42 minutes | Mar 3rd 2020

Ep#44 Nurturing and Finding Cheaper Money as a Strategy to Syndicate Deals in this Hot Market with Corey Peterson

James:  Hey audience and listeners. This is James Kandasamy from Achieve Wealth True Value Add Real Estate Investing podcast. You guys should definitely check last week's podcast where we featured Dr. Glenn Mueller who has 45 years of commercial real estate market cycle analysis experience.


And he is the one guy that most of the institutional big players sought after to find out where are we in market cycle for the different asset class or property types, as he calls it, right. Apartments, industrial, hotels, warehouse and, you know, a lot of other property types in commercial real estate. So it's an awesome show. It's called commercial real estate market cycles state of the union.


You guys want to check it out. There's also a webinar that came with it. So you want to send me an email to get into that webinar if you want to see all the slides that he presented. And today, I'm happy to have Corey Peterson from Kahuna Investment. Hey Corey, welcome to the show.


Corey:  Thank you, bro.


James:  All right, Corey. So Corey has been having like almost $95 million in assets that he has acquired and manages and he by across seven different states and he does some of the student housing and some of the conventional housing. We're going to go very deep into his operation, his structures and how is he killing it in this age of, you know, commercial real estate and how hard is the market cycle right now. Hey Corey, did I miss out on any of the introduction you want to fill up?


Corey:  No man, no, that's it. We have the best selling, I'm a best-selling author too.


James:  Got it, yeah. Awesome. That's the copy your Secrets to Success, right?


Corey:  Yeah, copy your way to success, standing on the shoulders of giants.


James:  Awesome.


Corey:  What I've done all my life, I've just copied other successful people.


James:  Yeah, absolutely. Why you innovate, right. So you just copy the guys who are being very successful, work hard and --


Corey:  Good chance you'll be successful too.


James:  Absolutely. So Corey I mean, when did you get started because I heard this Kahuna Investment and I thought some company out of Hawaii doing this and I was very intrigued. I mean, it's a nice name. I think it's a good brand and --


Corey:  Oh, thanks.


James:  Saw your pictures walking on the beach with your wife and making it like everything is, you know, very nice.


Corey:  And sunsets and palm trees, baby.


James:  Sunset and palm trees, yeah. And then this other thing that you always say in the last part of your podcast, what is that?


Corey:  Your paradise is possible.


James:  Your paradise is possible, yes, absolutely.


Corey:  You know, I started my company in 2005. But really how I got into real estate is back up about a year before that 2014, something magical happened to me and my mom was married to this man named Bruce. I call him Bruce Wayne, okay. He wasn't Batman but he was loaded. He had lots of money. And he had a house, guess where? In Hawaii.


And so I got invited me and my girlfriend, now my wife, 17 years, got invited to go to Hawaii. And we get there and the guy has a house right on the beach. And I mean, it's nice, he's got nice cars, he's got fine art. And I mean, if you ever been to Hawaii, it's a magical place, magical. The mountains and the ocean and just, it was really cool.


And I remember walking the beach, walking the cove and I was looking at his house and I'm like, man, what does this guy do? Because he had something different that I've never seen in most people because he had time and money you know. He really had a different aura about him. And so I asked him like, what do you do? And guess what he said, he said he was in real estate and he owned apartments.


And so I left the island thinking that he was the 'big kahuna', he had time and money. And then about six months later I read the book called; Rich Dad, Poor Dad and I realized what Bruce did. Bruce was a real estate investor that bought multifamily apartments. And so in 2005 you know I read every book I could on real estate and I was ready to jump in and I had to sit down and name my company.


And I was like, man, I'm going to name it with the end in mind of where I want to end up. I want to be the 'big kahuna'. So I called it Kahuna investments. And I've been on the journey ever since man. And what's crazy is I might be buying his house next year.


James:  Oh, that's like the vision board, right?


Corey:  Yeah.


James:  And then you might be buying it, that's awesome.


Corey:  Yeah, so it's gonna be pretty cool.


