer to answer where my background is. But easy over here. Yeah. I did. Blabbed enough for you.
Yeah. No. What an amazing story. I think the only thing that you left out is the entrepreneur part of your brain. Right?
Because that was definitely some entrepreneurial thinking, some risk-taking, and calculation and everything in that as well. So, kudos to you. What an amazing journey. Why don’t we talk to where you are today and kinda talk about the fund structure that you have today and what that looks like?
Sure. Absolutely. So kinda where the fund came about—remember when Gearhart came on board and he was like, look, if I’m coming on board, I wanna invest. He’s like, I have my money. I wanna put it in this. I was like, these returns are phenomenal. It’s risk-averse medical buildings. So he himself was like, you know, how do I partner with you? What can I do to partner with you?
I was like, well, I want you to come on full-time. Let’s kinda build something together. And that’s kinda where that relationship started, back in 2022, to get that going. Now, this is mindset, and I know you talk about mindset a lot. So when I started doing real estate, I didn’t really—I was more self-preservation.
Right? Hey. I want cash flow. I wanna be safe. I wanna keep assets protected.
I wanna build me and my family’s cash flow, and that’s all that mattered. Now, along the way, remember on my dental side, I had doctors buy into the offices. So I had multiple partners. Several of them were like, can we invest with you? Can we invest with you?
And the whole time, again, this is mentality shift. I was like, no. No. This is kinda mine. You guys have the dental stuff.
I’m doing the real estate. It’s mine. Mine. Mine. Right?
But, again, kinda as you learn throughout your career, one of the main shifts in my mind probably happened probably early 2000s. I was like, I need to switch this mentality of “me” and start coming from abundance. Right? From an abundance mentality that God gave me a lot. Right?
You have a lot. You really need to start giving more to those around you because the best—I feel the best when people around me succeed. Right? Like, when my dentists are killing it, I felt amazing. But now that I’m having all these people ask me to invest, and I was saying no, that was probably one of the biggest regrets.
I wish I would have brought people on earlier because it doesn’t really matter. Kind of you make X amount of money or X amount more—it wouldn’t have made that big of a difference in my life, but it would have made a lot of difference in their lives. Right? I would have impacted a lot more people.
So we said, let’s build a fund, and it was really geared more towards my dentists more than anything else. Like, I wasn’t planning on doing a public-facing fund. But then, along the way, I have a pacing partner. A pacing partner is, like, when you go to the gym, right, it’s nice to have somebody that pushes you. I have a business pacing partner.
And he was like, why aren’t you opening? I was like, I wanna invest with you. It’s like, why aren’t you opening this up to people? I was like, I’m only thinking of my dentists right now, and I just wanna give them a tool for them to invest in. I’m not really thinking.
And Gearhart’s in my ear here. He’s in my ear here. He’s like, you really should open this up. He’s like, we do have something special here. I was like blending medical operations and real estate is a really good blend, especially when they’re private equity-backed.
So I kinda contemplated it for a year or two. And then in 2024, I said, you know, you guys are right. Let me do it. Let me just do it. You know, I’m already learning.
I’m one of those guys that every year or two, I need another bone to chew on, right? I need to learn something new and do it. I was like, alright, what the hell haven’t I done?
Let me do a fund. I was like, this is kinda cool. Let me learn how these funds work. So, you know, hired a firm, and just like any—again, my engineering, entrepreneurial mind hat came on—I was like, let me learn from what everybody else did.
And I interviewed several firms, interviewed several people that did funds. I was like, alright, what do we do? And then we launched it in 2024. The whole premise was—and I told all my doctors this—I was like, look, everything I do going forward, right, so December 2023, that’s my legacy fund. That’s my legacy portfolio. We have 20-something properties in it: five or six big retail centers, the rest medical office buildings and a couple of office buildings.
So back to the fund. At that point, we said, okay, what we wanna do—let’s bring other investors on board so we can accelerate our growth. At this point, the private equity world was like, “You know, let’s focus on startup dental offices. We want you guys to do four or five dental offices a year.” And I’m like, alright. Well, we’re gonna double our pace here. We’re doing one or two a year. I said to do this much, let’s bring on other investors. And that was kinda the impetus to start the fund. It was called the Blue Ridge Capital Fund at the time.
