How I’ve Acquired $350MM in Self Storage

AJ Osborne: I actually became paralyzed overnight, and I was, let go of my job. I lost my job. After that, it was like, hey. Now I gotta figure out what I'm gonna do with my life. We don't know if I'll ever walk again.

We don't know if I'll ever be normal again. Worst moment of my life was seeing when my daughter walked into the room and looked at her dad hooked to tubes, and she didn't wanna get near me. It got to a point where they're like, alright. He's either gonna die, or he may never get out ever. He'll live on me forever.

Steve Trang: Hey, everybody. Thank you for joining us for today's episode of Real Estate Disruptors. So we have AJ Osborne with Cedar Creek Capital and AJ Flynn from Boise, Idaho to talk about how he's acquired $350,000,000 in self storage. It's an insane number, almost unfathomable to to even picture. Now, guys, I'm on a mission to create a 100 millionaires.

Information on the show alone is enough to help you become a millionaire in the next five to seven years. If you take consistent action, you will become one. And, guys, if you get value today, if you get value out of the show, please hit that subscribe button. That way we can help more people grow together. Do not keep us a secret.

That will not help me accomplish my goals of creating millionaires. You ready?

AJ: Ready, man.

Steve: Alright. So first question is, what was your life like right before you got into real estate?

AJ: Yeah. So I, followed in my father's footsteps, and I sold insurance.

Steve: Mhmm.

AJ: So selling insurance took my father out of poverty, extreme poverty. Right? They didn't have running water. He poached for food, would literally go up in the mountains in rural Idaho, and they'd shoot to eat. So he grew up with, you know, outhouse, no warm water kind of stuff.

And, he decided he wanted to change his life, and so he sold insurance. And so I thought growing up, but that's my route too. That was a way to I could get control, right, of whatever I wanna do. I was dyslexic, a d ADD, very bad. So I left school at 04:15, I think.

I left school. I actually ended up going to college at sixteen. But, I I I knew that the traditional route wasn't gonna really probably work for me. So I thought, okay. Sales is great.

And at the time, I thought it was like me controlling my income. I'm my own boss. I can sell. I can make it right.

Steve: That's what we all think before we get into it.

AJ: Yeah. That's what we all think before we get into it. And then I quickly learned, this is a treadmill. Like, this is just nonstop. I gotta sell.

I gotta make money if I don't. Me and my wife, we had to live on very little of our income because we didn't know, like, that it was an unpredictable way to live. So that's what life was like prior. And Mhmm. We What

Steve: kind of insurance was it?

AJ: Group medical. So health insurance.

Steve: Okay.

AJ: And, we decided real estate was our way to basically stabilize or try to create some kind of stabilization of income and to offset risk. Yeah. Because we we had times where, you know, my income was 35% less than it was the prior month or 40% less. Mhmm. So it fluctuated massively.

And so it was like, we we gotta do something to gain control over our life. And this thing that I thought gave me control didn't. I I thought that it was better than a w two, and I had no boss. But then I'm like, actually, all my clients are my bosses Mhmm. And they fire

Steve: me. So Yeah.

AJ: It just means I get fired more.

Steve: That was, for me, like, the biggest transformation when I when I left Intel, right, leaving a w two job to become a realtor, it was like, well, I'm self employed.

AJ: Yeah.

Steve: Right? I'm my own boss. Yep. Like, no. Everyone's your boss.

Every homeowner is your boss. Every buyer is your boss.

AJ: Yep. And And they can call you anytime. Anytime. You don't get off at five. Oh, no.

No. No. No. No. It's weekends.

Everything it's not

Steve: Well, that's, like, almost when it starts.

AJ: Right? Because there's a realtor. You're right.

Steve: You're working from, like, you know, nine you don't start 8AM as a realtor. Right? Like, maybe nine, 09:30. And you start your day, and you're doing a follow-up and this and that, but, like, showings or a one there off the clock. Yes.

So yeah. So yes, sir. Yes, ma'am. No no, sir. No, ma'am.

To everybody. Everybody. So okay. So yeah. That was your life.

That that

AJ: that was my life. And it's it I don't regret it at all, obviously. And it was an amazing opportunity option. I I don't wanna make it sound like it was bad or, you know, but it wasn't what I wanted. And, too, not only what I was what I wanted, but I looked at it as, there was no way to grow, like, because it was attached to my time.

Mhmm. And that's the same thing as w two.

Steve: So Right.

AJ: With it being attached to my time, there's only so much I could scale or grow, and I could never stop.

Steve: Would you consider yourself self employed at that time?

AJ: Yes. I I I would because it was all commission based.

Steve: Mhmm.

AJ: So my father started, he worked and worked for some very large insurance companies. Then he started a brokerage firm, which I went and worked under, and we just got paid commissions. So the great thing is, like, well, you you eat what you kill. Right? You either make money or you don't.

Nobody cares. You don't get paid.

Steve: So but you're just straight up changing

AJ: Yeah.

Steve: Trading time for money.

AJ: 100%. It was I if I provide you value value or if I get this, I get paid. If not, I don't Mhmm. At all. Right.

And it would like, we you wonder how long can I even live? Mhmm. So if I'm not able to do this thing, like, how long? Like, I guess, we looked at our savings. Well, how could how long will this even feed our family?

Yeah. And so that was an interesting place to be in because even with that said, in that sales role, it's not like I could go get a job. It's not like, oh, I'm an engineer. I'm whatever. And then if I get laid off, I can go somebody else will wanna employ me.

Right? It's no. Where do I go from here? So, I I loved it, and it taught me incredibly good skills, but it was not, in my view, sustainable.

Steve: Sure.

AJ: And it definitely wouldn't take me to anywhere where I really wanted to be in life. Mhmm. And so we started to look at other forms, and self storage was our thing that we liked and fell into. Now it's really important to know. I think a lot of people are like, oh, yeah.

Self storage and, you know, it's a hot thing. And so at the time, not only was it not, nobody knew about it.

Steve: It it was When was when was this?

AJ: We're we're talking early two thousands. Like So,

Steve: like, 02/1945.

AJ: Yeah. It was this was an asset class that most people didn't even know. Right? Yeah. It like, normal people didn't know.

Banks didn't want it. Investors didn't want it.

Steve: We were

AJ: buying things at, like, 10 caps, 12 caps because nobody wanted it.

Steve: You know what? Because I got in real estate in 2007. Right? Yeah. You know what my opinion was of self storage when I got in o seven?

What? So, basically, what you do is you buy land in the freaking boonies. Yep. Right? And then at some point You're it might be someone's farmland.

It'll grow. Right? And then as they expand in that direction, then eventually it's not land. Yep. You turn it into a nursery.

You sell trees. You sell plants. Whatever. Right? Where people would drive all the way out there to get to get plants at a discount price that's significantly cheaper than Home Depot.

And then as it developed further, the the city, then you convert it into self storage. Mhmm. And then as it grew further, then you would tear that down and then turn it into office industrial or maybe

AJ: That's how everybody thought of it. It was a land hold. Yeah. And it was a land hold that made you some money. And so it was kind of a good deal.

We thought of it as, no, this is an asset class we liked, and the guiding principle behind it was, you know, some of the basic stuff. There's no toilets. And so we liked that. But really how I looked at it being in sales and sales brokerage, I was in an all cash base. Right?

All of it. So we we didn't have assets. Mhmm. Right? We didn't you didn't have equity.

It was just

Steve: cash flow. Anything for collateral if you needed a loan.

AJ: Nothing. And so it was okay. This is a collateral based equity based thing that I can own, but I viewed it as this cash flow part of it. It's interesting that no other real estate asset class had. And I viewed that I could change it.

So it it was more like a business to me Mhmm. Than it was real estate. Because there was things that I could do within the self storage facility that I couldn't do, and I could change immediately. So I looked at it and said there's actually operations here. Mhmm.

And that ended up becoming the whole crux of our business and everything where I said self storage isn't real estate. It's a business. So I'm going buying a business, an underperforming business, and turning it into a good one. And I loved that. It was like my two worlds met.

Steve: Mhmm.

AJ: Right? Business and real estate, they came together, and it was, like, it was awesome. So nobody wanted them, so we could get high margins, high cash flow. Mhmm. Nobody really did anything with them.

It was, like, there was no operations for most people that owned them at the time. So then it was easy for us to turn them around and and get upside in it. So although it was a real estate, to me, it was a cash play. It was

Steve: revenue focused.

AJ: Mhmm. And it was cash flow, and it was a revenue focused business, which I would be buying with 100% analyzing and underwriting it, that the revenue should be at this point. So I wasn't buying and holding it. I was buying it to change that revenue. How did you know to do to do that?

So at first, when we bought it, we had a a very complex business strategy, and that was that we would make people pay their bills. We would let people know we were there, and we'd answer the phone. And that was our business strategy. And, it worked like magic because those that was things that other people just didn't do. And, but it, you know, it it was.

It was, like, literally, we're like, we can do better, and I can raise rents because you have this much vacancy. You have your economic occupancy is 70%. Your physical occupancy is a 100%, and your delinquencies are 15% or 10%. And I'm like, your delinquencies alone, I can increase gross revenue by 15%.

Steve: Right.

AJ: That's a fifth you know, that's a 50% increase then on my net profit after debt.

Steve: Right. So this all makes sense Yeah. Logically. Logically. Right.

AJ: But Implementation is different.

Steve: But when you got into it Yeah. How much business acumen did you know? Like, did you have a lot of business acumen because you're working in the sales side selling insurance?

AJ: Yeah. I I think I had more than other people. I think I was fortunate because my dad who didn't graduate from college or anything, but we had our brokerage firm. But I work because I worked in group medical, I actually got to work with businesses. Mhmm.

So I would work with the c suite of businesses because we'd be working with their insurance side. Mhmm. And I gotta see a lot of businesses. And I gotta

Steve: Well, I guess just you say c suite. So just for, context, who are some of your clients? Most business owners waste their time and money on solutions that never fix the root problems. They'll address all the symptoms due to slow revenue. And because they're only fixing the consequences, the real problem stays hidden and the cycle of wasting time and money continues.

It's like having a lingering headache that won't go away despite trying every over the counter medicine, when reality should've just gone to the doctor and had them figure out exactly what was causing the headache. And that's what's so difficult about business. You can see and feel the symptoms and yet struggle to find it. Now imagine you can find a prescription that doesn't just mask the symptoms but actually addresses the root cause. Where would your business be if you address that right now?

That's what our sales event is about. Your marketing doesn't suck. Your leads aren't bad, and your operations aren't terrible. It's that you haven't addressed what actually makes you money in wholesale, which is the conversations you have with homeowners. It's critical that you build trust with sellers, demonstrate that you fully understand their situation, know exactly what's keeping them up at night, and paint the ideal outcome that leads them to a better future by working with you.

That's what it takes to get signed contracts and keep your business going. Simply put, at our event, you'll walk away with the framework, phrases, questions, documents, and process to close more sales and buy more houses. Join the hundreds of others who've come to our live event and dramatically grown their business. Our event is happening soon and is available for you to join only if you're willing to take the pill.

AJ: So, we had clients that were really big clients we actually got. We got, Albertsons. Mhmm. We got, Jackson's. We got their huge gas station chains.

