WS1072: Scaling and Networking While Being Legally Compliant with Whitney Sewell

EPISODE 1082

[INTRODUCTION]

0:00:00.0 ANNOUNCER Welcome to the Real Estate Syndication Show. Whether you are a seasoned investor or building a new real estate business, this is the show for you. Whitney Sewell talks to top experts in the business. Our goal is to help you master real estate syndication. 

And now your host, Whitney Sewell.

00:00:24.000

Whitney Sewell: You definitely have to think about are you 506(b), 506(c). And, can you promote a deal? Can you blast it out? Can you not? So, every project that we have done has been 506(b) up to this point, except we launched a fund, we have a fund open right now. This 506 (c), by the way. So, I can blast that out. But, anything before that, I could not and had to have that pre-existing relationship. So, you’re talking about scaling and networking while staying compliant. 

Well, for me, it was developing that thought leadership platform, creating that podcast, that daily podcast that helped me to be in front of thousands of people. And even be shoulder to shoulder for even virtually with thousands of experts in the business. That is as far as scaling, networking, it’s about educating. I can promote educational content as much as I want. I cannot promote a deal unless it’s a 506(c) deal, but if it’s 506(b), I cannot promote those projects, right, except to our network that I have a pre-existing relationship with. 

And so scaling, it’s about who you are, your business, your mission, those things. It’s not about a specific deal, unless it’s 506(c) then obviously, you can talk about it. But the podcast has been a game changer for the scaling, networking, because remember, you’re interviewing these guests and then they are also promoting that to their network. So, you’re helping promote them, but they’re also helping promote you also. So, sometimes I thought leadership platform is a great way to help promote yourself as an expert, and really for you to educate yourself in a big way. I mean, it’s been like a university to me, it cost as much as a university as well. But, which is a great way to educate yourself and blast yourself out to many people’s networks without actually worrying about the legal component cause you’re not talking about a deal. 

So, the thing about 506(b) is that you can take up to 35 non-accredited investors. And so, you need to know who your network is, like who are you gonna raise money from today. And if most of them are not accredited, then you need to do a 506(b). And here’s the thing too, just because you can advertise, it does not mean that people are going to invest with you. It doesn’t mean that people are going to trust you. You’ve not built that trust and the loyalty component, if you haven’t done that, then 506(c), it may not do you any good. You can blast it from the rooftops and you could put it on billboards if you’re doing a 506(c) deal. But everyone that has to be accredited. Then you do have to take them through an accreditation verification process, so your company is required to verify the accreditation of each investor that invests in a 506(c) deal. 

And so, like I said, just because you can’t advertise in it, everybody thinks, “Well, I’m gonna be able to blast it from the rooftop and then I’m gonna be on a raise all this money.” Well, the investor is gonna ask you, “Well, tell me about your track record. Tell me about the deals you’ve purchased. Tell me about the deals you’ve exited, you’ve sold.” Maybe by doing a 506(c), that’ll help you get in front of that investor. But, they’re probably not likely to invest. And so, I would encourage you again, focus on the relationships, focus on how you’re building that loyalty component, because over time, just like us, we did all 506(b) deals until this fund.

And now, we have so many sophisticated investors that want to invest in it, but they can’t. We’re gonna have other ways that they can invest, but you have to have that loyalty component amongst thousands of investors before I would probably encourage you to do the 506(c) deal. Some people will have the money raised ahead of time, they’ll still do a 506(b) deal just so they can advertise it and really not even expect any new investors to invest that time, but really just a way for them to advertise and blast out a deal. I mean, that’s a technique some people will use also.

One thing I did not do a great job at early on was having funnels in place, ways to automate 

some emails and have those created. I mean, I was doing it manually, which I would not recommend completely, some things you need a personal touch with, but for me, now, somebody sends up on the website, obviously they hear the podcast, they hear me on a place like this even, or maybe I speak in an event. They go, sign up on the website, they get a call usually from somebody on our team on that day, maybe right away or within 24 hours. So they get a call, so there’s that personal touch. They also get an email, they would get a text message as well telling them if they missed the call, anything like that. And ultimately, there’s different pipelines that we have different types of emails. Or they sign up on the website, or if I’ve had a call with them, or somebody on the team has a call with them. There’s different things that will happen.

And so if it’s a team member that has that call with him, well, then the emails are addressing them for them. But then there’s also chains of emails that are educational from me, so it may be like if you could think of 25 to 50 different topics that you could just talk about for like two minutes each, right, or a minute even, start creating videos. That’s what we do here. And so, somebody on our team just sort of creating lists of potential emails for us to send out for our educational purposes for our investor base. Anything you can think of around the commercial real estate business or things that passive investors need to know. 

