The Real Estate Syndication Show

WS1935 Building Better Real Estate Partnerships | Lance Pederson

February 07, 2024 Whitney Sewell Episode 1935
The Real Estate Syndication Show
WS1935 Building Better Real Estate Partnerships | Lance Pederson
Show Notes Transcript

In today's episode of the Real Estate Syndication Show, we had the pleasure of welcoming back Lance Pederson, co-founder at Passive Advantage and creator of the Empire Builder Formula. Lance brings a wealth of experience in advising both General Partners (GPs) and Limited Partners (LPs) in the real estate syndication space.

Our conversation with Lance was incredibly insightful as we delved into the common frictions that arise between GPs and LPs and how to mitigate them. Lance shared valuable suggestions that can help both GPs and LPs have a smoother and more transparent partnership.

Key Takeaways:

  • Transparency and Access to Information: Lance emphasized the importance of GPs being transparent with LPs by sharing detailed financial models and documentation. He suggested using secure data rooms like Google Drive, Dropbox, or DocSend to provide LPs with access to sensitive information under a non-disclosure agreement (NDA).
  • Background Checks and Principal Questionnaires: He recommended that GPs run annual background checks on themselves and upload the results to the data room, along with a principal questionnaire, to build trust with LPs.
  • Realistic Underwriting: Lance discussed the pressure GPs face to inflate their underwriting to show higher potential returns. He advised GPs to be conservative and honest in their projections and to educate LPs on the reality of investment returns in the current economic climate.
  • Personal Habits for Success: Lance attributes his success to his habit of going to bed early and waking up early, which allows him to have a productive start to his day.
  • Spiritual Discipleship: Lastly, Lance spoke about the importance of discipleship and mentoring in one's spiritual journey, highlighting the need to actively help others grow in their faith.


We're also excited to announce that Lance will be contributing to the podcast by hosting some shows, bringing his expertise to our listeners.

Remember to like and subscribe to the Real Estate Syndication Show for more valuable insights into the world of real estate investing. Share this episode with friends who are looking to improve their GP-LP relationships and stay tuned for more expert advice on navigating the real estate syndication landscape.

VISIT OUR WEBSITE
https://lifebridgecapital.com/

Here are ways you can work with us here at Life Bridge Capital:
⚡️START INVESTING TODAY: If you think that real estate syndication may be right for you, contact us today to learn more about our current investment opportunities: https://lifebridgecapital.com/investwithlbc

⚡️Watch on YouTube: https://www.youtube.com/@TheRealEstateSyndicationShow

📝 JOIN THE DISCUSSION
https://www.facebook.com/groups/realestatesyndication

➡️ FOLLOW US
https://twitter.com/whitney_sewell
https://www.instagram.com/whitneysewell/
https://www.linkedin.com/in/whitney-sewell/

⭐ Be Our Guest!
We are continuously working hard to help our listeners with their journey to real estate syndication. If you think you can add value in any way to our listeners who are in commercial real estate, then we’d love to have you over.
Apply here: https://lifebridgecapital.com/join-our-podcast/

Lance Pederson: So that's where my passion really lies. And that's what I spend my days doing is, you know, building tools for the LPs to kind of do it. And then, you know, kind of empowering the GPs on how to like, Hey, if we, if you kind of do this a bit differently, I think you'll get some better results and all in the name of, you know, greater transparency, I think, you know, goes a long way.

Whitney Sewell: This is your daily real estate syndication show. I'm your host, Whitney Sewell. Today, our guest is Lance Pederson. He's co-founder at Passive Advantage, a creator of the Empire Builder Formula, an extensive background in advising GPs and LPs. And we're gonna dive in today into a number of things that cause friction often between GPs and LPs. I love some of the suggestions that he gave because if you're a GP or LP, you're going to be better informed and be able to have a better operation at knowing a few of these things to expect in that partnership, right? And that's, that's exactly what it is. So you're going to learn a lot from Lance and our conversation today. Lance, welcome back to the show. It's been a while since we have caught up on the podcast.

Lance Pederson: Yeah. Thanks for having me, Whitney.

