Corey Peterson is a rag to riches real estate entrepreneur and self-made multimillionaire. He’s owned and operated over 95 million dollars in commercial real estate and is on the move. He is the best-selling author of “Why the Rich Get Richer”, and “Copy your way to Success”.
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Welcome to the Global Investors Podcast, a show that focuses on helping foreign investors enter the lucrative US real estate market. Host, Charles Carillo, 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 Carillo.
Welcome to another episode of the Global Investors Podcast; I’m your host Charles Carillo. Today we have Corey Peterson. Corey has owned and operated nearly $100 million in commercial real estate and his firm currently controls about 1900 units. He is also an author and host of the Multifamily Legacy Podcast. Thank you so much for being on the show!
Thanks for having me, man. I’m excited.
So what was your professional background before you started in your, your current business kahuna investments?
Yeah, it’s real professional. I was a used car salesman, so and I was that guy. I was smoking joking. You know you come on a lot, I’m going to ask you how, you know, how you want to buy a car so that I actually did that. And then my, I actually met my wife and she said, I couldn’t be a, she couldn’t marry a car salesman. So actually got into food restaurant business. I was a restaurant manager because like, if you don’t have a college degree, you got to either sell some crap or manage some crap. And I did both. But it was then that I read that book called rich dad, poor dad in 2004. And that’s when my life changed forever, man.
So how did you get in how’d you get started in real estate investing. What were your first couple of investments?
I got in the single family, but the real story is this like, so what happened was my mom was married to this man, his name’s Bruce. I call him Bruce Wayne. Okay. He wasn’t Batman, but he was loaded and like lots of money and he had a house in Hawaii. And so my mom was like, Hey son, would you like to go to Hawaii? And I’m like, well, are you paying because I’m broke. And she said, yeah, I’m paying, I’m like, get my girlfriend come to, yeah. So we get there. And lo and behold, Bruce has got a house right on the beach in Hawaii, which is the garden Island. It’s the most beautiful Island of all the Hawaiian islands. And I remember, and it was on a Cove. So we watched the Cove in the morning. We watched the sun come up and I remember looking over to Bruce’s house. I’m like, Oh my God, what does this guy do? Cause Bruce had fine art, nice cars. And like his phone wasn’t ringing. Like it was different. Like it was true money. And so I had to ask him like, what do you do? And guess what? He said, he said the magic words that he’s in real estate and that he owned apartments. And so now I wish the story got better, but because was a grumpy old man and my mom was really pretty. So don’t judge my mom, she got me to Hawaii, but I did leave the Island thinking that Bruce was the big kahuna. Right. And so it was after that trip that I read that book, rich dad, poor dad. And I was like, Oh my God, that’s what Bruce did. Like, that’s a little real life example. And so at that moment I got hooked line and sinker in the business. So I went bananas, reading every book I could and, and all that stuff. And finally I was ready to like do it. And I was like, what do I name my company? And I thought about it like, well, I want to be like the big kahuna. And that’s how kahuna investments came to fruition. I started in 2005. Very cool. And my first couple deals were actually I’d gotten a line of credit from the home that I lived in. And back then I read a book that said, Hey, call the banks and call REO departments. And so I was like, well, okay. But I was too scared to call the bank. So I actually look at the credit union and this is going to date me because I was looking in the yellow pages. Okay. So I go to credit unions and then I’m like an American airlines, federal credit union. One of the first I met a lady named KA, her name was Holly lane and she was the REO department. And she sold me my first couple of deals that I fixed and flipped. And I made a little bit of money. I did so well that I quit my job. Nice. Well, that was great for about two minutes. Right? Cause then I, I bought three more properties from Holly and I was like, I’m going to make them rentals. And I did. And then I realized that a piece of all my money was in every rental property, but now he’s only making $600 a month cashflow and that was not enough to live on. So I actually went back to work, but this time I was little smarter. I got a job. They said, if you pass the test, you can get this job, which was a financial advisor with Edward Jones. So I had a friend that was an Edward Jones guy. He gave me the introduction and I actually used my real estate experience to get the job. And I learned all about private money or just money in general, how money works, thoughts, bonds, mutual funds. And so I got, I got a financial education out of it. And what it did though, is