James:  So what did you start, I mean, you realize that this guy, you know you saw one guy who you know who has a house and he revealed that he buys apartments, invest in real estate. So what was your first step to getting started? I mean --


Corey:  Well, you know, I actually did a self-assessment said gosh, well, I'm not anywhere close, I didn't have any money or credit. I started off as a wholesaler.  I went to the local RIAs; Real estate Investors Associations and sat around. And you know, I asked the people that were hosting the event, hey, who are the players? And they'd say, you know, this guy, this guy, and that guy. And so I would just make sure I sit right next to him.


And then I'll be asking him, hey, where do you guys like to buy? How much rehab do you like? And you know, really kind of figure out what their model look like. And then I'd be like, well, I find deals like that all the time. Would you pay me a fee that if I could find your deal like that? And they said yes. And so I started wholesaling. Then I actually did something that changed my life forever. And that's probably what we'll talk about; is I raised my first piece of private money.


And I did it by accident and I did it with a guy, I was asking him for his help. I wasn't even asked him for money, I was just sharing my business plan with him and then he eventually said well, hey I'm interested, can I invest in that deal? And that really is my secret sauce of how I've raised a crap ton of money. Last year we raised 10 million dollars of private capital. That's not too bad. And, but more importantly, is we get it really cheap. We raised cheap capital which I believe most people are overpaying for their money right now.


James:  So let's go into, deep into the cheap capital, right because that's very important in this market cycle. So I don't believe they are deals which are expensive, I just believe that you can pay for it or your money's not cheap enough to buy that deal.


Corey:  Right.


James:  You can find people who want zero percent interest in the world, right because they may be getting some other tax incentive and that is okay for that. Right, so I think one of the golden nuggets in buying deals in this hot market where everything is expensive and you're competing with all the syndicators and all this, you know, institutional buyers, a lot of people from the coastal cities is to find investors who are willing, who believe in you and who believe in the, the risk-adjusted return, right.


So where you have really good investment, you know, even though it's lower return but really good investment, good operators you know. So people who are willing to, you know, take lower returns compared to what we used to have in the past three to five years.


Corey:  Well, now it's lower returns based on what, right. So let me, so we'll start by doing that. Now, my background was a financial advisor. I was actually a financial advisor as well, right. So I sold stocks, bonds, mutual funds, CDs, bonds, all that stuff. I worked for Edward Jones. And that was my MO, is to go raise capital and you know, and put these people's money and investments, typically just mutual funds.


And I'm going to tell you that there's trillions and trillions and trillions of dollars out there that are investing in the stock market and IRAs and things like that. And so, and what's the average return that they're making in their accounts? And I would say if you ask most financial brokers, they would say six to eight. If someone had a blended return for all their stuff, they're like, hey, if you can make a six to eight percent return, annualized return, that's really good.


Now, then you have what we call what you're talking about, I call it smart money. And what I've learned to do is not fish in smart money pots. So I'll give an example of what I mean by smart money. That's, you know, you go to a real estate, multifamily convention and everybody there is the smart money, right. They're not going to give you their money for you know six to eight percent or 12%, they want 20% and they want a piece of the GP and they want a piece of the back end. And they want all the upside.


That's how smart money works or, you know, family office money, that's the really smart money, they want to use the power of their money. Like we got all kinds of money and if you want it, we want a big piece of the deal. And they let you have a small carve out as the syndicator as the, you know the one that's bringing the thing but they put a high price on the money. And so what I've learned to do is to flip the script.


And I'm telling you, I don't know why people don't do this more because when you really look at the opportunity, the one thing that we can do. So he who has the cheapest cost of capital, in my opinion, wins, right. If my cost of capital, that's why REITs and all these things are so powerful because they can raise really cheap capital and they're raising, you know, millions of dollars. So how do we play the same game that the REITs are playing but planning on a smaller scale?


It goes to them trying to find the right avatar for money. And so I've simply defined the right avatar, what my target person looks like is a doctor, dentist, lawyer, heavy or high professional, high-income earner that invests in the stock market, that's it. That's all I'm looking for that they don't do anything with real estate, they don't even know real estate out there. They wouldn't have a clue on how to do it, they don't go to conventions. They don't meet where real estate guys hang out, they just go to work.


