Corey Peterson is the CEO of Kahuna Investments, which is focused on income-producing multifamily opportunities in stable and emerging U.S. markets. They target high-yield passive cash flow and long-term capital appreciation through strategic acquisition and superior asset management.
In this episode, Corey talks about how to create productive relationships with brokers, why he chose to vertically integrate his property management company, and how he would advise a new investor to approach raising capital for the first time.
Corey Peterson | Real Estate Background
- CEO at Kahuna Investments
- Portfolio:
- 10 multifamily/student units
- 3,200+ beds valued at over $250M
- Based in: Phoenix, AZ
- Say hi to him at:
- Best Ever Book: A CEO Only Does Three Things by Trey Taylor
- Greatest Lesson: Free advice is always expensive.
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TRANSCRIPT
Ash Patel: Hello, Best Ever listeners. Welcome to the best real estate investing advice ever show. I'm Ash Patel and I'm with today's guest, Corey Peterson. Corey is joining us from Phoenix, Arizona. He is the owner and CEO of Kahuna Investments, where Corey strives to provide his investors with stable cash flow returns and long term capital appreciation by buying multifamily apartments. Coreys portfolio consists of 10 multifamily student units with 3,200 beds valued at over $250 million. Corey, thank you for joining us, and how are you today?
Corey Peterson: I'm wonderful, my friend. Wonderful.
Ash Patel: Corey, before we get started, can you give the Best Ever listeners a little bit more about your background and what you're focused on now?
Corey Peterson: Yeah, I started off as a used car salesman. I found real estate, I got to [unintelligible 00:02:08.16] at the age of 32, and I just fell in love with the business, or the the idea of the business. Started off as a wholesaler, moved into single family fix and flip, learned how to raise private money early, because back in 2009 there was no loans to get, so you had to go find and be resourceful to get private money. By the way, that's my best gift that I learned how to do. That's the big separator, I think, in multifamily apartments versus single family, is the ability to raise capital. And I did that fix and flip till 2011, when that business started to run out. The short sales and the REOs were gone. And from there, I was like, "I've gotta find another vehicle", because I had all this capital that was saying, "Put me to work." And one day I drove by an apartment complex, and I used to say, "I wish I could own an apartment." And that day, I said, "How can I own an apartment complex?" And once I framed the question right, I went to work, I found a mentor... A year later, I bought my first apartment, I bought it for $3.2 million, in Greenville, South Carolina. I kept that property for five years, and I sold it for $8.8 million, and I was well on my way to the multifamily scene.
Now, fast-forward, we have 10 active projects, $250 million worth of value, and we love what we do. And one of the things we've done this year as far as where we're going, I'll call it operational excellence. So we just vertically-integrated our property management company. And that has been very interesting, my friend.
Ash Patel: Corey, the $3.2 million - what did you do to add over $5 million in value, other than time?
Corey Peterson: We fixed all the broken problems. So this was a property, 1970s build. So we did a refresh around the exterior. We put about a million dollars of CapEx into it. Now, that's not a lot of money, but we put it in the right areas. It needed new roofs, we needed a slurry restripe, we refreshed the front office. But more importantly, what we did was we got rid of the riffraff. We had a drug problem at this property. It was very apparent where it was, and the location of it, and we had a courtesy officer from the Malden Police Department, and he knew where it was, too... And one day we're just having a conversation and I was like, "Dude, we've gotta get rid of this travel." I'm like, "Don't you guys have drug dogs?" "Yeah, we do, Corey." I said, "Would you guys like to have a training event at my property?" "We would love to do that, Corey."
Ash Patel: Is this like the school where the dog goes by all the lockers?
Corey Peterson: That's right. So we arranged for the Malden police to come in, and we put notices on all the doors saying that we're having Malden police, they're gonna bring their drug dogs and they're doing some training. And we have two move out in the middle of the night. Ash, those two were the problem. As soon as they left, the whole community comes back into the office saying "Thank you, thank you, thank you." They all knew where it was at, but they were not going to [unintelligible 00:05:18.01] on him... So as soon as we got rid of that element, it was amazing...
