Whitney Sewell is the founder and CEO of Life Bridge Capital, a leading real estate syndication company that offers its investment partners the opportunity to leverage shares of multifamily rental properties into a passive monthly income. In this episode, he shares the details of his journey from his background in military, law enforcement, and horse training to becoming a real estate syndicator with $350M in AUM.
Whitney Sewell | Real Estate Background
- Founder and CEO of Life Bridge Capital, which is a leading real estate syndication company that offers its investment partners the opportunity to leverage shares of multifamily rental properties into a passive monthly income.
- Previous episode: JF1690: What Are the Challenges You Faced Starting Your Syndication Journey?
- Portfolio:
- $350M in AUM
- Based in: Roanoke, VA
- Say hi to him at:
Click here to know more about our sponsors:
TRANSCRIPT
Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I'm Joe Fairless. This is the world's longest-running daily real estate investing podcast, where we only talk about the best advice ever. We don't get into any fluffy stuff. We don't like that fluffy stuff, only the real, hard-hitting stuff. With us today to talk about that is Whitney Sewell. How are you doing Whitney?
Whitney Sewell: I am very blessed, Joe. Grateful to be here.
Joe Fairless: Well, I am glad that you're here. This is Whitney's first time on the show, and I would venture to say that it's also a record for the show that he has hosted this show, one time at least. Was it just one time, Whitney?
Whitney Sewell: It was.
Joe Fairless: He hosted the show one time, episode 1690. The show title is "What are the challenges you faced starting your syndication journey?" So he has been a host of the show, but yet he has never been interviewed to be a guest on the show. So today, we're turning the table and Whitney will be an interview guest. We had a guest host back then, so now, approximately 1,000 days later, he will be a guest. I'm looking forward to our conversation. I've known Whitney for many years... I don't know, Whitney, do you know how many? Like six, seven, something like that? Five?
Whitney Sewell: Yeah, at least five or six years.
Joe Fairless: Five or six years, and he's a great person... And let me tell you a bit more about him. CEO and founder of LifeBridge Capital. They've got $345 million worth of apartment communities that they syndicate. They just closed their first fund. He's also got a daily podcast, his own podcast, The Real Estate Syndication Show. Based in Roanoke, Virginia. But that being said, do you want to get the Best Ever listeners a little bit more about your background and your current focus?
Whitney Sewell: Of course, Joe. Background - March 2001 I joined the military; I had no idea shortly thereafter I would be going to Iraq and spending a year in combat. Unfortunately, not everyone in my squad made it home, so obviously, just lots of lessons there learned... One thing the military I think taught me was having a never give up mentality. It's just not an option to give up when you're in combat. Other people are depending on you.
But I came home, thank the Lord, and tried to figure out what I was going to do for a career. Policing seemed like a great transition for me, and I was hired by Kentucky State Police. 1,200 applicants, five positions. I loved working the road as a police officer. I love the service, the discipline, the uniform, all those things. However, I got married, and then my wife and I just passed each other in the hallway the first full year of marriage, and quickly discover it's going to be hard to support a family on $28,000 roughly a year... Plus just working all the overtime I possibly could to get over to 33k, 34k. So there has to be something different that we can do to supplement our income.
I wasn't exposed to real estate at this time or before this, but I read that purple book amongst many others, that exposed my thinking to what's possible, and really, that so many people have built wealth in real estate. And I thought "Okay, if all of these people can do it, I can do something." So right away, Chelsea and I, we jumped in and started trying to learn about real estate. This was 2008-2009 now, and we bought two triplexes. We made a ton of mistakes, self-managing, and I learned a lot the hard way.
Newly married, we liked to just make things as crazy as possible. We also bought our first house, remodeling it while living in it, still working the crazy schedule... It was quite stressful on a new marriage. Thank the Lord we're still married today. But it was a lot of stress. So I kept seeking a way to increase my income. I became a federal agent, moved to Virginia, where we live now. That was a real blessing for us; better hours, better income, all those things. We were still pursuing real estate.