And there are lots of people out there like that. And so if you can go reach people like that, they're getting six to eight percent already in their retirement money. So if you can show them 12% and by the way, so we structure well, we'll go through the structure too maybe. But you want me to talk about structure a little bit too?


James:  Yes. Let's talk about your syndication structure because it's very interesting. And we can come back to the, you know, the how do you source, you know, that type of investors.


Corey:  Yeah. So what, I started to try to titrate this down. It's kind of like a science experiment. When I first was raising money, it was like, let's give 20% and all the backend that's how I started like everybody else because I needed to find a deal,e I needed a track record, I needed to prove myself. So sometimes you got to have to give up a lot just to be in the game. And then as you start getting experience, you learn to titrate it down.


And so my structure is this. We provide a six percent pref to investors with and the way it reads in our ppm is it's a six percent pref that upon disposition or redefine they get an additional, get a total return, including the pref of 12% annualized. Okay? And so all that means is that and it's actually on the back end, it's a 50/50 split until they get a total return of 12%.


And so, and what that means is that so they're getting six percent pref, we understand what that means. They get first dibs out of the profits and then on my sell, all you got to do is hit another six percent annualized for as long as they've been in the deal and then they get no more money. So my investors will only get a 12% total return. Now, why would someone do that if there are other syndications out there?


And here's how I've learned how to pitch it and talk about what we do and why we think we're different is because we're trying, what we've learned is if we can create consistency in the marketplace, that's what investors want. They want solid dependable deals that can pay, you know, quarterly checks, we pay our investors quarterly. And when they do that they're willing to take a smaller, lesser return.


But in their minds, it's not less because most of my investors are in the stock market which is currently six to eight. So 12 is winner, like, so if you ever go to a financial advisor and ask them, is 12% of great return? Most financial advisors are going to say what, yeah. Like that's my opinion. I mean, that's kind of what I think.


James:  Yeah, it's also a risk-adjusted return, right? I mean, 12% on something that you can't control versus real estate, right, which is, you know, much more low risk compared to a lot of other investment, is a much better return compared to --


Corey:  Yeah,  because they look at, you know, it's the roller coaster, right. Like, they really look at the stock market, they know it's a roller coaster. And one of the ways I try to educate my avatar, those people that are in that, like, a lot of times, I work with a lot of retired people or close to retirement. And so they've had their 401k or, you know, their solo one case for their practice and stuff like that.


And they've got a million or two million dollars of money sat there, that they've grown over a period of years. But now they need to produce a paycheck. And so that, and their minds are already thinking about I'm going to go to my broker and, you know, at this point in time, they're thinking about how long do they have to retire, right, how many years are they going to retire you know.


And now that number keeps getting longer 25, 30 years and so then they start worrying about am I going to run out of money and how much do I need? And so then they asked their advisor, hey, what can I invest my money in and not have any risk? Well, stocks that's risky, mutual funds risky. So what's left are bonds and CDs. Well, CDs, don't pay anything so then it's a bond, maybe a bond. And a bond typically yield is maybe three to four percent and it only pays annually.


Well, that's not really good for someone that needs to budget and create, you know, and pay bills. So if the average is three percent that's what a financial advisor would tell you, if we give the six percent pref, now, they're like, hey, I can make, I can budget and create and have a paycheck and I'm doubling my paycheck based on what my financial advisor was going to give me.


But then, you know, there's like, hey, but wait, there's more. There's the backside of, you know, guess what, our tenants because we do apartments, our tenants expect rents to go up. And we never disappoint them ever. And so, you know, as we raise the rents, we're going to raise the value of the property and so you'll get to share some additional profits at the end. And so in investors' minds, the avatar that we talked about to six percent is already great.


A 6% payer that pays quarterly, there's just not, there's not something out there in the stock market that does that good and consistent. And so we solve that problem first and then it's like, but the bonus round is you get more money in the end. And they're like, oh my god, I get more money. So now I have a chance for growth or at least keep up with inflation because they're going to be retired for 20 years. You've got your buying power has to keep up and ramp-up too.