I formed an advisory board because I love kinda different governance structures, and I brought some pretty big players on board. One had a billion-dollar exit in the medical space, and he sits on multiple medical boards. He was like, “I love the model. How do we get more private equity-backed medical groups and get the properties together, pull them together, and then sell them off to a REIT or a big family office or institutional investor?” So he came on as an adviser.
My other adviser, Erin Hudson, she runs several multifamily syndication deals out of Texas. So I was like, you know, let’s bring you on board. And we brought some really high-caliber people on the team to kinda be part of the GP structure and advise on what to do with this fund. They all loved the model, and they all personally put money in the model. And they said, you know, let’s roll.
So that’s kinda where we launched. We literally launched from dentists to other people, going up to meeting very cool people like you at conferences and kinda saying, alright, here’s our unique factor. Our unique factor is we have our own operations company. And before a building is built or even closed on a building, I get a lease signed—a ten-year lease signed with two five-year options—and these are, again, massive footprint offices, right? So it de-risked the whole deal. Most developers, you don’t have somebody in hand where it’s the same operator.
So having the ability to do it all and bring it all together is really the differentiator. This fund has all of our new dental properties that are coming up, and it focuses on the retail. Right? Last year, we were still able to get a couple of retail properties in the mid-eight cap rates. Right? You can’t find those deals now anymore, unfortunately, because retail again has become very hot.
The goal now is to really launch these funds every year. Every year, launch a fund, raise money for it, and get these buildings built. It’s three strategies—the exact same strategies I’ve done from day one. Focus on medtail, right? Most medicine now does what we do. They don’t wanna be in the back area. Right? All the urgent care centers, your family offices, your eye doctors, your physical therapists—they’re all prime retail space right now. So we have the contacts.
The goal is to get these retail centers and put a lot of medicine into those retail centers, right? So that’s one strategy. Retail. Right? Now, retail again—I can’t buy it cheap enough anymore, so I can’t get the value add. That’s not my focus much anymore. So now I’m focusing more on the development game. We’re building—we have four properties, four land parcels already purchased. Two of them are being actively developed now for our medical offices, and two are gonna be coming up in 2026, 2027.
We have a whole ramp-up of new medical offices coming in. But the highest ROI right now for us is finding high-growth areas where I can find a building that’s on the main thoroughfare that feels retail-y. Right? Then I take my office and put them there because I can buy these offices at 40% of replacement cost. Right? I can’t build this stuff cheap enough anymore. So take an office like that, put our dental office in it—that’s really an amazing ROI on the real estate.
We’re doing these three strategies in our fund right now. This fund—we’re gonna be done raising capital in—sorry, not March, in May of this year is gonna be the last time we’re gonna be raising capital for this fund, and we’re gonna deploy cash for the next probably 12 to 18 months. After that, we’re gonna harvest and plan to exit in 2027, 2028. So it’s gonna be phenomenal, phenomenal properties. Right? These are all ten-year, seven-year wall buildings, right? They’re all medical, and we’re gonna package and sell to REITs.
Again, markets are predictable, right? We all have seven-to-ten-year cycles, right? So right now, our goal is to buy these office products and convert them to medical because I can get them very cheap, and to keep developing where we are. Someone asked me, “How do you develop, and how do you know what lease rates to charge?” I have a formula—a very formulaic approach. I know where the market’s going to be, and I need to have a lease rate that works.
So Lightwave is our consolidating partner, and I sit on their board. We have access to all the information that’s going around in the private equity world on the dental space. What we do is that before anything is signed, the lease is signed before we even start construction. Our construction guys—they’re actually invested with us too.
So everybody’s kinda on the same team. Everybody wants this to win. I don’t want my dental office to fail. Right? That’ll be terrible on my equity dental side. All the people that have invested with us—from our developers to our leasing people, literally everybody on the team has put money into this. So everybody wants us to succeed.
One thing I told you—my regret is not doing this earlier on because now it just feels like a whole team approach. Everyone’s kinda wanting this to win as opposed to just assets that I and Dr. Bose personally own. So that’s really been a mindset change for me over the last couple of years.
But the goal is to finish raising. We’ve already deployed $20 million. We have another $50 to $60 million pretty much already committed, and then we’re gonna have to close this in May/June. So either way, we’re closing no matter what. I have a bunch of $10.31 money.