I bought a 15-unit complex with a partner at this time. Still learned a lot the hard way, and I really thought that it was so much bigger than I ever imagined, Joe; even a 15-unit. But I also took the next step most people take, I think... I'm not sure if you took this, Joe, for becoming successful in real estate - I became a professional horse trainer.
Joe Fairless: [laughs]
Whitney Sewell: It was just a passion of mine I had since I was a little boy... But it became a second full-time job and then some. So I grew in that, and started making good money doing that, but there was a major turning point a few years into that, where my wife and I were walking on the beach, and we just asked ourselves an important question, Joe. She said, "Ultimately, is what we're doing right now gonna get us where we want to go five years from now? Or even 10 years from now?" And the obvious answer at that time was absolutely not.
So this was September timeframe, and then we came home and sold our farm. We decided "If we're ever going to do this, now's the time. We put the farm on the market, we're moving out right after Christmas." And that's actually the same time you and I met as well.
And I've learned about syndication, I'd started to learn about this thing, commercial real estate, and that it wasn't just for those that had been in the business 20-30 years, like I thought. I never imagined being able to buy a 100-unit complex, or a $10 million building; that just did not seem possible for me. But once again, I started going to conferences, I started meeting people who were doing it, and my eyes were exposed, again, to "If all of these people can do this, I can do that, too. I can figure this out." And really just a scalable business model that seemed doable. It seemed possible for me then. But selling the farm was a massive commitment for us as well. I think that was crucial, just to be all-in as well.
Another thing, as I know you know, Joe, but as our big mission, our big Why at this time - we were pursuing our third adoption process, and when we learned about adoption many years ago, we learned just about the need, and the costs, and all those things that hinder so many families... And it pushed us to start a foundation that helps families adopt children. So that was a big mission behind LifeBridge Capital, but I would say too that during those times when it was really difficult to get the business started, that was a mission for my wife as well; she couldn't care less about real estate, but she was 110% into supporting our mission.
Shortly after the podcast came along, and the daily show, which you mentioned... 1,400 [unintelligible 00:06:53.04] shows now. I met my business partner, Sam Rust, and he had more deal flow, I had more capital, and we really took off once we were able to meet. Now it's multifamily, all value-add typically type projects in Colorado, and Idaho, and we have about 350 million in assets.
Joe Fairless: When people hear 1,400 episodes, that's probably impressive, but I want to be clear about - 1,400 episodes, divide that by 365. That's 3.8 years. Almost four years that you've been doing a daily show. Is that five days a week, or seven?
Whitney Sewell: Seven.
Joe Fairless: Seven. So yes, I did the math right. So it's almost four years that you've been doing dailies. So every single day, for almost the last four years, there has been an episode published. What has been the main benefit of doing that? And then what's been a downside of doing that?
Whitney Sewell: One of the main benefits... There's so many that have come from the daily podcast, and I glossed over that a little bit a minute ago, but if I had to pick one, I would say personal development, because it's almost infinite returns, right? Just the personal development, how that changes so many things... But man, I never imagined ever speaking, hardly ever, into a microphone. I started a podcast, and then speaking on stages... I just never imagined being in front of so many people, and the learning, the building the teams, and hiring people that it pushed me to do... So many things, but that's one of the main benefits.
But I would say the next bigger benefit too would be the network. Growing the network. Meeting so many great people in our industry, and learning from them at the same time. Being able to ask all those questions that we have. One of the downsides of doing a daily podcast, which you know so well, is the time commitment. I was still working full-time, believe it or not. I was off work from my federal position every other Monday, and our team knew "Hey, you'd better have 12 to 15 interviews scheduled that day, two days a month." My wife would call it my marathon day. It was as hard as I could go, nonstop. Literally, she would pack my lunch to go to the basement. It's just madness, right? But that level of time commitment... And I think I underestimated even the commitment it took for my family to pull that off also, for my wife and kids, being gone that much.