And so that's the story that we tell them and we've been really successful in raising six percent and I call it six and six, a total return of 12. And then what it does for me, it lowers the hurdle. It lowers like between the deals that when investors when I'm looking at a deal and if I didn't have cheap money and I was at 20% or 20 plus a lot fewer deals qualify to be deals.


James:  Yeah, absolutely. I mean, you should be able to find higher-quality deals, you know, because the money is cheaper, right? So let's go to step by step on how did you build this niche investor base. Because maybe it's not niche, maybe it's just a model perspective, right? So it's just maybe we are just not looking at it or just, you know, used to giving --


Corey:  Yeah, this is great. Now, this is gonna be really cool. So I should have my wife here because she'll tell you how she does it. Now, I'm pretty good at it but my wife's master. Now, my wife comes from the pharmaceutical industry, okay. And this is kind of how we stumbled on this and why we're doing so well with it, is her background was pharmaceuticals.


And every day she'd go in and talk to doctors, dentists, well, hers was just doctors but it's, we've realized it's the same talk, no matter if it's doctors, dentists, chiropractors, by the way, we don't like talking with doctors as much as we like dentist and chiropractors. Those are our two really places that we hit. And Shelly goes in just like she's a drug rep, right and we're actually training, we've actually just hired our staff. We're actually hiring just people to go out and represent my company and go out and tell the Kahuna story.


And what they do, I mean, we go door to door. We go every day, door to door, she goes and knocks and talks with doctors, dentists, chiropractors. And we tell, you know she does lunches, and all we talk about is the power of apartments. And we tell our story and then we set lunches. And then every month we have an event where we bring all those people that are interested and I tell them, you know, give them the big picture. And then I show them how they can use their IRA to invest in real estate. And that's, it's no harder than that's all we do.


James:  So do you focus a lot on getting IRA money or do they also give cash?


Corey:  IRA money.


James:  IRA money. Okay, got it.


Corey:  That is the secret, kids; IRA money. Now, like okay, so what it's not great for and this is now, you have to build this up. It takes a little time. But listen, ask me how many people bug me when I'm in my syndication? Like you know what I'm talking about like that one investor, sometimes it's the big dog that's got all the money, right? And it's like, what's this? What's this? Oh my god, what's this? Said no one ever in my deals. Why?


James:  All IRA money, right, something that they can't touch anyway.


Corey:  They're quiet as a mouse, they're just happy man. They're happy with 12%, they're like static. They're cool, man.


James:  If someone wants to put cash, would take it as well or --?


Corey:  Yeah, I mean we take a lot of that money too but the difference in our avatar is that type of person. They're busy working anyways and all you got to do is do what you say you're going to do. So if you're gonna say hey, we give a complete monthly financial package, we call it our dashboard. It's about 100 pages, right. Gets a really complete overview of our properties, it goes up every month.


But it's so detailed and then we kind of, I usually write, you know, a couple of paragraphs of what's going on in the deal and we meet their expectations. I tell them, this is what they're going to get, they do get it, they get it on the time that I said. And then everybody, I mean, no one really complains or has lots of other questions, there are no squeaky wheels, really in our deals which is great.


James:  Yeah. So let me recap the secret, right. So basically, you have, I mean, you and your wife have this connection where, you know, you have these high net worth individuals and you look for chiropractors and dentists, right and why not doctors?


Corey:  You want to know the real answer.


James:  Is it because --?


Corey:  It's because they're broke.


James:  Okay.


Corey:  Doctors are broke, don't let it, general practice. Now specialists not so much, right, so we like specialists but we've just found like the chiropractors and dentists are working with cash, right. If your teeth hurt, you're going to go get a pulled. And I just like those guys better. Doctors seem to have God complexes and I know I'm absolutely stereotyping in here so I apologize. But like, I'm trying to be blunt too that, like, I know my avatar.


