ADPI_083: Raising Capital And The World Of Syndication With Whitney Sewell

Apr 26, 2019


Episode Transcription:

 

(0:00)

Hey guys, what's going on? Welcome to the Active Duty Passive Income Podcast. Today's episode is going to be so much fun, okay? Because we're going to talk about a world that is very, very, very creative. Okay? Talking about syndications and getting money. This is a lot of people's problem. They go through the whole process of learning how to do deals, learning how to talk to people, learning how to, you know, get their elevator pitch down, but then they realize, okay, well, I have all these deals. I have all this knowledge. I have all this, you know, all these connections. But my problem Mike is money. How do I get money? Well, you definitely want to pay attention this episode because Whitney Sue is going to break down a lot of the specifics behind syndication, it's great. Make sure you're taking notes, and also make sure that you do further education on syndications, especially if you're going to be getting into that larger multifamily, family, you know, type of deal. Okay? You can for sure. Learn how to raise capital when it comes to doing smaller deals. All right? I don't want you to think that that's not possible. But when in the syndication world, we often talk about these larger deals 5, 100, 200 plus units, okay? And if this is something that you're thinking about, this is definitely a podcast that you want to listen to over and over again. Okay. All right. Without further ado, let's go ahead and start the show.

Introduction

(1:51)

Hey, freedom fighters. Welcome to the Active Duty Passive Income Podcast. The only place where military members, Veterans and their families learn how to build wealth through real estate investing. I'm your host, Mike Foster, and I'm here to show you how to stop wasting your benefits. Now get off your ass, step up to the firing line and make ready for today's lesson.

Today’s Guest: Whitney Sewell

(2:17)

Shooter standby. Hey, what's going on guys? Welcome to the Active Duty Passive Income Podcast. We have an amazing guest here. His name is Whitney Sewell. Not only is he the podcast host of the Syndication Show, but he is an army veteran. What's going on Whitney?

Hey, glad to be here. Mike, thanks for the invitation.

Thank you so much for coming. It is absolutely amazing to have you here. You know we met at rods event we've gotten to know each other a little bit over the past couple quarters. And I'm excited to have you here. I know you have an awesome message to share with our listeners.

Yeah, it was I was pleased to meet you as well in Tampa and at that event, and yeah, looking forward to the show.

Do you mind sharing with us a little bit about your military background?  And then how you got started in investing?

(3:00)

Sure. You know, I was, I guess I was 17 I joined the guard. And you know, and no clue what I you know, what that meant, all together, but, but just felt, I don't know, it just felt led to join. I was a junior, you know, in high school or in between the junior senior year or something like that. And a friend and I were signing up together. And you know, and that was before 2001. So even at that time, like, you know, the thought of like having to go to another country or go to war or anything like that, just, it just wasn't, you know, I didn't even cross your mind really, you know, that that was even an option or, or you had the assumption that it will join in the guard, even if you get activated, you're just going to go, you know, to the coast somewhere or you're going to go, you know, stay in the country. But anyway, that was very far from what actually happened, but you know, pretty quickly, you know, like a year or so later we were activated and arrest you know, 2003 I joined in March of a one. And 2003 were activated. We trained for three or four months in the in a complete blizzard getting ready to go to the desert. And somehow they like to do it that way. But anyway, we trained for three months, I ended up sending us home and I was in an artillery unit and we came home, we were home about a year then we got activated again. And then we went overseas as military police for a year in Iraq and it was, you know, obviously you know, most of the listeners if they're active duty they understand this you know, as well or better than I do but you know, great experience, but I'm glad that it's behind me. You know, and in the guys that were married and kids it's time I don't know how they did it, but you know, glad to be home and…

Obviously then I did my six years in the guard at a couple of years of active duty through all that and then now didn't sign back up, you know, and so I joined I came home and become a got hired by Kentucky State Police and, you know, went to law enforcement route and, and pretty quickly realized that I couldn't make any money being a police officer, so I had to do something else.

Right. That is awesome.

Do you mind letting us know what your first deal in Real Estate was like?

