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Evaluating and Vetting Potential Sponsors with Lance Pederson

ILB 10 | Evaluating Sponsors

One of the biggest obstacles investors face is finding and performing due diligence on investment, operators, or sponsors. How should you go about evaluating an opportunity to really know what you’re getting into? Lance Pederson, founder of Verivest, has made it his professional mission to bridge the gap between investors and sponsors, alleviating some of the headaches of finding trustworthy operators. You’ll learn several tips and things to watch out for when looking at a new investment opportunity. Listen in for some great insights.

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Evaluating And Vetting Potential Sponsors With Lance Pederson

We’ve got Lance Pederson of Verivest joining us on this show, talking about how to do due diligence. I’ve never met someone more passionate about doing due diligence on your investments and something we’re excited to dive into. Before we dive in, I want to give a little background on Lance. He has a pretty impressive resume. He has worked in their middle-market real estate space for many years. He has helped over 180 entrepreneurs, architects, different investment funds. He is passionate about the power of transparency and building trust between sponsors and investors.

He is the Founder and Managing Partner of Verivest, which is an end-to-end real estate investment platform designed to bring transparency to middle-market investing. He is a Principal of Fairway America, a private equity real estate company based out of Oregon. He is the host of a great podcast called The Real Estate Risk Report, where he features conversations with real estate sponsors on the topic of risk mitigation. Lance, thanks for coming to the show.

It’s my pleasure. Thanks for having me.

Let’s jump right in. Can you give some context for your background? You’ve been in the space of private equity real estate for a long time. Working at Fairway America and you guys have your own offerings and then the path that led you to start Verivest. It’s something I’m excited about and I know you are as well.

What we realized and having been in the business for a long time for deal sponsors and fund managers, the most challenging component of what we do is raising capital. For many of the people we work with, I would call them sub-institutional. These are not institutional quality people. It’s mainly because they’re acquiring assets and investments, as far as institutional investors are concerned, are very small like tiny and microscopic.

That means that as much as they probably would like to give them strategy, they need to put money out, $20 million, $50 million and $100 million at a time. That means that you’re left with raising money from high-net-worth individuals, people who are worth $1 million, $3 million, $5 million, $20 million, $50 million or something.

Now, you’re talking about people that on the spectrum of sophistication aren’t very sophisticated. Maybe they’re bright people and good at what they do but much of this stuff is new to them. That creates friction in the fundraising process. Not to mention that even if you get someone to yes, they believe in what you’re doing and they’ve done their own due diligence, there’s $100,000 at the end of the close. This industry is highly fragmented. There are many people offering investment opportunities in the market and prospective investors.

For us, it has been our mission to try to figure out, “How can we do our part to help that capital flow more efficiently?” You solve problems on both sides. The passive investor wants what many deal sponsors offer, which oftentimes are above-average risk-adjusted returns that are pushing double digits and they lack the volatility of the private markets. For those who qualify because of their net worth or income, it’s very attractive but that friction starts to get in the way. That’s what we’ve done with Verivest.

The biggest obstacle for investors is the fear of losing money—the money that they worked really hard to earn. Click To Tweet

What my passion is, is that in speaking with investors, you realize that for them the biggest obstacle is fear. This is money they worked really hard to earn. Therefore, parting with that money and investing it in somebody who is not a brand name or household name is frightening. That means that more often than not, your sales cycle is drawn way out. It could be 12, 18 or 24 months from the day you meet somebody before they make that $100,000 investment.

Let me jump in and maybe add color to what you’re saying. Would it be fair to say that a majority of the investors you work with are passively investing in our kinds of offerings, private placements or alternative investments? It’s not their full-time gig at this point. They’re probably still very involved in either a career, profession or maybe even retired and playing but they’re not dedicating a significant amount of time to vet out deals and do deep dive on figuring out where to put their money. Is that a fair assessment?

That’s a fair assessment. It’s certainly not their full-time thing.

