John Chapman Returns: Insights on Quitting your 9-5 and Finding Purpose

Foreign. Welcome back to the show. Today I've got my, my good friend John Chapman who is a two time guest and we were talking the other day and we thought it'd be interesting to just kind of have kind of a, a show somewhat formed around phone calls that we have where you know, we think we're solving all the lives, all the world's problems.

So John, man, welcome back to the show. Oh, good to be back. Thank you for inviting me. Yeah, man, this should be fun. So you sent me a list of, of ideas you want to talk about. So you did more prep than I did for this show, but one that I really, I love talking about and probably relates to something I posted the other day on, on social media too. But it's kind of what happens when you quit your job. Right. So essentially gaining financial freedom.

So however that is whether you've got some single family rentals, multi family self storage, in, in our case, you get financial freedom, you're able to leave your job, what you did as an attorney. What now?

So I guess I don't know, start with, start with how that felt to you the first week, first few months. Sure. You know, even just to one step back from even that question, I will answer it. Quitting in and of itself, I found to be exceptionally difficult. Even when it was very obvious that I had the ability to do so, it felt like a tremendous leap. In retrospect, it was nothing to actually do it. I was totally fine.

But overcoming that initial hurdle was really, really hard and I actually needed an entire room full of people in our mastermind to get me to commit to it because it's just such a fearful thing. So was real estate investing. What was your drive becoming to becoming financially free? Because it doesn't sound like maybe it was your job, but what was the driving force? It really was. I mean it was in part my job. Being attorney was just really draining and it didn't make me a very nice person.

But also just wanting the freedom that I think we all want. Right. We all want to be able to do what we want when we want. And so for me it was, it wasn't just I hate my job, it's I want freedom time freedom, financial freedom, freedom. So that really was the driving thing. I think it was kind of the same with you as well, wasn't it? Yeah, well, yeah. And yeah, for over a decade, just wanted out. Bad culture, bad. Yeah, just wanted out. And for me it was opposite. Like I couldn't wait to leave.

Now I didn't do them Dirty. I was there for probably, I don't remember exact timeline, maybe an extra two months to help train my replacements. And it was during COVID so that was. I feel like I probably gave them my notice in May or June of 20. So it was like in the depths of COVID there. I didn't have much going on. So I guess work another two months for me wasn't a big deal. But yeah, it was not hard for me to say, hey, I'm out of here.

Yeah, I've been a lawyer for 18 years and it was just so. Even though I didn't like it, it was just. I just was so steeped in it. It was, I think that really. Well, you went to school for it, right? Yeah. Your identity was wrapped up in it. Yeah, to some extent. I think that's fair. So. But yeah, so when I did it, uh, I think the, you know, the first few weeks were awesome. I'm like, wait, I don't have to go into the office. This is incredible. Um, and I'll, I'll be upfront.

I had really no plan for what my life was going to look like after I quit. I was like, well, I'll just figure it out. It'll be easy. Can't be any worse than this. Um, and I think that was a mistake because those first few weeks quickly wore off and then it was almost an existential crash crisis. It felt almost as bad, if not worse than even when I was working full time. Which sounds really self pitying and kind of lame. But I based on talking to other people.

I think they, a lot of people have that same experience. Well, we, as humans, we need to be productive in some fashion. Right. To just call it society in a way. Right. And I did the same thing. I now I. It was a little different because I was like, hey, I'm just gonna drive to my facilities when I feel like it and cut some weeds down. Like I wasn't using my time wisely, but I was plugging my time with something and it kind of goes back to.

And I was talking to another, a mutual friend of ours earlier this week about the whole buy back your time Dan Martell thing. And you've got to find that thing that you're gonna plug in once you remove something. So with our jobs, right, you have to find something that you're going to plug in. You can't just be like, hey, you know what, I'm retired. I'm just going to go hang out in my, you know, early mid-40s.

Yeah, it didn't work, I tried floating in my pool for a couple weeks with cocktails in the afternoon. I didn't get very far. After a while, hedonism catches up to you. And I think you raise a good point. I think one of the things that I struggled with was, well, what do I plug in there? And I think grinding it out for as long as I did. I conflated productivity with only monetary progress. I'm not making more money, I'm not being productive.

And I think I ultimately concluded that I was, I was pretty good at doing deals. I was pretty good at a lot of things, but I wasn't really good at just living and being happy and being content. And when you strip away the job and you actually have all that time to just, you know, take a hard look at yourself, it's. It can be a little unnerving, I think. I don't know. What was your experience like? Well, I was gonna ask how, how long was that transition, do you think, for you? Two or three years?

I've been, I, I'm pleased. I'm really happy with where I'm at now. But it was a multi year journey of trying new things, frankly. I did therapy that I thought helped just kind of smooth out some of the rougher edges and help me kind of figure out things. I mean, I just hadn't done much other than work for, you know, 18 years and be a parent, you know, which is great. But there is other things in life and particularly when you have that time. Freedom.

