Heroes in Business - Chris Loeffler CEO Caliber Building wealth through alternative access to real-estate investments

Episode Date: November 26, 2023

Chris Loeffler, CEO, Caliber, Building wealth through alternative access to real-estate investments.  

Thank you. heroes in business align. Now, here's your host flying in, David Kogan, founder of Eliance's. That's right. And you know what? Again, I can't thank everybody enough, our listeners and our viewers for the feedback we continue to get. Just like recently when I interviewed the co-founder of Zillow. Make sure that you go to Eliance alliances.com, click on the radio icon, and you can listen to that interview again, along with many other interviews. Take note today, I've got a great friend and also to colleague and somebody that I trust a lot. He is the CEO of CaliberCo, and you can reach him at caliberco.com, Caliber Companies. And we're going to just jump right in. Chris Loeffler.

So welcome to the show, Chris. Hey, David. Good to see you again. Okay. Now, I have known you for probably at least nine years, probably even close to 10 years and stuff. And you're the co-founder also of Caliber Co. But I got to let people know over this period of time, I think you've won almost every single award that exists within your industry.

I can't keep track of them all. So out of all of those awards, are there a couple that maybe stand out the most to you or maybe mean the most or the most difficult ones that you sought to have achieved? Yeah, you know, thanks, David. The awards are awesome because their recognition is of any entrepreneur's hard work. And all of you who are listening know that means early mornings, late nights, and a lot of missed family events at different times in your life. I think probably the accumulation of the Inc. Awards was pretty cool we were seven

times in a row on the Inc 5000 list while we were still private which is something that less than one percent of all in companies ever achieve uh and then most recently it was kind of nice I was unexpectedly um nominated as the ey entrepreneur of the, made it to be a finalist, which was pretty cool. Didn't win, but it was amazing just to be nominated and then go all the way to the finalist round. Now, give us a synopsis about CaliberCo because you guys have really morphed from, maybe just take us a step back of how it came to be. And then let's jump to where you are now, because those are, that's a big difference. Yeah, so Caliber is basically an investor, developer, and manager

of real estate. We started in late 2008, actually November of 2008, so this November will be our 15th year in business, and we were buying foreclosure properties at the trustee sales at, you know, kind of the auctions basically in Phoenix, Arizona. So we started a business at the height of investor fear and anxiety when people really didn't trust each other anymore, for probably for good reason. And, and we tried to build from nothing. We had no mom and dad money, no startup capital, no venture funding. And we just started with one client that turned into two, that turned into four, that's now turned into 2,000. So at that time, we were raising money from individual investors, buying properties at a

discount, renovating them, and then reselling them for a profit. 15 years later today, we basically do the same thing. We help individual investors, high net worth investors, ultra high net worth investors, investment advisors, family offices, broker dealers, and small institutions to invest in real estate in areas that we know really well. And we find that real estate at a discount to what we think it's worth, build value into the real estate and sell it for profit. build value into the real estate and sell it for profit. Now, one of the things is you did the most difficult thing that a private company can do.

Chris, would you steal the thunder on that? Oh, yeah. So Caliber went public on the NASDAQ in May this year, 2023. It was a very, very challenging process, a multi-year process to get from getting ready to be public all the way to getting public and then the post-public experience as well. And it's the first time in the history of the company that a non-accredited investor, basically anybody, can invest with Caliber by buying stock on the NASDAQ. Why, though? Why, if you're doing so well as a private company, would you or really any type of private company then decide to go public? I think it's a different answer depending on the business. In the modern version of public companies, what you see is a company that's trying to maximize their value and give liquidity to all the investors who built the company along the way. So if you look at like Instacart, it's going to go public soon. It's very big, big number, hopefully.

