Global Investors Podcast
GI8: True Diversified Global Real Estate Investing with Peter Badger & Karen Williams
September 13, 2019
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GI8: True Diversified Global Real Estate Investing with Peter Badger & Karen Williams

Peter Badger and Karen Williams co-founded the Global Investor Academy to help people obtain the mindset, strategies & tools to create recurring income from global real estate investing. Peter spent 25 years on Wall Street and in Silicon Valley while Karen spent 20 years in Management Consulting and Corporate Sales/Marketing. Today, real estate investing and education is their full-time endeavor.

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Transcript:

Announcer: Welcome to the Global Investors Podcast, a show that focuses on helping foreign investors enter the lucrative US real estate market host, Charles Carrillo combined decades of real estate investing experience with a professional background in international banking to interview experts in all areas of US real estate investing. Now here’s your host, Charles Carrillo.

Charles: Welcome to another episode of the Global Investors Podcast. I’m your host Charles Carrillo. Today we have Peter Badger and Karen Williams. They cofounded the Global Investor Academy to help people obtain their mindset strategies and tools to create recurring income from global real estate investing. Peter spent 25 years on wall street and in Silicon Valley while Karen spent 20 years in management consulting in corporate sales training. Today, real estate investing in education is your full time in Denver. So thank you very much for being on the show with us today.

Peter: Hi Charles, how are you?

Karen: Hello.

Charles: I’m doing well. How are you guys?

Peter: Very good.

Charles: So you have quite the business and quite the corporate background, which we see once in a while with investors coming into real estate. And how did you guys make this shift or, or start investing in real estate?

Peter: Yeah. So we, we met, well six, seven years ago at business school and we were actually doing independent investing on time in single family homes. So we’ve actually had a bit of a wild journey knows, you know, Meagan beginnings cause everybody has to start somewhere, you know, single family homes, investors get a head around, you know, simple asset class, you have a home you can get your head around and getting another home to rent somebody else. But we over once we started joining forces, we bought 24 single family homes across Texas, Florida, Pennsylvania in less than 18 months. And so it was actually a bit of a crazy journey but it was that, that was our initial foray.

Karen: Yeah

Peter: And then we kind of got stuck with scaling issues. Cause, as you can imagine, you know, we were, we had income to support ourselves, but that became a massive headache on, I think, you know, we, we kind of were rookie investors on the single family home front because we didn’t realize that we could have bought a single multifamily building with 24 doors with the effort of one single family home in terms of closing it. So it was a, it was a bit, a bit of a brutal beginning actually.

Karen: A lot of lessons learn to that process so

Peter: And so actually what happened was we kind of kept getting as ketamine to people like yourself, Charles, and you know, and somebody pointed out that it was a bit of a folly, have a strategy. So then we started getting into multi-family. So we bought a couple of buildings, 7 units, 12 units as you knew you in Tampa, Florida Metro area. And then we started just expanding to asset classes because once you get into real estate, you realize there’s pros and cons to every time, real estate asset class. And so we also want to spend counter cyclical. So we bought a mobile home park in Illinois. Obviously when the market crashes, everybody goes from eight class process, a, B, B to C, et cetera. And everybody comes out the bottom into mobile. Home parks become very valuable junior downturn. So we kind of went down that path for a while and then our next one was fall end.

Karen: Hmm. Well everybody has to eat, you know, so Farm land was something, I grew up on a farm actually in both Oregon and in Pennsylvania. And so definitely there has been a trend of people caring more about what they eat. That’s always been that way in Europe, a little bit less so in America, the very fast food culture that clearly we’ve seen in the whole foods in the sprouts and trader Joe’s and all these stores that people are caring more and more about where their food comes from. And so South and central America is really untainted, untouched land in terms of its organic qualities, richness of the soil, a plentiful water sources. And so yeah, we thought, well this makes sense. So everybody’s got to eat. The population is growing farmland. It’s another real estate backed, you know, hard asset backed investment class. And, um, yeah and we really love it cause it’s absolutely fascinating and it’s one of those industries that it’s just really growing, evolving and changing. The amount of tech now used in today, is, you know, a huge shift in that industry. So we were personally excited about it. We like to invest in things that we feel personally connected to.

