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WS652: Building Wealth Through A Global Investor Alliance with Peter Badger

Before you think of investing in real estate, it is so important to educate yourself! Today’s guest is Peter Badger and he joins us to talk about how he jumped into real estate head first, having to learn the hard way, and how he is applying all the lessons this taught him to help others now. Peter spent 18 years on Wall Street then founded a tech company in Silicon Valley.

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After his company was acquired in 2014, he turned to real estate investing to retain and grow his wealth. Realizing that real estate education was hard to come by on his investing journey, he eventually co-founded Global Investor Alliance in 2018 with his partner Karen. Peter does a great job of explaining his amazing journey in the business, stressing his mindset of perseverance as he experimented with many asset classes before landing on investing in multifamily syndications. From there, we get into some of the key factors any investor needs to analyze before jumping into a deal. Peter details these in a fantastic, granular way, working from macro factors relating to an asset’s neighborhood, all the way down to what one should look for in the deal itself on paper and by walking the actual property. Joining today’s conversation, you’ll hear many more amazing tips from Peter about how to vet operators, the value of having an alliance of investors like the one he and his partner created, and which asset classes have what it takes to stand strong through recessions like this one, so be sure to tune in!

Key Points From This Episode:

  • Pitfalls of the stock market and how Peter went from Silicon Valley to real estate investing.
  • How Peter made the transition from single to multifamily after hearing advice at a meetup.
  • Peter’s realization that the trouble he had with single and multifamily were because he hadn’t been educated.
  • Who Peter reached out to in order to get himself properly educated about real estate.
  • The assets Peter invested in such as mobile home parks before landing on syndication.
  • Basic rules people don’t know when it comes to investing in real estate Peter helps teach.
  • Some of the MSA metrics Peter looks at to assess whether a deal is worth investing in.
  • The implication of MSAs – the idea that the ‘real estate market’ is too general a term.
  • How important getting an education before investing is and how Peter’s MSAs can help.
  • Free tools for analyzing a prospective property from the macro to the micro-level.
  • How Peter underwrites a deal as far as attributes within the property of the asset itself.
  • The third piece of Peter’s underwriting process: visiting the property in person.
  • How Peter turned his deal vetting process into a course.
  • The advantages of Peter’s alliance group for clearing up blind spots in deals he’s in.
  • How Peter helps his alliance members understand deals by recording his visits on video.
  • Peter’s use of 2008’s recession as a benchmark for checking if deals are stress tested.
  • Why Peter likes operators who are ultra-conservative and data-focussed.
  • Going back to food and shelter-based investments in this time of the global pandemic.
  • The value of investing with syndicators who have strong local connections to their deals.
  • Peter’s lessons he learned after buying a badly underwritten property in Brazil.
  • The value of investing in community and how Peter likes to give back.

[bctt tweet=”It just became a trial by fire and what I realized was that I didn’t get an education to start this journey. — @badgerdot” username=”whitney_sewell”]

Links Mentioned in Today’s Episode:

Peter Badger on LinkedIn

Global Investor Alliance

Merrill Lynch

Michael Blank

Jake and Gino

Wheelbarrow Profits

city-data.com

neighborhoodscout.com

CoStar

PriceWaterhouseCoopers

Trulia

Zillow

About Peter Badger

Peter Badger is an Educator, Investor, and Entrepreneur. He recently co-founded Global Investor Alliance to help people obtain the mindset, strategies, and tools to create real and lasting financial independence with recurring income from real estate and other investments. In 2008, he co-founded and led a company called Framehawk through to acquisition by Citrix Systems. Prior to co-founding Framehawk, he held leadership roles in technology strategy, enterprise architecture, and software development at Barclays Global Investors, Qwest Communications, Merrill Lynch, Credit Suisse, and Morgan Stanley. He earned his BEng (Hons) in Computer Systems and Electronics from King’s College, London University.

Full Transcript

[INTRODUCTION]

[0:00:00.0] ANNOUNCER Welcome to the Real Estate Syndication Show. Whether you are a seasoned investor or building a new real estate business, this is the show for you. Whitney Sewell talks to top experts in the business. Our goal is to help you master real estate syndication.

