From Military to Multi-Million Dollar Real Estate Investor: Jesse Sells' Impact Strategy

All right everyone, we are back. Welcome to the Owner Meeting Podcast hosted by Multifamily Strategy. I am your channel host Christian Osgood, joined today by Jesse Sells. I am stupidly excited for this episode. Jesse has done everything that I have done and a ton more and is onto the next 3 levels of business. But what he's going to talk today about is impact investing, raising capital for projects that are both beneficial, that are interesting. I'm, I'm super excited to hear about the model, what you've migrated to. I'm going to have a ton of questions, but on this episode, I am learning right alongside the rest of you. Jesse, welcome to the channel.

Hey, thanks for having me. Excited to be here.

If someone has not heard of you before, which first of all, they're crazy. They need to follow you immediately. But, uh, Jesse, tell us a little bit about what your business looks like today, and then I'm going to work backwards towards where you started.

Yeah. So I'll give you my 30-second pitch of who I am. Uh, my 20s, I spent my time in the military, did military intelligence. Fortunate enough to be picked up by special operations, go and do small team stuff in the Middle East, speaking Arabic, drinking tea, working out of State Department, working with letter agencies, all that stuff. Got out of the military, put my life savings into commercial real estate because hey, financial freedom, right?

Yeah.

Yeah. So I put my $15,000 of my life savings, I was not a great saver, and created about $70 million worth of assets under management in 3 years.

There you go.

Which grew way too fast. Had some growing pains there. But yeah, it was all about profit and purpose. It was investing to actually make an impact in other people's lives and change people's lives. Yeah, that, that's me in a nutshell. Just taking that analytical, how do we get things done? How do we reframe it from the military and getting people on board and actually doing it in commercial real estate and having a real impact in people's lives?

Oh, that's fantastic. Help me clarify having an impact on other people's lives. What project interests you? And I think probably more importantly, What projects don't interest you because they don't have the impact that you'd like them to have? Like what, what is, what is the type of project that would be interesting to Jesse?

Yeah, so that's an interesting question and, and something we've debated internally for a long time. How do you measure impact? Yeah. Right. Before we started the recording, we talked about people with solar panels. You can measure how much energy you're saving. That's tangible. ESG is tangible for the most part. Yeah. ESG is also a cuss word in many circles. What's not tangible is one of my favorite stories is we had this 180-unit an apartment complex, Fort Worth, Texas, and the school nearby was just doing terrible because a lot of the students wouldn't— it would rain or get too cold or whatever, right? This affordable housing, mom and dad work, wake up at 5 AM, go to work, the kids walk to school. And this is like middle school, so they just wouldn't go, right? It's too hot, it's too cold, excuses, whatever. They wouldn't go because the bus— it was too close to the school for a bus stop. Oh, we found out. Yeah. So we found out is like, hey, the bus stop is going to be within a mile. So what we did is we dropped a location on Google Maps literally to the corner of the property and said that's a mile. Fill out the paperwork. Now the bus comes. And guess what? The rating for that school went up because now more students came in there. And if you don't know this, like teachers get graded on how many students they start with and they end with.

So Michael, I was a kindergarten teacher for 5 years. So yeah, I'm very, very familiar with this. Yes.

Right. So it turns into this like crappy looking, self licking ice cream cone, right? Of crap that these good teachers, like they don't want to be there because their rating goes down because students aren't showing up. They can't control a lot of that, but just by moving a bus stop, right? That has a huge impact. And we were actually the only school in the entire Fort Worth ISD district, which is a large city, of course, that rating went up in the area and more people showed up. That's impact, right?

Oh, that's fantastic. And in the grand scheme of projects that you can do, that's not that big of a project. No, it's some paperwork. It's some paperwork. It's some extra work, but that's not, you hear some people talking about these crazy projects they do to try to improve their community that may or may not work that are super expensive. Yeah. You're talking about like, hey, let's pay attention to the details and let's actually come up with a product that serves our community and serves our tenants. It doesn't have to be the most expensive or crazy thing. It's, it's are we doing these simple practical beyond the blocking and tackling of real estate? Right.

