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Welcome to The Legacy Wealth Podcast where we help accredited business owners become educated & get access to, private investments that the wealthiest investors in the world utilize to grow their net worth. We do this by providing insight & access to successful fund managers & investors across multiple asset classes.
I am your host, Pascal Wagner, and today I am interviewing Chad Corbett, CEO of the Magnum Opus Project and we're diving into:
- How to underwrite deals to make better investment decisions
- How to analyze a deal as a beginner
- And ultimately how to evaluate deals to match your goals & lifestyle
With that said, let’s get to it!
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Links from this episode:
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Links from this episode:
- If you're looking for highly vetted opportunities to invest in, get access to our deal database of alternative investments & join our investor club at www.getfundbase.com.
- Watch the show on YouTube here: https://youtu.be/ytHci0Y5vdI
Links from our Guest
- https://twitter.com/Chad_Corbett
- https://www.facebook.com/chad.corbett.12
- https://www.linkedin.com/in/chad-corbett/
- https://www.instagram.com/chadcorbett1/
- www.ChadCorbett.com
Time Stamps:
00:00 - Intro
01:35 - How Chad got into investing
04:23 - Chad's first investment
08:44 - On which fund Chad would go to
09:45 - Chad's mindset
11:55 - Why not the stock market? Or why funds?
15:32 - Meeting Joel Block
16:12 - What are sponsors?
19:59 - Chad's investment thesis
26:44 - Chad on stocks
29:15 - What is the recession proof vertical in real estate?
32:58 - What does Chad's investing look today?
35:48 - Chad's new route
39:51 - Chad's power purchase agreement
42:57 - Chad's process
54:30 - Chad's lessons and perspective
1:08:20 - Outro
Creators & Guests
What is Grow Your Cashflow Podcast?
Welcome to Grow Your Cashflow Podcast where we help accredited investors learn how to earn consistent monthly passive income from private placements.
If you're uncertain about where to invest for dependable returns, have limited access to exclusive opportunities like private placements, or are looking for expert insights and guidance on generating consistent income across various asset classes, then this show is tailored just for you.
By listening to this show, you'll achieve your passive income goals faster by learning:
🚀 Proven strategies to secure monthly passive income.
💡 Expert insights from successful fund managers and investors.
🌐 How to access exclusive opportunities in private placements.
📈 Techniques to diversify across multiple asset classes for a robust portfolio.
💰 The well-guarded secrets of wealth accumulation used by the world's elite.
Try listening to our most popular episodes on your favorite podcasting platform or on YouTube. We look forward to you joining our community of investors. You’ll be one step closer to growing your cashflow!
Pascal Wagner:
All right, welcome to another episode of the Legacy Wealth podcast where we help accredited business owners become educated and get access to private investments at the wealthiest investors in the world to utilize to grow their net worth. We do that by providing insight and access to successful fund managers and investors across multiple asset classes. And I'm your host Pascal Wagner and today we're interviewing Chad Corbett, the CEO of Magnum Opus Project. Welcome.
Chad Corbett:
Thanks for having me, man. I'm looking forward to this.
Pascal Wagner:
Yeah, man. So Chad and I know each other from Gobanance for a couple of years, which is a men's group, a mastermind group to help each other get better in all areas of life. But Chad, please just start out by giving us a story about how you got into investing in funds, syndications, anything where there's an operator managing capital on your behalf.
Chad Corbett:
Sure. For me, it started by learning the difference between investments and jobs. And I built companies thinking they were investments and they turned out to be jobs. And I built a real estate portfolio because that was supposed to be passive income. Bullshit. And
Pascal Wagner:
Ha ha ha!
Chad Corbett:
what I learned is that my lifestyle is what, I'd say the dominant reason for me becoming a truly passive investor was lifestyle goal. So I said I'd go to retire about 40 travel the world on adventure motorcycles and develop clean water throughout the world. So running a real estate team, doing over 100 deals a year, like a small team doing over 100 deals a year and doing another 50 or 60 on the investments front, you kind of have a localized business. You're not very geographically independent. So I started to look, as I learned more about investing, I started to pay more attention to taxes and what you actually lose when you flip a house, like what, how much of that is being eroded Or you just end up playing this game where the tax deferral game that you know swap till you drop and you're always running from it To me it just felt like a giant snowball of Liability and I didn't like that and I'm like how can I invest? To get and my like the yield that I set for myself was a goal of if it's if it won't yield a true 18% ROI then don't do it annualized And that's you know, that was pretty easy to do flipping houses It was pretty easy to do with force housing rentals with lease options with sub twos. And wholesale is technically, I guess, an infinite ROI. But those were very people-intensive. Like you had to be on the phone. You had to go to appointments. You had to know what your competitors were doing. And it just didn't seem like it would actually scale to where I could be out of the country for two or three months without cell service and come back without damage being done. So for me, it was a hell of a deal. In a large part of lifestyle move, I said, you know, how can I get 18% plus returns and not have to think about it when I'm, you know, trying to survive in the middle of Nepal when it's 115 degrees and there's a snow leopard outside my tent. And that was kind of how I started in this. So the first step there was turning a business into a million dollar balance sheet. So I used small business, mainly a real estate team, a real estate education company and a real and a holding company. Those are all the pieces like the multiple income streams that got me to where I could confidently put a million dollars on a balance sheet for a prescription agreement. And the very first investment that I made, a friend of mine, Paul Moore, who you've probably heard on bigger pockets, Paul and I would meet, just we had like a little two person mastermind. We'd meet once a week and have coffee and just talk things through. and he had just finished writing his multifamily book. It was already kind of the back end of that trend before people started paying crazy three cap prices. But Paul had already raised capital for multifamily investments and he just said, I'm in good conscience, I can't put my guys in these deals. So we talked that through and we back-tested different asset classes and he, I'm not taking credit for his fund. It was his idea. I just kind of helped, you know, validate it for him. But I watched him. put together a fund in 2018. His first fund was focused on Mobile Home Park and self-storage and we back tested that all the way through like a you know 01 and it looked like it would hold up. Multifamily looked like it was overbought. Boy do we not know what we didn't know right. But it was hard to find what we considered a really good deal that you'd stake your reputation on even all the way back then. So that was my first fund. went into his Wellings Income Fund 1. I think it was income and he had to he launched a growth fund and an income fund. So anyways I went on that it was if I remember right a $50,000 minimum with a bonus 10 preff for first-round investors and a projected projected multiple of 2.4 at the time with a three to five year principal payback and a seven to ten year were the terms of that. And I chickened out and I went 50 grand. I invested the minimum. And that's one of those things that was my first accredited investment. It was the first time I'd ever given up control. That was the hard part. Like, it's nothing to just go throw 50 grand down on the house because you know you've got options. You can drive over there and do X, Y, or Z with it. And it felt so much different the first time. But here we are several years into that. The multiple of 2.4 seems laughable when REITs approach you and buy assets at two and a half and three caps. You're just like, what? Sure. Like, can we close now? I'll NFT this thing so we can transfer it immediately. But so it's actually outperformed expectations. And you know, for me, I went from a point of being afraid to let go of 50,000 to having Paul come to me and say, And I'm like, I don't want my money back before you ask. I do not want my money back because for me, I saw it as well. Like if I can keep that deployed there, then I'm not playing the tax deferral game or trying to reallocate. So that was my first deal. It was with somebody I had already built trust with over time, somebody who I knew his story. I got to meet with him face to face. And one thing that I truly respect about Paul is even though we were, friends when I got apprehensive and I'm like, man, I don't know. I don't know what you fund to do. I don't know what dollar amount. He didn't close at all. He said, you know, listen, if you're unclear at all, just don't do this. He said, if you're not 100% clear, I don't want you to invest. And I respected that a lot. And that's ultimately what I've learned through this journey is I underwrote the first one correctly, people first, then the deal. And that's been probably the best lesson. that I was fortunate enough to learn in the very beginning of the very first deal is underwriting people. So that was the beginning of my journey. I've done quite a bit since, but that was the first one.