And now your host, Whitney Sewell.

[INTERVIEW]

[0:00:24.4] WS: This is your daily Real Estate Syndication show. I’m your host, Whitney Sewell. Today, our guest is Peter Badger. Thanks for being on the show Peter.

[0:00:33.1] PB: Thanks for inviting me Whitney, appreciate it.

[0:00:36.2] WS: Peter spent 18 years on Wall Street then founded a tech company in Silicon Valley. After his company was acquired in 2014, he turned full time to real estate investing to retain and grow his personal wealth. Realizing that real estate education was hard to come by on his own investing journey, he eventually cofounded the Global Investor Alliance in 2018 with his partner Karen.

Peter, thank you again so much, I want to hear more about your growth and how you got into this business and it sounds like your background probably helped you a little bit understanding numbers and how to get into this business somewhat but sounds like you had a difficult road understanding the real estate investment world which a lot of us do.

But give us a little more about your background and just getting into this syndication game?

[0:01:22.0] PB: Yeah, I think the journey started for me actually because we all kind of have a single family rental somewhere around. We buy a house that comes up cheap during one of the recessions and then rent it out so we get a taste of this stuff but what happened to me was, I had a small exit in Silicon Valley, call it single.

But enough money that it was meaningful that I didn’t want to lose in the volatility of the cycles of the stock market because I suffered like everyone else. I’m 52, I lost 80% of my pension fund in the .com bust. Because my broker at Merrill Lynch diversified me into tech stocks he told me at the time. I kind of know what the pitfalls are of the stock market and I want more control.

I guess exited the company and I started interviewing all of my CXO founders in Silicon Valley who had had exits as to what they did with their money and that was really the beginning because I kind of had probably six or seven detailed conversations over six months and every single person told me that most people who build significant wealth do it by taking stock and sharing coming from a company or building their own business and putting that money into real estate to retain and grow that wealth.

Kind of, I was given the message to take the money I had, the small part that it was and just focus on real estate investing. That really was the beginning of my journey.

[0:02:51.7] WS: Wow, okay, that’s definitely not a hard, I mean, not an easy pill to swallow there, losing 80% of your wealth in that bust but it sounds like it also pushed you in this direction for something that you felt was probably more secure or at least on the journey like you said, you started asking others.

“What are you doing? What did you do to build your wealth?” And you learned that they just started putting money in real estate? Could you elaborate on that journey just a little bit like who did you reach out to? How did you know who to reach out to there to figure out what they had done?

[0:03:24.8] PB: I think there’s this kind of two schools of thought obviously, a bunch of these people had wealth management people who were there to manage their wealth and it was basically give it to them, hand it off, they’ll kind of give you a report and they’ll kind of give you a pretty report, a glossy brochure, “Here’s your asset allocation, stocks, bonds, equities, a bit of gold and some alternative investment.”

I kind of wasn’t at that level of wealth compared to those people. I had to basically hack from the start and I reached out to a few people who had been doing single family home investing at scale and ironically because I reached out to those people first, it was kind of a little bubble of single family home rental people and I got stuck into it for two years and I bought 24 single family homes over 18 months.

Basically, you can imagine the end of this story, it’s fantastic because it was giving me about 12 grand a month in passive income so I didn’t have to work but then that 12 grand towards the end of that two year period, started to become seven and a half or nine or 10 and a half because a tenants would leave, I’d have six months of no income. Three grand in rehab cost in Jacksonville Florida with a class E tenant. I’d have someone steal an air-conditioning unit. I mean, I went through the ringer in the single-family home state.

I don’t know about you Whitney, when I go to these real estate meet-ups all the time, a lot of them. Because you got to educate yourself, you got to network, actually extend your knowledge real estate and I ended up with this – there was a REA real estate meet in Tampa Florida and at the start of the meeting, they give you an elevator pitch, they do a presentational topic and then you’ll mingle and network at the end.

