WS1226: Making A Difference with Institutional Partner with Sam Sells

EPISODE 1226

0:00:00.0 

Sam Sells (SS): Can we make a difference? Can we make a profit? If we can settle both of those things, then the property is, it goes through our underwriting process. And, if we can’t settle those two things then it’s not going to go through the underwriting process.

[INTERVIEW]

0:00:14

Whitney Sewell (WS): This is your daily real estate syndication show. I’m your host, Whitney Sewell. Today our guest is Sam Sells. He’s a syndicator-operator. His mission is to change lives, build communities, and grow wealth. He traveled the globe as an international health specialist while serving the Air Force, and was motivated by seeing poverty and the lack of safe housing to start his company, Wild Mountain Capital. He’s an experienced entrepreneur who has built quickly from mobile home parks to apartment complexes, and he quickly reached $100 million in assets under management in three years. 

I love this conversation with Sam. I love getting to know him. He and I actually met at a conference I was speaking at quite a few months back. He worked in Afghanistan, he was a 50 Cal gunner, he did rehabs – he talked about a $64 million rehab that he did in another country. But, how did that lead him to real estate? How did that lead him to impact investing?

He’s also gonna go on to some things where he transitioned from working with the retail investors, the investors that we worked with every day, to going to institutional money, institutional equity, right? And, what does that process look like? How do you do that? Why should you expect? It’s eye-opening, to say the least. We have not done that, personally. But, he has. It’s great to hear some things he has learned, how did it help him improve, and the pros and cons. And, maybe you’re thinking about that as well. I think it’s gonna be very helpful for you if you’re contemplating going that route instead of raising money by yourself. It’s a way to move fast, be able to make bigger deals and faster when you can bring in partners who can write checks that are, you know, $10 million, $100 million, at a time. Definitely, changes things for you and the deals you can buy.

We also got into building teams and finding people that are smarter than you so that you can scale faster but smarter as well. So, it’s just a great conversation with Sam. I know you will enjoy, be encouraged, and learn a lot.

0:02:09

WS: Sam, welcome to the show. It’s a pleasure to meet you again. I know you mentioned we met at a conference a while back and I’ve enjoyed even getting to know you a little better just to conversation and your background I think we have some, some similarities than in a few different ways.

That’s exciting but I love knowing how your career shaped, you know, moving into real estate and then also you know what you call impact investing? And I want the listeners to have a better understanding of what means a little bit and how you know are applying that in your business? But then getting into some thoughts around investors and institutional money and equity. And how you have transitioned and I think there’s going to be listeners who are wondering about that same thing for their own business as well.

Get us started, Sam, with a little bit about yourself, your background in the service. Thank you again for your service. Let’s dive in.

0:03:03

SS: Thank you, Whitney. Thank you for having me on the show and I look forward to, you know, talking with you and with your listeners. And I’ve been a longtime listener myself and I appreciate the opportunity to speak with you. So, a little bit about myself, a long time ago, spent some time with David Robinson, who’s also co-host. But after that time, you know, got into construction and then eventually joined the Air Force as a firefighter and that’s when we started flipping homes in the early 2000s — buying homes in a couple of different states simultaneously. And the guy that I first started flipping homes with he bought studs went sideways.

And, I just thought, “Oh my gosh, man. If he can do this, anyone can do this.” And so you know, I was fortunate to start teaching him about you know things like 16 on centers that’s go up and down not sideways. Seriously he was walling a wall so I was I don’t, you know, I grow like, man. So, I did that for a while and then finish my bachelor’s degree in business strategy, went to go work for a consulting firm. I did not really like that, I decided to go back to the Air Force, and became a healthcare administrator. Very soon I realized, I did not like the admin side. I wanted to do operational stuff and was able to go and you know spend some time in Afghanistan. I loved it, working with the Afghans all over the north of borders and other places, just really enjoy that time. Some other cool stuff that, you know, can share in different circles.