These are the people that if they’ve amassed an ultra-high net worth, they’re not necessarily afraid from the standpoint of being naive or ignorant. If they’ve accumulated those assets, they probably have respect for what real risk is but they don’t have the time, desire or tools to do the work that it requires to do that due diligence. Services like what you’re offering and, to a degree, that’s also what we like to do is educate people.

You’re providing that service because it’s where you can lose in alternatives. We all know where we can win. We’ve all won a lot in the space. You’re on the right racetrack but figuring out what pony to put your money on, that’s where people hit a brick wall. Everybody is a good marketer these days. You can hire people to do your marketing for you and everybody’s deal sounds fantastic on paper. The next step is, “How do I decide to pull the trigger?”

Even all the investors’ conversations I have, they’re like, “Lance, this is great. You guys are doing the background checks on these guys. You’re verifying their track record and monitoring the stuff on an ongoing basis.” Even then, they’re going, “Now, how do I choose which one?” These are smart and successful people. They’re sophisticated. Even on the investment due diligence side, doing the vetting of the investment, it’s a non-zero effort. That’s definitely the case.

We did a survey of our audience and asked, “What are some of the challenges you face when you’re trying to invest in offerings like this?” One of the biggest challenges that most people said was doing due diligence, “How do I know I’m asking the right questions? How do I know what to look for?” It’s not necessarily an issue of trust. They’re not dumb people but they don’t know what they don’t know. It’s that kind of prohibitor.

Talk about how you guys at Verivest do some of the due diligence that you do on sponsors. What are some of the inherent challenges that an individual may have when talking with a sponsor, where they might not have the ability to get the same information you can get as a single individual with a sponsor that may be working with hundreds or thousands?

ILB 10 | Evaluating Sponsors
Evaluating Sponsors: Making audacious claims is where a lot of people get overboard at times. Exaggerating claims does change the way people perceive you. Many of them will take that as gospel.

Our process starts with the people. The first step we take is we say, “You’ve got investment opportunities you want to make available or are making available. Who are the principals? Who were the people that controlled this particular investment opportunity?” We run background checks on them. We’re looking for, “Are there accusations of fraud or felony criminal convictions?” It’s the real basic stuff to make sure that these are fundamentally good people who have kept their noses clean.

The step beyond that then what we do is we request their marketing so it’s like, “What are you giving investors today?” because what I’m going after is, “What claims are you making?” What representations are you making to investors?” Oftentimes, it’s the amount of capital. We’re managing our assets under management that people use that.

We start there and I say, “You’re telling you’ve got $50 million. It says right here on page four that you’ve got over $60 million in investor capital under management. Give us some financial statements. Let’s start there and see, ‘Can we corroborate that claim?'” Two, proven track records or they got some sheet in their marketing collateral that’s saying that they bought all these properties or they’ve originated or bought all these loans. It’s the same thing. I’m like, “Do you realize that when the investor consumes this, the first thing they’re thinking is, ‘Is this BS?'” How would they know?

We make our sponsor members aware that that’s how the other side is looking at it and then let’s gather that information and see if we can corroborate and validate it. That’s where we start. You’re making claims. You certainly don’t want to be positioned where you’re misrepresenting yourself because that’s where the marketers and many of these guys get a little overboard at times, with exaggerating their claims, not realizing that it’s a big no-no as far as the SEC is concerned. It’s very powerful. It does change the way that people perceive you if you’re making audacious claims because many of them will take them as gospel and truth.

Having done this for a long time and working with a lot of both sponsors and investors, what do you find are the biggest misconceptions from an investor that’s trying to evaluate an opportunity, whether it’s an oversimplification or overcomplication of something that they are emphasizing in their due diligence? What would you say are the biggest things that myths the bust in a due diligence process?