Pascal Wagner:
Yeah, a ton to unpack there. I'm excited to dive into it. So tell me a little bit more about, you know, 100%, I resonate with when you invest your money in your first deal, it's like, okay, I'm aware that I'm not gonna see this money for a while, you know, hopefully this turns out okay, you know, the first time you do anything, it's really scary. What do you think eventually got you over that line? And how did you pick which fund to go into? Were you looking for cash flow? was it just like, I want to get in my first deal?
Chad Corbett:
Um, for me, I was, I was trying to, I knew that I needed because of the, the uncertainty and the discomfort I felt while trying to make that decision. I knew I had some growing to do, right? So for me, I ended up choosing the income fund, which was, you know, a slow return over time, but a longer haul. Um, and I wanted to condition myself with just a $50,000, you know, first investment. I'm like, this will make me comfortable for the next ones, but, you know, for the future. And, you know, in retrospect, I probably, if I had it to do over again, I would have done no less than 100 because it's been a deal that's, I mean, where do you get a 10 prep with what's probably going to end up being a 3.5, 4 multiple? Like it's a pretty rare one with a less than a 50% or less than a 35% debt ratio. Like it's almost unheard of. They're out there, but it was a unicorn. I just didn't know it. way more comfortable than I was, but I ended up choosing that because it forced me to have a long mindset, you know, the seven to 10 year mindset, and it forced me to make that that that connection of you're letting go of this money, forget about it. Like you you've you made an informed decision, you underwrote the deal now move on. That's what passive means. And I think I didn't I don't think I made any mistakes in that. I think it's it did do what I what I intended to do. It's funny to watch as you age. I'm only 41, but I've watched my risk tolerance go from, you know, I came out of poverty, great people, just not a lot of money. And I went from like clinging to every dollar to, now it's like, you know, I have to negotiate with the bank because they have these limits where they're like, nobody wires a half a million dollars in a day. And I'm like, yeah, they do. And it's like, I've sent, you know, I mean, I've sent seven figure wires and just didn't bat an eye. I just dropped into a kinko's or something and, you know, overnighted a package to make a million-dollar investment. And not always on my behalf, not always my money, but I represent others. And it's interesting to see in yourself how your risk tolerance or the seeing certain things that you used to perceive as threats are just administrative at this point. And that's what that was about. Like the biggest part of that, you know, the resistance on the front end that investment was knowing that I had to condition myself to have more trust in myself, frankly. Like
Pascal Wagner:
い
Chad Corbett:
I had kind of laid out a thesis. I did what I thought I should do to underwrite the person, then the deal. And it just came down to learning to trust myself at the end.
Pascal Wagner:
How did you even pick funds to begin with? Okay, so you knew Paul and this investment opportunity came up, but you had a ton of opportunities to maybe invest in your own business or invest in maybe your own real estate or deals. Why not the stock market? Or why
Chad Corbett:
Okay.
Pascal Wagner:
funds? Why not your
Chad Corbett:
Yeah.
Pascal Wagner:
own investments? Tell me about that.
Chad Corbett:
So for me, I came up like in the 2008, 9, 10 period, I was in resort real estate development and sales. So ski front, beach front. And when banks pulled all the condo products in the early summer of 2008, I knew I didn't have a good enough financial education to understand what was happening, but I wasn't stupid either. So I went to community banks and raised $42 million in two days. Then I went to the developer and said, I'm transitioning out of sales. I'm gonna help navigate this crisis So I ended up Managing the closings for over a billion dollars worth of pre-sold real estate with no lending behind it And we just we would negotiate one tranche at a time from banks when they were in a liquidity crisis And then I would kind of be the hub between the developer the broker the escrow and the buyer and I would try to find a way to put deals together and in that it ended up becoming like a real life thinking grow rich. So I got to help over 400 high net worth and ultra high net worth individuals in one of their darkest hours when they you know they were used to running off credit but their credit was frozen. They were illiquid with you know they had an $18-20 million balance sheet and literally didn't know they were going to buy groceries. And I got that experience I think probably shaped me as an investor because I saw what leverage I saw the ugly side of leverage first. just starting to build my financial education in that deleveraging event. And I saw the ugly, I saw deleveraging in its ugliest form and grown men crying, who had so much of their self-worth wrapped up in their net worth. And I think that really shaped who I am as a man, but also who I am as an investor. So coming out of that and becoming an entrepreneur, starting real estate businesses, and seeing myself being more like them, I started, I learned my first golden cage lesson. And, you know, the golden cage is when you're breaking six figures in revenue and from the outside world's like, that guy's a stud, like he's killing it. And then you realize you worked an 18 hour day and you really haven't lived in weeks or months. So, I've made those mistakes. And that in part started to shape that too when I, you know, real estate's hard. Like if you're a solopreneur, whether it's investment or brokerage, you have to bust your ass to make real money. Like, it's just... It's extremely hard. I own real estate course companies and I try to make it sound simple enough that people aren't intimidated from trying, but I don't lie. It takes no lack of tenacity. So learning that lesson, just how hard it, you know, develop, ski front, beach front development, I basically snowboarded Scuba Dove and made buddies with high net worth people. It's a whole different ball game when you're dealing with single family or multi family. So I learned that hard lesson. And I was like, my gosh. This doesn't scale unless you get, and I see how hard it is for people to build a true autonomous business and real estate investment, like in residential investment or brokerage. It's almost impossible to have it something be truly autonomous in a sustainable manner. So I started to lose hope in that vision, and I started to look at, well, what could I do? Like, I have this financial education now. I know how to underwrite deals. I've done stuff for, you know, who were high net worth clients that didn't know a lot about investing. I was able to educate them to make better investment decisions, which just created my next deal, right? So, that ended up leading me to an introduction to a guy named Joel Block. And Joel did a dozen annual or biannual syndication symposium in Las Vegas. And I think it was a family office guy that said, you need to meet this guy. So I flew out to Vegas and I went through, I think it was three or four like intensive symposium with Joel Block and learned how to be a sponsor. And that to me looked like the biggest golden cage I could ever build. I was really grateful to know exactly how to put an offering together to know what it looks like to be a sponsor and to meet sponsors who were trapped in their own deals because they
Pascal Wagner:
Explain
Chad Corbett:
didn't earn
Pascal Wagner:
Sponsor to the audience.