So I don’t even look for investors anymore. I love helping people, but I look for kind of people to co-sponsor with me, like you, Dave. I love people that can consolidate, aggregate, and then do it together, because it just makes all of our jobs a lot easier. So that’s kind of what my focus is now—how do I find partners to co-invest with? To give you perspective, me and my main GP, we’re putting probably $30 million in this fund ourselves.
We’re putting a big chunk of the cash ourselves into this fund. Now we have two other funds that are coming up when this fund closes. One of them is going to be this exact same thing, but more focused on not just North Carolina and Virginia, but more on the South in general because there’s tremendous growth in South Carolina, tremendous growth in some parts of Texas, North Florida, and Georgia. So we want to capture a lot of this growth with medical-backed leases across kind of the whole South—the whole Southeast Corridor—and do the exact same strategy. This is a proven strategy.
I’ve been doing this for fifteen years. It’s proven. It’s not easy; it’s a lot of freaking work that goes into it, but it’s super profitable. People can expect to get, you know, 20% IRR. To get a 20% IRR in real estate is not easy to do. You’ve probably been doing this long enough—it’s hard to find deals that can do that, right? We’re predicting our low end is going to be 14% IRR, but we should be able to do the 20%, based on, you know, the deals we literally have in now because the leases are already signed.
We know what the economics are going to be, and we know because we’re selling these assets right now in the disposition stage, we know what the cap rates are. So it’s very predictable, it’s very lucrative, and I’m happy to be able to offer this to other people that want to grow their wealth. We’ll be doing distributions probably at the beginning of next year. A lot of the beginning is developing the land, so I don’t want to keep raising, and I’d rather take the cash flow from the buildings that we have and put them in the deployment stage.
But really towards the tail end of this fund—2026 towards the end of 2027—and whenever we exit based on market timing in 2028, there’s going to be six to 8% cash flow based on whatever cash you put in. So, a cash-on-cash cash flow of six to 8% is what we anticipate. Every investor—the goal is to get an 8% preferred rate of return. So there’s always a pref there. If we don’t have the cash, it’ll be kind of accrued till exit time when we start selling the properties.
Now when we sell the properties, the goal is to give every investor an opportunity to roll into the next fund. Right? We’re going to 1031 these properties to other assets doing the exact same thing, so you always have a tax-advantaged way of growing your wealth. And what I love about real estate is it’s one of the very few things where you can 1031. Right? I think fifteen years ago, you could 1031 other like-for-like assets, but real estate is the only one that’s really stuck with it.
Most people think of real estate as an investment. I see it as an operating business that generates predictable cash flow.
So, you know, imagine growing tax-free at 20% a year for ten years, right? It’s the eighth wonder of the world, right? It’s compound interest, right? So we can get these compounded returns over a long period of time, and I believe it’s recession-proof, right? You’re always going to go to your doctors, you’re still going to go to your physical therapist, you’re still going to go to these people, no matter what. And with the aging population, there’s only going to be more and more demand for these medical services.
If you’re focusing on the right areas—I’m not focusing on Michigan, right, and Iowa—well, Iowa’s growing pretty good. But I’m not focusing on Cleveland. I’m not focusing on areas where you have Pennsylvania, where you have very slow or sometimes negative growth. I’m focusing on high-growth areas, right? So I know there’s going to be demand, and it’s easy to predict demand because I look at data all day long.
So the plan is to launch funds for investors to constantly invest with us over the years. And, you know, the ideal situation is to partner with people like you, Dave, that kind of want to continue doing the same strategy. Now we have a sexier fund coming up. This is a riskier fund, right? But again, I’m all about data and metrics, and I think it’s the same play that I did with the retail side, right?
You always want to buy when everyone sells and sell when everyone buys. It’s kind of the Warren Buffett strategy—you buy when there’s blood in the streets, right, and there’s blood in the water. Right? So there’s blood in the water on the office space right now. And I’ve been looking at metrics. Over the last couple of years, vacancy rates have literally done this—they’ve gone up from, like, 10% to now hitting, like, 20% in certain markets. But you know what’s happened over the last quarter? They’ve stopped doing this—they’ve kind of started leveling out, right?
So what’s happening in the office space is that there’s going to be a flight back to office. You know why? Because people hate being at home. So people are going back to the freaking office. I was waiting for when this stabilized. I’ve been looking at the last couple of years, and now it’s finally starting to stay stable. Like, it’s literally doing this now.
