How you can Trust a Potential Partner with Corey Peterson and Clif Luber

Episode 63 of the Diary of an Apartment Investor Podcast with Corey Peterson and Clif Luber. Transcript by – please forgive any errors.

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Brian Briscoe 0:00

Hey cliff, we have Corey on the line here. What do you want to ask him?

Clif Luber 0:03

How many touch points you think it would take for you to build trust enough to go in on a deal with someone,

Corey Peterson 0:09

there's lots of tools you can start to get to know and get in their network. And then surely if you're like, Hey, I think I've got a deal or you're trying to narrow it down to say, Hey, listen, I want to bring you a deal or I think I can bring some money. Can I get some referrals of other partners that have been deals with you don't listen to them, listen to the other people or like talk to my investors. Because what you really want to know is this person has integrity. Are they going to run projects good? Do they pay their investors cuz if you're raising money, you got to make sure that that syndicator is going to take care of your people like gold.

Brian Briscoe 0:49

Welcome to the Diary of an Apartment Investor Podcast with your host Brian Briscoe. In this podcast we bring some of the top professionals in the apartment investment field to discuss various aspects of the apartment investing journey, with the sole purpose of educating listeners to make wise investment decisions. The Diary of an Apartment Investor podcast is sponsored by Four Oaks Capital, bringing you high yield returns through apartment complex investing. This is journal entry number 63. With the Big Kahuna himself, Corey Peterson and aspiring investor Clif Luber. Keep listening for tips on raising money and how to build trust with your partners. Now, before we get to the show, I just want to remind everybody that we do have a brand new website it is diary of an apartment was the name of the podcast with on the end, I know very creative now why don't you go ahead and enjoy the show. Welcome to the diamond apartment investor podcast. I'm your host Brian brisco with foros capital. I'm super excited for today's show. It's one of our Ask the Expert episodes and we have two amazing people on the line with us right now. And we got a guy with a tonne of experience in a very recognisable figure, Corey Peterson and we have a motivated and energetic aspiring investor, Clif Luber. So a little bit about Corey, He's the owner of Kahuna investments, he's managing acquired over $95 million in real estate across the country. He's a best selling author of copy your way to success standing on the shoulders of giants and host of the multifamily legacy podcast. He speaks around the country on the subject, including Harvard and NASDAQ. Well, Corey, welcome to the show. That's very impressive. Glad to have you. Yeah. I'm excited to be here, man. Yeah, this is great. So a couple of things. First of all, I'm a huge fan of your podcast, you haven't listened to that for a while? Can you tell us just a little bit about it?

Corey Peterson 2:30

You know, I start off that podcast because I love what I do. I love this game of real estate and eggs, and more importantly, the multifamily game, but I just wanted to leave a bunch of clues and nuggets and, and a trail of, of what I done so other people could find a way and kind of find their journey as well. And so I love it.

Brian Briscoe 2:53

Yeah, you know, and something that I really like about it is your energy and enthusiasm shines through. So I listened to your podcast episode. And I'm like, motivated. You know, as soon as I'm done, I'm like, Yes, that's good. So, yeah, it's good. It's good. Also, you know, I bought your book, your newest book about why the rich get richer, love the book, I think it's amazing. And can you tell the listeners where to pick that up?

Corey Peterson 3:18

Yeah, so we actually have two books. So my new book is copy your way to success kind of standing on the shoulders of giants. That's my nose. And that's really kind of my hero story that I would say that's for some of this thing about getting a real estate. It's a great book to talk about all the failures and the struggles and the things you go through as an entrepreneur and how you ultimately can have success. I think it's a great inspirational story. And then why the rich get richer is really is more about here's the the game that rich people play. Why not play it, too?

Brian Briscoe 3:47

Yeah, yeah, amazing. So I just hit the buy. Now with one click button, I'm going to get copyrights, he says delivered to my house in a couple of days. And I'll read that one too. So yeah, I read the other one last week. And you know, it was a really good book, really a lot of good tips there. So let's do this. Let's talk a little bit about your background and your history kind of up until you said I want to do apartments.

Corey Peterson 4:07

Yeah. Well, I, you know, this is a great story because I started off as a country farm kid not voted most likely to succeed. grew up poor. And I made it I was a used car salesman. That one, that kind of guy. And, and I remember, I just I wanted to be successful I had and how I found real estate was really crazy. But like 20 years ago, I went to Hawaii. My mom was married to a man named Bruce. I call him Bruce Wayne. Yep, he was a Batman but he was loaded. And when we get there, he's got this house right on the beach in Hawaii tonight. And I was like, oh my gosh. What does this guy do? Because he had time. He had money. His phone wasn't ringing. No nice art. Nice cars. He just looked and acted differently. It was the first time I saw true wealth. And so I had to know what he did. And guess what he said? He said he was in real estate and that he owned apartments. Wow. And so I left the island thinking that Bruce was the big kahuna. And so, about six months later, I read that book called Rich Dad, Poor Dad by Robert Kiyosaki. And when I was reading it, I was like, Oh, my God, that is Bruce. That's what Bruce did. And I had a real life example. So I, I started out in 2005, I stake my claim. And I started my company. I was like, What do I name my company? And I called it Kahuna investments. Because I wanted to be the big kahuna, just like Bruce nice now that I went on the journey, and and really what I did is some self reflection. And I said, Where am I? What do I have? Well, I had no money, no credit. But I had a big desire. And I had to know, up until that point, I was book read, I feel like I had a little bit of knowledge. And I started off as a wholesaler, I would go to the local RIAs and find people that had money, and I would sit next to them and find out what kind of deals they'd like and then I go find them deals. So I started off as a wholesaler initially, and I got into the game of real estate.