Yep. Yep. Yeah. I mean, mine, I think, I think I feel like I'm always in transition to, to a certain degree. I, you know, and you make a good point of it doesn't have to be something where you're making money because I think initially that that's our thought. Like, well, I'm here and it's because I did something well with how I invested or made, you know, made money in some fashion, somewhat passive money. So you feel like that you got to stick to that. But yeah, I've, I've been in transitions.

I mean, I started a podcast. I've looked at different ventures and continue to do that now since the weather's finally nice. I, it's easier for me because now I can do things like get outside, I can golf, I can, I can do things that fill my cup that aren't necessarily money making, but while also still trying to grow my business. I think that's one thing that, and it's tough too, because there's, especially with self storage, it's not like single family rentals.

You can't go out and send 10,000 mailers weekly. Right. Like self storage, you just can't do that. And you and I have talked about this and we'll probably get into it. I want to stay in Ohio for the most part. I want to stay in these markets. So my pool that I'm, that I'm fishing in is smaller. So I can't always just look for deals. So there's got to be other things. I agree 100 with what you're saying there.

It moves so slowly and if you're relying on that, provide that sort of intellectual stimulation, you're going to be very disappointed. I think a couple of the points I would make is that, and I don't know if a lot of people go through this, but I, I was almost like a rich fat person in the sense with my time I was so stingy with. I was so glad to have.

I hoarded my time in the sense that, oh, I don't want to go do this because I don't want to get sucked back into doing anything I don't want to do again.

And I think that led to sort of an attitude that I knew everything I already needed to know and really from an intellectual standpoint just kind of stagnated a bit because I didn't want to waste time researching new asset classes because, well, storage is working fine and I don't want to get sucked into something that may not work out the way I wanted. Almost fearful. You know, how people tend to become more risk averse as they accumulate more.

I'd accumulated so much time I was being risk averse to spending it and it was getting to a less than rich life. I think that's interesting and I think you're, I think you're dead on too. And it's interesting because it's. And you know, by the way, we're maybe talking somewhat negatives about this, but this is a, it's. And we know this like it's a great problem to have. Oh, 100%. But you need something to fill your cup. And yeah, I think, I think the fearful fact is, and I'm, I still am. Right.

I don't want to lose my time. Especially your kids are a little bit older and you've been traveling a lot more. My kids are still younger. So it's, I don't want to lose that time freedom. And I think because we both have jobs, it's like we don't want to get into another asset class or situation in General to where that time that we've worked so hard to get, time freedom, we don't want to lose that. So I think that's probably where the. Fear comes, right, oh, 100% that you summed it up perfectly.

And. And then it makes us afraid to spend our time in any way that might not work out exactly the way we want. Or at least that was my experience. And it took some work to get over it. And it's not been a smooth, easy transition. I think the other thing I learned about just quitting my job is when you actually have this time freedom and thing. I've actually come to the conclusion that doing deals and making money. I don't know if this sounds arrogant or not.

Is probably one of the easier things in life. It's linear, it's goal setting. It's hard to actually live a rich life. It takes just as much work. Try making friends in your 40s. It's really hard. Like, it's not like when we were kids. And so you have to put in this mass amount of effort to live, I think, a richer life. And I think once you have that freedom, you're forced to kind of confront it.

Or you could do what other people I know do, just throw themselves endlessly into chasing deals and trying to make more money without any endings. I know that there's just nothing. They just do it just to distract themselves because they can't or don't want to ask themselves hard questions. Yeah, no, I agree.

And they're probably just working on one aspect of their life where I think, you know, I think both of try and a lot of people that we surround ourselves with and the, you know, the mastermind we're part of and all that. I think most of us try to better ourselves in all assets of life.

And I think, you know, I mean, looking back, like, like filling your cup thing has become big for me because it's like, you know, five years ago, 10 years ago, I was definitely not aware of, hey, I need to do these things to make myself feel better and fulfilled so that I can be at my best towards my wife and my kids or my friend and. Or my friends. And I think, though, I'm always doing tweaks with that. But I think you're right.

I think there's a lot of people that are just like, yeah, I'll just keep doing deals. That'll. That'll. Right. Band aid on it, basically. Yeah. It'll entertain me. It'll keep me up my intellectually stimulated. And I think another point I would say is I really underestimated the need for structure. Yeah, A job. I think people think, oh, I can do whatever I want, whenever I want to be great. I don't know anyone that's done well.

I try to put, you know, multiple lunches a week with friends just, you know, keep my socialization. I make sure I exercise. You just have to put these things in place. I don't think we're wired to not have processes and structures. Doesn't mean to be rigid. But I, I always include that. Like I don't need structure. It'll be amazing. My whole life's been structured to this point. Yeah, well.