We got large hospitals we ended up. So we ended up getting big clients.

Steve: Have relationships with people that know business?

AJ: Yes. And we could ask them, and we could talk to them. And we had lots of clients. So we had, like, 300, and we could actually see, and we'd talk about it. And it was fun.

It was like a game for me and my dad. Because what we would do is we'd go into we'd we'd start looking and we'd be talking, we ask them all the questions, then we'd leave and we'd be like, I wonder how good their business is doing. So we're like, alright. Here's what they sell. Here's their cost of goods sold.

This is how many employees they have to how much they make. This is, you know and so we kinda analyze and look at those businesses and try to see how how that was working. And it was a game for us. We liked it. Right?

But it did give me, I think, obviously, insight that other people didn't get. Yeah. And, when we looked at storage, it was super simple. Right? But we understood the basic tenants of sales, and you have to pick up the phone.

You've gotta let people know you're there. Right? And that sounds so dumb and simple, but they weren't nobody was doing that because they looked at it as real estate. Mhmm. You don't do sales in real estate.

Somebody leases out that spot, and it's done. Right?

Steve: Well, I mean, like like I was saying, like, when I first got into real estate, like, that was my Yeah. Concept. So this is what self storage is. It's just there Yep. To preserve the value of the land or add value to the land, but it was not meant to necessarily be optimized.

AJ: Yes. Exactly. And then when a better usage came along, you would change it.

Steve: Right.

AJ: And that's how people viewed it. And two, also, banks didn't like it. Like, it was a trashy asset. It was like, you had junkyards and storage. And, banks didn't like it at all.

They didn't wanna lend on it. One of the reasons that self storage did so well through 2008 that people don't realize is it was the lowest debt to equity of any commercial real estate asset. Mhmm. Because banks didn't wanna loan any money to it, and then people hold it as a land hold, and so they had no debt on it.

Steve: Right.

AJ: So, in a debt crisis, of course, it's gonna do well. Right?

Steve: Right.

AJ: And we have big margins. But when the asset was not people just didn't like it, because they thought it was a fad. Mhmm. But so many people literally thought this is a fad and this will be gone. They also thought

Steve: that argument today. I can't imagine that argument back then.

AJ: Yeah. It's crazy. And even back then, you had a lot of banks and, common theme was this is the first thing people will default on when they got in trouble.

Steve: Turns out

AJ: it's actually the last.

Steve: Yes. The exact opposite.

AJ: It's exact opposite. And, that shocked everybody through 2008. I mean, self storage is the number it's the top performing asset in twenty five years, and it's the lowest default. Mhmm. So imagine that.

You have the number one performing Mhmm. And the lowest defaulting in the same category.

Steve: You wouldn't know that if you watched Storage Wars.

AJ: No. You wouldn't. So it's a very interesting, combination, and they think everybody they just had it so wrong. Mhmm. Now after 2008, boy, did that change.

And now we know, like, today where self storage is a really hot topic.

Steve: Mhmm.

AJ: It's a really hot asset class because of how it performed. But that's a ten year period of time that people went from saying this is a trash asset that won't even be around. It's a fad to this is, like, the top asset class, and everybody wants to be in it. And just literally less than ten years from 2015 to 2020, really.

Steve: I mean, I really don't, quite fully understand it because, like, I see them everywhere. Yeah. I was just wondering, like, when is vacancy gonna catch up

AJ: Yeah.

Steve: With how much

AJ: Yeah. There. It's crazy. Right? Yeah.

One of the biggest things that happened was self storage moved from the industrial parks and the bad tide town into the neighborhoods.

Steve: Right.

AJ: And, they we in self storage, I think a lot of people don't understand where demand comes from, and it's an economic and a regulatory function. So as we've had a, very tight in lock, incline of cost of real estate along the lines with, right now, something like 80% of all new subdivisions, homes, everything else like that are built in HOAs. Mhmm. So regulations and cost of real estate from since the nineties has exploded. Right.

So in the eighties, right, if our parents wanted to build or wanted a new car and wanted a shop to house it, they just build it in the backyard. Yeah. Nobody's gonna say anything. They're gonna do it. They throw their junk in it.

Right? And it work. And it was cheap enough for them to do it. They didn't need to get permits. It was just so you could do whatever you wanted.

Today, no way. You can't do any of that.

Steve: Mhmm.

AJ: You can't park things in your yard. You can't park it on the side of the road. You can't just if you wanna add, you know, a garage space, well, most people can't even afford it. That's so expensive. Right.

So we have less land. We have higher real estate cost. We have more regulation. And in the exact same time frame, the cost of consumption has plummeted. Also, our ability to be mobile has increased.

Now businesses has decentralized due to the Internet, which fuels massively storage. I have a storage facility where about 30% of my tenants are businesses. So these things all accumulated to where self storage moved from being this thing that some people would need or use to being actually more traditional infrastructure in The United States. And the more people understood it and got to know it and realized it, the more, I don't wanna say popular because that's not the right word, the more important it became

Steve: More mainstream.

AJ: More mainstream it became and more of a staple to America. Mhmm. Right now, we have roughly 12% of the population uses storage at any given time. Now in some markets, that's higher.

Steve: Yeah. That would be much higher.

AJ: In Arizona, it's it's definitely higher because the, the the growth. So as growth goes up, if you look at, like, you may have 10% of the population that uses it. But if you're growing at 4% and you have a million people, that's 400,000 people. Right? Or excuse me.

If you have a million people, that's 40,000 people. Mhmm. Well, if you look at that 40,000 people, though, it's not 10% because they're moving. So that's more like 75 of those people use storage. So all of a sudden, you have 30,000 people that need storage units.

Steve: Yeah. And I think, we see this quite a bit where, like, some something will suggest to a homeowner that needs to move somewhere, but they have nowhere to put their cells in. We'll pay for storage unit.

AJ: Yep. Exactly.

Steve: We'll pay for storage unit for three months, six months. Just put everything in there.

AJ: Yep.

Steve: And you go move out with your life, and then we'll take it from there.

AJ: Bingo. Exactly. Yeah. And so it's it's, you know, it kinda molded into this thing. And, you know, it's it's kinda funny because we actually didn't really I didn't like to tell people we invested in storage.

Mhmm. Because it was looked down upon.

Steve: Right. So You're classless.

AJ: Exactly. It was. I mean, I literally had somebody that was like, okay. You're going from, like, a white collar professional where you're selling insurance.

Steve: Mhmm.

AJ: And they said, now you're becoming a slumlord. That's what they said. And they're like, why are you it's below you. Like, what are you doing? Right?

Yeah. And, so interesting how the world changes. And ten years later, it was just everybody wanted it, and Wall Street moved in, and and everybody needed it. But, at the time, it's not what you would ever have thought of investing in.

Steve: Yeah. No. It's not it's not nearly as sexy as as it is today. No. So you just jumped right into it from, like, you were making good money selling insurance, and then you just did this as a side hustle?

Yeah. And there was a seamless transition?

AJ: No. No. Not seamless at all. So we when we started, we were going in very small markets with very small assets. We're you know?

Steve: So you didn't just start locally?

AJ: Oh, no. No. We didn't start locally at all. No. We couldn't afford anything in our local markets.

Now one of the things that I think people think when you think commercial asset, the first thing you think is, oh, it's a skyscraper. We're talking about assets. You can buy a storage facility today that is less expensive than probably most of the duplexes in Phoenix. Mhmm. And you can get fifty, sixty doors.

So we were going into really rural markets, really small rural facilities that were cheap that we could buy. And then we were operating them that way. And we built, we we bought a bunch of them, but we realized it just we couldn't go anywhere with it. It was,

Steve: Why not?

AJ: Because we couldn't how we operate or how we ran in those markets, they were so small. We couldn't get very much, higher prices. So they just kinda plateaued, and they stagnated. So we sold them off because we didn't view that there was much of a future with it. And then we moved into bigger markets and went instead of having more small ones, we concentrated on bigger ones.

That made our margins go up because the operational part of it doesn't change that much. So you just add on doors. That means you get more revenue. Mhmm. So our margins got bigger, and that also made it easier to scale.

And we could charge higher prices and bigger markets because people made more money and people were moving. And so that's when we found we could go still buy these mom and pops that were doing the same thing they were doing in these teeny markets, but yet they had this bigger asset that had more doors and had more upside, and we could buy it. And the same thing we were doing on that small one yielded us way more on the big one. Mhmm. Because now those small changes were leveraged across more doors, more revenue.

And that's where we really hit our stride. And then from there, we we were like, we're serious about this. This is what we're doing.

Steve: So how long were you doing self storage before you quit your sales job?

AJ: So that's a funny story. Long time. I was actually by the time I stopped, I was work working for the third largest, at the time, brokerage firm in The United States. And, I did not stop necessarily because I wanted to because the money I didn't wanna take money out of my business. So we didn't have investors.

So we are just pouring everything back into our companies. Everything back into the real estate. We what we would do is we'd buy it, we'd improve it, we'd refinance it, and take that money and go buy more.

Steve: And Serious wealth accumulation. Exactly. Or asset accumulation.

AJ: Absolutely. So for me, my salary was too precious, to leave. So I was working two jobs. I was building a side company for a job. I actually became paralyzed overnight, and I was, let go of my job.

I lost my job on life because I was on life support in the hospital.

Steve: And So, you know, for those watching, I wouldn't make the argument. You don't look paralyzed.

AJ: No. I don't. Thank goodness. So I'm I'm I'm up walking. This this was, about seven years ago now.

I'm I'm walking. My lower legs don't quite work. I'm not not a runner. We'll just say that. Mhmm.

But I'm I'm walking without help, and you I don't think anybody notices, really. And so that's more than we ever thought would happen. But I I got put on life support for months. I couldn't speak. Nothing.

I was just living on tubes. And then after that, I I was sent home. I was home paralyzed in the at home. They just took me home. And, I stayed there.

My wife and my brother moved in with us to help take care of me. And I had lost my job. So we were living on the real estate, and that saved our financial life. And so that's why we're so, I'm so passionate obviously about it, and I I I'm so into it because of what it did for me and my family. And, over after that, it was like, hey.

Now I gotta figure out what I'm gonna do with my life. We don't know if I'll ever walk again. We don't know if I'll ever be normal again. I probably can't, you know, work or do whatever we want, but I was so passionate about that. I just went all in even more.

Steve: So I think before we continue

AJ: Yeah. Yeah. Go ahead.

Steve: What happened?

AJ: Yeah. So, it's something called, most people think that it was like an accident or something. It's something called Guillain Barre. And Guillain Barre is when your white blood cells so you get triggered, and your white blood cells attack your central nervous system, and they actually destroy all your nerves. So my brain could not send signals to my body, and my body lost the ability to take care of itself, do anything.

I couldn't breathe.

Steve: So your immune system attacked your nerves? Yeah. Those, like, some is it one of those immune disorders?

AJ: Yeah. Yeah. It's a and, you know, it's hard for them to even really classify what it is because it happened one time. It is a trigger. It means something had to cause it.

And then from there, they're like, okay. It'll never happen again. So it's not like we worry about it happening again. I don't you know, there's nothing you can do for it at all. So they're like, we'll try to keep you alive, and then hopefully your nerves will just come back.

There's no medicine. There's no nothing.

