Multi-Family Deal Lab Podcast Episode 013

This week David Lindahl sits down with Corey Peterson. Corey describes his journey from restaurant manager to grocery salesman to having a terrific real estate investment portfolio.

He also talks about mindset and learning how there’s A LOT more to property management than he thought and how he solved that problem!

Speaker 1: Welcome to the multifamily deal lab podcast, where we dissect a deal before your eyes and ears. So you can discover the strategies and tactics that got each deal to the finish line strategies and tactics that you can put in your own toolbox to get you to the closing table from sourcing the deal, raising due diligence to the property takeover. Multi-family deal lab shows how you too can get the deal done. And now here’s your host. David Lindahl, everybody. Welcome to multi-family deal lab. I’m your host David Lindahl.

Speaker 2: And I’m with Corey Peterson. He’s going to tell you who he is and where he’s from Corey away from Dave. I’m from Arizona in the hot state of Arizona right now. Did you always come from Arizona Where’d you grow up?

I grew up, I grew up in a small, small town, Dave. no one will know where it’s at, but it’s in Missouri. It’s by Branson. and I grew up in the country. I grew up on 180 acre farm and, I was not voted most likely to succeed in my high school days. we vote by body. Yeah. And, you know, let’s say I was good at copying. and my teachers never really liked that too much. I find my professional life is the best, skill trait that I have the copy successful people. Absolutely. And then that’s all I’ve done.

Speaker 2: So, yeah, so, you know, my background was, when you, when you don’t have a degree, you either got to sell something or manage something. And that’s what I did. I managed a restaurant. Then I started selling groceries to restaurants and honestly it was just dead end stuff and not what I wanted to do, but you know, it was a job. And then I came across your book, multifamily millions. Did you get my book Did you, but actually by a bookstore or you see someone else I actually, 2004, I read Robert Kiyosaki’s book, rich tip for you. That’s the book that got me in the right direction. And then, you know, I used to drive by these apartments that I would say, man, I wish I could own one. And you know, and it was just a big wish. And then now wishes never do anything.

Speaker 2: But one day I asked myself, how can I own an apartment complex I go, why I don’t know how good I had to put my brain in motion. And basically what I did is I went to Barnes and noble and I bought like seven books on multi-families and yours was unfortunately the last one I read, but it was the best one I read actually I actually immediately connected to you. And, you know, you’re funny how you do your books, but this is great. You left a lot of cookie crumbles there too, what to do next. And so, yeah, about online course and then I actually got into your coaching program and, it was amazing. you know, you guys really held my hand cause I, you know, I was, at that point I started doing a lot of fix and flips in my life.

Speaker 2: This is like 2008. When the market crashed, I quit my job and what real estate full-time. I started doing a lot of fix and flips, and got into your program. And, it was great. It was, you know, it’s had a lot of success doing it and that came to the point where my market was changing in Arizona. And so I knew that I was going to start making some more steps to the multifamily side because I don’t think I could sustain the fixing process. Right. And so along the way, I got a fourplex with your, with your coaching and your team and it kind of got my, it got my nerves around the project. I don’t know what I was.

Speaker 3: All right. So let’s talk about that first deal. So it was a U S you started with the fourplex. how did you find that deal What fears did you have going into it

Speaker 2: On the flip flux I wasn’t so fearful because I still felt like it was single families in a way it was just the, you know, three more of them. So I was fairly comfortable with that one, but just the whole financing process. I did raise the private money to do that deal. So that was a new component for me.

Speaker 3: Okay. So, so the fourplex, how much did it cost

Speaker 2: You 120,000.

Speaker 3: And how much fun did you find this whole thing through private money

Speaker 2: No, I, I financed, pretty much 90% of it and I used the other 10% of my own money.

Speaker 3: Okay. So where’d you get that 90%

Speaker 2: From just a personal investor.

Speaker 3: And so like somebody of my rotary club. Okay, good. So we’ve already called the great source of funding, private money. Yeah.

Speaker 2: and I showed them the deal, show him what I wanted to do and kind of showed him the numbers, what I was going to give him as a rate of return and that he liked it. And I, you know, he only asked that I put a little 10% of my own money in it. And so it was a good deal. And we did it, we operated for a while, probably only six months cause I was still in the fixing and flipping, but you know, I had to lease it up and get it filled up. We had a lot of repairs on it and we made a lot of profit on it.

Speaker 3: So, so you held the physics munch and you flipped it out. All right. So what was the biggest surprise with the multifamily that did that, that you didn’t expect when you either on the process of doing the deal or after you’d bought the deal

Speaker 2: how hard it was to the whole tenant process I wanna say, finding good tenants, the tenant screen.