When you're looking for money and you have a certain type of money that seems to do well, why try to go find something that doesn't? Stick with what works and just do more of it. And so we found those dentists and chiropractors are very warm to us and are easier to access than doctors and love the story. And a lot of them are just having a financial advisor. So what we like to say is that we're just an alternative to the stock market.


So our whole marketing is just geared up to tell them a story, right, get them interested, they raised their hand, said I want to know more. They'll usually come to one of our monthly events or they might do a one on one, they can do a one on one with Corey. And then we start working to create a substantive relationship, right. And so we have, you know, what, basically we tell them our story and then say if you'd like to learn more about us, you know, you got to fill out our credit investor.


And so then they fill that out, now we have documented. We've got usually a couple more types of correspondence and we have a whole email process that goes out. And we found that it's very effective in cultivating new leads, we’ll call them new leads. And you know, they all are ready at different points in their lives. But there's, what I like about it truly is that it's a local, we have a big local presence here in Phoenix.


James:  So a lot of your investors are Phoenix base?


Corey:  Yeah. And more and more I like, we're actually, it's becoming more and more. And we're kind of really excited about that because we want to start doing galas, right, some galas and stuff at the end of the year, let's do a fundraiser or do a charity event where we can invite all our investors, they can mingle. And you know, we can set the stage for that kind of stuff, super excited about it. And to me, that's how we're going to get more capital too, it's just by loving on our ones that have money now.


James:  Yeah, absolutely. If you work, if you take care of your current investors, you know they're going to be recommending others to and they're going to be just comfortable with you, right. And I mean, a few days back, I had an investor with me, they said there was one-liner question to me. James, can I have an investment opportunity, just like an annuity?


He just wants like, just give me cash-flow in consistent which is, I realized there are so many investors out there who want that, right and you are very right in terms of finding that people who want it and you should be able to cater for them. And that's okay, right. There could be some guy out there who's promising 20%, 25% IRR but he may be some random guy who they can't trust right.


Corey:  Yeah. And I see that going on in the marketplace. I know you do, too. There are so many people out there that are especially new syndicators that are coming out and they don't even know what a deal looks like, and they're offering these stupid returns. And I see it all the time where people promise something but what they deliver is absolutely different.


James:  Correct.


Corey:  And so I just say just, you know, we want to give a real return, not a, you know, smoking crack return but just a real one.


James:  Yeah. A lot of people that have made a lot of return just because the market is compressed. Right? The cap rate is compressed, not because they did a damn good job.


Corey:  They didn't do anything great, it's just because the market, yeah it covered up a lot of mistakes. And it's coming, change is coming, we both know it. And those people are going to be found out quickly.


James:  Yeah, at some point, yeah, absolutely. I mean, it's becoming a market where you have to be a strong operator to really do well in this market, right. So let's go to a bit more detail into you know, nurturing this niche group of investors, right. So you have them and you have this monthly meeting. And is it at night, is it on the weekend and what do you --?


Corey:  It's usually at night, well, it's in the night and it's usually on the weekends. We have started trying to do a 'lunch and learn'. We call it lunch and learn, it's not as successful as anything. But on the evening ones, we don't do a big dinner. We do an event, we have some cocktails and it's only you know, an hour and a half, two hours long max and we're just really efficient, we just tell the story.


Usually, I'll do it with an IRA partner, right like specialized IRAs or you know like you know, quest somebody that's because I'm going to show them the why apartments and I call it, I have a canned speech I called the power of apartments. I just talked about what I'm talking about in that speech is demographics and what we do like our special size, which is, you know, you talk about the baby boomers, they're all downsizing, they're renting apartments. You got millennials, they don't want to own; one more people are choosing to rent more than ever.


We talked about the climate, then we talked about the product, which is we buy old apartment buildings, affordable housing, not section eight and then we also do student housing. So we talked about those two groups of things. And then we talk about why apartments make sense, you know they take, you know, cash into, they are like factories, they take in cash in the form of rent checks, they grind it through the factory process and it spits out profit out the back door. That's what we manufacture.