Steve: So there's nothing you mean to get the white blood cell back in line?

AJ: No. They can they do what's called, like, I had, like, an IVIG, which all they do is just kill all the white blood cells, so hopefully it stops. And then but that's it. That's all they can do. And then from there, they just try to keep you alive.

Steve: So you don't know what triggered it?

AJ: I do. Yes. Actually, I I I do. I don't know if they'll take your podcast down so you can edit it out, I guess, if you want to, but it was a vaccine. It was

Steve: a vaccine? Yeah. Gotcha. So So like an ordinary vaccine or vaccine for travel?

AJ: It was a vaccine for travel. MMR is headed to Brazil. Mhmm. The most common one is the flu one. So there there's different types of vaccines.

Right? But, it is one that what what they think happens is when it goes into the body, the the body produces white blood cells to attack it. That's what vaccines report. Then we build immunity, and the white blood cells attack. Right?

That that's the whole point. But because they they think maybe because it's not natural that the white blood cells get confused. Mhmm. And then for some reason, they don't know why, but then they say the nervous system is the threat. Mhmm.

So then your body starts, producing white blood cells at, you know, tens of hundreds of times normal. And your whole body because your brain goes it's or your your immune system goes, it's everywhere. It's all over the body. Mhmm. So we have to produce astronomical amount of white blood cells to try to kill this thing.

And then it just goes attacks your, central nervous system, and it it destroys it completely, rips it apart. And, your brain can no longer send signals and communicate.

Steve: So did they destroy all the nerves, or did they, like, destroy, like, important parts? All of them. They did

AJ: my spinal calm, everything. So, my I first started, I actually was totally fine, and I was starting to hurt. And I couldn't figure out what was going on. And that night, I was like, okay. I'm gonna sit in the bathtub and soak my legs.

My legs were hurting. And, I went to get out of the bathtub, and my legs don't work. So my wife dragged me out, took me to the hospital. And, then what happened was it just kinda went up the body all the way up to my head. And so I was partially paralyzed even in the eyes.

I could see the end of my hospital bed, but nothing below worked. I couldn't breathe. I couldn't speak. I was on tubes, so I couldn't speak for months. But my body then, having the nervous system damage, felt like it had been burned and crushed because my nerves were destroyed.

Mhmm. So There's no

Steve: pain. It's just numb.

AJ: No. It was endless pain. I didn't sleep for over a month.

Steve: I I was passing move, but it hurt like hell. Yeah. Even worse.

AJ: Felt like I was blown up.

Steve: Because usually when you're paralyzed, you can't feel anything. Yes. So not only could you not move I was on

AJ: fire and dying twenty four seven. So I I would sleep when I'd pass out.

Steve: Wow.

AJ: Weeks. So I didn't I didn't sleep for a month.

Steve: Painkillers even work? Or

AJ: I was on at one time, they had me on fentanyl, methadone, oxy, morphine, everything, and they could not stop it. And, my wife was like, you gotta give him more to try to stop it or not. And they're like, he'll we'll kill him. There's no way we could he could survive.

Steve: How are you conveying that you were in pain?

AJ: So we had a few ways they could basically And

Steve: I'm asking awfully personal questions.

AJ: Please do. No. I'm totally open about this, man. I I like, doesn't bother me talking about it all. So they're they could look at me, and they they could see, like, holy.

Something's going on. Right? But, they we had a plastic sheet, and the plastic sheet of paper that you could see through, where you'd had pictures on it. And I would look at the pictures to try to indicate, and then I would say yes or no by blinking. And so that's how I communicate.

But the vast majority of the time, they didn't know. So I could be sitting there just dying of pain and be like, you gotta give me more medicine, but I kinda obviously communicate it. And people are sitting in the room, and I guess it didn't

Steve: Unless they asked you, there's no way to communicate. So we were talking for the show you have four kids.

AJ: I do. We'd had our fourth. So you had your fourth? Three months. So my wife had just had our fourth child when I went in the hospital.

Steve: Yeah. So, like, what were some of the thoughts and feelings you're experiencing

AJ: During that time.

Steve: Through all this?

AJ: So when it first happened, obviously, we didn't my wife didn't know what to tell the kids. And two, we we didn't know if I was even gonna survive. So we didn't know if I was ever gonna come off tubes. We didn't know if I'd even live, and there was no answers. So That's

Steve: the worst.

AJ: Yeah. It's like, when is he gonna be better? Is he gonna get we don't know. We'll see. Mhmm.

That's it. We'll see. Maybe. And when so we we went for a while where my wife's like, your your dad is sick in the hospital, but they're taking care of him. And, that was it.

Right? And the kids we tried to keep the kids' lives as normal as possible. We didn't. She did. And, then she would take care of me in the hospital.

My brother came with me, and my parents were there. But it got to a point where they're like, alright. He's either gonna die, or he may never get out ever. He'll live on to it forever. Or he'll eventually get out, but we don't know when.

So you gotta tell the kids sometime. So then finally, she came. We don't have answers. It's already been weeks. And, so she just had to bring the kids in and show them.

And that was probably the worst moment of my life was seeing when my daughter walked into the room and looked at her dad hooked to tubes, and she didn't wanna get near me. She was it was terrifying, obviously, to her. You know, her her dad who used to be this, you know, great Superman guy, Superman Yeah. Is there and less nothing. Like, just nothing.

Can't speak, can't do anything. And that was one of the hardest things ever. It was it was hard not seeing my children, obviously. But then it was even worse seeing them, because you could see it in their face, in their eyes. Now, eventually, they'd come and visit me all the time, and they got, was like, oh, I'm glad they're here.

Right? The best thing that ever happened to us was that we had our fourth child, and because he was only months old. Right? I mean, I'm in there, and he's whatever four or five months. They would lie him on the pillow next to me, and he would use he'd he'd play with my lips, and I'd move my lips to try to play with him.

And that's how I played with my children. So it I was actually very fortunate that we had our little baby because he didn't know, and he didn't care. He had no concept that dad's paralyzed. He just dad. And he was happy to be there and play with me as I couldn't speak or do anything, but I'd move my lips and try to eat his hands.

Mhmm. And he liked that. And, so that was probably the I mean, Borlaug saved me and gave me sanity because I was so excited to see him. Mhmm. And I he didn't care.

There was no judgment. There was no look when everybody else came in, and it was shocking to see me. And I could obviously see that. I knew. So it was it was a combination of while you're in that state.

First of all, the pain was so overwhelming that most of the time, it was just out of it. As they got better control of it, they never got it to go away. It still doesn't today. So I'm on pain meds, everything else like that, but I'm in pain twenty four seven. And so they got it more under control to where I think I could think normal.

Right? Things like that. And then that's when all the other stuff comes in, and you're sitting there going, you know, okay. Like, why are they because you lose all your senses. Now if I'm going too deep into this No.

Steve: There's no there's

AJ: no such

Steve: things to do. Alright.

AJ: Alright. So when you lose your senses, weird things start to happen. So a lot of people, we forget. We know we're standing on Earth because your feet are telling your brain you're standing on Earth. You know it's cold outside.

Right? You you see things. You touch things. And and all of these senses actually build the world around us. It's not just your eyes.

That's not how your brain works.

Steve: Right.

AJ: So when you take all those away, things get weird. Like, time gets weird. Mhmm. You don't really understand necessarily where you're at. And then you have things called, like, ICU delirium and stuff.

So it was this constant managing and thinking through and trying to understand and communicating with people through blinking, and I people come visit. Right? And it was it was so strange, but I I didn't know how long I'd been there. I for me, the experience was years. That's how my brain interpreted it.

And, still to this day, it was years in my head. And when I look back on it too, it was really hard at first because I didn't know why they were keeping me there. Like, I didn't know why they weren't letting me die. Mhmm. And it was like, this is a sick joke, you guys.

Like, what are you doing? Right?

Steve: Yeah. Why are you torturing me?

AJ: Why are you torturing me? And, so it was it it was kind of this survival mode every time I open up my eyes, which was obviously from pain. It would pass out pain, open up from pain, and it was like, oh, I'm back in hell. And then it was I don't know how long I've been here. I don't know why this is still going on.

And then it was survival mode. So for the first quite a while, that's all really it was in the head. It was just survival mode, nothing more.

Steve: So in some ways, I think your wife should be here because she's the superhero here.

AJ: A 100%, she is. Yeah. A 100%.

Steve: So what was

AJ: I just lied there. So Yeah. I

Steve: mean, here is

AJ: here. The one that was,

Steve: I mean, you're right. Of a vacation.

AJ: Yep. Exactly.

Steve: So when you've got time

AJ: Mhmm.

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AJ: So, you know, I for a while afterwards, I even asked my wife, I wonder if the hospital broke me. You know? And she's like, it didn't, but it changed you. And that's right. It did.

It did change me. And it changed me in ways that I wasn't suspecting. Like, I think a lot of people think you go through something like that and there's an outcome, like, certain things become not important. And and what I found was things that became not important was, like, my kids didn't annoy me afterwards. Like, things that would have bugged me prior to like, I became much more affectionate with my children.

It was like, nope. I'm holding you. I'm gonna give you kisses. You're gonna like it. I don't care.

Right?

Steve: You don't have to say this.

AJ: You don't have to say this. I'm like, I am gonna love every single second that I'm with you. And it was, like, I didn't necessarily care if they did things, and there became a delineation where you're either doing something wrong or annoying me. If it's annoying, I don't care at all. Mhmm.

Like, whatever. And so I I changed as a father the way that I viewed them. They became much more precious to me. Mhmm. And, I that sounds bad because they were precious before, but not

Steve: You didn't appreciate that. They're precious.

AJ: It like every second, like, it was. They they were not something that was a task. They weren't something that was like, I gotta do no. Not at all. It was just, wow.

You this is amazing. Like, that you're even here.

Steve: Mhmm.

AJ: And then, other things that changed was I I went a lot bigger when I got out of the hospital. So a lot of people are like, oh, yeah. Work wasn't important. Right? Things like that.

And it's true. Work became really not important to the hospital. I didn't even think about it. Didn't matter. Like, I'm just I mean, they're gonna die or not.

Like, it it just it was irrelevant. Mhmm. But when I got out, all of a sudden, the person that who I was when I went in died. Mhmm. And when I was sitting there watching the snowfall, and I was gonna go home, and I was gonna get to be Christmas morning.

They were gonna let me visit my kids, and they before they took me back to the hospital, so it was they were gonna assist it. And I I mean, last time I went in, I was planting trees out in the backyard. So I'm watching the snowfall, and I was so excited, right, to go home. And it was a realization at that point, though, I'm gonna go home and there's either there's two people are gonna go home. AJ in the wheelchair or somebody different.

Now that didn't mean that I wasn't in a wheelchair, but it meant that's I was either gonna identify as this thing Mhmm. Or something else. I don't know what that thing is anymore. I I I'm not me. Mhmm.

I can't do anything that I used to do. I don't even really know how to be a dad. I don't know how to be a husband. I don't know how anything. I don't even know what I can do because I couldn't do anything.

But it was like, I have to be something else.

Steve: Right.

AJ: And so there was this idea that when I got out, everything that I did, I wanted to do way bigger.