Charles: You guys are a truly diversified, truly diversified real estate investors. Because you’ll see when I talk to investors they’ll say, Oh yeah, we’re diversified. We have five different apartment buildings and we go C and we go B. And you guys are going

Peter: Well here’s the thing, it’s all about a sophistication of asset flats because so the good thing about single family home, you’ve got a roof, all the structure to support air conditioning, water heater. You got to multifamily, you’ve hopefully scaled a bit, you know, so you’ve got some centralized capability and then we’d like a mobile home parks. You got a pad that’s actually no mobile homes, hopefully to maintain you just telling you about a concrete with some utilities that some guy that investigated, he said, he said, they said, you guys already, he said, why maintain all this physical stuff? Because when you actually plant, avocado, mango trees, whatever the crop is on a piece of land. You planted once it produces full harvest in one to five years, depending on the crop type, then it prints for 60 to 80 years. So it’s an annuity and then it goes wrong, you know? Yeah. You’ve got different risks falling and falling risks around disease, wool to other stuff, which you can manage just like you can all the other sites, but you soon realize actually those asset classes which are lot less hassles than others to make a diversified portfolio. It makes sense.

Charles: And one of the things too is do you guys still own your mobile home park and how do you do the management on that? You have someone on site that handles that.

Peter: Yeah, so we’ve always had property managers, so we’re kind of hands off investors. We’ll see work out what to buy and we’ll go through that in a second. Actually, we’ve, we’ve kind of gone from having a lot of titled properties personally to more of the syndicates around.

Charles: Okay. So what are you guys syndicating currently? Are you syndicating in all the different asset classes you’ve previously mentioned?

Karen: Well, we have, we still have a mobile home park operation going on. We have a real estate development effort this in Reno, Nevada, Sparks, Nevada around where a lot of tech is moving out of San Francisco and to Nevada because of the state tax issues and such and Tesla battery factory there. And so there’s a lot of growth in that environment and the need for executive homes. We also have like a hospitality, boutique hospitality and hotel type play that is in Puerto Rico. The farming, most of the farming deals that we’re in are syndicated and see, I think that’s all of this indications right now, but right. Like a real estate kind of basically community development effort of like executive homes, the mobile home parks, the farm land and big multifamily projects. Yeah. That are, you know, on a large scale, like a couple hundred units being upgraded, refreshed, you know, forced value-add and then slipped or held on depending on where the market end up ends up going for us.

Peter: But we really found like for ourselves after having, like Peter talked about, starting with the single family homes and even with property managers, I mean finding good ones like Dan, our needle in haystack, right? And so it’s still can be a lot of hassle, a lot of work just managing the managers, especially if you have them spread across the country. And so since our mission has been kind of helping other people that were like us, Ex corporate nine to five to get to sort of their Nirvana lifestyle and out of the rat race that they’re in sooner, we’re like, okay, well time, everybody only has so much time when you do the syndicated investments. Yes, there’s the up upfront time of analyzing the investment, but you’d have that anyway if you were holding title to the property. But when you do get into syndication, you’ve already got the legal structure that protects you there in that syndication effort. And it truly is, do the analysis, make your bet on the, on the industry, the project, the team, and then, you know, kind of received the updates and checking in with the management about what’s going on. But they’re all pretty proactive about keeping their investors. I mean there’s sophisticated operations and it becomes much more hands off like a stock market investment would be your mutual fund thing where that’s where people are kind of used to, right. Their focus of their time right now as maybe elsewhere on their career and their family. But they want to be building that ramp. And so we just felt this was the best passive and protected way to do it actually.

