From Wholesaling Hustle to Self-Storage Freedom with Alex Pardo

[0:00] Welcome to the REI Agent, a holistic approach to life through real estate. I’m Matias, an agent and investor. And I’m Erica, a licensed therapist. Join us as we interview guests that also strive to live bold and fulfilled lives through business and real estate investing. Tune in every week for interviews with real estate agents and investors. Ready to level up? Let’s do it.

[0:24] Welcome back to the REI Agent. You may not recognize the background, and obviously I’m wearing some goofy stuff. We are in Hilton Head. Our family took a vacation to Hilton Head for a week. We had a couple cancellations in our recording schedule, and so I realized I was going to need to record a couple episodes while we’re here. So lo and behold, we are on vacation and we are having a pretty good time. Vacation with kids, young kids, can be not always relaxing. There’s a sign above our kitchen window thing that says relax. You’re on vacation time or on beach time or something like that. And I just kind of scoff at it every time I go by. I think it would be better to say try and relax. You’re on your kid’s vacation time or something like that.

[1:15] But we’ve been able to find a balance with it overall. So it’s not 100% perfect, but we are still enjoying our time here. It’s been a little bit rainy, but we’ve been able to go to places like a really cool playground and do pools. There’s two pools in our community we’re staying at. So yeah, anyway, we’re having a great time. But I want to talk a little bit about our guest today, Alex. Alex is coming out of Miami. He’s gone all in on self-storage. And it’s going to be an interesting conversation. If you’re familiar with self-storage or if you’re not, if you are not as familiar with commercial real estate and cap rates, he does a really good job explaining the power behind them and why it can be such a win-win opportunity.

[2:11] If you’re even just you’re investing in one and somebody else is leading a deal, there can be a lot of meat on the bones in these kind of deals. Or you can increase the revenue a lot with various strategies. And that’s what you kind of look for to make the value a lot higher. And that’s how all these deals work. But I’ll let him talk about it more. He gets into mindset a lot. And I think one of the big things, the big takeaways from this episode as well is you kind of have to put in self-work. We don’t say it directly, but I think that’s something that if you haven’t gone through that journey, if you haven’t done some self-work, that’s probably one of the places to start. You can do that through reading.

[2:57] You can do that through counseling. You can do that through having a coach. Maybe all of the above is good because really you have the power to decide how you want to live your life and where you want your life to be in a couple of years. And if you are standing in your own way from getting there, if you’re not actually thinking through the steps that you need to take to get there, and if you’re being held back by things like fear,

[3:25] there’s ways. There’s been a ton of people that have gotten to where you want to be. So it’s important to do that self-work so that you can start living your life, the life that you want. Just think about it. You could be recording a podcast in a stupid hat on the beach. Anyway, this is a really good episode. Definitely stay tuned for this one. Listen to the whole thing. Alex has got some great tips. And yeah, without further ado, here is Alex.

[3:59] Welcome back to the REI Agent. I’m here with Alex Pardo. Alex, thanks so much for joining us. Matias, I’m excited to be here, man. I’m looking forward to the conversation. Alex, I am a different location. I’m in Hilton Head. I’m a little bit closer to you. You are based out of the always sunny Miami, right? Never stormy. Yes, sir. Hot, humid, born and raised in Miami. Parents are Cuban. So if you’re detecting an accent, that’s probably where it comes from. But yeah, born and raised in Miami. It’s interesting that the accent still carries, even though you were born and raised in Miami. That’s funny. That’s cool. That’s right. There’s a running joke here that anybody that lives in Miami is pretty much Cuban in some way, shape, or form.

[4:39] There’s got a little bit of a hint of that accent. There you go. I love it. That’s cool. I’ve never been to Miami. It’s definitely a bucket list place to go to. I hear amazing things. It would be a lot of fun to visit. Well, man, if you ever have an opportunity to make it out, man, let me know. Take you to authentic Cuban restaurant. Get some Cuban coffee. Enjoy the vibe here. And then you got to rent like a super fancy car, right? Not for me. That’s not my style. But hey, to each their own, right? I’ll throw a jacked up Hummer. There you go. Just to make parking more fun. But anyway, Alex, let’s get down to business here. Tell us a little bit about your real estate journey. What got you into the space you’re in?