Chad Corbett:
it. Just the general partner in a deal. So the person who has all the voting, power and all the decision-making power that your money is funding. And for me, the risk reward of that, I'm an empath. It's really important to me that I don't hurt people or disappoint people. I want to make people's lives better. So what I had overlooked in that, I was excited about the finance, the capitalism side of being a sponsor. I hadn't really considered the human side. And when I started to hear, like, actually meet people. who were stuck in deals because of the human aspects, because their reputation was on the line. The return was gone. They were working their asses off to save their reputation. And I'm like, nope, this isn't for me. Like this is even worse than owning a single family or multi-family portfolio. It owns you. And for anyone, I mean, I have friends who are probably listening that are sponsors. Like I have nothing, but I have the utmost respect for good sponsors. I don't feel like I should be one I like to earn like a banker and live like a hippie and if I want to be off grid for a month I want to be off grid for a month. I don't want to be you know thumbing an iPhone looking for a cell signal So that was my first introduction to funds was actually Like looking at getting into the fund as a GP because I had deal flow What I didn't have was enough buyers to buy all the deals that I could find back then I underwrote some really neat stuff for other for other investors in that 13, 14, the corporate bankruptcies were still happening. There were still some pretty damn interesting deals happening behind the scenes. And I'm like, my gosh, but they were big deals. And those are past now, it's coming. We're setting up for that again. But that's kind of where I made the switch from having a GP mindset to an LP mindset. And I'm like, wow, nothing but respect for these guys. I'm an investor, not a sponsor. I've adjusted my strategy and thesis and I'm like, okay, so I know I want to be a passive investor, not active, and I just doubled down, I shut down three companies in one day, doubled down on one, focused all my growth and the one that would allow me geographic independence and the quickest growth trajectory for a balance sheet, doubled down on that, took it into seven figures and was able to get my personal balance sheet up, and then I just, then I started, you know, just pouring every dollar I could. Like I, I cut my, when I first joined Go Abundance, we do one sheets for anyone who's not on it, which is essentially like your personal financial and lifestyle statement. If you could imagine that all on one page. And at the first year that I joined, I had spent 50,000, I think I had 503 horizontal and I'd given away 163 and everyone's like, hell are you? And but that's how I was thinking like I was spending as little as possible and just all of it was being pushed into investments so I could get there. So that's how I got into it. And then you know once you get into a good deal it's like you want more right? It's like well who the hell cares if that house just hit the market? Like if I can make a 25% IRR and go travel nine months a year I could give a damn if every house in the neighborhood is 50 cents on the dollar.
Pascal Wagner:
Yeah, yeah, totally. And when you started investing, was it for additional cash flow? Were you looking for opportunities that were primarily equity growth focused? Was it a mix?
Chad Corbett:
No, for me, I learned something. And I thought at that time I was in my early 30s and I thought I wanted to retire by 40. That was a goal that I set. At 29, I hit the reset button, burnt the boats, disappeared into the wilderness and came out a different guy. And my goal was retire by 40, go save the world. Like go do philanthropy work, do adventure travel, blend all that together with photography and just have fun. But as I got to where I, And I said a number of 2.25 million invested at a conservative 10% yield and that would give me 225 grand and that was enough to live and give like I wanted to. But when I got there, you know, hedonistic adaptation gets the best of us. It's like, well, this isn't that special. Now what? So I started to think differently. I started to think bigger and I'm like, well, what if I can give away 20 million bucks before I turn 50? Just to see what that feels like. So that in large part has shaped my investment thesis. I look at things in short term, midterm, long term. And for me at 41 years old, for me at 30 years old, when I first kind of, these are my novel thoughts, but I'm sure many people have come to these same conclusions. For me, short term meant in the next three years. Midterm, or excuse me, it meant in the next 10 years at that time from 30 to 40. until that retirement horizon. And then midterm was 40 to 62 until you can access your retirement instruments. And then from there on that was the longterm bucket, the legacy bucket. So for the beginning of this story, I was investing with that mindset. Like I want to between now and fit 40 years old, this is where you do your high risk, aggressive investments. This is where you learn and take chances. This is the proving ground. The midterm bucket, like index universal life where I started investing in my early 30s so I know I could self-bank in my 40s and I have contingency plans for long-term care disability chronic illness. I've got all those routers attached. It's even, you know, it's I can use it in such a way that I can give myself zero percent interest loans for acquisitions. I can treat it like a cash instrument or I can loan myself money at ridiculous commercial rates liabilities into a non-taxable entity. So if I want to make an investment personally, or through an LLC, then my IUL can lend my dead, dead Chad's money to this at like, let's say 30%. And I can make 30% returns and pull that profit out of the company and into the IUL. So that was my midterm mindset was things that aren't necessarily that risky, but it takes time for them to mature into where they become really usable. So I started to invest in my 30s for an instrument that I still don't use in my 40s. Now we're coming into the environment where it seems really smart that I set that up because I'm still paying premiums based on my 30-year-old self. But now my 41-year-old self has a million dollars in liquidity at zero interest or stupid high interest rates depending on what the strategy is and who that wants to pay eight and a quarter for a deal. Like if you do want to use correction like so it's that I got my myself on the back a little bit there because everyone told me I was a fool but it's turned out to be really good it was it was smart to do and it only represents us you know a percentage of it is not my primary investment vehicle but I'm I guess mostly showing you my mindset at the time is like that that is just it's a it's a you know 18 grand a year goes into that in premium but it represents a whole new set of in my 40s and 50s. And I started to fund the investment in my 30s. So you don't see a great return on that. I mean, it's probably returned eight or 9% tax-free though. And as time goes on, it's almost like an amortization table. The fees are heavy on the front and then almost taper off to nothing as it becomes fully funded. So that was the midterm. And then long term, I was using self-directed IRAs with checkbook control, and set high arrays. And that's a bit of a game, like the deferral game. I ended up changing all that as the political climate shifted this last time. And I saw goalposts being prepared to be moved. I ended up restating all that into a QRP. But at that time, my long-term bucket was hard money lending on a small scale. I guess I would call it just private money lending. But I did really well with that. So my long-term bucket, I would write real estate investors, I would originate at 1.15% interest unless the loan goes out of term at which