And that's the thing, you know, that same property actually— well, I'm going to get myself in trouble here, but we— that's my first institutional partners. So these guys are like Harvard grads, they're brilliant. Oh, they also like— no, it sucks. They also see things. They also see things from like an ivory tower where it's like, this should work on paper. And then you go down and you talk to the residents, you talk to the property managers, assistant managers, They're like, no, this is the dumbest thing I ever heard.

Right?

Because that's not what people want. That's not what people need.

It's this. So when you're using institutional capital where, where maybe they do have a removed view at the property level, how do you communicate the vision? How do you work with the right people where you have the amount of control that you need to have the impact that you want?

Yeah, it's, I, I think that's for me, the big change that happened with us is we started doing weekly meetings with everybody. That's with the developers, teams, on-site teams, invite the asset manager, excuse me, not the asset manager, but the assistant manager for property management, like the leasing agents, invite them on and actually get real input. Because we've all had a job where you're working at a place and just because for the military, it's like somebody with a star said we have to do this, right? Star on the shoulder and it makes zero sense. Next thing you know, I'm mopping outside in the rain, right? Because you can't have water be on the, whatever. It just doesn't make any sense. But from that level, they think it does. So you have to go down and listen to the guy that's actually swinging the hammer or actually, you know, working with the tenants to figure out what people care about. And that's, that's how you find out that, you know, hey, these, this afterschool program doesn't really help anybody because, and then the students are, or it's catered to, or it doesn't, there's nobody here that age. Like, ah, I thought Boys and Girls Club would be awesome, but no, it's all for like 6 and younger, at least that one was. Yeah. And we don't, we have like 3 people in the whole place. If we do it for teenagers who cause the most ruckus, right? I was a crazy kid, teenager. We do some after-school program that helps them out. Then guess what? Crime went down 75% at a different property.

Yeah.

All because we looked at what people need.

It's amazing what a difference that makes. One of the properties that we, I think we onboarded the least effectively was, is a little 44-unit property, affordable, 55+. In Stephenville, Texas. So you mentioned Fort Worth. This is about an hour, 15 minutes out of Fort Worth. Yeah. Stephenville, Texas. We buy this 45, 44 unit. There were no systems whatsoever for the retirees. What they really wanted at the end of the day, because there, there's all sorts of people started moving out, leasing went slower and we couldn't figure it out because there's like no 55+ communities here. There's a ton of older people like the, there's excess demand, limited supply. Like why is Why do people not want to live here and why are they not happy? What it ended up being is, I guess, years before they had every other week bingo night and every week Bible study in the main office, and the space was not usable at that time for that, those activities. All we did was just say, okay, we're going to bring back bingo night, Bible study, and we're going to bring back holiday events. Those little things. And then we coordinate a shuttle. That can go to the, uh, there's a, there's a local food bank. There's a few lower income people there. Yeah. We just coordinate a shuttle that comes once a week at the same time that can take them there. And the service costs a dollar per person who actually rides it. It's a, it's a local service you can register for. All low cost, really practical things. The difference is we went from 80% occupied to we are 100% occupied with about a 10-person waiting list today. It's the little things though where it's like, hey, we went from we're a little worse than our competitors to we're a little better. And the things that we solved were practical, which is exactly what you see today. And then if you get to feel good about your impact on the community, which is exactly what you're talking about, it's all the difference. Right.

And again, how do you measure that? It's like we have this many bingo nights, like cool. Right. But in reality, that's what they want and that does make a huge impact in their lives. Yeah. That's that community. And then that gives them the, you know, when people will feel that community of a property, I always tell people when, we buy these crappy— sorry, these rundown apartment complexes, right? And I always tell the new management, like, people are gonna hate you for 6 months because you're gonna come in here, you're gonna establish some rules. People were used to getting away with stuff, but in 6 months they're gonna love you because now they're like, oh man, I could sleep at night. There's no partying going on, there's no one— there's no drug deals going on over here. I feel safe. My kids can go play on the playground equipment without me, like, having to sit there on alert the whole time. And when you build that community, then they actually care about where they live. They take care of the space too.

It, it night and day difference. I'm curious. So, so I, the philosophy's awesome, by the way. I absolutely get that. So you're like, hey, ground level coming from the military, you understand what it takes to operate from ground level on a property, which is dude, awesome. How do you make the jump from military to multifamily? Like what was that actual turning point for you where you actually even got into the industry? Because you made it very far so far. Yeah. What was step one?