[5:24] I’ll let you kind of talk about it. And yeah, where’d you start from? Yeah, look, I got started in real estate late 2005. I had finished the two-year rotational program working for General Electric and their financial management program. And I realized early on, Matias, that I didn’t want to work for somebody. I felt like I was wired to create, to build something, to help others, to obviously make money and be able to provide for my family. And traveling has been something I’ve always been interested in. So when I finished that rotational program, I decided to go backpacking around Europe. So I went to, I think I visited 53 cities and 22 or 23 countries in three and a half months. Funded on a credit card for under $7,000.

[6:09] So we were like roughing it. And I was in Ibiza in Spain and I went into an internet cafe and I had an email from a buddy of mine that was inviting me to something called a marketing for deals bootcamp. That was happening October of 2005. And the reason that was relevant was because when we were bouncing from city to city, country to country in Europe, on the train, the Eurorail, I was reading books about real estate. That’s when I read Think and Grow Rich and Rich Dad Poor Dad. And for me, the pain of moving back home, by the way, into my parents’ house at 25 years old, which is not what I wanted, not how I drew it up in my head. I didn’t want to go work for somebody. And so I committed at that point, even though it was a $997 weekend event, I said, this is my fork in the road.

[6:58] Let me go all in. Let me commit to real estate. So I attended that event. And then a little bit under three months later, I did my first deal, which was a short sale. And between myself and a partner that I brought on board, we made $44,000. And I pretty much haven’t looked back ever since. Yeah, it’s amazing how many times I’ve heard how Rich Dad Poor Dad, Think and Grow Rich has definitely come out a few times as well. But more than any other book, I think Rich Dad Poor Dad really has changed people’s lives. It’s just pretty incredible. It really has. I think what it did for me is it just gave me a paradigm shift. It just helped me view things from a different lens. And for me, that was pretty much all I needed.

[7:43] Like one of the things that I think has helped me in my journey, and we’ll talk about it, and I’m sure get into two different aspects of it, is I never really felt the need to have to have all the answers before taking the first step. And so the Ready Fire Aim approach has served me really well. There’s been a few times that I wish I had a mulligan, where I’m like, I probably should have thought this one out a little bit more. But generally speaking, that mindset and having that framework and construct of, hey, get clear about what you want, figure out what’s the first step. Don’t worry about steps eight, nine, and 10, right? Just get going and that progress breeds momentum. That momentum breeds some success, and then you just keep building.

[8:27] And as they say, success is never a straight line, right? You’re always going to have all these peaks and valleys, and you’re going to have challenges and lessons learned. But I think if you go into an endeavor, anything that you might want to accomplish in business or your personal life, expecting there to be resistance and friction and challenges, then I think it sets you up for success knowing that, hey, I’m committed to the long run. I’m not worried about the hiccups that are going to occur along the way. You know, it reminds me of that. I don’t remember the quote exactly. Ziegler says something about if you wait for all the lights to turn green on your commute to get to work or to get to wherever you’re going to, you’ll never leave.

[9:07] And I mean, it’s so true.

[9:10] If you never start, and honestly, that’s the hardest part. And I think people being paralyzed with fear for maybe losing money if they’re taking on an investment deal. I mean, it always feels like it’s like a zero-sum game, right? It feels like it’s going to be all or nothing. You’re investing $200,000. You’re investing whatever it is, and you’re going to lose it all if this deal goes wrong. But in reality, it can. And certainly, there are examples of people losing a lot of money. But usually, if you’re losing some money, it’s not all that. It’s like maybe $10,000 or something to that extent, which obviously you want to avoid. But that’s also a cheap education. That will help you know how to do the next one better.

[9:54] And having that courage to take that step is so important. Yeah. Look, and to your point, since 2005, I’ve probably closed somewhere north of 750, 800 real estate transactions. And the only reason I highlight that is because people sometimes ask me, hey, what’s the best deal you’ve done? And I always surprise them. Literally, 10 out of 10 times I surprise them. My very best deal is a deal that I lost. Myself personally, I lost $51,000 on that deal. My partner lost $51,000. We lost $102,000. And that was our first fix and flip project right before the crash of 2008. We bought a property thinking we were buying it right. We were going to renovate it, put it back on the market. Obviously, the crash happened in 2008.

[10:47] And fortunately, I was able to survive that. But the reason I say it was my best deal was because up until that point, I always viewed coaches and mentors and masterminds and communities. For some reason, I saw it as an expense. I didn’t necessarily see the value in it. And that was the deal that got me to do a complete 180 and realize that, hey, if I would have had a coach or a mentor, someone that was even just a few steps ahead of me on the journey, A, I would have never gotten involved in that deal. B, I probably would have been able to read the tea leaves of what was going on around that time. But as they say, you don’t know what you don’t know. And I had had some success that first year, year and a half in business.