Steve: Mhmm. So if

AJ: I was gonna spend my time doing anything, it better be awesome. So out of my wheelchair, I started three different companies. We scaled our assets, and it was like, I went harder than before Mhmm. Which surprised people. I think a lot of people thought I would have laid off the gas.

Like, it would have been like, oh, no. You're gonna do you're gonna enjoy your time or something like that.

Steve: Unleash on life.

AJ: I've enjoyed my time. I lied around. Right? Instead, my time became more important. Mhmm.

So if I had to choose to do something, the outcome of it had to be bigger, and it had to be worth it. Mhmm. When there was no reason to do it at all.

Steve: So Kinda goes back to mom's adage if it's if it's worth doing.

AJ: Yeah. Exactly. And so that became really important and big. And so everything that I started to do, it was now it it's gonna be huge or why do it?

Steve: Go big or go home. That's my that's my motto.

AJ: 100%.

Steve: So as you as you're talking about all this, I'm thinking about FMLA. Yeah. How were they able to fire you legally?

AJ: So how it works is it's not firing. It's you're letting go. And there's good reasons for it too. And I think people, they're they they hear it, and they're like, that was so bad. And everything, like, no.

Not at all. Because I couldn't get disability. If I if if I if you're an employee, I couldn't work. They they couldn't employ me. I wasn't doing anything.

Steve: Right.

AJ: And two, they actually stop you from being able to go through a normal cycle. Because at the time, I I could have been on disability for the rest of my life. We had no idea, which actually is funny. I went on disability, and I immediately lost my disability because my real estate made too much money, which that a whole other story that ticked me off. I'm like, okay.

Well, why did I ever do that? But, so it was I I I guess, I went on to disability

Steve: and

AJ: part of it. But it was a termination of employment. Everything else done. You're on disability. You're gone.

And that was strange because your identity in what you do is so much, and that had just been eradicated.

Steve: Right.

AJ: And it was, thank you. Bye. Left. Done over. Never those people were gone.

Never saw them get and it was a little shock to the system where it was like, oh, wow. I I really didn't matter at all in this context. Yeah. And that was I mean, clients didn't it it's just over. Yeah.

And none of it like, as if none of it ever even happened.

Steve: Yeah. We're all replaceable.

AJ: Yes. Very much so. It was the most humbling experience of my life considering I couldn't even go to the bathroom, so I laid naked on a bed, and people rolled me over to bathe me and to take care of me. So that was another thing that was very good about it. I mean, I started doing things like social media and podcasting, things like that that I would have never done before because I didn't care.

It was like, I mean, what's the lying in a bed, you know, growing a bathroom on myself and having other people bathed me with rags for months. Like, it just now I'm in a wheelchair sitting here, like, can hardly do anything. So pride just was gone. Mhmm. And that was very liberating.

And, it's interesting that over now over seven years, how much that creeps back in. Like, it's like I would have thought that I could have staved it off, but it doesn't. Like, now you post something on most oh, it's stupid or should I say that thing right? I actually love telling the story because when I do, it reminds me, it doesn't matter.

Steve: Yeah.

AJ: Like, it it doesn't matter. And it that's very freeing.

Steve: But all those thoughts, they're part of the human experience. They are. They come back.

AJ: They really are. They come back. And you just can't warm up. It's something you have to remind yourself, you know, constantly. Mhmm.

And that it's nobody really cares that much. It's not that big of a deal. Mhmm. It's not important. And, you should say what you want.

You should be open, and you should the the risk of embarrassment should never be something that ever stops you. Yet, it's probably the number one thing that stops everybody.

Steve: Yeah. One thing I say a lot to people is that you should you you should stop taking yourself so seriously. You're not that important.

AJ: You're not that important. You're just not. Really not. Yeah. You're not that important.

I it was funny because that was the one thing I was like, the I was looking out the window and saw the cars moving everything else, and it was like, you know what? Like, nobody knows. Nobody cares. Mhmm. The world will move on, and it's outside a few select people.

Mhmm. That's it. And and to even them, they'll get over it too. You're really just not that important.

Steve: Right.

AJ: And a lot of people, I I think, don't like that, but I think it's actually quite freeing to understand that.

Steve: I mean, a lot fewer things I have to worry about when I'm making decisions.

AJ: A lot fewer. I completely agree. But it's that's hard. We because we we start thinking that we are. We start thinking that we matter more and that that certain things are so dangerous or lost.

And it's like, we can't separate those things, and that prohibits us like chains grabbing us and holding us down. Because we start to think that, well, if I fail, that means something about me, and other people will then see me or think that I'm that thing. And I don't want that, so I'm not gonna do. Mhmm. And the truth is nobody cares.

Steve: Alright.

AJ: And the failure is nothing. It doesn't even really matter. In fact, it actually helps you grow, and nobody cares. Nobody will judge you. Nobody thinks anything of you.

It's you're just not that important. So the very thing holding you down is actually the very thing that doesn't matter.

Steve: One of the things when I started this podcast was I mean, we're over 300 episodes in. You know? Yeah. And I was like, I'm gonna do 10 episodes. Have it completely bombs?

No one would even know.

AJ: No one will know. No. No. No. No one will care.

Steve: Yeah. No one wants to be like, can you please see see try that podcast? What? You're an idiot.

AJ: Yeah. Nobody. Nobody else.

Steve: So you go into the hospital. Yep. And along the way, you've already accumulated Yes. Multiple assets. Yes.

So two questions.

AJ: Yep.

Steve: How do those assets do without you, and what those assets do for you?

AJ: They made more money and were worth more when I got out of the hospital. My income had my job had been gone and destroyed. My assets made more money and were worth more when I got out. One of the most powerful lessons I ever learned. And so then from there, I I mean, it it my wife didn't we'd have to sell our home.

My wife didn't have to leave me paralyzed in in in a bed with four kids to go get a job to try to take care of us. Because, you know, even if you're like, oh, I got disability, and disability is a fraction Mhmm. Jamaica. It would not have taken care of us. It would not have done anything.

All the growth of the kids, it wouldn't no. It doesn't work. Right? So, you know, we would have had to dramatically change our life. Mhmm.

And it would have been so disruptive. And, frankly, I don't think it would have let me heal because not only the stress of it, but I wouldn't have been able to get the care and the help that I needed. So and and I don't mean by medical professions. I mean, like, at home. Like, you just all of a sudden, we we're survival mode.

Right? You can't you can't do it. That changes the way your body even works.

Steve: Yeah. So you have a lot more stress. Yeah. Besides, I need to get better. Now you're worried, and you're wallowing in misery.

AJ: Yes. So it allowed me to really say, hey. Let's focus up. Let's get better. And then two, be proactive instead of reactive about building a new life Mhmm.

Which that helped me magnify then everything moving forward.

Steve: Yeah. So you were a successful sales guy.

AJ: Mhmm.

Steve: When we were talking about, like, successful, like, how much were you bringing it in?

AJ: On average, 2 to $300,000 a year.

Steve: And I I I say this for context because there's, like, this evolution. Right? Like, we all write Rich Dad, Poor Dad, or a lot of us write Rich Dad, Poor Dad. And we think I wanna get out of the rat race.

AJ: Yes.

Steve: Right? And so I gather rat race, like, okay. Maybe you do instead of working a w two job, you're self employed doing sales.

AJ: Yes.

Steve: Right? Like, this is there's there's self employed, business owner kinda, like, transition entrepreneur Yep. Deal. And what I see there is we become we just join a faster rat race

AJ: A 100%.

Steve: Where instead of us running around in circles, we all get in Lamborghinis And move forward. And we go faster. So it's in, like, it's like an Yeah. It's a much nicer rat race.

AJ: A much nicer rat race. But it doesn't end.

Steve: But it doesn't end.

AJ: It doesn't end.

Steve: There's always like, well, what's AJ doing over there? Right? What's he doing over there? How many units are you doing? How much how many assets is he on?

How many doors is

AJ: he on? Like, I I I had a group I was literally telling this to yesterday. It's like they're like, oh, you own this stuff? Must be nice. Well, if I had that, I'd get that.

And I'm like and I'm like, you what you have to do is a fraction of what I do. Mhmm. I'm like, you need $300,000 to invest. I need a 150,000,000 I need to go get to invest. Mhmm.

Like, my problems are a 100 x what you perceive as a problem. The only difference is I know how to do it, and I don't mind it because I've got the skills that I'm gonna go do it. So I don't even perceive it necessarily as problems. Mhmm. It's just part of it.

And that's a huge mental block for people because you didn't get it because you had it. Mhmm. You have it because you went out and got it, and you have to keep going. It it doesn't not even that you have to keep going. I don't wanna say that, but it's just it's part of the process.

They're not separate things. It's not a it's not an ending point.

Steve: Mhmm.

AJ: That's not how it works.

Steve: Right.

AJ: You don't win. Right? You create. You progress. You grow.

It's part of it. Mhmm. And so many people, they don't want the things that it actually takes to progress and to be better. And they think that I'll get to a point where I won't have to do anything Mhmm. Or those things won't matter.

Steve: Right.

AJ: And I wanted financial freedom, and I viewed financial freedom so I could do more, not so I could do less. I didn't want a fixed income sitting at a retirement home or a fixed income sitting on the beach not doing anything. Mhmm. That's that to me, that's not financial freedom. I I view financial freedom very differently.

I wanted financial freedom to do whatever I wanted.

Steve: Right.

AJ: Not to not do anything. And the idea of being and fulfilling who you are is that you can create and you can become more and you can do more. That's the fun of it. That's the purpose of it. Yeah.

It is not to do nothing. There's only so much Netflix you can watch before you hate yourself.

Steve: Yeah. No. There is a point where it all becomes boring. Yep. So you're talking about, like, you don't want to do the things or you don't want the things.

AJ: So can

Steve: you elaborate on that, like, what about

AJ: Absolutely. I I don't want to be in an uncomfortable position. I don't wanna fail. I don't wanna put myself in a position that makes me have to either work or makes me have to do, certain things that I'm uncomfortable with. And that's not how life works.

Yeah. Instead, you need to be comfortable being uncomfortable. You need to be comfortable solving problems that you don't know the answers to.

Steve: Mhmm.

AJ: You need to be comfortable failing. If you can get those three things down, you can do anything.

Steve: Yeah. We were we were doing a call this morning in inside a whale club, and, one of the guys said, miss Cal Arnold. He said, most of us suffer in silence because we're trying to find a way we're trying to find a way to avoid doing the things Yes. We know we have to do. Yes.

Yeah. So

AJ: Yeah. We and two, you know, I look at it today as everybody like, we like, so me and my two partners, we built multiple businesses and sold them. We worked and put all our money into it. We actually did it the hard way. Looking back on it, it was like, wow.

We really didn't know. There was no resources. There was no books. There was no podcast. There was no social media.

Steve: No. It was a terrible class asset.

AJ: Figure it out. Terrible class asset. We're trying to figure this thing out. We worked 10 times as hard as we even had to. Mhmm.

But we learned. And now I know, okay, there's a lot easier ways to do it. And then once we learn to figure that out, we our our portfolio exploded. We doubled it in a fraction of the time that it took before. Right?

But I was also though we could explode it because I was already comfortable doing the things that it took. Mhmm. And then I did it smart smarter and better, and then it was much easier to grow.