And then you start doing your rehab, your refresh program, and we started changing the community from the inside out. And when we did that, we were able to attract a whole different tenant. Basically, we did it by raising the rents that much, because when we started improve the value that way, it was exponential. And then - it was a little bit of market luck, right? So when we went to sell, what I believe that sells and makes really profitable properties is clean, steady, rising income. So by that fifth year -- your first year, you're rehabbing, fixing it. The second year, you're fixing your tenant base. Your third, fourth and fifth year, you should be really trying to maximize operations, where we don't have a lot of inconsistency. When you have consistent, steady income, guess you will overpay? Everybody, because they want an easy button. And we effectively created an easy button, and we sold it 4-cap.
Ash Patel: That's incredible. Corey, I love that advice about clearing out drug dealers, because I know a lot of apartment owners that will pay for police to sit in their parking lot, and hire security... But that strategy is brilliant. And I wonder, instead of telling them what day they're coming, just say "Throughout the next several weeks, we're going to have police drug dogs coming through here."
Corey Peterson: That would be amazing. [laughs]
Ash Patel: What a great strategy. You're heavily concentrated on student housing. Why?
Corey Peterson: We got into it, and it was a niche piece. So we were in it before COVID, and we were doing well, and then COVID came and ripped our wind out of our sails from it. It has been a tough two years during COVID... But it also identified where is blood in the streets. And I believe when things are bad, that's when you should be buying. So because it was bad, I was like "Listen, we need to make a heavier, concerted effort, because we could probably pick up some right properties." And that's exactly what we did. So we went and pushed in, all-in for the next two years of buying really student assets. And we've done really well with them. Now that we're coming out of COVID, and markets are back to normal, we are really seeing the benefit of that.
Ash Patel: Good for you. That was an incredible opportunity that nobody really saw at the time, because we were all in this panic about the lockdown, and we saw those student housing prices just drop, because they're vacant, right?
Corey Peterson: Yes.
Ash Patel: So if you can absorb that pain for who knows how long, you certainly benefited on the end. Well, now student housing is more competitive. How are you finding deals? Because everybody wants a piece of that.
Corey Peterson: Yeah, it's like anything else... This is unfair. I believe this is totally unfair. It's broker relations. So anybody that says you can't find deals right now, it's just because you don't have the right relationships with the right people. I will challenge you on any of that crap. Because that's not what happens. I've found if I have great relationships - and I'm talking about... When I call, it's not, "Hey, look at my deal, yada yada yada." I should be able to talk to that broker -- I know his kids, his dog, I know what he likes to do for fun... I probably have him to my place, we hang out... We are friends. When you get that relationship, it is unfair, Ash.
So my angle is I am a relationship-based entrepreneur. I leverage my relationships, and I have fun doing business with my friends. So to do that, one of the easiest questions I've ever learned is ask "What do you like to do for fun?" So when I've made a basic contact with someone, I'm gonna ask them what they do. Now, I've got to have a commonality, Ash, or it doesn't work. So if you said, "Well, I like golfing." I hate golfing. I hate golf. I suck at it. So tell me more about that. I'd be like, "Well, what else do you like to do?"
If I had a genuine interest, I'd be like "Oh--" Or you like the Pittsburgh Steelers, whatever. I'd be like, "Okay, well, I like football... So who's your favorite Steelers guy?" and I would get all into your Steelers. And when I'm calling you for the follow-up on a deal - Ash, our open is about the Steelers. And probably I googled some stuff to figure out your guy, or what's going on with the Steelers... So that's my conversation. Then, when you have good friends, that's how normal conversations go. We talk about stuff, and then we get down to business. And when you practice that tip, I'm telling you, it is magic.
Ash Patel: Do you have a CRM system where you keep notes on all these people?
Corey Peterson: Of course, yes. I have multiple CRMs. But I typically use the one that most people will probably hate, which is Infusionsoft, or Confusion soft, which if you don't have a good builder, it can be quite cumbersome. But we also use Active Campaign for some other things like that, for our sales process. But listen, I believe it takes five to seven good brokers; you don't have to have 100 of them. You just have to have deep relationships with five to seven good brokers in the regions and the areas that you like to buy, and they will keep you fed for life.
Ash Patel: How many brokers do you have to go through to get the five to seven good ones?
Corey Peterson: 50 to 100. Until you find the connection. The goal is -- and listen, brokers are easy, because they work for free until you transact. So understanding that that's the game, and that's how it works for them, be very mindful of it. Don't waste their time, and get on the inside. Let them talk about themselves. Everybody loves talking about themselves. Let them do it. Ask them about their career, how are they doing, what have they done lately. I'm telling you, you should be so focused on what they do. Don't even think about yourself and what you're trying to get out of; just focus on them, and those relationships will percolate.