And that includes investors invested in the seed round, the series A, the series B, the series C, the series D, et cetera. And so what they're trying to accomplish with the IPO is to maximize the exit, the value at the time, the public offering and then create liquidity for the early investors to sell their shares at some point in time. Caliber went public vis-a-vis a totally different process. We did what's called a micro-cap IPO, which is basically like a public version of venture funding. It's still an early stage in our company. The company is still relatively small as

compared to a large public company, and investors can get in early in our growth path and grow with us along the way. And so the reason why we did it was we are in the business of managing highly complex private securities. We already had the infrastructure necessary to manage a public company. Our funds were already audited by Deloitte. We had a lot of in-house infrastructure. And we looked at it and said, gee, if we just go public, we spend a little bit more, not much more than we're already spending to manage our business. But now we have access to the public capital markets, the growth engine that comes from that, the ability to hire and attract great employees who own real stock in the company, the ability to acquire other businesses, the ability to get better financing. So there's a lot of different things that you do to go public. And like I said,

every business is different. You have to look at your business and understand exactly why you would want to do something like that. Excellent. And again, you're watching, listening to me, David Kogan, host of the Alliances Hero Show. Make sure that you go to alliances.com. That's E-L-I-A-N-C-E-S.com. The only place where entrepreneurs align. And we have with us Chris Loeffler. He is the CEO of Caliber. You can reach him at caliberco.com. They're a wealth investment, real estate company, investing in a variety of different things from real estate to redeveloping. I mean, you're, you've got a lot. We do it all. We do it all. We got, we have hotels, we have apartments, we have office, we have retail, we're doing master plan community development. We're doing, we even do still a

little bit of single family homes, but you know, what we really are is we're a distressed real estate investor and we're opportunistic. And so I can tell you, breaking news here on the radio show, today in the last two or three months has been the first time since 2012 that I'm starting to see real opportunities to buy real estate at a discount. And that's because there's properties that are going into bankruptcy and in foreclosure and that are having what we call distress in the market. And in my business, distress equals discount. Excellent. And also, too, I need to note to our audiences is that you've been a strong supporter of alliances. You've been a strong supporter of those in the community, alliances itself, which is entrepreneurs, the backbone of our country.

There are a variety of members who are also investors into Caliber and you've done a lot. What support, you've supported, again, entrepreneurship, our community for a long time. How can that community go about supporting you? Well, you know, I love entrepreneurs. We're a little bit of a strange breed. There's always something about us that's not quite right because we see the world differently and we have a different perspective oftentimes. And that perspective leads to vision and that vision leads to great companies that are being built across the country. And it's actually one of the most unique things about America is that we have this

culture of entrepreneurship. So, hey, first and foremost, send us your energy, send us your good vibes and send us all that. Second of all, we're super excited to get public, but the type of public offering we did is not a big IPO. And it's usually going to be supported by a relatively small group of early shareholders who know the business well, who decide that they want to buy stock and help us grow our market capitalization and help us grow our market capitalization and help us grow our shareholder base. So if you know Caliber, you like Caliber, just want to make sure you know Republic now,

buy some stock, join us along the way. Shout out with the ticker symbol, please. Ticker symbol CWD, CWD, Caliber Wealth Development. Excellent. Well, this has been David Kogan with the Alliances Hero Show. Make sure that you go to alliances.com and click on radio and you can hear past interviews. Make sure you go to caliberco.com because, again, we've had with us Chris Woffler.

He is the co-founder and also CEO of Caliber. You can reach him again by going to caliberco.com. Once again, that's caliberco.com and alliances.com, E-L-I-A-N-C-E-S.com. Continue to stay tuned as we've got a lot more going on on the Alliance's Hero Show. Thank you again. This has been David Kogan with the Alliance's Hero Show. So we're going to continue now with this interview too. So those of you that are watching out one of our 50 outlets that are out there, wherever you're listening, we've got some now behind the scenes things I want to ask. So Chris, we've got a number of people that submitted questions prior to you coming on. And so I want to kind of help maybe answer as many of those questions as you can. First up is crystal ball,

crystal ball. People, you know, they're doing so much searching on the internet, half the world saying buy, run, buy, and the other half is saying run. What do we believe? How do we sift through all this information? And it changes, it seems, by the hour. The ones that just said buy now say sell. Yeah. And it's whatever drives the traffic to their website, right? You know, I think I always try, when I teach, I try to teach from a position of what I'm actually doing and what I actually know. So this is not what I've read in the book and certainly not from what I've seen in the news. And so I know real estate, I know distressed real estate. I know when we're going into a market that's going to have lower prices. And I think that's what we're going to see in the next six