Steve: Yeah. The going back to, you know, you started in the early two thousands. Let's see. We have Richhead Portia out. There's a book.

We got a bunch of Robert Allen books. Yeah. Right? But there was definitely no bigger pockets. There was no podcasting.

AJ: Nope. No social media.

Steve: And no social media. So, like, did you guys have at least, like, a self storage association?

AJ: So there was. There was a self storage association. It was teeny. Mhmm. And it was kind of a joke at the time too.

And so we would go that once a year, and we would try to learn, okay. Well, maybe you could paint something here or maybe you could make something. But, I mean, that it was pitiful to say the least.

Steve: Yeah. So, really, it was just one strap and just fail for it. Gotcha. Now you mentioned that you started a few businesses while you're in your wheelchair?

AJ: Yeah. Yeah. Yeah. So I, when I got out, I started, private equity side. So we I currently own we have our private equity syndication company that does storage.

We have our, storage management company, but I also have, software companies. We have an architecture company. We have a debt brokerage side now. I also have our educational platform that we do now as well. We have, so I'm sure there's always other things that I'm thinking.

We what we did is we built an eco I built an ecosystem of companies out to do the thing that we we were doing. And it was well, if we need something, instead of sitting around and let's just solve the problem.

Steve: Mhmm.

AJ: So I just solve the problem. We'd create a business to do the thing. My wife started a school that was solely it's an entrepreneur investing school that she built because it was like, we just got tired. It was like, if we see a problem, we're just gonna fix it because we don't have enough time. We don't wanna waste life.

And that just kinda became the default mode of operation afterwards. Can we

Steve: start a self storage association?

AJ: So, we it's funny. We actually started the largest self storage coop in the world. Mhmm. And it was we were founding members. We built it up and it's store local, then we built that into our national brand that we use.

Steve: So What is what does that mean?

AJ: So the national brand when you look at when you look at, storage, customer acquisition is like the most important thing that you can do. 85% of all customers we find or or come to us from mobile. So that means that your domain ranking and your ability to capture those customers is probably the most important thing that you could even do. Mhmm. So we built a co op where we could share resources and act like a REIT or a big boy.

Right? Well, then we learned that was so important. We turned the store local into a national brand where people could use it. But because more people were using it, you would get much higher domain authority, and you would rank higher so you could acquire the customers just like you could if you were a huge big company.

Steve: Mhmm.

AJ: Which small guys and by small, I mean, you're talking under 500 stores, which that's like a billion dollar company, and under that small. Right? We're at north of 350,000,000, and we're small. Mhmm. So because we can't compete with the REITs and the big boys.

So we use that, and now everybody can get the benefits of being big. That's why we built it.

Steve: So, is it it's like a giant collaboration

AJ: Yeah.

Steve: Where we can all ship money in Yep. Invest in SEO ranking

AJ: Yep.

Steve: To source leads or a deal.

AJ: And you and the brand name, you license out, and so you can use the brand. So Google recognizes it as this huge company.

Steve: Are there limitations to, like, how many per market? Or

AJ: So what we did is kind of like a franchise model where if it's in three mile radius of somebody else, you need to get permission, but that's it.

Steve: Gotcha. Okay. So, I'm looking at this, and I say, wow. You know, self storage, this seems like a no brainer. I'm going all in.

Mhmm. What's the first thing I'm doing?

AJ: So the first thing is self storage isn't like other asset classes. I think the biggest thing is the learning curve is so steep. When I wrote my first self storage book, it became a bestseller, like, immediately, which I was shocked by. But that's because there was no information on storage. Mhmm.

Steve: And so it was like When did it come out?

AJ: So that was, oh, man, Five years ago now. Jeez. I think

Steve: it was five

AJ: years ago now. It is called Growing Wealth in Self Storage, by AJ Osborne. The second book's actually coming out here in June. But it was it was a playbook. I'm like, this is exactly what you gotta do.

Steve: It's growing wealth and self storage.

AJ: Yeah.

Steve: So if you're listening to this, get that book. And then the upcoming book is gonna be called

AJ: It's growing wealth and self storage with number two. Number two. Huge. It's like a knob it's like 400 pages. So it's like it's it's a it's a everything you would need.

Right? And that's was so popular, though. It did so well because people are like, I wanna do this, but it's so weird. Right? It's so different.

So the first thing about storage is you you any asset class, it doesn't matter. If you don't understand the value of the thing, you can't do it. Mhmm. So then you gotta figure out, alright. How do I value it and how it's valued and what it can be will depend on operations.

Right? Things like that. So it's the learning curve, I think, that is the first thing that if you wanna get in the asset class, like, storage people that invest in storage, we're not real estate investors. Right? I'm a storage guy.

Steve: Yeah.

AJ: That's what I do. I own a storage company. Mhmm. I I don't invest in storage. I own a storage company.

And that storage guys are storage guys. Mhmm. That's what we do. Why? Because it's so unique.

We like it, and it's we we build it out for it. So

Steve: So this is kinda like McDonald's where, like, you run a business, but the value's in the real estate? Or is this Yeah.

AJ: Yeah. It kinda it kinda is. And, you know, we can the great thing about real estate is the better you run the business, you increase net income, which is applied to a cap rate and increases the value. Right. So it's a great lever to create mass equity.

Steve: Right.

AJ: So

Steve: Gotcha. Okay. So step one, understand

AJ: Yes.

Steve: The business.

AJ: Yep. Understand the business of storage.

Steve: Gotcha. Okay. So I understand the business storage. I read your book. Yep.

Consumes consume some content. Yep. Yep. I'm good here. Yep.

What happens after that?

AJ: So the number one thing is you gotta figure out where you're gonna play. So storage is divided up. I view it in basically three different buckets. You have size, which is under 50,000 square feet at rentable. Now somebody may say, that's ginormous.

Right? 30,000 net rentable square feet. Well, in in storage, it's not like multifamily. Mhmm. Right?

30,000 square feet, that may be a couple $100,000 depending on where you're at. So it it's it's not applied like like that. 50 to a 100,000 net rentable square feet, that is midsize, and then a 100,000 net rentable square feet plus is big. Now we use net rentable square feet as opposed to doors because it doesn't make sense because of storage doors are all sorts of different sizes. Mhmm.

So that doesn't really tell you anything. Now once you figure out, alright, under 50,000, you're dealing more in automation. It's more manless, touchless system automation. You get bigger than you have, like, managers on-site, things like that. So understanding where you wanna play in that.

And then markets. Are you really small markets, mid sized markets, or big markets? Once you understand those two things, you can figure out now your buy box, what I wanna buy, and what the strategy is behind it.

Steve: Mhmm.

AJ: And then from there, you can source and target your acquisitions, and you you know what needs to be done within that model of it. It's not that it's complex, but it's just I guess, it's just different than most people think about.

Steve: So I'm a I'm a w two guy Mhmm. Working a good job, making a $100,150,000 a year.

AJ: Yep.

Steve: Which would you recommend?

AJ: Start small and grow from there. Yeah. It's the easiest way.

Steve: Smaller footprint, smaller city?

AJ: Yes. Smaller market, smaller footprint. The and one of the main reasons is is, we do a lot of seller finance deals, things like that, because they don't have access. Big capital doesn't wanna go down there. You get higher cap rates, which if you don't understand what cap rates mean, that's how we view we it's kinda we talk about value commercial real estate.

The higher a cap rate is isn't price. That means the lower the prices. So you get a better deal on it, because they can't sell it to institutional capital. You

Steve: get better cash and cash returns.

AJ: And they also will we can do things like sell our finance. They'll work with you. Right? So it makes it way easier for a beginner to actually buy and do it. It also means in those small markets, they're generally the worst run facilities.

Mhmm. So there's more upside and potential on them. Right?

Steve: Right.

AJ: And it's easier to just handle and do. It's way less doors. There's way less even going on, and very simple things can have a really big upside. So you can be successful, and it's way easier with way less risk.

Steve: Mhmm.

AJ: Right? And then from there, you can figure out and move up.

Steve: So on the flip side, you know, I'm listening to a show. I'm doing three to seven wholesale deals a month. I'm making pretty good money, and I want to diversify. Yes. Which way do you recommend then as far as footprint and location?

AJ: So I'd I I'd recommend more of the mid sized markets. The bigger you go, the better the margins generally are. Mhmm. And now the bigger you go, though, the the level of complexity kind of goes up. Once again, if you're going from 20,000 square feet to 40,000 square feet, it doesn't really go up.

Mhmm.

Steve: If you're

AJ: going from 20,000 to 85,000, it does. Right. You're you're you're talking about the difference of 80 doors to 400.

Steve: Mhmm.

AJ: Right? So you you may need to have a manager on-site. Now that's when you need to decide if you're gonna do it, are you gonna run it, are you gonna hire somebody else to run it, or or are you just gonna partner with somebody and go in on the deal? Mhmm. If you're jumping straight into mid or big deals, you you should probably think about if you're gonna do it yourself, that's fine, but you shouldn't go about it alone.

I don't ever suggest that. Or you need to get a property management company that specializes in self storage if you can in those markets, or you just team up with somebody and do it that way.

Steve: What are the biggest challenges you see from people getting into self storage?

AJ: They think it's easy. They say, oh, there's no toilets. It's to roll up It

Steve: looks pretty easy when I watch it. When I'm on social media, this

AJ: is Yeah. Simple. Right? You just buy it, and it's just like they just pay you. Right?

And so that's the biggest struggle the this biggest thing. We find people, they buy it. A year later, I want out of this, And they're like, well, I thought it was passive. And I'm like, you've obviously never done real estate before. That's not how real estate works.

Steve: I Like I said, it's a business.

AJ: It's a business. I mean, if you buy a midsize facility, you have 600 tenants that turn over monthly. Like, we view it as like a retail. I sell insurance. I sell fund the tenant insurance.

We get premiums back. We sell boxes. You know, if we got people coming out in all the time, we we need to be selling people every single day. Mhmm. And then our prices are changing every single day.

Mhmm. We're managing all of it all the time, and then we're optimizing occupancy and revenue. So we do things like dynamic pricing, like an airline does, where everybody that's sitting on that plane paid a different price Mhmm. Than the person sitting next to them. We do the same thing.

All the units are priced differently.

Steve: Right.

AJ: But once again, you gotta be managing. You gotta understand those things.

Steve: Is your software to do all that?

AJ: Yeah. And so we look at it and you say, alright. There's no toilets. Nobody's living in there. It's much more passive.

But then at the same time, though, what you don't have in real estate problems as much, you have more on business operation side.

Steve: Yeah. And that what's your software called?

AJ: So we have a tenant, Inc, which is a software called Hummingbird, which is a property management system that you can use. We also have a revenue management tool that you can go to self storage income and Yeah.

Steve: Check that out. Well, I'm just asking this because, you know, the guy that founded Priceline, we got a chance to meet him. You know? Yeah. Jeff Hoffman, billionaire, obviously.

And, like, his claim to fame sorry. His his second claim to fame. His first one was he's he went to the kiosk at the airport. The second one was dynamic pricing for the hotels. Right?

Because Yes. But along the time Yep. They all, pay the same. But once they figured out price line

AJ: Yes.

Steve: And say, hey. Based off demand, how many people are on the website

AJ: Yep.