it kept me from making any mistakes 2005, six, seven, eight, then the market crashed. So I kinda give up my dream for just a minute of doing, doing real estate to focus on this financial advisors. But when the market crashed, I realized I had no control of any investment that I’d ever made. And I, and these people were grown men and women, 65 years old plus come into my office sobbing. I mean, just sobbing because they’re their biggest fear. It just come true. Am I going to run out of money? And the answer was yes. And by the way, they’re like, well move it. And then I had to charge him a fee. I felt like crap, dude. So my heart left the business. Here’s my heart did sort of my cells. And so I got fired. Best thing that ever could have happened to me. I remember getting fired and I walked out of there, like Rocky was like, cause I already knew what I wanted to do. I want to do real estate full-time. And I was living, I live in Phoenix, Arizona now. And that market had went to, you know, it was half off, whatever you want, you could buy it half off. And I wasn’t that smart, but as I’ve always been really resourceful. And so what I did was I, an Edward Jones taught me money and taught me how to network. So I’d go to the local REIAs and I would find it. I actually was really smart as like the guy that’s running the rehab, Hey, listen, I’m new. Can you show me some of the players? Like who’s the guys that are really doing deals and they pointed them out. Well guess who sat right next to me? And I’m like, so where do you like to buy it? What is your rehab look like? How much profit do you like to make? I’m taking the order. And so I was like, you wouldn’t believe this, but I find deals just like that. And I started being in like a wholesaler. I’d go find out, smoke out deals, using the MLS, doing the work. And I had wholesale to them, but I didn’t have the money to do my own deal, at least not yet. And that’s when magic struck. And this is the one piece that has allowed me to be the multimillionaire that I am now. And that was, I was playing racquetball with one of my old clients from Edward Jones. He’s older. And quite frankly, he still beats me sometimes playing racketball. Okay. I’m not afraid to admit it cause he’s really good. But I was like, I was sharing with him. I’m like, Hey, curl. You know what I’m doing? You see that I’m wholesaling, I’m getting like a $3,000 fee. And the guys that I’m doing the wholesale, like I’m actually managing their projects for them. They’re making $25,000 rips. And like, I want to flip the script and I’m like, if I keep and the thing was, he lived in a retirement community. Cause I didn’t think Carl had any money. So I was just, I was like, Hey Carl, here’s what I’m doing. Do you, do you know anybody in your retirement community that would want to be able to, you know, earn a little bit more money? I’d give him a note and get a trust. And so he was like, well, I’ll see what I can do. Well the next morning, guess what phone rings? And it’s coral. And Carl’s like, Hey Corey, do you still want to do that? 12%? And in the back of my mind, I was like, Oh my God, Carll found somebody. And he goes, Cory, you don’t know this, but my home is totally paid for. I can borrow money at 3.2%. If you give me 12%, I make the spread. How much money do you need? Now? This is when I was like, okay, do I tell them the real amount or what? You know? And I was like, Carl, I need $85,000. And he was like, and it was silent for a minute. He goes, yeah, yeah, yeah. Okay. Yeah, yeah. Yeah. Where do you want me to send it and do just like that. I raised my first piece of private money and you’re talking to a used car salesman here. Okay. Like daddy, wasn’t the spoonfed and we never grew around money. So every, I always equate it to, like, I went into a telephone booth as Clark Kent. And I spun around that son of a biscuit. I come out there saying, hi, you know, like Sue, I raise private money. And what it did was it gave me such a confidence. And it was like, it was like, these scales had come off my eyes. I could see. And I was like, Oh my God, I just got money. Someone believed in me enough to give me some of their money. And that had never happened to me before. And, but, but it really did open up my eyes to where I was like, is what else? Like, there’s gotta be some other guys doing this and what are they doing? What are they using? And so, and I learned two secrets from Carl. Number one is you never asked people for money. I didn’t ask Carl for money. I was asked for his help. Right. I was asking him for his friends and which leads me to number two is the right. People will always self-select right. All you gotta do is tell your story. And the right people will say, well, what about me? I’m interested. And, and really that’s, that’s all I’ve done is like, when you, and what I’ve learned to do is have a little bit better. We’ll call it a pitch deck or a marketing packet that tells your story helps you tell your story better. Right. So they can see it visually understand it. And then you say, Hey, listen, the reason I’m asking you Charles, is because I think you may know of some