Alex Pardo’s journey in real estate began with the ambition many entrepreneurs share: pursuing time freedom and financial independence. Starting in 2005, he quickly made a name for himself by wholesaling and flipping single-family houses in Miami, closing over 700 transactions. Despite the financial benefits and the rewards of building a thriving business, Alex soon realized that the hustle and constant deal-chasing left him unfulfilled and drained.
The structure of the business, with its significant overhead costs and dependency on continuous transactions, soon felt more like a burden than a source of joy. Even though Alex managed a capable team, the daily grind and the lack of a consistent cash flow were at odds with his deeper goals and vision for life.
The Wholesaling Grind: An Unfulfilling Success
Alex Pardo’s journey in real estate began like many ambitious entrepreneurs: driven by the promise of time freedom and financial independence. In 2005, he launched into wholesaling and flipping single-family houses in Miami, eventually closing over 700 transactions. Though this line of work generated substantial revenue, it wasn’t long before Pardo realized that the grind of constantly chasing deals didn’t offer the joy and fulfillment he sought. He felt trapped within his business as if he had built prison walls around it without having the key to escape.
Despite having a successful team and well-structured systems, the business model was misaligned with his vision. Instead of delivering the time freedom he desired, it consumed his mental and emotional energy.
The Epiphany: Aligning Business with Personal Vision
In 2018, during a cruise with his wife, Alex experienced a pivotal moment. Even though he was physically on vacation, his mind was consumed by business concerns, preventing him from being fully present. This lack of fulfillment prompted him to take a deeper look at his goals and the business model sustaining them. It became clear that his wholesaling business, despite its financial rewards, did not resonate with his deeper life goals.
Realigning with his vision required more than a superficial change; it called for a complete overhaul. He recognized that while the business was financially healthy on the surface, it was not providing the bottom-line profitability or personal satisfaction he wanted. He made more money as a solopreneur in earlier years than he did running a large team with significant overhead.
Transition to Self-Storage: A Strategic Pivot
After shutting down his wholesaling business, Alex took a sabbatical to reconnect with his personal goals and spiritual beliefs. This period of reflection led him to identify self-storage as a better-aligned business model. Self-storage offered the stability and cash flow he sought, without the constant need to chase new deals. It also provided a lower-maintenance option with fewer moving parts compared to wholesaling.
Why Self-Storage?
Self-storage presented several advantages, including its low-maintenance nature and the ability to generate consistent cash flow. Unlike the transactional and high-overhead model of wholesaling, self-storage could provide long-term financial security. It also allowed for the potential of building a business that required fewer employees and could be more seamlessly systematized and automated.
Importance of Alignment and Community
A recurring theme in Alex’s story is the importance of aligning one’s business with personal goals and values. He stresses the need for entrepreneurs to understand their vision and create business models that support that vision. This alignment ensures long-term satisfaction and fulfillment, going beyond mere financial success.
Both Alex and Jay emphasize the significance of faith and surrounding oneself with a supportive community. Alex’s faith has been a cornerstone of his journey, providing guidance and confidence. Additionally, having a network of mentors and like-minded individuals helped him navigate his transition and identify blind spots.
Raising Private Money Through Relationships
Alex’s approach to raising private money revolves around building meaningful relationships. For his $1.45 million deal for a storage facility, the relationships and trust he had cultivated were crucial. He advises investors to focus on nurturing relationships and being authentic. Private lenders tend to invest in people they trust rather than the deals themselves.
For those new to raising private money, Alex recommends relationship-building over immediate capital-seeking. Authenticity and a genuine interest in others’ goals are essential. He also suggests leaving breadcrumbs about one’s business activities, ensuring that potential investors think of you when relevant opportunities arise.
Practical Tips
Incorporating Alex’s advice into practical steps includes focusing on relationships, acting with authenticity, and creating meaningful connections. Instead of seeking out immediate returns, building long-term, trust-based relationships is crucial. This approach not only aids in successful fund-raising but also supports building a fulfilling business.