I thought I was like the bees knees, I was at this Tampa Bay REA, I was like, “Yeah, my name’s Peter, I’ve got 24 single family homes, financially free,” that was my elevator pitch, it’s a bit arrogant and I never forget it, this guy walked up to me at the break, you know, he said, “Well, you’re a complete idiot.” I was like, I never met this guy and I’m like, “What do you mean I’m an idiot?”

He said, he shocks me, I’m like, you just met me, you’re insulting me to my face. He said, you should have bought two or three single family homes, understood the economics and then saved all of that hustle and bought a multi-family building of 15 to 20 doors. He said, you would have saved yourself a ton of work and removed the single family business model issues around being reliant on one tenant for all your income to cover the mortgage, tax insurance, HOA’s.

That was my first era. I now basically moved to Tampa Florida. This guy, he was in multi-family and he told me a bunch of stuff and we bought two buildings, a seven unit, a 12 unit and we were hit by Irma, hurricane Irma. By the end of that year of those 12 units, eight were empty from flooding, I was in a lawsuit with my insurance company who were not paying out anything after Harvey and Irma, you know, that double battle that summer.

Yeah, the irony was with insurance lawsuit, I couldn’t rehab those eight units and get them back on the market until the insurance company had claimant processed. It just became a trial by fire and what I realized was that I didn’t get an education to start this journey. That’s when I started reaching out to the major educators in each niche.

Michael Blank for multi-family, Jake and Gino, Wheelbarrow Profits are joined their masterminds, got the deep education and then somebody kind of said to me, “Wait a minute, why are you investing multi-family because mobile home parks is a better asset because you’re not maintaining all those buildings. There’s no air conditioning infrastructure, there’s no roofs to fix every 15 to 20 years.” With the mobile home park it’s a pad of concrete with some utility outcrops. So I went and bought a mobile home park in Illinois and I met some other guy and said, “Wait a minute, why are you doing mobile home parks, bothering with concrete? Invest in farm land.” I was like, “Why?”

Because you can plant a tree on a plot of land, it will produce no income for four or five years, let’s say an avocado tree and then the last, you produce avocados to 60 to 80 years. If you get a decent farm management multigenerational farm management team. Buy the land, plant the trees and go at it on the farm land, you need to worry about three or four water sources and then the farming team to reduce disease and pests and you’re good to go.

I went to this whole journey about boutique hotels by the way, short term rentals, got a condo in Disney which is now empty in Florida after COVID, went form 1,500 bucks a month in income to $2,800 loss in the past four months, I’ve got a beach condo in Mexico, empty. I kind of like, I’ve been through this whole journey whether it’s early investments I’ve kind of like, I learned by hacking. Learned by then getting experts and asset class. I realized that there was nobody to just bring us together and explain comparative pros and cons of asset classes and more importantly, the best way to do it which in my journey is to invest in syndications.

That’s my conclusion. I mean, I’m talking to the choir Whitney.

[0:08:57.0] WS: It’s interesting that you wanted to do any investing or whatsoever, you know? It’s just like, “Okay, I’m done with this,” after, really getting punched in the face numerous times but there’s a great quote there. I can’t remember exactly but you know, it keeps getting up after getting punched in the face, right? The ones that finally succeed and you’ve done it, you know?

It sounds like a horrible journey but you know, you learned so much, you finally realized, “Okay, I need an education. I just maybe I jumped in a little too fast,” and I love that drive though and just how gung-ho you were about it and you made it happen and then you still didn’t quit after many setbacks. Congratulations on that part alone. Just that mindset. Yeah that mindset behind that is so much more important than most other things that we could even talk about probably, it’s so important.

Well Peter, let’s jump into that a little bit, you know, as far as – you’re helping people, you’re helping educate people now because you had such a struggle with that and that’s great. But let’s jump in about analyzing a syndication and how you know what that looks like or maybe some tips on analyzing syndication so you know that okay, this one over that one, you figured out that investing in syndication is the way for you to build wealth, maybe you could start there and say okay, why are syndications the way to go for you now? And then, let’s jump in analyzing.