people that could really help me out. And I just want to make sure that you understand it. Cause if I talk to your friends about it and you don’t understand it, they’re not going to understand it either. So poke some holes in it. And what I really did ask you to do is critically look at my thing. And now you’re doing it from a different set of eyes, instead of saying, is Corey going to pitch me? Right. I took that away off the table right off the beginning. And what I’ve learned is that the right people self-select. And so that’s, that’s how I got into race and money. And I really started doing that for single family fix and flips here in the Valley, in Phoenix. That wasn’t till my next problem, which is I was a chicken with my head cut off. Okay. You’re already experienced that, like where you think you’re doing about 10,000 jobs. And eventually, like I had to like a couple of million dollars out on the street, like lots of pride, five or six projects going on at any given time. And I felt like a professional parts runners for lows. My whole job was to go to one side, be like, Oh shit, they need stuff. And go to that place to get all the stuff and run it back. And then it goes to the next one. Oh my God, can’t believe you guys are doing this. You do this, this, and then go back to Lowe’s and get more stuff and bring it back. And to the point where I was becoming really bad, really bad father without saying it bluntly, but that’s what it was doing is I, my phone was attached to my head. I was irritable. I was no fun and I was going through the motions, but my family was like the last part I was trying to pursue money. And I would say a lot of people would think that I looked really, you know, successful in the world’s eyes. But as a dad, I was screwing up to the point where my son was like, Hey dad, you know, are you going to be on my game Saturday? And I was like, yeah, no problem. So, and I’m going to be there. And Saturday comes up and I’m like, Oh my God, I got to look at these three properties. So I, you know, I’m like, I’m gonna make a plan. I’m gonna go wake up real early. And so I can make it back to that two o’clock game. And long story of it is, is I got to the game at the end man. And and my son came off. The field, dude looked at me and he, and he started crying. And this one is targeted hard to talk about a little bit because it, this is how bad it affected me. It was like, dad, you promised, you promised dad and I’m telling you, it broke me at that point. I got broke to this day. It’s still painful to talk about that pain that I disappoint your kids in a way like that, where you know, that kind of sob dude is just the worst in the world. And I had led money in the pursuit of money affect my life and affect my family. The thing that I hold dear to my heart is my family. And I’ve been putting it off to the wayside and putting money in front. I drive, you know, kids are resilient though. He still wants to jump in the car and my truck and go home with me. And that made it worse. Cause the whole time he’s, you know, and I’m just like, Oh my gosh. You know? And I was just feeling horrible. I get home. I drop him off. My wife looks at me with those eyes. Like you better fix this dude. Like you’re screwing up. And I get my car, my truck and I’m driving. Right. I’m actually, I’m actually beating myself up. I’m I mean, I’m cussing at myself. I’m, I’m an absolute mess. And I finally find forgiveness. I finally asked for forgiveness. I asked God to forgive me. And I finally got peace. I had a calmness and cause I knew I’d screwed up. And in that, in that low part of my life, something and I, God, I’m a spiritual guy. And I feel like God does things that sometimes you don’t understand, but in that calmness, he said, look over here. And dude, I’ve driven past this apartment a million times. And I used to say, I wish I could own an apartment complex. And in that very moment, I looked at that apartment and I said, how can I own an apartment complex? And as the moment I framed the question, right? My brain started firing. And all of a sudden I flash back to Bruce. Bruce had time and money. He didn’t his phone, wasn’t ringing. He wasn’t living this crazy hamster wheel life that I was on. And I knew that that was the answer, man. I flipped the U-turn. I went to Barnes and Nobles. Now we just go on our cell phones, I get it. But I went to Barnes and ovals. I bought all the books I could on multifamily investing, which was like four, of course Murphy’s law is always at play. So the last book that I read is the one that I connected with and it was written by David Lindel and it’s called multifamily millions. And David Lindel actually became my mentor and he taught me the business. And then I use the skills that I learned on raising private money to fund my first apartment deal. I bought my first apartment deal for $3.2 million. I raised $1.4 million in private equity. And then I actually just sold that deal. Maybe I think it’s three years ago, but I sold it for 8.8 million bucks. Wow. I made $4.7 million off my first multi-family deal. Wow. And that would set me free for the rest of my life. Geez.
