What’s up Freedom Fighters! Today I have my pal Corey Peterson on the show. Corey started in single family investing, but has become known as a multi-family investor over the past several years. He’s done $96M in Apartment deals…and I had the honor to participate in 2 Apartment deals that closed late last year (Total of $20M in deals). Today we talk about the benefits of multi-family investing, and even how you might be able to work with us on an upcoming deal!

Highlights of this show

  • Meet Corey Peterson (aka: The Big Kahuna), Multi-Family Investor
  • Join our conversation on the benefits of multi-family investing
  • Listen in as we share some details from our recent deals
  • Learn how you can potentially join us on an upcoming deal!

Resources and Links from this show:

Listen to the Audio Version of this Episode

FlipNerd Show Transcript:

Mike:Welcome to Real Estate Investing Secrets. We’re all looking for freedom and the opportunity to live better, more fulfilling lives. But most of us were trained our entire lives to work for someone else and chase their dreams. How can we use real estate investing as a vehicle to achieve financial freedom? My life is dedicated to answering your real estate investing questions and helping you build an investing business that allows you to change your life and the world around you. And to enable you to turn your dreams of financial freedom into a reality.
My name is Mike Hambright from flipnerd.com and your questions get answered here on the Real Estate Investing Secrets Show. What’s up, freedom fighters? Hey, welcome back to the show. This is episode number 458. And I’m excited to talk about today. I’m here with my good buddy, Corey Peterson. If you’ve been following me for a while you probably know who Corey is too because truthfully, Corey and I have become good friends. He’s like my brother from another mother. And in fact Corey and our wives, we’re actually about to go on some bucket list adventures. We’ll maybe talk a little bit about that on the show today. But I want to kind of tee this show up a little bit before we kick this in.
I’ve been a real estate investor for 11 years now. I’ve flipped about 400 properties. I’ve coached and mentored people that have bought thousands of houses. It’s been very, very good to me. Today we’re going to talk about multifamily investing a little bit more, which has not been my thing historically, it’s been single family. But probably like a lot of investors, I’ve been excited about the people doing those big multifamily deals, those big apartment deals, how are they doing that? And the truth is, is I’ve just been too busy to go figure that out on my own.
And Corey and I partnered on some deals that we’ve done here lately. I want to talk about those deals but more at a high level I want to talk about just . . . you know, he used to be a single family guy too. And I’m not moving away from single family for those of you that are, you know, listening here today. I’m not going to say anything bad about single family. It’s great. I’m still doing it. We’re still teaching it, all those things. But you can invest in other things and I guess what I found is I need a more passive role just like maybe some of you listening here to do those big deals because I just don’t have the time and capacity to go figure it out. So with all that, said, what’s up, buddy? How’s it going, Corey?
Corey:Dude, what’s up, brother? Man, I always love coming on your show. I just love everything you stand for, Mike. And the way you teach and the way . . . your coaching program, everything that you do is such high level. I’m honored to be your guest, brother, honored.
Mike:I’m glad to have you. You’re better like me because this is only about a half hour so we’re about to spend about 10 days together locked in a cabin in the middle of nowhere pretty much so . . .
Corey:In the freaking cold, bro. And we got our wives to come in too.
Mike:Yeah, that’s right, that’s right.
Corey:That’s saying something.
Mike:So for those of you who that listening just to kind of give you some context. We run the Investor Fuel Mastermind. Corey is a member. Actually, Corey is one of our founding members of the Investor Fuel Real Estate Mastermind. And we have our event coming up here just a couple more weeks actually, in Salt Lake City. And then, a number of our group has maybe 20-plus people members are going out to Park City to go skiing for kind of a long weekend after our event.
And then I said, “Well, where’s the after after party at?” And we decided to go . . . my wife and son and I went on a month long RV trip this past summer through the Rockies and we spent some time in Yellowstone for the first time in our lives, which was really, really awesome. And my wife is kind of a photographer. She’s really, you know, getting into photography. And I remember she said several times how beautiful that would be in the wintertime. And, you know, obviously a lot less people there.
And so while we were there, I was like, “Hey, we’re going to . . . ” I kind of knew we were going to be in Salt Lake City. And I just said, “Why don’t we come up here after that trip?” And so we’re tying that onto the back and we’re actually going up to Yellowstone. And in fact, they actually closed the roads to the park so you have to go in with like a guide. So anyway, we’re going snowmobiling one day in Yellowstone and dog sledding on another day which is really . . .