(unknown)

Yeah. Yeah. Yeah. So you know, when I become a, became a police officer pretty quickly. I could, you know, while I really enjoyed working the road and doing that, it was a lot of fun, you know, but before I was married, and then, you know, pretty quickly, you know, after being married, we just passed each other in the hallway, the first whole year of marriage working overnight weekend and holiday, you know, and then and then so I'm like, okay, there's got to be something else. You know, I've got to like find another way to have some income right and then you know, somehow I was introduced to Rich Dad Poor Dad and some other books like that Dave Ramsey even, you know, and some things like that and, and I thought okay, you know, there's this there's something to this real estate thing that you know, I need to I need to start figuring this out or learn a little bit more about this and, and then so it wasn't long till about a couple trop flexes and so drew try to try Plexus and learned a lot the hard way that's for sure, you know, and really probably jumped in before I was educated enough, you know, thankfully we didn't, we didn't lose any money but I definitely lost some sleep and, but however, we learned a lot and got through that and, you know, it's only made us stronger and more educated. Are you… Hey, you know what? Sometimes you got it. What is it ready, fire, aim?

It is all good. It's all good man. But awesome. So you started out with triplex as you went right into multifamily? I'm sure that was definitely quite an experience.

Can you share with us some of the challenges that you had to go through during your first Real Estate investment, specifically with a triplex property?

(unknown)

Yeah. You know, one thing is, is I didn't understand the market that I was buying in, I didn't understand the class of property or tenants very well, you know, or as well as I needed to or thought that I did, maybe. And in managed, I was self-managing another big problem, but I couldn't have afforded to have had higher property management, you know, at that time and, and, and so, you know, managing those tenants, you know, getting all the calls and, you know, the tenant turnover, it was, you know, it was very frequent. And, and so, you know, trying to keep them rented, you know, was a was a problem. There was lots of deferred maintenance that I didn't account for, you know, I hired a professional to come in and do a, do an inspection on everything I could think of however, you know, it wasn't, you know… I didn't think about hiring just somebody that was specialized and heat and they say, you know, HPC, you know, or, you know, I thought that this guy was an expert and all that, you know, and then, so there was lots of deferred maintenance, but, but I hadn't accounted for that, you know, and so, you know, when things started tearing up, you know, we could afford to fix it, but there was like, no cash flow, you know, so, I mean, it was paying for itself, thankfully. But, you know, I was working all these hours trying to fix all this stuff and do the tenant turnover, but I was gaining education, you know, the whole time is was what I was making off that property, but, but, you know, just simple things like understanding that, you know, some tenants are just never going to pay on time and you know, you know, just like understanding you know, you can't, as much as you want to help some of them. You just can't almost, you know, and, and, you know, I will never forget one young lady that never paid on time. And, and so I finally went, went and tried to help her I created this whole financial statement for her, you know, like, this is your income, this is what your bills are, you know, like, I tried to like… Okay, I'm going to help you try to get this figured out, you know, so you can get on track and, and okay, you know, and I even like laid it out said, okay, it's going to take two months, but at that time, you'll be able to start paying on time and then you won't have a late fee. You know, like, tried to lay it all out for you know, of course it never worked. She but she always paid but she always paid late fees. So eventually I was like, okay, I'll just take the life right. But yeah, from management to just not understanding the market well enough before buying you know, and the location, right was some issue major issues and, but that led and bigger problems. But all in all, they weren't that big a problem.

So right well, you made it, you know, you survived school of hard knocks kind of talk to you.

That's right, good lessons and if anything, outsourcing a lot of the stuff that you really don't want to focus on, and eventually kind of led you into syndication world, right?

I mean, that's right, multifamily and take a little bigger.

What inspired you to shift to larger level, multifamily properties?

