Investing in Self Storage for Maximum Profits and Revenue with AJ Osborne
For this episode, I am excited to welcome AJ Osborne to the Just Start Real Estate Podcast. AJ is an entrepreneur, investor, author, speaker, and popular podcast host of Cashflow 2 Freedom and Self Storage Income. He also owns and manages his self-storage portfolio of $100 million in assets and specializes in acquiring and turning around underperforming facilities with a value-add strategy. AJ loves to show other entrepreneurs and investors on how to focus on technology and automation in order to grow their businesses.
AJ starts out by providing some background on how he got into real estate investing. He starts off by telling us that he was an insurance nerd, and even though it is thought of as a boring occupation, it taught him so much because of the lessons it provided him. He was selling group insurance policies, which were very technical, had a long sales cycle, and a very high failure rate. He learned so many great lessons from working in this field but started to see that it was not something he could scale and he wasn’t really working for himself.
As AJ began to see that earning a high wage wasn’t necessarily making him wealthy or financially free, he decided to buy brokerages in order to consistently have clients. He had a terrible experience with one of these deals and this changed his entire work strategy. He decided he needed to actually own assets that paid him consistently and predictably. AJ and his dad, working as partners, ended up buying several self storage complexes mostly because they thought they would be easy real estate investments because they didn’t have toilets. What AJ found was that they were more like businesses rather than real estate assets.
AJ said that the way they began approaching these self storage investments was to look at the potential for building revenue only. I asked him to explain what he meant by revenue management other than occupancy because this type of investing seems a lot like multi-family properties to me, which hinges on occupancy. AJ gave us some great analogies to explain his philosophy towards creating wealth with this unique wealth-building tool.
AJ shares a lot about the lessons he learned in building his business and he found that very few people understand the intricacies of self storage investing so he decided to share all of this information through podcasting and writing a book, titled The Investor’s Guide to Growing Wealth in Self Storage. He said they just starting uploading all of this information and it caught on like wildfire because there are no other resources for this type of investing. AJ mentioned how they get a lot of deals this way because sharing these investment strategies built people’s trust in their business.
AJ mentioned he had just started a private equity company, so I asked him to explain what that meant to our listeners. He said that they just take on private investor’s money to give them equity in a deal. He explains to us how he started in this arm of the business and give us some specific examples of deals he has taken on private money. He also shared how doing business this way reinvigorated him because he is a people-person and loves brainstorming with others.
I asked AJ to explain the new technology company he is involved with. He said they are partners with Tenant Inc, a property management program whose technology is superior, yet simple and helps to centralize and streamline your self storage business. Some of its functionality includes ways to easily integrate third-party technology, manage your managers, and bolster your profits, equity, and market position.
We also talked about networking, how you go about finding and closing self storage deals, how to grow your businesses and still be personally productive, and so much more! You have GOT to listen to this information-packed episode of Just Start Real Estate! AJ is involved in so many different projects and aspects of the industry, you do not want to miss all of the fantastic value he shares!
Notable Quotes:
“I followed in my father’s footsteps as a salesman because that was what I thought life was.”
- AJ Osborne
“I learned very quickly, and early, there were some things I was good at and I had to stick with that because there was nothing else.”
- AJ Osborne
“I liked sales - it made me fail all the time!”
- AJ Osborne
“Sales experience will serve you forever. Sales is such a valuable background to have.”
- Mike Simmons
“That was the culture of my family… no one cares if you are hurting, you just work.”
- AJ Osborne
“I was rich, but I was not wealthy. Those two things are completely different.”
- AJ Osborne
“I was on the biggest treadmill ever, and the moment that it stopped, I was screwed.”
- AJ Osborne
“We own a lot of different companies and in most, we are partners. We have an incredible relationship.”
- AJ Osborne, about his father
“That’s what we real estate investors do - we get into it and realize what it takes to actually be profitable.”
- Mike Simmons
“What operational aspects can I change to increase the revenue to make it worth my time?”
- AJ Osborne
“We focus on understanding our tenants.”
- AJ Osborne
“We are cash-flow guys.”
- AJ Osborne
“I want to be the best - I’m just a little competitive.”
- AJ Osborne
“People don’t understand this asset class and they need to, so I started the podcast and wrote the book.”
- AJ Osborne
“I figured if we could partner with other people, we could grow so much bigger and faster.”
- AJ Osborne
“I like other people participating in success.”
- AJ Osborne
“You build a relationship and the relationship turns into deals.”
- AJ Osborne
Links:
Level Jumping: How I Grew My Business to Over $1 Million in Profits in 12 Months