That’s the deal man That’s crazy. So what, what are you guys working on now with, what is your obviously that’s where you start it in in multifamily investing. What is your criteria now? What do you look for?
So we me buy B class properties. I like to say maybe some CS, but more, more just be assets is what we like now. Between 15 to $20 million, we actually own quite a few student housing projects right now, which quite frankly sucks because of COVID right. We have four student housing properties. Two of them are doing good. One’s doing great. One’s doing okay. And two like 50% occupancy because of COVID. We’re doing work route. The banks have already got in touch with us. We’re doing loan mods on both those they’re going to work out two of them the previous two years that we’ve owned them. Like for one we own for this our fourth year. And we’ve been a hundred percent every fall leasing year, except for this year, we’re 50%. So it’s, COVID, it’s not our operating. But really we’re just, we’re trying to buy a hundred unit plus deals that, that financially makes sense. And the goal is that, you know, then you just vary it to capital. I mean, we always have capital ready and waiting for good solid deals.
So what is the process with, with your capital of standing? What was the process when a new investor comes in and starts the conversation with you? How do, how do you and your team kind of move them through to the process where they’re actually investing? How does that work?
That’s a great question. So we used to do it old school. Okay. But now we use technology. So our, our process now is we kind of have a funnel built. So we have an online funnel that we either have a free book. It starts off, you can either buy one of our books, free book or a couple of different call them lead magnets. Right? Of course our podcasts. We have a podcast as well, multifamily legacy podcast, where we teach and coach and do all that stuff as well. But a lot of people will come into our website and then they click into get into the deal room. Or if they buy a book, we deliver the book and add value, add value, add value about that fourth email. Then we changed the conversation. We call it a new a new play, right? So we have our fulfillment of the book. And then we start a new sequence called push to deal group. And that’s usually about a five email sequence with some text that says, Hey, you know, you’ve learned about Cory. Cause usually we’re already sending them some direct mail at that point, if they bought a blood for sending them direct mail and we’re warming them up to our company who we are, what we do. And then we’ll finally ask them to get into the deal room. A lot of people do it a lot different. I think they just started rush to the deal room or get into it, look at our deals. I think that’s too forward, man. I think you’ve got to be a little bit more. You got to, you’ve got to create way more value to get the right people in. And so once they go, so they click this button, get into the deal room, it brings up a questionnaire. There’s like four questions. Who are you? What do you do? How much money do you make real? And it’s really vague. We don’t, we’re not trying to pre-qualify them yet. We’re just trying to make sure that they fill out something. And how did you hear about us? Cause we just like to know where lead source comes from. So it’s real basic. And then they submit and then the next step is then it says, well, listen, we’d love to learn more about you. You need to schedule your one-on-one appointment. So we use a lot of people, use calendar, Calendarly, calendar, calendar li we use the appointment core because our CRM is called infusion soft. And it plugs in well with that. But basically we’re going to then push push them to schedule a, one-on-one a zoom call, just like we’re doing our podcast on. And we found that that’s the most effective. So then my team usually that is handled by that initial zoom call. The intake is my wife actually does it most of the time. And she’ll go in and then she creates the relationship. She’s asking them about their friends, their families, their financial goals, their dreams. What do they look for investing? What kind of investor are they? And then she’s also showing them our process and they’re showing them what it even looks like when you become one of our investors and all the things that we do. So she’s given them a preview of the other side as well. And then once we get that done at the end of the call, and this is all the way during the call, she’s always saying, Hey, the next step is, you’ll get all this stuff. But the next step you have to do is you’ve got to fill out our accredited investor form that we’re going to be sending you. So when