But, and then after that just really you know the last 10 years of my career focused on global health and traveled around all over the place building clinics and 200-bed facilities. And, Project Officer for a 500 bed, you know, largest wartime hospital in the world. And doing a $64 million rehab on that was super interesting but, you know, been in, you know, places where we’re literally negotiating dirt and gravel and movement and everything else from grades and engineering to where the trains are going to be put, bathroom systems in West Africa, sub-Sahara Africa, or working with foreign militaries to help them move patients off battlefields with whatever little helicopter airplane they have. Just really grew a love and passion for health security and for housing security — seeing people living in mud huts and all kinds of crazy stuff. And, I thought I grew up for, we took bass and horse trough and we thought as kids we thought it was super fun. Didn’t have running water or electricity for a while but that was cool, you know.

Now growing up I’m like “Oh that was probably not, that was American poor.” And then now I see, you know, “Hey we had a good compared to what the rest of the world has.” So, towards the end of my career I just thought, you know, we really need to get into creating clean, healthy places where people can safely reside and we built Wild Mountain Holdings, and then a bunch of other companies that have come out of that over the years.

But, started with my dad and my brother, and we eventually just grew that. And then when I stepped out of the military with the company was already going, you know, full speed ahead. I think we had 10 properties by the time I stepped down. We had syndicated probably five or six times. Done JVs and done a few ourselves. So just passionate about this but making a difference, through real estate in we, you know, we buy a lot of properties that are 10, 20, 40, 50% occupied. And then we get after churning out three units a week, whether our development teams and producing change as quickly as we can. And it’s been been a crazy ride.

0:06:54

WS: I appreciate the detail on some of the things that have sounded like impacted you in a big way right? Like it should anyone. I mean, working in Afghanistan, and actually being a 50 cal. gunner, I was also a 50 cal. gunner, I don’t even know if the listeners even after 1,300 episodes now, I don’t know that any of them know that. It’s an amazing machine. Yeah, it’s just amazing that those things operate after so many years, the way they do. 

But, back on real estate, you focused on global health for many years, you did a $64 million rehab on a hospital. You learned a lot in the military that helped push you into real estate in many avenues. And even to the point now you know you mentioned buying properties that are 50% occupied. And I wanted us to talk about that a little bit. But I didn’t want to go too quick over the impact of investing. It’s just neat how you, even sharing how you were raised, I mean that that would seem like horrible to most people listening You’re taking baths and a and a feed trough. That doesn’t sound very fun to me but I’m thinking about making my kids do that because they need that experience.

0:08:00

SS: You know, it would be like wintertime my dad to put a fire, you know, put it up on cinder blocks and a fire in the middle. If you get too close to the middle, you’d like to burn your feet or your rear end off and so he’s a little bit away and got like snow falling on your head and like “Man, I’m cold. But my feet are on fire.”

0:08:14

WS: It’s just all about your perspective is that right? I mean, I was just having this conversation with my kids at the breakfast table this morning, I mean they have no idea how fortunate we are. But, you know, working in Afghanistan and other parts of Africa and whatnot helped you to really see that perspective and a whole new light right? And I think visiting some of those places has helped me with that as well. In Iraq and Haiti and different parts of Africa, Ethiopia, but that changed me, right? In a big way and I think it’s interesting to hear how that’s that’s changed your philosophy maybe towards investing and helping, you know, not only the lives of your residents but your investors and in seeing that differently than maybe you would have if you just grew up as a businessman, an entrepreneur, right? And you didn’t have those experiences.

Speak about the impact investing a little bit before we move on. What does that mean in your business now and how do you do that?

0:09:06

SS: We thought and considered about how do we change lives, the most amount of lives as possible and, you know, I spent some time working for the USAID, their office for Disaster Assistance so that put me going all over the for disaster response and that stuff was amazing. But I just felt you know I need to come back to America and where can I do that the most since I don’t have a lot of money. And so, the way we thought, I was like, you know, let’s focus on housing. There’s a way for us to do this in a capitalistic paradigm and go after where, you know, responsibility has been advocated by institutions because they’re not going to go touch these properties. It’s, you know, it’s not an 80s or 90s product. It isn’t court plus or whatever else that they’re looking at.