Speaker 3: Oh, so, so you did your own property management. Yeah. I sold it in six months. Yeah, absolutely. You know, cause one of the things I always trained is don’t do, don’t be your own property manager, but you know, a lot of, and I know a lot of people are going to start on it and I did the same thing. I did it for three years. Almost, almost killed me. but I know a lot of people are going to, do some of it themselves. So that’s why we always train, you know, on not only how to be a good asset manager, but to know how to property manage. So, you know, if your asset manager is doing it right. But I really train that because I know some people are going to do it themselves until they realize it really sucks.

Speaker 2: Yeah. Well, I, you know, it’s funny cause they let, even until I took your, you know, after that experience, I took your bootcamp for property management, Nancy, because I, you know, what insights did you get from that man, I mean, I took down a lot of notes. I mean, I, I realized that I knew nothing about property management. I thought I knew something, but I didn’t know anything. And you know, the one thing I’ve always just given you a lot of credit for it, I think this is where you’ve made a profound impact on my life is, you know, a real true mentor has been there, done that. And really you have done all aspects of the business. So you’ve put that in pretty easy steps to follow. So it’s, it’s manageable to understand comprehend. And so by reading your materials, going into your bootcamps, you know, hearing a couple of different ways, even if your audience that you sent, I mean, you’re really step on it. So it helps. I mean just help me get a broader knowledge of what I was supposed to do. And then I realized I’m not supposed to be managing my own staff.

Speaker 2: I need to, you know, find projects or enough projects that I can have a professional management do it because I don’t want to get calls for toilets and stuff like that.

Speaker 3: Yeah. That sucks. so you’re so you’re, you’re very nice at all. What you’re saying about, you know, been there, done that. I mean, that’s the, I think the basis of our education is the fact that we’d have been there, done that all of my coaches have been there, done that and we all continue to do it. And so when we are teaching, we’re teaching like, you know, straight from experience. So it’s, you know, when I there’s, a lot of times I’ll be up there teaching and I’ll be talking about something in particular and in my mind, we’ll go right back to a particular property doing a particular thing. And then all of a sudden it’s like that, Oh, and when you do this, watch out for this, because this is probably going to happen. And I think that’s the, some of the most valuable information is not the fluff, fluff success. Success is stuff. Holy crap. This happened to me. Don’t let it happen to you type of stuff.

Speaker 2: That’s where all of that, that’s the money. I mean, that’s, to me, I think that’s what you get with your, with what you’ve created is with already mentor. I mean, it is the real deal. I mean, you watch you speak. I mean, you see it when you turn it on, like, let me tell you about this story. This is good. And it’s really all the stuff that like can go wrong. And I think that’s what a mentor in my mind, what a real mentor does is helps you limit your mistakes. I still make mistakes, but I haven’t made any one. That’s put me out of the game.

Speaker 3: Well, that’s the whole idea. Yeah. It’s, it’s, you’re gonna make mistakes. I tell people that all the time you’ve got to make mistakes, but if we can make those mistakes, small mistakes instead of, game-changing mistakes, then, then we’ve done our job because I still make mistakes out there. so let’s talk about your, your next deal. So what’d you do after that

Speaker 2: So after that, then I, I really made up my mind that I wanted to do something bigger and I felt like I, I could raise the money. I had some success with it. And so I wanted to see what I could do. So we actually, I did 144 unit deal in South Carolina. and I did it almost two years ago and that property is amazingly profitable. I can’t that one made me a millionaire. So that one made you a millionaire.

Speaker 3: That’s pretty sweet. One, one, one large deal

Speaker 2: For 3.2 million. I raised $1.1 million on a private equity. And, we made, we didn’t have enough. We didn’t do enough res to get a big acquisition fee, but we did make some acquisition like 40, 50,000 still don’t to get paid, but we did the deal closed

Speaker 3: Just for the people that are, don’t understand what an acquisition fee, that’s the money that your investors give you. The people that gave you the money to, to do the deal. That’s the money they give you for doing the deal. So they actually pay you anywhere from three to 5% of the purchase price, just for putting the deal together. And that’s the 30th, 50,000 that you got for there.