Whitney Sewell: Yeah, I'm honored to have you and to catch up again and really to update and educate the listeners in many ways on what's happening with you and even, uh, you know, you starting to help post some shows, uh, for the podcast or for the real estate syndication show. I'm excited about that personally, and just bringing your, uh, experience expertise, you know, uh, to the listeners and to help educate our, uh, investors and operators that, that listen as well from your, uh, just experience, which we're going to dive into today in a number of ways, but I'm excited about that.

Lance Pederson: Yeah, me as well. Yeah, I'm super excited to be part of the team. And yeah, hopefully bring some great guests and have some great content for everyone. And yeah, I mean, I love doing this stuff, so I couldn't be more excited.

Whitney Sewell: Awesome. Awesome. No, we're grateful again. And well, let's jump into some of your, your skill sets and, and why don't, why don't you update the listeners on like your focus right now? And then we're going to dive into, you know, you have a, a vast experience of really coaching LPs and GPs. And we're going to talk about some of that, that maybe that friction that's, you know, they're often in our industry and how you've helped minimize a lot of that, you know, on both sides of that, of that transaction, right. We'll say, or, and dive into some of the things that you've been helping with. But first, give us a little update about yourself, maybe your focus right now.

Lance Pederson: Yeah, so I mean, for those of you who don't know me, so I was a principal at a real estate private equity firm. So we had pooled discretionary funds, and we're allocating capital into other sponsors around the country, into their deals and their funds. But we had an accidental business, which was what was called VeraVest. And so ostensibly a real estate fund administration company. And what made it accidental was that as LPs in other people's deals, we realized that some sponsors really needed some help with the back office accounting stuff. And my initial, my first business was a service business in IT. We took care of people's computer networks. So I had a lot of background just in running service businesses. But, but nonetheless, I mean, as a real estate fund administrator, I found myself and as we built and grew that, I mean, when started it, like I said, it was accidental started at kind of $0 of asset center administration and grew it to over 3 billion. Um, it kind of took on a life of its own, but I really ended up. realizing I had a lot of passion for kind of being the referee in the industry, so to speak, because when you're the administrator, my job is to make sure that everything's being done, that it's fair and equitable, right, between the passive investors, the LPs and the GPs, that the GPs are doing what they should be doing. And so I ended up helping lots of guys architect their pooled investment funds, right, which is all about how do we create alignment in this vehicle so that it's fair to the investors and So basically every day of my life was just these scenarios and situations that come up from an accounting perspective as to how do you handle these transactions and book them and what you need to disclose and all those sorts of things. And so my passion became just transparency in general, just realizing that there needs to be far more transparency. to the LPs in terms of what kind of information they have access to. Because oftentimes that's a bit of the knock on some of these deals is that they're a bit opaque. Investors can't really see into what they've invested in after they've invested. And so we ended up creating a a sponsor due diligence verification service where we run background checks on sponsors, we'd verify their track records. Those all came out of just passions of how can we remove some friction from the business so it's easier for investors to get comfortable investing with people when they know that, hey, some independent third parties verified that. With that said, what I'm doing today is I've moved on from VeriVest, no longer involved, but you know, I've kind of carried that torch where I spend most of my days still helping guys architect funds, you know, the sponsors on that side, you know, doing much the same I've done. And I partnered up with Dr. Sam Giordano. And we've created what's called, you know, passive advantage. And so we're building tools for LPs to help kind of analyze deals. So when you get a deal from a sponsor, right, the ability to kind of plug it into a tool, have it highlight red, yellow, green, what are the areas that you need to focus on as you're, you know, you're conducting your own due diligence. And so I really have kind of straddled both sides of that where I'm kind of teaching both sides, like, Here's how you should look at this from the other person's perspective. In both cases, I think there's just things that could be done to remove some of that friction or what could be called a bit of a dysfunctional sales process. So that's where my passion really lies. And that's what I spend my days doing is, you know, building tools for the LPs to kind of do it. And then, you know, kind of empowering the GPs on how to like, Hey, if we, if you kind of do this a bit differently, I think you'll get some better results and all in the name of, you know, greater transparency, I think, you know, goes a long way.