point it retroactively adjusts to 18% interest from the point of origination. And with that, I would average about 19% APY in a self-directed IRA. And I mean, do the math. Your money doubles every 3.65 years, right, if you're doing that. So that. But that was kind of a game, like the long-term bucket is kind of my education department, right? That's where you're like, okay, so if I have to make a mistake, I wanna make it in the long-term bucket. The short-term bucket is, you know, it's aggressive. You find out if you're wrong faster in that bucket. So I kind of looked at it that way, and then I started, once I had that established, so I was focused on income growth in my own companies, which would give me investment capital. like getting my taxes as low as I possibly could, all above board, but without building in myself another golden cage. So I became a Florida resident. I started learning, I learned a lot more about how to properly use LLCs with S corp elections, like how I received money became very different. So that was, and I've been able to keep my effective tax rate below 20% for years. I think it was 12.8 in this last year. It was kind of focus on growing your income, then focus on minimizing your taxes, then focus on having some investments in those buckets. And then you're like, okay, now what? And that's where like past LP positions were just the most logical thing for me. You can go buy a small business, you can go start another small business, you can go buy real estate, there's a million things you can do. To me, stocks, I look at stocks as the same as... Stock investing to me is like investing in real estate by only looking at Zillow for sale by owners. The deal has been picked over thousands of times, and I know there's obviously exceptions, like look at Buffett and Munger, but as a basket, I think we have an index fund bubble right now because too many people trust passive investing and equities. And I respect Jack Bogle, but I do think that what he said in the 80s isn't the same now. built this confirmation bias chamber of Facebook groups and blog movements that have turned into an everything bubble and we're we're gonna see a lot of those passive investors that are trying to live on a 4% rule they're in for a pretty rough decade I think so I looked at that I looked at Mr. Money Mustache and you know there's all these different fire people the financial independence retire early and that to me looked more dangerous than the My family rents always go up, confirmation buys chambers. And I'm like, yep, that's not it. So I started to look at stock. I did look at stocks. You know, you look at stocks, you look at bonds, you look at real estate, you look at gold. At the time crypto wasn't that exciting. You know, we were all still, I think at that point still learning about it. I go back to emails between me and buddies in 2013. And I'm like, I can't even read this. Cause we were like, if we just put 10,000 on it, you know, we, a way different conversation.
Pascal Wagner:
Hmm.
Chad Corbett:
How do we have the courage to do that? But ultimately where I ended up was I like real estate. I like certain silos of certain verticals in real estate and that 2016 made me very nervous. Like when the Federal Reserve tried to taper from 2008's QE or their intervention, when they tried to taper and we had taper tantrums and fall of 2019 when the repo you're trying to taper the Fed balance sheet, I just didn't, I didn't trust many things. And I like real estate, but I don't really trust the markets in real estate that are purely driven by falsely low interest rates. You know what goes up has to come down. And if rates stayed at zero forever, that would have been fine, but I didn't think they would. So I was looking for what is the recession proof vertical in real estate? What is that? You know, the lower 30th percent obviously get hurt the most in these type of monetary environments, but they also spend them, they have to consume the highest percentage of income. And that's where workforce housing, self-storage, mobile home parks, things like that are, you know, wise real estate investments, grocery stores, you know, discount stores. But most of the things that I looked at then were already looking overbought to me. I mean, how many dollar generals have been built in the last, in the last, in the last eight years. Like that was a really attractive investment back then in like 2013, 14. I was like, ooh, I wish I was in a position to do this. But I wasn't, and now it's like, who would do a dollar a general? You have to build 14 of them to make any sense of it now. So that's what landed me into the LP mindset, what ultimately landed me back in the real estate vertical and looking for that first deal. I looked at buying my own mobile home park, or I actually had an idea to leath land dirt cheap, throw up a chain link fence, put in 150 tons of gravel, and go to the port in Norfolk, Virginia, and buy wholesale conaxes, bring them back in turn, make a modular self-storage. The reason I got to that is as I underwrote my first couple self-storage deals, I realized the biggest risk you have, and the one that's hardest to control, is someone else building one street or just down the road or a closer to an intersection. And I was like, well, you can mitigate that risk. Just make yourself storage portable. So why don't we do conaxes? Just cut garage doors in them. Well, frame walls. And in a matter of three days, you could move your entire facility and just send them a new address. Your stuff's here. So that's what I was looking at doing. And I'm like, that's just too much work. That's where that I was like, earn like a banker. Nope, that's working like a banker. So I kind of backed off and I was like, okay, how can I invest in this? So Paul and I met for coffee one day and he's like, you're not gonna believe, I'm completely pivoting. And I'm like, tell me more. And ironically enough, he was pivoting into the space that I was considering jumping into on my own. And I'm like, take my money.
Pascal Wagner:
That's awesome. So what I'm hearing from you is this trend of, look, you've built up your, you had this dream as an entrepreneur to grow your wealth and ultimately kind of live this lifestyle where you could travel the world and do what you wanted. And at some point, you're a deal junkie. You're someone who has
Chad Corbett:
Thank you. Thank you.
Pascal Wagner:
access to deals. You have knowledge. You have the expertise. You could do all of, and you do all of these things yourself, but you are, you're realizing that in order the next stage in your life to have that more freedom, the ultimate goal of what you're trying to pursue is that you need to be more of an LP investor. And then what I'm also hearing is that what you're thinking is, okay, where do I want to place money in what asset classes, what's happening in the economy, and you're a smart guy. And so you're thinking through like, oh, well, this is not overbought yet, or things like that, and then you're finding operators to place your cash with so that you can go live that lifestyle. Does that sound like a good recap? Nailed it. Nailed it. Nailed it. Nailed it. Nailed it. Nailed it. Nailed it. Nailed it. Nailed it. Nailed it. Nailed
Chad Corbett:
Yep,
Pascal Wagner:
it. Nailed it. Nailed it. Nailed it. Nailed it. Nailed it. Nailed
Chad Corbett:
that
Pascal Wagner:
it. Nailed
Chad Corbett:
sounds
Pascal Wagner:
it.
Chad Corbett:
started.
Pascal Wagner:
Um, so, so what does that look like? What is your investing look like today? Like how much of you invested into LP deals? Um, what's, what, or maybe the different types of asset classes you've invested into, or is it all, all, you know, mobile home parks? Uh,
Chad Corbett:
Yep.
Pascal Wagner:
and then, and then how did you, how do you pick? Um, I would love, love more of your thinking of pick of why you went into those and maybe what you're thinking about now.