And then I believe in giving experiences. So for me, I'm an avid Jeep guy. I'm in Arizona, we go wheeling; off road, weird stuff. My jeep can do crazy stuff. I make it a point to try to get them to come to my place, so I can take them wheeling; something they've probably never done... And I give them an experience. And by the way, that's a six-hour in my jeep round trip for the [unintelligible 00:11:37.25] We're having conversations, I'm giving them an experience he's probably never had. I'm gonna let him drive the jeep and get vertical and almost tip.
Ash Patel: And is this after a deal? Or is this initial preliminary [unintelligible 00:11:50.07]
Corey Peterson: This is whenever I've got some right relationships where I feel like I'm on the inside, I'm like, "Listen, we need to get together. Ash, we've got to get together. What's the next time you're coming to Phoenix?" Or I'll try to find ways -- if he likes to shoot guns; anything that I really like to do, if I can find that angle... "I'm coming to town, I'm gonna go see the properties. Let's go shoot some guns."
Ash Patel: Corey, advice for people that are inexperienced, don't have their first deal yet, but want those broker relationships? How do they penetrate that if they don't have a track record? How do they compete against people like you?
Corey Peterson: Borrow someone else's. But the one thing about this business - it's all about relationship-based. Find a mentor. This is why we go to events. Go find someone that you can be part of their team, or find a way to get on their team if you're brand new. The easiest way to get into a deal, in my opinion, is to get with someone else that's already doing deals, and add value. So what is add value? It means find a deal, and bring it to them. Then ask for permission to be part of their team. Can I borrow your stuff?
Corey Peterson: Okay, so I want to reiterate a couple of great pieces of advice that you gave. One is my first sales job, I was taught this - people love to talk about themselves. Best Ever listeners, I need you to really hear that - every job interview I went on, I won because I would always ask things like, "How did you get into this business? How did you end up in Cincinnati? Are you from here?" And the stories just go on and on. People love talking about themselves. And then, the team - I think this is so important... People may make a lot of phone calls, a lot of attempts at getting deals from brokers, getting those inside deals, and they get frustrated because they don't have a track record. A broker asks, "What's the last deal that you closed? What's the size of your portfolio?" and that's where your advice about the team really comes in. Don't lie, don't fake it, but ask somebody if you can find deals for them, like you said. And you can now represent "The team that I work with. My team. This is what we closed on last. This is what we're looking for. This is how much capital we're looking to deploy." So make yourself sound bigger than you are, and make yourself appealing to all of those brokers. Great, great advice. Nobody has any excuse to not build broker relationships.
Corey Peterson: Amen. That's one of the keys. The easiest way to get into a deal is to find a really good deal, and then if you can't take it all the way home, find someone that could do it with you and partner up. That's really the game that I play in the apartment world. When I first started, I had partners, and most people that I know have partners on most deals. I still to this day have partners on deals.
So it really is a team sport, and that's why going to your Best Ever conference is huge. That's a good way to meet a bunch of people... And you find synergies. Believe it or not, this business is a lot simpler than we all think it is, because it's really relationship based. It's your partnership relationships, it's your broker relationships, it's your lender relationships. It's really a relationship-based -- it's old school. And then the job is just to find the needles in the haystack.
Ash Patel: Corey, if you meet somebody at a conference, and you just have a surface conversation... Do you follow up with them? And how often?
Corey Peterson: I can't probably show you on this if you're listening right now, but I do handwritten cards. It is my signature move. I learned this from a long time ago; if I get somebody's card -- now, today everybody wants to give their digital card, and usually, in the digital card they have a bunch of information anyways. But if I don't have it, I'll send them a text or an email, "Listen, if I wanted to send you something in the mail, where do I send it?" I'll get the text, "Here's the address." So then, if I have a good conversation with somebody, that I'm like, "That's a good conversation", on the back of that card, or I'll make a note in my notes in my phone, "John Smith, talked about yada, yada, yada." And that will trigger me, so when I go back, after the conference, I'll sit with my stack of cards, and I want to personalize and I'll write a handwritten note.
Now, I step it up, Ash. I have a whole process to do like a wax seal. And I have a glue gun, by the way, which has wax inserts, to really step up my card. So when it comes in the mail, I personally write the address on the card, I put a live stamp, and I have a wax seal on it. When you get that, you will remember me.
Ash Patel: I love that. So these old school tactics still work.