Step one was identifying what I wanted to do. You know, I grew up, you know, lower income for when I was younger and then my dad even got a degree when he was older. So by the time I graduated high school, I was kind of middle income, which is nice, right? But you know, my entire childhood we were flipping homes essentially, you know, always remodeling, always doing something. If you look at my roof over here, I'm already like retexturing my ceiling 'cause I just can't get past this mindset that I gotta do it myself. Awesome. It's terrible. You know, I saw that, like, you know, the statistic that like 90% of millionaires own real estate, right? They come from that essentially. So I was looking at different ways, you know, Piers Moby, Subject To. And while in the military, you know, I rented out a few houses, I flipped a few houses. So I did the math. I was like, okay, if I want financial freedom, I put $10,000 a month, right? And I make like $150 to $200 a month after all savings and CapEx and everything else. It's like, holy cow, I need like 70 to 80 homes homes to make $10,000 a month of passive income. Yeah, right. That sucks. So, and that's not passive. So did some, a lot of YouTube University, discovered syndications and just kind of talked to some of the people I knew, friends and family, bought the first mobile home parks and the first 2 we bought within the first 6 months started giving us $6,000 a month. Oh, and after that I was just full-time, just jumped right in. I love that.

When you, when you were buying those first deals, was that specifically you're just buying for cash flow? That's the, that was the goal. Just like get income, set a base.

Yeah, mobile home parks. Yeah. Cash is king, right? That's a lot of people forgot about that. A lot of people got screwed over because it's all these projections and then reality hit, right? 2021. Yeah, we sold a lot of properties, but we did it right. But yeah, it's cash is king at the end of the day. Mobile home parks are great for cash flow. Fantastic. And then, yeah, as we just grew, we learned that a lot of people are scared of that next jump, you know, and I guess I had something wrong with me because I've never been really scared of that next jump. It's hard. Sorry, you got me on a whole pedestal here, but it's hard to raise for your first deal, right? Everybody knows is listening, you know, like, how do I get started? You know, I don't have friends that have hundreds of millions of dollars willing to give me.

I don't either.

Right, right. And key number one is you're not asking for a favor. You're giving people an investment that's going to make them more money, save their taxes, and give them a real asset that they can see, look and touch, be proud of. But, but also, you know, when you're asking somebody for $10,000 or $20,000, that's their life savings and they don't like losing it and they don't understand that it's in an apartment building or a mobile home park. Yeah. So when I graduated and got up to that over the 100 units, then all of a sudden it started getting easier and easier to raise capital because people are used to being like, oh yeah, it's his wiring instructions, I'll be there tomorrow. I've done this 100 times and now I'm moving into the space we talked about before. It's like these data centers, which is a giant gold mine. It's crazy out there. I'm talking to people that Yeah, they're like, everybody I talk to is like, hey, we won't do anything unless it's $20 million or above. Yeah. I'm like, cool. All right, I'll do that. Well, here's this project. It's a, you know, $9 billion. And they're like, oh, this is awesome. Let me review it. And 2 weeks later we're, we're talking terms. It's, it's a different world.

So, yeah. So with transitioning to the data, so you, you start in mobile home RV, you've done multifamily, you're, you're in the data center space. How do you, determine, and then we're going to talk data centers, but how do you determine what asset class? Because you've jumped from one thing to the next thing to what determines, hey, this is the project that I want to do. Because I do see a lot of entrepreneurs do too much of everything and you end up with a business that makes less sense. I also see people who do this in a very structured and measured way, which seems to be how you do most of your investing. You may be geared as a risk taker, but You don't strike me as someone who does things unintentionally. So how do you decide, hey, I'm going from RV mobile to multifamily to data center. What is the decision-making process in what you're investing in?

Yeah, so multifamily is a little tough right now, right? So we exited a bunch, we got pretty liquid, and then we started looking at, okay, what's, what's the next thing out there? Data centers don't have a lot of impact, right? And a lot of people say negative impact. And you can go to, there's these fantastic Facebook hate groups that, data centers that say that birds are gonna explode as they fly over them. I'm not even joking. That's like a big conspiracy right now. That's awesome. Yeah. Too bad birds aren't real.