Joe Fairless: I'm nodding my head, because I know your feeling, and I know what you mean, from all those [unintelligible 00:09:11.15] I want to go back to the question that you and your wife asked when you were walking on the beach, that changed the direction and the trajectory of your career. You asked "Will what we're doing now get us where we want to go?" And I think you said "Absolutely not", or I think I remember you saying something like "Definitively no." And that piques my interest, because I heard what your background is, and you had bought two triplexes, and you also had just closed on a 15-unit with a partner... So why wouldn't that momentum, if you go from two triplexes to a 15-unit, and then you do well on the 15-unit, you 1031 that into a 30-unit, or a 45-unit, or a 60-unit, and just keep going... Why wouldn't that get you where you want to go?
Whitney Sewell: Good question. It does get some people maybe where they want to go. It was not going to scale fast enough for us. But another part of that though - the horse training business was never going to create the wealth that we had wanted, or for our children, or to be able to help enough people as well... So while that was going pretty well, I had to cut that off completely. I knew it was never going to be passive. Those people wanted me to be the one to train their horses, or me to be the one to hold the clinic, or whatever that may be. It doesn't mean I can't ever ride horses again, but at least for a period of time I've got to cut that off. So I still do the federal agent position, and still support the family. The kids still have to eat... But still have the time to push into syndication.
But when I started learning about syndication, Joe, it was like, "Okay, when I can buy a $30 million project, I can help, obviously, lots of investors, I can help that many more families through the foundation, because it's such a bigger deal, there's so much more income, there's so much more capital." Obviously, it's a lot more work I would say as well, but we can move so much faster and help so many more people. And I think almost the same amount of time as it would take to buy another 15-unit, or even to buy the next 30-unit. We could have bought a 100-unit or a 150-unit.
Joe Fairless: Having that greater purpose. That's the key. It's about the [unintelligible 00:11:14.24] help enough people get everything they want, and you'll get everything you want. Perhaps that might be to capitalistic for your example, but it's a close cousin too concept that you're talking about.
Whitney Sewell: For sure.
Joe Fairless: So let's talk about your business. We heard a 15-unit and two triplexes, but yet I introduced you having 345 million assets under management. What was the tipping point for that?
Whitney Sewell: The tipping point was definitely meeting my business partner, Sam Rust.
Joe Fairless: Why?
Whitney Sewell: Complementary skill sets. Ultimately, he had deal flow, I'd been networking and meeting investors as hard as I could go for a good while at that point, and it allowed our first deal to be $20 million together.
Joe Fairless: Where did you meet him, and what was your previous deal before that $20 million deal?
Whitney Sewell: Yeah, so the previous deal before that would have been the 15-unit, and then I partnered with you on a couple of projects as well, which was crucial in just launching and getting started, no doubt about it. And then shortly after that, Sam and I met actually at the Best Ever conference. So at your conference, we met... We were just at dinner one night, I heard him share about his family, his faith, what he had done in business, even a smaller deal that he had already syndicated... I could tell he was very gung-ho, and was somebody that I could connect with.
We actually talked a few times, but then the last night of the conference, I just pulled him aside and said, "Hey, Sam, my wife and I have been praying for a business partner for a long time. You seem to fit the bill. I'd love to get to know you better, ultimately." I made it very clear, "That doesn't mean we're gonna partner, but I want to get to know you." And he was excited. This is like 10:30 at night now, the last night, and he took me to the airport, and took me by his house as well, so I met his wife that night at like 11 or 12 o'clock, and actually she had homemade bread and coffee there when I got there, and --
Joe Fairless: Oh, my...! It's amazing.
Break: [00:13:08.20] to [00:14:14.03]
Joe Fairless: What did you put on the line for that $20 million deal? What were you risking?
Whitney Sewell: It's a good question. For that $20 million project for us, the risk was all the work we had put in up to that point. The network that we created... Just the time spent; the podcast, all this stuff that we had been working so hard on, "Man, now it's our time to see what we can do. Can we actually do it?" So obviously, Sam and I both had earnest money in, and those things, but --
Joe Fairless: How much? Do you remember?
Whitney Sewell: I don't remember exactly...
Joe Fairless: About a couple hundred thousand...?
Whitney Sewell: At least 100k to 200k, I would imagine.