[0:10:16.2] PB: Yeah, I think if you look at the summary of where I ended up was I teach people to have a foundation of wealth with multi-family United States-based syndications. Because the US state from a real estate market standpoint is the most consistent, data transparent market on the market. I know, I’ve invested a lot in the world now so I kind of know how much data we have and so one of my big frustrations is actually about people who go into real estate investment first time is they don’t – they normally go on a whim without the education.

I got a neighbor who is a broker and he would say, “Hey,” I’m in Denver Colorado here. In the high lands, all these town houses being built. I met a guy in January and he says, “Yeah, I just bought a town house, $600,000 and I’m going to rent it out, my first time, the broker was a buddy at a party and should buy it, it’s appreciating.”

That was his entire strategy, walk into real estate and what he doesn’t realize is that he broke the 1% rule which is your rent should be 1% of the purchase price to stay out of trouble for a single family home. Just the basics, people don’t understand going into it. He was charging three grand a month for 600 rent town house. It’s half percent. I knew he was in trouble before the conversation ended. The thing for me actually is that when it comes to going to real estate, people do not analyze the macro MSA’s metropolitan statistical areas all the way down to the block and neighborhood area.

What we do for analysis is we say okay, let’s look at the 400 metropolitan statistical areas across the US and let’s work on based on population growth, hopefully going higher, job growth across a set of diversified industries, you look at crime going lower, you look at median house price, condo values going higher, you look at the school quality, you can kind of look at this whole kind of macro picture for every major real estate region across The States.

And you’ve chosen a high level market as in it’s growing up, crime’s going down, there’s a good quality of high level, let’s call it B-class neighborhoods, A-class neighborhoods that you can have great schools at. And then you say okay, let’s go down to a zip code. Do the same analysis.

The zip code, how’s the population growth, how far are these jobs from a commute standpoint? Are they 15 to 30 minutes in a car? Or is there public transport links locally and then you go down to the block in the neighborhood level, do the same analysis and then you go by the street to the street, you know?

This is what frustrates me is that when someone says to me, “Where do you think the real estate market is going?” It’s an idiotic question, no offense, because real estate market isn’t a thing, it’s not a thing. Everything is so local by MSA, by zip code, by neighborhood, by block, by street, by corner of the street. That’s why with all this data that’s transparent to these markets, you can go through, if you find a decent syndication provider who has got a great track record and demonstrate for the past 10 years that bought X buildings that had value ad projects, they’ve sold them, got an exit and got the returns for the investments.

If you got that, you can then go to my analysis techniques, mine and Karen’s and basically really go down to that asset level and work out whether it’s a deal with that syndication body you want to be in. To me, it’s a long winded segue of saying, get the education first. Because if you can’t measure it, you can’t go through the data and process-driven analytics of that deal, you shouldn’t really be investing.

[0:14:01.2] WS: Where do you go to find some of that data? I love how you talk about you know, the real estate. Real estate market isn’t a thing, it’s really a specific location.

[0:14:09.6] PB: There’s macro tools and micro tools, a bunch of it is free, a bunch is paid. I do two things, I kind of – I’m a techy at heart so unfortunately, I’m a bit of a sad data geek. I went through, when I wanted to move, I just moved to Denver, Colorado, I looked at all the markets across the states and you can go to, you know, even Google for population numbers by the way. Type in population, Tampa metro area.

It will give you the growth since 2000 on the chart, it’s pretty obvious. City-data.com is an amazing source where you can down at a macro level, zip code, in an MSA to work out all those condo house values, crime rates, et cetera. And then when you get to the neighborhood, there’s a bunch of simple paid reports and give a simple one, neighborhoodscout.com is what it sounds like and for $29, you can get a very detailed, micro analysis of your neighborhood around jobs, commute times, crime, demographics, school quality.

