GI11: Syndication Strategies after 900 doors and $120 million with Whitney Sewell

Whitney Sewell is the founder of Life Bridge Capital and works with accredited investors to improve their investment returns via multifamily syndication. They have invested in over 900 doors valued at over $120 million. Whitney hosts The Real Estate Syndication Show, a daily podcast, interviewing experts providing cutting-edge tools and strategies of the syndication business. He and his wife Chelsea have adopted three children and donate up to 50% of their own profits towards adoption causes.

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Welcome to the Global Investors Podcast, a show that focuses on helping foreign investors enter the lucrative US real estate market, host Charles Carillo combined decades of real estate investing experience with a professional background in international banking to interview experts in all areas of US real estate investing. Now here’s your host, Charles Carillo.

Welcome to another episode of the global investors podcast. I’m your host, Charles Carillo. Today we have Whitney Sule when he’s the founder of life capital and works with accredited investors to help improve their investment returns via multifamily syndication. Uh, he is currently invested in over 900 doors and valued over $120 million. A Whitney hosts the real estate syndication show, a daily podcast interviewing experts, providing cutting edge tools and strategies of the syndication business. He and his wife also have two adopted sons and a third adopt the child on the way and donate up to 50% of their own profits to adoption, which is great to hear. So how are you doing today, Whitney doing great. Doing great. I appreciate you having me on the show, Charles. And I would say I would update that way. We need to update that bio cause we just brought our daughter home through adoption, our third child.

Uh, just like, Oh well I about a week and a half ago now. Oh wow. Okay. Congratulations. That’s awesome. Thank you. So when you tell us a little background, I know you’ve been investing since 2009 and what, what, what did you do before real estate and what got you into real estate? I was a million in the military, went overseas for a year and come home and then I was on the hunt then of what can I do, what am I qualified to do? And law enforcement then was kind of a shoe and you know, being in military and having that experience. And so I, I joined Kentucky state police and started working for them. I love to work in the road as an officer and I would have almost done it for free when I first got started, but quickly found out that there was no way to make much money being a police officer, unfortunately.

And it was always going to be stuck working those nights and weekends and holidays and then then got married and first whole year of marriage, my wife and I pass each other in the hallway. And so quickly found out that okay, this is not what’s best, you know, for our family longterm. And that, that really put me on that hunt to looking for something else. I wasn’t raised in an often entrepreneurial family or real estate background, you know, anything like that. And so I wasn’t exposed to that just yet. But then came either a [inaudible] or something like that that exposed me to this possibility of real estate and all of these, you know, multimillionaires who made their wealth through real estate and that, okay, you know, if these guys can do it, I can too. And so that, that started that, that real estate journey quickly bought a couple of trap flexes in Kentucky and made a lot of mistakes, learned a lot the hard way, you know, and, and a lot of sleepless nights and just working on, you know, trying to get more tenants or we’re working on units, whatever that was.

But I learned a lot and you know, then that, that transition to many things. But a, we moved to, I took a federal position was a big step up for most police officers that led us to where we’re at now in Virginia. But then quickly got into the syndication business after learning how we could scale that business so we can get into that. But, uh, uh, but that’s, you know, that’s initially how I was exposed to real estate and why it was just that need of, Oh, wait a minute, I’ve got to find some way to make more income. And in King real estate, yeah, it’s the lifestyle and then also the flexibility and also the, uh, the income as well. So do you still own those triplexes and Kentucky? No, we sold those when we moved to Virginia. Yeah, that’s probably a good idea. So what for your property is that you, I mean you syndicate properties now and we’ll get more into that as we go, but, uh, what type of properties does your firm do you guys target now?