Joe Fairless: And I'd imagine it was non refundable...
Whitney Sewell: Right.
Joe Fairless: So you had 100k to 200k approximately non refundable. And were you in a position to lose that should the deal not happen?
Whitney Sewell: No way. No way. There were months, Joe, that I didn't even know if we were gonna have the capital to keep producing the podcast, much less lose that kind of capital on that first deal.
Joe Fairless: So what gave you the faith to put that non refundable money down and to buy a $20 million project when you hadn't done that before to that level?
Whitney Sewell: When I think education, mentorships obviously with you as well, Joe, during that time, and now it's just people that surrounded us. Sam's ability to underwrite deals, and both of us coming together with our skill sets to look at this deal and ensure that this is a good deal in this market. We loved the market. We loved just the dynamics of this deal. We knew that there was tons of room for growth there. There were numerous things around that value-add plan, of course, but that was it.
Joe Fairless: Since that first $20 million deal to today, what has not gone right?
Whitney Sewell: I would say the time commitment for one, as far as the time away from family and children, for two and a half years or so. It was more than I expected potentially, but I was willing to keep pushing through to do that. Deal-wise, I would say probably that project - we should have raised more money for CapEx. It would be a learning curve there; believe it or not, the deal just went under contract to sale. So that project just went under contract, yesterday or today. So it's gone really well; the Lord's been really kind. However, we did learn a lot through that project, and that's probably one of the bigger things that didn't go well. We should have raised more money. It's just meant later in that business plan. Sam and I both have put money into that deal to finish some CapEx, or something like that.
Joe Fairless: As far as the time away from family and children, it's a trade-off... I imagine you think of it similarly, where you put in a lot of time now for even more time with family later... Because I'm building something that is scalable, and I can eventually step back from, at least a little bit, relative to where I'm at now. But knowing what you know now, with the time commitment involved, would you do it again?
Whitney Sewell: I would. I would do it again, in a heartbeat. If I knew then what I know now - yes, by far. I have more freedom now than I've ever had in my life, as much as I want to build into my own schedule. So it's just been a major life change because of the commitment.
Joe Fairless: So I think that's a part where a lot of real estate entrepreneurs and entrepreneurs in general can get tripped up... And that is the consistent commitment daily, over an extended period of time. We just talked about your daily podcast is approaching four years now, and you were going into the basement with a sack lunch to do 12 to 15 interviews on your day off from your full-time job... And that's quite a commitment. At what point, if any, did you think "Let's scale this back a little bit and let's pump the brakes some, and let's get some sanity here"?
Whitney Sewell: I don't think I could allow myself to think that way.
Joe Fairless: Why?
Whitney Sewell: It would have been too easy to quit, I think, if I had been thinking that way. I had a team behind me, a family behind me, we had a mission that was bigger than us... There's so many things... I look back and I think some of that was purposeful, some of it was not, but I was thankful that there was all of that driving us.
So I built a system as well. I knew -- if I produced a weekly show, Joe, I would have said "You know what, I can save the money, I can learn how to edit the audio and video, and all these things... I'll find the guests, and I'll write the intros. I can figure it out. I'll do it." But I know that I would have gotten behind, I would have probably quit then, because I could not have kept up. But because -- I call it over-committing. Because I over-committed in a big way, I had to figure out a new way to operate, and I had to figure out a new way, which was hiring people and creating systems that I had never done before. So I think a lot of that even pushed me to keep going.
They had people lined up. I had to keep going. These people are depending on me to be there. But not only that, my family could depend on me to keep going; these people that we were helping out through the foundation. They didn't know it yet, but they were depending on us as well. So that's a lot of what kept us going.
Joe Fairless: What's the challenge for you right now in your business?
Whitney Sewell: Learning to manage quick growth, fast team growth. So we're hiring great people... I think one challenge right now is the culture, and ensuring we're creating a great culture, and communication, and things like that amongst a fast-growing team.
Joe Fairless: What have you been doing to remedy that?