Speaker 2: And I’m assuming it’s still, that was sweet. Right but fast forward only bought that still. It was a repositioning. we bought it at 68% occupancy. Our gross, monthly income was around 60,000, 60, 58 60. we are at 97% today. we’re pretty least at 99. And, we just collected, I think, 99,000 this month for the month. So from 60,000 a month to 90,000, on a monthly basis,

Speaker 3: Do you know what your, a breakeven occupancy is on that particular property Just like 71. Wow. That’s it,

Speaker 2: It’s a pretty good cash flow thing. We bought it, we bought it at $22,000 a door, Dave, and, we’ve done, you know, we had a, luckily our management company helped us with our roast. We had a storm come through and we got, you know, brand new, replacement roofs. we’ve done, you know, about $350,000 for the CapEx improvements into the property. And, we’re getting almost a hundred dollars more in rent now for door. And, I mean, this is a great property it’s it makes good money. And,

Speaker 3: Cool. So how did you source that particular deal How’d that come about How did that come into your life

Speaker 2: I actually found it in your bootcamp. I went to, so, you know, I kept not going to your boot camps. I’ve been gone to a lot of them, but, this was two years ago, so it’s still pretty new. I realized that you gotta keep going through the bootcamps. You’re going to find people and things that you don’t know, and, and we all meet together and you, you find solutions. So, a guy had a deal and I actually stood up in the room and said, Hey, we had, we had some private money kind of ready. And so we said, we’ve got money. We’re looking for deals. And a slow deals came to me that day. And one was really good that we looked at and we liked it. And so we said, let’s, let’s work on this one and see if it’s it’s worth it. And it was,

Speaker 3: it’s awesome. And so, and then what did you, what’d you get the money that was, what’d you say at 1.3 at $1.4 million raise

Speaker 2: One by one. we did that through, I, I doing my fix and flips. we’re raising money, doing the fix and flips here in the Phoenix. And so I had a pretty good network of private investors of, just retired people, people that I’ve met, just really kind of the things that you teach is just going out and talking about your story. Here’s what we do. And we were doing it for single families and like your junker strategy. Right. And, then we just transitioned and say, Hey, instead of doing single families and having to do a transaction every 90 days, cause they never stopped giving me their money. We just said, let’s translate it to our apartment complex and keep it for Island, give you the same great returns. And so they said, yeah, that sounds good.

Speaker 3: So you basically took a grassroots effort, went to the different, networking spots until the people you’re doing.

Speaker 2: Yeah. And that helped me get a large piece of the deal, you know, even though the partners had brought us the deal, because we were in a position where we had most of the money, we were able to get a good position in the deal. So as far as the ownership of the management company, so what I’ve been doing since then, I, we just, we bought another seven unit deal last year at last September in Tucson, South of Phoenix. bought that for 3 million or so close to 3 million, 1.4 raise on that one. So again, that one, I, partnered with one of your partners, a coaching student, I think that you have at your group and, another person that I knew from an outside source, but we put that deal together. that’s doing well. And then just last month we closed on a 120 or 117 unit deal in Atlanta.

Speaker 2: That was nice. So, Atlanta, it’s in Decatur, Decatur, Georgia. it’s, it’s really cool deal. It’s like 98% occupied. but there’s definitely, they’ve just not raise rents in a long time. So there’s good upside in that. And we’re doing a military. We have a lot of, VASH veterans that are staying there and they just don’t come with, much baggage. And, I mean, as far as tenants, you know, sexually, it’s not a bad thing, but, it’s a really good process and it’s a really good streamlined property. So we’re excited about it and didn’t take, it was a, that was a $1.1 million raise. That’s pretty good. So you, so you’re rolling at 331 units man,

Speaker 3: Mean, what are you doing if you’re doing one deal, you blah, blah, blah deal a year now. And the first deal made you a millionaire. What do you do with all your free time

Speaker 2: you know, I am my, you know, I’m a full-time dad. Yeah. I, I love what I do. I still work. I mean, I still do, you know, find deals and stuff like that, but honestly, I, you know, I’m, I’m active in my kids’ life. I love my life. I mean, I don’t have anything that’s pressing today that I’m doing. I’m just doing my webinars with you

Speaker 3: Every day.

Speaker 2: Well, pretty much now. but I mean, from where I started Dave and to where I’m at now, it is amazingly, it’s just the coolest thing. You know my brother had some financial problems the other day and I stroked him a check, you know, and,

Speaker 3: I know exactly what you’re talking about. Cause you know, like you, I came from, I come from a history of, you know, just busting my butt when I first started. And I started that I was in the band for the eight years and then I started that construction company and landscaping and, and I was finally making money. So I was out there, you know, working my butt off constantly, you know, getting that money coming in. And then I was like, you know, there’s gotta be some sort of an easier way. And when I learned about apartment buildings and people buying properties for you and giving you a cash flow, I thought that’s gotta be it and started doing that. And I remember somebody, I, you know, my house, I’m on two and a half acres right now. And and I had a cookout the other day and, and one of my friends turned to me and says, dams must take you a long time. The mowed, his lawn. Right. I was like, it takes like, it takes like five minutes and he goes, what do you mean He’s like five minutes. What do you get Some sort of like, you know, a tech futuristic technology. I go, no, I just write a check, write a check. And one gets mowed. It’s amazing

Speaker 2: Laundry.