Brian Briscoe 6:21

Nice. Now I a lot of people who who are talking about wholesaling, you know, they do it because, you know, maybe they lacked the the money upfront was that it was at your case at the time. That's exactly what it was. Yeah, you know, it's it's a way you don't have to have the money, you just have to have the right people in place, you have to have a deal flow, and you have to have somebody you can put the property to. So how did that how did that help you later on when you started, you know, buying multifamily for yourself?

Corey Peterson 6:46

Well, so the transition was okay, so I was doing wholesaling. And then I was like, but these guys, I was actually managing their whole rehabs for these investors and people. They were my deals and they were making like 20 or $30,000, flipping them. And I was like, gosh, I got to figure out how to do this. How do I get money. And so something magical happened. And it's the one thing that changed the rest of my life. I was playing racquetball with this old guy that, you know, lives in a retirement community. And I was sharing with him my dilemma. In other words, I'm wholesaling, making a small fee. These guys are making the big money. I'm like, Carl, you live in this retirement community. Surely, you know, somebody that's got some money that wants to get, you know, a decent rate of return, I can give them a note deed of trust. And so Carl was like, well, I'll see what I can do. Well, the next day, Carl calls me up. He goes, Hey, Cory, do you want to do that? 12% and I was like, Oh my god, cuz I wouldn't ask him for money. I didn't think Carl had any money. And Carl goes, Well, Cory, you don't know this, but my home's totally paid for? I can borrow money at 2% you give me 12 I make a spread. How much do you need? Wow. This is like a big like, Carl, I need $85,000. Mm hmm. And there was a small silence and it was like, yeah, yeah. Okay. Yeah. Where do you want me send the money? Wow. And just like that, I mean, my jaw dropped down. I was like, Oh, my God. And I was like, uh, do you know where to do with it? I say hold on call. I'll call you tomorrow. I gotta find out what we got to do put this money. Yeah, but I equate that moment to going into a telephone booth as clerk kit. And I split around that sucker man, I started coming out like Superman. I raised Friday money.

Brian Briscoe 8:31

That is awesome. You know, it's not something I've found. I've gotten people who who've invested with us who I didn't realise I never thought they would want to invest. And I think that's, that's a really good point for a lot of people. Talk to everybody. You know, if you're trying to raise money, talk to everybody you never knows to

Corey Peterson 8:46

real clues that I know for certain this has changed my life. Number one, when you're new, you never ask people for money. Make sure you listen, put a mental thing in your mind. Never ask people for money. only ask Who do you know? And see, when you do that you take the onus off of them to be like, Oh, you got to talk to me about money. Right? That's a really defensive but if you say Hey, hey, Brian, can I share with you my business plan because I think you may be able to refer me somebody, and I want you to critically look at it, you know, poke some holes in it. And then I'm going through my what I call my pitch deck. And you're critically now watching and then what I believe is this. You share your story and the right people will always self select. And that is what I've done my entire life up to that point to raise millions of dollars.

Brian Briscoe 9:39

Yeah, yeah. So So what you're saying is you share them your story, you share them the pitch deck, your ask them for referrals, they look at that and say, Hey, Cory, can I get into this?

Corey Peterson 9:50

Yeah, that's exactly what Carl there. Hey, Cory. Can I do some of that? I didn't know. Yeah, I didn't know cry money, but he's like, he's Carl's sitting there. Thinking about how we can borrow money out of his house. And put it to work.

Brian Briscoe 10:01

Yeah. Yeah, that's awesome that that's a great tip. You know, and I think there's a little less pressure for the new syndicators you know, the new syndicators are thinking I have to ask people for money when the reality is I think the the energy and enthusiasm the just talking about it gets other people interested. And you know, a lot of

Corey Peterson 10:19

way more excited. Yeah, way. Less pressured.

Brian Briscoe 10:23

Yeah. Well, good. Good. So let's look at a little bit about your your motivation. Cute. Can you talk a little bit about your big burning? Why you know why you continue to do this?

Corey Peterson 10:32

Yeah, well, and I'm actually going to continue the story on the Y side, is really my transition. So once I learned how to raise private money, I went gangbusters. They like I started looking around saying, because then I go, like my eyes were open. I was like, there's gotta be other people that are raising capital, what are they doing. And then I started learning that you got to have a pitch deck, you got to have, you know, a credibility kit, you got to have kind of your stuff together. And the sharper your images, and what it looks like on paper and how presents itself is important. So then I shortly started raising, I had about four or $5 million out on the street doing single family fix and flips. And this is going to get to my why here in a minute is because what happened, my wife, my family, okay, I'm just gonna, that's what I am. I love the game. I love everything about finding deals, raising money, people, all of it, I love it. But what happened was, I chose real estate, I looked at Bruce remember, he said time and money. And all of a sudden I was in real estate, I look successful from the outside world. But internally, when I was doing all those fixin flips, all by myself, I was an absolute train wreck. I had sacrifice money at the expense of my family, to the point that here's what happened. My son's like, Hey, Dad, are you gonna be at my game on Saturday? And I'm like, no problem. So I'm gonna be there. But internally, I was like, gosh, I didn't look at these three homes, I gotta go look at them. Um, so I devised the plan. I'm gonna wake up real early, go to these properties. And next thing you know, you know, I'm running to Lowe's. This I got that. I'm, you know, by the third time I get to my third property. Long story short, I show up at the end of the game. I missed it. And I'm off to the very end, and he started crying. And I was like, Dad, you promised, I'm telling you, my son, I got crushed. Man, my son's coming out to feel crying. So Dad, you you promise me. And I'm telling you, if you've ever, like have kids, and you're a full time dad, and want to be that person, and when you disappoint your kids and in their eyes, you see me know it. I'm just going to tell you, man, it crushed me. I mean, it's hard to even tell the story because, yeah, I mean, just put them in my, in my shoulders. And, and he's, and I'm just, I'm feel like a complete failure. Why did I put money in the pursuit and put it in front of my family. And so what happened was, you know, kids are resilient. So he's like, still wants to get my truck and meet me take him home, right. And that was even worse, because me sitting on the side, just, you know, trying to and I'm just going, Oh, my God, and I'm just hanging his kid. And I dropped them off at the house. looks at me, she's like, you better fix this. And so I go dry in my truck, and I'm telling you what I'm driving. I am cursing myself. I'm calling myself the worst piece of trash. And I'm not adequately doing it for a good 20 minutes. Now I'm just driving around aimlessly. And finally I found peace. I found I asked Jesus. And I asked myself, I forgave myself Finally, and why I'm driving around in that peace and calm. And just, you know, trying to, you know, be with God, whatnot. And then it happens. I drive past this apartment complex. Brian, I've driven by this apartment club apartment a million times. And I used to say, I wish I could own an apartment complex. And in that moment, I said, How can I own an apartment complex? Yeah, paradigm shifts. I framed it right. My my brain went to work and all sudden my flashback to Bruce because Bruce had time and money and freedom. And I knew that that was the right direction. 100% I flipped my truck around. I drove all the way back to Barnes and Nobles. Now we have Amazon k went to Barnes and Nobles and I bought all the multifamily books I could and then and that's how I got on the journey of multifamily real estate. And but the Why is truly because I don't think there's anything else that can give you time and money, the way that real estate and more importantly multifamily real estate playing the rich man's real estate game, not single family fix and flip your trader, if I do that with Dr. But if you do it long enough, and that's all you're doing you're feel like a trader. Because Rich Dad Poor Dad always talks about cash flow. You know,