Charles: So where do you guys find most of your investors? Your, you spend most of your time in Europe, is that correct? You live in the UK.

Peter: No. So we’ve, we kind of follow the seasons writing for around three years now. I’m actually with here about hope in Puerto Rico. Have other locations in Europe. Central South America.

Charles: Okay. So you guys are to Europe to back and all. Okay, that’s great. Do you find most of your investors are US based or are they international? Global

Peter: That that global, so we have ’em a bunch of US investors on it cause it’s an easy thing in terms of tax advantages. But then we have people in, you know, UK, Canada across Europe,

Karen: Australia, clearly the speaking. Yeah. So I would say predominantly US-based. To answer your question directly, Charles, but that is growing as more and more people on because we focus on global assets. We ended up meeting other people that are like, well I’d like to get involved in that. We started with the US market because it’s a big market, right? And having come from that environment in lots of the real estate meetups and those sorts of networks we understand and how they think kind of what they understand at this point where they need to go. But more and more, yeah, we’re finding a lot of global investors interested because they see that we’re looking at a global investments. So it applies to them to an English speaking obviously from the U S to UK, Canada, Australia makes sense because we’re English speaking, but we’re definitely, we have a vision to be able to, to advance this. There’s a lot of growing middle class in central and South America where we find a lot of our investment opportunities and we would love for them to, to, to rise up in this capacity as well.

Charles: Yeah, that’s great. And that’s kinda going into the next question, but the thing is that, just a quickly, what are the, what do you find that your international investors are interested in investing into? So when you speak to someone, say they’re based outside the United States, are they interested in farm land? They’re interested in apartments. They’re interested in.

Peter: Yeah, I mean it because when we played in through a, you know, build a diversified portfolio, you know, baseline of good investments in the U S and then wrap it up with some diversification in central South American Europe that is supposed to give you like country and currency diversification. Because ultimately in our lifetime, if the U S dollar topples quite hard, which is high, given the debt we’re actually holding as a country, then we’re okay because we have in other countries, central South American Europe, they can support us theoretically.

Charles: So yeah. So for your investors when you come in, you kind of put together a whole plan for them. That’s great. Yeah.

Karen: Consistently they are interested in yield, diversification of risk and enhancement of lifestyle. Yeah.

Charles: So they’re looking for just kind of like where you guys were going from single family to multifamily kind to cut down on that asset management portion of your time and spending more time doing things you want, which is kind of the whole reason we’re all getting involved in this.

Peter: It’s also about a lifestyle. I mean, you know, so eventually examples. So we own poly syndication, a coffee farm, you know, and Colombia coffee from my phone. Awesome that people want to not only investing in things that produce high yield, you know, basically assesses that, made a profit to support a lot of stuff, but to go visit the farms. So, you know, it’s a nice double whammy. Really. We have a,

Karen: We, we, we seem to attract kind of multicultural, couples that are maybe one or the other is Canadian or American, but they’re married to somebody who’s from, you know, Columbia or Italy or you know, Argentina. And they have this sort of yes, fused together, very global mindset. And as they, you know, as they build enough financial wealth to do so, they want travel and adventure and they look at their investing as kind of a part of that journey that builds their wealth and builds their, the richness of their life and their experiences.

Charles: So how do you guys find your investments? Cause it’s not just like going finding an apartment building and you talk to someone and Marcus and Millichap and, find a coffee farm in New Columbia. You know what I mean?

Peter: Yeah, no, it’s, um, so honestly it’s networking. It’s travel. So we love global travel. We probably lived part time in 17 towns and cities the past three years. And we basically landed a place Airbnb for six weeks and we met with and real estate and get to know the air and meet people and you know when you’re full time invest in like we are real estate. It’s just amazing. People start coming to you and get connected to you. So it’s a, it’s a long lead work to be honest with you.