A few of the big things that investors do that they need to guard themselves are focusing on those targeted returns that are being quoted. They use that as some measuring stick from one opportunity to the next. That’s why I launched the podcast, The Real Estate Risk Report. That drives me crazy more than anything because you can’t do that. One person’s 10% return is not the same as another person’s 10% return. Bob, you and I talked about this in the podcast when I had you on. That’s the big thing. They go right after that number and they use that as their filtering criteria. Now, they’ve narrowed down the world based on something that is misguided.

The counter to that is more of asking themselves more high-level, “What is in my investment portfolio globally now? What do I have doing an audit of that?” and then asking themselves, “What don’t I have enough of? Have I invested in too many of these deep value-add multifamily deals and now I’m sitting there with exposure of that sort?” That’s one of the things they think, “It’s cashflowing.” I’m going, “That cashflowing could go away quickly. Am I too heavy on income? Do I have too many incomes from these investments? Maybe like Aspen Income Fund or something?”

Everyone is different but you need to start to know where you’re at, begin to look and then ask yourself what the underlying assets you have exposure to. If we’re talking real estate, “What’s the underlying asset? Is it single-family, multi, industrial or self-storage?” You want to build a diverse portfolio if you’re going to play in this game in the real estate sector in particular. That’s one of the big things they overlook.

Investors need to focus on the targeted returns that are being quoted. Click To Tweet

The other one too is the whole notion of skin in the game to know that that’s the Holy Grail. I’m not saying it’s not important. I just think that it’s a tricky one. If you’re wealthy then my expectation is you put a bunch of your own money into the deal. If you’re an Emerging Manager, it’s different for everyone. You have to think that through. It’s not that simple of using skin in the game is like the disqualifying criteria of whether you invest or not.

I’ll throw one at you based on the skin in the game and then you mentioned you’re looking at financial statements. I’ll be transparent here. I know a guy that used to be a deal junkie. He was super optimistic and very capable. He was doing small developments in Southern California and every deal looks great coming out of the starting gate.

The moral of the story is that guy that I know well, over time, when he looks back at the properties that he had control of if he had had deep pockets and been able to weather the storms that come the ups-and-downs, would be sitting on probably billion dollars worth of real estate instead of having gone completely broke. It’s because of the debt alligator and not having the sufficient liquid capital to back up what happens if you have to put this thing on mothballs for 1 or 2 years.

In the real estate entrepreneur world, it’s inherent that once you learn how to find a good deal and execute it, you don’t want to keep money in the bank. You want to go find the next 3 or 4 good deals. I see a lot of investors don’t look at that aspect of it. The person can be smart, the business plan can be sound or the deal can look great but if it’s a deal junkie, which goes along with being a developer mindset, that’s something that could torture everybody’s investment. I know that guy and it was painful.

You’ve got it. Going back to, like you said, picking the pony. In that case, if that guy was offering some of those investments up to limited partners or passive investors, the context matters. You need to look at it and not just the deal the guy is presenting but you say, “Let me see the deals that you’ve got in the pipe that you’ve already got underway.” Now, the skin in the game thing has context because you say, “It looks like you’re getting out over your skis.” I’ve heard the East Coast version of the same story before. Sometimes, even private lenders get in trouble because they are myopic on the project that’s handed on underwriting, not realizing that all these other deals they’ve got, the deal junkie got it going.

If anything hiccups, all of a sudden, that guy can be sunk. The first-position loan that you thought was high and dry and never going to lose on, you had a whole portion of your portfolio with that borrower go flipped. Being an investor means that you have to look at the holistic picture of the party you’re conducting the due diligence on. Pan out, get an understanding and then drill down. You have to take your own situation and pan out.

Think about what you need. Don’t get over-excited about the pretty pictures for the development project or whatever, slow it down a beat. If you do that, you’ll end up being okay. Certainly, if you find yourself getting all emotional and excited, you’re probably going down the wrong path. You need to try to keep yourself in an analytical frame of mind. Have any process but be consistent.