Corey Peterson: To this day. I tell you, I send out as many cards as I can. Staff, people, people that work for you... It could be your broker... And I'm telling you, I've gotten to their office, and some people have a little place for all their personal stuff, and my card will be sitting up there. And it'll be sitting up there for years, my friend...
Ash Patel: And that wax seal - does that contain all the information that a business card would?
Corey Peterson: No, the wax seal is just a wax stamp, it just makes it look cool. Right?
Ash Patel: Okay. So do you include a separate business card?
Corey Peterson: Yes, I usually put my business card in there, with my personal note.
Ash Patel: And are you a believer in digital business cards? Or do you still use paper?
Corey Peterson: I use digital... I hate it, because it's not personal... But I still just use that. And then I use that technology now. I like to give cards with the QR code, so I can just show them -- but I still want them to have a card.
Ash Patel: Yeah. So I agree with you. And you know what's funny - the Best Ever conference, a lot of high-level real estate investors, everybody has paper cards. Maybe 5% of the people there have the QR codes. And to me, that's annoying. Because I want to physically put your card information into my CRM. If I scan your QR code, you're automatically in my phone, and at the end of the conference, it's like "Wait a minute, who are all the new people?" You've got to sort through that.
Corey Peterson: You can export that list to a CRM, and then you can be able to sort that out. That's what we currently do. I still hate it... But that's what everybody seems to be going to, so that's fine. And I have a QR code as well. But I do like to give out my personal card with the QR code there, so if they want to put it in their phone, they can. But what I've learned is when it gets in my phone, I have to immediately put something that it's an identifier. So I'll put "Best Ever" if I'm at the Best Ever conference, in the company section, which usually does not get filled out. I'll put Best Ever, so I can type in Best Ever and everybody that I met from Best Ever will show up. That's a little hack to figure out who did you talk to. BE. I don't even type Best Ever. Some type of code, so you can recall everybody that are in your context for BE, and then you'll be able to see who they are.
Ash Patel: Great advice. And I'll share a hack that I started doing the last Best Ever... I'm not fast enough to type in all these notes on my phone. So as I have a conversation with somebody, when I walk away, I take out my phone and hit the Voice Record button, and I just record a note about the person that I met, or whatever, and later transcribe that. So it's just maybe not the most efficient, but a faster way.
Corey Peterson: No, that's a great hack. That's actually -- that's a good one. That's really good.
Ash Patel: Good.
Corey Peterson: Yeah, I'm gonna take that one. I didn't think about that -- that's another way. Because that's the biggest thing, is you're meeting people... How do you keep track of that? And anytime you get more systemized in your business, and in your process, it usually yields to better results, because you want to have better relations.
Break: [00:19:06.13]
Ash Patel: Corey, you've given us some incredible advice on cultivating broker relationships. Can we pick your brain on raising capital?
Corey Peterson: Sure.
Ash Patel: Alright. So, look - a tremendous amount of sales experience. The first time you had to raise capital, how did you do it?
Corey Peterson: I did it by accident. This is why I know it works. So I was a wholesaler, and trying to figure out how to do fix and flips. And I remember I was talking with this guy, Carl, and we played racquetball together. And I asked him for help. And I asked him who did he know? Because I was wholesaling -- I want to do a fix and flip, but I don't have the money for it. I'm like, "Surely you know somebody that would be interested." He'd been watching what I did, so I went through my whole process with them... And I was like, "Let me know if you know anybody."
Well, the next day Carl calls me, he's like, "Corey, do you still want to do that deal?" in the back of my mind I'm like, "Carl found somebody." He goes, "Corey, you don't know this, but my home is totally paid for. I could borrow money at 3%. You give me 12%, I make the spread. How much money do you need?" So Carl had self-selected.
Now, when you're new, I always say, share the opportunity, don't worry about the results. And ask people "Who do you know?" In other words, "I've got this project that I'm working on, and I think, Ash, you could provide a lot of referrals for me. Will you critically look at my pitch deck or my opportunity and poke some holes in it? Let me know if there's anything that doesn't make sense, because I want you to feel real confident in being able to give me some referrals of people you think might be interested in this." And I'm just telling you, the right people will always self-select. They're like, "This looks good. I think I might be interested."
And that's how I initially first started... Because when you're new, money is really weird at first. It's just a little different concept. Until you start getting confidence, then we're talking about money, it's okay. But sometimes to break that ice, what I've found is asking people "Who do you know?" and sharing the opportunity - that gets you the practice so you can practice, drill, and rehearse in giving your presentation.