Speaker 3: Yeah, absolutely. I guess I would do my laundry right now as we speak, actually I just left my house. But yeah. I mean, you, you, you go through the process, you do what you have to do to be successful. You know, it does take some time, there’s work involved, but

Speaker 2: Work in the beginning of day. I mean, it was a lot, I worked a lot harder in the beginning than I do now, but now I love the sport. Like what am I do forever I mean, this is it. I love it. I love trying to find a deal. I love sourcing the money. I love, going to your events. I love the networking piece of it. it’s I can consistently do this for a long time because it’s, it’s just fun.

Speaker 3: Yeah. Yeah. There’s a, I mean, once you understand how to do it and how the process works and it becomes like a cookie cutter, but I think the best thing is, is when you get to the level that you’re at and you did it and just three deals really do it and your first deal, but really every deal after that makes you more and more comfortable. But you get to wake up in the morning and decide what you’re going to do that day, you know, and yeah. Getting new deals as a sport. So that’s part of your, your day because it’s fun. But more importantly, being in your kids’ lives is even more important. So you’re able to schedule your work life around your kid’s life, you know, when you’re there for the important things. And, and sometimes you don’t even schedule yourself at all and just kind of hang out and it’s just, it’s just great. And then the ability just to get things done by writing checks, you know, when I was, I, you, you, you rehabbed a bunch of houses. I rehab a bunch of houses. I’m sure you did fricking just about everything. You know, I put in floors, I put on windows, I painted, you know, I got two days, what’d you say

Speaker 2: Oh, it was a handyman hack. I was the worst day at every.

Speaker 3: Yeah, yeah, yeah. But, so yeah, so that’s like, it’s just, now it’s just writing checks. Like I don’t do anything, you know, and I still enjoy landscaping. So I’ll landscape around my house. You know, I have a garden and all that, but other than that, I don’t do anything. I just write checks. Right. I get this guy. He’s a great handyman for me. You just need something done. Just go with Dave, his name’s Dave, do, Hey, Dave, you know, pop over the house. And

Speaker 2: I mean, there’s some flowers in this area I need to get to make that happen. I want it to look like this and you kind of give the vision for them and then they go do it. And it’s

Speaker 3: Yeah, that’s a good thing. So give some good, give people advice on, on just starting out, you know, what, what was the biggest surprise that you had to overcome we talked about the management aspect of it, but is there anything else out there that you can give people advice on that they’re going to encounter it, that they might not expect and how to get over it

Speaker 2: Aye, man, this, this year, you know, I think my biggest surprise or biggest, roadblock was thinking that I couldn’t do it. I think it was 90% mentally. Dave is, you know, you blind, you start talking to yourself and you start getting nervous. You let fear come in. And so you don’t even try, you’ll get locked up and you can’t make the first step. You know, I think that’s for me, I had to keep, and it happens at every step. So you get a deal, Oh gosh, now you get locked up. What I got a deal, what do I do And he, I felt, you know, I’m supposed to, you know, put some money down where I get the money. And so every step, I think there’s a piece there that kind of just like frozen for a minute and say, okay, hold on.

Speaker 2: And for me, I was in the coaching program when I did this. So, my first two deals, I was in the coaching program and that’s when, I mean, for me, it was as simple as call my coach and say, dude, I think I got a deal. Is that a deal You know, help me underwrite this. Yeah, you gotta deal. So that gave me confidence and the confidence, I think the church helped me, you know, give to me why I was in the, a newbie, helped me overcome my fear and you know, what’s next, what’s next And he kind of gave me the vision to, okay, here’s, what’s going to be coming up. Right. And you need to get your lenders go. I need to get, you know, now that you gotta go, you gotta be able to make sure you finance it. And, it was those little things. So at every spot, even the money raised, gosh, the money raised was so I can know that it was over it’s stressful, but it always is, you know, every like that it’s the same, same thing on my shoulders. But for you to say, I’m gonna make it, you plan for it. you, like you said, you oversubscribed the crap out of it is people will drop like flies.

