Ok,
I two blue print classes. Both are placeable on the scene. They are named BP_Dem_Target and BP_Dem_Entry. The BP_Dem_Entry blueprint must hold a reference to one instance of BP_Dem_Target. I tried creating a new variable of type Object BP_Dem_Target_C within BP_Dem_Entry. But I want to set its value to one of the instances of BP_Dem_Target that I have already placed in the scene. How can I do this? In the current setup I am not allowed to set a default value to the variable that I created.
ok I am trying to grasp what you are doing here so if I am way off sorry.
So lets see Entry needs to POINT to a specific TARGET in the level?
So in ENTRY create a variable TYPE TARGET blueprint class … should be BP_Dem_Target_C.
Make the variable EDITABLE. I am not sure what you want to do with it from there so.
Sorry If I was not clear.
What I want is to be able to pick a target for an instance of BP_Dem_Enrty (target is a variable inside BP_Dem_Entry). This target should be an instance of BP_Dem_Target which is already placed on the level.
Ok if Entry is not placed in the level then you need to use GETALLACTORSOFCLASS node and select the target class as type. Then if you need to access a function in that blueprint you could cast to it or you can make an interface between them.
Just so you know GETALLACTORSOFCLASS will search thru the level and find how many there are so you can search for a specific one if there are more than one in the level.
Actually what I want is let the designer chose the target. That the target is NOT selected at runtime - but during level design phase.
UPDATE: Solved it myself. I had to place an instance of my BP_Dem_Entry in the level first
Which was what I thought you were doing when I posted the first answer 
@mindfane If I am not mistaken, then you should have a look on this following article and let me know if it helped or not.Blueprint Communication to Share variables