(unknown)

Yes. So, you know, I was never the single-family guy or never thought about, you know, just doing single family homes. I always thought, you know, okay, you know, I want to do larger properties or multifamily, but I'd never liked the word syndication and never, like, I'd never been introduced to that and, you know, for a long time and, and so, you know, I'd had a few smaller properties and up to like a 15 unit. And then, but, you know, scaling, this was just really difficult, you know, like, being, you know, and seeing a person complexes or something like that, and you think, well, who owns that? You know, or how do I get to that level? Or, you know, who is that person, you know, you know, maybe 20 years from now, maybe I'll be up to where I can, you know, buy 100 unit complex or something. And, but, but I finally was introduced to syndication and started studying and trying to figure out what that was and how to get into that business. And, you know, it was a, it's a process, that's for sure, you know, and it’s a in more than anything. It's a mindset change. I believe that, you know, it's it was definitely something interesting. When I went to my first rod event, and I saw David, Tubingen standing up there on that stage. 21-year-old are these 22 at the time, right? But, but crazy, I mean, because it is that mindset shift. Is that belief that okay, well, let me just figure out how to do it.

But you definitely figured it out. And it sounds like you've cracked the code.

We're working on it anyway. Not it.

I mean, your podcast is awesome. I've listened to it a bunch of times. And for those of you who don't know, it needs definitely need to get to know him go check out his syndication show.

What is syndication?

(unknown)

Yeah. So, you know, it's as complicated as this. I mean, it's a, it's a lot of people that are putting their money together. I mean, you know, you're pulling lots of, you know, investors together to purchase a larger property. I mean, it's, it's really that simple. I mean, it's a syndication, you know, there's other industries that use that term for different things. However, in real estate, it's, you know, raising capital from lots of investors to purchase a large property, you know, their passive investors and, and so it allows us to find property that has some type of problem that we can fix, you know, because I'm commercial property, obviously, the, the income is what determines the value, you know, and so if we can raise the value, you know, feel they have 100 units and we can raise them just by a few dollars or, you know, $50 or you know, I mean, it makes a big difference, you know, on the on the value of the property.

And so that's really the, the key, you know, to, to this business or the multifamily business as far as that a large scale and syndication and that's what these guys, you know, do they improve the property somehow they get the rents up, you know, and that's where they make their money, you know, obviously, do their life with the property but ultimately when they sell, right, and is awesome…

Do you have to have money to syndicate an apartment deal?

(13:26)

So, you know, I think some of that's a misconception a little bit, honestly, you know, you know, to say, No, you don't have to have any money I don't think would be doing people justice. You know, because you don't ultimately have to invest personally right, you know, in a deal to get into a deal. You don't, you do not have to, you know, and… However, there are expenses to getting started such as, you know, if you want to go to conferences to meet people… If you're going to travel to meet investors, or even if it's just taking investors out to lunch time and time and time and time again, to build those relationships or, you know, just there's going to be some expense, you know, to say you're not going to have any of your money out, you know, out of pocket is, I don't think is true. However you it is true that you don't have to put into your own money into a deal to get in to get into a deal. Outstanding now that is very, very important. Whitney, I'm glad you made that point. Because it's not like you know, the cost of getting started is zero, you still have to you know, take yourself to the venue I pay for gas, you gotta you know, to network out there. And then there is also some like some immediate costs that you have to face with some like closing stuff, right, like working with an attorney and I mean, whether the nice your pocket money maybe you could charge that on a credit card or something right, but there's a risk as well. That could be a few hundred thousand, you know, as far as your earnest money earnest money deposit and you know, in those some of those things that have to be paid for up front, however, you know, that still doesn't have to be out of your pocket, you do have to figure out where it's going to come from, okay, you know, you're going to have to have somebody else that they like we call a key principle or Kp that's going to sign for the debt, they have to have a net worth of at least the, you know, the size of the property, you know, but a lot of times that same person or sometimes depending on, you know, your ability or your relationship with them, your track record, lots of those things, you know, that same person may also, you know, bring that money to the table and obviously, you're going to have to pay them they're going to be a big partner in the in the in the deal, you know, but, but there's still ways that they keep you from having to have 100,000 or 200,000 or whatever to put down, you know, out of your own pocket.

Wow.

Would finding a mentor be the right place to start if you wanted to syndicate?

