Bogdasarian, forty-three, is the president of the Promanas Group, an Ann Arbor real estate investment firm, and he feels fortunate to have made it through the Great Recession. “In the end of 2007 and pretty much all of 2008, we just sat around and watched the whole thing melt down a little bit,” he says. “It was hard to know when was the right time to buy.” Bogdasarian’s firm is organized similarly to a real estate investment trust, or REIT, where investors buy into a company’s portfolio of properties. While many REITs’ share values plummeted by 50 percent or more in the late 2000s, Bogdasarian managed to grow his business.
He attributes that success to a measure of foresight but also to a conservative philosophy that favors low-risk investments. “There’s a lot of ways to mitigate risk,” Bogdasarian says. “But in a lot of the deals we see, we don’t see people doing that.” When it comes to borrowing money, he prefers shorter-term loans (nothing over twenty years) and a debt service coverage ratio (which compares available income to annual debt payments) of 2 to 1, rather than the normal 1.2 to 1. He dislikes speculation and prefers properties that will generate cash flow from the get-go, keeping an eye out for properties that sell below the cost it would take to replace them.
Sensing in 2007 that trouble was coming, Bogdasarian sold off one of his major assets, a 129-unit student housing portfolio in South Bend, for $14 million. As the recession hit, Bogdasarian cooled his heels, keeping an eye on what he calls a “silent” real estate market and awaiting the right moment to get busy again. “There were certain people who would say, ‘Don’t forget to turn out the lights when you’re the last one that leaves Michigan,'” he says. “And I was like, ‘Michigan isn’t going anywhere.'”
Bogdasarian developed his business and financial acumen in a long, slow climb from the bottom. Although his grandfathers, father, and two uncles were all doctors, he says he didn’t have the attention span for medical school. After five undistinguished years at the University of Arizona, he selected Spanish as his major because it would get him out of school the fastest. He graduated after another year and a half, then moved back home “because I had no idea what I was going to do with myself.” He considered the restaurant business and tried to get a start by washing dishes and waiting tables at Cottage Inn, but he soon found more intriguing work in real estate. He took a job with developer Don Chisholm at the Stonebridge golf course community. “I was the girl who drove the golf cart around and toured people,” he says.
At twenty-six, he’d saved up $10,000 and bought a condo–his first investment. He got his real estate license and worked seven years as a listing agent for Prudential. By the time he was thirty, Bogdasarian estimates that he owned about eighteen Washtenaw County rental properties (he sold four in the mid-2000s but still owns the rest). Then he moved into commercial real estate.
Bogdasarian started buying again in early 2009: a portfolio of five Grand Rapids buildings occupied by Grand Valley Health Plan. Bogdasarian soon restructured his business, grouping multiple properties under a single investment fund. His business officially became the Promanas Group–which he says is a “terrible, terrible name.” (It’s a portmanteau for Professional Management Acquisitions and Syndication).”
His firm has about 130 investors, many of them doctors and prominent community members. “It’s almost everybody I know,” Bogdasarian says. “If I screw up, I’m not going to be able to go to any parties anymore.”
One investor, Zingerman’s co-founder Ari Weinzweig, a describes Bogdasarian as “personable, accessible, down-to-earth, willing to explain things to people who aren’t that knowledgeable about these types of matters.” All Star Driver Education owner Brent Wall says “he’d never try to sell us on something he didn’t believe in … They really do their due diligence.”
The real estate recovery has brought new challenges: Bogdasarian says it’s becoming “really hard” to find properties he wants to invest in. “Right now people are overpaying for real estate, like, dramatically,” he says. “It came back so fast it’ll make your head spin, and it’s scary. We’re going to be right back where we were.”