Corey:Yeah. Dog sledding, brother.
Mike:Yeah. It’s going to be cool. It’s going to be cool. It’s going to be a really cool trip, bucket list items, I think. You know, if you know Corey and I or if you’re getting to know us, that’s what life is about now. It’s about experiences. It’s about creating freedom to be able to do things like this.
Corey:I’m so looking forward to that trip, brother. Like, listen, you breathe the words and I was like, “Dude, I’m all in.” There’s no way that I’m not doing that trip. It’s going to be epic. I promise you it’ll be epic. And the great thing is that real estate allowed us, is allowing us to live a life like no other, right? And that is truly amazing.
Mike:No doubt, no doubt. Yep. Coincidentally I was at the dentist today. I’m pointing this way but the dentist actually is right next to my office here in the next office over. And she’s like, “Do you have any trips planned for the New Year?” And I was like, “You know, I don’t want to brag but I’ve got some cool stuff going on.” So like, “I’m going on a dog sledding and snowmobiling trip and Yellowstone,” you know, we kind of talked about it a little bit. She’s like, “Well, what do you do that you can leave for that long?” I told her we have an event and we’re doing this. We’re going to be gone for about two weeks. “What do you do?” I was like, “I’m a real estate investor.”
Corey:It’s beautiful, man.
Mike:Yeah, yeah. Well, hey, Corey, for those that don’t know you well yet, I don’t know how they could not know you, my friend, but just take a couple of minutes here and give a little background.
Corey:Yeah, man. You know, I started off like every investor, I think. Just broke and just excited about trying to like get into real estate. I grew up as a small country farm boy from a small town in West Plains, Missouri. Thinking about the movie “Ozark” in Netflix. That’s where I grew up and wasn’t voted most likely to succeed. And honestly, I didn’t get to download from the mothership until I was 32 years old. And so, you know, I’ve sold cars and I managed restaurants and I found the bug at 32, I believe, of real estate. I read “Rich Dad Poor Dad.” And I committed . . . in 2005, I created my company. I called it Kahuna Investments because I wanted to be the big Kahuna, right? And I’ve been on a journey ever since.
I started off as a wholesaler because I had no money, no credit, and that was the easiest way for me to start is to find deals and sell them to people that had money. Then I got into fix and flip. And by doing fix and flip, I actually discovered one of my greatest strengths which is being able to raise capital. And so I started raising a lots of money from other people to do single family deals. And then in 2011, as the market was changing, from ’08, ’09 the downturn, you know, it was getting a little harder to find deals and I didn’t know how to do marketing. Like, that’s what everybody teaches now, how to market for single family deals.
Well, I didn’t know how to do that. And so I went a different route and I was like, “I’m going to get . . . ” because what I was really good at was raising capital. And so I just said, “Well, what if I could own an apartment?” And actually, I didn’t say, “What if?” I said, “How can I own an apartment?” So I went and got smart. I found some mentors in apartments. I bought my first one in 2011. I bought it for 3.2 million bucks. And I just sold that one, Mike, last year. I bought for $3.2. I sold it for $8.8.
Mike:That’s awesome, man. I remember that.
Corey:I made a crap ton of money. And that was just one. I’ve done many deals. And in fact, we just did a couple of deals. And before we get into that, what I love about the multifamily space . . . because I don’t like to poo poo on single family deals at all either, right? That’s where I got my start. What I’ve learned as far as when it comes . . . here’s what I love about the multifamily space, is that I get paid time and time again for work done one time. And so that really attracted me to the multifamily space. And the other thing was scale of economy. So it’s really difficult to buy like 100 single family homes in a year. Like, you got to be pretty good at acquisitions and finding deals. It’s almost eight, nine deals a month, right?
Mike:Right. Yep.
Corey:Now a lot of guys do it. They wholesale that many in a month. But to own them and then operate them as rentals, now that’s a feat because you have 100 different yards, 100 different addresses, and this is sometimes a nightmare. And I can buy 100 unit complex and actually that’s the small one, right? And just have one yard, you know. And I have staff that actually live on site and work the property. And so that’s what I discovered was a good mix and so that’s what I’ve been doing. We bought $25 million worth of property this year.