Listeners.

No, I'm just kidding. You seen that one? That's a, one of my favorite conspiracy theories. No, but so I didn't really enjoy the, the data center space because it just felt kind of cold and it's different. It's, it's not really a construction piece cuz it's got a lot of mergers and acquisitions in there. There's a lot of, there's power now you have to get provided in there. Then I started talking to people about, you know, what the impact is for companies, for what's called sovereign data centers and digital infrastructure. And that's when I got interested because now it's taking people's information and it's actually protecting it. So now it's kind of going back to my roots, what I did in the Intel world, working with state departments and getting people to take care of their own stuff. Now it's the same idea where it's, you know, we don't let Anthropic come or, I'm getting myself sued, Microsoft or these big corporations that are just scraping and stealing all your information, all your data, which could be your secrets for how you run your company, right? And then they can take it and redo it. It's actually creating a layer, an air gap between the Anthropic and your data or your sovereign data for talk— we're talking about like a project in Nigeria I'm working on right now that now all that can be controlled and protected. So it's kind of interesting. That's a huge impact.

Oh, that is super cool. That is a really high impact. Those, so what part of the, development process, data center process, where, where does your business focus on these? Because I know there's a, there's a ton of coordination, there's a ton of moving pieces. What does your group do specifically in the data center realm?

Yeah, so we've changed our tactics. So we were doing everything internally, right? Our own property management company, our own development company, switched over to now finding the best GPs, the— finally, people that have done this over and over again at a large scale. Turned into kind of more of a private equity firm. So it's kind of a longer answer, but so now I go and find these guys who've done this 10,000 times, you know, and then I, now I can go, hey, I've got all these family office guys I work with, I've got great lenders I work with. So I'll come in and bring in the capital. And then I will also do connections of, hey, this family office knows the governor of this place or whatever else. Or, you know, that's how I got into Nigeria essentially. They just asked me to, if I could do it. And I said, let me ask. And the next thing I know, I'm flying out to Nigeria in a few weeks. So do it. Meeting with the governor of Lagos, never even Nigeria. So, so that's the piece I bring is, you know, those connections, the financial capital, and then also just finding who, right? Because that's the biggest thing. If you have the right team together, you can do anything. So that's, that's what I, that's how I do it. I just kind of piece everybody together. And then as we develop this, I'll have my own construction manager, my own asset managers sit and do those phone calls once a week with the local people, make sure everybody's on board. Board and create some magic.

It's kind of fun. I love that. And this is where I see a lot of entrepreneurs go, and this is something that I'm actively working on in my business, but you can't— this takes me back to a saying that we had early in my career. I learned that you can't have an A team with C players. I was going into— I had an investor in town with me, and while we were in town, this is Moses Lake, Washington, before I moved to Dallas. So it was Central Washington's where I started my first portfolio. I'm like, hey, I want you to meet this broker. He occasionally has some deals. He's kind of like our C-team player. And my investor immediately was like, oh no, I played select soccer. We, I don't need to meet the C-team. That's, we don't need to do that. And I was like, huh? It was kind of like a rude way for him to say it, but I've reflected on that exact moment so many times in my career. I'm like, he does have a good point. If you have a bunch of C-players on the team, it doesn't really matter what the vision is, what the target is, what the leadership is. At a certain point, you just can't win with a team that is not aligned, that is not skilled. You just can't do it. You need to align the right people. And so, yeah, what I'm hearing is you found, hey, by doing a bunch of different flavors of development, multifamily, building a property management company, those are all totally within themselves different businesses. You found, hey, your best skills were aligning capital and building teams. And so now you've taken what you were best at and that's now what you do for other projects. Is that more or less accurate?

Yeah. And now I also understand like every level to a degree, right? I didn't do it for 20 years or anything, but now I understand to a degree what it takes to be a good property manager. Now it takes to be a good developer, those teams, right? Because then you'll find a lot of contractors. I'm sure you have this experience where they'll blow smoke up, you know, and just say, hey, this costs this much, it'll take this much time. And they're like, no, it doesn't. Oh, that guy would do it for a better, for less.

The general rule of thumb in the industry is whatever timeline they give you, multiply by 3. That's, that's the, just kind of the general rule of thumb.

