Corey Chonsky is a full-time real estate investor and multifamily syndicator at Fair Winds Capital, a real estate investment firm that purchases value-add multifamily properties through JV or syndicated partnerships. In this episode, Corey discusses how forming partnerships helped him 10x his unit count, why he and his partners are transitioning to a fund model, and his advice for finding great partners.
Corey Chonsky | Real Estate Background
- Retired Navy and full-time real estate investor and multifamily syndicator at Fair Winds Capital, a real estate investment firm that purchases value-add multifamily properties through JV or syndicated partnerships.
- Portfolio:
- 675 units under management through all partnerships
- Based in: Norfolk, VA
- Say hi to him at:
- Greatest Lesson: Document expectations with people that you partner with. That way you leave no doubt as to who is doing what on a project.
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TRANSCRIPT
Ash Patel: Hello, Best Ever listeners. Welcome to the best real estate investing advice ever show. I'm Ash Patel and I'm with today's guest, Corey Chonsky. Corey is joining us from Norfolk, Virginia. He is retired from the US Navy, and now a full-time real estate investor and multifamily syndicator at Fair Winds Capital, a real estate investment firm that purchases multifamily properties through JVs and syndications. Corey's portfolio consists of 675 units under management. Corey, thank you very much for joining us, and how are you today?
Corey Chonsky: I'm good, and I appreciate you having me on the show, Ash.
Ash Patel: It's our pleasure, Corey. Before we get started, can you give the Best Ever listeners and a little bit more about your background and what you're focused on now?
Corey Chonsky: Yeah, so I was in the United States Navy for almost 23 years. I recently retired last year before I went into real estate full-time... But I did get into real estate while I was active duty. My first property that I turned into a rental I purchased back in 2010, and like a lot of military folks, you're moving around a lot, and you tend to buy houses where you are, and then you either sell or you rent them out as you move to your next duty station. So that's how I actually came across my first rental property. And like a lot of investors, I started off with your single family properties, and then transitioned to your multifamilies.
Ash Patel: Multifamilies. The big boys.
Corey Chonsky: The big boys. So I didn't really get fully started in real estate investing until I got to the Norfolk area about seven years ago. I'd read a lot of books, and I had listened to a lot of podcasts, so when I got to Norfolk, I bought my primary residence, and then I bought my first rental property about a month after that. So I hit the road running. And while I was in active duty, I was able to double my portfolio every year, and I even closed the property while I was on deployment. So I made it a priority, and I got those houses under contract and closed.
Ash Patel: Were you working solo? Or did you have a team?
Corey Chonsky: When I first started, I was working solo, and I built my own personal portfolio up to about 60 units before I started to take on partnerships. And obviously, as you start taking on partnerships and being able to build your own personal portfolio and seeing what you can do after that, you wish you would have taken on partners before that. But yeah, I was in real estate for about four or five years before I did a single partnership.
Ash Patel: Got it. Corey, thank you and your family for your service and sacrifice. It's hard enough to do this while you have a W-2, let alone being deployed. 23 years in the Navy, you took the initiative to educate yourself on real estate and take the initiative, get these deals done... Is that a rare attribute in the service?
Corey Chonsky: I think the way I approached it, it can be. You do see a lot of folks that, like I said, they'll buy a property where they move... But even then, you see a lot of younger sailors, or even folks that are more senior, that just basically rent, or they live in base housing wherever they go... And I feel like that's a real missed opportunity. So that was one of the things that, as I got heavier into real estate in downtime, while I was on ship underway, I would frequently talk to younger sailors, whether enlisted or officer, and talk to them about what I was doing, sharing my experience, and just providing some guidance as they became more interested and looked to do when I was doing.
Ash Patel: Goof for you. And now that you're out of the Navy, are you doing anything to continue that education with people that are still enlisted?