One of the common on the skin of the game and is something we’ve talked with investors about. Many times, it doesn’t just look like one thing, which is cash in a deal or cash in a fund. It can be like in Aspen’s case. We’re a fast-growing operator. We have a whole management company that bears the cost and the burden of all that growth, staff, overhead and all the due diligence side of things that it takes to grow these businesses. That’s some element of skin in the game as well where it doesn’t always have to look like cash in a deal, which is obviously a good indicator and something that you should want to a certain degree. To your point, it’s a much broader conversation than zero in on that one factor as the primary decision-maker.

ILB 10 | Evaluating Sponsors
Evaluating Sponsors: Being an investor means that you have to look at the holistic picture of the party that you’re conducting the due diligence on. You have to think about what you need. Don’t get over-excited.

It’s a good point because you look at that and see a lot of the sweat equity and money that’s being poured in to subsidize and underwrite. It’s important for passive investors to understand that when deal sponsors are brand new emerging, their overhead is very low. They can be nimble. The good thing from an investor in that perspective is that you can get good economics because they’re hungry and they want to prove themselves. As they grow and scale, there’s this depth.

It’s hard because when you look at the business model for guys like you or anyone that’s in the investment management real estate space, there’s no such thing as exponential growth. It’s very linear. Your expenses and most of your upsides on the back end, asset management fees, acquisition fees or any of those things barely cover overhead. In fact, when you’re growing and scaling, they don’t.

The other thing to keep in mind for passive investors there if we’re talking about investing like a billionaire, something to keep in mind is that there are opportunities to have especially if you’ve been successful yourself and you do have some money. Think about approaching some of these emerging firms in making investments in their operating company.

It’s not just the LP. That’s one component of your portfolio. I invest in Aspen Income Fund. That’s a fixed income replacement to my portfolio. Meaning, I can count on that to be consistent cashflow to pay my bills. If I want to go and get into that venture space in the spirit of having something for the whole thing, if they’re willing to let you in potentially into the operating company, it could be a fruitful investment.

You hit on something, which I want to dive into a little bit is fees. As a passive investor, if I’m looking at an opportunity and you’re looking at the headline return or the IRR, a lot of times investors don’t know how to read through a PPM and pull out all the hidden costs of an offering. I know you guys look at that. Those are a lot of times can be more transparent when you’re looking at a platform like Verivest when you’re looking at those kinds of things and making sure it’s not outside of market rates.

There are PPMs and offerings that I’ve seen in other investors you probably have as well where it’s very fee-heavy. If there’s a deal that’s heavy on the fees, that’s something that, in my mind, should be a yellow flag. What do you see are hidden fees to look out for things that are above market? Is that a concern to you as an investor?

The first thing I look at when anyone sends me offering materials is that I’ll usually try to get to the limited partnership agreement first, the OA because the PPM has got a lot of stuff. I’m not minimizing its importance. I know when I can get to the operating agreement, I can find the fee section much faster. They have to be disclosed. There usually are clauses inside of the PPM that say something to a degree of like, “Whatever is here, the operating agreement is the final arbiter.” Sometimes I’m like, “I’m going to go right after that and I’m going to write them down.” I literally will say, “I’ll read it and put a 2% asset management fee.” They’re usually in one section.

Even one I was reading was talking about, “Refinance proceeds was in the distribution column.” I was looking at it and it basically said, “When we refinance, 70% to the limited partners, 30% to the manager.” I read it again. I’m like, “You’re saying if I go in, do a cash-out refi and gave the proceeds back, I would think it would be 100% to limited partners because that’s capital but it says only 70% goes and 30%.” I’m going, “Do you know what that is? That’s a hidden fee. That’s a 30% refinance fee.” That’s criminal but it wasn’t in the fees section. That was in the operating agreement because it has to be clear. It’s a legal document.

One person's 10% return is not the same as another person's 10% return. Click To Tweet

It’s going after those things, jotting down the fees and saying, “Who gets paid what?” is a great first exercise. The second exercise is you take each fee on its surface and say, “What is that for?” My philosophy as an architect of these funds is, “You put the money where the work is.” You put ease where effort is expended and then you say to yourself, “What type of effort needs to be expended?” We’ve talked about this before with your strategy. Executing your strategy is a lot of work. These loans are generally smaller. You got to sift through tons of stuff and maybe do some workouts. It’s labor-intensive.