Is it all multifamily or it is, we are strictly focused on multifamily and I liked being focused, you know, in one asset class, you know, for now anyway. And yeah, 150 plus w we’ll, we’ll look at anything a hundred or more units, but we’d prefer 150 plus and a class a B plus to be, I mean a C plus to B minus. There’s some type of value add. Yeah. And what, what type of markets are you guys currently looking in? Especially at this point in the cycle that you see still see it has a lot of opportunity or opportunity to roll. Yeah. There, I mean, there’s definitely opportunities. You know, it’s, you know, everybody sees this, this thing coming, right. You know, in the market and we feel like we know it’s coming. We don’t know when, but you know, people have been saying that for years, but, uh, but it’s, it’s more about being prepared, you know, for it and how you prepare a but too, but understanding your market.

But, uh, we’re in Colorado Springs at the moment. Um, we really liked Colorado Springs and we’ve been in Texas a little while and, and, which is still a great market, but we’re focused and I have a partner that’s in Denver and so we have boots on the ground there as well. And, and, uh, you know, that market’s growing rapidly and, and doing very well. Can you talk a little bit about the Colorado Springs deal? Was that like a five Oh six B or was that a five Oh six C that you could talk about or, yeah, yeah, it was a five Oh six B. I mean, it’s closed. It’s done now, you know, so, but yeah, 108 it was 180 units and Colorado Springs and we, it was a grassy C plus property. And, um, you know, with some light value adds, you know, that property specifically had a like a 20% loss delay.

So from the current rants to the market, rants are that 20% difference when they don’t put that deal under contract. And then, you know, by the time we closed, we had already closed or the units that had turned were already, you know, had gained 15% of that loss. And then, you know, and even now, uh, it’s, we’ve only been, uh, closed on that deal about two months now. And the units that are turning are, you know, 75 $80 above what we even projected. So, you know, it’s going very well. That market’s doing very well, you know, I mean, it’s known as well, like the fourth or fifth best city to live in. And, uh, you know, it’s, Oh, we really like it. That’s great. That’s a great, was that an on market deal or did you get off market through a broker? It was on market. Yeah, it was on market through a broker. Colorado is such a, such a hot market right now. There’s so many different, um, parts within it. I mean, obviously Denver as a Denver just is itself, but these, some of the other markets

within at that we were in looking at it as well. It’s just, it’s really great. Now, when we spoke a couple of months back, you had a potential investor that was international. Since our podcast is kind of based around international investors investing in the U S and


you had an issue getting him involved into one of your deals, what kind of problems did you have and how are you working with that investor now? Yeah, so we had,

well, we’ve had numerous investors, international investors that ever wanted to invest with us and so it really led me to start doing some research, right? Like I want to be able to accommodate them. And at the time from other sponsors that I’d talked to most are like, Oh no, you know, it’s too much of an accounting burden. It’s too much of a, you know, all these things. It’s just better to stay away from that. But I’m like, no, wait a minute. You know, I felt like we can figure this out. I know there’s guys who are accepting international investors and I know there’s a way that we can make this happen. We just have to figure it out. Right. And so, so at that time, you know, that investor specifically, he had not invested innocent indication in the U S at the time or invested in the U S and so, you know, we tried to start ham to, you know, getting that us entity created and, and some of that and getting it funded so he can invest that way.

And, but he couldn’t get it created in time or the U S entity and get it funded in time. So he wasn’t able to invest that time. But we’re hoping, you know, he’ll be prepared for the next one. And we’ve also had numerous conversations with different attorneys recently and specifically asking about, you know, structuring this and, and there’s numerous ways or it sounds a couple of ways it can be done, but, but one is that having the U S entity and them funding that entity, you know, the funding your deal and you know, we’re trying to figure out the, you know, confirming, you know, do we have to hold the 30% you know, and when do we do that? And, and some of those issues that we’re not, we’re just not familiar with that. We’re trying to confirm that we’re doing it correctly from the beginning.