Corey Chonsky: What I've been doing is -- it's not as frequent, because I don't have as many touchpoints with those folks as I used to... I'd be on watch and just have general discussions with those guys that would be trapped in the same space that I was for hours on end... But yes, I still try to reach out to folks and discuss their options, and other ways to go about building wealth than what is naturally put out there. A lot of the focus is on your TSP, or retirement, which those are all good things, but there are obviously other options, and in my opinion, better options than just those paths.
Ash Patel: Yeah, very similar to typical nine-to-fives, pensions, and 401 K's. I get it. When you left the Navy, you had 60 units?
Corey Chonsky: Approximately 60 units. We had actually started Fair Winds Capital Investments before then, so we have started to build that Fair Winds portfolio before I left... But for the most part, that was my portfolio.
Ash Patel: What could you have done differently while you were in the service to remotely manage properties, or scale your business?
Corey Chonsky: Like I said, I regret not doing partnerships sooner. Obviously, I wish I would have started heavier, sooner. I got selected for a program called Seaman Admiral, where I went from being enlisted to being commissioned. I went to the University of Wisconsin, and I really wish I would have started back then, because Madison is a great market; I don't own anything there, but I felt like I missed an opportunity there with buying some properties while I was a poor college student... Not that poor.
But then starting partnerships sooner as well. Like said, I didn't really have my first partnership until 2019, and I had been doing all that work on my own. So those are the things that I would impress upon younger folks that are looking to invest in real estate, is starting sooner, and don't be afraid to partner with people, and being able to use that to really amplify what you're able to do.
Ash Patel: Yeah, and don't be hard on yourself, because I was in the same boat as you, no pun intended. My first partnership was 2019 as well... And similar to what you've experienced, the growth is exponential once you partner up. And life and work just becomes a lot more fun when you get to bounce things off of people, and go together.
Corey Chonsky: Yeah, I have great partners at Fair Winds Capital. In 2019 I was probably around 30 or 35 units, and now through partnerships we've managed to build that up to well over 10x that. So definitely, that is a force multiplier, partnerships.
Ash Patel: Corey, today you've got about 675 units. Are they all multifamily?
Corey Chonsky: A large portion of that is multifamily. One deal is a hotel to multifamily conversion down in Houston. So we have a couple of deals down in Houston. Another one is -- it's actually one of my favorite deals, but it's different than what we typically do. We actually were able to purchase the Naval Academy Alumni House up in Annapolis, Maryland... So they're actually still our tenants, but once they move in, we're looking to convert that from admin spaces to a historic inn, because these admin spaces are actually old historic homes. So there's about three homes that we're going to convert into a historic inn.
Ash Patel: So you're taking a hotel to apartments, and you're taking a hall to a hotel?
Corey Chonsky: Yes.
Ash Patel: I love it.
Corey Chonsky: Yeah, I'm pretty excited for that one.
Ash Patel: What are the returns on that deal? Can we dive into the numbers, on both the hotel and on this inn?
Corey Chonsky: So the hotel just recently closed this fall, so no real return metrics on that one yet. The inn--
Corey Chonsky: Sorry, let's pause. Let's dive into the hotel. What was it? Was it a flagged hotel, or a mom and pop?
Corey Chonsky: It was a flagged hotel. It was a Sheraton. And we didn't have any experience really with that major hotel to apartment conversion... So one of the ways that we wanted to learn how to do that is we partnered with folks that had significant experience. So we came into that deal via being able to just close out the raise on that, and that's how we also grow through partnerships, is we're taking on a deal that we're not the lead sponsors on it, but it's going to give us insight into how this company that does all of these hotel to multifamily conversions... And they go and they work their business plan, and we can learn from that, while not necessarily having to go do it on our own. We learn the mistakes and the best way to do it without necessarily making all the mistakes on our own.
Ash Patel: What was the total raise on that deal, and what percentage of the raise did you guys contribute?
Corey Chonsky: The total raise... So it's been a bit since I looked at the number, so I think the total raise was around 5 million... And we only brought in maybe 10% to 15% of that.
Ash Patel: And then you get to be on the GP side and kind of go along for the ride and learn how this process works...
