PROVIDING INVESTOR FUNDING

PROFIT IN SERVINGTHE LESS FORTUNATEBITING BACK AGAINSTFAKE REGULATORY DOGPROVIDINGINVESTOR FUNDINGCROWDFUNDING UPDATENEW RENTAL LENDERS B2R FINANCE FIRSTKEY LENDINGCapital CitiesChattanoogaAll Aboard for ProfitsOaklandThe Bright Side of the BayBonusSupplementINVESTORREVIEWSERIESSPECIAL SUPPLEMENTMAKING DOLLARS & SENSE hat It’s All AboutWhy ParticipateHow to BeginWhich Asset to ChooseWho Can HelpWhere to BuyWhen You Should StartBUY-TO-RENTAge-Old Industry RenewedRewards For Wise Investors Individual or Small Cap Investment Providers orMid Cap & Institutions or Large CapSECURITYLET BRAD SUMROKSHOW YOU THE WAYPrice 9.95 USwww.PersonalRealEstateInvestorMag.comBRAD SUMROK,Founder of Brad Sumrok MultifamilyInvesting Events & Mentoring andWinner of the National Apartment Association’s2012 Independent Owner of the Year AwardNumber 5 in Personal Real Estate Investor Magazine’s Investor Review Series1INVESTOR REVIEW No. 5: Buy-To-RentBrad Sumrok MultifamilyInvesting Events &MentoringJanuary/February 2014Price 5.95 US 6.95 CANAvailable for iOS,Android, Mac & PCOfficial Publishing PartnerMASTER INVESTORS — Chris Loeffler, Donnie Schrader & Jennifer Schrader / Caliber Companies

MASTER INVESTORSSUCCEEDINGBY MEETINGINVESTORS’ NEEDSBy Susan Thomas SpringerOne evening last November, a few hundred guestscelebrated Caliber Companies’ newly expanded8,500 square feet of office space complete withHugo Boss furniture, candles and swanky music. Guests noshed on flat iron steak bruschetta with gorgonzola and sipped “Caliber Cocktails,” champagne and asplash of Elderflower liqueur.That’s a long way to come for this Scottsdale, Ariz.,business that started about five years ago out of the threepartners’ houses, with only one client and no capital. Thesepartners had found each other based on complementaryskills and an investor who believed they could deliver better returns using real estate.BEGINNINGSThe whirlwind journey began with house flipping,then multifamily investing and on to commercial, retailand recently hospitality. Today Caliber is a full-service realestate investment company with 22 corporate employees,150 hotel staff and at least 60 subcontractors. The partnershave made plenty of bold moves, expanded into new areasand learned lessons along the way. One thing they have notbeen is bored.“None of us thought that we were going to be doingwhat we’re doing three years ago,” says Jennifer Schrader,one of Caliber’s three managing partners. “I think the surprise for me was where we can take this, and how fun andCaliber’s executive team, from left: Jennifer Schrader,Donnie Schrader, Patrick McNamara (president ofconstruction), Chris Loeffler, Paul Bressan(chief financial officer) and Bill Howard(vice president of operations).28January February 2014 . Personal Real Estate Investorwww.PersonalRealEstateInvestorMag.com

challenging and exciting it is to have the team around usthat we have.”“One of our biggest moments was when we closed ourfirst large commercial transaction,” says Chris Loeffler,also a Caliber Managing Partner. “It was just such a fantastic time for us — we saw that if we can buy a 5 milliondeal, we can buy a 50 million deal.”MAKING THE LEAPThe third managing partner, Donnie Schrader, wasflipping houses in Michigan in the early 2000s. Jennifer,an architecture student noticing signs of the oncoming recession, decided she’d rather be an entrepreneur than besaddled with student loans. So she quit school and joinedDonnie house flipping where she was still able to use herdesign skills. Soon, the couple sold their “small portfolioof rental homes”and moved toArizona in late2007.Loeffler wasworking in thecorporate worldat an accounting firm where he was learning “how bigcompanies are made, how they work, how they don’t workand everything in between.” Years earlier, he’d read “getrich in real estate” books and remained intrigued with theconcept of “borrowing my way to success.”The three joined forces, and Caliber was born.“The focus at the start was 100 percent on buyinghomes at auctions, quickly remodeling them and puttingthem back on the market and selling them. We all had theforesight to see that wasn’t going to last forever,” says Jennifer. “We thought that we needed to do something else inorder to have a sustainable company.”FLIPPING IS “EATING YOUR SEED CORN”Although flipping hundreds of homes a year was profitable, the three partners knew they needed to change theirbusiness model in order to build a sustainable company.The essence of flipping is that you sell your best assets, asincome, says Loeffler, and you are left with no residual income from the effort. You are eating your seed corn.So they moved into multifamily and then branchedout into additional types of properties. Their philosophyevolved as well, from “opportunistic” to providing wealthdevelopment vehicles for other investors beyond the usualstocks, bonds and mutual funds.“We wanted to create an option for people to invest inthese types of projects that was pretty far removed fromyour traditional choices,” says Loeffler.Today, Caliber has in-house teams to handle construction and development, brokerage, acquisitions, propertymanagement, property asset management, capital raising,accounting and tax NG SOMETHING NEWCaliber’s current push is opening and operating private real estate funds. That’s accomplished through a disclosure document called a private placement memorandum (PPM). They have two funds so far. It allows themto “put people’s money together in a pool and buy a singleproperty or a group of properties.”“We’ll likely be opening a third fund soon,” says Loeffler. “This is some of the perfect combination of our ability,which is buy phenomenal investment properties and manage it right, and our clients are able to participate with usat the best possible level.”A second, newer area is also a popular one — Caliber’sBridge Note Program. Investors provide the capital forCaliber to purchase, renovate, market and sell properties.Capital is secured by a first position deed of trust, withinvestors receiving a 12.125 percent fixed annual rate of return.“There’sthis certain ability for real estate to maintain your capital, so there’s little risk there, butpeople don’t always want to own an apartment complexand do the heavy lifting of plunging toilets and decidingwhether or not they should change the carpet or what theywant to do with the paint, and so on,” says Loeffler.A third new area is hospitality. When the trio recentlypurchased a hotel, they realized it was a complex industryinvolving millions of dollars in renovation and includingbusiness within it — such as a restaurant and bar. Theywere familiar with most aspects, but needed additional expertise on others.“The part where we needed a little bit of help was themanagement of the daily operations,” said Jennifer. “Wemade sure before we purchased it that we had a rock starmanagement team to come in and be our partner and helpus on it.”Along with experts to manage new investments comesthe willingness to jump in.“If you want to understand the hotel industry, justgo buy one, and you’ll know. The learning curve is muchshorter,” says Loeffler, who adds that sometimes investorstake too much time analyzing risks instead of acting.“I think my advice would be, thinking about it andbuilding a team is important, but at some point in time,you’ve got to decide whether or not you’re going to be thekind of person who can just take the risk,” says Loeffler.“When trying to start a real estate business, the besteducation you can get is experience — and the only wayyou get experience is by actually doing it,” says Donnie.“Don’t spent too much time reading every guru’s book onthe market or going to every seminar you can find tryingto learn how to do this. Just get involved in at least oneJanuary February 2014 . Personal Real Estate Investor29