Therefore, one could substantiate a higher fund management fee because it’s more effort. Whereas if you’re buying core-plus multifamily properties that are basically running themselves, I will scrutinize a high fee because I would be like, “Seriously, 2.5% for what? What are you doing? No renovation. The tenant is stable.” Context matters. I’m going to think about, “What’s this fee for?” As an investor, then go push back against the ones that seem like, “I don’t get it. Why are you charging a 5% disposition fee? I don’t understand. Am I missing something? Is there some extra work that’s involved in disposing of the asset that I’m not aware of?” Maybe there is. I don’t know.

That’s such a good point in making that distinction. Like Ben alluded to earlier, we have a massive overhead for our operation and there is a lot of work going. We, as the manager of the fund, we’re paying significant salaries in some cases to people to get and come over into the business venture and work on that thing. They’re working on it continually but we’re paying for that.

Some of the fees that we take and you mentioned covering the overhead, it doesn’t cover it. We can keep the lights on, keep the doors open and keep operating because it doesn’t help anybody if we can’t but we don’t make money unless the deal is the deal. In our case, it’s a series of a bunch of little deals unless it’s profitable. We’re not in business just to pay our people and not make a profit.

That’s what you want to look for is that next layer, “Is the offering aligned? As I now understand the business, is there alignment here?” Some people think that it’s a queue to subordinate management fees to a preferred return. That makes my offering more attractive. Every client of mine that has come to me that tries, I’m like, “I can’t do it. I cannot let you do that.” “I don’t understand, Lance but that will make me more competitive.” I’m like, “Maybe it will but things happen. Things that are out of your control, market forces could be against you. The second that something happens and all of the money legally and contractually needs to go to the investors and not to you, you’re not going to work for free.”

You’re not doing them any good if you have to let your staff go, cancel your lease, walk out of the building and there was no company left.

When you evaluate those fees and say, “It seems reasonable. It’s covering overhead.” Now, you have alignment. In your guys’ case, you got to clear the hurdle and get past the preferred return to winning. That’s alignment. That means everyone that shows up is like, “That’s what they’re there to do is to perform so that you guys can be profitable, make money and do what you want to do.”

I drilled down a little bit more on the alignment of interests and how the waterfalls and other things can incentivize that. It’s something that maybe is a newer concept in these types of investments. If you’re investing in stocks and bonds, this is not a similar concept as it would be in these private equity deals where there is this waterfall of distributions and certain things occur and then certain parties get compensated for that. Talk a little bit about what you look for when you’re evaluating opportunities. What do you see are positive strengths to an alignment perspective?

ILB 10 | Evaluating Sponsors
Evaluating Sponsors: Context matters. Think about what’s this fee for as an investor, then go push back against the fees that you don’t understand.

It’s along those lines. I’m looking to make sure I understand how the business works, see where the fees are going, understand the parts and then say, “I, as the investor, is my downside risk being protected?” That’s how I evaluate whether or not whatever hurdle whether it’s an IRR hurdle or a preferred return, “Do I feel like given my understanding of the strategy, that I’m being compensated to protect my downside risk?” Meaning, “Am I going to get what is reasonable?”

From there then I say, “Now when I clear that hurdle, let’s say it’s 50/50 after that.” In some, it’s none. It all goes to them. I’m evaluating and saying as I understand it because, with some of the strategies, like you guys, there’s a note right on there. You could buy it at a discount. Your yield that you can generate is kept. It can only be so much. As an investor, you have to realize that and think through that there’s literally a ceiling to certain things.