And it's funny, I think, I think the people that I don't want to say, I guess kind of break out, that become financially free. There's a reason why, and that's probably because structure and discipline we've had in our life before and it worked. And obviously you can't just get rid of that. And it's funny because I entered. Someone told. What was I listening to or talk. I was talking to some, something, I don't remember, but someone was like, yeah, I put in Chat GPT.

What are my biggest strengths? What are my biggest weaknesses? And it's funny. Chat GPT said one of my biggest strengths is my discipline and my structure. And it said something like, because I've got it set up to where it's kind of witty. So it's like you're the, you're the type of person that won't skip on leg day. And I'm like, how do you know this? How like. And I'm reading, I'm like, you know, because it's easy for me to read it, process it, and then be like, yeah, that is kind of me.

Or that's me to a T. So yeah, it's interesting how I think a lot of us are like that. Oh, absolutely. And you know, and I should qualify too. It doesn't mean, you know, now that I'm financially free that I just don't do business. I still enjoy it, but it has a more balanced place. Like every morning I have, I'll, I'll mess around, you know, look at some new listings and try to learn something new every day.

But it's not the all consuming thing that it once was for me that really I'm still moving forward financially. It's kind of crazy actually how much I think this is a point, another point of financial freedom. How much once you're financially free and not tied down by a job, how Much your net worth, your wealth will increase.

I don't know anyone who's quit their job and not seeing it explode and they give up six figure salaries because you don't, you just underestimate just what a drag that is on your mental abilities, your time abilities. So yeah, I mean, I Wish I quit 10 years before. I'd probably be way further ahead financially if I had. Oh yeah, all of it. Well, yeah, I mean all of us. Because we're in a system. Yeah, I mean we could go into that, but we spent 14 minutes on this.

Yeah, I mean we're, we're in, we're, you know, and this isn't a knock for people that do have jobs and you know, they're definitely perks to it. And, and even when, when we try to make hires and, and the people that I've hired, like, I try to do my best to make it to where they're not in like the system and they can kind of do their own thing and they can grow and if they want to be entrepreneurs, they can and however that looks.

But yeah, when you're in the system and you feel like I'm making six figures and you just. I don't know. Yeah, Well, I think we've covered this one pretty well. Yeah, it's a big therapy session for us both. Yeah, right. Well, let's kind of. This somewhat parlays into it. We're, and I think we were talking about this the other day was the markets that we're in and both you and I are in tertiary markets. My population size is between 10 and 50,000. How about you?

I'm actually a little smaller than you, man. I'm about 5,000. I think the biggest one is 20,000. Okay. I like those little bitty towns a lot. I think we both do for the same reasons. Well, tell us what's those reasons? Oh, I mean, first of all, you don't have, I mean, nine times out of 10 you don't have to pay for marketing because there's only two or three other competitors. You do not have competition from the REITs who will absolutely destroy you if you're next to them.

Like, I don't know how you compete against them with their marketing budgets and their sophistication. I was telling you before we got on the call, you know, I know, I know in Dallas, Fort Worth, a syndicator who bought a, actually a great location in Fort Worth. Beautiful facility, perfect location. And he's going to lose it to the bank because he cannot lease it up because he's literally wedged between public storage and extra space. And you don't run into that in these smaller towns.

I think if you want to play go into the larger cities, you have to grow a large business, which for most individuals doesn't make a lot of sense. Yep. But even with that, one of those REITs can build right next to you. Yeah, those little bitty towns are kind of like a moat. They're never going to come there. It's. They're too small for them. Yep, yep. And I'm in the town with the 50,000.

I mean, there's, I think technically three U hauls now one of them's mom and pop operated, which is different. But yeah, I think three U hauls, one's all climate, which is kind of a buffer. But yeah, I'm, I'm definitely seeing an impact there. But my other markets, yeah, it's. They just. That's people like us. At worst, it's Jim Bob and his cousin who threw up some buildings and take cash and maybe they'll collect every six months and just don't care.

Yeah. And I think, I think there's two points I would also make. I don't even like the secondary markets because then you start fighting larger regional players who have way more resources than you, and they flood the market with supply and promotions and whatnot. You know? You know, so I, I'm staying tur to send ID storage. It'll always be tertiary because I just think it's clean and easy. Yep. Well, and this conversation kind of, I mean, we've talked about.

But this conversation the other day came from kind of scaling up. Right. Like, let's find can we find better asset. Either asset classes or. Because, I mean, all of our sites are probably class C. We're in smaller markets and, you know, gravel that's maybe their, their asphalt. But they're still probably class C. Correct. You know, and we were talking about that, and I don't know that I would trade. I mean, some of them I'd trade in because I don't have great cash flow.