The Personnel FileMASTER INVESTORS30Company: Caliber Companies LLCWebsite: www.caliberco.comOffice Phone: 480-295-7600Name: John Christopher Loeffler II “Chris”Position: Managing PartnerEmail: Chris@CaliberCo.comHometown: Scottsdale, Ariz.Education: B.S. (Business Administration& Accounting),Cal Poly / San Luis ObispoFirst real estate deal: My first home,a five-bedroom in a college town that Irented to roommates.Guiding principles: Integrity, honesty,transparency, responsibility and honor.What makes you get up every morning: The opportunity to create somethingnew.When you’re not working: I spend timewith my fiancé, enjoy the outdoors andhead to the gym.Best advice ever received: If it’s to be,it’s up to me.Technology you can’t live without:iPhone.What most people don’t know aboutyou: I grew up in a military family andhave lived in Asia and Europe.On competition: Quality competitioncreates more opportunity overall; considerthe Starbucks effect to the local coffeeshop.Most impactful book: “Jobs” (biography of Apple founder Steve Jobs).If I had to do it all over again: I’d startwith an assistant!Favorite quote: “Whenever you findyourself on the side of the majority, it’stime to pause and reflect.” — MarkTwainJanuary February 2014 . Personal Real Estate InvestorName: Donnie SchraderPosition: Managing PartnerEmail: donnie@caliberco.comHometown: Brighton, MichEducation: Attended SchoolcraftCollege (Garden City, Mich.)First real estatedeal: Simultaneously purchased twodistressed single-family homes onthe outskirts of Detroit, remodeledand flipped with 50 percent profit.Guiding principles: Perseverance,responsibility, adaptability, honesty.What makes you get up everymorning: Being able to be my ownboss and own my own company.When you’re not working:Exploring the outdoors with my wifeand dogs, traveling, gym, car stuff.Best advice ever received: Don’tever get too emotionally attached toa deal; there’s always another. Anddon’t get greedy.Technology you can’t live without: iPhone.What most people don’t knowabout you: I have four older sisters.On competition: I am very competitive, not just with my competition, butwith myself. I’m always trying to getbetter! Former professional motorcycle racer.Most impactful book: “Jobs”If I had to do it all over again: Iwould, just sooner!Favorite quote: “As long as you’regoing to be thinking anyway, thinkbig.” — Donald TrumpName: Jennifer SchraderPosition: Managing PartnerEmail: Jennifer@CaliberCo.comHometown: Brighton, Mich.Education: Attended LawrenceTechnological University in Michigan– pursued a degree in architecture/interior architectureFirst real estate deal: Purchasedand remodeled a dilapidated homeone block north of Detroit border.Sold it for more than 50 percentprofit.Guiding principles: Respect andresponsibility.What makes you get up everymorning: Coffee!When you’re not working: Loveto explore.Best advice ever received:Pay attention to every pennyspent, however insignificant it mayseem. It’s all the little things thatadd up and have the potential tomake or break you.Technology you can’t live without: iPhone.On competition: Love it! Healthycompetition breeds creativity.Most impactful book: I love reading – too hard to name just one.If I had to do it all over again: Iwould.Favorite quote: “Control your owndestiny or someone else will.” —Jack Welchwww.PersonalRealEstateInvestorMag.com