As Associate Director of EquityMultiple’s Investor Relations Team, I enjoy connecting with investors and learning about their unique stories, experiences, and strategies. Earlier this year I visited a number of investors across the Western U.S. This is an interview with Peter Kuhn, a 17-time EquityMultiple investor…
- “10 years into my investing career I began to realize that all of the older, most successful investors I knew had substantial real estate portfolios.”
- Peter believes in continuing to diversify across markets and property types.
- Preferred equity investments are appealing, especially amid volatility, for their payment priority and ability to tap into some upside.
Tell us a bit about yourself… outside of work, what do you like to do? What freedoms do you make possible through investing?
I’ve been fortunate enough to earn a good living through the employee benefit brokerage and consultancy I founded in the mid-’80s, and in making some opportunistic investments in municipal bonds and real estate.
I met my wife Diane in college and she’s had a great career herself – over 20 years at Cisco after getting her MBA. We now split our time between San Jose, California and Scottsdale, Arizona. I sold my employee benefit consulting firm company to a strategic partner in 2017. We are fortunate to have the financial freedom and access to do all the things we love: golf, mountain bike, cook, ski, attend concerts, and invest. As much as we are homebodies we enjoy traveling domestically and internationally as well. Most recently we visited New Zealand and rafted the highest commercial drop in the world, in Iceland we enjoyed a multi-day trek on a glacier and attended an Ed Sheeran concert.
Tell us about your journey to “accredited investor/qualified purchaser”… how did your career progress such that you are now able to establish income streams through passive investments?
I studied to be an accountant and that’s where I began my career: as a CPA for Price Waterhouse & Company. I went to work for Cigna, facilitating employee benefits and retirement programs for small and mid-size businesses, which became a professional passion of mine. I started my own firm – IBP Insurance Services – and I have made a career out of finding creative, cost-saving employee benefit solutions for companies big and small.
As my career was progressing I also realized that in order to get where I wanted to go, I would need to establish passive income streams. Fortunately, I have always enjoyed investing. I have invested thoughtfully and carefully over 30 years, adding new asset classes to create a well-balanced portfolio along the way.
When did you first become interested in real estate investing, and why?
About 10 years into my investing career I began to realize that all of the older, most successful investors I knew had substantial real estate portfolios. With the downturn in the early ‘90s portions of my stock portfolio took a bit of a beating, and I became interested in adding some different asset classes and some alternative ways to realize long-term appreciation and steady income.
Since I have been an active real estate investor, it’s been a really fun way for Diane and I to collaborate on investments. Real estate is tangible, and we have traveled all over the country including many of the markets we have invested in, so not only can it be lucrative, but it feels more like a real-life story that we can discuss and be part of.
What specific kinds of real estate do you like investing in (property types, specific markets, types of business plan, or positions in the capital stack)?
I have invested in all kinds of properties all over the country. Like any asset class, I believe in diversification. I have exposure to a big portfolio of Dollar General stores, learning centers, urgent care centers, and more defensive properties.
I like triple net lease deals and neighborhood retail, and I have really liked investing in the preferred equity positions I have access to through EquityMultiple, particularly at volatile moments like this when payment priority is paramount and I can still tap into some upside.
What has your experience with EquityMultiple been? What does EquityMultiple add to your portfolio and how do these investments complement your overall investing strategy?
EquityMultiple has been awesome and really added another dimension to my real estate investing. They have provided access to amazing, vetted deal flow, and a way for me to very quickly understand what the opportunity is and commit as much as I want. Instead of doing my own diligence on one deal, I can instead rely on EquityMultiple’s underwriting and allocate that investment across 10 different properties.
The term of the investments are broad, from 6 months to 10 years, allowing me to ladder maturity and time exits with liquidity needs or another investment opportunity. Also, EquityMultiple will be there if there are challenges much better than investing on my own with 10 other unrelated or connected parties, especially considering that these investments are all over the country.
What advice would you have for a younger investor looking to take control of their portfolio?
Do your homework. Perform due diligence, read, and educate yourself about the upside and (more importantly) the downside of any investment you become involved in. Figure out how much risk you can tolerate and really make sure you understand the risk factors for any given investment. It’s crucial to scrutinize a Sponsor’s track record as they are ultimately your partner in an investment for multiple years, but a platform like EquityMultiple can really help in that regard. In times of uncertainty, selloffs offer attractive entry points in the market, whenever price and value get temporarily disconnected. Recognize when a downturn represents opportunity and make bold, calculated moves without being hamstrung by “short-termism.” This takes time and practice, but you’ll get there if you pay attention through cycles.
Practice strong discipline, and keep looking for means of diversification! One great thing about EquityMultiple is that you can go as deep as you want to. If I get a good feeling about one of their offerings, I can spend 5 minutes talking to my Investor Relations rep and have my questions answered. Or I can dive deep on the fine points if I want to. Finding investment channels that work for your level of knowledge and your risk tolerance is very important.
*This customer testimonial may not be representative of the experience of other customers. No testimonial is indicative of future performance or success.
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