But I don't know that there's something for me to trade up because of what we just talked about. The, the bad comps, bad competitors, one and two, the basis that we're probably in at. We got in a good time and you know, and there's a lot of things that go with that too. Cash flow, equity, all that. So I don't know. I don't know that I would trade up because, yeah, they're going to be pretty much stable.

They're probably not going to lose a ton of value because no one's going to come building those towns and demand should hopefully always be there. Yeah, I think there's a couple things. One I think you and I both, we should clarify when we talk about investing in small towns. I'm not talking about a decaying town in like Mississippi or something that's experiencing population loss and stuff like that in healthy smaller markets outside of major metropolitan areas that catch overflow from that.

And so I think that's a pretty crucial distinction because you can get slaughtered in a small town too. But back to your point about trading up, I mean, that's a really interesting thing. You know, I mean, to me, you know, I kind of guess I've always seen real estate as monopoly.

You know, you buy your houses, then you trade up to a hotel and most asset classes, I do think kind of lend themselves eventually reach a point where you, you don't want to buy a $500,000 property, you want to buy a $2.8 million, 3 million dollar property. And in the tertiary markets where we're at, there just aren't that many. I mean, and the truth is what I really struggle with is I, I personally am starting to want, I want a legacy asset.

Like I want to be in a, like a super high demand major metropolitan area. I mean, you know, like, like I'm in Dallas, like I want to own now industrial in Dallas. I know that's going to just go up. So solid, stable storage is just, it's so weird, right, because it works, but it works in places that really like the dirt my properties are on is worthless. It's the values in the business, not the real estate. So I think, you know, it's just as easy to buy a $3 million facility as it is a 500,000.

It's just as much work. And you don't, you don't need a steep of a value add. You can, 20% increase on a $3 million property is way better than, you know, I'll take that over, you know, a 50% one on a $300,000 property. It's just, you don't have to move the needle. Well, and, and you're kind of talking and to me there's, there's, there's levels to this. Right. I don't think you can just skip to what you're talking about. Correct.

We've got a good base and, and I've talked about this before, we've got a good foundation of not Only equity, but cash flow too. So now you can pick your, you know, look at your portfolio and say, yeah, this one's not performing that great. Let's sell it off, take that equity and get into something nicer that maybe doesn't cash flow as much. But you're looking for appreciation down the road. Is that kind of what you're looking at? I'm actually going to probably keep my storage.

I would probably just use a refi. Those appraisals are so high now that on the LTV you get almost what you get on a sale. So I would envision holding on to it and adding on to the existing portfolio. But I do think, I think any real estate investor has been doing it for a while, has accumulated that financial base you're talking about is probably, I think this is a natural evolution of real estate investing.

Looking for something larger, something higher quality and yeah, I mean, and for me, anyways, like I said, I'm seriously exploring industrial. I'm really just enjoying the research and the journey of learning all about it. I mean, not do anything with it and just keep buying storage. But I do like the idea of a little bit of diversity as well. It gets a little.

Even though they're stable, you know, I don't know how you feel, but sometimes feel a little unnerving having everything in self storage and a very concentrated market. Yeah, no, I agree. I don't know. I think, and I've thought about this a lot and we've talked about, I've talked to others about it, but I don't know. I think no matter what you're in, you're gonna feel that. We're always gonna feel like, are we safe here? I've got 50 single family rentals. Am I safe here? Right?

Like, is the neighborhood gonna go to crap and now these are worth nothing. Like there's always, you're, no matter what you're doing, you're always looking for what could come get you, which I think is a good thing. Right? You should always be looking to see what's going to pop out, pop up out there. In my opinion, knock on wood. I think storage is safe for the next 10 years. But I've always said, what's that Amazon disruptor that's going to come in?

And if it, if and when it does, I think it's going to hit bigger markets before us and I think we'll have time to pivot whether, you know, we, we use our locations as something different or morph into something different. But I think we'll have time to adjust because we are in these smaller markets that are more slow moving. Yeah. I think at a basic level I just can't still believe this business works. Yeah. I'm almost kind of scratching my head like you want to pay me to put your stuff here?

Like I, I just intellectually. Sorry, I won't spill the secret. Well it's, I mean you look at it even these small, you know and I've looked, I've tried and haven't looked at numbers. But even these smaller, especially bigger markets, we're going to a renter nation. Like I don't know how many apartments are being built in some of these smaller markets that we're in. But just in general people have, I mean compared to 30 years ago people have way more junk now it's just we've got more junk.

What are people going to do with it? Store it I guess. Start our lockers, I guess. Yeah, no, I mean it's fine. We're filling a need. I've, I mean I'm, I'm just, I always, just at the back of my mind I'm always like surely the country's gonna catch on and just stop buying stuff and storing it. But I don't think that's gonna happen anytime soon.