[11:31] And I felt I could just kind of do it on my own and figure it out. I’ve always been pretty resourceful. And so I would seek information. I would act. I would learn. I’d make mistakes. I’d modify. But that was a big mistake. And it could have totally put me under. When I went through that painful experience, I said, I am never not going to have somebody in my corner that I consider a coach or a mentor who’s further along in the journey than me. And ever since that moment from 2008, 2009 up until today, I don’t think I’ve ever gone a day without actually paying a coach or a mentor to work with me. And today I have two or three different coaches in different areas of my life. And so it’s completely that one deal for me, I think, has been responsible for a lot of wins throughout the years.

[12:20] Not because I have everything figured out. I certainly don’t. But because I have a trusted network of advisors and people around me that I can lean on when things get challenging or when I don’t have the answers. Yeah, you know, I don’t know if it’s the same as self-help books, but I know that there was a lot of stigma around self-help books. Anything kind of in that vein when I first started reading stuff like that at all. Like so, you know, think and grow rich, you know, rich dad, poor dad, how to win friends and influence people, all these classics. And I don’t know if there’s the same kind of stigma with coaches and stuff. I know a lot of people that won’t, you know, won’t take that step, won’t have that extra support or, yeah, haven’t joined a mastermind, don’t have that network.

[13:06] And I don’t, you know, I don’t know why it is. And I think it is one of those things once you kind of break through, you realize it’s silly. And yeah, you just go all in. Because like, yeah, like you said, you can save yourself, you can jump ahead. Just like, you know, somebody who has, you know, lived a crazy life and done so much and written it all in a book. You can learn that for $20 or whatever, right? You know, this is like a more personalized thing where you can, you know, get that advice, get that wisdom firsthand for what you’re going through. That’s right. With somebody else, other people. The one thing that’s guaranteed, Matias, is that there’s going to be setbacks and there’s going to be challenges and there’s going to be situations that we run up against that we don’t, we might not have all the answers and oftentimes we don’t.

[13:53] But there are people that have experienced that and have walked that path. And so to me, it’s the ultimate insurance policy. It’s like, why not have a network of people that have more experience in life and business than you that you can lean on? When you don’t have those answers. And I think as a result, you get sharper. Now you gain their wisdom. You have that experience and you continue to grow from there. So if there is a stigma around it, I don’t understand why. And I would challenge people that think there should be a stigma around it because I think they’re holding themselves back from growing, thinking that they need to figure it out all of themselves. Why would you try to figure it out all in yourself when to your point, you have books and resources and all this content out there.

[14:34] You have coaches who have done this. Why try to figure it out on your own? I don’t know. To me, it doesn’t really make a lot of sense. Yeah. And I think it might be that the charlatans or the people that look like they’re just going to raw you up and not actually have much value. I think maybe that might be part of it. But at the end of the day, even if you do experience a bad coach or something, which I’m sure there are, and they’re bad self-help books. But it’s all about progress and you’ll find the right ones eventually. I think it’s a valuable thing for sure. Yeah, I would agree. So how did that take you to the next level? What did you do then once you got that outside influence?

[15:24] It helped me tremendously. I started to get clarity about the specific goals I had and made sure that my goals were aligned with my vision. One thing that was challenging for me is I got into real estate and I became an agent and because I wanted access to the MLS and really throughout my 14-year career in the single-family space, I did a lot of wholesaling and fix and flip. I didn’t do too much agent work, although I had a license. For me, it was more to have access to the MLS, but I got into real estate because I wanted to experience freedom. I wanted more cash flow and I wanted to take advantage of all the benefits of real estate, everything that it offers us, but I felt like I was playing the wrong game.

[16:04] I was playing a transactional game. Fast forward to 2017, at that point, it was 12 years into my journey and I remember telling my wife, I said, yes, we’ve done well and yes, this has provided a certain lifestyle and we’ve taken care of our family, et cetera, but where are the assets? Where is the cash flow? It felt like another version of my corporate job. It was a hamster wheel. The difference was it was a hamster wheel that I built and created, not one that I wanted to be on per se. So we started buying rental properties in Cleveland, Ohio. And again, I live in Miami and it didn’t take me long. I got to my fourth rental and I’m like, yes, can you build wealth this way and generate cash flow?

