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Kahuna Investments Buys Cash Flowing Apartments Across the USA

Download The Kahuna “Trusted Cash Flow Formula”

Did you know you can invest with your IRA?

Most people have no idea they can use their retirement money located in there Roth or Traditional IRA account. The Problem is many traditional brokers do not allow this type of investment. Luckily for you, we have wonderful relationships with many Self-Directed IRA Fiduciary’s, where you can transfer money from your IRA into a qualified account and use that money to invest in Real Estate.

Our unique approach

It’s about taking care of our capital

What we do?

At the core of our business model, our primary focus is to identify potential cash flowing multi-family assets with all the right fixable problems.  We partner with Investor Capital and Bank Debt to arrive at a capital stack that meets our conservative underwriting. Utilizing Operations, we formulate a plan to increase occupancy and rent growth by eliminating deferred maintenance and bringing the property to its peak condition.  With our 5 year time horizon, this allows us to maximize our profits and sell for top dollar.

 

Why work with us?

Experience = Cashflow

As a seasoned real estate investor, my team and I have thousands of hours mastering apartment investing. We train our team to pay attention to the little things at the property level that makes the most impact.

We simply do the work

We acquire multifamily assets in prime locations by extensively underwriting 95% of all assets in the markets we follow. This gives us great deal flow, allowing us to go after deals that meet our criteria. Using conservative underwriting and appreciation assumptions, we expect these opportunities to increase in the coming years.

Strong Emerging Markets

Our strategy is to patiently acquire, manage and operate multi-family assets which generate high yields and passive cash flows. We selectively position ourselves to take advantage of opportunities on the horizon. In addition, we only target strong employment centers with growth and stability trends.

Apartment Acquisitions Criteria

CAP Rate:

  • Min. 7% (based on current financials)

Target Return & Investment Period:

  • 6%- 8% annual cash on cash return (based on current financials)
  • 10%-14% total annual return over investment period
  • 5-7 year hold period (medium to long- term)

General Criteria:

  • Potential high yield income streams.
  • 20% below replacement cost.
  • Cash equity-“All cash” or “Cash to existing debt”.
  • Value-add opportunities sought.

Property Criteria:

  • Utilities: Individual metered units preferred.
  • Roofs: Pitched roof construction preferred, but not required.
  • Premier Properties: Stabilized properties with minimal deferred maintenance preferred, but will consider others if well located and possessing a strong, value-add opportunity.

Transaction Size:

  • $1 – $20 Million
  • Minimum 100+ Units

Asset Type:

  • B+ to C+ class multi-family properties; Prefer B class in A market and C+ class in B market opportunities. Will review distressed A class deals in markets with 1MM+ populations.

Occupancy:

  • Prefer stabilized properties. Minimum 85% occupancy. Will consider lower occupancy if property is well located and has value-add upside.

Age:

  • Preference is 1978 and newer, but will consider all age properties.

Target Markets:

  • Nationwide growth markets.

Location:

  • B+ to C+ trade areas with strong demographics and economic diversity.

The Kahuna Process

Our trusted cash flow formula guides our team

  1. Kahuna Acquisition Filter ™

    Allows us to thoroughly analyze 95% of all deals in our targeted markets with only 2% – 3% qualifying for further review. This strict filtering process ensures assets that meet our conservative underwriting and focus on cash flow for investors get selected.

  2. Kahuna Due Diligence Audit ™

    When on-site, our team of experts inspect and analyze on site all financials and the physical condition of the property to mitigate potential risks and uncover opportunities for our investors. Only qualified deals move forward.

  3. Kahuna Management Advantage ™

    Our systematic team approach to performance, KPIs and people constantly elevates our communities to highest standards. This ensures predictable investor cash flow and appreciation.

  4. Kahuna Investor Return Maximizer ™

    Utilizes a cash flow centric approach, driving profits to the bottom line, while maintaining the asset. This positions the property for a proper and profitable exit for our investors. With return of equity and profits, our investors are now positioned to take advantage of the next Kahuna acquisition.

Our asset organization chart

We structure our deals with asset protection in mind

How we do it!

Kahuna Investments believes in asset protection.  Our SEC layers consult and prepare the necessary organizational structure, LLC’s, and Private Placement Memorandum (PPM). Our PPM has two types of shares:

  • “A” Shares = investors
  • “B” Shares = sponsors

This method ensures proper operational structure and documentation, which guides Kahuna Investments in all decision making.