When you’re investing in common equity like you’re in a first-loss position, in theory, it’s an unlimited upside. At that point then that’s where you’re looking for is you’re identifying, “This is a commercial real estate acquisition. I’m investing in first-loss position common equity alongside the sponsor. Therefore, my upside is unlimited.” I’m saying, “Is it fair that they’re going to give me 70% of anything above that hurdle rate to another hurdle rate of whatever.”

It’s contextual but you have to evaluate and say, “Does it seem fair? If it doesn’t seem fair, with common sense then it probably isn’t. It might be one-sided and some of those guys do that.” The underlying risk is huge. They put hurdles in to cool down the returns so that it doesn’t sound so risky, “It’s going to generate a 14% return.” Meanwhile, it’s ground-up construction in the roughest parts of town. It happens. All context matters. It’s important to understand that.

It’s pretty evident you’ve looked at a lot of these offering documents before. One thing I would say to any readers is if you’re getting new to this space and introduced to it, go to a platform like Verivest and realize they’re doing some of the work for you but it doesn’t alleviate the diligence that you still need to do for yourself.

The reason that Lance can say this thing so confidently is he has looked at probably 1,000 or more offering documents. He has this context for what feels what’s reasonable and not reasonable. Even going on Verivest and starting to download offering documents of some of the top sponsors there, start reading through them and get familiar with them, you’re going to get a good gut sense of, “Does this feel reasonable and fair or not?”

Lance, I want to shift the conversation a little bit. It’s something we’ve talked about before. How do you view Verivest in the value that it’s bringing to investors relative to other crowdfunding platforms out there? We’ve heard of a lot of the other ones that are focused on accredited investors. There are the CrowdStreet, RealCrowd and RealtyMogul of the world that have done a lot of volumes. They attracted a lot of accredited investors. Talk about how you’re structured differently. You view this as crowdfunding 2.0 and the new model. How do you see this being advantageous?

First and foremost is that with crowdfunding version one, much of this notion of syndicated equity and private placements was new to many people. They didn’t even know that you could get into the deal. It made sense how it played out but we’re now at that Amazon.com pivot point where people are aware that it exists. They’ve read a lot of offering documents. They’re becoming privy to the different strategies. It’s evolving and maturing.

Put your money where the work is. Click To Tweet

For me, when that happens, we need to create an environment that’s more inclusive, not exclusive. It has always been the beauty of the real estate. Fragmentation is a feature. It’s a location. It’s everywhere. To boil the ocean down to a handful of offerings, I’m not saying that every deal that anyone ever put together is worth investing in but it certainly isn’t 3%. In my opinion, it’s somewhere around 50% or 60% of any offering that someone puts together and goes through the process is probably worth investing in. I don’t know. Maybe I’m being generous.

My big thing is to be more inclusive and add reputation to the space that already exists that’s burgeoning. When you look at any of these things that any marketplace that springs up, eBay versus Craigslist, Craigslist did not add reputation. It’s a complete dumpster fire now but you have eBay and Amazon that did. We’re doing the same thing. We need to add reputation contextually before that fits into it. To me, it’s about the participants, those who are presenting the offerings and opportunities.

That’s the big difference for me is giving people access to more options and then teaching them and doing our part. Everyone needs to be educating. That’s part of what you need to be doing and give them more options so that they can build a diverse portfolio of these sorts of investments. That’s the biggest difference and then us not promoting directly. That’s the other big thing.

We need to be the referee. We need to provide the rails and the infrastructure to facilitate these transactions, handle the compliance and make sure all those things are not in oversight. I viewed as the private sector stepping in so that the regulatory regimes don’t need to. If this thing keeps going, look at crypto if you let everyone do what they want to do, it becomes a mess and they overly-regulate us. I’m like, “Let’s step in and regulate ourselves. It makes more sense to me.”

To underscore the point here, some of these platforms are registered broker-dealers, which means they get compensated for the equity or funds that are placed through their platform with some of the sponsors. It’s not always a misalignment of interests but what you’re saying is Verivest is a completely neutral third party. You’re not getting paid more from a sponsor to raise more equity.

