Sharing secrets of his success

Alicia Robinson

Who wouldn’t like to retire at age 32?

Corey Donaldson did. He left corporate life last year, after using

his entrepreneurial acumen to build a $10-million real estate

portfolio. Now he’s helping others on the path to early retirement,

sharing his secrets with would-be investors through seminars at area

colleges and universities.

“I don’t see real estate as a risk because it’s brick and mortar,”

he said. “It’s not like you’re betting on the stock market.”

His interest in business dates back to his earliest jobs.

“I’ve always been entrepreneurial,” Donaldson said. “I wasn’t

satisfied with just one newspaper route. I’d have about eight or 10

of them and I’d subcontract them out to my brothers and sisters.”

By working a variety of jobs, he paid his own way through college

and bought himself a car. After he made $200 in one day sealing a

neighbor’s driveway, he decided to start a driveway-sealing company

that quickly became the largest in Connecticut, where he was then

living.

But the cold weather in the East and a penchant for fitness drove

him to Southern California, where he founded and then sold a

dry-cleaning delivery business. In 1994, Donaldson took a sales job

with PacifiCare Health Systems and rose through the ranks. Meanwhile,

by saving as much as possible and selling possessions such as his Jet

Ski, he scraped together $22,000 for a down payment on a duplex.

He moved into one half of the house with some roommates and rented

out the other half, and he spent his free time fixing up the property

himself. A year later, he was able to buy a triplex, and as his

property values rose, he was able to borrow more to buy two

fourplexes.

Today his business, Avalon Properties, owns more than 100 housing

units, mainly in Costa Mesa and Anaheim, as well as a Newport

Boulevard business plaza that includes a motel, self storage facility

and restaurant.

One of the biggest challenges was initially making improvements to

the properties himself. He’s replaced carpets, poured an asphalt

parking lot and painted anything and everything.

Now, a team of people manages his properties and he focuses on new

acquisitions.

What Donaldson was able to do is uncommon, said G. Christopher

Davis, director of the real estate management program at UC Irvine’s

Graduate School of Management.

“It’s quite risky,” Davis said. “It’s not something that’s easily

done, and obviously he’s picked properties that are appreciating in

value, No. 1, and No. 2 are in good locations.”

A demand for housing that exceeds the supply by about 10,000 units

has caused housing values, especially in rentals, to rise, he said.

But with mortgage rates rising about 1% in the last few months and

the real estate market leveling off, rental real estate values may

have hit their peak, Davis said.

Donaldson expects real estate prices to come down about 20% to 25%

over the next two to three years, which will drive real estate

speculators out of the market. The expected price drop has led him to

consider investing out of state in more stable markets such as

Albuquerque.

There is still money to be made in real estate, and he wants to

help people learn to invest slowly and ethically, he said.

He and business partner Kyle Kazan have partnered with eight

college campuses where they’ll give three-hour seminars on real

estate fundamentals such as how to analyze a property, financing,

insurance and taxes, and they’ll talk about the Orange County market

and how to find real estate clubs and other resources.

“What is important is hard work, taking risk but calculated risk,

aligning yourself with some really good people,” Donaldson said.

“Keep educating yourself as much as possible; become a student of the

business.”

Davis said many people toy with the idea of real estate investing

but few of them actually take the plunge.

“The potential rewards in real estate are large and sometimes

huge, but one has to realize that in order to reap those rewards you

have to take risks and you have to have some degree of expertise,” he

said. “It’s not for the everyday investor.”

For information on Corey Donaldson’s real estate investing

seminars, call (888)252-2924 or visit

https://www.reinvestmentstrategies.net.

* ALICIA ROBINSON covers business, politics and the environment.

She may be reached at (949) 764-4330 or by e-mail at

[email protected].