Brian Briscoe 15:15

I look at some of that some of the times in my life, I'm active duty, I've missed a lot of my kids moments. And that's part of my big burning why I remember one day getting a voicemail from my daughter, you know, she's 18. Now she was probably six at a time. And I've listened to it a million times, it almost always makes me tear up. It's Daddy, I scored a goal today, you know, is that our soccer game, and she's telling me about how she scored a goal and everything else. And it turns out, it was the only goal she had ever scored in like three seasons of soccer. And I missed it because I was doing other things that weren't family. And that honestly, you know, every time I listened to it, and sometimes I just listened to it, because it's cute. But it reminds me a lot that I need to be with my kids. And I appreciate your story. I think that's that's, that's amazing. You know,

Corey Peterson 16:00

just oh, by the way, thank you for serving man, I just want to make sure we say that because like, that's a calling. And it's a duty as an honour. And listen, we don't give enough respect to our servicemen and women and all that stuff. So again, that's a huge sacrifice. And I thank you for it.

Brian Briscoe 16:15

Thank you, I appreciate that. Appreciate that. So let's let's do this. Now let's just change gears a little bit. Let's talk about you know, some of the deals, you can pick one deal, or you can just kind of give an idea of what types of stuff you do. I'm

Corey Peterson 16:26

going to keep on continuing the story. Next time, right, perfect. So I go and read all these books. And I take about a year and a half to kind of get like, educated where I feel like I've got it, right. Like I've been fairly successful in the single family game, but the multifamily games completely different. And honestly, if I was to start again, I would never start with single family. I went straight to monkey butt. So I got the confidence. And then I was like, I'm ready. But I was having a hard time finding deals. So I went to a multifamily event. It was actually Dave lindo was my mentor, and I went to one of his multifamily events, and something really crazy happened. Because usually you're these wrenches trying to figure out who or who's actually doing deals and whatnot. And so I was like, I want to stand out, I want to be different. So we go to this thing, and they like, Hey, does anybody got any announcements? It was day one. I was like, Oh my god, this is my cue. This is my cue. So I jump up the back of the room. I'm Mike, my name is Corey Peterson. I've got a crap tonne of money. And I'm looking for some deals or any deals out there. Come see me I'd like to take a look at them and see if we can do some business. Now, that was on day one. It was a four day event and I didn't pay for lunch or dinner for the rest of the deal. And I was like, hey, Cory, look at my deal. Cory look at my deal. And I almost said I was like, Oh, the god I caught the Corey Leoni method. Yes. The Godfather showed up. Yeah, I don't know, you know. And so what I realise is He who has the money has gotten used to think real estate was money was in real estate. The money's not in real estate, the money's in the money. And he doesn't even have to be your money. I was using other people's money behind me, but I knew I could command it, make it do stuff. And so the money gets the last look, it negotiates out of strength. It's patient, it always gets the last look, it has the best negotiating power. And I use that negotiating power of the money to find a real deal that I was able to get 75% ownership for Wow. So I bought the deal with two partners that end up being idiots. But we bought it for $3.2 million. And we raised $1.4 million of private money. I did, right? I kept that deal for five years. I sold it I think four years I bought in 2011 I sold it like 2016 for 8.8 million.

Brian Briscoe 18:54

Oh geez.

Corey Peterson 18:54

I made $4.7 million on my first deal. Dude.

Brian Briscoe 19:00

That's a killer. That's that's a home run right there, man. Oh, my goodness. Yeah, that's crazy. So So what what's what's your your deal? purchasing philosophy now? How has that changed since then? What are you looking for?

Corey Peterson 19:12

It's still the same. I mean, it really is. So like, the whole game of Monopoly is what we're trying to play. You know by. Now, I will say this, I don't try to buy si assets as much anymore. I like B assets. I started in the C asset classes of the 1970s 60s buildings. And they're great because you can buy them for little money and you don't have to raise as much money. But once you start raising more and more capital, then I think it's much better to play in a B class 1980s 90s product. That's better. I just think you get better. And all you do is look for the broken things. You look for broken problems that are solvable and fixable. So bad management, bad and really bad management also leads to deferred maintenance, right? And so we can fix those things. We can bring new money in to fix all the broken stuff. And then we can replace bad management with good management. And when we do that, it's usually a really good recipe for success.

Brian Briscoe 20:14

Yeah. Nice, nice. So be class assets, and you're just looking for a problem to fix.