Mike:That’s awesome, man.
Corey:And you know what the best part is?
Mike:What’s that?
Corey:Me and you got to do it together, brother.
Mike:Yeah. Yeah, no doubt. No doubt. I didn’t know what you’re going to say. I like that part too. So yeah, the cool thing is, is for me, I have been an investor for 11 years now, we’ve done a lot of stuff, built a rental portfolio, which is a single family portfolio that’s treated us very well. And I was like, you know, in order for me to go like 10X that, like you said, single family, it would be hard, that would be the hardest way to do it. Not that it can’t be done, but it’s hard and it’s harder than it used to be to find, buy and holds and find good deals.
Like, a lot of those were bought in, you know, 2009, 2010, 2011, 2012 when the market was down. And of course, we can look back now in hindsight and say, “Why didn’t I do this or do that.” But the reality is, is I’m at a point now in my life and my career, where I know that I’m willing to pay to move faster. So if I can buy some coaching or mentoring or other things that I can do that I can move faster, I’ll do it. If I can partner with people on things to move the needle faster, I’ll do it.
So for me to go learn how to find multifamily deals, how to raise money, how to property manage, like all those things would be like me starting my career over. And I’m not saying that people shouldn’t do that or can’t do that, but I just value . . . I’m a busy guy. I value my life. I don’t really have to work that hard anymore. I choose to do what I do most days, right? But the thing is, I’m like, “Why would I go figure that out? Corey and I are buddies. Let’s work on it together and let’s go do it.” So yeah, we closed two deals, I guess in the past 90 days, right? One of them was right before Christmas . . .
Corey:Yeah. We went right, boom to boom.
Mike:The other one was right before Halloween, right?
Corey:Yep. So we closed the Catalina Village, right before Halloween. It was a 10.6 . . . No, $9.69 acquisition. Then we raised $3.6 million at private equity. And then we just closed Hawkeye Towers, which is in Waterloo, Iowa, that was a $10.6 million purchase. And we raised $4.6 million for that deal.
Mike:Yep. Yep.
Corey:That’s a lot of money, brother.
Mike:And it’s exciting. And the thing for me is, you know, I helped raise the money, I put some of my own money in it and things like that. The reality is, is I haven’t personally been to the property. Either of those. I know it’s in good hands now because of your property management companies taking care of it. And, you know, when I closed on three deals, single family deals last week, too. And it wasn’t that easy. Like, I close on them and then a whole bunch of shit starts to have to happen, right? We got to start doing things. What’s going on with this? Are the utilities on yet? Like, we’re worried about all these things. And the reality is, is like you said, even though these were big properties, big, big unit properties, very little that I had to do because when you’re buying big things with a big scale like that, there are systems and processes in place for other people to do it.
Corey:Dude, you just said it. Systems and processes. Now I want to back up to your earlier statement for just a minute because I think you just said, is like, probably the most key thing that I’ve ever heard is that, coaching and mentoring is the key, right? If you don’t have that . . . like so, every time I’ve ever wanted to try something new, you either have to learn it yourself . . . and you said it, just learn it yourself, you buy coach . . . or you can fast track it with coaching and mentoring, right? And then more importantly, partnering with someone is even the crème to crème, right? And you’ve done both, right? I mean, how much coaching have you bought in your lifetime? Probably just as much as I have. I have a whole case of stuff . . .
Mike:A lot, a lot.
Corey: . . . that I’ve not even opened, right?
Mike:And the other way around is even on the other side of that, I partner with students now. People like, join my . . . you know, our FlipNerd coaching program. And we work together on deals and we help them . . . the same way that I’m working with you, similar way on multifamily, right? I valued that, “Hey, I could go figure this out of my own but it’s going to take me years.”
Corey:Yeah, or it is how can we add value together and make the right split that makes sense then we’ll just go together, right? That’s exactly what we did. That’s what I love about the multifamily business is that more . . . in a single family spot, it’s kind of like you’re solo, you go by yourself, go alone mentality. It’s a lonely world, right?
I mean being a single family investor or being just an investor in general, a lot of times it’s a lonely world because it’s usually you and, you know, sometimes you have teams but they’re scattered. But in the multifamily space, you know, it usually takes more than one person to do a deal with you, and we’ve partnered together, we make great relationships, and then we kind of form this thing and we say, “Here’s where we’re going and let’s all help us get us there.” And that’s exactly what you did. And you brought in and you actually help bring capital to the deal.