Whitney Sewell: Yeah, no, that's awesome. I love the background. And even how you had a quote, accidental business, right, that really took off. But but then you realized that you loved being the referee. And now that you and I think it's great that you are able to really focus on that now. You know, like this thing that you figured out that I love. I figured out I really love doing this. And now I'm just I want to just be all in there. You know, I think that's a it's a sweet spot to be in that a lot of people never get to be. And I feel like, you know, or they just don't take the leap to do it.

Lance Pederson: Yeah. And I think a lot of it too just comes from when you've been on all sides of the table, it's just a bit easier to have empathy for the other side, right? Because we were capital allocators, so ostensibly LPs ourselves. And so we had to develop our own processes and procedures for conducting that kind of due diligence because we didn't necessarily have control ourselves. So, you know, you get really good at that. And then when you're kind of administrating in the middle and seeing all these dynamics that take place, and I won't call them funny business, but you just see, a lot of times it's just ignorance driven, right? It's just that they don't know, they don't understand that, you know, hey, they're real estate guys. They don't understand all the ins and outs of GAAP financials and accounting and all this other sort of stuff. But ultimately that's, it's super important. So I just think for me, I've just, it's a bit of an enigma. I've just had, I've just had a very, you know, I've got 15 years of seat time and I've sat in basically every, every role and every function within this. And so not everyone can say that. So it's not that I'm, there's nothing special about me per se, other than just having a bit of grit. I show up every day and I've just had a chance to kind of see more than other people have. And so my perspective therefore is just, it's just a different perspective that you wouldn't have if you hadn't done the things that I've done.

Whitney Sewell: For sure. Well, let's jump into some of those ways that maybe you are, uh, you know, are focused on even empowering those GPs, right. And how it's, you know, how it's benefiting the LPs as well. And maybe some examples of how you've seen this, really the lack of transparency or standardization, like you and I were talking about in the industry, uh, and, uh, ways you see that that could be improved. Let's, you know, help. I think just talking through some of those things are gonna help both sides of that transaction as well, right? The GPs and the LPs. I think I would love to know some of those. Like we want our LPs to be better informed, right? We want them to have what they need. We wanna have that as readily available for them as we possibly can. And I think sometimes like we don't know what we don't know as far as what they would really like to see. We try to get that information from them, but it's not always, extremely easy to know if they have what they need, I guess, in a very understandable way, things like that.

Lance Pederson: The big example that comes to my mind is just from the GP's perspective, just the willingness to share all of the data and documentation that surround transactions with LPs. And by that, I mean, if it's a syndicated deal, not being afraid to share the five-year full pro forma that you've put together, that is basically the foundation of what your business plan is and what you expect to do. and not being willing to share the Excel file, so to speak, with investors who are interested. I'm not saying that you have to offer it to everybody, but if someone asks for it, having a secure data room set up where you're like, here's a link to the information, feel free to review it. Obviously, it's confidential. You can't go and share it with a bunch of other people. That's fine. That's reasonable. But to say that you won't share it, right? I mean, what's that saying to the LP? That's sort of saying that you have something to hide when more often than not, in speaking with you know, the GPs is that it's just more of the fear that they don't want to spawn more questions. They don't want to, they're fearful to sit on the phone for hours and hours answering questions, um, from someone who they would sort of deem as not nearly as sophisticated as they are. And I'm not saying that's not true. Um, but I just think it's just being able to provide something like that as an example, and then even post transaction, you know, just. allowing them to have access to the property level financials, the general ledger detail that shows everything that went in and out of the property, just a standard course. Rather than once again, having to have everyone think that they don't have a right to see it, and having to request it. It's just like, here it is. You can go look at it. There's communication strategy on the GP side that you can do it in a way that's not going to create more work for you. Most investors just knowing they have access to it is the comfort, right? And let's just face it. I mean, our attention spans are super short. So even when someone goes in and looks at it, they're more than likely will be overwhelmed in about five minutes. But just the It just gives them peace, right, knowing that at least they have access to it if they needed to.