(unknown)

So yes, I mean, that is one of the first things I tell people so I'll take calls all week, you know, just so many, sometimes many, many, many calls every day and all those people, but also I'll say 8080 to 90% of them are saying, how do I get started in syndication business? Or how do I do a podcast, or you know, those things, but, but something I tell almost everyone is you need a mentor. And there's even a process and you know, and finding a good mentor, however, is key is key. And so, just like that those trap flex is if I had had a mentor, I felt like I would have had, I mean, I was overly confident, I think, you know, obviously, you know, at the time, however, if I had a mentor, I think I could have made a lot better decisions or, you know, I would have understand the negotiation of that property a little bit, you know, or how to underwrite it a little better, or how to do a little better due diligence. There's many things that I feel like I could have done better or walked away from it completely, you know, until I found something else.

So a mentor is key. And anyway, you know, I'm happy to talk about binding mentor, whatever…  

No worries, man go for it.

What are the first few steps one needs to take to get started with their first syndication?  And since we are talking about mentors?

(unknown)

Yeah, yeah. And, you know, obviously, you know, and ask a lot of people that and how they got started and everybody says, you gotta educate yourself and it's true. You know, you do, you gotta educate yourself and you gotta, you know, there's obviously some great books and there's things you gotta, you know, you got to be soaking up all these podcasts. And, you know, there's so much free information out there, that there's no reason that you don't have you know, you haven't educated yourself some and if you haven't, there's a lot of mentors aren't going to talk to you, you know, people that good mentor you if you're not putting out some effort, but, but finding a mentor is so key and, and because I find like before, before finding a mentor, like I mean, I'm ready to work hard, I'm ready to do 80 hours a week if I have to do it, whatever. And I've been doing it a long time. Now, but you know, and that's, that's fine. But you know, if you're just running on a treadmill, you're not going anywhere. You know, you think you're working hard. And you think you're you, maybe you even think you're getting a lot done. But, you know, it's just like, you know, two ships going out at sea. I know, most people have heard that analogy, but you know, if one of them just me one degree off, yeah, you know, you know, in a little bit of time, he's so far off track, you know, or offer out, you know, it's really difficult for him to get caught back up, you know, a really difficult. And so, yeah, yeah.

And so that mentor, having that mentor, just, I mean, it gives you this other level of confidence as well. And so when you are underwriting a property or your whatever, whatever it may be, or looking at markets or you know how to have those investor conversations or you know, what you need to do at closing or the week after closing or all of these things that you just don't know what you don't know, you know, a lot of the time and so but when you have somebody that that has been there, done that it's doing it right now. It just it just elevates your game to a new to a new level. I believe that now it's true. And you said something very, very critical there. You don't know what you don't know. And I know that being guilty of being overconfident as well. A lot of those, I don't know, things come back, and they can bite you really hard. So that is, that's crucial. But okay, so step one, get a mentor, right? Find a mentor, keep a mentor, what was step to be? So yeah, so firstly, I education mentor. So the mentor is really going to help you to, to know what the next step is, right? And it's really going to depend on your, on your situation. And we're talking about specifically syndication right now, right, or how to get into this business. Right. So, so a lot of people get into this business by raising capital, you know, and so that's a way and if you have a mentor, you know, a lot of times it's going to be know him that you're going to partner with. Okay. And so obviously in the syndication or a lot of people may not know, but there's what we call the general partnership and the limited partnership, the general partnership, we're going to be the operators, the people who find the deal, underwrite the deal, operating, you know, making sure that it's operating correctly after close all those things. And then, you know, the Limited Partnerships out are going to be all there just are passive investors. And so, you know, it's usually like a 70/30 split will say, you know, the equity. So, you know, 30% would go to the general partnership, 70% go to the passive investors are limited partners. And so, a lot of people get started by just raising capital. And so you have to, you have to be able to assess your network, okay. And I know a lot of people that get it that have never done anything in real estate, but then they get a mentor, and, you know, two to three months of getting started. They're already partnering on, you know, 40 to $50 million deals. Okay.

Well, yeah, and it sounds impressive.