Mike:Yeah, yeah. So my view now is just to, you know, if people are listening and saying, “What?” You know, not that you should jump out a single family and multi-family, you need to do whatever makes sense for you. I’m of this belief now, that I make my kind of shorter term money, I make my today money, if you will, with flipping house. And longer term stuff, I want cash flowing assets. And I have some single family, now we have some multifamily, there could be other things in that bucket.
But I look at it as separately in the multifamily space because I’m partnering with Corey and because I partner with you, my friend, I don’t have a day to day . . . I’m not part of the operations, right?
Corey:You have a very passive [part 00:14:42].
Mike:Because it might take a lot of my time. I’m passive, right? And then my kind of day job of the things I do for my businesses are what I do mostly for today money. And [inaudible 00:14:51] any money I earned I can go invest longer term and really move the needle faster because they’re bigger deals, right?
Corey: Yeah. Well, and like, you just said too, it’s like, you get more . . . you know, when you’re doing lots of fix and flips and all that stuff and you built that machine and that you teach how to do that very well. I mean, that’s the reason I’m part of Investor Fuel. I love . . . I mean, I still love single family and I love to bring a little bit of sprinkle of what I do to that to that group because I grow in that group, right? I mean there’s things that I learn and I’m like, “Oh.” That cross pollinates all the time. Like, I learned stuff from what guys do in a single family that I should be doing in marketing ones, right? I mean, there’s lots of stuff like that. But the ability to scale and then the other part of what you said is having . . . because they’re such a big properties, not only do they afford a management company, but they afford staff.
And even for me, like I don’t do a lot of the work. So even . . . you know, you’re partnering with me, it’s not that I do a lot of work either. I don’t get a lot of phone calls. I don’t [slap the 00:15:54] utilities. We have a third-party management company that specializes in the apartments. And they’re not just good, they’re great. Now I’ve searched the world like, a lot of times in finding systems and processes . . . and this is with anything, if you do a better job being very diligent in finding the right person or the right company that really understands your value, your culture, and that operate in very high level, because there’s average operators and then there’s great ones. Just like there’s great people and there’s, you know, vice versa.
Spend the time in trying to find the right people, the best. And dude, it makes me look smart and I barely made out of high school, you know. But that’s what people are buying from me, is my processes. And the reality is it’s not my process, it’s borrowing my management company processes. They’re doing the day to day. They’re in the grind and I just have to make sure that we have the right vision and we set the course and they go. And then sometimes we have to make corrections, but it’s not like, “Oh my god, what’s going on?” Right? We’re not usually in “oh crap” mode.
Mike:Right. Right. And don’t sell yourself short. I mean, there’s lots of lessons learned over the years, right? Of what to do better, oh, man, never do that again. Like, don’t use that property management company. Like, it’s trial and error. You have to figure those things out. So a lot of times, you know, it’s easy for people to say, “Well, yeah, that worked for you. Look how successful you are.” I was like, “Yeah, overnight success. For me, you know, 11 years in the making.” Right? Exactly. You didn’t see . . .
Corey:Hold on. Let me show you all my scars. Let me show you all the ways I’ve lost money.
Mike:I’ve got some arrows wounds in my back. Yeah, I’ve been a pioneer one too many times. But hey, I know . . . one thing I want to say is for people listening right now, keep listening because at the end, you know, we’re going to do more deals together. We actually . . . I’m not aware of any hot deals right now. I know we’re always kind of, you got the team always looking for deals. But there’s going to be some more deals coming. I mean your plan is to do . . .
Corey:Soon.
Mike: . . . more deals in 2019 here. And people that are listening right now, we want to tell you, how, if you’re looking for more of a passive investment, how you can work with us.
So we don’t even have any deals to talk about right now. But later in the show towards the end I want to give you guys the ability to jump on the phone with us and talk about, you know, maybe if there’s an opportunity to work together on deals that come up in the future. Just start to get to know each other a little bit. So we’ll come back to that.