Whitney Sewell: One thing is learning more about the EOS system, or Traction entrepreneur system. I'm sure many have heard of it. But for us, it's been implementing specific types of meetings. And so we do a thing called a Daily Huddle... It's kind of daily huddle, but we do it three days a week. And it's really quick; every team members on there. We all say a success, we all say something we're focused on that day, and we say if there's anywhere that we're stuck. So that helps me as a leader to see, "Okay, what's everybody's focus? What is anyone stuck on?" And then immediately too I can say, "Okay, this team member, that team member, hang on here for just a minute after the meeting, and let's discuss that thing." Or I know this thing's coming up that we need to discuss. Or maybe they're focused on something that I didn't know they were focused on, and I need to help redirect their focus, right? So that's been very helpful.
We've also started L10s recently, or :evel 10 meetings, in an effort to help everyone operate at a level 10. And that's a learning process in itself. We're all virtual, but it's helped us to see each other more, helped us to know more about what everyone does, what everyone's working on... So it's just encouraged a lot of communication. However, they're very structured, there is an agenda, and the meeting scheduled for an L10 maybe an hour and a half, but if we're done in 30 minutes, we're done, and we're moving on to something else. So it's we're in, we're out, but it does provide a great way for us to communicate.
Joe Fairless: How do you structure an L10 meeting?
Whitney Sewell: So we'll start off with five minutes of successes; what are successes anyone's experienced over the last seven days, and that could be personally or professionally. We'll talk about some numbers that we're tracking, or where different people are at, at a really more organizational level. Maybe investor relations, or maybe calls that have been made, or on the marketing site, how many podcasts were done, or how many deals were underwritten, those things. Are we hitting those benchmarks?
And then we'll talk about rocks. Rocks are actually 90-day goals, and we'll try to figure out where's each team member at on their rocks. And we're just moving into a phase now where we're going to encourage team members to have three personal and three professional rocks. So we'll talk about those during the meeting as well. Or if anybody's stuck on the rocks, or they're behind - we track those.
And then we'll have what's called an IDS. Identify, Discuss and Solve issues. So people bring up issues. Preferably they emailed it to me or whatever before the meeting or the day before, and then we'll prioritize those. We'll try to talk through issues that the team member is having as a team as well; oftentimes an issue that someone's having may involve numerous team members, so that's helpful at that moment. And that team member leads that discussion around that issue that they're experiencing.
And then we move to a time to-do. So what came out of that meeting; what came out of the issue-solving time, what needs to happen between now and the next L10s over the next seven days. Hey Joe, you need to do this; hey, Amy, you need to do this. And I'll go back over those. I'll make notes of those as we're going. So I'll conclude the meeting, "Hey, this is what we're going to try to accomplish over the next seven days. Here you go. Have a great day. See you at the huddle tomorrow", and then we move forward.
Joe Fairless: Taking a step back, what's your best real estate investing advice ever?
Whitney Sewell: You must have a great mentor. And numerous, most likely. Have a great mentor to bypass failings, right? Have somebody that has been there and done it; I think that is just crucial in speeding up your process, but also just your confidence level.
I think that was crucial for me, and with you, Joe - having somebody that's been there and done it, whether it's podcasts, whether it's that first deal, whatever it may be... That just elevates your confidence from saying, "Okay, instead of doing the 15-unit, now I can do a 25-unit." "No, we can do a $20 million project." That's a massive job, and it's because of mentors.
Joe Fairless: Been there, done that, and actively doing it, and knows how to teach how to do it. Remember, Tim Ferriss talks about that a lot, where he interviews high-performers, and it's one thing if a high performer is just a stud, but it's another if they can communicate how they became that good at something, and then teach others. So it's a different skill set. And I by no means am promoting my consulting program. It's not something I'm actively looking to grow anymore... So this is really about the importance of finding someone or a group that can help all of us get to another level.
I personally am in a group, a mastermind to help me professionally and personally do that, and Whitney's in at least one group I know of, mine, and there's many other ones. I remember Tony Robbins talks about where the expectations of our peer groups, and he used an example - actually, it was a military example... Someone - I think it was a Marine - was saying, "Why do some of my fellow Marines, when they get out, they excel, and others do not?" And he said "One reason is because when you're in the Marines, or in the Army, you're around people who are performing at an incredibly high level, so that elevates the group. But then when you get out of that environment, you've got to either do it yourself, or find others who are similar to that, and it helps you continue to stay at that level."