I mean, you know, however, they're bringing just about portion of the equity. So, you know, they reach out to their, their network, you know, they learn how to talk, they educate themselves, right. So they're learning how to talk to investors are learning how you know what all these terms mean about syndication and all this stuff. And, and they're learning how to have those conversations with investors. And so even if they can just raise 50 to $100,000, you know, a lot of they can still partner on this on this property. And so if you can imagine if you can partner it say you could just bring 100,000 from another investor, you didn't put any of your money on it anyway, you have your money into the deal, but if you can partner, and then all the sudden, you know, your conversations then change, you know, so when you're having the next conversations with investors, and you can say, yeah, you know, we just partnered on this $50 million deal, you know, 250 units, whatever it is, you know, you know, the conversation changes, you're now all of a sudden you have some track record, you know, you've actually done something. And so, it's just, it's a big deal. That's another reason why you need that mentor, right? And you want somebody that's gonna, you know, let you come in on a deal, you know, let you partner and let you grow that tracker. But, but you have to be able to assess your, your network, you know, and so if you're, you're somebody who's a very successful entrepreneur, but maybe in another, you know, in something outside of real estate, you probably already have a high net worth network, you know, right. But if you don't, then guess what, you got to go find those people are you have to change your mindset. You have to, you have to think about who you're surrounding yourself with, like, we've all talked about her before, but you really do. And so adding growth and wealth wealthy family I didn't, you know, I was not surrounded by wealthy people in any way. I have not reached out to family to invest in real estate or in syndications. You know, and so, you know, myself, you know, here comes the money part, you know, is, you know, I had to, I had to really, I mean, that's just the way I do things. So I'm just going to jump in with both feet and that's why I wanted a mentor to because I'm ready to make it happen. Right, but I wanted some guidance. You know, I wanted to be able to ask those questions. And so that's where that mentor came in. Oh, come. So but raising capital, so who's your network? And then, you know, I try, I've been traveling a lot and just like meeting people, like you, Mike and, you know, speaking on the stages and going around, and that's where I've met lots of investors. And so, you know, access your network, you know, and start to talk to them telling people what you're doing. So people don't know, you know, they see you as this, you know, when they think of my face, they see my, you know, in a uniform, right, in camera, you know, they don't know Mike as, as this real estate person, you know, or, you know, Mike starts to talk to me about real estate, and I'm like, wait a minute, Mike, you know, I thought you were in the military or I thought, you know, so there's this, you know, you have to let everybody know what you're doing one way or another, you know, and then we can get into thought leadership platforms and all that stuff and why that's important. But you got to get started right. You got to take action. You got a lot of people know what you're doing? And then start, you know, trying to raise some capital, you know, and usually, you know that mentor or somebody you know, you're going to find somebody that you can partner with. Right?

That is awesome, man. Okay, cool. So, so yeah, I think that folks have some good steps here to get started.

Can you provide us with an example of syndication that we can run through? I know syndications run in so many different shapes and sizes, etc.

Yeah, I can, yeah, I can get really complicated, but however, it's not extremely complicated. But if you can make it complicated, you know, so, you know, you have to think about the deal size. And I mean, I've heard of people syndicating 12- and 15-unit properties. However, you know, it's, I can't say that it's very cost effective. You know, because to syndicate, you know, the, the attorney fees alone can be anywhere from 10 to 25 to 50,000, you know, depending on the property size, and, you know, I mean, depending on lots of things, however, you know, it's a big expense. So if you're, if you're working on a $300,000 property, you know, to say, now, all of a sudden, you're going to have a $25,000 expense, you know, I mean, just attorney phase to close where to get started, you know, there's gonna I mean, you're gonna have to do everything right. You know, that mean, there's just not gonna be any room for error. That's a really great point. I didn't even think to ask that question. Right. I mean, as far as what you should syndicate and what you shouldn't syndicate, I'm so glad you said that. Yeah. So but something else, you know, like the size of the property. You know, people it's, it's intimidating.