Yeah, there’s a lot of facets to it, but it’s, it’s one of those things where if they’re interested in investing as a LP or even if they’re doing direct investing, they have to get that the entities easiest way always of getting set up first and then working with a CPA and of course an attorney that knows kind of how to deal with working with them and how to deal obviously with the taxes. I had a a, a CPA on that focused on with foreign investors and he was saying that, I mean, even the smallest things, even if they passed away and went into the state, and it’s much different, you know, with federal it’s $11 million really collectively for a, you avoid a state tax dependent, not, not counting on your state, but the thing is that it’s only $60,000 with international investors. So that could be one syndication with the minimum investment, which is traditionally $50,000 you could [inaudible] say, God forbid they, they passed away or something like this. I mean, the burden to their family of even just trying to figure out how to will that or how to, you know, if it has to be in a trust and all this kind of stuff now, yeah. You’re an expert on doing syndication obviously because of your show and with, with hundreds of different investors that you’ve worked with. What, when someone comes to you and speaks to you, whether it’s at a conference or they contact you through your website, what mistakes do you commonly see with new investors when they start investing? Yeah,

so, you know, getting in this industry is like a, is a massive topic. And, and I, I get questions every week. People schedule calls with me every week or, you know, and ask, well, how did you get started? How can I get started? What do I need to do? And you know, what if I do this? And, and you know, big thing happening right now is as raising capital, you know, like you hear that term capital raisers and I’m trying to delete that from my vocabulary that, that term capital raiser. I mean, because yeah, there’s so many issues with that. And even that, my partner and I’ve done so much due diligence recently and paid a lot of money with a big name attorneys just to confirm we’re structuring deals correctly and that there’s no issues going forward. But, um, but that’s a big way people get started.

But one mistake, you know, a big mistake that I see a lot of people doing, I feel is a mistake, is just like partnering with any sponsor or just like numerous sponsors and trying to raise capital. Even if they’re bringing a couple of hundred thousand, they’re just, you know, I see their deals, they’re sending them to me and they’re partnering with numerous, numerous sponsors and not really knowing that sponsor doing much due diligence. You know? And so you know, and what I, what I tell people is if you are building a business and this is going to be a longterm thing, you know you’re going to be connected to that sponsor for the life of that deal. You know, if it’s a five year hold, if it’s 10 year, like you are going to be connected to that sponsor for that entire time and bigger than that, these investors that you’re getting started with that are trusting you are going to be connected to that sponsor as well, you know?

And so if their communication is poor, if their track record is poor, all of these things, or you know, they don’t know how to operate a deal or the, there’s all, all these things that she needed and know that they know how to do, you know, and if they don’t do those things properly, you’re going to be answering those questions to your investors for the life of that deal. You know? And it’s just a hard way to get star started. You know, if you get off on the wrong step like that or, or, or, you know, separating from that sponsor then is almost impossible, um, for the life of that deal anyway. And so, but it can really hinder that relationship going forward to future deals with these investors who have trusted you, you know, of course. Um, and so, you know, there’s other things we can talk about too, just how to do that properly if you want.

Uh, but that’s, that’s one of the big mistakes that I see people doing now. It’s not, not really being patient, you know, and learning that side of the industry and really choosing wisely who they’re going to partner with, you know, and understanding really that, that whole mesh of how they come into the deal. Yeah. Because it’s, it’s a term that’s commonly thrown around and this is something with the deal that we closed a couple of weeks ago. We had our first call with all the GPS last night and it was, it’s now, I mean, but you have to figure it, yeah, it’s capital raising. They throw that around all day long. But it’s very important that they’re actually not just managing their investors, which is a given, but it’s also that they are half part of the asset management and they’re signing on the loan and they’re fully connected to the whole deal. Right. So it’s one of those things where you have to really 100% no, your other partners, because first of all, if you’re going to go in, you know, I’m going to bring this to the table, this asset management and some this money from my investors, you’re doing the same thing. We’re both signing on loan. We have to

make sure when it comes to closing that, you know, it’s not, well you got, you brought in more money but you’re getting more of the deal. You have to, you know, it’s, it’s very, you have to be very careful with it because when deals go sideways, that’s when all this stuff comes out. And every email you sent back between your GPS is going to come out when the LPs are looking for their money or looking for an explanation