I mean, walkability, amenities, hospitals, malls. I mean, it gives you this amazing detail, 30 bucks for a report. Why when you’re dropping a hundred grand in a syndication or you know, 50 grand in a single family home. Why wouldn’t you just spend the $30 just to see how the neighborhood is in that level? I got probably 30 data sources and majority of them are free and some paid. Before you then can go to syndication provider by the way and ask them for their reports.

Because those syndication providers use Costar, use other sources that are paid which are expensive. You can say to them, “Hey listen, I’m thinking on investing in your deal, please send me the rent reports for this building that you’re buying for from CoStar. You can read it like they can and see where the rents are at and check that data and make sure that they can command those rates rents as part of the business plan.

[0:16:07.3] WS: Okay. You know, analyzing further, you know, you laid it out there, I mean, population growth, job growth, crime rate, make sure it’s going down medium house prices, school quality and some great resources there. City-data, that’s a great website. At first, I remember it was a little clunky for me to figure out how to use, I remember that, you know? But once you figure out kind of your reports that you like to see then you figure out where to go to but okay.

Now we’re going to invest in a syndication and we’re not messing with single family or anything else, what else should we be looking at as far as investing in that deal or that opportunity with that operator?

[0:16:46.1] PB: Well, I think this is where the alliance came together for me and Karen. We’ve probably invested in 50 deals in the past seven years and I’ve made a few mistakes.

[0:16:56.1] WS: 50 deals?

[0:16:57.4] PB: Yup, they’ve become less mistakes as time went on and here’s the reason why. We kind of do three main areas, we go through and do that full financial analysis. Macro and micro asset kind of make sure we’re in the right location, we then go through the full model for the actual asset itself. What are the returns, what are the assumptions around debt coverage, we won’t buy or won’t go into a syndication with more than 75% of debt because that’s really getting in trouble generally?Just a rule of thumb, you know? To live by.

We go through and work out what those rents are, what they are today, if it’s a value ad project, are they 15, 20, 25, 30% below market rates? If we put in five to seven grand to 10 grand on fancy kitchens and bathrooms, can we command from $1,100 to $1,500 in that zip code, in that location based upon other comparable buildings around it.

We go through the full asset analysis in that neighborhood and the third piece is you visit it. We got feet on the ground, we’re going to see the property because you got to walk around it. I mean it is unbelievable how people will look at the glossy investment summary, throw a 100 grand over there and not realize that less than 50 feet down the corner there is a drug den, you know? On the corner and so it’s so street neighbor specific. So those are three things, macro-micro, is at the right market to be in, period, and neighborhood.

Number two, how’s the asset, what is the business plan? Check all the inputs and outputs and verify it fully and then third, go and do physical due diligence, pitch up, meet the syndication provider, meet the rehab people who are going to be replacing those kitchens and bathrooms and walk the neighborhood. Look at the shops, chat to residents, you know? “Is there any crime here?” You know? I mean I pretend for these assets – I walk into the sales office with Karen.

And I say we are a couple looking for a place to live and we see how they respond. We’re checking their staff if they’re customer friendly, bedside manner, do they treat us well, do they follow up, how they approach us and what the tour feels like and we give that feedback to the syndication sponsor by the way because it is important. They know that going into buying an asset. So that is really the due dilligence we are doing and here is the irony of the alliance for us.

So I’d say about probably 2016 we started talking about this stuff to our friends and family like you do. What are you doing now Peter? You left Silicon Valley, how do you fill your time? Well, I invest in real estate and I went through the journey and I started talking about it and people start to latch on, start repeating it and then in 2018 a guy called Rudy who used to work for me, he met me for lunch. He said, “Thank you Peter and Karen.”

He said, “I have now replaced my corporate income from going to the same investing techniques you taught me and have mentored me for the past few years.” He said, “Why don’t you make it into a course?” So we created this eight week program, all of this information that I chatted about now is in detail, 17 hours by the way of education videos plus some exercises with all the models you can download and apply to your asset you’re thinking of buying.