Right. Yeah. So yeah, that's the part I enjoy the most is kind of putting it all together, seeing the outcome, and then setting up guardrails that we know like, hey, this is where we're going. This is what we need to do to get there. Uh, when we first hopped on the call, you talked about like, you know, hey, there's a fire happened, right? And they called you cuz you're the only one that could take care of it.

Exactly.

Yeah, it's awesome. So it's kind of the same thing. It's just I'll let people handle their pieces and then if I can put together the right team where I know I can trust a star who's a great asset manager of mine or other key members, then you know, it's fantastic.

That's something I find very rewarding and this is why there's so few people who actually truly want or thrive in the CEO position. For the most part, if you're hiring good people and you're putting together a good team, you are actually not responsible for a lot of day-to-day things that a lot of your recurring tasks should be in the hands of someone who's even better at that task or more specialized in that task than you are. Downside, you pretty much deal with everything that is unusual or completely sucks. Most of your job is, hey, this is too unique, too hard. Out of my area of specialty. You put out a lot of fires even when you have a great team. I'd argue especially when you have a great team, the problems that you solve just get more and more complex and more and more difficult. That if you are doing the CEO role correctly, I think that that seems to be consistently what it looks like is you get greater and greater challenges to overcome and you get a very variable day of basically only really hard things for the most part.

Yeah, absolutely. I tell you, you can get to the point where you hire your own asset manager who handles a lot those property level issues, but then there's always something else, right? There's always some other issue that pops up or something new challenge to, to handle.

So that was my, that was my flavor today. My, I have a director of property management. She is amazing. However, we have a document for, in Texas we call it TDHCA, but if you, if you do LIHTC, you have to go through the compliance with the state. There was an annual doc due that she's like, oh, I thought I had the pieces for this. It's due tomorrow. And turns out I need a whole bunch of stuff that only ownership has, and you now have 24 hours to find all of it for every property. And I'm like, huh?

Of course.

Of course we do. Of course we do. Frustrating. Yes. Stressful for some people. Yes. But also depending on how you're wired, those are also kind of the fun challenges. Like you wake up this morning, I didn't know that was going to happen. Now we get to solve a big task and it feels amazing when you come in and you finish it and it was hard and you're like, okay, good. Mission accomplished. I enjoy those. I like having a challenging mission that is unique and I like, I like that every day doesn't look the same. I don't want it to always be chaos, but I like that every day is unique.

Yeah. And then one day we'll have a day where you only have to work with those 3-hour work week. I haven't figured that part out and I get like, I'm still a 7:00 AM to 7:00 PM type of guy.

Yeah. At least I was gonna, I was gonna ask you if you figured that piece out. 'Cause you said you've, before the, before the call you mentioned that you had Taken from a large management team and lots of silos to you're a much smaller team now. How many, how many person team are you right now?

Yes, we have about 100, uh, with, you know, development, property managers, asset managers, uh, accounting. Everything was internal to now about 10 people total.

Wow. Yeah. And you're still 7 to 7?

Yeah, unfortunately. Yeah, I keep— I don't know, it's— you got to learn how to say no, right? And I keep telling myself that, and then I, like, focus on things and there's more opportunities. And that's the problem, there's, there's So many opportunities out there. Yes. But like you said earlier, if you get stretched too thin, you know, you might move everything 1 inch or you can move one thing 1 mile, you know? So it's just, yeah, that's what I do. I get overwhelmed, then my assistant kicks in and saves my butt a few times and then I shut things down and then refocus and move forward.

So what are you—

I'm just so much.

What are your primary differences that you, you know, I'll take this even simpler. What are the things that you actually feel different between a 100-person team and a 10-person team? What has been the differences for your business making that shift?