This is only a quarter’s worth of data—I don’t have six years’ worth of data—but it’s been doing this. And I’m like, here, it’s kind of stopping. Now the hardest thing, remember what happened in retail when I told you that story, is that banks weren’t lending, right? Guess what banks aren’t doing now in office? They’re not lending, right?
So now we have some players that invest with us that are starting to lend. So two or three banks now are saying, “Okay, we’ll start lending to you, Dr. Baky. We see the vision. We see kind of where this is going.” So because the lending environment is starting to get a little looser right now, I’m going to start a new fund at the end of this year. It’s going to launch later this year, specifically focused on office.
I’m going to buy office properties between 10 to 12% cap rate, and I’ll sit on them. I’m just going to gentrify them a little bit—fix the lobby, maybe paint it, do some basic services to it. But it’s really just a matter of supply and demand, right? There’s a supply and demand imbalance. There’s a lot of supply right now in office and not much demand.
If my theory holds that, hey, it’s going to switch over, then within a year or two, demand is going to rise, supply will shrink, and that’s going to push cap rates down. So I’m going to do the exact same strategy with a different fund launching later this year, specifically for office. And I’m always going to put my money where my mouth is—I’ll probably put $10 to $15 million of my own money into this fund because I believe it to be a winning strategy.
It is higher risk, right? Because I could be wrong—I’m not saying I’m right. But if I am right, it’s a good, you know, three to four x return. If I’m wrong, then it might be a one x return—you still get your money back, right? It’s kind of hard to buy things at one-third of replacement costs and have them go wrong.
So the plan is to execute the office play in the next fund. My journey, Dave, has gone from being a dental operator to starting my real estate company. Now I’m starting to manage these funds, right? And these funds are exciting for me.
It’s like, alright, this is something new. Again, another bone to pick on. Let me figure out how to do these funds where we attract the right investor class, where we kinda co-invest together and build something truly transformational for investors, where they can get a really high rate of return on a real estate asset that typically people can’t buy into. Like, no one would sell these medical buildings before.
Right? You could buy one by yourself, but to be able to put a few hundred thousand dollars into something like this—it’s really powerful because you can truly build wealth. And the 1031 strategy in real estate is, bar none, probably the best investment rollover strategy that’s out there. So, it’s great for people to take advantage of it and keep doing it.
Yeah, awesome. What a comprehensive overview. You answered all the questions I was gonna ask you all at once, so that was—
I tried to get them all for you as much as I could.
Yeah, and everything was really successive and kind of really went through the trajectory that you guys have been on. So, that was super helpful. I think you really didn’t wanna interrupt there because I think you covered all of the key questions I was gonna ask and that we wanted to share with the audience. I do wanna respect your time.
So, what we have done for listeners out there, if you haven’t had an opportunity or you’re kind of interested in learning more and potentially investing, we’ve actually set up a special landing page with resources at pantheondentalfund.com. You can actually see the complete presentation that Dr. Baky and the CFO did on this opportunity. There are other assets in there to help you get smart and see if it’s a fit for you.
And just, yeah, really appreciate your time, your wisdom, and the opportunity. It is an amazing opportunity. It’s an amazing story. And, you know, I think you really pegged it well, right? Which is, you know, everything comes down to kind of luck, timing, expertise, building a team, having the right mindset. And you’ve really pulled all those together to make this what we think is a home run opportunity for our investors. Super low risk, recession-proof as you mentioned, and just love that you’re walking the walk yourself where you guys have $30,000,000 of the GP capital in this investment yourselves.
So, thanks again, Dr. Baky. Really appreciate your time. And if people do wanna connect with you, what would be the best place?
Sure. On our website or my email. My email is Hesham@abbcre.com, or my LinkedIn page. So, you can find me on LinkedIn. You can email me. Either of those work really well.
Awesome. Thanks again for coming on the show. Appreciate it.
Dave, appreciate the opportunity. Take care. Bye-bye, Dave.
Thanks for listening to this episode of Wealth Strategy Secrets. If you’d like to get a free copy of the book, go to holisticwealthstrategy.com. That’s holisticwealthstrategy.com.
If you’d like to learn more about upcoming opportunities at Pantheon, please visit pantheoninvest.com. That’s pantheoninvest.com.
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