[16:44] But it’s very slow and I would need a lot of doors. And I don’t have the economies of scale and I have all these tenants and I have toilets and I’m like, there’s gotta be a better way. And I happened to be running a mastermind at that point and I was coaching somebody who owned a self-storage facility. And then I started learning about what an incredible asset class it is. And just one of the many reasons is because you’re not dealing with tenants and toilets and trash and trauma. And it’s a business with the benefits of real estate and you get cash flow. And anyway, I just started to immerse myself learning more about the asset class. And it was 2020 that I decided, hey, I am going to shut down my wholesaling business, even though it was profitable.

[17:26] At that stage, we had a team of nine people and our overhead had ballooned to like 40, $45,000 a month. So we had to do a couple of deals just to break even. And I said, hey, this no longer, even though we’re making money or profitable, it no longer fits with the direction I want to go in. So shut down that business. I was able to sell off pieces of it. I didn’t sell the business per se because I didn’t build a sellable business. And later that year, I planted my flag and said, hey, I’m going to commit to self-storage. And that was almost five years ago now. Okay, I love it. And that you hit a couple points that I want to highlight there because it’s very similar in this agent sales world as the wholesaling world.

[18:09] Honestly, I kind of feel like that’s two different paths. I feel like it’s going to be really hard to do both 100%. I mean, which we all know you can’t really do multiple things 100%. But that’s a different topic. But the point is that you are transactional. You’re making money. You can make really good money, but it is just there and then it’s gone. And you have to, as these agents, as wholesalers, as investors, I mean, you have to do everything yourself. There’s not a matching 401k program. And you’ve got to invest and you’ve got to plan for the retirement. And I mean, my net worth is all equity, pretty much, not all, but like most of it is equity from investing in real estate and letting it grow.

[18:57] And if you’re not doing that, then you’re just really, yeah, you’re going to be stuck. I mean, we all have seen, if you’re an agent, you’ve seen that, you know, the person that’s like in their 80s still at the office working because they just really don’t have any other options at that point. And so like exactly what you’re saying is like at some point, and the goal, one of the goals of this podcast is to help you realize this and help you also understand that as a real estate professional, you have tax benefits and you have all this great opportunity that can really, really benefit you in investing in real estate in some form or fashion. Now, the self-storage is, yeah, it’s an awesome asset class.

[19:39] I know that it has been kind of popular here recently. And I want to ask you then about finding deals because I think that could be difficult since it kind of did gain popularity. But there’s a lot of things there that’s really nice, like what you’re talking about, the fact that you’re likely operating off cap rates as well for value. And if you don’t fully understand that, there could be huge multiples of like making things, the value go up by, you know, making the revenue go up. 100%. But there’s also the depreciation. And that’s where you can, you know, get your own self-storage unit or you can, you know, invest in somebody else’s as a, you know, as a passive investor and realize that depreciation, which is huge.

[20:26] And again, part of that, like realtor 401k, real estate professional 401k kind of program if you’re investing in deals like this. But yeah, yeah. Tell me about, tell me about finding deals as me. Has that gotten harder? Yeah. Yeah. Look, it absolutely has gotten more challenging to find deals. And if you walk away thinking, hey, because it’s hard, there’s no deals out there. You’re 100% right. I have a different mindset. So is it more challenging to find deals than when I got involved in self-storage in late 2020, beginning of 2021? Absolutely. COVID exploded. Self-storage absolutely exploded as a result of COVID. Cap rates were completely compressed. And there was, I mean, it was just occupancy was through the roof.

[21:12] People were making money hand over fist in storage. This is the new norm, right? And this is back to the norm. And I think it’s a healthy stabilization of the market. And I’m finding deals. I have storage wins, members finding deals. You can still find deals. The question is, are you going to work and are you going to work consistently? The beautiful thing that I want people to understand about storage is that when I went into this asset class, I had the false expectation and thought that I was going to need to learn a completely different skill set. And what I now know with certainty, almost five years later, is that a lot of the skill sets that I acquired as a real estate investor, as a realtor, all of those skill sets have translated over into storage from lead generation to negotiations to acquisitions, dispositions.

[22:01] Now, how we analyze and underwrite these deals, because you made a great point in commercial real estate and storage as an asset class of commercial, the value is determined not by comparable sales like we do in residential. It’s determined by the income that the asset produces and that operating income. And Matias brought up that when you apply a cap rate, it has an exponential increase on the value. So in storage, we get to do something called forced appreciation.