So. No. Nope. Well and this kind of parlays into something else we were talking about is especially the markets that we're in, it's easier to remote manage because if we were in and I've thought about this like if we were in a big city, if I was in a big city, you know as Columbus or Cincinnati, whatever and try to do remote manage, I. Remote management. I don't think it would work. Like you need someone on site.

So that also plays a factor where I think we've seen some people go into some bigger markets and try to do remote management because that's what we all learned. I just don't know that it works. I think you have to have that great customer service on site. I don't know what's your thoughts? I agree 100 with that. I don't think that's why I don't. You know one example where they're going to lose the bang. The facility in Fort Worth I was telling you about that they're probably going to lose it.

They can't afford someone on site. There's only 25000 square feet. You know I think a lot of those A class properties rely on foot traffic. I mean and I know a lot a number of people who've Gone into major metropolitan areas and just get beat up by the reeds, even if they've got a good location because nobody, you know, it's all online marketing and the REITs get the eyeballs first. So. But yeah, I think you need someone on site if you're going to compete in a major Petropolitan market.

I don't, Yeah, I don't think remote works and I think remote also, just as a general matter, I don't think remote management like out of state is the greatest idea either. I think people think it looks good in the beginning but then they realize it's a lot harder and there's a lot more leakage. Yeah, well, and I think it, I think there's a lot of things that go into that because I think you can make it work. Especially if you start growing in that area where. And start growing in that area.

Like you can't have a 10,000 square foot site in Kentucky, another 10,000 in Georgia. Right. Like you've got to have it somewhat in the same area. And you also have to hire and have great systems, which that's not necessarily real estate investing. That's, you know, that's something that we've all been working on especially in our lfg. Mastermind is trying to do better, have better systems, hire better, train better, develop better.

I think that's where I guess those mistakes kind of happen because it's like storage especially, you know, where we started and what we started, how we learned from it's you know, hiring a lot of part time help. Guess what? And I was talking, I was talking to someone on the phone this morning about this. We had, I had, we used to have basically a helper boots on the ground part time at each site and that comes with part time mentality, part time work part time, everything.

So I think it's like you're not going to get, maybe you get an A player part time maybe, but probably not all of them. If you've got multiple facilities and how long are you going to have that part time person? I just think it's all those factors I think play a part in trying to manage remotely. I think that's 100% correct.

I think getting to scale as quickly as possible and being able to have full time employees the job I found that management got significantly easier the bigger I got because I could afford good people, I could bonus them, I could give them benefits. It's like what Dan Martell says, you know, the bigger you get, the actual more time you can buy back. It's kind of almost counterintuitive, but it really is true. I would personally not go.

I'm not going into any new towns unless I could go in and have a full time employee in that town or if it's close enough to my other stuff, maybe an hour away from my other stuff. Maybe I'd look at it. But. Yep, that's why, I mean, but to your original point, that's why I'm not buying much storage right now because there's just not much around me and I'm really concentrated. Like all of my stuff is within an hour each other. So it's great.

So you're saying you shouldn't buy one or two facilities, gain financial freedom and just stop? No, no, I don't think that's a good idea for, I mean, aside from just, you know, going crazy, you know, costs keep going up, you got to keep running. I mean it's not, it's like there's a, it's like Pac man or something. There's chasing behind you, you know, like you got to keep moving forward and growing. It's a great analogy. Pac man, that's a, that's a new one on the show. Pacman analogy.

I bring that up kind of, you know, somewhat joking, but we've definitely seen it. And you know, I've seen a lot of people that are like, I've got two storage facilities, I'm cool, I'm good. I mean, probably not your expenses are going to go up faster. You need to keep moving. I mean, and then at that point, what are you living on? Like a super tight budget?

I mean, who wants to live in retirement counting pennies instead of going out and you know, living your best life, you know, you got financial freedom so you don't have to worry about money. And to watch that kid eaten away. I don't understand it when I see people do that. Well, and not only that, but, but, and obviously the money thing is important because you want your business to continue to run.

And if you're not scaling, you're dying. If you're not growing, you're dying. But not only business wise, but personal wise too. Like if you're not. And yeah, you could do things that aren't making money to fill your cup. But yeah, I mean most of those people that we see that do that, they're also not growing as much in other areas or at all. They're just kind of stagnant. And. I think professional growth and you know, person, that's a significant, that's a component of personal overall growth.

Like, I don't think you can just cut that out. It's like I'm not gonna, I'm gonna grow in these areas, but I'm not gonna go try to have a social life or whatever you're out of. It's, it's. You can't just get rid of it. I think it's important. Yep. And I'm, I'm pulling up my phone here because I posted something when this show airs. This was probably two weeks ago, but posted something from Dan Martell. It's the third time we brought him up. We need him to be a sponsor on the show or something.