Our talented team

Meet our dedicated team members who go above and beyond

Corey Peterson

Chief Kahuna

As a managing member of Kahuna Property Partners, Corey Peterson strives to provide his investors with stable cash flow returns and long term capital appreciation. Corey has flipped, renovated, converted, acquired and sold over $39 million in real estate across the country. He has also been involved in the ownership and management of more than $31 Million dollars worth of commercial and residential properties nationwide. Corey is the bestselling author of “Why The Rich Get Richer-The Secret to Cash Flowing Apartments”, and has spoken at the prestigious, Harvard University. Corey is also the host of the podcast, Multi-Family Apartments Investing Podcast and has been featured on FOX, CBS, ABC, NBC affiliates.

Shelley Peterson

The RainMaker

Shelley Peterson focuses on investor relations, acquisitions and asset management of all current portfolio assets. Her primary roles are sourcing investment opportunities and managing investor communications. In addition to finding deals, Shelley is responsible for developing effective communication strategies and vehicles targeted to the investment community that accurately portrays the company’s vision, performance and prospects. Shelley graduated from the University of Central Oklahoma with a Masters degree in science. Her strengths include an unmatched ability to quickly connect and communicate effectively to others.

Some facts about us

Multi Units

Flipped Homes

Followers

Coffee Cups

Frequently asked questions

What kind of properties do in you invest in?

We currently invest solely in multi-family apartment buildings one of the most recession proof segments of the Real Estate market.  This is true particularly true as the United States population continues to grow. Even with continued advancements in online marketing (particularly Amazon) and “work from home” (which threatens the retail and office markets), people will always need residential solutions. Within this segment, we focus on B+ to C+ class multi-family properties yet prefer B class in A markets and C+ class in B markets.  This strategy positions us in the segment of the market most shielded from ups and downs that come with economic cycles. We will also review distressed A class deals in markets with 1MM+ population.

What is an Accredited Investor?

To qualify as an accredited investor: a person must demonstrate an annual income of $200,000, or $300,000 for joint income, for the last two years with expectation of earning the same or higher income.  Individuals must have earned income above the thresholds either alone or with a spouse over the last three years. Or A person is also considered an accredited investor if he has a net worth exceeding $1 million, either individually or jointly with his spouse excluding personal home.

Can I invest even if I am not accredited?

Unfortunately No, you must be an accredited investor to participate in our deals.

How does Kahuna Property Partners find its apartment deals?

We have relationships with the vast majority of commercial brokers in the Central and Southern United States.  These brokers bring us deals often before they hit the open market. [We also occasionally engage in direct marketing campaigns and are constantly building relationships with banks to get access to their REO inventory.] Once presented with an opportunity our team underwrites every property to the highest standards.  This eliminates any unfavorable or questionable properties.  In 2016 the Kahuna team underwrote 726 -only a little more than 20 met our stringent standards.

How are the Kahuna Property Partners Investments Structured?

Great news! You will be limited liability owner of the property which comes with all the benefits like depreciation and cash flow.  Meaning the property is owned by a “Property LLC” for which that property is the only asset (reduces liability). You in turn will be a direct shareholder in this “Property LLC” which allows for a direct flow-through of cash flow, depreciation.  Furthermore, upon sale of the asset, you will realize long term capital gains… PLUS, you literally get to tell your friends you “own” an apartment complex, because you do!

What will my return on Investment be?

All Kahuna investments Private Placement Memorandums are based on individual properties.  Every property is different and will  offer different returns. Our current investors are currently realizing between 5%-8% preferred cash yield annually.  The expectation is to double this return upon the sale or refinancing of the property.  We project the overall investment life-cycle returns to be 10-16%.

Our returns consist of three parts:

Preferred Return from Cash Flow:  Kahuna Investments will only select investments that it pays a minimum average annual preferred return of at least 5% (depending on individual property  this could be higher). Returns are paid quarterly via direct deposit  or by check.  Our priority is to pay our investors before our sponsors.  This protects you, the investor, and ensures we only select projects with strong cash flow outlook.

Profit Share: Upon a sale or refinance of a property our goal is to return 100% of the initial investment to each investor.  Next, procedure calls for a 50/50 profit split between sponsors and investors, up to the point where investors doubled their annual return from the cash-flow.

 

How much are these properties leveraged?

This is an exciting point. Over a five-year period our goal is to have our properties be no more than 50-60% leveraged.  We rapidly decrease that ratio by actively paying down the loan and forcing property appreciation.  This is accomplished through value add improvements, superior management, and rent increases.  In turn this leads to a 5-year loan to value ratio of no more than 60%. This conservative approach provides additional buffer from the ups and downs of the real estate market.

Can I invest with my retirement plan?