Ash Patel: Interesting. So even if you're pitching somebody, you're kind of doing it in a less pressure way of saying "Who do you know?" So you're just presenting a deal, and they have the option. You're not directly asking them and putting them on the spot.
Corey Peterson: Right.
Ash Patel: I think that's important for anybody raising capital to understand, is we don't sell, we don't pitch, we present.
Corey Peterson: Yes, that's the goal.
Ash Patel: Yeah. If you have to call people up and say "We need $100,000 by next Friday to get this deal done. What have you got?" I don't think that works.
Corey Peterson: It smells desperate. And people can smell desperate. Now, the reason I say that in the beginning -- because you've got to develop... It's a muscle. When we're first doing this for the first time, we've not developed this capital raising muscle. So I always believe in baby steps; baby steps, baby steps. So you pitching it and getting better at talking about your deal correctly, you'll start seeing the more confidence you get after you've done it the 15,000th time; you start getting where now you know you're good. People are nodding with you; then you got them.
So then eventually, you make the switch to where "Listen, I'm gonna share with you my opportunity..." And it's pass or play, but I'm not gonna go back and say "Who do you know?" I'll be like, "Hey, listen, we're talking about this deal... I think you're the right person to do it. Let me go through the good, Bad, and answer your questions. You or somebody you know may be interested."
Ash Patel: Corey, do you predominantly present these deals through email or phone?
Corey Peterson: We try to group. As we've matured, we do webinars, like probably everybody else; we drive people to a webinar, and then we open up the deal. But we still do a lot of one on one. So we initially open it up to everybody that's in our sphere, and then we start working on -- we have a target list of the people that we want, our repeat investors, new investors that are coming in, that we've identified, that we've tagged in our CRM...
Now, here's what I do that's a lot different than anybody else, Ash. I raise capital differently than anybody else that I know. And I will tell you this - I do not go to conferences to raise capital. And I say that with a lot of love, okay? Because I go to the Best Ever and conferences like that to make contacts with people that can find deals, to find relationships and partners and vendors and things that really work. When I'm raising capital, I track and target an avatar -- because we all believe that everybody's like us. Everybody's in real estate. And that is the farthest thing from the truth. My background is I used to be a financial advisor; series seven, Edward Jones, stocks, bonds and mutual funds.
Ash Patel: Is that what you called yourself a used car salesmen earlier?
Corey Peterson: I was a used car salesman.
Ash Patel: Okay.
Corey Peterson: I told you, I didn't get to download from the mothership till I was 32, Ash. And I didn't have a degree, so I either managed stuff, or sold stuff. I sold cars for a long time. And that's where I learned my sales experience, by the way... And then I actually traded up, I got a real job with Edward Jones. They said, "If you pass this test, you can sell securities." Great. I've never studied so hard to make a 72 in my life, but I passed. But Edward Jones taught me the money game; they taught me about rates of return... And guys, understand that most people that are in the stock market, they are getting a 6% to 8% return. That is what every broker would say to their mother, "What's a solid return?" Six to eight. On our side, we're trying to give people 18 to 20 plus. If I told that to this avatar, they would immediately run out the back door, because they would consider it so risky.
So I don't even pitch it like that, and I've been able to raise a lot cheaper capital, because I understand my avatar. I try to go after people that are in the stock market. In fact, our tagline is "Kahuna Investments - we're an alternative to the stock market." Because a lot of people think -- they do; it's a roller coaster, they want to get off, and they want a solid return. So we termed a program, we call it our Six and Six method. We give a 6% pref, and then we give another 6% on the back end, annualized, for every year they've been in the deal... Which is like a 12% cash on cash return. That's it.
Ash Patel: I like that, that's creative. Another great piece of advice that you shared is know your audience. Years ago I had a conversation - and this is before I started raising capital. [00:27:36.15] retirement party, friend of ours... And he's like, "Gosh, you're in real estate. I'd love to invest." "Sure, what kind of returns are you looking for?" He's like 6% to 8% will be great." And I'm like "Six to eight percent? My passive investments make 20%", and I lost him, because he thought that was too good to be true. Too risky. I had this conversation with him, and he didn't even want to talk about it. So had I followed the conversation and said, "Yeah, let's work together. Let's find a deal", blah, blah, blah, I could have gotten very, very cheap money.