We're certainly giving him some free press. Yeah, I give him a lot of. But he posted something. I had to repost it. He said the most dangerous person in your life is the one who makes you feel comfortable with mediocrity. Yeah. I mean that, that, you know, relative to what we're talking about here is, you know, having two facilities, one facility just to gain financial freedom and you've got an extra 500 bucks a month. It's mediocrity. I mean I, to me, I feel like I, they're.

I feel like I can do a lot more. I'm sure you feel that way, right? Oh, 100, you know, and I, I'm gonna do a lot more. It's going to be at a more measured pace, I think than the breakneck speed I was going for all those years. But. But was it breakneck speed? It wasn't really breaknecks. Well, I put a lot of hours in when you tacked on the job and everything else. Yeah, but take the job out of it because that's not relative. Now you don't have any. Not really.

I guess, I guess I'm getting a little confused. Maybe I'm trying to confuse you. No. Well, you said breakneck speed. I guess to grow. You don't have to go breakneck speed to grow your portfolio. That is one thing I've learned since getting. Since quitting my job. You're right. Like, I mean I, I was always just non stop looking for deals, chasing deals, blah, blah, blah, blah. But. And I think you have to do that in the beginning.

But once you get established, once you, you know, have connections and relationships, it gets a lot easier. And you're to spend that much time doing the same thing sometimes is maybe not the most productive use of your time. Yep. Yep. Well, not only that, but you just like anything, anything that you're doing for a period of longer Period of time you get better at. Right.

So for you, a deal comes across, you especially storage deal right now comes across your desk, you probably know within 30 seconds, maybe probably 5 seconds if you're going to underwrite it or not. Right. Five years ago, probably not the case. Correct. Different. You get better at things. You know how to find deals better. Deals fall in your lap, you know how to underwrite them better. And at this point you can probably underwrite tighter too. Correct, Correct.

They're far more accurate, the results, I should say, than when I first started. Yeah, yeah, yeah. So you're not breaking that, you're not breaking your neck? No, not, not at the moment. God. Well, you're traveling. Well, that's another piece. You said you don't need to make money to kind of fill your cup. You've been traveling a lot lately. Yeah, that's one of the things, you know, I didn't do much of that except for work.

That's a new experience in the last couple years I've really taken on a lot of. And it probably leads me being a little stingy with my time because I love being able to go away for a few weeks and see the world and personal growth you experience when you do that. But that's again. But like, you know, for example, I think I went a little too heavy on that in the last maybe year. And so like it's not the solution for everything. It's like being productive.

It's a, you know, a component of, I believe a healthy, you know, happy life. But I don't think it all be all people say they want to travel non stop forever and I'm just like, it gets old after, it just gets old after a while. Yeah, well, and that's, you know, you hear that and I think that goes back to the whole nine to five mentality of you're somewhat in a prison and you're, you know, you get two weeks vacation, right. So it's like, yeah, I want to travel.

That's all I want to do right now, prison. So I think it kind of goes back to that. And then once you get the freedom and you do some traveling, you're like, I enjoy traveling, but not every week, probably not every month. So I think that's, you know, it's, it's all about where you're at in life and how you view that. I think, yeah, I think it's got. A role to play for everybody. It's different. You know, some people travel more or less, but it's, it doesn't Fix everything.

I think a lot of people think that it's going to make you happy and that's. This missing component is travel and it's, it's not sufficient in. Of itself in my opinion. But one thing I will say that's great about our storage businesses is that we do have the time to do that. That's what's so awesome about, you know, real estate investing in general too. Once you set your systems up, you can go away from one to your. It's fine. Yep. 100. Yep. Nothing wrong. What's that?

I said if you can't do that, then you're doing something wrong with your real estate because it should not tie you to where you're at. Correct. Grinding mode. And you're trying to scale and you're trying to build. But yeah, if you're a few years into it and you've, you've got financial freedom, you've got systems and teams in place. Yeah, you should absolutely be able to step away and not lose track, not lose momentum, I guess. Let's talk a little bit about.

Kind. Of what you're doing with deals, you know, because it's been, I would say buyers and sellers are definitely off as far as prices. So what's your strategy right now? When was the last time you bought a deal? I bought one last summer. What about. It was 54, 000 square feet and we talked. I mean, I'm happy to give numbers if that's helpful, but I've just added 6,000 square feet to it. It was 100% occupied, super low rents. It checked all the boxes at land for expansion, which I love.

That's kind of been my bread and butter is to buy a highly occupied property and then, you know, raise the rents, put into place tenant protection and then expand because you know, your basis at that point is just replacement costs. And I got seller financing on it. Very advantageous terms. But the price per square foot wasn't that good. It was the most I've ever paid per square foot. I think I paid like 50 bucks a foot, something like that. Usually I, you know, I build between 30 and 35.