Whitney Sewell: Right. I could not agree more just about having them having the access. That just means a lot to them, even if they don't know what half of it means. It's good. But many of them do know and many of them are. I mean, I just know I get really good questions from our investors often. You know, I'm like, OK, you've been studying this and have dove in here. But anyway, so a couple of really quick things for the operators that are listening. What are some best practices you've seen around that data room? Or is there a platform you've seen to be able to do that well? Or Google Drive? What's been the best way?

Lance Pederson: Yeah, I mean, it could be as simple as Google Drive or Dropbox. I myself have used the platform. It's now owned by Dropbox called DocSend. And it just has a bit more controlled access, right? So when someone goes to access the secure data room, it's affordable. They have to register and you can have them sign a non-disclosure agreement. So some of the fears that people have, you can sort of remove those concerns by having them sign an NDA so that they know they're not going to be disclosing this information. And then you also can just see who accessed it for how long, what did they download, that sort of thing. You can see that. Yeah. Yeah. So you see when they, when they click on things, if they download something, you know, you can watermark documents, you know, it's not as fancy as like the full blown data rooms that institutional investors use, but I think it's just a great platform. And, and that's where I can say, just speaking from experiences that I've provided access to, you know, docs end to many investors. And it always kind of cracks me up. They're like, yeah, they want to see it. And then they go in and I see they, they downloaded like one thing and, or looked at it for three minutes and left. It's a great solution and I think it puts their minds at ease. The other things that I think that you put in the data room too is is run a background check on yourself and the principles once a year and just upload it to the data room. So it's like, we've got background checks, you want to see them, we're going to update them once a year. You can go and see, hey, they're running them on themselves, but it's like, it's better than nothing. Because a lot of investors, that's a question I got all the time was, I just don't, feel like I could ask for that. And of course, it would be an administrative nightmare if every one of the brothers asking to run a background check on you. But so just do it on yourself, right? And be willing to just share even if there's It is what it is. I just think that ultimately, when it comes to the GP side, I just believe that your close rate will go up. So you want a higher close rate, then do these things. Because when they get to the moment of truth and they're deciding where they want to invest, these are the things that are flooding through their minds, the LP's minds. Like, man, I don't know. I just met these guys. I'm not sure. And then that becomes a no. It's easy to say no. But you can turn that into a yes, where you're just like, listen, whatever you need to see, we've got it. And I also believe in filling out a principal questionnaire that's sort of attesting that, hey, we're not bad actors. We've done these things. You sign it. You upload the principal questionnaire. It's like you've got it all there. Because those are the things that we, as kind of pro LPs ourselves, I mean, that was the process we used. So my thinking is just why not share that with everybody?

Whitney Sewell: Yeah. And now is that questionnaire, uh, where does that come from? How's that created? Is that just something you just have GPs create themselves?

Lance Pederson: Yeah. I mean, you can find like, you can kind of Google principal questionnaire. Um, there's, you know, templates, a lot of attorneys, securities attorneys have probably had most GPs fill out a principal questionnaire. So it's, you know, getting ahold of one won't be difficult, but like once again, it's kind of like the background check, just, You know, Hey, the attorney ran it. I know they ran it. I know the lenders run all these background checks, but it's just sort of in theory. Um, it just puts their mind at ease. Just fill one out on your own and, you know, upload it. And there it is. And, and, uh, I will say that that was the most commonly downloaded sort of things they would go and look for. They go to the background check and they go to the principal questionnaire.

Whitney Sewell: Nice. No, that's good to know. And you mentioned a minute ago, an NDA. And would you require, say, you know, all investors to sign an NDA? Or is that part of the process of them, you know, getting logging into the DocSend system? Or how does that work?

Lance Pederson: Yeah, I mean, I just put it, if you're going to access the secure data room where I'm providing everything to you, then sign an NDA at that point. I mean, if I just gave you the PPM and the OM and that stuff, it's probably gated behind the investor portal. you know, piece where they can get access to that. And of course, I would put the PPM and the operating agreement and those things in the data room as well. But yeah, so you have the NDAs when they're signing up to access it. And, you know, that way you just know, because if you're putting up your closing statements and, you know, on deals and, you know, your track record and the returns and, you know, the more things you can put in there, I mean, some of that stuff, you just, you don't want them just sending it out willy nilly to other people.