And, you know, then they're like little cities and we don't need every you know, if everybody doesn't show up to work, we're okay because it's a community. People understand that sometimes you got to talk in metaphors with people so they can understand the concept. And so we do that at an event and it works out really well. Most people actually fill out our accredited investor form there. So they can start. And then we set up a one on one calls with them to talk and kind of go more in detail about their investment goals and strategies.


And really, we're trying to see if they're the right fit, we don't want just anybody to be a part of our investment group, right. And we call it the deal room. So once we feel like they're the right fit, then we accept them into the deal room. Then we start another kind of drip campaign which is an email marketing campaign that talks about who we are, our team, our process.


And you know, there are about four or five canned emails that go out over, you know, one a day for five days, just to really tell and let you know don't take our word, hear one of our investors so we have testimonials built-in. So the whole time and then not only that but we also, let me see if I can grab this real quick. For anybody that's you know watching this, you know, we have a whole can series of direct mail carts, you know. And so we believe that these things, so we hit them with direct mail, we hit them with emails, we really take the time. And this is my favorites, right, the cash flow life.


James:  So it's a paper copy that you sent to them as a mailer?


Corey:  Yeah, these are just a just regular, you know, cards right and that has a nice picture and then a little story at the end. It just says who we are. Again, all we're trying to do is we were setting up the long game and you've got to set it up by doing something different and we like direct mail a lot. Everybody does email but direct mail is a lost art. And so that's our nurture campaign.


And then from there, we just have, you know, when they first come on board, we're going to have monthly calls for the first four months. And then because they're actively waiting to invest, so we got to wait till we have an active deal. So we're just nurturing them until we actually have a deal. And then we start working, would you like to invest in our deal? And so that's kind of, from there, which then after they maybe they've invested, maybe they've not. Then we started having we have a quarterly loop.


So every quarter, we're going to give them a call and we're trying to find like things like these are really important things. But what do they love to do? Like what do they like to do for fun? One of my favorite questions to ask investors, what do you like to do for fun? And the reason I like that is that it's an answer that has nothing to do with real estate or making money, right. That's important because they're going to tell you, hey, I'd like to golf and man, don't think that we're not writing detailed notes here, right, likes to golf.


You know what's your favorite place that you've golf at, you know, because maybe we might send them some golfing tickets somewhere. Like, we're always looking for ways to love on our capital. You know someone's sick, oh my god, we're really, you know, we're sending flower baskets. You know, like, you've got to key up to these types of because people are going to tell you these things. And the best part is once you really know what they do like to do for fun, that really becomes the open.


In other words, if I'm calling an investor before we even talked about anything else, James, if you said to me, hey, Cory, I like golf. So my first talk is James, now how's golf and man, what are you up to golf and what's the coolest place you just golf at? And you know, and you're going to tell me all about it. If you're passionate about it, it's something we're going to have a great conversation about it. Then we finally get to business. And that's to me what this business is about.


That's why I love this business. It's relationship-based. And people don't understand the power of relationships. And if they did and how to nurture that they would be way more successful than they. And that's why I'm hoping I'm getting some value here because that is the one thing that's made me super successful is understanding that relationships are important.


James:  Yeah. I think the personal touch is so important with the investors. I think it's just super critical right now. They are basically trusting you with money and you want, I think you are genuinely trying to understand them, trying to really have them with the investment as well. I mean.


Corey:  Yeah, they become your friends, right. I think the investors become your friends. Not always, you know, but like there's a good deal. So we don't always talk, we don't always go out. But when we do have our conversations, they're always fun and enjoyable and I don't have all the conversations. So I'm actually trying to build a business where I'm the CEO, right, I have one or two touches but my team has these interactions with them.


And that's where we're actually headed is where Corey is not on the phone every day with my investors, my team is. And that's what we're developing now is that team approach that kind of like, I'll call it the Edward Jones model you know. I worked for Edward Jones but I never met him, right. But all the clients that I had that I worked hard to get were truly the company's, were Edward Jones clients but they listened to me. And so that's what we're building now is our staff and people that go out there and help raise capital for our company and telling the Kahuna story.