Corey Peterson 20:19

Yep. And we also own student housing, probably properties as well. So we, we have a good mix of that asset class in our portfolio. Right now. We're getting hit by the COVID. Yep. We're like 5050 with really success right there. But I mean, it's just a season so whatever.

Brian Briscoe 20:36

Yeah, yeah, you know, and I don't know, I'm, maybe I'm too much of an optimist. But you know, I think eventually we're going to learn how to live with COVID people are going to people already want to live their normal lives. And you know, a lot of people are going back to it, we're going to learn to live with COVID. Or we're going to get a vaccine or something. But I think, you know, there's still a lot of strength in student housing. Just a temporary downturn. I think there's a lot of strength in just the the apartment market in general. Yeah, we might just have a tough year or so. But anyway, so what's next for you?

Corey Peterson 21:07

Man? It's really just a lot of the same. I mean, listen, we're, I'm financially free, by the way, just want to, like, we're almost actually, if it wasn't for COVID, we were getting ready to vibrissae this house. Right? How cool is that? Yes, the story. I'll probably buy it next summer. But um, so what I do now is I'm looking to do two to three good deals a year. That's the pace that I don't need to do anymore. I'm not super, I don't have that much ambition. But if I can buy an if we only bought one, that would be okay, that one to two, maybe three is a great pace, one to one per trimester. That's a nice little cycle for us. And we just want to continue to do that till we die. And maybe probably three years from now we'll integrate a management company because right now we third party, but we will integrate and bring on in house management.

Brian Briscoe 22:01

Nice. Nice. So so you enjoy it so much. You're financially free, you're just gonna keep on doing one, three to four months and vertically integrate a couple of things just for to take advantage of economies of scale right now.

Corey Peterson 22:13

Yeah, my kids are 14 and 15. I don't know if they're going to come into the business or not. But I've had some really good mentors say, Listen, you just build it. Yeah. But then go do their thing in college, whatever. And then they'll come back if they're ready. And if they aren't great, I'll have a company that they can, you know, they can come in and learn the ropes, and really helped me probably grow to a level that I didn't think possible. And maybe that doesn't happen, and I'm okay with that. I got a great team that I can bring up. Yep. So either way is a win. But I don't think I ever want to retire because I I got to do something. And then listen, if all I'm doing is one or two deals, three deals a year. It doesn't screw up my travel, and all my fun stuff. And my rock crawling in my Harley riding and all the stuff that I do for fun. Nice.

Brian Briscoe 22:57

Yeah, you know, and by the way, I've seen the videos of your Jeep and your your Harley and you know, I'm a mad jealous, but I think my next vehicle is going to be the car that I want to have. Because I've got five, I've got five kids. So you know, our criteria when we go look for new cars is does it have third row seating, you know, so, you know, Jeeps and Mustangs are kind of out. So next cars is the car that I want. And we'll see what it's

Corey Peterson 23:24

a great feeling, man, I just park it like that's what my Jeep is. It's not for a driver, we just have that Jeep to go rock crawling to go out into the trails that people don't go to. Yeah, and but I don't drive it every day. But I drive it when I want to go out and have a go have fun and bring friends in. And here's the big other part. You want to say like what? Real quickly. I have a new model and I call it supplier have fun. That's why I do this business now. Yep. And because I want to get my friends and family people I care about experiences. So for example, last summer or last fall, I took all my neighbours seven of us to Hawaii, and I got to pay for all this. And I got to supply the fun. Yeah, they just had this now they bought their tickets because they insisted to fly there. But after but everything when we ever since we got there was all I mean, and But truly, it was just we have fun and without having to worry about money.

Brian Briscoe 24:18

Yeah, you know, for two years straight and maybe to get back to this model. You know, for Christmas. I took my family on vacations instead. And you know, one of my daughters was like, You mean we're not going to get presence? I could get some presence, you know, and then, you know, stroke of genius. I asked her the question. I'm like, What did you get for Christmas last year? And she could not remember, you know, she's like, uh, then I asked her the question. I'm like, will you remember a trip to Mexico City? And she's like, Yes, I'll remember that. You know, and I think that supplier of fun, I think the you know, what you're looking to do is going to create memories. It's going to deepen friendships, and it's a lot cooler than stuff to be honest with you. So Exactly, yeah, I love it. Yeah, I love it. All right, so let's, let's switch gears right now we got Cliff sitting in the sidelines right here. gonna introduce him real quick and bring him on the show. So cliff is active duty Navy officer and the Joint Staff at the Pentagon. And he's been stationed at Pearl Harbour as well, where he served on a destroyer, a hospital ship and a submarine. And I think that's unique. Because you know, a lot of people don't have that breadth of experience in the Navy, again, real estate investing in 2019, sort of house hacking a three bedroom condo, and you know, he's done more, I'll let him talk about that. But he's launched the firm upward capital dedicated to helping young professionals invest and build financial freedom. So that said, Cliff, welcome to the show.

Clif Luber 25:37

Hey, thanks, Brian. I appreciate you having me. And Cory, I appreciate you joining us say thank you for your time.

Brian Briscoe 25:42

Yeah. So so this is great. Good, heavy. Yeah, I mean, we've met a couple of times, we both work at the Pentagon, which is nice. So you know, meet for lunch every once in a while. But let's do this. Give us give us a little bit of background on you who you are, and then your history up until you decided to hop into apartment investing?