[22:31] We can put more of a fingerprint or footprint on increasing the value of the facility, which has an exponential increase in the net operating income, which has an exponential increase in the value of the facility. We get to raise rates. We get to increase by fee income and tenant protection and all these different things. So yes, to answer your question, it is more challenging and we’re still finding deals. So direct mail is one of my favorite ways to find deals. So we find mom and pop operated facilities in smaller markets, like what we call tertiary markets, and we send direct mail campaigns to them, jumping on Google Maps and locating mom and pop facilities that you can tell they’re not operating very efficiently.

[23:14] They might not have a website or their Google reviews are really bad and customer service is an issue or you look at their website and it looks like it was built 20 years ago. Those are all signs of mom and pop operators and we just pick up the phone. We smile and dial. So cold calling is a great way to get deals, building relationships with storage brokers and wholesalers, joining storage Facebook groups is a great way to connect with people and find deals. Believe it or not, jumping on Facebook marketplace and you pull up a particular city and you find the storage owners that are advertising units for rent and you just send them a DM, you send them a message asking if they’ve ever considered or thought about selling their facility.

[23:58] So it’s so much easier, I believe, to get in contact with these mom and pop storage owner operators than sometimes I found in the residential world where we might have to skip trace people to find their contact information. So maybe that was a long-winded answer to your question but yes, it’s more challenging and there’s still plenty of opportunity out there. I think there’s north of 60,000 storage facilities in the country and about 64% of them are owned by mom and pop operators. Okay. Yeah, that’s really good information. I mean, that’s some awesome strategies for this kind of world and to kind of highlight some of the possibilities here, if somebody doesn’t really understand cap rates and kind of the economies of scale when you’re looking at bigger commercial deals, there’s a lot of different ways of looking at it but think about, for example, if you’re taking down if you buy one rental and you increase the rent by $15 a year, that’s pretty slow.

[25:01] If you have $200 and you increase those by $15, that’s a much bigger number, right? So if you’re looking at a self-storage facility and there are 200 units, that can be one really easy way that it just becomes a $15 increase is not a lot for most people. That’s probably not something they’re going to really bat an eye at but you do that over 200. That’s huge. And then you do some other things like if you’re able to figure out a way to make the expenses lower and I don’t really know how much expenses are in the storage world. I’m sure there are but you figure out how to make those. Yeah. About 30 to 40% operating expense ratio in storage where if you compare that to like multifamily, multifamily can be 45 to 55% operating expense ratio.

[25:48] Yeah, so if you figure out to make that cheaper as well, if your income goes up overall, you do the cap rate multiplication on that and you can have millions of dollars of increase through making the property perform better. But speaking of operating income, so are you investing, I would imagine, throughout the country, you said tertiary markets. So you’re hiring somebody to run these then like a manager. Tell me about that. Yeah, so we run what’s called an unmanned model. What does that mean? We don’t have an employee at these facilities. In fact, all my facilities have offices but they’re locked like nobody works out of the office. When you think about a traditional storage facility, you’ve probably, if you’ve ever rented storage, you’ve probably walked into an office, talked to somebody behind the desk, they gave you a code or a key and you went to your unit.

[26:43] Here, we don’t have anybody so everything is done remotely. And so we have a three-pronged management system. At every facility, we hire a local boots on the ground, which is a subcontractor essentially, and they get paid, depending on the market, anywhere between $300 a month to $600 a month. And their job is once a week, twice a week sometimes, do lock audits, unit cleanouts, make sure the facility is clean. So we have a local boots on the ground. Then we have a third-party management company that handles the day-to-day operations and they have an in-house call center. So we have QR codes and signs so when a customer visits our facility, they can just take a picture of the QR code, they can go rent a unit online.

[27:28] Everything is automated, the entire process, or they can call the call center. And within minutes, they get a text with their gatecode, they have a lock waiting for them inside the unit. I mean, it doesn’t require really any human intervention, aside from if they decide to call the call center, but everything can be done online. And that’s one of the things that really appealed to me about storage is that it’s a low headache business with high margins. Right? And we don’t, I don’t, up until late last year, I sold off about 80,000 square feet of storage in Mississippi, but up until that point, I owned 838 units across 104,000 net rentable square feet, zero employees. Like I don’t, you don’t need to have a big team.

[28:12] You can run everything very tight, lean and mean. And that really appealed to me and the fact that this can be run, this business can be run because of technology from literally anywhere in the world. Was just very appealing and attractive for me. I love it. And I, and my mind immediately thinks, okay, so you, you find a mom and pop business where there’s salaries involved in their operating expenses, right? And boom, that immediately increases the value. Matias, I can tell you know what you’re talking about, man, because my very, so my very first deal was in Mississippi. It was a 43,000 square foot facility. When I looked at their PNL and I saw they had about $60,000 worth of salaries, I immediately thought to myself, well, I can wipe out basically two thirds of that because my property management company at the time was charging me two grand a month.