The syndicator checklist, you know 30 points about how to analyze the syndication team, which is the most important thing by the way and then what we realized was as we started growing the alliance, we actually go and look for deals, me and Karen find deals. We actually analyze them ourselves. Once we are going to commit how personal capital we then offer it out to our alliance members and then what I didn’t realize was that there’s 10, 20, 30, 40 pairs of eyes on the same deal.

So we got on a Zoom call just like this. We start chatting about the deal and I realize I’ve got blind spots, Karen has blind spots. We start to fill in each other’s the blind spots, all of a sudden it’s like crowd source proven methods all looking at these syndication deals in tandem with that kind of similar base knowledge now I mean after the program and we’ve got better investor outcomes because of it. So I never realized that this was where the journey would take me.

Which is actually making me a better investor because other people are helping us analyze those deals so.

[0:21:08.0] WS: Wow, so many good points there Peter and I would just make a couple of notes and I wanted to highlight, you mentioned traveling to the property and I always encourage people or investors, our investors, I always say you are always welcome to come out to the property especially if we’re there we would love to meet you there, you know and meet you in person and it is unfortunate – we’re obviously – investors spread all over the world.

Ultimately especially all over the US, you can’t meet them all and we would like to though but I just feel like if you are investing 50,000 or especially 100,000, 200,000 you know what is a thousand dollars and a day and a half to travel to come see this property or this investment. I love that part of the due diligence, how you all just walk in and say I am looking for an apartment and seeing the response that you get, you know? And just getting a feel.

I think just walking through the apartment complex and walking part of the neighborhood, you are going to just learn more about it than you would if you didn’t do that, you know? And you are going to have better questions for that operator as well. You are going to see things you wouldn’t know about.

[0:22:10.0] PB: That’s right and so we’re also lucky because we’re full time on this. So for our alliance members I mean a lot of these people are high flying corporate careers who have their own businesses and to your point, they haven’t got the time. They got three young kids, you know the full on business working seven days a week. They’re like, “Peter, I can’t fly to Austin, Texas for two days,” and so what I do actually is me and Karen video it.

We do a full video walk through the apartments, walk through the property. We interview the property management people, we do the full shebang. So okay, here is your 30 minutes and video lets people touch it and feel it and feel immensely attached to the investment and they say, “You know what? Me and Karen are trusted to party people,” we’ve done the physical due diligence, I feel more comfortable and so my statement is either go yourself or find a trusted third party. So you truly know they know what they are talking about to go and do the due diligence for you.

[0:23:06.2] WS: What do you like to see now in the operator or their plan, you know, talking about say a potential downturn or something and let’s say after what’s happened with COVID and what is going on right now, what do you like to see if you are presented with an opportunity now, what is going to be some things about the next six months or another downturn that you are going to be looking for in their documents.

[0:23:28.5] PB: Well I think because we have kind of – I am kind of tech, Karen is from ex PriceWaterhouseCoopers consulting and we are both process and data driven. So we had a set of parameters in our models before COVID, before the next recession and so I like to see in multi-family sponsor that they’ve gone through and modeled out what happened in their market in 2008. I want to see that if 2008 repeats itself here’s what happens.

So we’re in some buildings in Cincinnati, Ohio but the worst point in a level financial crisis, Cincinnati rent collections went down to 86%. So I want to see an 80% model, okay if there’s 20% of the tenants, what happens to that income, what happens to that property? So I’d actually in fairness got these parameters walking into any analysis to make sure that one of the worst periods we saw, which is real estate-based by the way, you know 2001 was tech.

2008 was real estate recession and so if we can model for that we should be okay. Now I must confess, a pandemic was not on my risk matrix, you know? And I would love to be somebody who had that listed on their risk but no. So I think to answer your question, I want to see modeling of growth in a financial crisis in your numbers of that market at the time. I want to see how you’re impacted and what you do at that time. I also want to see the debt coverage is 75% or less.

I also make sure that we got decent cash reserves after you’ve put aside the rehab have funds and a lot of sources about leasing up is about the infrastructure. So are you big on social media, how do you lease up your apartments or you’re just like old school hiding in your office and put a few newspaper ads out there or actually you’re out there doing Instagram and/or Facebook posts saying these apartments are available and what is your partner on Zillow and all of these rental finding sites Trulia, etcetera.