Clif Luber 26:00

Sure, yeah. So I grew up in Missouri, I lived on a small farm as well, Cory, my parents had a bit of a hobby farm, but they had lived on the east coast and kind of wanted to up and live somewhere with a little more land. And so we got that, you know, some cattle and pigs horses growing up on a 50 acre farm in Missouri. Then I kind of randomly decided to join the Navy and went to the Naval Academy. And then since then, I've been a supply officer. And as you mentioned, Brian, was stationed in Hawaii for three and a half years, which was a great time to get to go over to Hawaii as well. And maybe I drove by Bruce's house court, I don't know. It's a beautiful, beautiful state and lots of great islands out there. But yeah, I was on a destroyer hospital deployment on the hospital ship mercy and went out to the Pacific for deployment for the western Pacific. And then did a western Pacific deployment on my submarine. And actually, while I was on those deployments, you know, you have some long nights on watch, and things are kind of quiet, and you have time to talk to other people about their life in general. And I was talking to a couple of senior enlisted guys, and I would come to find out that they owned a couple of houses, and we're renting those out from places they've been previously station. And I'm like, wait, see? How much are you making a month? You know, like a couple 100 bucks, you know, here and there. And what do you pay your property manager? How does that work? You don't have to do anything like, no, they, you know, they send me the money every month, I send it to my CPA, all this stuff was like mailbox. Okay, that's pretty awesome. I'm gonna look into that. Yeah. So but I, you know, really had a monetary loan baby before? That's right. Yeah. And I haven't even used my VA loan yet. Oh, my God. Yeah. When I moved to DC, you know, it's very hard to use a VA loan for a condo. And houses are relatively expensive. So I partnered up with a really close friend of mine, who I did an internship with before and known for several years. And him and I bought a place together and split the down payment, we own a 5050. I live in the house, and he lives down the street. And we hadn't even really heard of what house hacking was, we were just kind of like, well, other people can help us pay down the principal, you know, we get help, they'll pay the rent, right? And all this stuff. And let's just do that. And so then we started to think like, well, what if we got a group of people together and bought an apartment building? Like, what would that look like? And then we did some research, like, Alright, we're a little late to the game, people have thought of that before. Yes, he's even come down and explained how you should do it and can't legally do it. So glad we did our research there. But then, you know, so we just started to think a little bit bigger after having such a good experience, house hacking in the house that we have in DC now. And so we just started to think, Okay, how can we do that? How can we build financial freedom? And how can we start to bring other people into the fray because we weren't able to buy a house in DC, by ourselves, we had to partner up and do it together and come to an agreement. And then you know, split all of the headaches with maybe we had been flooding in the last week from some flash flooding that came through DC. So our basement took all our water damage. And luckily, you know, Danny was the first person I call to kind of deal with the stress of it. And that's kind of what partnership seemed to be about, at least for me. And so, yeah, so you know, that's been a good experience. And we wanted to try and replicate that model for other projects, but then also tell other people Hey, this is what we were able to do. We've had such a good experience so far because of real estate and what it can offer you as an investment vehicle but also through partnerships and working with other people as well.

Brian Briscoe 28:57

Yeah, that's that's awesome. That's awesome. And incidentally, that same storm put a bunch of water in my basement and if I were to take the background off you'd see this room is a mess right now but evil good on you. I mean that that three bedrooms, so you have you have renters in a three bedroom with you.

Clif Luber 29:13

Yeah, so rent. Yep. So we're running out the other two bedrooms which just about covers the the mortgage, which is pretty great, obviously, and I'm still contributing rent but I mean, we're cash flowing a place above 10% in a non cash flowing market. Yes. And we spent months and months looking at certain properties, you know, running the you know, the due diligence or the running the underwriting for single family home isn't that difficult per se, but I did it for over well over 100 houses in DC before in the months up to me moving here before we decided to buy and because this one was a good opportunity that popped up. You know, we made the offer and everything before I even moved from DC so I did miss the first inspection. But the second walkthrough we had for the house before we close I finally saw it, but I was trusting my buddy here in DC and the videos and everything that he could send me and he was like, I cannot believe you're trusting me to do this. I was like well, I trust you. We have to trust each other. And you can only move at the speed of trust. And so, you know, don't worry about me, I'm comfortable doing this, even though most people would not be doing the long distance real estate thing.

Brian Briscoe 30:09

Well, I mean, here's the other point, you've already underwritten your many, many houses at this point, right? So when you saw this come up, you know, you probably had a real estate a good baseline of what the market was looking like, what the rents were looking like, what the what the numbers were looking like. So I mean, a lot of that trust was, you know, built in because of the effort you had put in prior to. So I don't know, I mean, right. I think it's genius. in DC, there's a lot of people who are just looking to rent rooms, you know, a lot of young professionals.

Clif Luber 30:37

Absolutely. And we know a lot of them. And so we're, you know, Robin, we are here, yeah, yeah. And we can do that. Yeah. And we bought across the street from a kind of, I guess, essentially abandoned at this point section, a complex that's going to be renovated next year, they're going to break ground on a new development, and it'll be a mixed income housing. So all of those 150, some units that are across the street will have people living in them again, and it'll be a wide swath of kind of income and rent caps and whatnot, and it should be great for the neighbourhood. So we we definitely tried to buy on the path of development to and we've already seen double digit appreciation and just a year since we bought it. So yeah, it's been great, great experience so far.

Brian Briscoe 31:12

Congratulations for that. Good deal. So what's your big burning motivation?

Clif Luber 31:17

Yes. So I think, kind of going back to the discovering the value of partnerships, I think my big motivation is being able to achieve financial freedom, but more so help other people achieve upward mobility, you know, a life of abundance that they want and financial freedom for themselves. And I can't Yeah, I haven't done what Cory has done. So I haven't accomplished that yet yet. So I'm still working on it. But I feel like there's no reason why I couldn't try and bring others along on my my journey to financial freedom. And so that's kind of my big burning, why, and I, you know, as a supply officer in the Navy, right. So that's, and I'm a, I guess a logistician kind of compare it to the other branches. And so most of our job is customer service, you know, operators come in and saying, Hey, here's what we need engineer say, Hey, you know, sup, oh, this is broken, can you help me fix it? Or we need to get one on order, as soon as possible. And so the customer service aspect of the helping people is really kind of been what I've seen is my life purpose to be, you know, so far at 28 years of age, and I don't see why I couldn't do that in real estate as well.