Chad Corbett:
Sure, so from that first deal, I took the position and I'm like, okay, now I'll rebuild cash, get back to a good cash position, and I'll go find the next one. So I started looking at other syndications. At that point, I got really fixated on the lifestyle goal. So grow business income, grow as quickly as possible, and go have a damn ball. So 2018 and 19 were just fantastic years. I traveled nine to 12 months a year, broke, you know, was growing my net worth tremendously, growing cash flow tremendously, started new companies, like had a digital course company, and I was just having a ball. So I got a little distracted from my own thesis. I was just piling cash. And until that come around to, I was at November of 19, I just looked up, and I'm like, I had been literally all over the world that year and I hadn't even thought about investing. I had like 800 grand in cash sitting in fricking checking account or in one of the money market under a million and a half FDIC insurance with Edward Jones. But I hadn't even been looking at that. I was just plowing money into that waiting for correction. Right. Like I'm like, well, the repo market's breaking down when they do simple tapering. So it's about time I get the cash ready. So I was just stacking cash for, you know, two years almost. a lot like what I was investing in my companies the time I invested was resulting in you know very high income so I've looked up all of a sudden I'm like what the hell was wrong with me who sits around with like 800 grand sitting and what was the what was the money market account back then like 0.003
Pascal Wagner:
Probably less than 1%, yeah.
Chad Corbett:
and so I'm like holy crap I gotta do something with all this money and I started looking at what do you buy and I almost went back into multifamily family because I was in the process of selling my shares in a company already had more cash than I cared to have and wasn't using it. It was I just kind of I'd been busier playing than I had been thinking about investing. So coming or just prior to COVID we put Nigel and I had $7.3 million worth of multifamily under LOI. We got home from Nashville two days later. Boom COVID lockdown. And I'm like, I don't know, man. what this is going to be. So I took the conservative route. I'm like, I'm going to pull back and wait and I realized it might cost me these deals. And while I was waiting, I was like, you know, I trust based on the macro conditions at that time, what I saw was an energy crisis. And I started looking for energy arbitrage. And I'm like, what the hell does this even look like? How do you gain control of fuel or, you know, like electricity or, you know, I've looked a lot in the solar, like commercial solar development, and I'm like, how do you control electricity? If everyone's going to be home, rates are going to rise. If we're doing all these things economically, we're going to disrupt commodities markets, we're going to disrupt. So how do I get into commodities and energy? And how do I do that as an LP? Not by equities, not by stocks or ETFs. Like how do I get into the wholesale side of energy arbitrage, not the retail side? utilities as an ETF. And that is what ultimately led me to find an opportunity in Bitcoin mining. And I was a first round investor. I found some guys out of Texas that when, if you remember the day West Texas crewed went to minus 35 a barrel, that was a pretty exciting day because we were already talking about this and they took action in a big way. And getting that power purchase agreement at a sub two cent electricity. do with sub two cent electricity in a free substation they don't have to pay for. The best way to convert that into cash even when Bitcoin was trading at 8,000 bucks was with a Bitcoin mine. So I took a $200,000 position and a $30 million raise that was probably the most speculative thing I've ever invested in. However, when I looked at the macro environment and I looked at Bitcoin, like too. Like I didn't have the courage to buy Bitcoin because I didn't see the adoption rates where I wanted to see them. I didn't see that the utility, like others didn't see the utility of it and it wasn't understood enough. So I'm like I want to benefit from what I believe will be you know a huge rise in Bitcoin but I don't want exposure to the Bitcoin itself. So what can I tolerate exposure to? Energy and real estate. And that's how I looked at that deal. It was backed, you know, it was backed by energy for the most part, but also backed by a dead instrument senior senior dead instrument and that one I went 200 in that and Not no more than I wrote the check it seems like Bitcoin went I think Bitcoin was trading at 12 I discounted it to eight Like I gave I was looking at a 25% discount for just for underwriting And we how we underwrite sponsors, that was an interesting one. But ultimately, you know, Bitcoin went on a tear literally two weeks after that. And that one rose to be a unicorn in what, eight months? I think we went from zero to three billion, independent valuation in eight months. So that one, that's where LP got really exciting. And that investment's very close to going through a reverse merger, even throughout the turmoil of the last 18 months. We're still looking to, you know, to list that company. That'll be a first for me, like to within a three year period, you know, invest in a unicorn with, what I would still say is an extreme level of protection, multiple layers of contingency plans, and to have it actually blow into a unicorn and go public. That's been a pretty fun ride. I've learned a ton. I was just on the phone with. I was just on the phone with. I was just on the phone with. I was just on
Pascal Wagner:
So
Chad Corbett:
the
Pascal Wagner:
you
Chad Corbett:
phone
Pascal Wagner:
invested
Chad Corbett:
with.
Pascal Wagner:
in that company as an LP, and it wasn't like a Bitcoin, it wasn't a Bitcoin mining fund, it was an investment in the company that does Bitcoin.
Chad Corbett:
Yep.
Pascal Wagner:
Oh wow.
Chad Corbett:
And the assets were, you know, a power purchase agreement. That was a 10-year power purchase agreement. It included a, you know, it was only a $1 lease, but it was in an industrial brown space that was condemned by the EPA, but had all the electrical infrastructure already in place. And we're talking $150 million in substation infrastructure that we didn't have to raise capital for. So there were risks in the deal, like what if the EPA says, nope, we want that back? What if, you know, caught, you know, Reneegs on their deal and cuts the power. There was a lot of, you know, a lot of risk we really had no control over, which was, that was, again, like I had conditioned myself to have more risk tolerance. So for me, it was the people who were the biggest part of that deal, like who are they? What have they done in the past? What do they do if all this goes sideways? And what I loved about that deal is they had not just one, but multiple contingency plans. You can just sell the electricity. You can convert the building into a server farm. You can do many different things But in addition to having contingency plans to the primary primary strategy of the company They also had they were giving us senior creditor positions So we didn't have voting rights, but we had control if it went sideways And I found that you know, I think that was I Think in retrospect like those guys should really document What's what's happened with this deal over? six rounds all having a different type of you know dead equity instruments. It's and it was very investor focused like they've along the way have continued to if something changes which boy has it changed a lot recently like they will get creative and actually offer you know kind of a bonus to investors for trusting them while they weathered the storm. So that one that deal you know there's a huge returns in it but I think the biggest takeaway from that deal is. is the validation that really focusing on underwriting people is critical. That's what matters
Pascal Wagner:
Yeah,
Chad Corbett:
more than anything.
Pascal Wagner:
so dive into that a little bit more. So, you mentioned at the beginning, it's actually just a common theme on this show, of investing in the operator first, the deal second. One thing that I keep hearing is when you keep talking about the operator, which I want to get into here now, but you've also talked about a lot about how to de-risk the deal. So maybe what I'm hearing here is you have a two-step process. The first is you underwrite the operator, make sure that you feel comfortable. And then the second part is, is like, okay, everything about this deal, what are all the things, what are all the risks and how is it being de-risked? And then am I comfortable taking those risks? Is that, is that what I'm understanding?
Chad Corbett:
Yeah. Yeah, and that first part of it, like the thing for me is I want to look a guy in the eye and say what happens when this gets sideways. When you're working seven days a week to defend my principle with no chance of return and you're not getting paid, how many years can you tolerate that? That's a good question. I think it's a good question. I think it's a good question. I think it's a good question. I think it's a good question.