Right, if somebody says, you know, if you're used to going after single family homes, and all of a sudden, I said, you know, Mike well, let's go, you know, let's look for a 15-minute property. Well, you know, you know, a lot of people are gonna be like, Oh, wait a minute, you know, I'm not there yet. Yeah, I'm not there yet. You know, I can't do that. Or, you know, so if I'm raising the capital, if I'm raising money from investors, and we're able to, you know, to purchase 100-unit property, and, and we're raising the capital from investors will Why look for the 50 unit, or why look for the 25 unit. You know, and, and I know, there's people that will say, Oh, wait a minute, the sweet spot is 50 to 75 units, or as sweet spot is, you know, 30 to 50. And, and everybody has their own thing they feel is, you know, the sweet, you know, spot or whatever number units are the value. But, you know, the more I'm doing this, the more I'm learning, I say that, okay, you know, the larger the batter, there's just more numbers are more zeros, you know, and so why not do the largest deal for raising all the capital… Anyway, I'm not having to come up with all the down payment out of my own pocket, you know, and so why not do a larger deal? You know, we're doing the same due diligence on 100 units that we would have 75- or 35-unit property, you know, so why not do a larger deal?

But, but anyway, so, you know, as far as going through a little bit of a syndication, you know, some things to think about, you know, is obviously, who the operators are, you know, the operator is, is extremely important. It's also why you need a mentor, because when you're talking to investors, you know, that there's, they're going to be like, wait a minute, Mike, do you know how to operate 100-unit property? Do you have you ever done this before? You know, like, they're going to these questions, right, like, oh, what do you know about this? Or, you know, and then, you know, and you don't want to be sitting there? Well, you know, I'm going to work really hard, you know, that, like, that's not your answer, right. You know, well, I can do this, you know, I know that I can well, you know, they're going to need a little more assurance before they're going to hand you a high thousand dollars, you know, or 50 or even 25, probably at that point, but, you know, when you can say, Well, our team has done this 12 times, you know, or this is their 12th or 13th property or whatever, you know, in this market, they, you know, they've got $200 million under management. And so, you know, I've shifted that conversation, right? And so, you know, he asked about my experience, but then immediately, I'm gonna say, Well, our team has this kind of experience, or our team has done this many properties, or, you know, and so, you know, I'm giving him the experience of our team or my mentors team, you know, but that builds my credibility because I'm surrounding myself with those people. And I'm not the operator at that point, you know, like getting started. And so, you know, I'm, I'm, you know, I'm really hanging on the coattails of a mentor or another team that is very experienced, and to think that I'm going to jump into a syndication and there's very few people anyway, I've seen it done as a and successfully, but there's very few people to jump into 100 unit property right off the bat with, you know, with no mentor, and with no partners or nobody that's more experienced, you know, usually you're going to have somebody that's more experienced before you're going to do that because an outside of some of it, you know, it's going to be similar to not syndicating. I mean, you know, you got to find the market, you got to build your team, you gotta, you know, you got to do this a lot.

So the same things. However, it's the capital raising side that a lot of people get hung up on.

