Profits with Purpose: How to build a $300M+ Real Estate Fund That's Changing Communities with Samuel Sells

0:02Who's ready to rock today, Fire Nation. JLD here and welcome to Entrepreneurs on Fire. The only daily show interviewing the world's top entrepreneurs, and we're talking seven days a week. Today, we'll be breaking down profits with a purpose, how to build a 300 million plus real estate fund that's changing communities. To drop these value bombs, I brought Samuel Sells in the EO Fire Studios. Samuel is a retired Air Force officer, a visionary CEO, investor, and social impact entrepreneur who went from 30K in the bank to creating a$300 million impact fund and is set to acquire$1 billion in affordable housing.

0:37In today's information, we'll talk about that story, the five levels of real estate success. We'll also talk about raising money from investors and what impact investing is and oh, so much more. And a big thank you for sponsoring today's episode goes to Samuel and our sponsors. Franocity has helped hundreds of people leave unfulfilling jobs, invest in recession-resilient businesses, and create legacy income for their families through franchising. Visit Franocity.com. That's F-R-A-N-O-C-I-T-Y.com to book a free consultation and start your franchising journey with expert guidance. Samuel, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with.

1:19Hey, what's up, Fire Nation? So happy to be here. So good to speak with you. And yeah, what is something that I believe in that most people might disagree with me? So most people think that getting wealthy is all about the numbers, right? What's my ROI? How's the dollar doing? Et cetera, et cetera. To me, it's all about people. I believe we can become successful, wealthy by helping improve other people's lives. And when we create meaning or we can create meaning wealth at the same time, it's not just about the money. It's about creating value and meaning. And when we do that, then we become successful.

1:56So I like to flip that script on its head. I love flipping scripts. And we're gonna be doing that all day today, Fire Nation, because we're gonna be talking about profits with a purpose. And it's quite a story. How the heck, Sam, does one go from$30 ,000 in the bank to$1 billion in real estate? Tell us that story. I knew in my life at one point when I was getting out of the military a little bit early that I had to do something different, radically different. And I just developed this incredible passion for helping people. And the real thing, the trigger that made all the difference was when I learned how to raise money.

2:32So I knew I wanted to go into real estate. I knew I wanted to do real estate in a way that made a difference in other people's lives, like creating clean, safe, affordable housing. But it wasn't until I learned that one key thing of how to raise capital legally and ethically that that changed everything. Once I learned how to do that, it was just from 30 ,000 to 30 million to 300 million fund to a billion dollars in real estate. It's been an incredible ride. Now, one thing that I'm really excited to chat about today because my audience, they love steps. They love processes. They love systems. You actually have five levels of real estate that nobody, and I mean nobody talks about.

3:09Let's talk about them now. Nobody talks about, I never ever heard this. It's only because I've learned it over time. Everyone mostly focuses on level one. Some people hear about number two, and then it's just very, very, very tiny if you even get past that. So level one is what I call the one man band. So this is your Pace Morbys. This is your rich dad, poor dad, learning how to buy that first single family home or house hacking or wholesaling or doing it all. But you're doing it all yourself. You're a one man band or one woman band, I guess. The next level, though, is learning how to raise capital.

3:46So when I learned how to raise capital, I left behind the bigger pockets world and got into commercial real estate and would raise$100 ,000,$500 ,000,$1 million,$10 million,$30 million. That's what's called being a syndicator. Syndicating is pulling together other people's money, and that's level two. The next step, though, if you're a syndicator, you've learned how to raise capital, and you're thinking, like, how do I get bigger and go farther? Well, the next level is called an institutional operator. Most people have never, ever heard of an institutional operator. And what that is, is there's these massive institutions who raise all this money and they need somebody to go do the work because they're sitting in their suits in New York City.

4:27They're not about to go operate a property. And so they need an institutional grade operator who is very experienced to go and they will give you all the money to operate an apartment complexes or multiple apartment complexes. It's incredible. but there's a level above that so the next level so one level one is one man band level two is syndicator where you learn how to raise capital level three is institutional operator and number four is when you become the institution by running these big funds so like right now i'm raising 300 million dollars for a fund that'll buy a billion dollars worth of real estate six years ago i didn't never own or seven years ago i never even had a commercial real estate property i didn't know about syndication didn't know any of these steps so anybody can do this level four you be become the institution, you institutionalize, you become very sophisticated, you have very deep rooted processes.

5:20And then you raise these big funds,$300 million fund,$500 million fund, billion dollar funds. And that takes you to the next level, which is called to me, massive scale, think of Blackstone, think of these massive enterprises where they're taking hundreds of billions of dollars and turning it into trillions of dollars. It's incredible, but nobody ever talks about this. So if you want to know, like, where can I go in real estate? You can go from nothing to trillions all in this industry just by following the steps. Sam, money's a scary word for most people. Very scary. They're scared of it. They have the wrong mindset around it.