But for now, Corey, what are some of the . . . we talked about it a little bit of a high level, but talk about . . . for people that are listening to this right now, if they’re newer, like, you know, you started basically from broken, worked your way there. There’s also people that are in corporate America that have access to some money, but they don’t have time, right? And so talk to a couple of these types of people that are listening right now. The new investor, the small person that is, you know, trying to string things together to get going and then the maybe the person that has some money that doesn’t have time, right? There’s a path there. There’s a path there for everybody. It’s just a matter which path you go down to get started.
Corey:Yeah, so the guy that’s starting out, like, hey, listen, I always say it’s not bad to start in the single family spot. I mean that is my ascension model. Like, I started off wholesaling, I got . . . then I started on finding some deals. Like, I am going to get a couple of deals by myself and learn the fix and flip process. But I will tell you that each time it was a whole different process. So from wholesaling to doing fix and flip, it’s like a whole different language. Like, there’s a whole different skill set required and it’s the same thing with multifamily.
So people could start just with multifamily and start there, but it’s a whole different skill set. And sometimes it makes in my mind, some sense to have a base of income and it’s probably a little easier to start in the single family world and to get an income started, where you need to have a little base. And then you can start to transition to the bigger deals. I think that makes total sense and that’s how I get it, right? Now, my only wish for me is I wish I would have started sooner. If I would start sooner, it might have been great but I would have bought some more properties.
Mike:That’s always hindsight, right? You always look back and say, “I could do . . . ” I mean, if I knew what would happen over the last few years, you know, everybody says this, there’s a lot of things I would do differently, right? I would have kept . . .
Corey:I mean, 11 years of experience, you know a lot more now than you did then, right?
Mike:No doubt. No doubt.
Corey:And I’m the same way. I mean, I started 2005. So I’ve got 13 years, right? I’m two more years than Mike. But Mike, he’s got a way bigger podcast than I do.
Mike:They say size doesn’t matter, Corey. I’m not here to . . .
Corey:But, you know . . . and then to the other guy, to that working professional, right?
Mike:Yeah.
Corey:No, I don’t want to undervalue what those people have because, man, what I’ve learned is the crème de crème, at least in the multifamily world is the ability to have influence and raise capital. Right? And so I think a lot of these working professionals, doctors, dentists, lawyers, are just professional. And my wife used to be a pharmaceutical rep, right? She was in a setting where she knew lots of people and had big networks and you can take a network like that if you have influence over and learn the business of multifamily or even like, you know, knowing Mike Hambright is a big deal.
At the end of the show, you got to give them a place that you can be a part of our deals and put money and go find capital, or maybe it’s your own capital. And most people don’t even know this that they . . . you can use your IRAs to invest in multifamily. And most people don’t even know that, like, they’re like, “I can use my real self-directed IRA.” And the answer is, yes, right? Most people don’t even know that.
But that person, that working professional, they have a huge opportunity, they don’t have the time, but they can partner with people that do. And a lot of times that’s . . . a lot of what I’ve been able to do is take those types of successful people and then parlay them and say, “Listen, bring me your people and we’ll help close them.” And then I’ll do a lot of the work, we’ll partner together and we create relationships that way, and that happens all the time.
Mike:Yep. Yep.
Corey:So don’t value your . . . or devalue your network and who you know. That sometimes it’s everything.
Mike: Yeah, yeah. And there is, you know, there’s a lot of truth in starting a single family if you need an income, right? The thing about the multifamily stuff and the thing for me, for multifamily and a lot of the, you know, folks that have more access to capital to do deals is, they’re not looking for an immediate return on that. So they’re looking for building longer term wealth and that’s where I’m at and I think that’s where a lot of people at that are investing in these deals. There is no . . . other than, you know, paying an interest rate if you’re a debt investor, things like that. It’s not like you’re flipping the property in a couple of months and there’s going to be this big payday. I mean, that’s not your model.
Corey:No, it is long term. It’s called cash flow. I call it the cash flow life. Man, listen, I love it. There’s nothing more sexy to me than money coming in every month for work I never did. I love it. And then as I keep buying these assets, that money keep stacking to where like, I don’t want to like boast her name, but like we’re making almost over a half million dollars in passive income. And . . .
Mike:Not bad.
Corey: . . . I ain’t working for it, brother. You know, I am but I did the work once.