Corey Chonsky: Absolutely.
Ash Patel: Awesome. And then the inn. Do you know the numbers on that?
Corey Chonsky: Yeah, so we are definitely the lead sponsor on that. So we've owned that deal for a little over a year. There's not a whole lot of returns yet, because we've been renting it back to the Alumni Association... That was kind of part of the deal, and we pitched that to our investors, "Hey, there's going to be a lease-back period for this. So don't really expect too much in terms of returns for the first two years, because we need to complete that lease-back process, and we need to go in and actually renovate, turning what had been bedrooms, and then turn it into admin offices and going back to turning into bedrooms for the historic inn portion." So not a whole lot of returns there, but that's a long-term plan.
We partnered with a lot of limited partners that are Naval Academy graduates, so this is something that's near and dear to their heart, and it's been special to kind of go along this journey with them, on this great historic property in Annapolis, Maryland, which is in a historic area right next to the Naval Academy. So not a whole lot of returns yet, but we have high hopes once we're actually able to execute the business plan.
Ash Patel: And that has to feel good. All the years you spent in the Navy, now they're paying you rent. It's gotta be a good feeling. I had an opportunity -- an office building that I worked in, many years after I left, I had an opportunity to buy the entire office park; it was probably half a million square feet... And we were the second highest bidder... But man, that would have felt good, owning the entire corporate park where I had a little office, and kind of hated going to work... So good for you. How do you get investors today?
Corey Chonsky: So we do a lot of advertising through LinkedIn, and Facebook... We also have our own investor portal that is connected to our website. So we do a lot of marketing through social media in order to bring in investors. Additionally, we also partner with folks that have experience with capital raising, that come in and they do capital raising and investor relations for us on our deals.
So our portal, I think we have -- last time I checked, maybe 750-800 folks in our portal. They get all of our content, they get all of the deals that we have available, and they get to see them first. Our marketing team has a much larger mailing campaign list that they put together as well... So we do drip campaigns through that email list as well.
Ash Patel: That's impressive. How many years have you been marketing for investors?
Corey Chonsky: I'd say we started probably in 2021 on our own, and then we brought on a third-party marketing team that's really been helping us out for a little over a year now.
Break: [00:12:26.25]
Ash Patel: Alright, so in less than two years you've got 750 to 800 people that have signed up on this portal.
Corey Chonsky: Yes.
Ash Patel: That's incredible. And you nonchalantly said "We did LinkedIn, we did Facebook, and we have a website." I feel like there's a lot more to that. How active are you guys on these platforms? Is it outsourced, or is it the principals that are engaging with people on social media?
Corey Chonsky: So we do some outsourcing of the initial connections, but when they make that initial connection, if someone on LinkedIn for me reaches out, and they make that initial, "Hey, I'd like to connect", that's a VA. But then the responses after that are me. I set up several meetings this week through LinkedIn from those connections that then I follow up, and they're talking to me on LinkedIn, when that connection is made after that.
Ash Patel: Is that connection initiated by an outward contact? ...meaning does your VA specifically reach out to somebody? Or is it a post where somebody wants more information?
Corey Chonsky: Typically, when I get involved is when a VA reaches out to them through the messages, and says, "Hey, I would like to connect with like-minded people", or whatever the message is that they use. So if a person responds, and then after that response that they send, that's when I jump in to make the further connection and set up meetings, and have those discussions.
Ash Patel: How long does each meeting typically last?
Corey Chonsky: I'd say around half an hour. That's the average.
Ash Patel: And do you do Zoom? Phone calls?
Corey Chonsky: Big fan of Zoom. I have an AI Otter that jumps into all my meetings and takes notes for me... So I definitely prefer Zoom when possible. I do some stuff through Microsoft Meeting and Teams, and then through Google, but I prefer Zoom, because I have such easy connection with Otter going into that.
Ash Patel: AI Otter. What is that?
Corey Chonsky: It's just an automatic note taker.
Ash Patel: Do they have a window on Zoom? Are they in the background?