And so, we went after class C properties in class C areas or Class B areas, and in some of these places it’s like you know nobody wanted to touch them or very few did. And went after it and when you walk in and you’re like okay the rent roll shows five people and I see 22 people living here. “What’s your name? And do you want to pay rent? ‘No.’ Okay you got to get out, buddy.” And so, we’ve had you know some crazy stories I mean, just crazy stories but the difference that has happened in people’s lives and we hire local managers, and we find people who have the cleanest area or, you know, and I could go on about that but really focusing on making a difference, increasing occupancy. These people are coming from just nasty units or owners who are trying to squeeze every penny out of them but they don’t do anything to the property. Or, you know, big funds, they do the renovations, have funds, and then in 20 years, they don’t spend another penny or CapEx on the property so they can maximize their investors’ return.

And then they let this property go and it hasn’t really cared for years. And so, we’ve picked up some properties that way. And then turn them back around and make sure we invest in them. It’s been really good. 

0:11:07

WS: Now that’s so cool and I, yeah I just want the listeners to hear that as well. You know, just like how you’re looking at properties now and thinking that through and helping these people. And so, I want to get to though, you mentioned, you’re buying properties that are 50% occupied. And, oftentimes people say, “Oh that’s just too risky or I don’t want to buy a property like that. It’s too much hair on it.”

Tell us how you see a property like that though and are not scared of something like that right? That you can see a bigger picture sounds like and you’re not scared of good percent occupied. Maybe see a lot of value there. How does that look to you — see a property it’s 50% occupied in a manner, “Hey I can go tackle that”?

0:11:43

SS: Let’s direct, I guess, through the lens of the capitalistic paradigm right? So how do we make money on something like that? So I spent a fair amount of time on, you know, milk farms, and they smell terrible, right? And the farmers, every one of them, would always say smell the money, you know, and I’m like, that’s terrible but you know that’s the smell of money for them. Right?

0:12:05

WS: That’s a good analogy.

0:12:07

SS: So when we walk into these milk farms, these properties and they just smell terrible and you see roaches and it smells like pee, and somebody stole doors, you know, off of the units. And like, “Who steal doors?” You know, I guess, doors or commodities sometimes that people want. Anyways, you’re just thinking “Okay. Can I make a difference here and can we make money doing it?” And so, that’s kind of really how we look at it and we look at it like in that farmer, they saying this is where I make money. And so this is where we go with the same, can we make a difference? Can we make a profit? If we can settle both of those things, then the property is, it goes through our underwriting process. And, if we can’t settle those two things then it’s not going to go through the underwriting process.

0:12:51

WS: Awesome. And I just love it when there’s like “Okay, you know I’m not scared of this property. I don’t care if it’s 20 or 30 or 50% occupied if it meets these things. If it does meet these things, then we can make it happen.” Right? You don’t just run right away from it. You might find a lot of value there, right? Stinky as it may be, that may be a clue for you to think about “Hey I should pursue this further.”

And so, I know we are, with what time we have left here, I just have a couple of things I wanted to get to because you’re doing some amazing stuff. And I think you can speak to that transitioning from say the retail investor to institutional money, your equity. Like, I want us to jump in because I think there’s confusion around that too. Oftentimes when people are getting started, maybe they’ve syndicated a deal or two maybe they haven’t, but they still wonder what does that even means? And you know, is that something I should consider? Obviously, we all know, lots of things are rumors people talk about, you know, about wire or they should or shouldn’t do something like that.

But I’d love to hear maybe that transition for you, and let’s talk about maybe why you would transition and how to do that?

0:13:56

SS: So I think, as you have learned, you know, there are different systems that you need to put in place if you’re going to generate sufficient interest to buy properties that can both cash flow really well, provide a great return, and you can make a difference in them. If not, you’re stuck in this world of buying smaller properties and you can only raise a million dollars at a time. So you can never really grow beyond that. So, we’ve purchased about 18 deals, 17, 18 deals, and syndicated probably 10 or 12 times by that point. And we decided, you know, this is a little bit of a struggle for us because our superpower is not telling our story. 