Charles: Yeah. I imagine when people come to you and you already have the lifestyle that they’re envious of, that they’ve been working so long for and then you tell them your lifestyle, then there they probably, the next question is how can I do the same thing or how can you teach me or what do you have for me to invest into?

Peter: Yeah. It’s funny we have some investment providers who are also investing in some of our other deals cause I’ve seen other yields from their own portfolio.

Karen: Right? Like they work in one asset class but they’re saying, huh, I like that whole diversification idea. I don’t want all my eggs in one basket. Especially if they are syndicator we’re an operator. Okay. Just one asset class where they have the expertise, they want to still ranch out their own personal investments.

Charles: Uh, what do you, what are your investments in farmland right now? What are they, you said you said coffee and what else do you have currently or you’re looking at?

Karen: Yeah, we have coffee. We have a sort of mixed used investment that’s cattle coconuts and teach. Which is, that is like a novelty that I don’t think we’ll ever see again. We have a new one in Lyme that’s coming out and that’s also these, the farm deals. What’s interesting about the investing in farmland is it’s, it’s almost beyond just investing in farmland. It’s really investing in agribusiness that’s backed by the heart asset of the farm land, you know, so should things go awry? Right. It was plenty of value behind the company, but it’s more than just growing. It’s the growing, it’s the harvesting, it’s the pack, the processing, the packing, the distribution channels, the whole sales and distribution worldwide to Europe, to Asia, to America, to the South America, all of these markets are very different. So we’re finding that the agribusiness is like this. It’s this amazingly rich and evolving asset class that again, we all need to eat. And it’s interesting to see the ways you can de-risked the investment by all the different layers of, of kind of hard assets backing that investment. So you’re owning a piece of the land, a piece of the developed packing facility, perhaps you’ve got the established channels of distribution. They have a brand, the one company called Madonna, where they have all their tropical fruits under this one brand. So every time they bring in a new project to the fold, they already have a piece of the puzzle or several pieces of the puzzle in place. So once you make inroads into the food distribution process, which in in Europe tends to be centered around Rotterdam and then disbursed off from there. Well, once you have those relationships in place, every other project that you go into gets to leverage off the back of that.

Charles: Yeah, that was one question I had with the brands. So say with the cocoa farm, when you had the coffee right there, how does that, so when you’re investing, are you actually, you’re just going to sell the beans to a producer or you’re going all the way where you’re, you’re going to farm it, you’re going to package it in the morning.

Peter: The Colombian deal has certain characteristics. So firstly we got in very cheap because Colombian pesos down 40% in the US dollar. So you’re buying these coffee farms which are struggling.

Karen: Yeah, it’s like a distressed asset to think that the value add concept in multifamily, you’re getting into the discount

Peter: And then what we’re doing basically we’re bringing more from farms together to get some scale. And then as, I mean in the case of Columbia, there’s actually a Colombian Coffee Growers Association and the government buys the beans off all the farmers cause it’s kinda like, you know, it’s like all farming in Europe and the U S the government supports a base price, often the commodity price and said worst case scenario not business deal is that we sell to live Colombian government. Best cases. You still have to take containers to North Korea, China. We have some outlets now, but then more importantly. Sorry, South Korea. That’d be interesting. That’s a little,

Charles: That’s a whole different episode.

Peter: We’ll discuss that like Tanzania investing. And so the other piece is then we actually take a container loads and we sell them to be spoke coffee roasters in the U S and Europe because you can get, you know, $750, $550-$750 a bag in these markets then. So it, it’s a combination of different sales channels to try and sell this through.

Karen: So the consistent thing we’ve been seeing with these farmland project sponsors basically is that the more integrated they can get, the whole supply chain from seed to sale, right. And distribution is, um, it just makes it that much more powerful cause you can really control your margins every piece of that. Because as we’ve been learning about the food distribution process, everybody’s taking their piece along the way. So the further you can sell down that value chain all the way through, you know.