she finishes off that call, we have, we use DocuSign. That’s another great little tool DocuSign to then send the accredited investor form to someone’s email. And they fill out our form for us. When we properly do this, what we’ve just done is created a 506B relationship, a pre-existing substantive relationship. We’ve asked them financial questions. They know us, we know them. We’ve had quite a bit of interaction through emails, texts, and it’s all timestamped in our CRM. And exactly we’ve got this thing built with our deal. When they finished that DocuSign, it’s imported into our CRM and is shown it’s in a file now it’s got its own deal. So we can prove to the sec that we all our communication patterns with these people. And then they go into an active investor waiting for deal lists. I guess what we call it, active investor, waiting for deal. And then we start, what’s called a nurture campaign, which is through emails and texts, just different articles that we think are important. And then it also hits. What’s called the start. We call it a start tag for our phone followups. So every two months we’re gonna have someone from our team, call them and reach out and communicate. I know that’s a lot, but that’s like when you’re playing the game for real and you want to raise a crap ton of money, like you pay attention and you do these things, it didn’t start off like that. A lot of these things in the beginning were not automated, right? I just had to physically do them.
We do, we do something similar to that. It’s a, you put them through the campaign, but to do that 506B, you need to have that relationship or you can get in trouble. So that’s you, we do this whole same thing on our CRM. Every time we reach out every time a call, every time an email. And then if anything ever happened, you have everything documented that you can
Documented to the nines, man. Yeah. Yeah.
So what are some of the factors that have contributed to your success in business?
Man, I say factors a little bit of luck. I think, you know, I call that charisma either have, or you don’t most, most entrepreneurs that I’ve made have charisma. They have a drive and a burning passion to not let obstacles get in the way the only look at and find a way around them. So I would say that’s my number one is I’ve always been resourceful into understanding that road. No doesn’t mean, no, it just means no today or they need to know more. I’ve kind of led myself to that guiding principle all my life is that I’m always a student one and that I teach what I know. I think by teaching what I know, I become a better student and I get better at my craft. Right. that’s some guiding principles. The other one is be willing to fail. I’ve always been willing to fail. I’ve always been willing to make mistakes because I believe in version one is better than version none. And sometimes when you fail, you learn things not to do. And a lot, a lot of times you learn more from failure than you do.
Yeah. That’s for sure. That’s true. Yeah. You learn what not to do. And then when you do it next time through
No one else does. Right.
That’s why mentoring and coaching is so important when you’re in a business that you don’t know. So you can learn from their mistakes,
Man. Like you pay for speed, right? Like, listen, I’m a kind of sewer of education to this day. I buy, I mean, I probably got stuff that I, I’m not even a package cause I buy. Right. But you know, now I just send my team to go learn it some more, more than me than I’m listening to go NIGO, learn that. Tell me what you, what we need to do.
Yeah. It’s like the same thing as a, I have a golf coach to teach me a what I don’t want to sit and try and 10 hours watching YouTube videos that I can learn in 30 minutes. You know what I mean, know what I’m doing and look at me and tell me what I’m doing wrong and tell me, and that’s what we paid for. So
Yeah, that’s exactly it. I, you know, I’m a Jeep guy. I love, I just bought a Jeep and and my Jeep is like capable. Like it can rock crawl. It’s 40 inch tires and all these things, but I you know, you get on YouTube. I will get on you. I’m like, Oh, I need this one part here. I need this little thing here. Now, if I was to try to figure it out on my own, I’d be lost, but I can, I can go be resourceful and find the clubs and the groups that already have all this stuff going on, how to install my CV or my ham radio. Right. What kind of kit do I need to have in the back? Just in case we get stuck, right. Your recovery gear. And so like that, I didn’t know any of that, but I learned it by reaching out. And the great thing about today’s information age that it’s everywhere,
Right? Yeah. For sure. So tell us about your podcast, Multifamily Legacy Podcast.