Pascal Wagner:
How do you do that? Like, okay, I'm imagining Chad walks into a bar, talks to this guy and is,
Chad Corbett:
You just do it
Pascal Wagner:
you
Chad Corbett:
the
Pascal Wagner:
know,
Chad Corbett:
way I
Pascal Wagner:
like.
Chad Corbett:
just did it. You let awkward silence hang and you watch body language. You listen to
Pascal Wagner:
So you're literally asking that question.
Chad Corbett:
answers. Oh, hell yeah.
Pascal Wagner:
Yeah, give me like the answers. The answer is no. The answer is no. The answer is no. The answer is no. The answer is no. The answer is no. The answer is no. The answer is no. The answer is no. The answer is no. The answer is no. The answer is no. The answer is no. The answer is no. The answer is no. The answer is no. The answer is no.
Chad Corbett:
They're all different. Like that's just the thing. You can tell silence, like awkward silence, I find to be one of the best tools in business. So if you can say something abrupt that the other party didn't expect, then you get them, they're not, that you break them out of their patterns, you put them in their prefrontal cortex and you get the real answer. And the more rapid you do that and the more awkward the silence is following that, the more authentic the answer usually is. So if a guy's gonna squirm, like Nate from, you know, when we, the first, I wish I had a recording of that first call. I was like, this guy's gonna hate me because I was trying to flush out any, any inauthenticity. And we're, you know, we're, we're friends. It didn't, it didn't cost me the relationship because he, he got through it. He was, he was who I was hoping he was. But I was pretty tough on him. Like I was, I was very crass and I'm not that way in real life. you know, in business, but there's a lot. I don't I don't really want to put a percentage to it. Just be damn careful because a lot of a lot of sponsors, like a lot of GPs, like it's it's all great when it's a pro forma. But what you have to underwrite is what happens when that pro forma proves to be wrong and he is he going to work 20 hours a day, mortgage his damn house and know that he gets zero salary and zero return on the deal, but will he do that to defend your capital? And if the answer is no, go find one that will. They're hard to find, but they're worth the work.
Pascal Wagner:
How do you, how do you, I mean, you know, I'm just trying to picture you asking, you know, each GP this question and watching them squirm, but.
Chad Corbett:
They're all different. Like, you know, there was one here recently that it didn't go well. And because just a, and that wasn't nearly as aggressive as what I just showed you, but they were claiming to have artificial intelligence. And I'm like, oh, that's great. I mean, like, so you've got true machine learning algorithms and language models. Oh yeah, yeah, I'm like, cool, pull up your screen, let's demo. Oh, I'm like, all right, well send me the NDA, let's do that. And you know, go ahead and send I'll sign it but like I want to see what you know, I want to see what you're building Well, he immediately got defensive. So I just turned the heat up a little bit. Well come to find out They didn't they're not even fucking right in code They had 20 million dollars of other people's money paying fat salaries bragging about their last exit. They don't have anything Chat GPT will destroy those guys because they're claiming to have an AI driven robo coach and act like it's a damn You know virtual Tony Robbins, but they have an idea And just by barely leaning on them, they got defensive. They showed me that early and I would never, and I was that direct. I said, I don't trust you. I would never place a dollar of my worst enemy's money with you. You will screw your investors. And that didn't go over too well either. But like, I don't mind having that reputation as an underwriter. Like I want sponsors to respect me, but if it's a sponsor that's doing that to people, I want him to, I want him to be aware of me. I don't want him to tell his friends about it because that way they won't end up on my calendar, right?
Pascal Wagner:
It's totally totally is this process methodical for you? Do you have like a checklist? Is it like I ask these
Chad Corbett:
It's
Pascal Wagner:
Chad Corbett:
intuitive.
Pascal Wagner:
questions?
Chad Corbett:
Just it's an intuitive thing. You know, no different than if you, it's like building friendships, honestly. Like it's really, is this a person that I want to share my most limited scarce resource with? You know, when you meet a guy, it's easy to get excited, especially conventions are good for this, right? Everybody's juiced and there to connect. And it's like one of the things I ask myself is, you know, obviously time is our most precious resource. Is this human someone that I want to share my most precious resource with? And can I add value to his life? Like can I, you know, make it worth his time? And it's not that much different with sponsors. Like is this someone that, you know, you're probably your second most precious resource just because it can help you with all areas of life is money? And is this someone that I trust no matter what to invest this precious resource with? So it's intuitive, no different than like who you can trust in your personal life and in the course of everyday business, it's kind of the same thing, not rocket science. It's not rocket science.
Pascal Wagner:
Yeah, and then when you get into deals,
Chad Corbett:
Thank
Pascal Wagner:
I
Chad Corbett:
you.
Pascal Wagner:
mean,
Chad Corbett:
Bye.
Pascal Wagner:
I'm here you listing off like, oh, there was this risk of the EPA being able to pull back their contract or, you know, like, do you have a pool of people that you talk to or you've just been in this game long enough to where you're like, how do things go sideways? I don't know. I don't know. I don't know. I don't know. I don't know. I don't know. I don't know. I don't know. I don't know. I don't know. I don't know. I don't know.
Chad Corbett:
Yeah, I talked to people so ultimately where I've ended up is I've ended up investing with to allow friends into investments that they didn't have access to. I sent a text message in, I don't know, I was out in Washington near Leavenworth, Washington out in the National Forest living in a camper and just thought, oh, why not start an investment club? So there was a safe round, an investment that was coming up as a safe round. So I sent a text message to 12 And I said, hey, I've got this opportunity that really the public doesn't have access to. You guys all think I'm a drug dealer. This is the kind of stuff that I invest in. Are you interested? And 10 of them jumped. And so within five days, I went from not knowing what an investment club was to owning one. So I pulled together the operating agreement, the procedures. I used TribeVest as the platform to kind of get the communication hub and banking. And all that came together in five days in the middle of the national forest in remote Washington. I learned a ton in five days. But what I've ultimately learned, I thought it was going to be a single-purpose thing. I'm like, all right, I'll let them ride my coattails through this one, then we'll just burn this once we're liquid. And what ended up happening is I realized in that my closest circle of friends, their developers, they work for you know, large, large companies. companies. We've built ski front, beach front, luxury, single family, multi-family, highways, cabins in the Smoky Mountains, water parks, but mostly small business and real estate income, but they have never even heard of these types of investments. So one text message kind of changed my whole perspective on things and how I underwrite, I'm not their fiduciary. I'm a GP, they're a GP, but I feel like they're fiduciary because I got them into this. and you know, the beside of my name, it says president. So it's really changed how important, it's made underwriting even more important for me because imagine if you make a bad investment decision and drag your 11 best friends into it with you. That sucks, right?
Pascal Wagner:
Oh yeah.