Mike:You build that, right? I mean, that’s what I want people to understand is, you know, no matter where you’re at, don’t hear that and get deterred either. Like, Corey has been doing this for 13 years. So you have to build up. It’s just a stair-step approach and if you’re working with people like Corey, the multifamily space or me and the single family space, what we try to do is help people climb that learning curve. Instead of 13 years or 11 years, let’s talk about 13 months or 11 months. Like, let’s [inaudible 00:24:19] leave that learning curve down.
Corey:I only wish that I could have that . . . I remember, I mean, I wish I would have had a mentor early on in my business. I would have been so much more successful because I made every mistake there was, Mike.
Mike:All right. I hear you.
Corey:I mean, I’d read a book it would say, “Go do this.” And I was like, “Well, that worked about 10 years ago when the book was written.” You know, it wasn’t working now. And sometimes I think that’s the most valuable piece of having real investors and being part of a real group and real mentoring, coaching program, is that you get actionable data and processes that are working right now. Not yesterday or not when the market crashed, but like right now, this works. And that’s what people need.
Mike:Yep. Hey, one of the [beauties 00:25:07] I want to say, I want to talk about . . . just for a couple minutes talk about the two deals we did. But one of the cool things that I really like about your model and I think that a lot of people like is, these are deals that are cash flowing now. Like, my whole real estate investing background, all my experience is taking something that is fundamentally broken and adding value to it along the way, whether it’s fixing it up, or even just finding the deal is adding value in the single family space. But in the multifamily space, these deals are already cash flowing. They’re already cash flow positive and you don’t have plans to go in there. It’s not like there’s 50% vacancy and you need to like, you know, we’re all hoping and . . .
Corey:Do $2 million for the rehab or something, right?
Mike:Hoping and praying that you figure this out. It’s like, they’re working better now. And the good thing about multifamily is you can move some levers just briefly and twist some knobs briefly. And it magnifies the value of the properties. I mean, there’s just some little tweaks, right?
Corey:Man, that’s what I love about this business. So this is why we’re so good at raising money is, think about this, right? What do most people hate about the stock market? That is up and down and crazy.
Mike:Unpredictable. Yeah.
Corey:Right?
Mike:Right.
Corey:And so sometimes our single family housing market is like that at times. Now as a whole it’s pretty steady. But the thing with the multifamily is that rent is very steady. And we look for buying opportunities from sellers. We will never buy . . . most of our properties are what’s called stabilized, meaning 85% or more occupied. We already have most of the people in the property and they pay rent. And not only just pay it but we collect it. So now we have a stabilized process and so if we can add value by taking it like . . . Now, we’ve bought Hawkeye Towers. I’ll give you an example.
Hawkeye, that’s the student housing property. That was 88% occupied. Now 88% is pretty good. Like, that’s a good number. But for us, 88% sucks, right? If we go from 88% to . . . now, we projected to go to 94%. But theoretically, all my properties that we manage, we run at about a 97% occupancy. So 97% is amazing, by the way. And then if you set up some systems and processes just to go from 88% to 97%, that’s such a big gap that you can make a crap ton of money. I mean, a lot of money, millions of dollars in that range. And all we do . . .
Mike:There’s this very little additional expense. That’s all revenue, right?
Corey:Yes. And not only revenue. It’s like, you said it best. Like, some of these deals . . . on Hawkeye Towers, we have a budget of $202,000 in capital expense or CapEx, right? Any single family, we call that . . .
Mike:[inaudible 00:28:03] $10 million property is nothing.
Corey:Yeah, we call it rehab money in the single family business, right? So $200,000 . . .
Mike:I literally am about to rehab a 1700 square foot. I just got the bid this morning. I don’t have it in front of me, 1700 square foot house, Plano, Texas here. Yeah, it’s a nice area. It’s a 50-year old house, so it needs everything. People were just living there. It’s livable, it’s just outdated, you know, so we’re going to rip a bunch of stuff out. Everything in is all over like $55,000, $56,000. That’s for one house, 1700 square foot house.
Corey:So let that sink in for a minute.
Mike:All right.
Corey:So when we look at this property, we’re like, “Okay, what are we going to do this property?” Like, listen, we need to slurry the parking lot and re-stripe it. Well, you’re like, “What is that?” That is about 40,000 bucks to do that, some roofing repair, we’re going to add security cameras and some fast internet, right? These are not major items. Like, we’re not structurally doing anything. And we’re going to put some stuff on top of the pavement, paint some stripes, you know, like, put some cameras up so everybody feels safe and change the light bulbs.