What partner do you use to basically it will take dead leads and or people who sells office and try and get that through your marketing infrastructure. So those are kinds of things that we are looking at right now.

[0:25:43.6] WS: Nice and many great points you just laid out there. Is there an amount of reserves that you’d like to see an operator have or is there a way that you know what you like to see there?

[0:25:55.4] PB: It depends on the syndication provider honestly and they have their parameters and I will often invest in the deals where they’re the most conservative. I mean I love people who are gnarly and conservative with their models, that’s what I reach for. When I meet like a CFO or an asset manager who’s completely data focussed and conservative and you know doesn’t want to make any risk whatsoever, you know I like that because you know what?

He is going to take care of the downside, which is all we care about, which is a retaining A capital you know? In a lot of ways of downturn.

[0:26:29.7] WS: So Peter, what is a way you’ve recently improved your business that we could apply to our business?

[0:26:35.0] PB: From an education standpoint, so gosh it’s a good question because we have been in COVID so it’s like this is an unnatural period of time for everybody. So I mean I am slightly embarrassed to admit that the first month after lockdown occurred I sat there catatonic like everybody else, you know? What’s just happened, what can I do? And I actually stopped marketing our alliance to the world because you know when their hairs are on fire, when there is 40 million job losses over eight weeks the last thing I want to be reaching out to people is saying, “Do you want to invest in real estate?”

Because you don’t know people’s situation and a lot of people have been furloughed at home. It is a bit of a mixed bag out there. So honestly what I’ve done in the past two months during the final phases of lockdown, we are now open in Denver, restaurants are open, there isn’t a spike like in some of the states but basically I have done a version four of our Alliance program.

And I have taken all of the learnings of the past couple of years, put it into the program and so actually I have ended up improving my business by saying, as a strategy in real estate, you could do all of these asset classes but the bell weathers are the bottom of the Maslow’s Hierarchy of Need triangle. So Maslow’s hierarchy of need has like food and shelter at the bottom and to me that is where it’s at. So food is the agriculture investments we’re in, shelter is the multi-family syndications.

If you stick to those two asset classes, your foundation in multi-family in the US with good syndication providers who have a decent track record and have been through that global financial crisis and survived it with good agriculture investments outside the US, central and south America, outside the hurricane belt, good water sources, good multi-family generational farming teams, with those two asset classes I believe you can build, grow and pass on your wealth through multiple generations of your family.

And so my improvement is version four, forget the short term rentals, forget the mobile home parks because the tenants class is just too dodgy you know? There is a bunch of let’s say shyster in the buying and selling. The mobile home parks is a tough place to be and yeah, boutique hotels, hospitality tourism, it is a tough space to be right now given the pandemic. So for me it is like back to basics.

[0:29:02.6] WS: Food and shelter, if we don’t either one of those we’re going to be in a bad predicament. Nothing else is going to matter, is it vacation or rentals or anything else, yeah. You know I wanted to ask you, so you’ve invested I think you’d said in 50 deals over a short period of time and obviously you have analyzed lots of deals, lots of operators, markets, all of those things but after that kind of experience as a limited partner, as a passive investor, what are a few things that have stood out to you amongst let’s say the top few operators that you’ve invested with?

What are some of the things that allowed them to stand out, say, “Okay, you know out of all of those deals these two or three operators are my best operators,” or I like these deals the best or the way they operate the best or the way they communicate or whatever it may be, how did they stand out?

[0:29:50.5] PB: I think the biggest thing me and Karen learned was the team itself and the fact that those one, two or three hopefully principles of that asset manager were local to that city. They were born there, they grew up there, they know every street corner every block. They all have some connection to some real estate family member. I mean my group in Austin, Texas the guy’s dad is on the planning board of the city of Texas.

So I think for me it is finding those principles of the syndication provider who are local, boys or girls who grew up there, been there their whole life, had some connection to real estate through their family members and they just seem to know it, they eat and breath and live and as long as they have been in the market since 2008 buying and selling these buildings, I am good to go.