Whitney Sewell: Yeah. Yeah. And I, you know, I've wondered at times about making it where they can't download it. It's like, you can view it all right here, but you can't download it ultimately just so they can't just anybody can't come in and send it to anywhere. But I don't know. What are your thoughts on that?

Lance Pederson: Well, my thoughts on that is that the NDA sort of solves that problem, right? So it just becomes, Hey, you just signed a nondisclosure agreement that says you won't do anything with this. So then it kind of the concern.

Whitney Sewell: The other pushback that I hear often is, well, we've spent so much time on this underwriting model. I don't want to just spend money. I don't want to just send it out to people. I don't know. I just wondered your thoughts, because I hear that often as well.

Lance Pederson: Yeah, I think that's a bit misplaced.

Whitney Sewell: Or maybe they send PDFs instead or something like that.

Lance Pederson: Yeah, I mean, that's all the things that they tend to do. I guess I just don't know if I buy it. I mean, I think that, yeah, you did spend a lot of money. Those are tools that you have. Once again, if they're under NDA, I just don't think that it holds water, in my opinion. Yeah, but you did spend a lot of money on it, and it's a tool that you use to do your job. And yeah, if somebody else somehow gets a hold of that and uses it, but it's already happening, right? That's already all over the place. You can do a Google search and get a model for, I mean, as we speak, I literally have a text message that's asking, do you have a model on a hotel? I mean, it's gonna happen. So it's for my whole thing is just like, you can't stop that. So that one little act isn't going to, it just, it's not going to make a difference, right? If it's going to get out, it's going to get out. I just think we're protecting, we're spending time on the wrong things, I think.

Whitney Sewell: Yeah, no, I think that's a great answer. Like we're, yeah, we're spending way too much thought process on that. Uh, there's, there's no telling how many different models I have, you know, that have been shared over the years, you know, as well. I mean, it's just, uh, anyway, uh, what about, uh, other examples, Lance of just like removing this, uh, friction or ways that you've seen, uh, you know, the best practices there, you know, between the GPLPs or, uh, whether it's communication or whether it's something deal specific or structure or anything.

Lance Pederson: Yeah, I mean, I think the other big one is just around the fact that the pressure on the GP side to sort of, you know, get a little bit more aggressive on their underwriting because everyone else is doing it, right? So it's just, if it's not spitting out an 18 IRR or 20 IRR, they're just so fearful that their deal will just be passed by by LPs just on that basis. You know, I kind of use the analogy of, it's kind of like what happened in baseball with steroids. is just, if everyone's on steroids and your livelihood depends upon getting that next contract, you've got a tough decision to make, and they're not policing it, then you're like, I got to go on steroids. Well, I think it's just a bit of the same as just the fact that it's stopping them from being able to have their own livelihood from the GP standpoint. They're kind of like, well, Let's just kind of manipulate cap rate a little bit. Let's just do whatever we can to kind of push it up and just not feeling comfortable to defend that. So, I mean, on the LP side, I'd say, listen, this is why you can't do that, right? Like you need to dive in a little bit deeper to understand all the dynamics before you're just going to look on the surface at an IRR and decide whether you're going to pass on the deals that are less than 15. And it's just, it's not that simple. And so, and yes, we all had a great run there for six, seven, eight years, where it was amazing. I mean, that's what happens when money is basically free, you know, cheap, cheap debt, right? So, but that's not realistic today, right? And so it's just a completely different, it's just completely different. So you can't do that. But on the flip side, that's where I'd say, GPs, you have to be able to defend that. And a lot of it is that you can defend it with your past actions, you can show Here was the pro forma on this deal we did. You'll see that we pro forma this thing at 13.4 IRR, and we ended up realizing an 18. Now I can show you 12 different instances where we did that and just have enough courage to find another way to overcome that objection because we have to both sides have to work together to kind of become more realistic about what we're dealing with. Under-promise and over-deliver. If everyone did that, then we wouldn't have any issues. But I think, unfortunately, it's just we see other guys doing it. So we think that we've got to kind of puff up.