Corey Peterson: Yeah. So that's the point, right? I always say -- at first, I go "It's six and six." I don't say 12. I can do six and 10, or six and 12... I can make it be a total return of 18. But the first six was what -- they already picked six to eight, right? So I'm like, "Guys, that's your paycheck. That's your quarterly distribution that we're gonna be trying to reach and obtain over the period of this process." "If it just did that, it would be great." "Yeah. What else can you invest in in the stock market right now, that's a 6% that can pay you a quarterly distribution?" And they're like, "I don't know anything." "Me neither." So that makes sense, and they're like, "Yup, great."
Now, tenants expect rents to go up. And guess what, Ash? We never disappoint them. We always raise the rents. When we do that, we're raising the value of the property; we do this over a five to seven year period of time. We've created a lot more value of that property. So when we do exit and sell, we're going to share that additional profit with you, and that's where you get that extra money on the end.
So I've kind of broken it up into separate things in their mind, and they get that. And I always talk dollars, I don't talk about IRR. Those are not sophisticated -- even though, I'm telling you, they have millions dollars. My avatar is a business owner that has 25 employees, or more. Well, you have 25 -- you have a real business, you're busy, you're running your business... And most of those guys have a financial advisor. That's where they go. They do not know people like us. And they're too busy, but they know real estate probably is a place for it. So that's our target, is those types of people.
Ash Patel: Yeah. And I want to repeat your advice... We all make the assumption that everyone is a real estate investor. People are just in our world, and they're really not. Most very successful business people are experts at their business, but not experts in growing wealth or managing wealth. A lot of doctors, lawyers - same thing. They're experts at their craft, but never took the time or may not have the inclination to learn about how to invest money. Such great advice.
I want to circle back -- you and I could probably just talk for hours and hours, but you mentioned something earlier about you started vertically integrating your management company. Tell me more about that, please.
Corey Peterson: Best thing we've done in 2023. Because it's survived 25 -- listen, am I affected? It has not been pleasant for anybody that's in the business right now. It's the rapid increase in the interest rates. Not that interest rates went up. Instead, it went up so rapidly... We were all doing bridge loans. I've got bridge loans still on the books that we're trying to get rid of. So the drive to operational excellence has been so intense for us to make sure that we meet our deadline. Because these things are ticking time bombs when these rate caps go out. So you should know when your rate caps are going out, you've got to make sure your properties are performing, so you can get out of that debt. So when we take a internal look at our whole organization, we are to the size now where it makes sense -- we asked ourselves the question of "If we did take operations internally, would it help, hinder or profit?" And we did it within my team, and we said we think it'll profit. Well, what do we need? What pieces do we need? And can we afford it? And what will it look like? And overall, we just said we do. So we built an accounting team; we already had really strong controllers... That was our first piece, is we knew we had to have a solid accounting vertical. Once we got that developed, we then felt confident because we had a good enough team members, our asset manager that we've helped build our property management team as far as regionals and senior vice presidents and that staff there, required to manage the people. And we already had internally good people, but they weren't our employees yet. So we had to make sure that most of them were going to come on board. And we did that by flying all of them to our corporate.
Ash Patel: Corey, this was a third party management company that you were using.
Corey Peterson: Correct.
Ash Patel: So did you just poach their employees?
Corey Peterson: I will consider them my employees at that time. So yes, we were going to cancel... And so the goal was to make them want to stay with us. So all I did was "Hey, listen, guys, you guys can request off and you're coming to Kahuna. And we're going to talk about what we're going to do, and we're going to pitch what our vision is." And what I realized is they wanted vision and culture in a place that mattered... So we got around 90% of them. Some of them still left...
Ash Patel: Yeah, but you were able to test-drive these employees, essentially, before you hired them.
Corey Peterson: We already knew what they were doing. They were already working on our assets. But what we wanted to is to say "Guys, we're gonna do it a little differently. We're gonna put in a little more structure." And we started talking about profitability. P&Ls. Every third party management company out there -- and I said I would never do this, Ash. I said I would never be a property management company. And yet, I feel like it's the Godfather story... As soon as I get out, they bring me back in. But looking back at it now, we're now six months into property management. Best decision ever.
Ash Patel: What was the biggest pain point?