Speaker 3: Yeah. And the money raise. Yeah, absolutely. I think the best thing about that coaching program is the fact that we have recorded every session that I’ve either done the training. And one of my coaches has done the training over the last five and a half years. And we broken the deal down into 46 parts. And you can go to any one of those parts in the deal. And if you get frozen, like you said, you know, we’ve got five to 15 modules on that particular section of the deal and you just listen to them all by the time you’re done. You’re like,

Speaker 2: Pastor, I can only tell you when you say like, what did I really do I I’ve listened. I’ve read I’ve. I mean, I’ve read every book you’ve ever written. I’ve listened to every CD you’ve put out. I am a true student. I mean, I’ve, I went to town on here’s stuff I did. And I, I read it like it was the Bible. Like this thing was going to set me free and that’s how I took it. And I took my business. When I, when I decided that I was going to do it, that’s what I did. I just said, I’m going to do it no matter what I’m going to have to learn from this guys, Dave, you’re proven successful. Why wouldn’t I And I had to get myself, kind of pull myself out of my brain. Sometimes you’re like, Oh, I could do it. I could, why don’t I do it this way You know, if you start thinking you like, you know more and you really don’t, you know, like, and so had a up and say, gosh, he says, don’t do it this way. There is a process. And so I just, I made it for myself.

Speaker 3: Yeah, absolutely.

Speaker 2: I mean, so now and now it’s worked so many times. I don’t even question. I’m like, it’s the same process over and over again. Dave know, I don’t know if you know what I mean, you changed my life. I always say this. I only want to give you the credit for it because this is the true part of what you’ve done for me and my family. I grew up a poor vulnerable, I dude, I can’t even tell you, you know, I always wanted, I had the desire to be successful, but I just didn’t know what it was going to be at Ryan and never got the download from the mothership. And I swear to God, I read your book. I read Rebecca cop, Robert Kiyosaki’s book, put me on the path, but yours gave me the meat. And I said, here’s how you do it. Your rubber never told you how to do it. At least not in rich dad, poor dad, but you gave a lot of cookie crumbles and you gave all the pieces to here’s how you do it. And it’s step by step by step. And Dave, I’ll be all. I’ll be forever thankful. I mean, I, my family loves you. The kitchen loves you go back and why this year, we might go back to Hawaii. We’re naturally coming to Boston though. So we’ll be at Boston. next month

Speaker 3: I have Boston for the, secret underground secret underground three. Actually, we’re going to have you present that, that secret underground three as well. And talking about how you, how you getting in doing these deals a little bit more intricately. So the people in the audience can go away with some more takeaways, but just

Speaker 2: Say my full story. Cause it’s pretty cool.

Speaker 3: Oh yeah. It’s really is. and just as a side note, so last year Corey is also in our El society and we had a meeting in Hawaii and then we had this big cook-off, you know, like gray iron chef type of a thing. And we had different teams and all that. And of course his wife is so competitive, so competitive and her team didn’t win. And Oh my gosh. Did we hear that Huh

Speaker 2: I think you’ll probably hear it to Boston again. I get the hang of that though.

Speaker 3: Probably will. And you’re the one that made the drink, that one, right

Speaker 3: Great name that you came up with for that, for the drink that you made,

Speaker 2: Turn the lights off and come to bed. That’s pretty good. It’s a lot of fun, man. That was a really cool, that was a fun that El society trip. I always look back to that one. That was the most relaxed, cool setting. you know, you gave a lot of yourself on that trip, you know, as far as access and just talking to you, as a, you know, not as the one that’s up on the stadium, speaking to everybody, but just as you know, Hey, I’m Dave regular guy. It was cool. Yeah, it was a good time.

Speaker 3: Hey, so, one of the things we haven’t really come up with yet is, is I, I talked a lot about it at the different events on, on the mental process, you know, and, and how to overcome, but there’s a great book that I just read called mind power. you can get it on amazon.com. somebody referred it to me and I, I read through it and I get a bunch of different notes. And every day I look at a certain section of my notes for that mind power. And it really, it really gives me the edge. It’s like everyday, cause I got a bad back everyday. I got to wake up and I got to do my stretching from a back. So I have a good day with that so I can keep doing being a triathlete. And then the second thing I make sure I do is I make sure I read the certain section of my notes with this mind power thing. And it’s just good stuff. So, go to Amazon and get that book, mind, power. And, you’ll get good things from that. But this is that another edition of how they did that. And this is how Corey Peterson

Speaker 1: You’ve been listening to the multifamily deal lab podcast, where the deals get done. If you’d like to learn more visit Dave’s free book.com and don’t forget to leave a five-star rating and review and hit that subscribe button. So you don’t miss an episode. Thanks for listening.