[0:30:46.9] WS: What’s the number one thing that’s contributed to your success?

[0:30:49.3] PB: Perseverance to your point earlier. I mean I don’t – in my life there isn’t a failure. It’s a learning and trust me, I had some learnings. I’ve got a bit of a beach front land in Brazil. If you want Whitney, you know you can go and take that one you know? So there’s marketing brochure, sent 50 grand, wired it over and then never did the due diligence to find out it was about 30 miles from any utility hookups. So if you want to go to Brazil.

So I think for me it’s when you hit those scenarios, don’t give up. Learn from it, understand, network with people, get some mentors and start to put a process or system in place so you don’t make those same mistakes again so.

[0:31:34.0] WS: How do you like to give back?

[0:31:35.5] PB: It’s a combination. I have a bunch of charities we support locally and globally as and when the business revenue allows obviously. It is fairly cyclical listings go through and I think dedicating time to, honestly, friends, family and neighbors. You’d be surprised how many people in your local community would appreciate help, you know COVID has been a classic. I’ve got a bunch of elderly people in the neighborhood here and to go out do their shopping for them.

Leave it on their doorstep, I mean stop looking at Haiti and other places in the world and I get they’re poor, they’re impoverished. There is NGO’s out there taking care of that. Look at your own doorstep because I think if you can build your own community and give back to that community I think will make your life and everyone’s lives around you better off so.

[0:32:23.5] WS: Peter, I am so grateful for your time today and how you have given back to us. You have provided some great points and laid out many of these list of things that we could just go through as a passive investor and how to analyze a deal and an operator and market and resources and where to find those and even I just like your personal story as well. I mean just really getting punched in the face and getting back up many, many times just showing your perseverance.

And just some mindset it takes to be able to do that and that is why not everyone succeeds in any business I think. They get knocked down and a lot of people will stay down but you didn’t. You made a choice not to stay down that’s for sure and now you’re helping many others do the same thing. So grateful for that and tell the listeners though how they can get in touch with you and learn more about you?

[0:33:07.9] PB: Yeah, so you can find us at globalinvestoralliance.com and on the website, there is a little booking thing there. So just click on it and just book a session with me and Karen for 30 minutes. Let us talk through what your personal financial goals are. Let us look at where you want to head in life and let’s see if we can help you and so we do an invite only. If we can help you, we know we can help you. We’d invite you in it is a onetime fee and yeah, come and join us.

Because we have an incredible diverse group of individuals, all walks of life, we just analyze the deals together but invest individually and it just becomes a lovely, a safe peer group because the biggest problem people have in real estate investing is their family members. Their uncle says, “Oh you will lose money in real estate.” They know nothing about it. You got to find your tribe of investors and that is what the Alliance does for us, for me and Karen and it can do the same for you. So globalinvestoralliance.com, we’d love to chat with you and see if we can help.

[END OF INTERVIEW]

[0:34:05.0] WS: Don’t go yet, thank you for listening to today’s episode. I would love it if you would go to iTunes right now and leave a rating and written review. I want to hear your feedback. It makes a big difference in getting the podcast out there. You can also go to the Real Estate Syndication Show on Facebook so you can connect with me and we can also receive feedback and your questions there that you want me to answer on the show.

Subscribe too so you can get the latest episodes. Lastly, I want to keep you updated so head over to LifeBridgeCapital.com and sign up for the newsletter. If you are interested in partnering with me, sign up on the contact us page so you can talk to me directly. Have a blessed day and I will talk to you tomorrow.

[OUTRO]

[0:34:45.7] ANNOUNCER: Thank you for listening to the Real Estate Syndication Show, brought to you by Life Bridge Capital. Life Bridge Capital works with investors nationwide to invest in real estate while also donating 50% of its profits to assist parents who are committing to adoption. Life Bridge Capital, making a difference one investor and one child at a time. Connect online at www.LifeBridgeCapital.com for free material and videos to further your success.

[END]

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