So once a week, or about every 10 days or so, they get a new email from us and it’s maybe a one to two-minute video of me just explaining something. And so, we’re constantly staying in front of them, but it’s something short, something educational, that’s beneficial, if it teaches them something, so it’s a positive thing, just staying in front of them. And then also having that person on my team to help me with that has been crucial. If you can find somebody in-house for a little bit of that, or at least the thought process of putting some of that stuff together or the components on the back end, so useful, so you’re not having to spend that time on that. But getting them to the call with you is so important. So if they haven’t had a call with you yet, you can’t blast that deal out, a 560(b) deal that you’re doing.

So, you gotta get them to that call, right. So call, leave a message. Wait a week, call them again, say, Hey, they signed up with you, so there’s some interest there already. So reach back out, send them a message, say, “Hey, we’d love to follow up with you and answer any questions you have or help you in any way I can with commercial real estate, whatever that may be.” So reaching back out, follow-up, being consistent, and then staying in front of them was something educational, something that’s helpful, those things. But something that’s very short and sweet, so they know they’re not gonna spend 30 minutes reading an email most likely. So, something short and sweet.

How am I using my time? Because really, I’ve missed a lot of time with my family over the last few years, and then it’s like I wanna get that back, right? But it’s a struggle as an entrepreneur, as a business owner. I bet a lot of you probably struggle with shutting that off, punching in the clock at the end of the day and leaving your business in the office. Right? It’s very difficult to do. But for me, my alarm goes off at about 4:50. You asked a little about the morning routine, a little bit about 4:50, the alarm goes off and it’s just time to, about 10 minutes, just wake up and really get coffee started and drink some water. And then coffee’s made, and then I read for about an hour, so from five to six. And this is time with my wife as well, so she’s reading. She’s up as well. She’s reading then, we’re both praying together or reading the Bible, and then we also have another educational book of some kind, personal development or real estate book, whatever it may be, that I’m reading in addition during that time. But then say, 6:00 to 6:30 exercise, some type of exercise, sometimes it’s riding a horse now, it’s not just an exercise routine, but some type of exercise in the morning. And then it’s shower, breakfast, and into the office. But often I’m trying to have breakfast with the family too. 

So, I’m trying to be more purposeful about blocking that time during the day of breakfast and lunch where I can actually have those meals with the family while I’m working at home. So, that morning routine is pretty standard. But then throughout, say a Monday is usually team meetings until noon. I’ll meet with almost every team member personally or one-on-one and we go through certain KPIs. What are we working on? Where are we at on this? How are we doing? Like, let’s make some decisions about these things so we can move forward, whatever that may be. And they have different ways that we track, different analytics that they really report to me during that time. And so, we can talk about what’s working and what is not. But that’s a Monday, and Monday afternoons, I try to leave pretty open. And sometimes I’ll put other meetings in there that are kind of unscheduled, whether that’s with investors or whether that’s with new potential partners or whatever. Tuesdays are usually my recording days. Now I’ll do six or seven interviews on those days. Now I’m not doing 20-15 anymore, I do not have to do that many in a day. I don’t. It’s a crazy, crazy, crazy day, even doing six or seven, a pretty full day, but even those days, sometimes I’ll still be interviewed on other shows or take calls, those things. The Wednesdays, so something that happened to me recently, and I’ll share this with you, ’cause I want you to know this, your week just fills up, if you let it. It’ll just fill up, rght. And if I have open time on my calendar, it’s amazing what my team will put in there. There’ll be something. I mean, they’re just meeting after meeting, it’ll be something that just fills up my day. And a few months back, actually, I guess it was like February, I had an all-day meeting scheduled, and the night before, we received a big snow ,for us, anyway, and it got cancelled. 

Well, immediately that got me thinking, “Man, how am I gonna use this time? I got like a whole day here, right.” So, that next morning was one of my most productive mornings that I’ve had in a long time. Okay, there was nothing scheduled, I had time to just think and start his knocking stuff out. And so I told my assistant right there, “Hey, we’ve got to implement this, I have to have more time to think, more time to just work on top of the business instead of in the business.” And so, every Wednesday now for almost until like 11 or 12 o’clock, there’s nothing scheduled. We call it productivity time, there’s nothing there, and sometimes I do have to schedule a meeting there, but our goal is for me not to. 

Thursdays, Fridays are usually full of investor calls, and I mean new investors, so that new intro call where I’m talking to them, answering their questions and sharing about Life Bridge Capital  or myself, and documenting those calls. So, if we’re doing a 506(b) deal, I can say, I have this call with this person on this day, this is what we talked about, we talked about they know the risk of investing all these things before they ever invested with us. That’s typical, like this week, I’m traveling Thursday, Friday, Saturday, or this weekend next week, to different conferences I’m speaking. And so that changes, it fluctuates some, but that’s a typical week for me. 

[OUTRO]

0:10:30.0 ANNOUNCER: Thank you for listening to the Real Estate Syndication Show, brought to you by Life Bridge Capital. Life Bridge Capital works with investors nationwide to invest in real estate while also donating 50% of its profits to assist parents who are committing to adoption. Life Bridge Capital, making a difference one investor and one child at a time. Connect online at www.LifeBridgeCapital.com for free material and videos to further your success.

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