Whitney Sewell: There's pressure. Yeah, no doubt about it. And I would rather someone invest with us because we are being conservative versus because we're showing a 25 RR. And I think too, if an investor, I shared this with you before, but if they're not going to invest with us because we're not showing a high enough, our you know, 25%, whatever it is, you know, something really way up there, then they're probably just not our investor. I'd rather our underwriting be conservative and be honest. You know, I just and not shy away from that.

Lance Pederson: I agree. I mean, in the other patch, and I've had this discussion with plenty of GPS, it's like, you know, put forth the pro forma that you considered the conservative version. Like, listen, this is what we think we can hit and over deliver on. And here's our stretch, right? Like if you absolutely have got to see what you think our stretch is, then I'll show you our stretch, right? Like here's what we're shooting for. And here's what our stretch is. I mean, this is what we would be thrilled and would just all celebrate if we hit this number. If that's, if it's that important to you, then we can do that. But I want you to see how easily I can manipulate these. I mean, that's, that's the crux of the matter. You can see how easily I can manipulate this. I can change rent growth. you know, half a percent, I can change just a handful of these things, and you see the sensitivity of the IRR. And it's nice to have those sensitivity analysis in your stuff. So all those sorts of things, but there's just, it's educational around, like, education has to be taking place. And that's where I think when you're not being transparent, then that means that you're trying to keep the current state where there's a lot of ignorance on the other side. We're better off educating so that these people become more savvy and more sophisticated, LPs that is, right? And so that's a good thing. And I think that's what it will take for this industry to continue to grow and flourish is just more meaningful educational content on the LP side so that they actually become more savvy and sophisticated.

Whitney Sewell: Yeah, no, I agree. It is something we're striving to do better at all the time, I feel like, is better educational content for LPs. And yeah, they're just going to make wiser decisions financially, and better investments, and maybe avoid investments as well that they shouldn't. Well, Lance, let's transition a little bit. you know, I ask anybody with experience like yourself and listeners always ask, people are asking me all the time, like, is your prediction right over the next 12, 6, 12, 18 months, anything like that, that you would share? And I say, you know, nobody has a crystal ball. However, what you believe is going to happen affects what you're doing. Right. And so I just, you know, any insights, any thoughts on, on, you know, what you expect over the next, you know, a little bit in the real estate industry. Yeah.

Lance Pederson: Yeah, so my sense is that there's going to be quite a bit of fallout from the situation that we're in, specifically in commercial real estate. I think it's going to materialize over two or three years. It's gonna take a lot longer than people think, right? There's just not gonna be one day we wake up and there's just complete blood on the streets and madness. But it's not gonna be pretty, right? Because there's a lot of, with a lot of lenders and banks, they've got a lot of distress that's sitting in their portfolios. So that's not gonna be, it's gonna be bad news for a lot of people who are invested in deals that were, you know, acquired in 2021, 2022, which isn't great. It's kind of a bit of a black eye on the business. But like always, I mean, real estate cycles. So what it also means is going to be tremendous opportunity. You know, there's going to be people who lose a lot of capital, but there's going to be assets that come back into the market that will be, you know, the prices will be reset and someone else will be able to step in and execute their business plan and, you know, and find lots of success. I mean, we kind of saw this happen right with single family. in the early 2010s, that's sort of how it played out. It all took a lot longer than people thought, right, for the distress to sort of materialize and hit the markets because lenders are basically just holding on for dear life. They're kicking the can down the road. Everyone's going to kind of do that. They're the operators, right? And so are the operators. Everyone's fighting to hold on as long as they can, which part of it will be where it probably won't be too systemic because of that. Everyone's going to hold on as long as they can. It's going to draw it out much longer. But in the same with interest rates, I just think that they're just not going to fall as fast as we hope, and they won't go as low as we'd all like them to go. I mean, I'm not in that category. I think that that's the problem is that we just can't keep doing this guardrail to guardrail on rates. We just need to settle in where it's like the prime rates at between three and 4.75 or something like that. I mean, there's proof that when the rates are in that band, everything just seems to work more efficiently. But that's kind of what I expect to see. It's going to be very interesting. Yeah. And it's going to be hard on a lot of people, but I think it's going to create lots of opportunities for others.