Corey Peterson: Losing the staff, losing a couple of key property managers, initially. We thought it was going to be the day of -- "Oh, I'm not going." They kind of led us to believe and then said "Oops." But my team was so agile, and we plan on some things breaking. So we're like, "If this is gonna happen, you're parachuting." We had a couple of golden parachutes, right? "You're gonna parachute into that property. You're gonna be the property manager until we find somebody." So we had a couple of people that were ready to deploy for that just in case. And we did. But because we're so much more agile, leaner, we found people quickly, and we found good people.
Ash Patel: What is one thing you wish you did differently in that transition?
Corey Peterson: I don't have that answer yet, because I'm still so far into it... I feel like we did it the best that we could. And I'm okay with that. It's still a little bit clunky... This is straight-up entrepreneurship 101. Jumped out of the airplane, built the parachute. That's kind of how it felt like... And we come back and look at our team, we just had our weekly conference... We're like, "We've come a long way."
And now we're all about SOP. So we follow a book called Traction, level 10. Having the right people in the right seats, and making sure we're all rolling and congruent. So we're big on SOPs, we keep developing more and more SOPs as we go forward... And that's what's going to create an award-winning property management company.
Ash Patel: Yeah. Listen, Corey, we can go on and on about this... At some point, I'd love to have you back in deep dive about transitioning the property management back in-house. So if you're up for that, I would love to invite you back for that.
Corey Peterson: Yeah, we've got lots of stories on that, Ash. I'm telling you.
Ash Patel: I bet there's a lot of lessons learned... But a lot of people are a slave to their property management company. And if they're not as big as you are, maybe they're limited in the number of PM companies that would actually take them on. So I think you could share an incredible number of lessons on that... But let's wrap this thing up. Let's hear your best real estate investing advice ever.
Corey Peterson: My best real estate investing advice ever is to never quit. I cannot tell you how many times that I felt like I was inadequate, not capable, not worthy... Somehow I had a wonderful wife, that told me that I was. I had one support system that I could go to. And having that one support person in your life, no matter who it is - it could be a mentor, it could be a coach, it could be your spouse. It's so vitally important. Because if you don't quit, you win in this business.
Ash Patel: Corey, are you ready for the Best Ever Lightning Round?
Corey Peterson: Yes.
Ash Patel: Alright. Corey, what's the Best Ever book you've recently read?
Corey Peterson: "A CEO does three things", by Trey Taylor. People, culture and numbers. Great book. I used the hiring process in that book. Phenomenal book. And if you want to elevate yourself to a different level -- because there's levels to the game. When I first started, it was like "I just want to replace my paycheck." Now we're building an award-winning company, and it's different. So I've got to level up as the CEO to do that. So learning and developing CEO skills is something that's new to me... So where do you get those informations? You start feeding your mind with books, and that is a great, phenomenal book that will help guide you a little bit.
Ash Patel: Corey, what's the Best Ever way you like to give back?
Corey Peterson: Charity. And this will go back into probably a way to raise money. And don't do it to raise money, but this is what happens. I'm in a group called the Chandler Compadres here in Arizona. I got into it because they give back to local kids charities. And it took me a couple of years to get into this group. You have to be kind of selective... I put in the time, but when I went and joined this charity, I put in the work, Ash. I just got Rookie of the Year. This is my second year in the business. I got Rookie of the Year, because I put in the work.
Now, the relationships - these are guys who have seven-figure businesses, all of them. But I did it because we gave away $2 million to our local charities. $1 million went to our local Chandler Boys and Girls Club. When they get these checks, they cry. And to be part of something way bigger than yourself... So find a charity that you love, and then don't just give money, get involved. Get into the seat, get into a chair. You will grow so much through that and you'll make some great friends.
Ash Patel: Cory, how can the Best Ever listeners reach out to you?
Corey Peterson: The best way is to go to our website, Kahunainvestments.com. Get into the [unintelligible 00:37:38.06] and click the button, or check us out - we have a podcast where we teach what we do, all these little nuggets that we've given you. Multifamily Legacy Podcast.
Ash Patel: Corey, I've got to thank you for your time today. We had a great conversation. You shared a ton of valuable advice. Best Ever listeners, listen to this podcast a couple times, because there was so much incredible knowledge given on this. So thank you for your time today, Corey.
Corey Peterson: Thanks a lot, Ash. I appreciate it, brother.
Ash Patel: Awesome. Best Ever listeners, thank you for joining us. If you enjoyed this episode, please leave us a five-star review, share this podcast with someone you think can benefit from it. Also, follow, subscribe and have a Best Ever day.
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