So with that, I came up with what the projections there but I want to say we’re making on that property from the get go. If we can just even the sellers numbers, right? Not what we think we’re going to do, but what they did last year. It made $816,000 NOI, net operating income. And then we have to pay the bank debt service, right? I want to save us like $340,000 or $47,000 to pay the note, the mortgage. And what’s left over is profit. Now that’s like $500,000 worth of profit in year one, after we pay the note.
Mike:Yep.
Corey:Like, [can I 00:30:04] say Merry Christmas?
Mike:In year one, yeah, it’s cash flowing. Yeah
Corey:Like, listen. My investors know the reason they love this is because they know . . . like, I’m making just as much as my investors by the way. We are. So our payment sure capital is like $260,000-ish or something like that, which leaves like, $200,000, $230,000 left in free cash flow. Like, that goes to me and my friends.
And so, now here’s the real story, what happens if it goes bad? Like, what happens if this next downturn everybody’s talking about comes and shows up on our doorstep, right? Well, the great thing is for my investors because like, I don’t care about my eyes, I’m looking at my investors eyes. How would they look at it? Because they’re like, “Oh, crap. We got to make sure that we have some of the market . . . like, we don’t want to lose our money.” And so if I’m making $230,000 profit, that’s a lot of my profit that I can give up to make my investors hold.
Mike:There’s a lot of cushion there, right?
Corey:That’s a lot of cushion. That’s a lot of cushion.
Mike:But the thing is, it’s college housing across the street from a college that is not going anywhere and it’s safe, it’s reasonable, it’s clean, like, it’s probably one of the best [inaudible 00:31:21].
Corey:No, it was a community college, which is very rare, right? So it’s like already the value option. And it has history. Like, this property has been built in 2006, and so it’s been operating for 12 years.
Mike:Right. It’s not that old. Yeah.
Corey:Yeah, and it’s a newer product. Newer product, already has history, it’s always been stabilized, 85% occupancy or better. Like, that’s a recipe for success. And all we have to do is if we can improve it in any way because I just used the seller as old numbers because we plan on making more.
Mike:Sure. Yep, yep. Well, Corey, I know you and I could talk about this all day long, right?
Corey:Oh, it gets me excited, brother.
Mike:You talk about it a lot. I get excited too. And I’m excited to do more deals with you. So we’re going to keep doing some deals together. [inaudible 00:32:03].
Corey:We’re going to have something in March. I’m going to tell you, I have a feeling they have something in March, bro.
Mike:Is it okay if I give out . . . probably get something while we’re in the middle of Yellowstone, like, you know, not even really working hard and making stuff happen.
Corey:Yeah, man.
Mike:Hey, is it okay if I give out a link for people to contact us?
Corey:Yes please.
Mike:Okay. So here’s how it works everybody. Look, at the end of the day, if you’re serious, like, this is going to get you on the phone with Corey or myself. So please take this seriously. You know, just be serious about it. If you seriously want to talk and you’re a serious investor and you’re looking to . . .
Corey:Don’t waste my time.
Mike:Yeah, just don’t waste anybody’s time. And we don’t want to waste your time either. So if you go to flipnerd.com/income, flipnerd.com/income, we’ve got a form there where you can put your information in and that’s the first step of getting on the phone with us. And it will be . . . truthfully, it is going to be Corey if I’m being honest here. To talk about opportunities and look just more about what you’re looking for and see if you’re even a fit for who were looking for . . .
Corey:Yeah, we’re trying to . . .
Mike:We’ll even have conversations.
Corey:Yeah. And we know there’s no deals being pitched, we’re not going to ask you for money, we’re just going to find out who you are and what’s your goals, right? And, you know, because most people that I know, they have IRAs sitting around doing nothing, you know, as well or poorly managed. And think about what did the stock market just do? It gave everybody a goose egg this year. And like, how much control does your broker have over that? Probably not a lot. And what’s their excuse for it, right? “Well, I don’t manage your money. I just take it.” Well, I mean like that’s . . . you know. And by the way I can say that because I used to be a financial advisor. But the reality is they have no control and they have no idea about how things work in the stock market.