Yes.  Investing in multi-family apartments with a structure like ours is perfect for retirement plan investing.  Your involvement is by definition passive. All you need to do is set up a SELF-DIRECTED IRA with an independent custodian, like www.SpecializedIRAServices.com or www.VantageIRAs.com.  Once that is completed you can then invest using your IRA/401K/ROTH-IRA, or several other forms of self-directed retirement accounts.  Should you have questions, please contact us through our Contact US form or call us at 480.382.3933

What kind of properties do in you invest in?

We currently solely invest in multi-family apartment buildings, one of the most recession proof segments of the Real Estate Market, particularly with the United States population continuing to grow. Even with the continued advancements in online marketing (particularly Amazon) and “work from home” which threatens the retail and office markets, people will always need to live somewhere. Within this segment, we focus on B+ to C+ class multi-family properties and prefer B class in A markets and C+ class in B markets. We believe this positions us in the segment of the market that is shielded most from the ups and downs in the economic cycles. We will also review distressed A class deals in markets with 1MM+ populations.

What is an Accredited Investor?

To qualify as an accredited investor, a person must demonstrate an annual income of $200,000, or $300,000 for joint income, for the last two years with expectation of earning the same or higher income. An individual must have earned income above the thresholds either alone or with a spouse over the last three years. Or A person is also considered an accredited investor if he has a net worth exceeding $1 million, either individually or jointly with his spouse excluding personal home.

Can I invest even if I am not accredited?

Unfortuanley No, you have to be an accredit investor to participate in our deals.

How does Kahuna Investments find it’s Apartment Deals?

We have relationships with the vast majority of all commercial brokers in the Central and Eastern US, who bring us deals often before they go on the open market. We also occasionally engage in direct marketing campaigns and are constantly building relationships with banks to get access to their REO inventory. Once presented with an opportunity our team then underwrites ever single property to the highest standards and eliminates those that do not qualify at our rigorous standards. As an example last year our team underwrote 726 properties and with only a little over 20 qualifying for our stringent standards.

What will my return on Investment be?

All our investment and Private Placement Memorandums are based on individual properties, and every property is different and will therefore offer different returns. Our current investors are right now realizing between a 6%-8% preferred cash yield annually, and are expected to double this return upon the sale or refinancing of the property for overall investment lifecycle returns of 10%-16%. Our returns consist of three parts: Preferred Return from Cash Flow: Each investment is selected such that it pays an min. average annual preferred return of at least 6% (depending on the individual property deal this could be higher than that) which is paid out quarterly via direct deposit into your bank account or by check. In other words, the investors get paid first before the sponsors get paid anything. This protects you as an investor and makes sure we only pick projects that have strong cash flow outlooks. Profit Share: Upon a Sale or Refinancing of the property it is our goal to return 100% of the initial invested amount to each investor, and then do a 50/50 profit split between sponsors and investors up to the point where investors doubled their annual return from the Cash flow (so if Preferred Return from Cash flow is 6% the profit split is 50/50 until they reached a total “Target Return” of a 12% per year return over the holding period)  

How much are these properties leveraged?

This is an exciting point. Over a 5-year period it is our goal to have our properties not be more than 50-60% leveraged. While we start out with a 75%-80% leverage based on purchase price, we decrease that ratio rapidly by actively paying down the loan and by forcing appreciation of the property through value add improvements, superior management, and rent increases, leading to a 5-year loan to value ratio of no more than 60%. This conservative approach provides additional buffer from the ups and downs of the real estate market.

How are the Kahuna Investments Apartment Deals Structured?

Great news. You will be limitied liability owner of the property which comes with all the benefits like depreciation and cash flow, meaning the property is owned by a “Property LLC” for which that property is the only asset (reduces liability). You in turn will be a direct shareholder in this Property LLC so in essence you are part owner of the company that owns the property. This allows for a direct flow-through of cash flow, depreciation, and allows you upon sale of the asset to realize long term capital gains … PLUS, you literally get to tell your friends you “own” an apartment complex, because you do.

Can I invest with my retirement plan?

Yes, investing in Multi-family in a structure like ours is perfect for retirement plan investing because your involvement is by definition passive. All you need to do, if you haven’t already, is set up a SELF-DIRECTED IRA with an independent custodian, like www.SpecializedIRAServices.com or www.VantageIRAs.com and once that is done you can invest using your IRA/401K/ROTH-IRA… or several other self-directed retirement account forms. If you have questions about how to do that, please contact us through the Contact US form or call us at ((480)-382-3933)

“Enjoy passive real estate income without the hassle of management”

Download The Kahuna Trusted Cash Flow Formula...

Download The Kahuna Trusted Cash Flow Formula...

High yield cash flow centric investments for busy professionals.

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