Back in the heyday, you know, I buy them for 20 or 30 bucks a foot. You know, back in the good old days. So two years ago. Yeah, exactly. I just think, I think right now you kind of got to be creative. I think I keep sending letters to. But I don't have a lot of owners to market to because I don't want much except around me and then brokers. I've really started networking with brokers.

I think one thing that really matters, once you do a deal with a broker, you've got credibility and they'll come to you. I think one of the things I truly am now even just realizing is how much when you see an offering memorandum, that thing's probably been shot down by 50 other investors. They go to their lists first, they're not come. That offering memorandum has. It's almost like loop net, you know. Yep, yep. Yeah. Well and it's.

Yeah. I mean you talked about how you've kind of probably gotten a little more aggressive but I think we talked a little bit about it. Having patience and knowing kind of your buy box. I know it's helped me and, and we can be patient.

And I think going into this, I think going into what I'm going to say here, I think there's pro, I know there's pros and cons but neither one of us syndicate for the most part we're using our cash or something liquid or we're refinancing, pulling equity out to do deals. But that allows us to be patient. We don't have to syndicate to get fees to keep a team running. But at the same time, I know both of us are super deal hungry right now. We'd love to do a deal right now.

So I think there's pros and cons of that but it is nice to be able to be in a spot where we don't have to.

I mean I, I don't know how much I can can say but there is a very famous real estate investor that is in trouble on at least one or two deals and hasn't paid his investors and I think coming up on two years and will not be able to pay them back. So there's also the flip side of selling, syndicating and having to do deals to keep your, your team running and not being able to afford that patience.

Well and I think what I agree with everything you just said there is spot on to patience and not having even set aside syndication, not having partners means, you know, if you need 200,000 square feet to retire, you got to go find 400,000 if you've got a 50% partner.

I think people, people so underestimate the impact of cutting that pie up, you know and they give away their equity and it's the most precious thing out there and but it allows us because we have our own thing, we don't need as much either to really get the returns we're looking for. Yep. Yeah. No well, yeah, and you talk about the equity piece. I talked to some a couple other day and I actually think I said this on a recent podcast, but they're giving, they, they gave.

And listen, for your first deal, get your first deal done, right? Get your first. Get your foot in the door, get your first deal done. Hopefully you cash flow and you have some equity. Like those are the most important pieces. But then learn from it. They gave up 50% equity, which to me, deal. Now I don't know all the ins and outs, how much money that other person brought.

Like, I don't know all those details, but they, I'm pretty sure they brought the deal and they operate the deal and they got, you know, 50. I'm like, that's fine. Got you in the game. Don't do it again. Right? It's on your own. You don't need somebody else. If you want to raise money, do that. But you don't need to give 50 of the equity away. Oh, yeah, well, and I mean, partnerships, they're. They do work. I've seen them work long term, but I've seen way more not work. I was a lawyer.

I lived in the wasteland of ruined relationships. And you can like each other now. Ten years from now, you may not like each other. And it's why if you're really going for freedom, like the more relationships where you're bound to someone, you're. You're giving up some freedom. There a lot of freedom. I mean, people lose their way too sometimes. A lot of times, I mean, I've been guilty of it.

It's like we all got in the real estate investing and I've talked about this probably numerous times on here. We all got in the real estate investing for financial freedom. We gained that. That is like, I got to keep going. And sometimes we're like, well, we're just gonna bring partners on, do more deals, and we just do dumb things to handcuff us instead of kind of making things simpler.

Maybe getting out of a partnership or, you know, I think we just don't, we don't take inventory as well after we become financially free to kind of keep that freedom. Yeah, I don't think, I don't think simplicity is very sexy. Right. It's, you know, oh, I'm syndicating this and I'm in 20 different deals and I own 5% of each. And I just, you know, it's, it's not sexy what we do. It's really boring and there's not much to talk about because it is Simple.

But. Yep. You know, I've, I've, I've been, been banging on syndication. Syndication for a little while. I need to have someone, I've talked about, I need to have someone on that does it that we can debate. But it's really had, it's been in this heyday since the recession and there's a reason because real estate has not gone down in value since 2008, 2009.

Yeah. So there's a reason why syndication has been working and has been hot because real estate hasn't lost up until this year has not lost value. So now that it has now you're seeing all these pain in the streets and you're not seeing, at least I'm not hearing as much as many syndicators, you know, banging their chest on. This is the way to go. You need to syndicate, you need to, you need to cut the pie up and take a small piece. Like I me, I'm not hearing that stuff anymore.

I'm not as familiar with it, but that's generally consistent with what, what I'm seeing as well. And I mean it's got a place, you know, I mean good operators, you know, they deserve their fees and they, I think it just got flooded though with a bunch of junk ones. But, and I think they're going to pay for that. That's just my guess. They may, you know, may. I'll get lucky and they'll, you know, the market will bail them out.