Whitney Sewell: If they would just give you the dial to control that, You know, so you could just take care of the what the interest rate is. I'm just kidding. Yeah, maybe they'll send that to you. So you can just take care of that for us.

Lance Pederson: There's lots of there's, you know, those are the jobs I don't want.

Whitney Sewell: Yeah, yeah, for sure. What about what's your best source from meeting new investors right now?

Lance Pederson: I think for us with the passive advantage side, it's just because of Dr. Sam Giordano, it's just coming from doctors. That's where we're tilting up a masterclass series that goes down a fewer clicks. I think that's just where most of our new people that are signing up into our newsletter are coming from. You can see that's where my passion lies. I don't believe that people aren't smart enough to learn this stuff, and I'm not afraid to talk about things that are more complicated, even if they're overwhelmed. First of all, I'm incapable of doing it any other way. I just have to talk about the nitty-gritty details. But I'm excited about that. I'm excited to go deeper with LPs and teach them more advanced stuff. If I understand it and know it, I'm not the smartest guy in the world. There's no reason why they can't understand it. So that's not a good reason to not teach people things because they don't know it. That's foolish.

Whitney Sewell: That's why they don't know it. Nobody's taught it, I guess. They haven't learned it yet.

Lance Pederson: Exactly. So that just doesn't make any sense.

Whitney Sewell: What's your best advice for LPs or passive investors right now?

Lance Pederson: you need to be realistic, but I just think it's knowing who you're dealing with. I mean, it's the same stuff everyone says, but they say it and then they don't do it. So all the stuff we've mentioned here, I just, I think that those are things as an LP that you should have right to have access to and know who you're dealing with and, you know, trust, but verify as, as Reagan said, you know, like I believe in that. And I think if you do that, you'll make better decisions. And I think that's what it's about when you get, you got to realize that You are an investor, right? Even if you're in the beginning of your journey, you're an investor. We're all investors. And I think it's until that clicks in our minds that we're investors. We make money. We save money. We put money into retirement accounts that makes us an investor. And we're putting that capital into work and something. So you got to start acting like investor, but that's a mindset thing. First and foremost is that if you're financially illiterate today, then you need to become financially literate. And what steps do you need to take to become literate? You need to learn, you need to read, you need to consume things, you need to think about things, you need to do those things, and you can't abdicate that responsibility to somebody else. And if you've got a wealth manager, it's great, but you can't completely abdicate that responsibility to another person. It's your money. And even now, that's what I'm saying. If you invested in deals that went sideways, that pains me. I hate to see that, but it's just, this is what kind of shows that it's your responsibility, it's your money, it's your decision. And the right answer is not just to not do anything, right? It's more to be more educated and just to make better, the best decisions you can make with the information that you have.

Whitney Sewell: What about some habits you're disciplined about that have proven success for you?

Lance Pederson: I mean, the big one is just is going to bed early and waking up early. Right. And I mean, I started doing that years ago. you know, for a long time there, I was getting up at 4.30, I've moved it to five, but I just think like that makes the world of difference for me because, you know, and I'm a big fan of Atomic Habits, that book, if you haven't checked it out, I suggest you do. You know, like your ability just to habit stack, right? Step one is like, how do I get up at five, right? And then you get that down and then it's like, what's the next thing I'm gonna do? You know, getting that quiet time and reading my Bible and, you know, just, I mean, I don't think I could function if I didn't have that, right? Like you take that away from me now, it just, I'd be a mess. I'd just be an absolute mess.

Whitney Sewell: Couldn't, could not agree with you more. It changed my life when I started getting up early. and having a plan for my morning routine. It's, it's crucial. Anyway, I know what I'm going to be doing like every 15 minutes of my morning. So yeah, I love that.