[29:03] 24 grand is what property management is going to cost me. That’s less than half of what or more than half of what less than half, I’m sorry, of what they were paying. I knew I could eliminate $36,000 of expenses right out of the gate. And so, yeah, there’s opportunities. I mean, there’s two ways to make money. Obviously you can generate more revenue, but to your point, you can also reduce expenses because it all trickles down to the bottom line, the net operating income. And, you know, you might think that five, $10,000 more in NOI is insignificant, but when you apply an eight cap to that, it’s a big number. Yeah, it really is. And once you understand that it really unlocks that commercial game or that makes it make more sense. Because I think a lot of people, if they’re listening, if they’re residential agents, just don’t, they know what they are, but they don’t really, you know, interact with the cap rates on a frequent basis.

[30:00] And so, yeah, that’s interesting. That’s really cool. I think just one last point, man, to crystallize it, just because I think I was kind of thinking as I was hearing you speak that you’re right. Sometimes people can’t really contextualize or they don’t have a frame of reference. Like, okay, what does that mean? So you use the example earlier of 200 units, right? And let’s just say that we raise the rents by $10 across the 200 units. So what do we do? 200 times 10. So that’s $2,000 per month in additional revenue that we would be collecting, right? Times 12, that’s $24,000. Well, if you divide that number by 8%, which is a cap is pretty common. I think it’s storage, depending on the market, depending on the size and other factors. If you take that number divide by 8%, that’s a $300,000 increase in the overall value of the facility just by raising the rates $10 per month across that facility. And that’s one deal, right? So hopefully that puts things in perspective. And then when you think, well, what if you add tenant insurance? And what if you have $20 admin fee when somebody moves in

[31:12] and you have all these profit centers? That’s where it gets sexy and attractive, where like you can really have more of an impact on the value of the business than if you had a residential property and like, okay, maybe you decide to do an Airbnb and you can make more money. But now you’re dealing with more operations and people and toilets and complicated systems. So yeah, man, I’m sorry, I didn’t mean to like jump in, but I just wanted to hopefully give people a better understanding of what it would mean to just raise rents by 10 bucks a unit. Yeah, that’s a good point. Yeah, well, it’s perfect. And like you said before, you’ve had that one deal where you’re able to get what was it? $46,000 of decreased expenses right off the bat. So you can do the same math. I mean, that’s almost another $600,000, right? I mean, that’s a value right there from, you would know it from the beginning when you see it. So I mean, that’s, yeah, it’s awesome.

[32:12] It’s a really, that’s a fun, that’s a powerful thing about these. And it’s still if it feels like this stuff is unattainable, or you feel like, you know, obviously, there’s you, there’s people like you that are able to help guide you through. But if you’re really focused on sales, and you have don’t have much time, whatever, you can still get in on deals like this with being in a syndication, being a limited partner. When you understand the numbers and how they work like that, then you can kind of see why like the economies of scale are so much bigger when you’re playing at this level, because you can, you can have win-wins and get a really good return on the investment you make. And then, you know, depending on their end game, they might be refinancing, and you’ll get your money back, and maybe you’ll still have ownership in the deal.

[32:54] It could be that they are going to turn around and sell it at a big profit, and you maybe get, you know, double your money back or something. And when you understand how those numbers come about, with what you just explained, it starts making sense why this this works. Yeah, yeah. And look, I think what you said is so important, because I want people to understand that because the pie is bigger in storage, you don’t have to wear all the hats and be all parts of like, if you have money sitting on the sideline, and you find the right operator that finds the right deal, you can passively invest as an LP as a limited partner. If you’re really good at deal finding, right, you can take that skill set as an agent or as an investor and find deals for people like me, and you can carve out a piece of ownership and equity in these deals. I mean, there’s so many different ways to get involved. So don’t be limited to thinking, oh, I have to have millions of dollars, or I have to, you know, learn that you can double down on your strengths and what you’re really good at and still participate in benefit from this asset class. Yeah, 100%. And just to