Conclusion
Alex Pardo’s transition from wholesaling to self-storage underscores the importance of aligning business endeavors with personal vision and values. His journey highlights the value of genuine relationships, community support, and faith in achieving long-term success. For aspiring real estate investors, adopting these principles can pave the way to financial success and personal fulfillment.
To learn more about investing in self-storage facilities, Alex invites interested individuals to visit www.StorageWins.com and apply for further information and coaching. This insightful episode of Raising Private Money serves as a valuable resource for those looking to navigate the complexities of real estate investing and discover a path that aligns with their personal and professional aspirations.
10 Lessons Learned in this Episode:
- Transition to Self-Storage
Alex Pardo transitioned from wholesaling and flipping houses to self-storage to better align with his personal goals and values, finding greater fulfillment in this sector.
- Overcoming Business Challenges
Alex discusses the difficulties faced in the real estate wholesaling business, highlighting the need to address challenges head-on to find greater joy and fulfillment in one’s work.
- Building Relationship Capital
Emphasizing the importance of building genuine relationships and trust, Alex believes that relationship capital surpasses the importance of financial capital in raising private money.
- Finding Fulfillment
Genuine joy and fulfillment come from positively impacting others, not just from making deals. Alex found more satisfaction in helping and mentoring others than in closing transactions.
- Self-Storage’s Long-Term Value
Self-storage is highlighted as a stable, long-term investment offering minimal management challenges and benefiting from constant demand driven by American consumerism.
- Awareness and Clarity
Be honest about your current situation and clear about your desired future. Awareness and clarity are essential steps in creating a path toward personal and professional success.
- Reverse Engineer Success
Reverse engineer a plan from your current status to your desired outcome by setting clear goals and creating actionable steps to bridge the gap.
- Importance of Mentorship
Surrounding oneself with mentors, coaches, and a supportive community is vital for identifying blind spots, gaining insights, and accelerating personal and business growth.
- Faith as a Foundation
Faith plays a crucial role in Alex’s journey, providing confidence and guidance. He emphasizes the importance of seeking wisdom from a higher power and believes that with faith, all things are possible.
- Multi-Functional Business Strategy
Self-storage offers both immediate cash flow and long-term investment benefits. Alex teaches how to stabilize and optimize storage facilities for sustained profitability while managing minimal overhead.
Fun facts that were revealed in the episode:
- Alex Pardo achieved a major milestone by raising $1.45 million in private money to acquire a 37,175-square-foot storage facility, showcasing his expertise in real estate investing.
- One of the intriguing aspects of self-storage that Alex highlighted is its low-maintenance nature, complemented by numerous built-in profit centers, such as additional fees, making it an attractive long-term investment.
- Despite generating healthy revenue, Alex Pardo’s wholesaling business faced high overhead costs, which led him to pivot to the more aligned and fulfilling realm of self-storage, ultimately reshaping his business strategy.
Timestamps:
00:01 – Raising Private Money Without Asking For It
06:16 – Vision shifted, business unwound, decision made.
07:24 – Reputation and others’ opinions led to closure.
12:39 – Struggled to maintain business, and needed a new direction.
15:55 – Self-awareness, accountability, envisioning and reverse engineering goals.
20:17 – Build genuine relationships, be your authentic self.
21:57 – Secure relationships are key to raising private money.
27:15 – Self-storage business profitability determined by property management.
29:13 – Connect with Alex Pardo: https://www.StorageWins.com
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Self-Storage Success: Alex Pardo’s Path to $1.45 Million in Private Money
Jay Conner [00:00:01]:
Welcome to another amazing episode of Raising Private Money. I’m Jay Conner, your host, and I’m so excited to have my guest on today. He’s a dear friend. We’ve known each other for many, many years. And since we talked about raising private money on this show, my friend and guest just recently raised $1, 450, 000 to purchase his 37, 175 square foot storage facility. So, yes, we’re gonna talk about how you can make a lot of money in storage facilities here on this show. Now, a little bit about my friend’s background. Now, years ago, way back in 2005, I think he was 5 years old when he started this.