or both. That’s right. And you know, I’m happy to share our due diligence with people and I, I do, I answer this question already. It’s cost us a lot of money, but uh, you know, I’m happy to talk to anybody that you know, that wants to understand this better. But one thing I say is, you know, if you’re in what we hear from attorneys all the time is if your compensation is based on how much capital you bring, then that’s the wrong answer. Right. But, but one thing I would say, you know, a question that was asked to me and how to look at this and I’ll throw this out as if you bring no capital to the deal, how much are you going to be paid? You know, and if the answer is zero, then [inaudible] it’s not legal, it’s not structured properly. And so, so it’s just something to think about. You gotta out of the value, like you talked about, you’re signing on the debt, you know, or you have some asset management experience or there’s something else as well that you can do.

So going in, you know, using that as a 14 to the next. And next question here. What, uh, with building, you know, syndicating, with kind of growing as a team versus growing as an independent person, obviously you made the decision to partner with people to really multiply your business. What is a win when doing the team building? What do you think is one of the most important parts of that? And is it kind of each person, each partner is now focusing on a different part of the business? Obviously we were just talking about capital raising or I mean, but there’s really gonna be a major person in there that’s working on deal flow. There’s going to be a major person on doing the marketing for the group and kind of it all, it all gets, it all gets combined to get the deal done. So how do you think about, like when you’re, when you’re looking for team members and how did that help you grow your business to where it is now? Over a thousand units?

Yeah. So I mean, syndication is a team sport. There’s no doubt about it. You go at this alone, you’re gonna be very lonely. You know, you are, I mean, you’re just not going to get near as far as fast. Uh, but, and so you do have to step out eventually and partner with people and, and find those people. But, but it’s something also that I, I took very slowly, you know, and finding that partner that I’m really gonna be married to, right. I mean, it’s a, you know, you’re going to be very connected to this person for a very long time. And so I took that very slowly and who I was going to partner with, uh, especially, you know, creating our business and splitting up these tasks. Uh, but, but really, um, you know, I’m, so, you know, my partner now, and I’ll just share a little story, but we, we met at a conference and we were at the time, at the same table with numerous people over dinner for a couple of nights in a row.

And I honestly had been praying about a partner for a long time and, and had had numerous people asking me about partnering and really held off on that cause I just didn’t infill that jive. You know what I mean? I just didn’t fill it, fill that there. And, and, and I bet I heard this guy talk and I heard about his experience and thanks. He had done in syndication already and, and his, his knowledge and, and it was obvious, he was very intelligent and, and so I just approached down the last night and said, you know, I, I’ve been praying about a partner for a long time and you seem to fit that mold. Um, but you know, and, and I would like to discuss that with you if that’s something you’re open to. And so I just took that step, you know, saying that this is what I’m looking for.

You seem to fit that, but it’s no guarantees, you know? And so that, that was only the very beginning of a lot of due diligence that he and I did. You know, we had, I went and spent time at his, I stayed at his house. So he and his family for days, you know, just getting to know them more than anything, looking at properties together and just doing different things. But really just seeing him with his family. Then we, we had numerous zoom calls, my wife and he and his wife and just asking really tough questions, you know, for hours, you know, just really, you know, I will way outside of real estate, just very personal questions too. And you know, it’s much deeper than real estate, you know, and we’re connected like this. And so, you know, we want to make sure that we’re aligned personally as well as professionally and just goals with our family as much as with real estate as well.