Steve: How many inquiries we've had. Here's what the, events like. Here's the price to reduce vacancy cost.

AJ: Yep. Right?

Steve: And so Exactly. And it's fascinating. So, like, that's the, that's I was asking that. I was curious if you had any software because if you do, makes the software incredibly valuable. Very valuable.

And then I guess the, so we're talking about the the challenges here. One thing we haven't talked about, talking about Cedar Creek Capital. Yeah. So I can be very interested in self storage. Yeah.

But there's this other part I need to be good at Mhmm. Which is money.

AJ: Yes.

Steve: Talk to me. I wanna get into self storage. I wanna start raising capital. What do I need to do? What do I need to know to start raising capital?

AJ: Yeah. So there there's a few things. Now, partnerships is a core principle of real estate, always has been, and always will be, especially in commercial real estate. Commercial real estate is not done generally by yourself because they're so big. Right?

Yeah. Now when you look at the raising capital, a lot of people put the cart before the horse. So they're like, well, I don't have access to capital. And I'm like, nobody does until they have something to sell. Mhmm.

So how can you say that nobody will give you money when you're not selling it? Mhmm. So don't worry about the money. Go get a deal. Once you have a deal, the money will come.

Mhmm. But you're you're worrying about money because nobody will give you money, but you don't have anything for them to give it to. So how do you know? That doesn't make sense to me. Right?

It's like, I want a million dollars. And you say, well, what for? Nothing. Give me a million dollars. Nobody's gonna do that.

So, of course, nobody will give you money. Right?

Steve: Only your grandma maybe.

AJ: Maybe your grandma. And so but if I come to you and I'm like, hey. I can get you 200% return this year. I need a million dollars. You're gonna say take 10.

Steve: Mhmm.

AJ: Right? So, like, a lot of people raising capital, they think I need the money before I do real estate. No. You need the real estate to get the money. Mhmm.

Switch it around. Learn about the asset. Learn about value. Learn what makes a good deal. Go find a good deal.

The money will come.

Steve: Mhmm. How will the money come? Like, what's so I've got this incredible deal. Right. I've got this thing.

It's a 12 cap Yep. In Phoenix. Yep. I'm calling agent.

AJ: Call me. Yep. And done. We're it's all done. Nobody don't call anybody else, everybody.

Call me with your 12 cap in Phoenix. You got all the money you want you need. But so the first thing that I think a lot of people do is they're they're waiting for the magical man behind the curtain when it's actually just the people around you.

Steve: Yeah.

AJ: So networking, you're like, well, I don't know anybody or not. I'm like, you do. You just don't realize you do. Mhmm. May not be directly one, but is a second order con people.

Now there is entire associations, meetups, everything else. The money is there. So your local real estate meetups, it it's huge. You have people that go to local real estate meetups just for that functionality. You have entire forums.

You have entire webs. You need to they'll be out. So you need to be out. You need to tell people what you do, why you do it, what the value proposition is. And then you need to be making connections with those people.

Now there's also professional people that allocate capital. Right? You have everything from hard money lenders to you have equity people that that's all they do. They come in. They place capital together.

So whether you cultivate a network of people Mhmm. That you just know. Right? And things like that. Or you go out and pay or have people go get you equity, they do that.

You you can actually pay somebody to go get you money Mhmm. For equity in the deal. They get a piece of that equity.

Steve: Right.

AJ: So either way, you can do it. But the first thing you need to do is you need to be talking to people. You need to know what you're doing, why you're doing it. Go meet people. Networking is so important.

And online and, you know, so many people are like, well, I don't have money, but you don't tell anybody what you're doing. You don't tell anybody that you need it. You don't have a deal. Mhmm. And that doesn't make sense.

Like, get out there. Like, go talk to your uncle. Go talk to your neighbor. Go talk to and and too I'm not telling you to sell people. Like, people are like, I don't wanna ask people for money.

And I'm like, I never ask anybody for money. I never go to somebody and say, hey. Will you give me a half $1,000,000? Mhmm. No.

Hey. Hey. Well, what you have to do? I'm like, oh, dude. I just got this killer deal.

Like, it's it's like, oh, I've only wanted to do a real estate. You should look at it. I mean, it's it's an awesome deal. I'm like, sure. Can I give you 200,000?

Okay. I'm not I I don't go with a tin cup begging

Steve: people

AJ: for money. Yeah. And I think that's the largest fear from it. And and I didn't want to take capital, by the way. I I didn't take it.

We didn't take capital for fifteen years because I was afraid of it. It was scary to me.

Steve: Mhmm.

AJ: And I had somebody wants to tell me, and they're like, wait. So AJ, you're doing these deals. We could see your returns. We could see the deals you have. And you don't want to allow other people to get in on those deals because you don't wanna ask somebody for money.

They go, but it's not that you're not asking people for money. You're not allowing people the opportunity.

Steve: Yeah.

AJ: And I think once you change that frame of reference, it's easy to talk to people. Yeah. And it's easy to go online forums and talk about deals and what do we think about this. Make it more organic and connect with the people that are in the space doing the thing, learn from them, but don't think of it as asking them for money.

Steve: Mhmm.

AJ: Right? That's the first major barrier that you have.

Steve: It's a mental barrier.

AJ: It's a major mental barrier. Network don't ask people for money.

Steve: Mhmm. Yeah. I think, put another way was, you know, if you have access to investments where someone can make 20% of their money and you don't let people know, your insecurities, are are causing you to be selfish.

AJ: A 100.

Steve: And you're not letting other people around you win.

AJ: Yeah. Well and, you know, I was always like, you know, well, what if I mess up or what if they lose money? And they're like, well or or you don't think they're an adult? You don't think that they can make their own decisions? And they're like, have you ever done that before?

And I'm like, no. Like, you've never lost a deal. I'm like, no. You've never not made money. No.

And they're like, so you don't think that somebody can make their own choice, and you're afraid of something that's never happened because there's the potential of it happening. Mhmm. And they're like, that's kind of insane. And I'm like, yeah. When you put it that way, you're right.

It is a little ridiculous that that fear exists.

Steve: Yeah. Well, it's good. As an investor, like, I'm happy to know that you have that fear. Yes. But also happy to know that, you've never Yeah.

Never lost. So I've got the deal. Yeah. I've got the money.

AJ: Mhmm.

Steve: Someone needs to operate this deal.

AJ: Yep.

Steve: So what do I do there?

AJ: So operations, you know, this is the big thing with storage. The operator will determine the outcome in self storage. The market doesn't determine the outcome nearly as much in storage as the operator does. That's different in other asset classes. Like, if you have a multifamily unit, you and another multifamily of the exact same quality, the market's gonna price those units.

Steve: Mhmm.

AJ: K? Your two bedroom, one bathroom, or two bedroom, whatever it is, is $1,200. And it's gonna vary, very little. The markets determine what that is. This is not how it works at storage.

Steve: Really?

AJ: Yeah. My 10 by 10, I'm gonna sell it at this price for this day because I have five of them, and somebody else may be selling it lower. So the prices don't work like that. Mhmm. And it changes very quickly.

Like, you can go all over the city. Prices will be a 150 here, a 100 there, 85 there, 200 there. You don't see that in other asset classes. Right? So the self storage operator will have so much to do with the long term value.

And if you're learning and you're starting small, right, it's a great opportunity to learn and to grow and to do it, to put the work in. But if not, you need to focus on who that property management system or, excuse me, who that, property manager is and or who you're partnering up with Mhmm. Because that will make or break it.

Steve: Yeah. So the customer service

AJ: is absolutely

Steve: Two. Critical.

AJ: And what kind of technology they have? Do they understand the space? Can they understand the delicate balance between occupancy and revenue? How are they doing sales? What is the amount of percentage that they're getting back from tenant insurance and all of these things?

It's it makes a big deal on storage.

Steve: So a moment ago, we're talking about you gotta always be selling. So you got all these different ancillary services.

AJ: Yes.

Steve: What are all the different ancillary services?

AJ: Yeah. So we do everything from moving trucks to we provide, like, dump stations to electricity to boxes to, we can, like, cart things to rental trailers to wraps to locks to insurance to specialty usage, like conference rooms, office space. Like, there's a lot.

Steve: How important is the salesperson in that role?

AJ: Very important. Very important. We we analyze it like a sales team team team. I look at how many leads come in, what our close rate is. We look at when they were called back, how often somebody answered the phone.

I mean, it is a sales part, and we analyze it like that. How many calls came in? How many did you take? Why was your close rate lower? Why was it higher?

What time of the day do they come in? Why did this person not get called? Like, that call come in, it should have been answered immediately. Why did it wait for rings? I mean, it sells.

Yeah. My god.

Steve: So, I mean, it it it's a true business all the way through.

AJ: Oh, yeah. You better treat it like one. Yeah.

Steve: So one of the things I've heard in talking to my multifamily friends

AJ: Yeah.

Steve: Is the thing that scares them about storage is that there's no limitations to how many you can build. So, like Yes.

AJ: That's the number one fear.

Steve: Okay. So It

AJ: should be.

Steve: So talk to me about that.

AJ: So storage is much more susceptible to oversupply than other other, asset classes. Now the reason being is the barriers of entry are lower. So that's really good for beginners and everything, but at the same time, multifamily, if you wanna build if you wanna put 500 units in Phoenix and multifamily, what's that gonna cost you? Like, tens of millions. Yeah.

Right? You can put 500 units in Phoenix for $5,000,000

Steve: Mhmm.

AJ: For storage. And you can put so I'm building in Phoenix right now, and I'm putting 1,500 units, 200,000 net rentable square feet.

Steve: Yeah.

AJ: Like, a lot. Right? Right. And so you can have somebody like me come in and be like, I'm gonna add 10% of, you know, to the market right now. And that that is the biggest fear because then rates and occupancy is can get hit.

Now storage, though, has it it it can do that and survive it. We have big margins, and the default rate is a fraction of what multifamily is.

Steve: Mhmm.

AJ: But that is the biggest problem in storage is oversupplied, and you need to be able to analyze and know if a market is oversupplied or going to be. It is like like I tell people, if you could do that one thing, if you would know if there's demand, the smartest guy in storage in the world will fail in a market where demand is lower or weak. The stupidest person in the world will be successful in a market where demand is strong and moving up.

Steve: Mhmm.

AJ: So be the smartest person in the highest demand Mhmm. And then it's money. Right? But I I call it my margin of stupidity. That's literally what I call it.

I go, guys, we have to have a margin of stupidity. When I look at the market, I have to be stupid and still be successful. Mhmm. If not, don't do the deal. And Yeah.

That's all demand.

Steve: So then are you looking at at, you know, one of the metrics I think is always, funny to see in the slideshow is the cost of U Haul in each direction. Is that something you look at?

AJ: So it is. The migration patterns are very important to us Yeah. And how sustainable they are, why they're going, and where they're going. So it's two sides. We have the market, which speaks to that.

Are people coming in? Are they coming out? Mhmm. Then we have the storage market, which how much square footage is there? What is the occupancy and rates?

And is more storage coming? And so those two things you have to look at. And the storage market can actually destroy a market that has high demand because lots of people are moving there. They can still overbuild it.

Steve: Mhmm.

AJ: Then you can have an area that doesn't have a lot of demand because not a lot of people are moving there, but nobody built storage, so demand's sky high.