Peter: Sure. So we looked through investments in pharma, like Apple, you know, you control a hologram, which is the actual crop in the harvest from the farming piece to the retail store in these cases. You know,

Charles: Interesting. I was talking to another, it was a coffee farm and like Panama years back when the syndicators and he was saying one of the things too, it’s a, it’s great, like you were saying before, Karen where you’re raising peoples lifestyle that are working obviously with the farms directly. It’s not like you’re making money saying the United States and we’re donating money through some charity down there and hoping it happens. Your actually can raise their, their lifestyle too. You know what I mean? You can pay them more, you can do livable wage, all that kind of stuff right. Directly. So you know exactly. You, you see what you’ve done.

Karen: That’s very true. I mean it’s, um, it’s a profitable investment because again, our, that investors might yield its yield first. I definitely can tell you, it feels really good to make these investments and see the impact, not just on our investors who are here to serve. But also, you know, the company that’s putting in place these workers that have had no work health care or pensions or anything like that. And now they’re getting that, they’re often, you know, transported to the farm back and forth from their homes to the farm and that kind of thing. So it’s really, yeah, it’s a cool impact to see.

Charles: Great. So one of the things I wanted to get into is when did you, you guys create the global investor Academy and you started teaching and what made you make that, that next change from just doing the investment syndicating and going now into teaching?

Karen: Well, I guess it was probably 2016 or 17 we’d already been investing for a few years. 2016-17 we started telling more and more friends because people started really getting curious about what we were doing. Cause we were doing an awful lot of travel looking like around an awful lot of money on Facebook. And they’re like, what are you guys doing? Like you don’t work, you know, you’re 50 at the time. It was like, and so, yeah. So we kind of started to share more and more over coffee, dinner, whatever, friends and family and stuff first, and then those who really got it started to take us seriously and say, hell, okay, well can you help me kind of get started on this? And so we do a little hand holding of a few people and we had enough friends and family really having a lot of success and just getting momentum going in their own financial independence and they were like, you know where you should teach us to more people? And we kind of laughed it off at first and then finally like 2018 we’re like, okay, you know what? This is the real like this is, we need something really purposeful other than traveling around for our own investments, which is, it’s always great to build your own nest day, but we felt compelled like, wow, if we would have only known the possibilities of this life earlier, like how different that would have been and how much more time you could have spent with her kids.

Peter: For me, that was one pivotal moment for me was a friend, Rudy, who actually came to us after spending a couple of years investing in similar techniques. And he said, I finally replaced my base corporate income with passive income from his investment.

Charles: Nice.

Peter: And you have the first, you know, nest us. So powerful for the first one’s life. He could choose whether to do that job or not. And he actually continued doing it, which is the freedom of choice, you know? And that was huge. And yeah, and so we actually, we’ve helped a bunch of friends and family and it’s just been, because the thing is when we try, when started out, we didn’t know a lot about is asset classes. And there’s unfortunately in real estate there’s a bunch of shysters out there. They we’re looking to say in a crabby deal.

Charles: That’s for sure.

Peter: Whereas we’re actually aiming to sell them the education and then deals with invest with trying to extend out, you know, obviously they’re not, um, that I’m have to invest. The whole side is. But when they see the analysis, we teach them and showed me now, so as we’ve gone through, they soon understand that they can actually do it themselves and there’s such power in now. We just wished we were around to teach us when we started.

Charles: Yeah,

Karen: Because honestly, the hardest part I feel like an art journey was the fact that there is a lot of people out there that can maybe educate you in like one class because that’s what they focus on syndicating. And so there’s all these disparate pieces, but nobody’s kind of putting together the whole framework, the whole process about, okay, if this is your endpoint that you’re trying to achieve and this is where you’re starting, let’s map out the whole process of how to get there and educate you along the way so that you’re learning to fish for yourself and ultimately, you know, you’re kind of contributing back to the perpetual learning community of investors. I mean, we look at it in some regards as an ongoing investment club. Yeah.