[33:58] add one more element to pitch this a little bit further, when you get into the depreciation, so we just got 100% bonus depreciation back. And it basically just means that you are able to depreciate a ton up front. So people may be familiar with the traditional kind of just take the value of the structure, not the land, divide that by 27, and you take that off your taxes every year model of depreciation. But this would be like making an itemized account of every little thing in the property. So, you know, if you’re looking at a house, it’s, you know, roof, HVAC, that kind of stuff. I’m not sure, I’m sure there’s a bunch of stuff in the storage unit space. But you’re basically, the IRS has a timeline, a shelf life, you know, life of these each items, and it allows you to get a bigger depreciation up front. So if you’re investing in one of these deals, you don’t even have to worry about it. That’s going to be part of their game plan, and you’re going to get a benefit of a tax write off from these as well. So just to give you an example of something I invested in, I was able to invest $50,000 into a mobile home parks indication,

[35:07] getting about 10% return on my money. And then I was able to write off $66,000 off my taxes the first year, and 13,000 or so the next year. So maybe by year three or four, I’ll have like double the amount invested in tax write offs, while still returning a great amount. And this deal is one that they are planning on refinancing at some point, and where I would get my $50,000 back, but I’d still hold a small ownership in this and still receive dividends and then still receive profit if they sold it down the line. So yeah, I love it. It’s kind of a no brainer. It’s super powerful. depreciation is amazing. When you learn cost segregation studies and accelerating the depreciation. I mean, I did that at one of my facilities and it wiped out my tax liability in a certain year. Now you have recapture obviously, but talk to CPAs and people that really understand that. Because if you’re a high income earner, and you make a lot of money, you want to make sure that you’re taking advantage of depreciation. Now you don’t want to, in my opinion, you don’t want to just get into deals only because of the depreciation. It’s still got

[36:13] to be a good deal. You still want to follow the fundamentals, right? And it sounds like obviously you’ve done that, Mattias. So yeah, I love it, man. Well, when it all works, when all the things work well, it’s amazing. And you know, what a great 401k for a real estate professional, right? I mean, they got the tax benefits, you’ve got, you know, you get any passive income building up, and you get to use it now. Like I can use my dividends whenever I want to. I’m not waiting until I’m 65. But anyway, yeah, that’s, I mean, anything else you want to cover on the self storage front? No, look, I think more than anything, it’s just, I want to challenge any limiting beliefs that people have that because oftentimes I hear, oh, I don’t, I don’t have money, or I don’t have hundreds of thousands to go buy these. Sometimes people are intimidated because it’s just a bigger building and asset class. Guys, every single storage deal I have done has been without using my money. I’ve always leveraged other people’s money. And that could be seller financing, which I’ve done my very first deal, I got 85% financing from the Small Business Administration

[37:17] to buy the facility, I brought in an equity partner who needed the equity injection of 15%. There’s private investors. I mean, there are so many ways to structure these deals. So regardless of your situation, don’t feel like you need to have a certain amount of capital or experience to be able to get involved in storage. I think more than anything, it’s just finding the right support guidance, right, learning the business, but then making sure that you’re focused on the right activities. And I think that applies whether you want to be the best real estate agent, you can be the best investor, storage investor. I think the principles and the philosophy apply no matter what you’re looking to pursue, right? Surround yourself with the right people that have been there, done that. Community, take advantage of people that are doing the same thing you want to do so that you have a support system and you have accountability and guidance.

[38:08] And that’s just one of the things we provide within the storage wins community. So I think it’s super important to find your tribe. Yeah, 100% copy the person that is where you want to be. Yeah. And that’s like, they’ve done it. They’re successful. That’s a recipe for success. Just follow the recipe. I love it. That’s right. It’s amazing. I want to move it into the golden nugget question. I’m curious if you have a golden nugget for our listeners today. Yeah, look, and this is going to, this might be cliche for people. Do not be afraid to fail. I see so many people sitting on the sidelines because of fear, right? And fear. One of the acronyms I’ve heard is false evidence appearing real. I don’t know. I didn’t come up with that. I forgot where I heard that, but it always resonated with me. And I think too many people are scared to bet on themselves and take a leap. And my mentality, Matias, is I’m either going to win or I’m going to learn. Now you want to make sure that you’re being thoughtful and intentional about the action you take, but adopt the mentality of taking massive imperfect action. If you feel comfortable, that’s a sign that you’re

[39:14] probably not pushing yourself. And so I’m always mindful of doing things like, I’ll give you an example. Physically, about five, six months ago, I started jujitsu. I just turned 45 years old. Why? Not because I want to compete in mixed martial arts or in tournaments, but because I wanted to get in uncomfortable situations. I wanted to make sure that I could challenge myself. And I take that same mindset and philosophy and approach in business. It was challenging to think about shutting down a profitable single-family residential wholesaling business. But I knew that if I did that, I was comfortable and it wasn’t aligned with my vision. So I burned the ships and I found the community and a mentor. I learned self-storage, but I really learned by applying the information and executing on that. And I see too many people staying comfortable, not wanting to bet on themselves and take a leap. And to me, regret’s one of the worst things you could live with.