So surrounding yourself with a peer group who has high expectations is instrumental in being successful, in any business, let alone in real estate. We're gonna do a lightning round. Are you ready for the Best Ever lightning round?
Whitney Sewell: Let's do it!
Joe Fairless: Best ever deal you've done?
Whitney Sewell: Our second syndication, 216 units in Colorado Springs; value-add, sold it in 18 months. 2x investor returns.
Joe Fairless: What made that deal perform that way?
Whitney Sewell: The market? [laughs] A lot of that was market dynamics, no doubt.
Joe Fairless: What market?
Whitney Sewell: Colorado Springs.
Joe Fairless: What deal have you lost the most amount of money, and how much?
Whitney Sewell: It would be those triplexes that I talked about, the first ones that we purchased... And I would say instead of a dollar amount, it would be the brain damage. Or really the time lost from my bride. Newly married, and all the stress that was related to those projects - that time loss with her I think was the most valuable thing that was lost on a deal so far.
Joe Fairless: I get that, and I fully understand... But how much money was lost on those deals?
Whitney Sewell: On that project, probably 30k to 40k on the triplex.
Joe Fairless: Best Ever way you like to give back to the community?
Whitney Sewell: Through our foundation called the Aamna Foundation. We help families with the financial burden of adoption; it can cost 40k to 60k unfortunately to bring a child home through adoption; a lot of families say "Hey, Whitney, that's more than I make in a year. How can we do that?" And so we partner with them with large grants.
Joe Fairless: And how can the Best Ever listeners learn more about what you're doing?
Whitney Sewell: Lifebridgecapital.com.
Joe Fairless: Whitney, I enjoyed our conversation; thanks for talking about your journey, what's worked, what hasn't worked, the challenges and how you're implementing the structure with the remote team, which is incredibly challenging... And some tactical things that you're doing to help with that. So thanks for being on show. I hope you have a best ever day, and talk to you again soon.
Whitney Sewell: My pleasure, Joe. Thank you.
Website disclaimer
This website, including the podcasts and other content herein, are made available by Joesta PF LLC solely for informational purposes. The information, statements, comments, views and opinions expressed in this website do not constitute and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action. Neither Joe Fairless nor Joesta PF LLC are providing or undertaking to provide any financial, economic, legal, accounting, tax or other advice in or by virtue of this website. The information, statements, comments, views and opinions provided in this website are general in nature, and such information, statements, comments, views and opinions are not intended to be and should not be construed as the provision of investment advice by Joe Fairless or Joesta PF LLC to that listener or generally, and do not result in any listener being considered a client or customer of Joe Fairless or Joesta PF LLC.
The information, statements, comments, views, and opinions expressed or provided in this website (including by speakers who are not officers, employees, or agents of Joe Fairless or Joesta PF LLC) are not necessarily those of Joe Fairless or Joesta PF LLC, and may not be current. Neither Joe Fairless nor Joesta PF LLC make any representation or warranty as to the accuracy or completeness of any of the information, statements, comments, views or opinions contained in this website, and any liability therefor (including in respect of direct, indirect or consequential loss or damage of any kind whatsoever) is expressly disclaimed. Neither Joe Fairless nor Joesta PF LLC undertake any obligation whatsoever to provide any form of update, amendment, change or correction to any of the information, statements, comments, views or opinions set forth in this podcast.
No part of this podcast may, without Joesta PF LLC’s prior written consent, be reproduced, redistributed, published, copied or duplicated in any form, by any means.
Joe Fairless serves as director of investor relations with Ashcroft Capital, a real estate investment firm. Ashcroft Capital is not affiliated with Joesta PF LLC or this website, and is not responsible for any of the content herein.
Oral Disclaimer
The views and opinions expressed in this podcast are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action. For more information, go to www.bestevershow.com.