And so, you know, it worked out very well. It’s been a real blessing and it’s really helped us to move a lot faster because now he is focused on, you know, the asset management and they broke her relations where I’m more in investor relations and marketing, you know, and so, you know, we’re at, while he’s, you know, he’s much more of an expert in underwriting deals, uh, but he may underwrite 50 and then say, you know, okay, I’ve got a couple that we need to look at together. You know, we’ll come together and really look at those deals, you know, or walk them together or, you know, while he’s already done that walked him as well. Um, but, but it allows us to split those roles up so we can prefer, uh, perform, you know, much more professional tasks, you know, at a professional level because we can be focused and learn that side of the business a lot that are and, and increase that side of the business separately.

But putting us together has just really helped us to perform. Um, yeah, I mean I’d much prefer more professional level for one. Uh, but then I’m not having to do everything all the time. Right. And neither is he, uh, and so, uh, you know, but we have other partners as well that do lots of other things. But as far as, you know, the core team, it’s a, you know, it’s us. Yeah, that’s really important because it’s every, it’s definitely on your strengths. So if you’re, if his strength is going to be numbers, which a lot of people’s not, you know, that’s not their, their strength. And it’s also if they’re able to talk, if they’re introvert, extrovert and if they want to go to all the different conferences and do all that kind of networking piece, which is a huge time commitment obviously for you know, personally.

And then [inaudible] just a, you know, you really need to have two different people at least plus all everybody else that goes with it because yeah, I mean right after you close a deal is just when the work starts, you know? That’s right. That’s right. I mean, not counting the management teams and all, you know, all of those people, but also use virtual assistants a lot, you know, and I’ve got a, a stellar just rockstar virtual assistant, you know, that uh, has taken time, you know, to build that relationship as well. But I encourage everybody to have a virtual assistant if you didn’t already. Yeah, I would definitely, I, I definitely agree with that. The virtual assistant is something will, it’s a pain getting it started. It’s like systemizing your business where you’re writing down everything and like it’s, you know, one, two, three, four. Well, once it’s done and you look back after it keeps on rolling and after it’s actually rolling well on your own, this is fantastic because the amount of time is just taking stuff off your plate and simple tasks now are now gone in.

You’re really dealing with the high level kind of a process. So it’s very interesting that you’ve, you’ve really focused on syndication. I know there’s not another, there’s not another podcast that I know of that definitely, it’s not daily that the has syndication as the, as the core focus. So you’re, you’re at 300 podcasts, I think, coming up this week, right? Is that correct? That’s correct. We’re about to Peter. I mean, I’ve recorded way more than that, a lot more than that now, but uh, but yeah. Yeah. Probably this week we’ll be, we’ll publish about around 300 or more. So tell us a little bit about [inaudible] about your show, about the guests that you have on, if someone’s never heard of it or has never listened to it. Yeah. The real estate syndication show, it is a daily show. Charles mentioned and, and you know, we’ve just interviewed all the experts in the industry and that’s, it’s been amazing for that.

Just a great networking tools. I’m sure you’re experiencing as well, Charles. You know, it just allows you to have this face to face time with everybody in the industry. But if you’re looking for, you know, people to invest with, you know, it’s a great place for passive investors to go find that operator they’re looking to invest with and listen to them on the show, you know, or also, you know, you’ll hear, you can go to the website and you can search different types of things, you know, things you’re looking for as far as syndication and you know, and you’re going to see different shows come up where we’ve talked about those things. Um, you know, from all aspects of the business. And so I didn’t, I didn’t, you know, when we started, I didn’t know of another syndication podcasts or lots of real estate ones and I bet none that were focused on syndication.

So I thought, okay, you know, let’s make this simple and let’s, let’s just make it, you know, show exactly what we’re focused on. And, and that’s our business is the syndication model. And so that’s why, you know, why not focus on it but, but yeah, the show was going great and, and you can hear, you know, every kind of industry bleeder and men’s, I’m lots of people that are doing some amazing things, you know, in this business and from our every kind of commercial asset. That’s awesome. Yeah, it’s when I listened to, when I listened to your episodes and it’s, it’s if anybody wants to learn anything about syndication or any other thing that we’ve been talking about, any sec rules that are very, very confusing if you haven’t heard of them a dozen or two dozen times. But, uh, he always has on attorneys.