Chad Corbett:
So that's where a lot of this comes from is like trying to help other people into this has really changed how I look at deals. And that's why I'm willing to be even more crass earlier in the conversation. because if you got to talk to, you know, to me it's probably a hundred to one. I can look at a hundred decks and I might find one that I'd be like, yeah, I'd invest in that, I'd do that deal. It really is that, that thin. So like as I've since fall of 21, I've been underwriting, you know, through a different lens. Like I look at it with even more scrutiny now I'm not just protecting myself, I'm protecting my friends, but my reputation with those people. So I've gotten probably a little more, a little more critical of things. I met somebody just in, so I'm in Genius Network, and I met a gentleman in there that's, he's an advisor to Ultra High Net Worth business owners. And I've never seen anyone do this before, but what he does, he has a process that takes upwards of six months. Cost, the sponsor has to pay the cost between $200,000 and $250,000 to be fully underwritten and investigated. So what they're doing is they're getting CPA firms to go in and dig into every business they own. They ask them for a personal financial statement, including all businesses and everything. So they're looking into all of their businesses. They're looking at their own background checks, credit checks, like on all of the principles in those entities. Then they're digging into their personal finances. They're digging into their personal lives. uncovering every stone. But when they put somebody on a zoom call, they have been vetted for over a six month period and they're a quarter million dollars invested just to get on a zoom call. But to us very, very small firm with two partners has seven hundred and thirty one million dollars AUM. Wonder why? Because they can get their guys into three X, four X deals in a two to three year period because they're really scrutinizing and the good sponsors, cream rises to the top, like they have access to the no bullshit guys that won't quit, they'll make it work and they've got, you know, multiple ways to do that. And that's probably the most formal underwriting that I've ever seen on a sponsor. But I think that's absolutely brilliant. Like he's a trusted advisor. Like how many of you guys listening, how many of your financial advisors would even like spend $5 to take somebody for a cup of coffee? to see it like you know like they're very commission driven and unless it's a retirement account they're not even your or they're an RIA they're not even a fiduciary
Pascal Wagner:
Thank you.
Chad Corbett:
and
Pascal Wagner:
Bye.
Chad Corbett:
this guy is willing to put this huge hurdle in front of in front of his firm that says yeah we we can greatly benefit from you know from raising capital for you but before we raise capital for you who the hell are you and here's our process it's gonna cost you a quarter million bucks in six through that, they're gonna be with you for the long haul. Right, a lot of people, the ones that make me most nervous are the ones that are trying to raise capital within 90 days of the start date of the project. It's their first deal they've ever done and they have no contingency plans. And they're, you know, and the more risks that are disclosed in a PPM or a private placement memorandum, the scarier that document is, the better, the more I trust the principles because they're willing to put that out there.
Pascal Wagner:
Totally. So, to kind of like maybe wrap this up, what, how is your perspective on investing changed since you first started investing in funds to now? What lessons have you learned? What maybe have you adjusted in your process?
Chad Corbett:
Um, lessons learned is 99% of deals aren't deals for me. I like if, if you're going to take an eight preff on a 1.5 multiple and an 80, 20 split over 10 years, good for you. It's probably safer than stock investing. But to me, that's just like, I mean, that's retail shopping. So I'm looking for, you know, I'm looking for what when most people, people would perceive as really risky investments. But I'm looking for more upside. I mean hell like I mean you and I you and I both have money You're like we know funds where you can get you can get 12% with literally next day liquidity on a 12-pref like why buy those other deals when you can do that
Pascal Wagner:
totally.
Chad Corbett:
and And you can trust those guys like we know them right like they're they're really good people so I think I see a lot of people just buying of these these deals because they don't know what else is out there and There's some really amazing funds out there. You just have to add, and that's the thing. Like with Don, everyone knows he won't quit, right? Like it's not too big to fail, but the culture within that organization, they won't quit. Like
Pascal Wagner:
Totally
Chad Corbett:
they'll
Pascal Wagner:
right.
Chad Corbett:
figure it out. They'll pivot, they'll innovate. If the market shifts, like they're not gonna quit. They're just not in them. And
Pascal Wagner:
And there's a real business behind that opportunity. I
Chad Corbett:
yeah, for
Pascal Wagner:
just made
Chad Corbett:
sure.
Pascal Wagner:
an investment in their fun today, actually.
Chad Corbett:
Yeah, so like that is like that one's awesome. That's one that like it's hard to compare a lot. I mean it's hard to compare much to it. So for me I've gotten more picky. I've learned about you know I've learned to better underwrite the people to find which people are going to end up putting the best deals in front of you and like with that sponsor we were talking about I don't know if we're naming names but like they offer a variety. So whether you're looking for you know with liquidity or whether you're looking for long-term growth with tax favorability they pretty much have it there. So when they give you options like when a sponsor gets to the point where they're like okay you can have the red pill or the blue pill we don't care which well we don't care if you take either like that's when you're in the right room like you're talking to the right people when you start to hear things like that like we have options for you we don't care if you invest or not then you're on the right track and that's what I've learned so I've kind of raised and you It was I guess it wasn't an accident. I guess I was just right from the beginning. I have nothing but respect for Paul Moore I think he's outperformed my and probably every investor's expectations. I Somehow got that right in the beginning. I don't I'm very thankful. I don't have any horror stories about this. I got I My hackle went up and I got out before I ever got in on a lot of those like the ones that were marginal and I've seen him go sideways, too And I'm like whoo miss dodged a bullet on that one. But that's the biggest thing is like just figuring out and you're one of like you're you're inspiring like your your thesis like literally sitting down and taking the emotion out of investing by having a written thesis I think is an amazing thing to do and I've you shared yours with me before I've seen it and I think that everyone should do that. I don't really know anyone other than you and I that do it. When you do it I'm like All he's as big as a geek as I am. Because I have a spreadsheet with allocations where I am now, where I wanna be on a percentage basis, just formulas and it rolls my entire net worth and it shows me where I'm off balance. And it's just a simple spreadsheet. But I think having a thesis, like deliberately investing is really important. That helps you not be subject to your own cognitive biases in times like right now, when who the hell knows what's happening, right now, it'll be months before we actually reveal the truth. But I mean, just with what's happened with SVB, go back two weeks ago, did you think it would play out this way?
Pascal Wagner:
Thank
Chad Corbett:
No
Pascal Wagner:
you.