Oh, so it's, that's a good question. I think a lot of people will identify with this. It's hard to let go of control. 'Cause if you know, like you can do a really good job, right Christian? Like I, I know how to do this front and back, and if I hire somebody else, they might do it differently, which could be fine, or they might be able to only get like 95% or 90% of what you could have done right now. Times that times 100 people. Well, now I understand how all these guys work. I understand, you know, what's happening in detail at the property level because I know the assistant manager by name. I know his wife and kids. I know the maintenance guys. I know the fight clubs they get into, you know, everything else. Now it's just I get a one-week update of like, hey, This is what happened to property. Everything's fine. New leases, you know. So it's a, it's a control thing, right? You got to let go of that control, which could be good. Maybe these guys have been doing it for longer and but also it could be bad, especially when we turned over property management, everything went down from 90% collection down to the mid-80s and it stuck there for a long time because we just weren't as involved day to day and we were one one contract out of like 50 this company had, right? So they just don't care as much, you know, either. Yeah. So it's, it's a yin and yang, but because of that, now we can also do more with less. So it's, you gotta look at it and kind of weigh it out in my mind piece by piece.

That makes sense.

That makes sense.

How, how do you problem solve for that when, when you're like, hey, um, we have something that we've controlled really tightly that's hard to let go.

Mm-hmm.

And we've gone from 95% collections to 85% collections. The temptation for people is to go, hey, this didn't work, we need to take this back. And that may not actually be the right answer. How do you handle that when that input comes in? What is the, what is the decision-making process? Hey, this was a big deal. Yeah, we tried it. It's not going the way we want. What's the next step?

Yeah. And that's hard because especially if you change over like a property management, it takes 3 months to 6 months for them to really get good control of the property, depending on how many units you have, you know, and understand what's going on, understand the old bookkeeping, you know, just kind of get everything set up. So you don't want to do a knee-jerk and just pull the chocks and have somebody else come in and they, you know, just kind of create this, you know, snowball going down the hill. For us, it's asset managers that we get about 5 to 7 properties, one big project, they're doing construction or something like that, and then they go to the property at least once a quarter. So they go and talk to everybody, they go see and they know everybody personally. Of course they do the weekly meetings, but they also see, meet tenants, meet residents, excuse me. And get to know it intimately, you know, and that's the best way I've been able to figure it out on our own side. Just we have to have somebody whose responsibility is overlooking the property management and then also overlooking the numbers and like where the asset, property, where it's moving towards and also what's going on with the construction guys, you know.

I'm gonna shift gears slightly 'cause I'm curious. So this is a personal question for me, but I think everyone can, can learn from it. Where do you make the jump to like family office, private equity? I've figured out that, yeah, I've done lots of JVs, so I've had lots of individual partners. I've done syndicated deals. I've done enough online presence with my YouTube channel and my stuff where like there's a flow of money, but it is all, all of the money still stems from me and my sphere of influence and my marketing. When you get into the family office space, which I do have some friends that play in, it's just a different type of money. It's another way to do it, but it's a jump that I've never personally figured out how to make where you have the— I have a lot of the $1 to $2 million people. I don't have the $20 million people you mentioned, the $100 million people. I don't know where they exist. How do you make that jump and where does that connection come into the business?

Yeah, well, they're not on LinkedIn, so that's one mistake I made.

That is right there. That was already worth a lot of people. If you're taking notes, there you go. They're not on LinkedIn.

Good to know. And they're not— not usually anyways. We got to think about who they are, right? So if you are a family office, if you are an ultra-high net worth individual or high net worth individual, everybody, especially if you're kind of famous, you know, I know some guys that created some very large websites that everybody would know. If you're that person, everybody wants you for your money.

Okay.

Yeah. So any relationship you have with them is going to take time. And the last thing you should ever do is like, I do commercial real estate and I'm going to make you 3x your money, right? They care about a couple of different things and that's tax, right? And then downside protection. So risk mitigation. So that's my Intel world.

I—

how do we mitigate the risk? Okay, so those two things. Now where you find them, it's a big question that people have, right, is expensive small rooms. So I probably spent— I know I've spent hundreds of thousands of dollars going different events. I'm flying out to you on Friday to, I guess next week technically, to Miami for the Global Family Office event down there and speaking on stage there. So it's just in my experience, those bigger rooms, even if they are in those big rooms because they, you know, get free tickets, I speak and everybody loves them. But they're also getting hit up like 100 times by different people with business cards. You just don't stand out.

Yeah.

So you got to go to those smaller rooms, get introduced to those smaller rooms. And sometimes, like, I'll be honest with you, sometimes I, I've gone to like these mental health, uh, what do you call those things, like the— you go and they talk about your inner child and stuff like that.