Brian Briscoe 32:13

Yeah, you absolutely can is the answer. So now here's here's the greatest part of the podcast, I can say something like, hey, Cliff, we have Corey on the line here. What do you want to ask him? And I just sit back and enjoy the show. So go ahead, click away. I

Clif Luber 32:26

got it from here, then. Yeah. All right. I appreciate that. So Cory, I really liked what you had to say I love the supplier, a fun aspect. I had a couple of my, my buddy's friends growing up, who were kind of the suppliers, have fun with the boats on Lake of the Ozarks near where I grew up. So that was I appreciated them. And I'm sure your family and friends appreciate you, as well. So one thing I'm kind of curious about, especially when you mentioned your first deal, or the one where you had 75% ownership and the partners didn't end up really being worth continuing deals with is, you know, someone like me, who's an aspiring syndicator. And yet to get in on a multifamily deal, but I'm looking to do that. I'm kind of wondering how you approach partnerships and joining forces, and especially how you did it, you know, early on in your career before you were as established as you are now.

Corey Peterson 33:08

Yeah, that's a great question, Cliff. So partnerships are very tricky, but they're not hard. But you've got to understand the I call it understand the operating agreement, okay? You, you go into partnerships with a business mind, right. And you only go into a partnership with a business by now I say, do deals, not partnerships, okay? Meaning, I'm going to do a deal with somebody, that doesn't mean that I have to do all my deals with that person. That means that we've just come together on this deal. And I find that if we do it and approach it that way, you can usually have a coming to the minds. In other words, we all understand what we need to do is notice do a little bit of work in the beginning and say, what exactly is your responsibility? What are you going to be doing? What am I going to be doing? What happens if it goes wrong? What happens if we lose money? Are you going to be able to step up, you know, and getting everybody to chime in and hold them accountable. So everybody truly understands roles and responsibilities, right? We can do that. And then you draft it into your operating agreement. Now you have a document that when push comes to shove, you guys can all back and go this is what we started this relationship because things can go wrong, just like in marriages, they go wrong. So I treat those partnerships with great importance. And then also do your research on who you partner with. And I'll tell you, Cliff, it's a lot easier to get into a big multifamily deal by bringing value. And by bringing you value a lot of times you can bring money or you bring a deal, right. So in other words, you go learn how to find a deal. And then you bring that in to the right group and say, Hey, I'd like I've got a deal. It's really a viable deal. And I want to be a part of the gap. And I'll let you do the rest. Right? Sure. You get good started, you know, you've got friends and people that you know, you have a lot of influence, I believe you do. Anybody that went to the Naval Academy, by the way, my son wants to go as well. Awesome. Well, I'll give him my email address, please, I'd love to talk on a wrestling scholarship. But possibly in the Navy, for sure. But my point is, you can get together and have a meeting of the minds and you can do some really great things. But I always say just make it about the deal. And then because you might go after that deal, there's a new opportunity from somebody else, you want to have the ability to separate yourself from your group and not have to do it unless you choose to.

Clif Luber 35:42

Does that make sense? Sure. Yeah, absolutely. Now, is the gift kind of a, I guess, how many maybe touchpoints Do you think it would take for you to build trust enough to go in on a deal with someone, you know, because you can't just it seems like you couldn't just do 130 minute phone call and be like, Okay, cool. I now know and like you, but then I also trust you like that. Yeah,

Corey Peterson 36:00

I think you've got time, right? You gotta like really understand. So some some of the guys that run podcasts, I'd be like, you know, like, even Brian, I mean, like, even you know, me, Dave, you know, I'm thinking of Michael Becker, there's other people. There's lots of people just starting to get to know and getting their network, right. And then surely, if you're like, Hey, I think I've got a deal, or you're trying to narrow it down to say, Hey, listen, I this is what I want to do. I want to bring you a deal, or I think I can bring some money. Can I understand what you know, can I get some referrals of other partners that have been gills with you? So get referrals of other people? Don't listen to them, listen to the other people? Because that's usually how I do it, or like, talk to my investors have, you know, because what you really want to know, is this person has integrity? Are they going to run projects? Good? Do they pay their investors? Because if you're raising money, you got to make sure that that syndicator is going to take care of your people like gold? Right? Sure.

Brian Briscoe 36:59

Yeah. Yeah. You know, I was just thinking on a Korean your your earlier point where you never ask investors for money, you could probably use the same tactic. If you're, if you're looking for people to partner with, you know, hey, I've got access to you know, a million dollars in investor money, I need some place to park it, you know, a good syndicator, who has a deal that I can partner with?

Corey Peterson 37:18

Yep, same thing. And then just network like crazy. Go until the you know, that's what I believe I my books called copy your way to success, because I was never that smart. Right? But I was always very resourceful. And so really, what you're asking is Cory, how do you be resourceful? Well, you get involved, you go all in, right, that's the only way I know how to do it. Now you've got a job, it doesn't mean that you can't put one foot firmly in the other side, right. And when I say firmly, that means you show up, you go to these networking events, you start finding your team and building some people that you have, like interest, and then go break bread with them. Go you know, like that's, that's why I love Jeep, and I put people in my jeep, I get to learn their whole story by just you know, spending a whole day with them. Right? And then you'll start to know each other, then you and then from there, you can start figuring out like, Hey, I think I like you. I think we could be friends after this. And one of the persons that I truly respect, good friend of mine said, Great, don't ever go in business with people that you couldn't see yourself hanging out with, on a weekend doing you write only do business with people like that, because you'll find that it'll, it'll really help. Because it's not worth the aggravation of finding people that are not like you

hear Yeah, no, no, that's a great point. Thanks,

personality wise. Now, let me make sure I've seen that personality wise, right? Because skill set wise, they could be totally different skill sets, right? They could be really good at this. And you're not, but you want to find that you have some enough common interest that it's not work, just to say, Hey, what's going on? You know, hey, Brian, what's up? You know? Yeah,

Clif Luber 39:00

sure. Right. Yeah. And that seems like to be just kind of a good point about building relationships in general, right? Like, it's, there's so much more to people than just what they do professionally, right? Like what they like to do for fun, their families, all that stuff. And if you have a genuine interest in getting to know people, it seems like you can go far in this business because you have to talk to a lot of people.