Our superpower is really focusing on operations. And so, we started looking at, we partner with this syndicator because we’re really good at operations, we have a property management team in place, we have a development crew, we can renovate units for about one or two grand apiece, less expensive than anyone else that we’ve had come in and give us estimates. We’re turning out three units at a time. We’re really good at operations.

And so, it’s kind of very reflective for us to say, we’re not really good at syndicating, we’re not delivering as many touches as we need to to keep folks and inform the way that they need to because we’re out of the properties trying to make a difference with the resonance. Resonance pays the bills. And then, our investors are going to be fantastically happy when they see all of our properties. We leave here this summer and they’re getting 80, 70, 60, 45% returns on their investment, then they’ll be happy, right? 

But we’ve learned that you know we have this gap that we need to fill. And so, we’re working on that gap with some hires. But something we also did is say “Well, why don’t we move to the institutional world?” And so, with that in mind, we hired someone out of the institutional world, who spent years at Collier’s, and CBRE, and Lloyd Jones, and came into the company with a totally different perspective than we have. And, it’s always so focused on making a difference and then he focuses on institutionalizing our processes and, you know, and brought in, you know, equity and so forth. And so, when you get into the institutional world, the proceeds are much smaller so if you syndicate as a syndicator, you make more money on the deal than you do if you go to institutional partners. Institutional partners will write a 5, 10, 20, 30, 50, $100 million dollar check with no problem, but they’re going to get inside your fingernails and toenails and know everything — thing about you, your business, every single piece of property you purchase, returns. 

We have pages and pages of questions from them about a property we’re buying, about us. We’ve, I mean, it’s just been incredibly remarkable the amount of information, and you know when you’re talking to guys who are from Harvard and these other places, and their analysis is incredible. And you think, “Oh, I didn’t I didn’t know we could do that.” You know, we could change proceeds from the lender so that we boost this and change this and now at your three will. So, we’ve learned all these techniques to really improve profitability to the investors. But, you know, it’s been an interesting change.

One thing about institutions though is, I don’t want to work with other investors that just want us and a deal and them. So, we had to provide 10 to 20% of the capital ourselves out of our own pockets to work with them. So what we’re decided to do is kind of split a little bit, and still do syndications but want to do two or three years, and on their side, we can do 5,6, 8 with institutions. Less money per deal but more reliable and more deals, and bigger, because it needs to be bigger, you can’t buy anything under $20 million and have an institutional partner. Because I just don’t want that small deal. That $150 million, they need to deploy this year, that’s not going to be in $2 million chunks.

0:17:46

WS: Right, right. I just appreciate some of the details there, and even, you know, you said like they’re going to get under your fingernails and toenails like they’re going to know that much detail about you and the deal, no doubt about it. I think, oftentimes, people say, “Well, why would you want to go through that Sam? Why not just build your own investor relations farm and be able to raise more of your own money and not have to put up with that or give control?” I hear that often. Well, I don’t want to get, you know, they want too much control and well yes, if they’re bringing 80 to 90% of the money, you better believe they’re going to have control, right? I mean, rightfully so, you know.

But, speak to why you would do that and not just you know, say push forward on growing your own capital raising ability in that side of the team versus going institutional?

0:18:31

SS: I think it comes down to kind of that mindset. Do you have a scarcity mindset, or do you have an abundance mindset? And yeah, absolutely you’re going to get control away. And, are you willing to give control away to drive your vision, mission, and values of “Now I can change more lives, now we can do more.” And yes, each deal is going to be less profitable. 

Now if your focus is, I just really want to work four hours a week and syndication is going to get me there. You can get there with syndication right? You could do two or three deals a year. And, you know, get your return and go sit on the beach and if that’s what you want to do and it’s all about you and your family. Great. It’s all about you, great. But we just have a different mindset. So, we built a team and part of the driver for us is, one, back to, “Can we make a difference? Can we make a profit doing it? And now, can we make more of a difference and generate more of a profit because yeah I’m going to make 1% of set a 2% perhaps but it’s going to be on a $40 million deal versus a $5 million deal.” 