to 12 months. We're already starting to see it now at Caliber. We're starting to be able to buy properties for a significant discount to what it would cost to build them. And that is a market in distress. And the reason for it is interest rates went up really fast. And whenever interest rates go up really fast, it affects real estate, it affects valuations, it affects prices. And so as an investor, you can say, well, that's not good. I own some real estate. What am I going to do? Well, you want to position yourself to hold through that because you're going to have disruption in pricing and hopefully you're getting good rents. If you aren't investing in real estate or if you have extra capital,

now is the time before the rest of the world figures out that we're in a distressed market to make your bets. So you want to find companies like Caliber and others that are really good at buying distressed assets can get you those discounted prices. Because in 2008, in Phoenix, Arizona, we saw residential real estate drop in value by 50% because of the financial crisis. The following three years, Caliber generated 100% plus annualized return on investment to our clients three years running. So when the market gets highly disrupted, the upside is stronger than the downside. All right. And are you guys looking in a specific area or those that are out there too? Because we've had some people ask questions is, do I look at land? Do I look at

now the new laws regarding Airbnb of maybe buying those at a discount? What's going on with hotels? I mean, you guys are involved in so much. Where are you seeing maybe the most opportunity for Caliber and or for smaller individuals or medium individuals? Well, for us, we're focused on three things. Multifamily that was bought in the last couple of years, hotels and office. With the office, we're trying to convert that to multifamily or other uses. With the hotels, we're just buying them at a discount and holding them. On the multifamily side, we're targeting a lot of properties that were bought at a price that is far too high with short-term debt, and they're not going to be able to refinance. Basically, that's our target. If you're an individual

investor and buying a hotel or buying an apartment complex is not something you want to do, you really have two choices. You can either invest in a private equity model like Caliber does that has a certain minimum investment that you can achieve. Or what I would be doing is I would be focusing on buying rental properties if we see a dip in residential pricing. We haven't seen it yet. I'm not sure if it's going to happen because there's a variety of reasons why it might not. But if it does happen, I think you're probably going to see the window about six months from now. Does this still hold true for all of these of location, location, location? And if so, where?

Yeah, it's a tale of two markets. If you look at office in San Francisco, it's a bloodbath. They call it a capital extinction event is what they're now calling it, where anybody who owns those buildings may never see any value come out of them. And in Phoenix, Arizona, office vacancy is not that high. And there's people that are looking for office space. And so you need to know your market. I think the best markets are going to be the ones that showed growth through COVID. So that's going to be Arizona, Colorado, Texas, Nashville, Tennessee, Florida, et cetera, and markets that are sort of lost population, lost a lot of jobs because of the pandemic. I don't know how much that's coming back. So it could be a long time, even though there's, I don't, I wouldn't even maybe call them deals

right now in San Francisco, but I mean, you know, how, how much lower can it go? Well, there's a lot of structural things that make it take really a long time for those buildings to actually sell and then for them to actually be renovated or changed use. So the absorption will eventually occur. Everybody loves San Francisco. It's a beautiful city, but it's going to take a long time. Francisco, it's a beautiful city, but it's going to take a long time. Now, as far as diversity, what kind of advice do you have for people to diversify their funds so that they're not locked into one specific? Just diversity, what does that mean? Yeah. So in real estate investing, we call it concentration risk. So if you take all your money, say you sold your business and you're going to take a large chunk of that and buy one property, one multifamily asset.

Well, now you're concentrated in multifamily in that location and the asset class, the subclass of that multifamily with one manager and one with one strategy. If you invest in a fund of real estate investments, you might be invested in 30 projects with different strategies and different locations and different managers. So you want to diversify your risk if you can. I think that's a wise way to go. And unless you personally are going to manage that piece of real estate and really treat it like an owner and make sure you take care of it, highly recommend you diversify. Okay. Now, what do you spend most of your time doing? Because certainly your roles have changed throughout you being part of Caliber for 15 years from when you started till now. Maybe you can help walk us through our listeners and viewers of what's a typical day as a CEO of Caliber, Chris Loeffler?

