Whitney gets more than 20 calls a week asking him various questions. So today, he takes time to answer one of them on the show. Recently, he received a call from ‘John,’ who is looking to break into the syndication space. Having found a 506(c) deal, ‘John’ felt that because he could advertise, this was the deal that was going get him started in syndication.
Listen to the podcast here:
In this episode, Whitney shares his thoughts on why starting with a 506(c) deal can prove to be very difficult. He also emphasizes that without building strong relationships, how good a deal is on paper does not matter. Whitney also talks through why it is better to start with a smaller deal, how partnering with someone more experienced might be the best strategy for a first deal, and the importance of knowing and growing your investor list. Tune in today!
Key Points From This Episode:
- As a syndicator, you should know the difference between a 506(c) and 506(b) offering.
- With 506(b) offerings there can be up to 35 non-accredited investors.
- Why investors often get frustrated with a 506(c) deal.
- Know your investor list and who is accredited and not.
- Counting on the fact that you can advertise with a 506(c) can be a problem.
- If it’s your first deal, find a partner!
- Why it is important to build relationships before you have a deal.
[bctt tweet=”Everybody seems so tempted to do the 506(c), because now we can advertise. Well, that’s not all that it’s cracked up to be. — @whitney_sewell” username=”whitney_sewell”]
About Whitney Sewell
Whitney Sewell is a country boy from rural Kentucky. He grew up riding horses and has always driven a Chevy truck. He is a veteran of the Army National Guard and spent all of 2005 deployed in Iraq. He was awarded Soldier of the Year that year. When he arrived home, he began working for the Kentucky State Police and courting his lovely wife, whom he has now been married to for 10 years. Whitney and his wife, Chelsea, have two sons who came to their family by adoption. As of now, they are in the process of adopting their third child. They began investing in real estate in 2009 when it became clear that a career in law enforcement was not going to afford them the ability to live off one income as they desired, and started Life Bridge Capital in 2017.
Life Bridge Capital LLC works with accredited investors, helping them improve their investment returns via the exceptional opportunities that multifamily syndication offers. Whitney has always had a passion for both real estate and helping others, and Life Bridge Capital LLC allows him to do both, while also funding a very important cause that has become deeply personal. This becomes the best of both worlds for investors. They can receive exceptional returns financially, while also helping change the lives of orphans around the world, as well as the lives of the families who adopt them.
Whitney is quick to point out that while this is his passion, he doesn’t make this the main focus to investors, but does hope a certain percentage feel good about what Life Bridge Capital does. “We provide a fantastic return for our investors, and that’s why someone should invest with us first and foremost. However, it is my hope that this component of our business – us giving 50% of our profit to adoption – perhaps helps sway someone to work with us, assuming all else is equal, of course. This is our calling, but our investors can smile knowing that just by working with us, they helped a little bit too.” We now have invested in over 400 doors and am on track to be over 1000 doors by mid-2019.
Whitney is the host of The Real Estate Syndication Show, a daily podcast where he interviews experts in the real estate syndication business and provides essential content for his listeners. Life Bridge Capital’s motto is: making a difference one investor, one child at a time.
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