Okay, so yeah, 1% of a bigger number, perhaps, but two, is that we really, really wanted to improve ourselves. And so when you get somebody there who is super experienced and they’ve been doing this for 20 years and they’re looking at you and your systems and saying, All right, we’re going to partner together we’re gonna get married for the next 10 years on this project. This is what I expect, like, “Oh my goodness. Okay, we gotta fix this, this, and this really quickly.”

And so, it’s been, baptism by fire I guess. But it’s been a good transition and when you go to raise retail equity, we’re going to be that much better.

0:20:17

WS: No doubt. You and company-wide even proved in a massive way because of working with institutional money. Right? I mean, no doubt, you’ve learned so much and improved your processes systems. But speak to how do you do that? You know let’s say the listener that says “You know what, I see what I’m talking about. I should go try to do this. I should try to work with some institutional money. But man, you know I don’t really have that Rolodex of $100 million, ready to invest.”

How do they even get started to build that relationship?

0:20:47

SS: I think there are two different ways. One is to really is to hire an introducer who’s going to introduce you, you can find them on LinkedIn. If you reach out to me, I can make some recommendations. But folks who will just introduce you to institutions and family offices. There’s a lot of myth and more around family offices, I will tell you they are super slow to make decisions and if you have a deal that you’re trying to close, forget it.

You need six months for them to get to the point where “Okay yeah.” ‘Coz they’re not in a hurry, right? They’re not in a hurry. There’s a capital institution who are just focused on deploying capital, they don’t want to operate, they just want to oversee the operations and asset manager share the asset management with you, really need to like we did we hired somebody who had a lot of pre-existing relationships that we pulled out of, you know, Colliers or CBRE or someplace like that. And you need to hire somebody like that and they’re not going to be cheap, but they’re gonna be totally worth it. And as long as they can work well with your team and bring those folks with them or at least get the introductions and you can do that. 

I will say though that you better be prepared to know your stuff inside and out, like if you’re still struggling with understanding how IRR works and time, value, money, and some of those things and it’s probably not time to go talk to institutions. If you’re fully firmed up on that stuff, you’re fully firmed up on how your operations work, and they’re going to throw ratios at you about your labor versus materials and sources and everything else, you need to be squared away to the nth degree.

0:22:26

WS: And if you’re not you’re going to learn a lot.

0:22:30

SS: If you’re not, you’re gonna write this down and put it in a book because you’re gonna fail. And, honestly, we felt quite a bit at first, and then we got it sorted out. And, we’re closing this deal right now in Dallas, 180 units with an institutional partner. 

0:22:44

WS: Awesome. Congratulations on that, by the way. (Thank you.) You also mentioned before we got started that your superpower of putting together a team that is smarter than you are. I would say that’s what I’ve done as well. You know like, that’s the way we’ve scaled, right, really fast is finding amazing people and bringing them onboard, right? I can’t be the expert at everything and neither can you. And you know, there’s so many facets to syndicating a deal just like you’ve mentioned, many. You know, even working with an institutional partner, like, you can’t be the expert in everything they asked right like it’s just not possible. But, you can build a team of experts, and that’s something you claim you know you’ve done really well at, and that’s helped you to grow and scale. Speak to that a little bit, you know, like finding those amazing people, growing that team. How did you do that?

0:23:31

SS: In the beginning, you know, I went to my family members because it’s hard to convince people to work for free, right? So family and friends. And, you know, trying to get the right people on the bus. Right, so I see Good to Great. If you haven’t read that book, that’s a great book to read to get a good understanding of you to know the boss who gets on the bus and how to keep them. You know, there’s Built to Last, these great books that will teach you and show you some of those basic principles.