Corey Chonsky: Typically, when you see me log into a meeting, you'll see my face, whether I have the camera on or not, and then you'll see Corey's Otter AI.
Ash Patel: Got it. Interesting. And then what do you do with those notes afterwards?
Corey Chonsky: It depends on what the meeting was. So there's some meetings where I probably don't go back and look at the notes... Asset management meetings, or any meetings between partners, we go and we pull certain assignments and tasks that come out of those meetings, and that makes sure that we can grab those and capture those tasks, and then follow up with them. And then we have a spreadsheet. So I'll push that to one of our VA, like "Here's the meeting notes. Go into our spreadsheet and enter it for this specific property." And I say, "Hey, here's the comment. Here's who it's assigned to", due dates, and stuff like that.
Ash Patel: Corey, you have almost 800 people in your portal. Do you know what percentage of them convert into investors?
Corey Chonsky: I don't have that information right now. Vadim - he is one of our partners - he does more of the investor relations; he typically has those numbers more readily available.
Ash Patel: What does your team look like today?
Corey Chonsky: So there's a total four principles. Myself, Jonathan New, Vadim Rey, and Jaspreet Baveja. So I do a lot of the asset management, I do a lot of the finance stuff, I'm also working to try to improve our behind the scene processes... Jonathan does a lot more of the acquisitions/transaction stuff. Jaspreet is kind of heading up our short-term rental stuff that we are looking to include into our portfolio... Also, he's going to be running a lot of any future funds that we set up and run. And Vadim does a lot in terms of capital raising and investor relations.
Ash Patel: How was your fund set up? Is it deal by deal?
Corey Chonsky: Yeah, right now it's deal by deal. We're looking to transition that to kind of more of a fund model, where we can throw a couple of deals into each specific fund.
Ash Patel: And for the Best Ever listeners, can you explain how that works? When do you raise money? When do you pitch the fund? Is it when you get the first deal, or is it when you get all three deals lined up?
Corey Chonsky: So I think you can really kind of do all of them. Obviously, that's the process that we're still working towards, but from my understanding is you're able to basically start raising at the beginning, when you create that fund, and introduce those deals throughout that fund period that you've identified in the PPM.
Ash Patel: And the initial investors - are they obligated to continue to fund?
Corey Chonsky: From the way that we've talked about it, we're looking to do it where we're just bringing in new investors as we work through that initial funding process, but not necessarily [unintelligible 00:17:55.06] folks who want to put additional funds into it. So this is still kind of new for us. We're kind of working through all of the kinks and ins and outs of it. So that'll be something that we make sure that we have fully defined in the PPM as we start to put that out.
Ash Patel: Corey, what's the hardest lesson you've learned in real estate, whether it's about people, deals, money?
Corey Chonsky: There's so many. I would say the biggest one is - I preach on making sure that you are open to partnerships, but with that, you need to make sure that you fully define what each partner is going to do for a deal. And it needs to be defined in writing, and it's something that everyone needs to agree upon. So partnerships are good, but at the same time, you need to be able to define everyone's role, and then that way you're in a position to hold people accountable for the jobs that they agreed to.
Ash Patel: Did you learn that lesson the hard way?
Corey Chonsky: Yeah... We've had some partnerships that didn't necessarily work out the way that we intended. I think everyone is going in with the best intentions, but it's something like "I thought you were going to do this", and they're like, "Well, I didn't say I was going to do that." So it's something where I don't care if there have been your friend for 25 years or 30 years or whatever. If you agree to it, then there's no reason not to have it in writing.
Ash Patel: Yeah, that's a great point. I've learned that lesson the hard way as well. I had a partner that wanted to outsource everything, and that's not how we do things, right? We've got to work; certain things you can't outsource.
Corey Chonsky: Absolutely.
Ash Patel: And I would also add that anybody that's considering a partnership, do it on a deal by deal basis. So I get it, we all want partners so we can grow and scale and go fast... But do it on one deal, and then debrief after it's done, and figure out if this is the right partnership to do the next deal, and the next one... Instead of tying the knot, so to speak.