Steve: Right.

AJ: So you gotta be really careful because they're both just as important as the other one.

Steve: How do you measure, demand?

AJ: So we look at demand in in two ways. We look at the, total amount of units and square footage on the market, but then we also look at how the relationship is to occupancy and rates. And what I mean by that is occupancy isn't good enough. You can have high occupancy because you can drop your overall rates in half. That doesn't mean you have high demand.

That means you're giving things away for free, which people do. And so I wanna see occupancies be stabilized and rents going up and the occupancy to not have an inverse relationship to rates. Mhmm. Rates are going up, but occupancy is not going down. That means there's good demand.

And then I also wanna make sure that the supply is not changing dramatically. So if I'm in a market and somebody's gonna come and build a huge facility, that's gonna dramatically change the supply. So I don't know what the demand may be after there. That's gonna make me very, very nervous. I do not want to be in a market where a lot of supply is coming on.

Most people and if you're in a small market, no supply. I don't want any new supply coming on. And I'll go to the county, and we ask them, what lands approved? Has anyone put in permits? Are there any plans to build storage in this area?

If there are and if we're in a small market, that basically kills the deal. We won't even do it.

Steve: That's your due diligence.

AJ: Yep.

Steve: So I'm looking at here. $350,000,000 in self storage over 11,000 doors. I'm a stress.

AJ: I mean, we've got a lot of employees. So I I, you know, I don't it it's stress, man. We I stress about different things. Right? I I'm more stressed about the growth.

So the stress that I have is when the markets change. So at where I focus on levels, it's like, okay. How are we getting money? What are the new deals we're doing? How are those things coming in right?

As far as the management and operations go, the stress comes down to how are we performing and our markets aligning with that. Mhmm. Right? But on a day to day basis, I don't know what's happening at the facilities anymore. I used to know everything.

Right? I used to do it. I go shovel snow. But, today, I I don't know. I'm looking at broad trends, and I'm looking at things like that.

And it it's storage. We can usually see those things quick because things are moving. Right? So I actually we can get the data.

Steve: In real time data.

AJ: Yeah. And there's a busy season and a slow season of storage, and that can really set the tone in the way that it goes.

Steve: So I am not as educated in this space. So 350,000,000, 11,000 doors, like, are you you're the REITs, I imagine, are much larger.

AJ: Yes. Much larger.

Steve: Well, as far

AJ: We're in the top 70.

Steve: Would you be considered privately owned?

AJ: Yes. Yep. I'm sorry.

Steve: Where do you rank in, like, the privately owned

AJ: I think top 70. Top 70. In the world. Yeah.

Steve: Gotcha. So what separates you from, like, the average

AJ: Yeah.

Steve: Operator?

AJ: Operations. We we know what we're doing, and we've been through the cycle. 80% of all the funds in self storage have never been through a recession. 80% of all people taking money Yeah. Have never even been through a recession.

So and two, they've only been around since 2018.

Steve: Mhmm.

AJ: Brand new. Right? We've been through the cycles, and we understand, I believe, value better than other people do. And so that and then having the experience and the operations come in, those two things are where our value is. We we we we can measure it.

We can understand it. And then we have, the execution part where we built it out, and we know how to operate it. So that's where our value and what sets us apart, I think, really is.

Steve: So if someone's listening right now, like, I wanna send it. I wanna do a deal with AJ. Yeah. What is your criteria?

AJ: So my criteria in general is over 50,000 net rentable square feet, and we like markets have to be growing. We like second tier or third tier markets primarily. I don't want really things under if it's under 50,000 people, I start to not really not be that interested, and I don't want markets that aren't growing. If it's got stagnant population or negative population, generally, we don't wanna look at it. But if it's a mom and pop owned over 50,000 people and over 50,000 net rentable square feet and a market that's growing, we're interested.

Steve: Gotcha. Simple.

AJ: Yep.

Steve: Right? It's not it's not overly complicated.

AJ: Nope.

Steve: So, your business today versus you when you first got out of the hospital. Yeah. I mean, when you were when you got out of the hospital, like, you were still funding everything on your own.

AJ: A 100%.

Steve: Managing everything on your own as a side hustle.

AJ: Yep.

Steve: What and what were those numbers like back then?

AJ: So we built a $100,000,000. We're at

Steve: I mean, we say $300,100,000,000 as a side hustle?

AJ: Yeah. I know. Right? So, we'd but, I mean, 350,000,000, that's we have over 3,000,000 square feet, so that's probably being pretty conservative. But we tripled plus our employees.

We have went from one or two companies to a portfolio of seven now.

Steve: Mhmm.

AJ: It's totally different. I mean, it's it's it's wild to even think about how different it is today than it was.

Steve: So you're talking about freedom earlier. Right? Freedom is not to sit around and do nothing. Freedom is to do whatever you want. Yeah.

Would you say you've got that now?

AJ: Probably not quite in the way that I want, actually. Yeah. I'm very interested in big problems.

Steve: Mhmm.

AJ: Big problems. So freedom for me would be able to solve really big problems. Like, we really wanna solve problems with, like, the school system. We want to do that. So I I think I still have a little more to go.

But in general, I can yeah. I could do whatever I want. So Yeah. That's fine. We didn't

Steve: yeah. So school system, that's interesting. Yes. And because you mentioned earlier that your wife started a business

AJ: She did.

Steve: For that Yep. Reason. Yep. So what is it you wanna do with the school system?

AJ: So we would like to fundamentally change and create alternative options to the school system. Mhmm. The school system is antiquated. It doesn't work. Its performance is to say it's bad is an understatement.

In fact, most of the time, it does probably more damage than it does good. The school system is ran by the teachers union, which is the largest union in the world. Is it? Yep. And it is the most powerful union in the world, and it is there to protect teachers.

Steve: Mhmm.

AJ: We should have a kids union, I think.

Steve: Mhmm. But Or a parent's union.

AJ: Or a parent's union. And parents have been eliminated, and the school system has changed into something that it was never designed to do. Mhmm. The schools are actually built by the same people that build prisons. It's the same government contract.

And you mass put kids into a system that entire incentive structure is predicated by seats in the butts, not return not actual performance. And so you cram kids in. So the the structure of the school system has actually gotten away from the child. Mhmm. And then, therefore, it doesn't have anything applicable.

Most of the things that they learn today is predicated on a regurgitated process to be able to regurgitate information as if we didn't have computers or anything else, and most of the information is not applicable at all. So if you gave a kid a phone, he would ace every single test. Then why is he taking those tests? Mhmm. What what is he learning from it?

And does he understand the concept and the application of it, and the school system isn't even built for that?

Steve: Right.

AJ: It it it's you have 10 questions. You need to memorize these 10 questions and then put them on this piece of paper. From this piece of paper, If you can remember to put those eight amp or 10 answers down, you'll get an a. If you don't, you're gonna fail. And if you fail this one, that actually hurts you and the other one even if you were it actually makes no sense at all.

Steve: Mhmm.

AJ: And so we're not preparing kids. We're not setting up the very thing that we need is the youth to come out to be able to be productive, to actually take our country. And we don't do that at all in The United States. And so one of the big things that my wife's school was was to create applicable knowledge that can be transferred and utilized. That it is we understand the meaning behind it and how the application works, why we're learning it Mhmm.

And that the concepts then could be used to economics. We talked business. Right? But then everything else, they have mindset. They they teach kids on what it means to take care of yourself and others.

Like, fundamental things. Colleges, they asked the colleges. They said, what is the number one thing that you want kids to learn? And their the the guess what they said? It was, basic, principles like washing dishes, taking care of their clothes, taking care of themselves.

That's what they wanted.

Steve: Who who wants that?

AJ: The colleges.

Steve: Really?

AJ: Yeah. They're like, the kids don't know what to do. They don't know how to take care of themselves. Mhmm. They don't know how to do the basic things.

Steve: Oh, you're saying the colleges.

AJ: Yeah. When the school asked for the colleges, what's the number one thing you think kids should learn or whatnot? Mhmm. That was their answer.

Steve: Yeah.

AJ: And which is wild to think about.

Steve: It's But Yeah. That's very disappointing to hear.

AJ: Yeah. Yeah.

Steve: Standard is really low.

AJ: Yep. And so when you look at it, you're going, well, then what in the world are they they doing for eighteen years? Eighteen years.

Steve: And they

AJ: come out. They don't know how to balance a checkbook. Mhmm. They don't understand the basics of making it through a day. Yeah.

Like, you know, that's that's a huge, huge problem that we have, and they're not self sufficient. So what we've done is we've teach them to be dependent on something. Mhmm. We're gonna give you the answers, and if you get them wrong, you fail. You are dependent on me for a passing grade, and it has to be done exactly how I say.

Steve: Right.

AJ: That is not how life works at all. And so we're actually like, I think you we have to rehabilitate kids. No. No. No.

No. Guess what? The teacher is not God, and everything that they say is not right. That's not how this works. Yeah.

Actually, most of the time, that's the opposite. Mhmm. And just because they understand one thing here doesn't apply. And you have to, like, retrain them How to critical think and how failing is actually good and okay.

Steve: Yeah.

AJ: Like, it's good to have 10 questions and to question the questions that you have and to give an alternative answer. Yeah. That's good. You shouldn't fail.

Steve: So there's a couple different things. A, I have a I have a friend, someone I grew up with since I was, 12. He's my state senator.

AJ: Mhmm.

Steve: And he proposed a bill where you couldn't graduate high school until he'd taken a half credit. So senior year of high school, either first semester or second semester, you had to take one class of financial literacy, and they got killed Yeah. On the floor, you know, because he's a Republican Mhmm. And the guys that killed it, because it was it was it was party lines. Right?

He's Republican. Democrats killed it. And they're like, the problem with our country is not financial literacy. I was like, oh my god. Right?

AJ: So Are you kidding me? Like, it it it's so crazy when you think about it. I was having this conversation the other day. So we teach the kids everything you need to know about how the world works. And when I say the world, I mean, how flowers, you know, take in sunlight and turn that into energy.

But every part of the world that they interact with on a daily basis is predicated on economics. Mhmm. There is nothing that they do in life that is not predicated on that.

Steve: Right.

AJ: And we don't teach them anything about that.

Steve: Yeah.

AJ: It is just as important as the natural world, the economic world is. And people are like, that's not true. And I'm like, how is that not true? How? Tell me.

The only reason the school even exists, the only reason we are here, the only reason anything we have food, medicine, nothing exists without that.

Steve: Yeah. It's a very sophisticated maybe not very sophisticated. It's a glorified daycare.

AJ: Absolutely. It's a glorified daycare. It's teaching baseline principles.

Steve: And the you know, I I'm doing my best to insulate my kids because they do go to school. Yep. And, the one thing they have to learn is critical thinking. And what I said to them was, like, if there's anything that you learn in school that is not in alignment with how you view the world, we're not gonna question the teacher. Yeah.

You you just go with it, what the teacher says. Yeah. Come home

AJ: And ask us.

Steve: And ask for clarity.

AJ: 100%. Yeah. You ask here. And two, you can question. I mean, whatever they tell you, you don't need to just accept.

Yeah. That is not how this works.

Steve: Right.