In fact, you’re not even facilitating those conversations. You’re purely being the middleman, being the referee to your point of, “We’re in the background checks and doing the basic gut check. Are they at least showing what they’re saying that they’re going to do, representing that and then allowing investors to start that conversation with the sponsor with a leg up because they know that some of the basic questions are answered?”

We’re shortcutting that sales cycle and that burden that Jim talked about. It’s too much lift for them to conduct that in-depth due diligence and then post-investment. Like you guys, you submit all of your financial data to us quarterly. We review it to make sure that everything that the agreement that was signed is being done as said. I feel good about spending a lot of time talking about Aspen Funds because I know that you guys are doing what you said you do.

Will you always execute? I don’t know. I hope you will but I’m not promising that. That’s not what I’m telling people, “Invest in Aspen Funds. I guarantee you will get whatever they told you you’re going to get.” I’m saying, “They’re good guys that are committed to doing the right thing. We’re watching what they’re doing.” It’s a forcing function. Right there, it’s a powerful thing.

One of my final questions is, where do you see this whole world of crowdfunding going in the future? Where do you see Verivest going? Where does it fit into the bigger picture?

Where I see it going is that the percentage of offerings with some kind of real estate asset behind it, of those who are using that 506(b) exemption, which is those private business relationships, that shift is going to continue. It’s going to accelerate to where pretty much everybody is going to be publicly advertising and soliciting the offerings and have the ability to. That’s what’s happening and we’ll call that crowdfunding. I don’t know but it means accessible to anyone who qualifies.

That’s what I’m hoping will happen. I’m trying to do everything we can to remove as much friction that stands in the way of people deciding to make that leap. It’s easier when you have it fun. It’s perpetual and evergreen but many of these single-asset deals are still choosing to only present them to those they have prior business relationships with so not everyone has a crack at them.

The minimum investments are going to continue to go down because you guys know years ago, $100,000 was the typical minimum. Now, we’re seeing it as $75,000 or $50,000. It would be nice to see it get around $25,000 or something like that. That’s where it’s headed. My big thing is access, safety, comfortable people and peace of mind.

What I hope happens as part of what we’re doing is to open it up where there can be a secondary market, where Verivest in particular solved enough of this information asymmetry problem that people can not only purchase in the primary issuance of any given offering but have the ability to liquidate their position. Someone can purchase their position without taking a huge liquidity minority discount. The world hunger after that, we’ll solve it.

What’s the best way for readers to get ahold of you if they’re like, “I need to spend more time learning more about this?” Give us the name of the podcast again. You have an amazing library of resources. One of my favorites is The Definitive Real Estate Due Diligence Guide for Passive Investors. That’s for free on your website. Give a sense of where people can get ahold of you and get some of these resources.

Download the eBook. You can go to Verivest.com. It’s right at the bottom of the page. Plugin your email. It’s all we’re asking for. You’ve got the guide walk-through sponsor due diligence and ongoing monitoring. With the directory, you can find people like Aspen on there. If you’ve got any questions, The Real Estate Risk Report on any of the podcast channels, iTunes, you name it. You can type in The Real Estate Risk Report and find me. Subscribe and listen to that. If you have any questions, email me at [email protected].

Thank you so much for coming on, Lance. This has been helpful and I’m sure our readers will get some good gold out of this.

Thanks for having me. It’s good catching up as always.

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About Lance Pederson

Lance Pederson has worked in the middle-market real estate space for more than 13 years and has helped over 180 entrepreneurs architect pooled investment funds. He’s passionate about the power of transparency in building trust between sponsors and investors. Among the multiple hats he wears on a given day:
● Founder and Managing Partner of Verivest, an end-to-end real estate investment platform designed to bring transparency to middle-market investing.
● Principal of Fairway America, a private equity real estate company in Portland, Oregon.
● Host of the podcast ‘The Real Estate Risk Report,’ featuring conversations with real estate sponsors around the topic of risk mitigation
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