Corey Peterson 39:17

That's what that's what this business is. And you just said you're in customer service, you already know this. You're gonna be here.

Clif Luber 39:23

Well, thank you. I appreciate that. So one thing so going back to your story about Carl and how he was willing to give you 85 grand, you know, and I'm my book, my partner and I just sent out an email to a lot of people that we know launching upward capital last week, actually, and we were saying, you know, we already have people who are responding back saying hey, we'd love to invest I love to learn learn more about syndication What do you guys trying to buy? Exactly and all this stuff and it started to kind of awakened me like, Okay, this is other people's money like, and yes, it sounds nice that it's not your own money because, you know, I don't have it. You didn't have it when you started, but it's other people's money that they've worked hard to save and all that and I guess how did you maybe kind of overcome the initial maybe imposter syndrome. I've heard people throw around in the pressures of, hey, yep, the first deal is a lot of friends and family money. And so you don't want to let them down and you don't want to let anyone down, but especially the people that are closest to you in your life when

Corey Peterson 40:10

you're getting started. Yeah, you get one shot right? with your friends and family. Right. Here's what I've learned from that. Number one, you've got to firmly put in your mind that you are they're not you're not. You're not taking their money. Okay. They're offering you their money. I didn't, I didn't take Karl's money. Carl wanted to given to me. Big difference, right? Sure. Why? Cuz I know how to make money grow. Money flows, cash flows from people that can't handle it to people that can. And cliff, you will become a Money Magnet, as soon as you tell yourself and plently firm on it, and say, I help people make great returns by doing what I do best. Right. And everybody, and there's trillions of dollars out there that want to get out of the stock market. It's the roller coaster, they don't understand why it works. And they're looking for someone they can count on, like Cliff that can steer the ship to use a Navy term.

Clif Luber 41:15

Yeah. Sure. Yeah. No, well, no. perfectly executed. Good job. Yeah, so I mean, well, and especially, you know, earlier this year, once COVID kind of started to break out the February to March stock market ride was just unbelievable. I mean, so many people this year, I think have become very upset with how inconsistent it is. And then also, I mean, knowing the returns like, hey, over, you know, 30 years, the s&p 500 gets you six or 7%. And, frankly, real estate could triple that on you with conservative underwriting don't even

Corey Peterson 41:42

triple Okay, yeah, no, so here's an Can I, I don't want to interrupt you, but I want to give you a little gym here. Okay. Now, this is what I'm known for in my little space, because I do I raise money a little differently than most people. I believe I do what I call a six and six, which is a 6% profit 6% on the back end, all that means is a total return to my investors of 12%. Okay, it's not 20 I'm not giving my investors 2025 whatever that stupid stuff is. A it's hard to do that. And it's hard to promise that and even hit it. And I find a solid return is really what my investors want. Something they can depend on. That they know like, that's good. And when you hit 20s, or those triple, you say triple digits, or triple whatever. For a lot of those who that are already in that stock market where their financial advisors said six to nine, from six to 912 feels like speeding. Okay, sure. Above 12 feels like ludicrous speed, right? If you ever watch Spaceballs shows my age. Okay, I know I'm older. That's okay.

Brian Briscoe 42:50

I watched baseballs when I was a kid. So I don't

Corey Peterson 42:53

put it too ludicrous. Yeah. Um, but there's people out there that are looking for just a solid return. Right? And here's the thing for you is like, I would use everything you've done to now like before and afters, here's our house. Here's our segue. Here's what we're going like build your story of where you're going. And I call that your credibility kit. You know, and I'm, usually if you'll text me afterwards, I'll send you mine, just so you can have a look at what ours is. I'm sure, Brian, you have one as well. You know, it's a little tool that you would say, here's what we do. And if you're wanting to go in multifamily, it talks about what you're going to do in multifamily. And if you don't have any before and afters to talk about, like the stuff that you've owned, then find someone that you could partner with that would be willing to lend you their credibility. And that's always what I've done is like, what I wanted to get into something really bad. You find a partner that you can, that maybe he's already done that that has a lot more level of success, and say, Hey, listen, I'm gonna go out and do this, this guy borrow your credibility. And the right.

Brian Briscoe 43:59

Yes, yeah. You know, and I get paid for mentoring. If you look at my first credibility kit, my mentors at the bottom and then the guy who ran the mentoring programme is at the bottom, you know, those were my advisors, you know, so my, my credibility kit talked about all my military experience and how I can apply it to multifamily. Now I wanted to do all of this. Then at the bottom, it's like, hey, this guy owns 1200 units. This guy owns 3000 units. Yes. So yeah, it's

Unknown Speaker 44:24

that's what we do for our students as well. So it's like, we add our credibility. At the end of this. You put them in front, we're just part of their partner, their team. And then it's like, oh, well, okay, we've got stuff.