But if you’re the visionary, then you need to stay the visionary and not be the worker bee. If you’re a worker bee, you need to get a good visionary. If you want to syndicate but you’re not charismatic, then you need to find somebody who’s charismatic and wants to be the face of the organization. So, we’ve hired a face of the organization. I’m very passionate about having diversity and culture, and I just look around at all these syndicators like myself and think “Oh, man, we are not a very diverse group so we need to improve and grow our, you know, diversity of, you know, very diverse children.” I want them to grow up in a world where their diversity is loved and accepted and so we were doing that as a team and if it gets back to control you’re going to lose control. And it’s for the good that you lose control.

And so, that’s what we’re all about is finding those people who can work independently. But, who are willing to work together. And, we can sit in a room and talk about “Hey guys, this went terrible.” And, it’s been great. We’ve had some of those experiences and the teams have been like, “Okay. All right. How do we fix this? Or how do we press forward but we can’t fix it? It’s done. All right, it’s done, what do we learn?”

I’ve never been, we’ve never had a meeting in the past three years where people have said “You did this or this is your fault.” We’ve never had that. And, it’s been fantastic and it’s all about having the right people on the bus and getting after what they want to accomplish that builds towards the greater goal.

0:25:33

WS: Give a tip or two about finding that “right” person. It is so important and we spent a ton of time working on that ourselves. But, how have you done that? Give you a tip or two because I know that’s what the listeners wondering too. How do I find the right team member?

0:25:48

SS: Yeah, so it’s really hard with Covid because we’re not, you know, talking together and then when you’re talking through a mask it’s really kind of difficult as well, but I encourage, you know, in today’s market, zoom calls, groups, meetups, and other things, I remember being on one that was, you know, for veterans and people are talking about all their businesses and I kept thinking, “Man this guy on this call, something about him and we just connected afterward and one thing led to another and now he’s here.” Moved from California here to Texas and he’s super excited. I’m super excited and, you know, brought one of his teammates and they were super successful assets of their company, and join us and it’s been fantastic. 

So, you really need to connect. You need to go to join a good mastermind, find like-minded people, but once you have skills that you don’t have.

0:26:38

WS: Yeah. Love that. Gotta get to connect, you got to find those people, and I like how you mentioned, it’s like  you connected with this guy, and it’s like “Okay, I need to get to know him better.” And it’s like “Okay, you need to be a part of our team.”

You’re open to that, you know, and I think, personally, I’m always looking for talent. Right? I mean it’s like I see somebody  talking about like “Okay, how can I work and I put them in here?” You know like today or as quickly as possible, I approached them about that. I appreciate that. 

Tell us, do you have any predictions, Sam, for the real estate market over the next six to 12 months?

0:27:12

SS: Next six or 12 months I think it’s going to remain hot. We’re still at low-interest rates. It is going to take interest rates changing but as deals get more pricey it becomes more of an institutional world where they can deal with lower returns, or unless you can syndicate and guarantee your investors you know 15 IRR or 12 IRR. It’s getting harder to find the true value add projects. And, off-market, my best deals have been on-market deals. Our biggest returns have been on market loop net sourced projects. But we strive wholeheartedly to find off-market projects because it’s just I hate sitting there competing with a bunch of people. So, you want to get out of the competition game right? Competition lowers your return.

So, I think it’s going to remain hot, and then it’s going to taper off, we know it is, we’re just so far off. The concern is going to be as we’re all taking on these bridge loans that are, you know, set live, or maybe you can get it set on the 10-year treasury yield or something else like that depending on what lender you’re using. But, once that starts going up, cap rates are gonna follow up because you have to be able to, your (inaudible) is got to be high enough.

0:28:27

WS: Yeah, no, I appreciate that. And just how you’re thinking about the market I think it’s just helpful. Tell us though, you know, how do you prepare for a downturn? You know you’re buying a project. What are a couple of things or anything that you’re looking at, say you know what, if the market does take a dip in whatever way and three ballers go out, how do you weather that storm? How do you know that you’re prepared for that?