Yeah.

But you know who has money to do that and spend is wealthy people. And you know who— how you make a really good connection with somebody is you go to that place, you open up your heart, and they open up their heart, and you become friends. And you actually can see each other and know each other. And, and then, and then afterwards, then you start to talk about what you do because this is the natural progression, right? Yeah. If you're going to an event where they know you want money and you know they have money, right? It's just, it's just not natural. So honestly, the best events I've gone to is going to these random retreats or something. And, you know, where I know people are going to spend money there and then I just see who I make a connection with. Yeah, I love that.

It's very simple. Just put yourself where those people are and be a normal person, essentially.

How to win friends and influence people, right? Yeah. If you're trying to date somebody and she lives in a different state, you're probably not going to date her, right? You gotta— it's proximity is number one. So you gotta find the rooms that they spend time in, and then you gotta come in as a— maybe not an equal, but, you know, somebody that's on the same playing field as them. Yeah.

Yeah. No, that makes perfect sense. And that's a lot of, this is called the Owner Meeting Podcast. It's because everything that we did is we met people who've done what we want to do. And I didn't ask them to buy all their stuff. I asked them to show me like, how do you do this? And what did your portfolio look like? I drove out to people in the middle of Central Washington and they plopped me in their truck and they went, here's how I bought my first 100 units and here's what the partnership structures were. Yeah. Like you, you learn by doing. So it's really just a kind of, it's an extension of the owner meeting. You just army eating bigger owners. That's basically it.

Yeah. And sometimes you gotta pay for those rooms, which sucks, but yeah, it's an investment, I think. Yeah.

No, that tracks too, because you know where I've raised most of my capital? Pickleball. You know who plays pickleball early in the morning?

Rich people. Yes.

Yeah. This does track. I basically, this is a good call to action to get back into pickleball. Or other thing, I can't tell. So that's, I'm limited on that one, but I have a really good buddy.

He, first off, he like started dating some famous football, like soccer player's daughter. That's how he got into family offices. He's like, Jesse, how I raise most my money is I just go to yoga. I go to the fancy side of, it's in England somewhere, I don't know. And he's like, I just go to the fancy areas. I go yoga every day and we just all chit-chat and then that's, you know, 6 months later, I'm, I've got a project for, for them. Oh, you just go where they're at.

Huh. That was a great practical advice. Great practical advice. That's actually, that's like my favorite. That's the part of this podcast I'm gonna be writing down right after this. It's, uh, the next one.

That's my favorite thing. It's the simple things, right? It's like, it's just, we don't have to get too complicated. Yeah.

Yeah. No, it, it's simple. Identify where those people are going to be and then be there and don't hit them up for money. Just be a person around those people.

Be a human.

Yeah. Yeah. Simple practical advice. And you know what? That's pretty much how everyone does everything. Be a human. You form a relationship and now you have access that other people don't. It makes perfect sense. Wow. Well, Christian Osgood, that was a stupid question. That was an obvious answer. No, not at all. Be a person and be in the right place. No, I love it. It's good to hear that holds true at every level. I think a lot of people think like, oh, well I only have this sphere of influence. It's not that, it's not that hard to build a new connection. Just, just go where those people are. I, I love it.

The question, hey, and don't be afraid to ask too.

Oh yeah.

Because I think that's another thing, right? And not, not ask for money. I wouldn't do that. Right. Not right away. But just say, hey, do you know anybody else that's doing this type of stuff? I would love to learn what they're doing. Or just, you know, I'm looking for other people with like-minded that I could just talk real estate with if you're doing real estate, right?

Yeah.

Like, oh yeah, my buddy Joe does this, whatever.

Oh cool.

Bring in pickleball.

Yeah.

Easy.

Yeah. The, we ask this every podcast, but the, the, the biggest mistake, we call this the stupid tax, but you're the dumbest you'll ever be when you start something cuz you haven't learned all the things that you're about to learn in the A to B from where you started to where you're at today. What was the biggest learning tax that you had to pay along the way?

Yeah. Being an idiot. So been renovating homes my entire life, right?

Yeah..