Mike:They’re just front-end sales people usually, so.
Corey:Yep. And we’re operator. I’m an operator. I operate multifamily. I understand how they work and I know what’s going on. That’s a big difference.
Mike:So that’s flipnerd.com/income. And if you’re driving right now and about to . . . don’t go crash or anything. We’ll put the links down in the show notes here, if you go to flipnerd.com. Actually if you go to flipnerd.com/secrets which is what the new show is called here, flipnerd.com/secrets. That’ll get you to the shows area and then just find the show and in the show notes we’ll have some links down here for you.
So, Corey, I didn’t tell you this ahead of time. I just thought of this, but, so I coach people in the single family space, FlipNerd Coaching and then we have a mastermind that Corey is a member of it, that’s called Investor Fuel. We’re going to have links down below for all these things. But, Corey actually does some training for people that want to get into the real estate investing space. And it’s called the Kahuna Boardroom. Corey, would it be okay if people just go to that same link and fill out the form? I know it’s a little unconventional, they’re going to at least have a conversation with you, or you want them to go somewhere else?
Corey:No, that’s the right place. So kahunaboardroom.com. And Kahuna is spelled just like it sounds, K-A-H-U-N-A, like the big Kahuna. So kahunaboardroom.com and then you’ll . . . all you have to do is apply. So it’s an application process because I don’t teach and coach everybody that signs up. I want to find people that really want to do the business that I have a commonality with, that we can . . . you know, I want to have success. And I only do it for 35 people at a time.
Mike:And by the way, my wife and I are going to be there in March. How did I forget about that? God, we’re going to be spending . . . I’m spending more time with you than many of my closest family members, Corey.
Corey:Listen, [inaudible 00:35:48].
Mike:But my wife is coming with me and your wife’s coming with us. We’re all going together to . . .
Corey:We’re going to be singing Kumbaya, brother.
Mike:Yeah. So anyway, so your event’s in March, right?
Corey:Yeah.
Mike:Third week of March or something.
Corey:Yeah, it is actually March 20 . . . it’s so bad I don’t even know my schedule, 26, 27, 28.
Mike:Okay. Cool. So anyway, my wife and I will be there as well. If you decide to come, just let Corey know where you heard about us and we’ll . . . maybe you’ll get an extra lei or something, I don’t know.
Corey:Yeah. Well, we’ll [inaudible 00:36:22].
Mike:I know you guys have a . . .
Corey:We’ll give them the Mike Hambright special.
Mike:Special coconut drink or something. So, awesome. Well guys, we’ve given you some great links here. Corey, thanks for spending some time with us today on the show.
Corey:Brother, you know, I love it. I love your show. I love what you stand for. You’re . . .
Mike:Hey, I’m still here, man. We’re freedom fighters now. We’re fighting for freedom through real estate investing.
Corey:Amen, dude.
Mike:Yep. Awesome, buddy. Everybody, we’re going to add these links down below to all the things that we just talked about. I won’t repeat them again. But until the next episode, stay strong, stay cool, and keep on fighting for freedom. See you on the next one.
Thanks for listening to today’s show. There are three ways I can help you start or grow your real estate investing business. If you’re a new investor and just getting started, the FlipNerd Investor Coaching program is the most effective program in America. I’ve been coaching and mentoring new real estate investors for 10 years and my students have literally purchased thousands and thousands of properties. Many of them started with little to no experience at all.
Our program is a paint by numbers program where we tell you exactly what to do week by week, to make sure that you don’t get distracted on your way to results. We show you how to build a real business, not just create another job for yourself. New memberships are limited. You can learn more and apply or schedule a call with me and my team at flipnerd.com/coaching. If you’re an experienced investor doing a minimum of 10 deals a year up to 500 deals a year or more, or have a multimillion dollar real estate portfolio already, you should check out our powerful Investor Fuel Real Estate Investor Mastermind.
Over 100 of the nation’s leading real estate investors are members and it’s not uncommon for our members to 2X or 5X their business, just from getting around other members at Investor Fuel. At Investor Fuel, each of us are business advisors to one another’s businesses. But we don’t stop at business. We focus heavily on becoming better people and living fuller lives. If you’re looking for fuel for your business or fuel for your life, please check out investorfuel.com. Applications and interviews are required, as most investors are not a fit for our community.
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