Chad Corbett:
one had a freaking chance of guessing what would happen. My bank ended up buying up SVB's assets what two days ago. And I was freaking out, digging through their balance sheet. I'm like, should I move to other assets? And then hell, my bank ended up buying SVB. Didn't see that coming. The exact opposite. I ended up holding my position because they were healthy, but you never know what's gonna happen. And I think that these next 10 years, and I'm sure every generation has had a chance to say this, but these next 10 years sure seem like they're gonna be more interesting than any 10 years previous in US economics. Just because of the, you know, we're, we've been slowly transitioning from, you know, an ingrarian society to an industrial society, now into an information society. and like, you know, Mr. Moore's Law, he just passed away like two days ago, so disappointing, because like, he was just about to see Moore's Law like get to the point of proving it was right. But he got to see a lot of interesting things, but I think you're going to see more up, and I'll put this in air quotes for anyone who's not watching video, opportunities are gonna be your biggest risk in this, and the economy we're emerging into. because with AI, you're gonna have more deception, more possibility for deception and misinformation than you've ever seen in your life. You're gonna have tools that are doing underwriting work for you or for other people. And for me, I build my own damn spreadsheets. If somebody sends me a pro forma, I'm like, yeah, that's great, delete, start from the beginning. Because in my head, if I don't have a cognitive map of the formulas, I don't trust it. So when somebody, the But it's going to be easier to be taken advantage of in this new economy than it ever has been. It's going to be easier to create big, beautiful decks and amazing proformas and financial models with literally text prompts. People don't have to learn how to use Excel. I think the really, really good sponsors are probably going to be more back of the napkin than they've ever been. And the shysters are going to have beautiful pitch decks. Proformas and a lot of things like that. So I think we're going to have to be even more prudent as technology increases and that also affects the other asset classes that we're investing in. I think it's going to get really interesting, but you better watch your assets more than ever because it's going to be easy to be taken advantage of and there's going to be a lot of desperate people out there that were, they've been high on debt for most of their investing career and they're now that's breaking down and they're losing access to it. So be more diligent than ever when investing with somebody for the first time because their legal documents protect them if they can just get the cash. So just make sure that you're, and if you're not sure, find a mentor in this. And I can't remember the author's name, but there's a book that was written in the last wish would have been there when I started. And it's called, you know, a hands-off investor.
Pascal Wagner:
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Chad Corbett:
I cannot remember the author's name, but if you if you made it this far in this conversation and you haven't read hands-off investor and then you haven't yet done an LP deal, go buy that book. Because he took what took me a decade to really learn and he sells it to you for 15 bucks. That book's worth in this space, that book is worth a hundred grand to you. I don't have no association with it. I'm glad somebody finally wrote it. Because
Pascal Wagner:
Yeah Yeah
Chad Corbett:
I spent thousands of dollars going to conventions to sit in rooms for three and four days to learn it. And what he says in that book is really consistent with this conversation. I was surprised. I was like, oh, what am I going to learn? What have I been doing wrong? And he's kind of the same thing. Underrate the people, then look at the deal. But he'll explain to you in very simple terms. terms, what this looks like from an absolute beginner standpoint, and what the inner workings of a deal look like on the GP side, even though you're looking at being the LP, you should understand what their role as a GP is and what's important to look for in them. But I am looking for opportunities now. I think there's all that said. I think the technology is going to bring some interesting opportunities. I think Big Pharma better look out because we've got psychedelics in late, late years, clinical trials and I think there's going to be some really interesting opportunities in triple net real estate in that space I think you're going to see some really interesting opportunities in the the advancements in neuroscience and wearable devices I think there's some some really interesting plays that are emerging there and I think you're going to see some very interesting energy and commodity arbitrage opportunities and you know like I would I would suggest anyone listening to this like If Pascal hasn't talked about, you know, the way he establishes a thesis to make his investing less emotional, I think you should talk about that and show them like why and how, but you should do that on your own. Even if it's like, all right, I've got X amount and I'm gonna allocate that into these two, two different asset classes. And here's why I chose those two and here's how much I'm gonna put in each one and here's how long I expect the money to not be in my control. By doing that, Things get emotional when stuff goes sideways, when opportunity, when short term, when you have a small window of opportunity to make a deal, you won't get hung up in fear. You'll know, listen, I trust myself here because I have a thesis. It was carefully established. And all I have to do now is make sure it's the right person, the right deal. I don't have to deal with my own emotions. We've already cleared that hurdle. So that's what I would say is your largest step in preparation, get yourself educated to a point where you understand the vehicle we're talking about. You understand how a REG-D offering works. You understand the difference between REG-A and REG-D and where you fit in that. And does REG-A fit into maybe some of those opportunities fit into your thesis? But get all that out of the way first. Then start looking for deals or start looking for sponsors and start looking at their deals.
Pascal Wagner:
Yeah, and one of the benefits of even running an investment thesis is being able to look back and understand what were you thinking
Chad Corbett:
Yeah.
Pascal Wagner:
and then iterate. Like, oh, I thought this was happening and I was totally wrong.
Chad Corbett:
Yep.
Pascal Wagner:
And I think that's where most of the learning comes from. But...
Chad Corbett:
It's humbling because after, God knows how many thousands of hours of research in 2016, and I remember someone else that was doing the same thing. It was very validating for me when Ken McElroy started to dump a large chunk of his portfolio around the same time. And I'm like, see, I'm not crazy. And we were both, talk about a Michael Barry moment. Like, hell, we were five years early. But who knew that we were going to print $4 trillion and throw another two on the balance sheet, right? Like, who the hell knew?
Pascal Wagner:
totally
Chad Corbett:
And before we even did that, slam rates to zero. Like, had that not been done, I mean, the rates went to zero in a hurry because they already knew what the heck was going on. We learned that back in the fall of 19. Or, yeah. So, anyways, who the hell knew? But it's interesting to go back and I made a video in my, I had a real estate lead company. And it was right the first week of COVID lockdown. And I was like, God, everything I said in that was wrong. I went back and listened to it a few months ago. And everything wasn't wrong. And I actually did preface it. I said, all of my opinions are all subject to be wrong and to change based on what quantitative easing looks like and how much of it there is. This could be pushed out four to six years. And damn, I was actually right. Like, but I, and listen to that and I still think all that's happening. Like it's just happening way more slowly this time than it has in the past. And it's, you know, every time it's different and it always looks simple and retrospect. But in that, like one of the exciting things if you're just getting into this, congrats first of all for making it to a credit and investor status. Also congrats on being at the right part of the business cycle to ride the wave up. And most likely the right part, and what doesn't, it's not gonna feel right for a couple of years, but being in the right part of the monetary cycle, the long-term debt cycle, because this is our 19th, this is our great-grandparent's moment, I think. The world will come out of this looking a lot different than it has in the past.
Pascal Wagner:
Thank you for coming on the show chat. This was awesome. And I'm looking forward to talking to you again at one of the next Kobunits events. I'm going to be back in a minute. I'm going to be back in a minute. I'm going to be back in a minute. I'm going to be back in a minute. I'm going to be back in a minute. I'm going to be back in a minute. I'm going to be back in a minute. I'm going to be back in a minute. I'm going to be back in a minute. I'm going to be back in a minute. I'm going to be back in a minute.
Chad Corbett:
Yeah, well thanks for having me and if anyone wants to reach out to me I should have said that. You can, I'm on Facebook, Chad Corbett or you can email me Chad at magnumopusproject.com.
Pascal Wagner:
and I'll include all the links in the bios as well. So
Chad Corbett:
Okay, cool.
Pascal Wagner:
thank you everyone. That was awesome.