Brian Briscoe 44:34

Yeah. Now, of course, interesting. I picked up another book today, earlier today. It's called principles of real estate syndications by Sam freshmen, you know, and apparently, I keyed into this because somebody posted up there and said that he never offered more than 6% to his investors as a syndicator. And he had more money than he could ever place so I'm curious to see what that comes. But you know, I like your model. You know that the 6% in 6% out you And people look at that. And they say, Well, I'm gonna get 12%. So,

Corey Peterson 45:05

all the time and I mean, like we hit it now, I'm already ready to challenge myself, right? So I'm thinking about doing five and five, right? And make it 10. Because I still think 10 is a win, but like right now money is chasing, looking for different alternatives. Right? So, and he has the lowest cost of capital wins. Okay, if your cost of capital is 10% versus 12, versus 20, how many more deals qualified? And how many more deals Can you make more profitable for at the end of the day, I'm trying to make Corey a great living. But I'm also I like, so I'm trying to make three things happen. Really reshaped communities build great community award winning communities where my tenants are thrilled and call it home. Right? That's number one that's really important. It's home. Number two, is that I'm trying to make my investors a solid return where they're like, Man, I'm so happy. I mean, I've had some of my investors call me, like when the stock market crashes, crashes, and they're thanking me, saying, I'm so glad I'm with you, because this would drive me mad. Right? So I make those people happy. And then ultimately, because if I make those two people, that's my focus, then Korea gets to be happy with I get to make some money as well. And that's a win win win. And like, that's what I love about this business, Cliff.

Brian Briscoe 46:29

That's great. That's awesome. Hey, Cliff, we've got time for probably one more question, and then we're gonna have to wrap it up here soon.

Clif Luber 46:36

Already. Sounds good. So Cory, one thing I, you mentioned, you know, COVID slows down a little bit of your, your acquisition time, because it's harder to go look at places unless people are selling and all that. So I was kind of wondering, for your personal, you know, COVID crystal ball, as far as impacts on the multifamily market, kind of what your take was on, maybe how your underwriting should change, maybe any changes, you know, due to what could happen to the real estate market the next few years?

Corey Peterson 46:59

Yeah, we are already starting to titrate cap rates, meaning, if we're buying at a seven cap, we think that we're maybe projecting an eight cap that when we go to exit, we think that cap rates are gonna go a little bit, they're gonna change here, within the next year, really towards the middle of next year. And, and I think there's gonna be a lot of opportunity in about six more months. And the reason being is so I've got some properties that are like in Louisiana, really big COVID problems, and we just evicted like 15 tenants, we find out a little window to open. And now we had, I mean that we haven't run a business and we hate to put people out, but like, that's, we run a business. So we put these out. Now, I think a lot of other people are doing that too. And so that's going to have a cycled effect of people are, they're looking, and people are gonna get more properties and become more vacant, some people are gonna be able to recoup and put new people in, but not everybody's going to do it. And some people are going to be bad operators and bad properties and mismanaged. And so those are going to suffer worse, I think there's gonna be some opportunity.

Brian Briscoe 48:04

Yeah, I do, too. I mean, you know, just you talking about cap rates going up, you know, cap rates are a reflection of risk. And if there's, you know, higher vacancy rates and lower collection rates, that that puts a little bit of higher rates, all markets

Corey Peterson 48:15

specific cliff, it really is all materialistic, because, like, if you go to Dallas, Dallas ain't probably gonna see much of a recession. Right? I mean, they got everybody from California, or Well, you know, people from California moving Dallas or Houston. So every sub market is different. But you've really, you've got to understand your economics. And this is what I love about apartments, again, is it's numbers, and there's lots of data on all of it, you can see where jobs are coming, where companies are moving into employments at you know, incomes, and you can start to get a pretty good idea of what to expect in the future. It's like having a crystal ball with data, and kind of being able to see into the future a little bit. So that's what we do is we just really try to play the game, but I'm optimistic about like, I'm not even trying to buy new properties right now. until at least q1 of next year, we're doing a renovation, like we have a $7 million new construction project that we're doing, but it's on land that we already exist in existence we own but um, but unless unless the right deal fell just right into my lap, but I'm okay being patient because I again, I'm not trying to buy I don't have to go place money. I'm patient.

Brian Briscoe 49:26

Yeah. Yeah, that's, that's something that's really nice about financial freedom. You know, you're not doing this to feed your family, you know, and if you weren't doing this to feed your family, you may rush into something that could be a mistake. So, Brian, all right. Well, we're at the end of the line here. Hey, one question for both of you, Cory, you go first, how

Corey Peterson 49:44

can listeners get in touch with you? The best way is, honestly go to our podcast, multifamily legacy podcasts. Or you can go to Kahuna wealth builders, that's our education platform. That's a nice place to get some free stuff.

Brian Briscoe 49:56

Nice. Nice. Okay, and we'll make sure that's in the show notes. Link to the pie. To cast and you know, link to your website, Cliff, same question for you. How can they get in touch with you or learn more about you?

Clif Luber 50:06

Yeah, absolutely. So people could feel free to email me at Cliff at upward And that's Cliff with one F. So it's kind of unique. They're also on LinkedIn, Facebook, and my phone number also is 573480104. So anyone can call or text me anytime. We'd love to talk real estate.

Brian Briscoe 50:24

Perfect. Yeah. And we'll make sure those are the show notes too. So you know, if anybody who's listening right now, don't worry about writing it down. Just hit the show notes. And it'll all be right there as well. Well, thank you guys for coming on. You know, you guys added a tonne of value. You know, Cory, always a pleasure listening to you talking with you, you know, just just sharing any time with you. And, you know, Cliff, you I look forward to you know, a couple more lunches in the Pentagon here in the next couple months before I retire. But I wish

Corey Peterson 50:48

you lots of success club, I'm telling you right now, if you believe it in your mind, and you just put it there and focus on I'm telling you what to do amazing things.

Brian Briscoe 50:56

Yeah. And I got a lot of good things going for you already. I know you're going to be successful. This you're going to be crushing this soon. So Alright, so that's it for today's episode, and we'll see you next time.

Thank you for listening to the dialogue and apartment investor podcast today brought to you by four oaks capital. If you'd like to know more about how to invest in apartment buildings or want to be a guest on our show, visit our website at four oaks slash podcasts or email us directly. If you're still listening, you obviously like the show. So pull out your phone, app, subscribe, and leave us a five star rating on your favourite podcast app. And we'll see you again next week.

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