I created that podcast out of pure love for the game. I love the gay man. I love, I love real estate. I, I mean, I can’t tell you it changed my life. I mean, when you go from used car salesman to multimillionaire, to cashflow in and not having to worry about money, it’s life changing life alternating. And my goal was to leave enough clues and crumbs that people could see the path that I blazed. Right. And so my goal on that podcast is to talk about the dirt. I don’t think people talk about the dirt enough of my failures. And I use a lot of times myself as my own Guinea pig and be like, yeah, I screwed this one up. Let me talk about it. Right. So that people don’t, you know, Hey, it’s real. It’s what really happens. And so I don’t try to always paint the rosy picture. I really try to talk about, you know, the good, bad and the ugly. And I think people like it. So we’ve got a decent audience and honestly, I just, I love it. I love what I do because I think if you, if you don’t love it, don’t do it. Right. And I just enjoy the hell out of it. I say, learn, I guess if you had on your podcast, right. Did you learn something?
Oh yeah. Yeah. And then you get to ask questions that I normally wouldn’t be able to ask you, can’t just call someone up and you don’t wanna be that guy that asks for coffee. And so you just, you’re, you’re trying to add value to other people, to your audience, by adding value and exposure to a potential gap to a guest on your show
Relationships too. Like, I can’t tell you how many people now I go to a multifamily event. And like, you just got a whole group of people that like all these big speakers, way bigger than I am. It looks, everybody give it over yourself. First of all. Right. Because no matter who you are, there’s someone better than you, right? So you come to the steel yard kind of a big deal and you realize that no, you’re not, you’re not gay. You’re just, you’re not. But if you have a podcast, everybody wants to be your friend because they want on your show and I’m like, hell yeah, dude. And so I’ve, I’ve made some great relationships through my podcasts.
Awesome. Yeah, I’ve done the same and it’s great. Also when we restart all these face-to-face meetups and conferences, it’ll be great to actually go and meet with some of my guests actually face-to-face and I know we met last summer at a, an event in Dallas. I believe it was that you were speaking at. Yep, exactly. So awesome. Well, how can our listeners learn more about you and your business,
Man? If they want to go to kahunawealthbuilders.com, that is our education place. There’s stuff for free there, Quickstart a workshop guide. You can get it and we go over how to find deals and how to find money. Okay, awesome.
I’ll put all those links into the podcast and YouTube notes. And thank you so much for coming on and looking forward to connecting with you in the near future.
Rock N Roll brother,
talk to you soon.
Hi guys! It’s Charles from the Global Investors Podcast. I hope you enjoyed the show. If you’re interested in get involved with real estate, but you don’t know where to begin, set up a free 30 minute strategy call with me at schedulecharles.com. That’s schedulecharles.com. Thank you.
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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:
- Listeners can learn more: www.kahunainvestments.com
- Email: [email protected]
- YouTube: https://www.youtube.com/channel/UC2DTrPWl8DhSvzLigs-jirw?view_as=subscriber
- LinkedIn: https://www.linkedin.com/in/corey-peterson
- Twitter: https://twitter.com/Kahuna_1973
- Instagram: https://www.instagram.com/kahunacashflow/
About Corey Peterson
Corey Peterson is a rag to riches real estate entrepreneur and self-made multimillionaire.
He’s owned and operated over 95 million dollars in commercial real estate and is on the move.
He is the best-selling author of “Why the Rich Get Richer”, and “Copy your way to Success”.
As the host of the massively downloaded, Multifamily Legacy Podcast, Corey teaches individuals how to escape the hustle and grind to live a life of sunsets and palms tree. He speaks around the country on this subject, including at Harvard and Nasdaq. Corey is also frequently featured on FOX, CBS, ABC, and NBC affiliates.
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