6:01It terrifies them to even melt the words money. How do we face those fears and not only just talk about money, but raise money from investors? You know, when I first got started and I knew I wanted to scale, I didn't have the money. I was active duty military. It scared the hell out of me to even consider raising money from other people because it's so taboo. And you don't ask somebody how much money they make. It's just in America anyways, nobody wants to talk about it. Although I will say what's interesting about the military because I was an officer for eight years. You knew because it's publicly posted exactly how much everybody was making.

6:39So I actually had a little bit of a different mindset because I went right out of college. I just assumed that like, like everybody's salary was just posted somewhere. I just thought that was the case. So I was that person that was like, hey, I'm making$31 ,000, you know, a year. How much are you making? And they're like, what are you talking about? Yeah. how dare you to ask me that so rude military flips some script for us for sure two things this is going to sound super super simple and but this is exactly how it works to raise capital you need to do two things one you need to have a legally approved vehicle to raise that capital now if it's real estate or a security you're going to do a five regulation d 506c or a b or a crowdfunding or reg a there's different vehicles that give you your left and right limits of what you can say and do and so forth the next thing you have to do to raise capital is the hardest you have to ask people that's it and it's just hard because mentally that barrier of we don't talk about money that keeps you from asking but if you just ask and say hey i've got this vehicle this opportunity, this is what we're doing.

7:47Would you like to invest in something like this? Once you learn how to say that, then you can just keep saying it and keep raising money. That's how it works. Fire Nation, don't overcomplicate things. Learn from people who have come before us. Let's learn those lessons. Let's apply those lessons. We're all standing upon the shoulders of giants. And we have a lot more to talk about around this topic and more when we get back from thanking our sponsors. Starting your own business can feel overwhelming. There's so much to consider and protecting your identity and privacy are top concerns. With Northwest Registered Agents, you get more privacy, more guidance, and more freedom to run your business from anywhere in just 10 clicks and 10 minutes.

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10:05Visit Franocity.com. That's F-R-A-N-O-C-I-T-Y.com to book a free consultation and start your journey with expert guidance. Sam, there's something that a lot of people aren't very familiar with. Family offices, institutional investors, RIAs, which are registered investment advisors. Break these things down for us. What the heck are family offices, institutional investors, and RIAs, and why do they want to give us money? What's going on? So I was 40 years old, 41 years old when I learned about family offices. I just grew up in rural Oklahoma and joined the military. I didn't know at all what these things were.

10:44So family offices are essentially a very wealthy family or a group of wealthy families. They will hire a team to manage all of their investments. All right. They got wealthy. They have this capital. They wanted to preserve it and they want it to grow. And they usually have specific areas in which they want to grow, whether that's real estate, whether that's the equities market, stocks bonds whichever thing that they're interested in but these family offices control trillions of dollars of wealth some of them collectively most of them are controlling you know billions or hundreds of millions of dollars and they're actively looking for opportunities to invest the same thing applies to what's called institutional investors so institutional investors are these groups that have 300 million dollar funds 500 million dollar funds some of these institutions like Goldman Sachs and others, they've got hundreds of funds where they've raised hundreds of millions of dollars in every single one of these funds.

11:44And they have to deploy this capital, meaning they got to put the capital somewhere where it's going to work. And they're all out there looking for institutional grade operators. So at least the commercial real estate world, guys and gals who have experience operating commercial real estate. And so they will come in with 10 million, 20 million, 50 million, $100 million checks, a single check for$100 million and invest in your project as long as you have experience and so forth to run and operate that project. Registered investment advisors, RIA, same thing, managing a lot of wealth and they want to give you money.

12:27They are actively looking for people to give money to. You just have to create yourself and become that person that they want to give money to. It's incredible. If you're one of those people, Fire Nation, that has a hundred million dollars, entrepreneurs on fire, listen, it's not for sale technically, but you know, everything's for sale at a certain price. So I even take Bitcoin just for ease purposes. Anyways, let's talk about impact investing, because I think a lot of people understand the word impact. They want to make impact. They realize that after they have success, they want to become significant.

13:00They want to make an impact in this world at an even deeper level. What does that phrase mean to you, impact investing? Most people now have heard of ESG, so environmental social governance, and it's become a really hot topic and it's become a dirty word in a lot of situations. The reason is, is that ESG has a tendency to put numbers over people. Now, impact investing replaces that with putting people's social impact over the numbers. Now, impact investing does it in a way that falls under a capitalistic paradigm. I like money. If you're an investor, you probably like money too. You want to create it.