True, you know, you know, and that's a big part of syndication, you know, obviously, if you don't have just like a single-family house, you know, the down payment where you can't buy the deal. Well, same thing with, I know, there's other creative ways around that. But, but talking simple I mean, you know, in syndication, we got to have the down payment and we got to have the renovation costs, and we gotta, you know, we're going to raise all that capital up front, you know, whether, you know, depending on how much down payment we got to have and what the renovations are going to cost and things like that. We're going to raise all that capital, you know, up front from investors, you know, but those investors, they can either be Debt investors. So like a loan, you know, like just like you're getting from a bank or they can be equity investors. So now they own part of the deal. You know, some people say, well, debt investors, it's more safe to be a debt investor, it may be, but you're not gonna make as much money, you know, but if you're an equity investor, you know, if the deal does really well, then you're going to make a lot better return on your money. But you got to have those investors, it's very important and right and treating them like gold is very important, you know, and, and also, you know, and this was said to me not too long ago, and I'll put it out. Again, it's like, you know, somebody that invest 50,000 with you, you got to treat them, like they invested a million with you, because if you do, eventually it will be a million, either from them or from their network, you know, so, you gotta let people know what you're doing. And you know, you gotta put it out there. But, but anyway, going through the syndication, you know, usually there's going to be a 7030 split, like we mentioned earlier, it can, it can vary in many different ways. You know, there's different there's tons of different structures, different ways or you know, investors usually get what's called a preferred return. And that can be, you know, that will vary, you know, I would push usually always for at least 8% preferred return. And that just means investors get paid first, you know, so preferred return, they get paid before any operators are paid, you know, and if you're not getting preferred return, I'd want to know why. You know, and sometimes, depending on the deal, if there's tons of deferred maintenance, or if they're, you know, to get a property turned around, you know, maybe they can't pay investors for a year. You know, and, and that's a possibility, you know, let's say this property is going to be almost 100% vacant for six months, you know, because there's such a big rehab that has to be done. Well, you know, that could still be a good deal. But, you know, you got to know this operator knows what he's doing. You got to know that, you know, have they done properties like this before? And, you know, but then you're going to get, you know, then maybe you start getting paid, you know, after year one or you know, but you know, what's the distributions is it month in Are you getting paid monthly? Are you getting paid quarterly or is it annually, you know, some things to think about as an investor on the passive side, you know, how's that being handled? And what's the communications like, you know, from those operators, because as a passive investor, you know, you don't have say, and in, you know, what the paint colors are, you know, there's too many ambassadors, I'm not calling you to say, Oh, you know, Michael, you know, should we paint this unit blue? Or should we paint it gray? You know, you just can't you have time for, for that, you know, and, and so as a passive investor, you know, you're trusting this team, you know, you are investing in them, but then they're going to say, okay, annually, we're going to project a 15% are our internal rate of return, or maybe an annual basis, we're going to assess the cash flow and pay that out to investors. You know, and that's going to bump that up to 15% instead of 8%. You know, but then maybe after 15%, we're going to split you know, the GP and the LP is going to split the rest of it. 5050 you know, or, you know, something like that.

There's other ways to that split what will happen once we reach certain goals or certain projections, you know, so, you know, you need to know that, you know, like, especially as a passive investor will, you know, what happens after we reach the projected 15 or 19% are, you know, those types of things and, and, you know, if you don't know what AR is, it just takes in the time factor, you know, like to say, I say, if you're going to invest $50 with me, $50 and I'll tell you, Michael, you know, I can turn that 50 into 50,000 Well, who's not gonna give you $50? Right, but if I tell you, it's going to take 500 years, you know, now all of a sudden, wait a minute, I'm not giving you my $50.

Anyway, that's so cool. I mean, there's a lot of there's a lot of dynamic when it comes to syndication, it seems and there's a lot of stuff to get to know. And so that's exactly why Whitney says you know, get educated definitely make sure that you don't dabble in this stuff is what rod always says right? Don't dabble in multifamily real estate investing, but, but once you do understand it, it's beautiful. And it can definitely game change your life. I mean, I know Whitney can continually attest to it.

I mean, if you've got 100 unit, you know, by the time it's all said and done, I mean, on average, like, how much could you see your cash flow bump up from something like that? A couple thousand? Maybe?

Oh, you mean from like, a smaller multifamily right? Oh, yeah. Yeah, just them. I, you know, the asset management fees or the acquisition phase alone, you know, are nice, but however, you know, I try to remind people, you know, you've worked hard for that, you know, instead of the asset management fees aren't going to, like, support you alone until you've done a few deals. However, the like the acquisition fees, you know, will, but it's really, you're working towards that sale day, you know, to sell that property. And that's where, you know, that's where the investors are getting their big payday pay day as well. You know, and, you know, and you look forward to do that because, you know, you pay investors Well guess what? You know, they're going to want to invest with you again and they're telling all their friends about it. You know?

That's true. That is very, very true. Yeah. So awesome. Whitney, thank you so much for the wonderful wisdom as you get us on the show. So much value and I know folks are definitely glad to have heard this. I want to take you into our bonus round. I got three final questions for you.

BONUS ROUND

What is your favorite book?

(unknown)

Well, you know, top would be obviously the Bible is the word you know, I can't do without that. You know, if you want to let you know by far that's the top, but you know if it's specifically about syndication, then it's Joe Ferrara says new book, the best ever apartment syndication book. It's the most well thought out as far as about syndicate. There's just not many books about syndication, and some are some are really good. However, they're not beginner books. They're not there… like they'll talk over your head, you know if you're if you haven't been in the industry a little bit, but his book really helps you to get started.