0:28:48

SS: So I went through the downturn, you know, 2007, 2008, I was flipping homes. Some of those, we just turned and kept for years and years till the market return, and then we sold them and made a great return. But I always want, if you’re syndicating, always leave a way out to say, “Hey, you know, investors, year five happens to be the lowest point since 2009, this is not a good year to sell. We want to extend, you know, a few more years. Can we do that?” 

So, you want to provide yourself with as many options as possible. And, you know, the markets at its peak, you know I know we’re going to hold for five years but if we sell today we’re going to get 90% of our five-year value versus waiting five years. So, let’s sell today and go back into another project. So, we’ve been doing that. And, you know, because we’re not to be able to create the same value as we just had.

And then, others was one of the reasons why we were still able to weather the storm is our entry points for always flowing. So, we weren’t buying core-plus assets. You know if we’re still buying things that have meat on the bone, even if it’s a hairy deal, sometimes a lot of hair on the deal, we should still be good. So, if you’re in your target is 20% IRR, and then you’re down to 15% IRR, 12% IRR, you’re great. You just lost half year’s potential revenue but guess what, you know, our potential return, you’re still doing okay.

If you’re sitting at 15, now you’re down at six to seven, you’re probably still okay. But, you know, it’s just that challenge. So expect potential problems in the marketplace and, you know, a year, two years, three years, and be ready with some cash to go out and buy some stuff.

0:30:29

WS: Awesome. And I’m going to ask you, do you all self-manage?

0:30:32

SS: We do. In fact, that’s one of the things institutions really liked about us is that we had our own property management company. It’s actually a couple of companies we have brokers that are lined up so we can charge leasing fees and so forth. They have about 30 people on staff. It gets really easy when you’re doing large properties because they have on-site, four or five, six people on-site.

0:30:56

WS: I know, I think you’ve mentioned, you know, our team did some research about you, and I think you’ve mentioned you know like “You’re not going to get rich off property management.” And so, speak to being vertically integrated like that. Why do that? You’re not going to get rich off that. I mean, I understand many things about or why you do that but I want you to be able to share that with the listeners, like why go to the trouble of having your own property management company if it’s not going to be a source really of income for your business?

0:31:22

SS: Yeah. I will say property management is where most of the headaches of our, right? It just is. So, a couple of reasons why we did it, first off because we were buying properties and no one else would manage in the beginning. So, they were really distressed, you know, 20%, 5% occupancy. The property manager doesn’t want to manage that. There’s no money in there for him. And so, now that we have these, you know, 180, 245, these larger 200 plus unit properties, it’s easy to find a property manager, but it’s also very easy for us to manage it.

And so yeah, you’re not going to get rich off property management unless you have 10,000 units or something. But the focus for us is two things: one, we can make changes on that on a dime, and we can make we can change what’s happening, straight away. We don’t have to go through a review process or anything else I can just pick up the phone and say, “Jesse, can you do this?” He’d be like, “Yeah got it.” Or he’ll say, “No because x, y, z.” And then I can go back to institutional partners say “Hey, that was a great idea that you learned in whatever school you went to, but on the ground, this is what’s happening. You always want to trust your guy on the ground.”

So, we can make those changes right away. Same with having our own development team. If we want you to know prices on this just changed, we’re going to go and move and buy these because it’s less expensive. We can do that or we don’t want to buy that because it’s breaking apart, and then the sellers are installing it and they hate it. Let’s go back to something that’s in the middle ground. We can make those changes right away. And, we don’t have to go through review processes, we can keep our costs as low as possible, and then pass it on to our investors, because we, those guys are also making money from owning the properties and from other things. It just works out better for us. Quicker, leaner faster, more entrepreneurial.

0:33:11

WS: Yeah, the knowledge and the control, right? You have the inside immediately and much more of it. And you have the control to change things as you said immediately and do something better, right, what’s being done and don’t have to wait for the process like you’re talking about. And, I think it makes a ton of sense and we’ve not brought that in-house yet but we’ve definitely talked about when and how we would do that. Because we do understand it’s not so much about the dollar sign, right, from owning a property management business as much as it is how it affects your real estate business, right? You know, you’re inter-operations as a whole and the knowledge you have of how you’re operating.