James:  Got it. Now, that's very interesting, thanks for sharing the detail of how you nurture these passive investors who are, you know, willing to invest with you, you know, with the returns that you're talking about. And it just makes sense. I mean, they are people who want to invest, the IRA money for a solid, you know, investment with a good operator where they trust, right.


And that's more important than, you know, expecting a huge return and giving to someone random or people you do not know whether they can execute or not. And, you know, promising, you know, high returns and doesn't give it. So before, I mean, I don't think you came with this returns recently, right, so I'm sure when you started you said you had a 20% return --


Corey:  20%, then we went to like nine and nine then it went to eight and eight. Then I went to seven at seven. And I've been at six and six for a while now. 

That's probably where I'll stay, I might go five and five.


James:  So did your investors who invest with you drop in terms of the number of counts and how did you deal with that?


Corey:  Yeah, so every time I titrated down, I lost a couple. I lost a couple, I didn't lose a lot but I lost a couple of people. But a lot of them come back around even though they said no in the beginning, once they truly left, knew that I left the station and then I call them back up. So I still call them back up, come on John, like, man, that's where we were but this is where we're at now. And I like you like, let me just work some of that money. Yeah, all right, I know. Take my money, Corey.


James:  And did you know like from the beginning itself that you focus on the IRA money thing from the beginning itself or did you --?


Corey:  Yes and no. I started with just friends and family, right, which I guess was IRA money or a lot of it was IRA money. But I just really, as I've gotten more in tune with that, I learned that's a nice honey hole. Now, I always lead with IRA money, but a lot of people it's kind of eclectic group. Some people have cash money, some people have IRA money. I work with both groups, both them are, you know, usually these investors are fairly high earners and so they do have some cash.


But I would find that most of their real wealth is in their IRAs, right. And now my typical investor invest, you know, initially 100,000, that's our minimum; is 100,000. And then from there, that's usually their first deal is usually the minimum. But we very commonly have $200,000 to $400,000 segments. I don't normally have $800,000 or $700,000 or a million dollars clients. I have a lot of $200,000 to $300,000 to $400,000 investors all the time.


James:  And is it per deal or is it total investment?


Corey:  Per deal. So like you know if I got a three million dollar raise, I'm going to have a lot of, you know, probably half of them are going to be 100,000 new investors. And then the other half is going to be those $200,000 to $300,000 that they're coming in for their second deal. Now, they're pushing more it because they saw the concept and they liked it. And then they give us their bigger chunks.


James:  Got it.


Corey:  But I'm really cool with having those 100,000 because that's my new database. I'm always wanting to get new people in deals so they can experience the Kahuna way.


James:  Yeah. I don't know whether you have this data. Do you know how many unique investors do you have?


Corey:  I don't. I don't have it offhand. But I --


James:  It's not easy to do.


Corey:  Yeah, but we do have I will say this, we do have a lot of repeat investors. Just like you, I mean once they give you money. And I want to say quickly the last thing, I really want to make sure that I say, this right here you can't see it if you're listening to the audio but this is one of the things that I have done religiously, is a self handwritten letters and so this is like a letterhead.


So this is business letterhead, everybody needs to have a high-quality stock letterhead and I'll call it envelope letterhead like a five by eight type of letterhead, thick cardstock. Mine has gold, Kahuna investments and then my name but it looks like it's coming from the CEO of a Fortune 500 company. And what I do with this is that I am big and I mean, I am emphatic about handwriting personal notes.


When I meet somebody for the first time if we had a really good conversation, I keep it in my backpack. I'll pen a handwritten note and if I don't have their address and like hey, man, how do I send you some correspondence? Or I like them, I want him on my Christmas list. I need to put you on my Christmas list with your address. People will give it to you and then you can handwrite a thank you note and say, hey, you know James was really good meeting you the other day and I really enjoyed our conversation. Let me know how I can be of service, right, give me a call like, let's do coffee. And that my friend has been one of, it's a  forgotten art of a handwritten thank you card. But man, I'm telling you, that is money.