So I knew that, right? I know how to flip a home. I know how to do that stuff. First mobile home park, maybe the second one, we got this screaming deal, like 10 mobile homes that were junky, but for free essentially. I just gotta pay to move them. Like, awesome. I'm brilliant. I know how to renovate them, right? We'll lease them out. Jesse's awesome.

Okay.

That did not work out. We spent around $200K on that. So the big learning tax is like, yeah, I could renovate a house. I know that the basics, right? But I did not know mobile homes. So if I knew mobile homes, I knew there are certain places where water sneaks in that it's not very obvious. And then the wiring is yada, yada, yada, yada, yada. So every single one of those ended up failing and we lost about $1 million evaluation because I didn't have somebody to call a true mentor. You know, be careful about the people online. I know plenty that are not real people, a true mentor that you can call and say, hey, you've done this space, I'm thinking about this. And then if I had somebody, he would say, Jesse, it's a great idea, but just shift over off a couple inches, your plan, and I've been perfect. But instead we lost $1 million in value.

Well, and if that's the second one, that's the worst time to have a million-dollar loss is right in the beginning. That's really, how did you overcome that ultimately?

You know, you gotta, what's it say, buy the lemon, whatever it is. You know, you gotta be honest. I think a lot of people understand that this is your second deal. You have to tell people where you're at, right? And you just say, hey, this is what we learned. This is what we're going to do. You know, this is, Here's the reality of the event and here's our plan forward. And some people will be mad and scream at you and, and other people will just understand and thanks for the honesty and let's keep going.

Yeah, this is almost carbon copy of my, my first mistake early on. Bought a, bought a hotel, uh, a resort, like a, uh, campground cabins the whole night. A hundred-year-old awesome location. No one had hospitality experience. We thought Hey, we've done a bunch of creative finance, multifamily. We're good at business. Well, this, this will be like an extension of that. Hospitality is not multifamily. They're completely different businesses, run completely different, valued completely different, debt products completely different. It cost me $1 million. I had to buy out all the partners. It was the first million dollars I made.

I had to give away.

Sucked really, really hard. You do exactly that. You communicate, you, one person was mad, the other two were like, okay, it is what it is. Let's, let's come with a solution. You just, you handle it directly and you build. I'm not a huge Grant Cardone fan, to be completely honest, but I do love his books and sometimes he has some one-liners that are just awesome. So I will give him credit. He's excellent where he is excellent. But his advice early on to one of my friends that I just commandeered, he was like, hey, if you have a million-dollar problem, you need to build a business that makes more than a million dollars. He's like, basically just If you have a big problem, solve new problems and upscale that problem. And that was, that was the answer for us is let's build a bigger portfolio so that my million-dollar mistake here doesn't feel like the end of the world. And it's often the way out. Handle it directly, scale, move on. And you've done that to an incredible level, especially with early failure. I appreciate it. That's where a lot of people get wiped out though. That's that early.

Yeah.

Massive, you know, 7 figures is a lot in the beginning. Really is a lot.

So coming in, yeah, that's a lot of value. So it's only $200,000 loss of their equity or their money, but still it's, it's a lot of value to lose a million dollars. Yeah. But yeah, I've had plenty of failures, you know, and that's, you're going to keep having failures over and over again. It's just different levels.

Yeah. No one plays a perfect game at any level. It doesn't happen. Not possible. No one wins everything every time. Not possible.

And you can't predict everything. No one predicted COVID. No one predicted this, this straight up stuff. You know, you just can't predict everything. You just gotta roll with it. And what do we, what, how do we move forward?

Oh, that's awesome. Well, Jesse, if, if someone wanted to connect with you, learn from you, where do they, where do they find you online?

Yeah. Best place for me is probably LinkedIn to get contact with me. There we go. Uh, Jesse Sells, uh, or at impactgrowthcap.com.

Impactgrowthcap.com. And we will link that, uh, below as well. But Jesse, thank you so much for joining us on the Owner Meeting. I actually learned a lot. This was super fun. I love the way that you run business. I love your mindset behind it. This is awesome. So thank you for the takeaways you gave me. Everyone listening, I hope you had as much fun as I did. Like, subscribe, do all the things that you do to promote this channel because ultimately the owner meeting is about bringing the things that other people have done that you want to do to you. You want to get more of this, support the channel, give us a like, appreciate you, and we'll see you on the next episode.