Let's see. Well, it starts with taking care of the kids and the family. That is job number one of any dad. And that's an important part of my life. Other than that, I am lucky enough to have built a business that's large enough that I have a leadership team that can execute on our business and our strategy with or without me. And so what I get to do is focus on some of the big rocks. How are we capitalizing our growth? How are we making sure that we're tackling the best opportunities? And how are we building relationships

that are going to drive more value to Caliber, whether that's more investment or more off-market projects or better execution on our projects. So I do a lot of that. I also spend a lot of time personally with structure. So I work on how's this contract going to be structured? How's this relationship going to be structured? How are we going to make sure that caliber and our investors are protected? How are we going to make sure that we maximize each opportunity that comes across our desk? And then I'm lucky enough that I get to do a lot of speaking and educating and training, which is something that I really enjoy. And so to the extent I'm training internally with their own team, or I'm providing thought leadership at different real estate conferences,

I feel like I'm contributing to the fabric of the investment community, attracting people to Caliber and helping the business grow. Last thing, just so you know, as a public company CEO, you got to do a lot of stuff. That includes earnings calls, and that includes having regular conversations with investors, regular conversations with media sources and things like that. And so I spent a lot of my time doing that. Let's talk about hiring and your staff and that. How do you go about finding candidates? What type of candidates are you looking for now? Are you seeing it also to being a where we're at with the job market now more candidates looking? And what do you look for? Yeah, we look for a cultural fit first. And that doesn't mean that that is looking for the same person over and over again. That for us

means that they're committed personally to the core values of the company before they knew it. So as an example, we're big on authenticity and transparency. We use simple language. We make it very easy for people to understand what we do. And we want to have someone who naturally feels that way too, and is a naturally transparent and authentic person. Compassion and service is another set of our core values. Someone who sees themselves as a servant to the customer is important to us, and that really cares about what their outcomes are and then agility and vision is our third set of core values which is really someone who can take the time necessary to learn enough about themselves and their role to help us see around corners avoid issues kind of

see the future and is agile enough to change when things change because in the investment business things change constantly so we look for those core values we use that in our hiring process and then after we've achieved cultural fit everything else is about obviously matching the skill set finding diverse sets of candidates who have different points of view so we don't have all the same types of points of view or personalities in the process but i've seen an uptick in the availability of talent. I think that there are good companies that are laying people off. And I think that that is driving some of that talent. You've done a lot of personal development. Out of

all the personal development, what are some of the things that you found to be most significant or most impactful on you? Because I know you're very pro personal development. I think the best thing that I've gotten out of it was an opportunity for me personally to find my own, I would say personal leadership, my own ability to drive my own actions and behaviors, and then drive that into success in my life and business and personally and everything else. And so that came from, you know, going through trainings and things like that. And you do awareness training where you become aware of how you are and how you how other people experience you. And then eventually you'll do trainings around what do i do about it if i

want to keep it or change it what am i going to do about that awareness and then last is is really finding that that personal leadership um and the courage and the strength to kind of stand in your own two shoes and and move your life forward now you've done a lot of interviews tv interviews radio interviews what's a question that you haven't been asked that you would like to have been asked? I guess it depends on the context, but I guess it would be nice to be asked, how do you bring your life together? I think that's kind of an important, especially for entrepreneurs. I think they go all in on their business and then they don't really understand that that is actually not a path to success. And I'd like to help them avoid that. So, you know, the answer to my own question is I was able to very early on in our business,

come to the realization that if I just stopped answering the phone before nine, people would stop calling me before nine. And I think as an entrepreneur, you have to sort of build your life the way you want it to be. And for me personally, that means dedication to family. That means having time for that. That means I want people to come to the office as early as they feel needed to get their job done. But I want it to be a ghost town at five because I want them to be home with their families. And so you have the power to do it. It doesn't matter whether you're a startup or an established company.

And I think people, especially entrepreneurs should, should take that. Well said Chris. An honor knowing you for like close to 10 years. Again, make sure you reach out. Chris Lauffler,

CEO of Caliber. You can reach me at caliberco.com. Also too is this has been David Kogan with the Alliance's Hero Show. Make sure that you go to alliances.com. That's E-L-I-A-N-C-S.com. As you know, it is the only place where entrepreneurs line. Thank you again, Chris, for being part of the Alliance's Hero Show. Thank you, David.