James:  Yeah, yeah, I remember the first time when I meet you at a conference in Denver, right. You had a big bag behind you and you gave me a book copy of success, with your signature. I must be a high-quality client too.


Corey:  There it is, brother.


James:  Absolutely. I mean, we have a good relationship, right. So that's, I mean, I still have the book. I can see that you have written in the front and I appreciate that. And you are right, I mean, that personal classic touch is so important and people just feel that connection, right. So I also heard you call your investors on your distribution day.


Corey:  Yes, I really tried to call. Well, not always but someone on my team calls. I don't, I try to call and I'm pretty good at doing it most of the time. But on that week, whatever I love calling and saying it's payday, right. I mean, that's fun if you could call your investors once a quarter and say, hey, John, guess what day today is? Today is payday, right or guess what a week it is, it's payday week, right.


You know, I just want to let you know how much I appreciate you and you know, hey, John, we got some deals coming up. Who do you know that I should know? One of my favorite lines; who do you know that I should know? That needs to get a return like you're getting right now. And then you shut up and let them give them a moment to give you an answer. Silence is golden.


James:  Yes. And you said if you don't call, you have team members calling, right? How big is your team members?


Corey:  We've got a team of four.


James:  A team of four. Okay.


Corey:  Yeah. So I got an ad man, VA and I call him; Mr. Everything, which is like, his name's Isaac. He's my intern that turned into a full time but he really is, right now he's doing underwriting for us and acquisitions.


James:  And do you have an office or do you work from remotely --?


Corey:  I work right here at my house, man, this is it. Yeah, I've got my desk right here, I've got Isaac's is right behind me. We've got another desk to the right, that person we kicked out because it was getting too crowded in here. And then I got another room, I got another part by house that is the other part of the command central were two other people come to work every day.


James:  Oh, cool. So you have a house office with people looking in different parts --?


Corey:  Yeah, they come in. It's kind of eclectic but listen, we're supposed to like we all want maybe to get an office but I just like working from home so much that I just make everybody comes here. But I'm okay with that, like, you know, so it works for now, But we've really talked about maybe going to the next level and going to a real office. But I'm living my best life and so I always say why, why do we need to do that? Yeah.


James:  Yeah, absolutely. Well, that's so much information that you've given to me and to the audience. So it's really appreciated, it's just so I think the way I can summarize the approach is basically, you know, look for these investors that have the cash, right and, you know, nurture them by educating them through the monthly meeting. And of course, you do all kinds of personal touches. There's so much a personal touch and your cards are so professional, your pictures are very professional. And, you know, just people feel like you're dealing with somebody really, really high quality, right, and they trust you, right and that's so important. 


Corey:  Yeah and they'll take less for and by doing that correctly, their confidence goes up and then their expectations of what they really want because people want 20% but they'll take a solid return all the time. So we've just been said listen, we give the solid return; a real return. And that means something to our group of people.


James:  Yeah. Sometimes consistency is more important than, you know, getting this high return, right. So yeah, I've seen syndicators who given, you know, huge return the first two quarters of operation after that for the next four years, there's zero return.


Corey:  Yeah, there you go.


James:  It's better than giving an average return or even a slightly lower than average return consistently, right. Because people can expect that I guess, for passives, I think they just giving you the money, they just want to, you know, get something consistently rather than getting huge, you know, lottery money coming in, right so


Corey:  That's it.


James:  That's awesome. All right, Corey, I think you've added tons of value. Can you tell our audience and listeners how to get hold of you?


Corey:  Yeah, man. If you'd like to get a hold of me, you can go to a; listen to my podcast; The Multifamily Legacy podcast or go to kahunawealthbuilders.com, we got a free gift if you want to opt into and get my free book.


James:  Awesome. Thanks for coming on to the show, Corey. I've learned a lot and you have added, what is the last word that you say the --?


Corey:  Your Paradise is possible, brother


James:  Your paradise is possible. I need to get one for my show too. Awesome. Okay, bye.


Corey:  Thanks, bro.

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