But I mean, I keep going back to that Fort Worth property I was telling you about. Man, the OM on that they syndicate, it was, it was insane. A mutual friend of ours flipped it to me. I mean they had assumptions that were just beyond the pale of anything reasonable. And they were new, they were new at it. I think they were leaving multifamily to go into storage.

I mean, I think good things for storage is we don't get a lot of syndicators in it only because the values of the product properties aren't as high. Yep, yep. Well, go ahead. I guess one bad thing though is we won't see as many distressed properties. So. Yeah, I haven't seen too many. Yeah, yeah. And you said it. Syndication has its place. And I think, and you hinted on, you touched on it. I think the problem becomes the fundamentals go out the door.

The one deal that I was talking about with the, the, the high. Well, the famous real estate investor that this deal is just, it's, it's, it's done. I'm assuming he's going bankrupt on that deal or it's going back to the bank. The fundamentals just go out the door. Right. You can't, you can't figure interest rates to be lower in the future. You can't expect rents to double in the future. I know for that deal, that person was figuring both those. And there's something else too.

And the city that they were investing in rents, they didn't just stay stagnant, they went down by. I don't remember, I want to say 20 or more. Like all these bad things. Obviously interest rates since they gotten that deal have doubled and they got short term financing. So that just like, don't lose your fundamentals on how to invest. Yeah, I'm always kind of. And I realize it's probably, I mean, everyone can look back and say, oh, I would have done it differently.

But the people, particularly in the multifamily realm, the ones who didn't purchase the rate locks like that, insurance to protect the two years ago. I mean, when they're, you know, 4%, I just, everyone knew it wasn't gonna last. I mean, I was like, well, better buy it a cheap enough basis so that when rates reset, you know, you still got good enough cash flow. Yep, yep, yep.

Yeah, well, and it's funny because I still hear people talking about interest rates are gonna, are gonna go lower, you know, oh, we'll get back to. They're gonna, they're gonna drop at some point. In my mind, I'm like six and a half. Seven percent is pretty average. In fact, I think it's below average. Yeah, historically that's about what we've been. We just had an incredible period of time. Yeah, I don't see him coming back much lower.

But I mean, predicting interest rates is one of those dangerous games, you know, who knows? Yep. Well, this environment, I, you know, when this airs two weeks from now, who knows interest rates, it could be a point or two could have doubled or they could have been cut in half. Well, did we hit everything? You got anything else? No, I think we have. You know, I. Oh, you know, one thing I would actually just, I like to talk about is. No, I'm good. No, you brought it up. You got to finish now.

I think I actually. Okay. So this kind of touches as a follow up to a point we had recently is I, I really just don't think storage, I think it's a business. I don't think it works. Just trying to rely on third parties and the part time thing. I think the big boys have figured it out. You need employees you need in house people picking up the phone. I don't think it works well, farming out to call centers. I mean, you can, but you're not going to get it done the way you want it.

I think it's just a business like everything else. And so that, that'll be my only parting observation. I know, I know a lot of people do, just third parties, but. No, I, I completely agree with you and we're working on some things to. I, I think the, the important key is to always be improving. And if you're not, then that's a problem. But yeah, you know, from what, mid 2020 to. We'll call it at least mid 23, maybe storage was on fire. Yeah, right. You couldn't do anything wrong.

I mean, both you and I had a call center that didn't pick up the phone. Right, I'll pick up the phone. So it didn't matter how bad you were because then they were like, well, they're not picking up the phone. I gotta somehow rent a unit from here because it's the only place that has two units available. So then they go online and rent a unit. It's, it's different now. Occupants dropped. It's more normalized.

I think we do have a little bit of space to increase occupancy just because no one's moving right now. Obviously this is market specific, but in the markets that I'm in, houses aren't selling, no one's moving. We also don't have. The. People aren't losing their jobs yet. People aren't really being promoted. We're kind of stagnant. Doesn't like that. So I think we have a little bit of room to increase occupancy at some point, whether it's a recession or a great time where people have extra money.

But yeah, I mean, we went through the heyday where it didn't matter what you did and you were still 100 full. So yeah, you're right. You got to treat it like a business. And you've gotta, gotta, you gotta have operations and tighten your operations. Yeah, you can't stop. I mean, it just, it doesn't. I mean, I think when we started it was just Billy Bob out in a field with no website. You go, go in and put a website up. That doesn't work now. Everybody's getting more sophisticated.

Everybody's got a website now. So it's. You just like just got to keep improving and treat what it is a business. No, that's a great way to end it, man. That was a great. I like that little last tidbit there. Cool. Well, I appreciate it man. Appreciate you coming on. This was good. This is probably somewhat of a theory therapy session for both of us, but hopefully guys listening got some value out of it. And again, appreciate for you coming on John and see you guys next time.

Thanks for following, subscribing and listening to this episode of the Do More podcast hosted by John Farling. To learn more or ask questions, go to L4Investing.com.