Corey Chonsky: Absolutely. And we've had that discussion as our team, as we've discussed partnering with new groups or new individuals. Some folks are pushing "I want a long-term deal, however that may look." It's like "Well, let's just try to do the first deal first, and then we can go back afterwards and see if it's something that works for both of us." So we've definitely had that conversation several times amongst our group.
Ash Patel: Yeah. What is your bottleneck today? Is it deal flow? Is it investors?
Corey Chonsky: Well, today... It's December, so capital raising is always difficult during the holidays, and -- it's just difficult in general, but as you get between that Thanksgiving, Christmas to new year timeframe, it's super-difficult. But I always say capital raising -- so we have a lot of people on our portal, but at the same time, we're always looking to grow that, so we have different avenues for raising capital, and that's why we look for partnerships for folks that have their own portal that they can push deals to, just so that when we get a bigger deals - the last one was around 20 million - capital is not a concern... So that we know that when we get a deal under contract, we can have that path towards closing, because we have so many different avenues to bring the capital into the deal.
Also, I'd say bottlenecks right now - at same time deals, because you're having that change in mindset that's going on in the market. You have sellers that are still thinking their property is valued what it was six to eight months ago... So this is something I think will kind of work its way out of the market probably in the next couple of months, but in the meantime you're still dealing with that shift in mindset from what the market was previously to what it's become to today.
Ash Patel: Definitely interesting times that we're in right now. Corey, what is your best real estate investing advice ever?
Corey Chonsky: I feel like I've kind of already shared it, but yeah, partners. There's so much stuff that it's impossible for everyone to know, that the sooner you can partner with people that are smarter -- they don't have to be smarter than you overall, but they're just smarter than you in a specific area, whether that's development, or raising capital... Whatever it is, find those people that can bring something to the team to make you better, so that you can grow your overall portfolio and your overall net worth.
Ash Patel: Yeah. Even if they're not smarter, if they enjoy doing something that you hate, awesome.
Corey Chonsky: Absolutely.
Ash Patel: As long as they're complementary to you. Corey, are you ready for the Best Ever lightning round?
Corey Chonsky: I am. Let's do it.
Ash Patel: Alright, Corey, what's the Best Ever book you've recently read?
Corey Chonsky: So I have to say, I've shifted to business books recently, but I'd say real estate-related was probably Hunter Thompson's Raising Capital book. That's been awesome.
Ash Patel: And now that you started with real estate books, do you still read for fun?
Corey Chonsky: No. Well, I enjoy real estate books.
Ash Patel: What's the last fiction book that you read, for fun, that you enjoyed?
Corey Chonsky: We may have to go back to high school for that... In the Navy, I was reading technical documents for the last 20 years, so...
Ash Patel: Got it. Corey, what's the Best Ever way you like to give back?
Corey Chonsky: Kind of touched on this one, too... I was talking to younger sailors, but just younger folks in general. I had a couple of meetings with folks in their 20s this week, and they felt like they were behind, and they had bought their first property... I'm like "You're ahead of so many people." But just providing guidance and feedback to those individuals is something that I enjoy, and I look forward to continue to do in the future.
Ash Patel: Corey, how can the Best Ever listeners reach out to you?
Corey Chonsky: Yeah, so we have our own website, FWCinvestments.com. You can find me on Facebook or LinkedIn. Just search my name. Those are probably the best ways to get a hold of me. Otherwise, you can email me at corey@fwcinvestments.com.
Ash Patel: Corey, thank you and your family again for your service. Thank you today for sharing your time with us, your experience, some of the challenges, some of the wins that you've had... It's been a pleasure talking to you.
Corey Chonsky: Alright, I appreciate it. Thank you, Ash.
Corey Chonsky: Best Ever listeners, thank you so much for joining us. If you enjoyed this episode, please leave us a five-star review, share this episode with someone you think can benefit from it. Also, follow, subscribe and have a Best Ever day.
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