Show notes
Kyle McGee has raised $11 million from 50 investors. He is in his early thirties, and almost none of that money came from institutions. It came from aunts, uncles, family friends, and people who have sat in the same church as him for 30 years. This week I am breaking down syndication: the model where you raise money from a group of investors to buy an asset far bigger than you could buy on your own. It is not new. Irish partnerships were doing it in the early 2000s, including the syndicate that outbid a Saudi prince for the Savoy Hotel Group. Kyle is doing it at a more modest scale on the Florida Gulf Coast, and the route he took to get there is the instructive part. He started as a real estate appraiser in Key West, hated it, went home to Pensacola, and borrowed $250,000 from his father to build three spec houses. His father was diagnosed with stage four cancer and died six months later, halfway through the third build. Kyle finished it, found a financial backer, built four over-specified houses in a year and made a total of $8,000 between them, then rebuilt the whole model around cheap lots and simple starter homes. 130 houses later he hit the ceiling every small builder hits, and went looking for a way to scale. The part of this conversation worth your full attention is his warning about raising money too early. Nobody wants to fund your education. Investors are not backing your deck or your model, they are backing you, and if you have no track record they will tell you to come back once you have exited a few deals. Kyle has heard no far more often than yes. We also get into workforce housing and why it is close to the most recession resistant thing you can own, why he runs a property management company at a deliberate loss, how the general partner and limited partner split and the preferred return actually work, why he is taking bridge debt at nine and a half percent, and what happens when an event nobody modelled for arrives. I tell the story of watching the second plane hit on the first day of my honeymoon, and what that taught me about stress testing a portfolio. A note on timing: this interview was recorded in 2025 and sat unpublished after I pivoted to episode 268. The market references are from that period. The lessons are not. *** Connect with Kyle on LinkedIn: https://www.linkedin.com/in/kylemcgee/ Kyle's business Sunchase: https://www.sunchaseco.com/ *** Chapters 00:08 What syndication is, and the Irish syndicate that outbid a Saudi prince 01:14 Why this episode sat unpublished for a year 03:35 Pensacola, "lower Alabama", and hurricane season 05:10 From appraiser in Key West to contractor's licence 11:05 The $250,000 loan from his father, and three lots 12:35 Stage four diagnosis, six months, and finishing the house alone 15:24 The couple who backed him before he backed himself 17:46 23 years old, no credit, no way to scale 18:45 Getting a financial backer and a line of credit 20:48 Four houses, $8,000 profit, and what went wrong 21:47 The pivot to cheap lots and starter homes 22:18 COVID in Florida: $205k to $335k on the same house 24:18 Why you cannot out-build DR Horton 26:26 The first 14 unit apartment deal 30:02 General partner, limited partner, preferred return, promote 32:04 Why nobody wants to fund your education 33:43 What changes when the money is not yours 34:47 The rejections he does not talk about 35:47 50 investors, $11 million, no full cycle exits yet 37:18 Exiting investors into a new partnership 39:14 Time in the market, not timing the market 40:02 Bridge debt at 9.5% and a two year stabilisation window 42:00 9/11, Barbados, and the risk nobody models 45:01 A locations, C properties 47:44 Running a loss making management company on purpose 49:36 Discipline will take you where talent and hustle will not 50:41 Where to find Kyle 51:20 Free monthly workshop and how to work with me Mentioned in this episode How to begin real estate syndication Workforce housing development *** Elite Property Accelerator is open for its next intake. Learn more: https://epa-learn-more.scoreapp.com/ Join my next Workshop: https://elitepropertyaccelerator.com/workshop *** Behind The Facade is hosted by Gavin J Gallagher, a Dublin-based property investor and developer with 30 years in the Irish and international market, and first-hand experience of three property crashes. *** Support the channel: https://buymeacoffee.com/gavinjgallagher