I am not pretending to be something I am not, and I am not saying I am better than others who teach people how to invest in self-storage or other forms of real estate. I am not an expert at money or financial success – although I have gone from being bankrupt to being a multimillionaire.
What I’m saying is that if you want to shorten your learning curve and avoid the mistakes that I and so many others have made during self storage investing in their self-storage career – then I invite you to join us on this amazing journey in the self-storage business.
Is to supply the tools that can give self storage investors the ability to profit in the hottest form of all real estate and to create a community where thousands of self-storage professionals come together from all over the world in support and celebrating success of each other.
My Real estate Career began back in 1993 after purchasing a home study course by one of the top “Guru’s” in the country on how to invest in self storage with no money down.
And I, unlike so many other people who buy courses and then stick them on the shelf, actually watched those tapes and read the manual. And Guess what……..it worked! I bought my first piece of investment real estate (pictured below) for $30,000 with $0 money down!
The one that started it all! 8719 E. Catalina
Once I bought this home, I followed the steps in the home study course which showed me how to increase the value and force appreciation in my new investment.
I rehabbed that first house myself and moved a tenant in at $550 per month, which gave me a $150/month in positive cash flow after the mortgage, insurance, and taxes. Shortly after that, I had the property re-appraised and then I refinanced it and pulled out $15,000 which I used to buy 2 more just like it. I was hooked!
Approximately 6 years and 20 rental houses later, I decided to quit my Job to transform my real estate hobby into a full time Self Storage Investing business. I was married now and my wife and I were expecting our first child. My first full year in the real estate business went very well and we had acquired several more homes and an apartment complex (pictured below).
By now, I believed I had finally made it, I was living the dream!
As a result, I decided to show my friends and family how successful I was by buying a new car, taking my family on expensive vacations, shopping for the latest clothes, and by basically buying and doing whatever I pleased.
I continued to acquire more rental houses and apartment complexes, amassing over 400 rental units, and leveraging ourselves to the max along the way.
Then came the tragic events of September 11, which as many of you may remember, shook our country to the core. In the months afterward, The Fed dropped interest rates to record setting levels to boost the economy and our tenants began leaving in droves to take advantage of all the $0 Down-1st time home buyer programs that were being offered.
"As a result, our vacancy rate had taken us below our breakeven point within a matter of months."
In addition, our insurance rates had soared after the attacks, and a statewide property tax increase on all our properties a year later delivered the final blow. I continued to borrow from our credit lines and I maxed out both our business and personal credit cards each month in order to make our mortgage payments, pay our employees, keep the lights on, and provide for
We slashed every possible expense in our business and personal budgets and began selling off our rental houses and apartments in an effort to keep from sinking. At home, my wife began selling everything in the house that wasn’t nailed down on EBay® just to make ends meet, and it was working, but we were still holding our breath every 30 days in hopes the money wouldn’t run out before the month did.
"And then the inevitable Happened. Our family was in the checkout line at Walmart one night when our credit card was declined.... again."
But this time, our debit card was also declined, and my wife and I didn’t have enough cash between the two of us to pay for our groceries. The day I feared had finally come; we were broke! I was a real estate millionaire without a penny to my name. I felt as if I was going to pass out right there in the store. I pulled out another credit card…..declined, and another…… declined, and another, until finally, the last card in my wallet was accepted. My wife and I collected the kids, our bag of groceries, and drove home without saying a word. I had a feeling of the biggest failure in the world. I couldn’t even provide for my family.
That night, I did the only 2 things left to do. First, I prayed. I prayed that I wouldn’t have to file bankruptcy and for direction in my crumbling rental empire. The second thing I did was sit down and began to take a long hard look at where I had been, where I was, and where I wanted my life to go. The first place I knew I didn’t want to go was to live with my mother-in-law should I be forced to file bankruptcy and lose everything I own, which seemed to be where I
"So as I continued to think and work through this process over the next several days, I realized that my passion still lied with real estate, and that the main reason I was in this mess was because I was in the business of renting space to PEOPLE."
The lost rent from evictions, move-outs in the middle of the night, along with huge collection expenses and extended periods of time with high vacancies during the home sales boom, had literally drained our bank accounts. I then added in the cost to repair, re-paint, and re-carpet each of our 400 units over the years as they became vacant, and that number virtually doubled!
Also, being a victim of 100% to 200% increases in property taxes, insurance, and utility costs over the past 5 years brought me to the conclusion that I didn’t want to be in a position where I was slave to these 3 business partners any longer.