Charles: How does that work? How the framework for your teaching in your class? I mean you guys have a lot of asset classes the most that are, I mean most of these aren’t even touched upon with others in the caters or real estate coaches or mentors.

Peter: Well I think one of the keys to what we do, cause we lived ourselves the hard way, which you need to work out where you’re heading, what lifestyle you want before you start doing the investment.

Karen: Begin with the end in mind. You know,

Peter: Because while I’m doing those, we start to just invest, got enough passive income to free ourselves, feel very fortunate, very grateful. But then we were like, what do we do now? How do you fill your day? Why do you get up in the morning? And so we actually take people through a process of very start. So you know, if if money wasn’t an issue, we didn’t have to go into corporate job every day, what would you like that Nevada lifestyle to look like? Less than really the eight weeks. We take people on that educational genius, define that, look at how much cash you have, allocate the cash, the different plastics, lots of real estate. And then go through and classes and stuff executed.

Charles: Interesting. So where can, where can people learn more Peter and Karen about the global investor Academy and your other businesses?

Karen: Yeah, well they can go to www.globalinvestoracademy.com and you can feel free to subscribe to our blog there and reach, you know, reach out to us as well. Feel free to, to do that, share them. But if your journey and,

Peter: and, and yeah, one thing we try and do is, you know, we don’t bring many people in per month into our Academy cause I would go is, you know, we see a lot of people out there trying to get the, the mass amount of cash they can. And actually we’d rather have a small group of people been more intimately involved in some of the trends to achieve and to do more coaching to help them get that. And so what we actually do is you go to the website, you’ll see a small video explaining the techniques we use and if you’re interested, we’ll have a strategy session. Yeah, we’ll chat you 45 minutes. Okay. What are you trying to solve in your life? What does it look like today or you’d like to look like tomorrow late? Kind of make sure that you’re fit for purpose. We can help you because there’s no point in wasting our time old as if they all to be great fit for what we’re trying to achieve.

Charles: Yeah, that’s awesome. It’s true “Lifestyle investing” I guess you could say from a truly diversified group. I mean that’s, I do a lot of international traveling but I have never done 17 Airbnbs in one year. That is, One Day, right?

Peter: Airbnb, as a bit of a variability in mattresses trust right now.

Charles: Well, I want to thank you guys so much for being on the show and listeners, I’ll put all the information, all the contact information that, Peter and Karen have given us an, I’ll put it inside the notes for the podcast notes and also on YouTube. So I wanna thank you guys. One more time for being on the show and enjoy. I know you guys are leaving. You’re heading out this week, so have safe travels.

Peter & Karen: Thanks Charles. Have a great day. Thank you. Bye bye.

Announcer: Thank you for listening to the Global Investors Podcast. If you’d like to show, be sure to subscribe on iTunes or Google play to get new weekly episodes. For more resources and to receive our newsletter, please visit global investor podcast.com and don’t forget to join us next week for another episode.

Announcer: Nothing in this episode should be considered specific, personal or professional advice. Any investment opportunities mentioned on this podcast are limited to accredited investors. Any investments will only be made with proper disclosure, subscription documentation, and are subject to all applicable laws. Please consult an appropriate tax legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of harborside partners incorporated exclusively.

Links and Contact Information Mentioned In The Episode:

About Peter Badger and Karen Williams

Peter Badger and Karen Williams co-founded the Global Investor Academy to help people obtain the mindset, strategies & tools to create recurring income from global real estate investing. Peter spent 25 years on Wall Street and in Silicon Valley while Karen spent 20 years in Management Consulting and Corporate Sales/Marketing. Today, real estate investing and education is their full-time endeavor.

They are true diversified real estate investors, investing in single family, multi-family, mobile home parks and farmland. They travel the world, meeting investors and evaluating new investments.

They created the Global Investor Academy to help people replicate their success and escape their 9-5 jobs.

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