AJ: And it's the fact that we're training kids that that's not true. And two, let let me be very clear. I love teachers. And in fact, when you look at the school, her school doesn't have tenure. It doesn't have anything else like that.

They attract the best teachers. Why? Because the best teachers leave the school system Mhmm. Because they protect the worst teachers.

Steve: Mhmm. Right.

AJ: And so they don't they don't wanna be that. So I'm like, we need to actually pay more and protect the best teachers.

Steve: Mhmm.

AJ: But in a system that is predicated not on outcome and protecting the individual from anything that could go wrong regardless of performance Right. The outcome's the outcome. I don't know why we're surprised.

Steve: Yeah. I think, you know, I have no problems with any individual teachers. No. I have a problem with how they group up.

AJ: Bingo.

Steve: What is your why? I mean, your why, I would imagine, this has different lens. Yes. So what is your why?

AJ: So, really, my why has become to teach and allow people to participate in really dislocating their, themselves from their income. Mhmm. It it it it is about financial independence in probably a way that I maybe I think differently than other people. But my why is to allow people what is true freedom, and economic freedom is true freedom.

Steve: Mhmm.

AJ: And it's freedom of thought. It's freedom of practice. It's freedom of will. It's also freedom of creation. And when the reason I'm so believe me that because of what it did for me and how it saved me.

Mhmm. So that's become my why. And I feel like if I could provide what I had to more people I I mean, what it did for me was so incredible and and so important. If if I can do that to other people, that it's the best thing I could ever do. Yeah.

And

Steve: Absolutely. I think that's absolutely powerful. What's your biggest struggle today? We need to hire nine salespeople in the next five weeks. We launched our done for you cell service just a month ago, and the demand for it has been absolutely crazy.

We have all these people reaching out to us saying our cell service has been so helpful for them. Please get us more salespeople.

AJ: If you are in high ticket sales or looking to get into that space, if you want a calendar filled up with people raising their hands saying, call me at this time, please sell me, I wanna be sold to by a highly experienced salesperson, we are looking for you to have that role. We wanna take people who are good and make them great. People who wanna be held accountable the same way Michael Jordan would want his coach to hold him accountable, to take him to that next level.

Steve: So if you want Ian Ross or myself to train you to get better at sales, if you wanna be able to control your income, decide exactly how much money you make, and you wanna work at a company where you value and appreciate it, we encourage you click the link below. However, we're only hiring superstars. If you're not a plus caliber, don't click below.

AJ: Hands down capital. So the capital markets when we learned the hard way that so we we started working with, credit investors. Right? And to source our equity and our capital. And the first time investing right and as markets change, it was really interesting to see how investor sentiment changed.

And at the time when we're like, this is the best time to be investing, it's the hardest time to get investors. Now I I guess I understand that because that's how markets work, but I didn't understand that the people with the money would just not put it to work. Mhmm. Like, it that was weird to me because we made so much money doing the opposite. Right?

After 2008, we doubled up. And when you look if when you understand value, you're like, this is actually the safest time. You think two years was the safest time, but that's when prices were the highest. Why? Because they confuse price with value.

Price doesn't mean value. Value is what you get from what you buy. So if I buy an asset and it makes a $100,000, and then that asset's worth a million dollars, k, at that time. Now that asset goes to $3,000,000, and you think because the price is higher, you buy it because it's worth more. Mhmm.

It's not. It's worth less than it was in a million dollars. Mhmm. And then all of a sudden, the price goes down back down to 1,000,000, and you don't wanna buy it because the price is dropping.

Steve: Mhmm.

AJ: What? It's worth more because what you're buying is the $100,000.

Steve: The ROI is high. It's it was interesting because I, I haven't had to experience I'm not I'm not dealing with investors so much per se. Right? Like, I'm mostly a solo op operator.

AJ: Yep.

Steve: But I got to witness this firsthand because I went through the crash in o seven through eleven. Yep. And I would just be flabbergasted. I was just looking at everyone. I was like, I don't wanna buy right now.

Like, why not? Why not? Why don't you want to buy?

AJ: Prices are down.

Steve: Right? I was like, god. At that time, if I knew how to raise capital, the wealth I would have today Oh, staggering. Right? So I keep saying, looking forward to the next bad crash because I'm gonna buy everything.

Yeah. Right. You know, like, it is you're talking about the sentiment, you know, Warren Buffett. Right? When there's blood in the streets, that's the time to buy.

AJ: Like Time to buy.

Steve: And do what everyone is doing. If people are buying, don't. Everyone's selling, buy. It's fascinating. We've all heard these things, but our human behavior

AJ: that too. Yeah. The I know we have investors that say that. And then when you say invest, I don't want to say price down. I'm gonna wait till things stabilize or go back up.

And you're going there there's such a disconnect. Right?

Steve: Oh, yeah. Human behavior, the words and the alignment

AJ: Oh. Towards

Steve: the words and action don't always

AJ: Don't align. And it's that emotion driven that I think affects people more than they actually believe it does. And that's been an interesting thing for me to learn. So we we've looked at our business and say, how do we stabilize capital where the whole point of my business is to allow pea normal people into best? But then all of a sudden, if they don't wanna invest, obviously, you don't force them.

So then I'm like, we need to find what I'm gonna do is I'm gonna tranche out capitals. Mhmm. So we have a stabilizing capital because wealthy people and by wealthy people, I mean, really wealthy people, they're placing money.

Steve: Yeah.

AJ: Right? So we've never done dealt with wealthy people because that's not my why. But I'm like, my business can't stop because they don't want to. So I'm like, alright. So what we'll do is tranche it out, and we'll allow accredited investors and Main Street investors to invest.

But I gotta I have to have more of a consistent source of capital. So that's been the biggest thing that we've been working over the last six, eight months Mhmm. Is stabilizing those those those spreads in capital so we can continue at a known rate.

Steve: Gotcha. What's your superpower?

AJ: Man. Generally speaking, I think my superpower has been seeing what others don't. You know, it's been easy for me to look and see value and also see trends and markets and things that people just didn't seem to get. And in fact, they thought it was wrong at the time always. And, it was easy for me to say, well, you I get what you're saying, but it may look at it.

It makes sense. Mhmm. And to to see, I I wrote three years ago what I called the self storage bubble Mhmm. Which I said the self storage market is going to, not crash, but it's gonna contract. And And at the time, that was crazy.

Storage was hot. Everything was going good, and everybody's like, what? I've never even heard a bull or a a a bearish case on this, and it was hit millions of people saw it. I talked to tons of banks and everything, and six months later, it happened. We had the largest contraction in '22 2022 and into 2023 in storage rates ever, which I explained literally ten months prior and what exactly why it was gonna happen.

Steve: Do you think it's because you can interpret data better?

AJ: Yeah. I see. I ex exactly. I think I've I I understand it better. Mhmm.

It it's I understand the relationship between data better.

Steve: Yeah.

AJ: Why one thing affects another thing. It's a process. Right? So it's not independent data. It doesn't really matter, but it's the relationship that data has with and then how it works in application.

Steve: I mean, one of the most valuable skills, people call it intelligence. It's not necessarily intelligence, but the ability to connect the dots. Yes. Right? I think Ray Dalio talks about it in principles.

Right? Like Yes. You need someone that can connect the dots and so you're saying, like, that's you Yeah. You can see a pattern before other people see the pattern.

AJ: Yeah. And and too, it's not even like I I because I think people think that I'm saying that I time markets. I don't do that at all. And when I say that I oh, it's gonna be a storage contraction. I didn't time a market.

I I don't believe in that actually. I'm completely contrary to that. I looked and said, here's here's fundamentals of value. Here's what's happening. The relationship between the drivers of revenue, which then affect value.

Right? We have undermining. That means we're gonna have a contraction in revenue because we can see the demand side. I don't want anybody to be confused that in any way, shape, or form on certain markets, I actually don't believe in them. I I don't believe I can.

I don't believe anybody can. But you can

Steve: say, here's what's probably gonna happen.

AJ: And and two, here's why. Mhmm. So you we need to invest a certain way because if it does happen, right, so we said, k. We're gonna have inflation. We're inflation.

Everybody's like, there's not gonna be inflation, which was wild to me.

Steve: Anyone that said there wasn't any inflation, you you just dismiss them from your life.

AJ: Exactly. And two, it's like, I can invest. If there's not inflation, I still win. Yeah. But I can if there is, I've also hedged against it.

And so I I don't think I'm predicting it, but I can see exactly, like, there's this side and this side, and this is how we can prepare better position ourselves.

Steve: I don't wanna say this and have it come across as disrespectful anyway.

AJ: Yeah.

Steve: But But you're almost like the barefoot guy in The Big Short.

AJ: Yeah. Yeah. Well, yeah. Yeah. I'm I'm severely ADD into other things.

So yeah. I I, yeah. I I really like that stuff. It's it's interesting to me.

Steve: Well, I mean, it's a valuable skill. So I was very, very fortunate. What's your biggest regret?

AJ: That's tough. I don't regret a lot. Mhmm. I guess I don't really much have time to, or or care to. I guess if I regretted yeah.

I I guess I could always say I didn't go bigger sooner. Mhmm. So just regret that today. I should go bigger today. So always.

Steve: Gotcha. And then what book have you gifted more than any other?

AJ: The Warren Buffett way.

Steve: Check that one out. I've never checked that one out.

AJ: Yep. It's one of my favorite books. It takes all of his principles, writings, categorizes them. It's incredible when looking at value and how he does value based investing and market interpretations. And

Steve: Yeah. I still need to check out the the the Charlie Munger.

AJ: I know. Me too.

Steve: Whatever. Yeah. It was Almanac. Yes.

AJ: I know. Too.

Steve: Gotta check that one out. Gotcha. Yeah. I mean, why not listen to the the second best investor of all time right after Nancy Pelosi?

AJ: That's right. Alright.

Steve: Okay. So, I want you to think about some last thoughts. I'm gonna leave all the listeners with. Guys, if you have value today, I hope you guys get incredible value. I mean, AJ's just poured a ton of knowledge here.

Subscribe. Send us your friends. That way, we can reach more people. What are some last thoughts you'd like to leave all the listeners with?

AJ: I I think we not only do we overcomplicate things, but we prioritize things wrong. And I'm speaking from experience. Meaning, we prioritize either our fears or we prioritize we think things are more important than they are, including ourselves, and we think things are more dangerous than they are. And if we could understand it and you could have one skill, which is something that I want. It is to better understand the reality and the impact of what we not only do, but what we fear.

And, by doing that and by able to be doing that, that freed me up a lot. Yeah. And it made me realize more how most of the things that were holding me back were not only inconsequential

Steve: Mhmm.

AJ: They were also irrelevant, and that was a really stupid

Steve: It's all in your head. Yeah. Yeah. No. We are we are our biggest enemy.

AJ: A 100%.

Steve: Yeah. I I I I was having a conversation with someone, and I shared with him. I was like, have you noticed, like, all your biggest problems have one thing in common?

AJ: Exactly.

Steve: And, he did not like that, the observation. Well,

AJ: that's another thing. Pride is probably the biggest killer that we have. So

Steve: Oh, so cool. We'll wrap up here. Thank you for coming on. Thank you guys for watching, and we'll see you guys next time.

AJ: Shout out to Steve train. Jump on the Steve train. We real estate disrupt us.