Okay, awesome. And, and he's got a podcast as well, right?

He does real estate investing advice. Yeah, yeah.

All right. So yeah, there'll be links to the book in the show notes page for sure. I've heard a lot about him recently, which is good stuff. So I got I gotta start tapping into more of his stuff.

Who is your biggest hero and why?

(36:26)

For Jesus Christ, my biggest hero, by far as good? Yeah, yeah… gave us a lot for me and, and just amazing things he's done for our family. You know, no doubt our hero.

What are three nuggets of wisdom you would like to share with those who are just getting started in Real Estate investing

(36:47)

So, you know, everybody says, educate yourself. And I just think that's a given, you know, you're not going to invest in anything unless you're educated, I hope you're in educating yourself a little bit, at least, you know, however, you know, I say, take action. And, and but like, I, you know, I'm the type that, you know, I'm going to take, I'm going to try to take massive action, and I'm going to just jump in, like with both feet and try to just, I'm going to figure it out, you know, like, I'm going to have the mindset, I'm going to figure it out, you know, military, I think helped me with that a little bit. You know, I remember those, those ruck marches, you know, like 12 to 12 mile, you know, in the middle of the night and your feet are blistered and you're like, Nope, I can do it, you know, you're keeping them you know, it's some of that some of that mentality You know, I think that's helped me long term, you know, that I learned in the military and some of those things, but take massive action, you know, take action period.

It doesn't it doesn't even have to be extremely something big and don't know overcomplicate things, you know, like, it's not as complicated as we like to think it is. And I think we, we try to make it complicated because it's a, it helps validate our excuse of not getting started. You know, and so, you know, take action, don't overcomplicate it, right, you know, and find a mentor, ya know, for sure, that definitely is some solid wisdom there because a lot of people follow that analysis paralysis mode, but it's just another excuse. Yeah, even like, I never thought of myself as, as, you know, having a podcast, I don't even know what they were two years ago, you know, never even heard of a podcast. You know, never thought about doing a podcast, you know, now, I'm doing a daily podcast, you know, and, you know, if you see my little studio here, you'd be like, Well, you know, I mean, I never thought I'd be doing something like this, you know, you know, so, you know, take action, you know, it doesn't have to be a podcast, but you know, you have to do something, you know, like, get out there and it's amazing the things will that will start happening in the doors that will open when you just put yourself out there, you know and get started.

Hey, man, that's so true. That is so true, man. Don't I know that one? Man? Whitney, it was absolutely awesome to have you on the show. Thank you so much. How can our listeners get in touch with you?

Best place is go to life bridge capital. com. And that's where you'll learn more about our bio. And while we're doing this, and you know, our big one is helping families adopt children. You know, we've committed 50% of our profits to helping those families and we're in our third adoption process personally and so we're very passionate about helping families do that process but go to life bridge capital, or obviously and you can see the podcast on there to the real estate syndication show.

Awesome those there'll be links to those in the show notes page. We need thank you so much for all the awesome info the value that you've added to this. Thank you so much for what you do with your podcast and helping others and who…

Yeah, definitely excited.

We'd love to have you on the show again later on. Looking forward to can't wait. All right. Take care. Thank you my phenomenal, thank you so much Whitney for your time really appreciate your appearance on this podcast.

Conclusion

(unknown)

Guys make sure you hit the subscribe button if you haven't already. You don't want to miss out on these awesome episodes that we are releasing. Okay, cool. So a little bit of what's going on. If you guys haven't figured out yet we have launched rapid deploy again. And we are keeping it open for a limited window. We've got folks that are pouring in. So make sure that you hop on that train before you miss out. Last thing, we are starting to do more seminars and more meetups in the areas. So if you guys are Pathak potentially thinking about starting a meetup of your own, and you want to work with the API team, reach out to us, hit us up on our start to spark page and let us know that you are interested in hosting a meetup in your area and we will try and get with you figure out how we can help coordinate that or maybe even get to it if we can. All right. are you guys doing great catch you later.



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