Lance Pederson: Yeah, I've got appointments on there. It's like, you know, God and Lance, you know, like, and it comes up and okay, now it's time to do that. Yeah. Like, I mean, now I live by now I'm a bit of a drone here. I just live whatever the calendar tells me I'm going to do. I do. And some of this was just driven by my wife and I have five children and they were all pretty close in age. So it was a necessity back in the day. You'd get no quiet time if you didn't do it. But now they're a bit older.

Whitney Sewell: I can relate to that. For sure. How do you like to give back?

Lance Pederson: Yeah, my big thing is just right now I'm on this kick like discipleship, and I'm kind of running my own family through it. But I just believe that there's a bit of a missing part. We've gotten really good at sort of getting people to accept Jesus as Lord and Savior. The part we just haven't done as great a job at is just actually helping people follow Jesus better. And I just think back to specifically, Jesus' main mission was to train 12 random guys on how basically to start the church. So when you think about it, His mission was discipleship. But when I look at what we do, and I'm looking no further than myself, I have to be better at helping people on their walk. And so I just think there's no better thing to put your effort, energy, and to obviously have passion for it. But just helping people, you know, hey, great, you've accepted Jesus, you've been baptized, you know, you've done those things. But hey, now it's time to, you know, how do you do this thing? Because it's, it's the decision you made is a great decision, you know, the biggest decision in your life, but ultimately, You know, we've got we've got a mission here while we're here, and it's to love others as we love ourselves. Right. But we've got to go out and that's active. But it's just it's just the same stuff we're talking about here with financial literacy. If people are financially illiterate, then they need to be taught. They need to be trained. And it's the same. It's like you need to be mentored. You need to be discipled. We shouldn't just expect that people will figure it out on their own. There's forces that are against them, the daily lives and all this stuff going on. You need to learn how to do that. It's something that you learn. It's a skill that you develop.

Whitney Sewell: I could not agree with you more, Lance. It makes me think about, it's probably been a year ago or so, while I sought out another mentor in my life. While my wife and I were raised in church, we weren't believers. We didn't know Jesus as our Savior until later in life, unfortunately. But thank the Lord that he did save us. But I noticed many years later, After I realized the value of mentorship in my business, real estate business, even speaking coach, all these different areas, I'm like, no, I need to find somebody that's been doing that and let them help me minimize this learning curve. And then I thought, wait a minute. why haven't I done that in the most important area of my life? You know, spiritually, right? And so I did, I sought out my pastor and said, Hey, I would really love to like, have just some mentoring, you know, I wasn't raised to think this way, or to do these things. Or, you know, it's like, even just studying your Bible, like somebody that's been doing it a long time can help you do better, like maximize your Bible time in the morning. Right. And so anyway, I love that you brought that up. And And just to focus there on, hey, we need mentoring spiritually as much as anything as well, and seeking that out. Anyway, I'm all on board with you saying that, but I'm grateful for your time with us today, grateful for us jumping into, you know, this, eliminating this friction between the GP and LPs, right? And we, like, I think we talk about it weekly as a team, I think, like, ways that we can do that, you know? They're trying to do that well and so I'm grateful for your desire there and even bringing out some very good examples that I think operators can take right now and improve on that you mentioned from the show and even LPs as they listen. They could be asking their GPs about these things and hopefully then they're you know if they haven't done it yet they're thinking about how they could you know put these things in place that you mentioned today as well and they're going to be a better operator because of it I'm confident. And LPs are going to be better off as well. So grateful for your time, Lance. Grateful you're going to be hosting some shows and bringing your skills and experience to the listeners and some great guests also. So thank you again.

Lance Pederson: Yeah, no, my pleasure. I'm super excited to help out and to get to be part of the show. And yeah, super thrilled.

Whitney Sewell: Thank you for being with us again today. I hope that you have learned a lot from the show. Don't forget to like and subscribe. I hope you're telling your friends about the Real Estate Syndication Show and how they can also build wealth in real estate. You can also go to lifebridgecapital.com and start investing today.