AJ Osborne started out selling insurance. Followed in his dad’s footsteps. Wasn’t really a fan of real estate. But when he realized his income would forever be up and down and so much went to the government anydamnway, he changed his tune. Him and his dad went in on a small self storage facility together. Which was pretty ballsy ’cause at the time, it wasn’t mainstream like it is now. Banks didn’t get it, so it was hard to get cheap money.
But they liked it. It operated more like a business than a buncha rental properties. They could go in, improve it, raise their rates, collect cash flow, go acquire another facility, repeat. And that’s what they did for years. “Then one day, I became paralyzed,” AJ says, forcing me to replay that part just to make sure I heard him right. “Completely just, my legs stopped working. And I became a quadriplegic. I was hooked up to life support. All the tubes. I couldn’t speak, I couldn’t do anything. Paralyzed all the way up to my eyes.”
“I was on life support for months,” he continues, as I’m over here like, Bro, what happened? “And then I went to rehab facilities. And because I had these real estate assets that were passive income, I didn’t lose my house. Me and my wife had just had our fourth child. I didn’t have to worry about her having to leave her kids and paralyzed husband to go get a job just to pay the bills. And that was due to real estate. And that moment really changed everything that I was doing. I went back home, still paralyzed.”
AJ’s brother moves in with ’em to help. Over the course of the next five years, he relearns how to talk, walk, and all the other things you and I take for granted. Turns out, he had a rare neurological condition called Guillain-Barré syndrome, which, if I understand it correctly, is when your immune system goes all Hacksaw Jim Duggan on your nerves. Scary! But anyways, while he was recovering, the value and cash flow from his self storage portfolio only went up. No wonder he’s passionate about teaching this stuff.
What are the basics AJ wants you to know about self storage? Well, it’s a different animal. The biggest threat to self storage is self storage. It’s one of the easiest assets to over supply a market with. And when that happens, it drives down rates and increases vacancies. So that’s the first thing. It’s very sensitive to supply and demand. Second is it’s hyper local. Think in terms of a three-mile radius. Right? Like Phoenix is one housing market, but it’s like 100 different self storage markets.
And then the third thing is, these aren’t houses or apartment units; self storage is a business. And it needs to be ran as such. The market and the operations are the only things that matter. You treat it like you would a retail store. People come in and out, you sell different products (different sizes of storage space), and you’re looking for that product-market fit. Someone who wants a 5×5 climate controlled space isn’t the same as someone who just needs to store their motorhome somewhere enclosed for the winter.
Great insights, but that brings up a ton of follow-up questions, doesn’t it? Like how do you know if an area is oversaturated? How do you even find deals to begin with? How do you get funding? What should you do to maximize rates? How do you market the thing? Collect payments? Handle maintenance and repairs? Put a team in place? Scale it up? When is it wise to sell a facility? What about just building an entire facility from scratch? AJ’s got paid programs for that. Inner Circle, CRE Circle, Private Storage SSI Community, and more. Prices are listed on his website. Consider me a fan.