But, I’d love to keep going about some of this stuff, Sam, unfortunately, we’re gonna we’re out of time. Give us a couple of daily habits that you are disciplined about that have helped you achieve this level of success.

0:33:54

SS: So, every morning like I get up, I get ready and the first 30 minutes is study time. Quiet. Just myself, sometimes, my four-year-old comes down there at 5:30 in the morning. And we’ll sit right next to me and, you know, learn about the solar system or something on his iPad. But it’s just, you know, it’s time to set the study, to reflect, and think about how or what I’m doing as a person and so forth and get inspirations. 

It’s amazing how much inspiration you can get about your business from the scriptures, by the way. So, I’ll just leave that there. And then, and then after that is before I leave the house I work. So, emails and other things because as soon as I get to my office, day’s over. Emails, phone calls, people doing everything I can to help support the team and the machine, and I prioritize my people over anything else, making sure they have what they need. If they do, then the mission gets accomplished. Sorry to use some military jargon there. So, The Mission, The Men, and Me is a great, great book by the way. But, you know, I felt for a very long time that that’s the way it needed to be. And we’ve become successful I think because of that.

So that’s one, you know daily habits. Two, love your family and prioritize time with them because if you’re not right with your family, you’re not going to be right with your business. That’s going to bleed over.

And three, never forget to be grateful.

0:35:23

WS: Love that. I appreciate you sharing that and it’s like the small things you do every day, they seem small but man, they add up to some massive things. I’ve experienced that personally and similar, very similar, to what you talked about.

Tell us how you like to give back?

0:35:37

SS: So few different ways. We did it, adopt kids. I know that’s very limited but in their lives, we’ve made a significant difference. I know that from when they came. And then, want to set up my business in a way that we are constantly giving back through the work that we do.

We love to hire if we can find somebody at that property even they don’t, if it’s a small property and they haven’t had management experience, we’re willing to train them and teach them as long as they do what they’re supposed to be doing. And that has worked out more times than not. Surprisingly. Given folks an opportunity there have been some times where people have done really great.  And then all of sudden they fall off the earth. And we get a call and go down the property and there are words missing and you’re like, What in the world happened in the displays, you gotta, you know, get things where you organize it back on track. But, that’s part of life and we are humans. And, we want opportunities so that’s other ways that we give back. 

Personally, we’re constantly giving away anything that we’ve had. We’ve been blessed with abundance. We try to share as much as we can with as many people as we can.

0:36:40

WS: It’s a mindset, right? I love that, that shows from what you said. And, Sam it’s been an honor to get to know you better and have you on the show. I mean just going from working in Afghanistan and a 50 Cal gunner focused on global health impact investing to growing an amazing portfolio and team and helping so many people. And even going to transition from retail investor to institutional money. Just so many great points that you’ve left us with. I know the listeners are encouraged and have learned a lot. I have as well, grateful to have you on the show. 

Tell them how they can get in touch with you and learn more about you.

0:37:16

SS: Yes. Great. Thank you so much Whitney for allowing me to be on your show. Definitely an honor for me, a fantastic show loved it for a long time and was motivational to myself as well as inspiring. I appreciate that. We need more people like yourself out there and doing it because you know there are some good people in the world and, you know, we just need to keep doing good things.

So how to reach out to me, so [email protected]. Send me a text message. My Alaskan phone number is 907 406 9042. But yeah, [email protected]. I’m on LinkedIn. I am terrible at social media so sometimes people post things for me, or every once while I’ll post something on LinkedIn, but I will, if you messaged me I will definitely message you back and we are happy to give advice, mentorship, guidance, chat about shooting things with the guns and, you know, anything else you guys want to talk about.

[END OF INTERVIEW]

0:38:09.4 

Whitney Sewell: Thank you for being a loyal listener of the Real Estate Syndication Show, please subscribe and like the show, share it with your friends so we can help them as well. Don’t forget to go to LifeBridgeCapital.com, where you can sign up and start investing in real estate today. Have a blessed day. 

[END]