13:39You want more of it. You want to do stuff with it. And you might be thinking, oh, I need to donate it to a nonprofit or a charity. But that's just not the case. You can invest in a firm like ours. There's lots of others out there who are focused on creating social impact in some specific way. So you're investing for a profit, but in a way that aligns with your values. So you can create meaning and profit at the exact same time. You don't have to sacrifice profits or sacrifice your values just to make a buck. That's what impact investing is. And there's lots of companies out there doing it. It's becoming more and more important and more and more available.

14:19And if you're interested in any of that, just reach out to me and say, hey, Sam, I'm interested in this type of impact investing. and I can steer you to groups that we know that do those things. So this is along the same lines, but let's just break down some of your best advice for those people that are listening, Fire Nation right now, who want to make a lot of money. I applaud you, by the way, if that's who you are. And do good at the same time. This is what I would do. First is just understand that this even exists. All right. you can think of like uh cotopaxi um their entire you know making clothes for good and donating you've heard of tom's shoes perhaps all these companies are out there doing it what you want to do is know that you can invest for profit in a company that's going to make a difference in the world so go find a company or an operator like myself someone else and set up a call with them ask them a thousand questions you know how are you doing this what are you doing what are the returns look like?

15:21Because I want to make a profit. But, you know, what's the impact you're doing? And if it's okay, I could share just a really short story. So I'm an impact investor. We run, we take over distressed multifamily apartment complexes, mobile home parks. We clean them up. We make them clean, safe places to live. And in the process, we usually double our investors' money in the first four to five years. Now, there was a property we took over. There was a murder on the property during due diligence phase before we bought it. While, while we are buying it, there's a murder there. Uh, the day we close on the property, the SWAT team arrives.

15:58My brother who goes to the property after I signed the paperwork, he's like, Sam, I just arrived in the SWAT teams here. Like, Oh my goodness. So like the property, 180 units in Dallas, Fort Worth is rough. Six months later, the property is clean. It's safe. There's kids playing on the playground again. The city comes to us 12 months later, the city comes to us and says, Sam, what did you guys do? Crime has dropped by 75 % at this property. And the next nearest, closest operator property, they've only dropped crime by 33%. So you've more than doubled what they've done. What did you guys do? And we walk through the processes, what we do.

16:40And oh, by the way our investors have more than doubled their money in the first year on that property. Like that's how you create impact. That's how you make a difference. And that's how you make money all at the same time. Now that's the story, Fire Nation, that I think we can all feel good about. When you're having that kind of an impact on what it is you're doing in this world, man, that feels good. Sam, give us the one single takeaway that you want our listeners to get from our entire conversation today, the best way that we can connect with you, your call to action to our listeners, and then we'll say goodbye.

17:15Fire Nation, if you've been inspired by what I've talked about, then I want you to do two things. One, I want you to determine what kind of impact do you want to have in the world? And if that's in real estate, you want to create clean, safe, affordable housing, I would love to speak to you. You can reach out to me on Instagram at the disruptive capitalist. You can reach me on LinkedIn, Samuel Sells. You can just shoot me an email, sam at impactgrowthcap.com. And I would love to talk to you about that. If you have questions about how do I make an impact in the world in this thing, just shoot me a message and I'll respond and say, hey, I know somebody and I'll connect you.

17:54The thing to remember is that you can invest in a way that aligns with your values, with what you want to become. And of course, if you're just like, Sam, I just really want to learn how to raise capital so I can grow. That's fine too. Shoot me a message and I would love to talk to you and we'll do my best to help you out. Fire Nation, you're the average of the five people you spend the most time with. And you've been hanging out with SS and JLD today. So keep up that heat. For links to everything we talked about, visit eofire.com. Type Samuel in the search bar and the show notes page will pop right up.

18:26Sam, thank you for sharing your truth, your knowledge, your value with Fire Nation today. For that, we salute you, brother, and we'll catch you on the flip side. Thank you. Hey, Fire Nation, a huge thank you to our sponsors and Samuel for sponsoring today's episode. And Fire Nation, over the last decade, I've interviewed more than 4 ,000 of the world's most successful entrepreneurs, and I've created a revolutionary 17-step roadmap to your financial freedom and fulfillment. I put it all into my first traditionally published book, The Common Path to Uncommon Success, which is personally endorsed by Seth Godin and Gary Vaynerchuk.

18:59The Common Path to Uncommon Success is the step-by-step guidance that you need to achieve the lifestyle of your dreams. Visit UncommonSuccessBook.com. I'll catch you there or on the flip side. Franocity has helped hundreds of people leave unfulfilling jobs, invest in recession-resilient businesses, and create legacy income for their families through franchising. Visit Franocity.com. That's F-R-A-N-O-C-I-T-Y.com to book a free consultation and start your franchising journey with expert guidance.