He has on CPAs, other syndicators, uh, very well known syndicators and uh, so it’s great if anybody’s ever interested in syndication, definitely subscribe to his scrubbed, his podcast and also your YouTube channel too, cause you do a video, is that correct? We do. Okay. So, yeah. Awesome. And, um, so about your company life fridge, we were going through it and you were saying that you guys focus on multifamily, obviously 150 deals, plus you’re in a number of different markets. I was looking at everything from North Carolina, Colorado, Texas, and tell us about your, your other mission with in regards to you and your wife in regards to adoption and how that coincides with LifeBridge capital. Yeah, appreciate you asking about that. I always love sharing about, you know, that our passion about helping, helping families adopt children and my wife and I just brought home number three through adoption and it is such a roller coaster, the adoption process, you know, it took us two years for this adoption process.

Our first one was two years to the month and the second one was a little bit of, we’re quite a bit faster, but still just the bachelor journey is [inaudible]. Uh, I just am horrible, you know, there’s no other way to say it. They really just take advantage. But so many people take advantage of you in the situation, you know, the adoptive family, financially and emotionally and all those things. Um, but I like to tell people it’s so worth it. You know, when you can bring that child home, you know, when you can bring them into your family. And our family has been extremely blessed by adoption, but that because of those struggles and because of all the families that we know who would love to adopt, you know, and when we say, you know, it’s gonna, you know, it could cost 40 to $60,000. They’re like, well, wait a minute Whitney.

You know, that’s, that’s more than I’m making a year. You know, how can we do that? And so that’s where we want to come along beside them and say, you know, if you’re, if you will commit to it. So this adoption process, if you’ll commit to bring this child home, you know, we want to be able to help you financially. And so we’ve committed at LifeBridge capital as, as committed half of our profits to our own nonprofit. We’re in the process of getting that started at, at the moment, uh, the actual nonprofit. We have other, other nonprofits that we’ve partnered with up to this point, but, uh, committing half of our profits to helping these families. And so, you know, we just look forward to, you know, more, more children being adopted and you know, helping these families get through the process as well. So you have your own nonprofit, is that correct?

I didn’t see it on when I was looking at it. Oh, it’s not a, it’s not, I guess officially established. We are in the process of doing the paperwork now. Okay, awesome. Well let us know when the, when you actually get that finalized. I imagine it takes some time to do that. And is it, how long does it usually take? Not, I haven’t yet. You know, too much about adoption before. And I mean I know I’ve heard those costs before the 40, 60,000, which is outrageous. But what is a timeframe on something like that where you made the decision and then till it happens? Yeah, you’re looking one to two years. Most of the time, like I said, two of ours were two years long. The adoption process, our second was only about nine months, which is kind of unusual. Um, but uh, but yeah, it’s, it’s a very long process.

Wow. Well that’s fantastic. It’s always great to have a cause and give back with eh in one way or another with your business and also personally so. Well Whitney, I really appreciate you being on the show today and what I’ll do is all the links to LifeBridge and information on Whitney. I will put into the show notes and people can get in touch with you as they’re on their way. I have the LifeBridge capital website. Is there any other way that or is that the best way for people to read now you can obviously contact us on the website LifeBridge you can email [email protected] you can also call or texts me (540) 585-4338. Okay. I will put all that information into the nodes for anybody and that’s great. Well. Thank you very and have a great rest of your week. My pleasure. Thank you, Charles. Thank you.

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About Whitney Sewell

Whitney Sewell is the founder of Life Bridge Capital and works with accredited investors to improve their investment returns via multifamily syndication. They have invested in over 900 doors valued at over $120 million. Whitney hosts The Real Estate Syndication Show, a daily podcast, interviewing experts providing cutting-edge tools and strategies of the syndication business. He and his wife Chelsea have adopted three children and donate up to 50% of their own profits towards adoption causes.

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