[40:11] So play the movie forward, fast forward five, 10, 15, 20 years. Are you going to look back and regret and say, I should have, or are you going to be like, no, I did it and I learned and I won. And so just, I think that concept of playing the movie forward, what’s your life going to look like 10, 15 years if you do take the action you want to take, what’s it also going to look like if you don’t, what’s the cost of inaction. So those are some things that hopefully resonate with people regardless of whatever you’re pursuing or wanting to do. Yeah, I love that. And I just want to underline too, I think the more that you show up for yourself and do the things you say you’re going to do, you build up, like once you challenge yourself and you get through it, you push yourself, you keep showing up, the easier it’s going to be to do something like what you just talked about with burning the ships. I think it kind of all stems from a place of total ownership. If you don’t own what is happening to you in your life, if you’re always blaming other people or other things or circumstances, blah, blah, blah, for things not working out, you’re

[41:16] not going to have very much faith that you’re going to be able to do this big hairy goal that you just talked about. You’re not going to feel like you’re going to be able to jump out because somebody else is going to come in and something else is going to come in and affect your life. But if you have been owning it for a while and you realize that really you have control over most things, whether it’s just your perspective on them, that’s going to give you a lot more confidence to jump in there. So that’s really well said. Yeah, man, absolutely. But look, just bet on yourself. Continue to plug in to the ARIA Agent podcast, like obviously everything. I have so much respect for podcast hosts and content creators because it takes a lot of time, energy and effort to get on here and interview people and to just have a genuine desire to want to help and impact people. If I can, Matias, for over nine years, I’ve been hosting the Flip Empire show and it’s ironic that we’re recording this one. We are because in just a few days, Monday, August 11th, I’m making a shift. I’m rebranding the whole show so that it’s all aligned with storage and it’s going to be called the

[42:23] Storage Winds podcast. So for anybody that if any of this resonated and you want to kind of follow along, the Storage Winds podcast is being launched Monday, August 11th. And yeah, it’s a place where I just I openly share, by the way, not just the wins, but also the challenges. Because again, I don’t have everything figured out. I got setbacks just like everybody else. And I openly and transparently share that because again, my mentality is you’re going to win or you’re going to learn. And I can’t speak for you, but I would imagine that you’re like me in that I’ve learned a lot from some of the mistakes and challenges that people have gone through. And so that’s one of the purposes of the podcast. I love it. Yeah, that’s awesome. Tell me about an influential book, one that you either think is everybody should read or maybe one you just really enjoy right now.

[43:12] I was hoping to spot it right behind me. It’s somewhere The Go-Giver by Bob Berg. The Go-Giver is probably one of my favorite books. I’m a big believer that the most valuable capital you can raise is not money. It’s not like what most people think about in terms of raising capital. It’s relationship capital. And when you approach relationships with a heart to give without the expectation of something in return, man, life just gets better. And it’s filled with more meaningful relationships. So if you haven’t read The Go-Giver, I mean, I can, as you can see, I’m a fan of books and reading, but The Go-Giver is a big one. And then Buy Back Your Time is a good business book that I like to recommend by Dan Martell. I’ve implemented a lot of what he teaches. So those are two books I would say have resonated with me. Okay, awesome. I love those.

[44:03] And then you have, you mentioned your podcast, but what other places can people reach out or find you? I know you have a course or a community and then I mean, there’s social media, I’m sure. Yeah, for sure. So there’s a Storage Wins podcast, storagewins.com, storagewins.com for anybody that might be interested in learning how to find, fund and buy your first cash flowing storage facility. That would be a great place to go. And then I’m on, if you’re on Instagram, I’m at Alex Pardo 25. And just the typical socials. I have a Facebook group that’s, it’s free. Anybody can join. It’s just about storage. It’s called the Storage Wins Facebook group. So I think if you just search for Storage Wins, you’ll probably find me and everything I’m connected in. Well, Alex, it’s been an awesome conversation. I really appreciate you being on.

[44:50] Yeah, no, thank you for having me, man. I appreciate the conversation and hopefully it helps people in some way, shape or form. So just go out there, take that massive imperfect action, continue to plug into this podcast. And yeah, I appreciate you having me on.

[45:16] All content in this show is not investment advice or mental health therapy. It is intended for entertainment purposes only.