Jay Conner [00:00:46]:
Anyway, he started wholesaling and flipping single-family houses in the Miami market back in 2005. And he’s closed, like, over 700 transactions. But then something changed in 2020, 15 years down the road. He changed and he transitioned from doing the house business over to storage facilities. So, he currently owns 3 storage facilities in Florida and Mississippi. He’s got over 104, 000 net rentable square feet. So, what has my friend done? Well, he’s combined his experience of coaching entrepreneurs and he’s combined it with his knowledge of owning and operating storage facilities. So, now what does he focus on? He’s focused on helping people like you purchase their very first cash-flowing storage facility within 6 months of starting to work on it without having any experience.
Jay Conner [00:01:49]:
And, you know I love this part, without needing any of your own money. Now for years, he has had the podcast that I have been privileged to be a guest on. His podcast is called Flip Empire Show. It’s a top-rated Apple podcast designed to help anyone achieve freedom and a personalized lifestyle through real estate investing. So his show, Flip Empire, was launched all the way back in 2016, and he’s had industry thought leaders, and he covers all kinds of topics on his show like entrepreneurship, real estate investing, marketing, team building, and on and on and on. Most importantly, how he and I connected originally was through our faith. His vision is he lives out being a man of faith and a family man first. In just a moment, you’re going to meet my dear friend and fellow successful real estate investor, Alex Pardo!
Narrator [00:02:54]:
If you’re a real estate investor and are wondering how to raise and leverage private money to make more profit on every deal, then you’re in the right place. On raising private money, we’ll speak with new and seasoned investors to dissect their deals and extract the best tips and strategies to help you get the money because the money comes first. Now here’s your host, Jay Conner.
Jay Conner [00:03:21]:
Oh, my lands, Alex. I’m so excited to have you here on the show, man. I mean, you know, just looking at just looking at your smile just lights me up from 1 side to the other. But welcome back to the show, Alex. It’s so good to see you.
Alex Pardo [00:03:36]:
Jay, it is an honor and a pleasure, brother. Man, you emit so much positive energy. We were just talking backstage. How every time I see you, it’s hard not to smile around you, brother. So thank you for the opportunity to share, and I’m really looking forward to being on your show.
Jay Conner [00:03:49]:
Well, I tell you what. We’re gonna dive in. So, obviously, we’re gonna talk about raising private money since this is Raising Private Money podcast and show. But we’re also going to talk about self-storage. And, of course, this goes hand in hand because, you know, you raise private money for self-storage, and you can raise private money like I do for single-family houses and apartments and anything that you want to in real estate. But before we dive into raising private money and talking about self-storage and all that kind of good stuff, we want to hear your story. And, Alex, my lands, have you got a story? Because you built this, like, massive wholesaling business empire way back, and you sort of figured out that what you were doing just didn’t really align with who you were. Yeah.
Jay Conner [00:04:42]:
And then, you know, you didn’t know who you were. You had the self-identity crisis and stuff. And then you, like, changed gears totally to a whole different, you know, space of real estate investing. Tell us the journey.
Alex Pardo [00:04:59]:
Absolutely. Wow. Thank you so much for the introduction, Jay. So I’m an open book. I’m gonna be extremely vulnerable and transparent with you. But, you know, I I got started in 2, 005, and I had quite a bit of success throughout the years. And, of course, I had adversity and I had setbacks throughout that time building a business as everybody does. But in 2018, Jay, I was on a cruise with my wife, and I’ll never forget it because it kinda felt like a fork-in-the-road moment for me.
Alex Pardo [00:05:25]:
And I remember that I had built a team, and we had the typical structure of lead managers and acquisition managers and all the team members. I think we had 8 or 9 team members at the time. And yet I told my wife, even though I’m on this cruise, I’m having a hard time being present because the mind is on the business. I felt, Jay like I had built prison walls around my business, and I didn’t have the key to get out. Like, that’s literally what I felt like. And around the same time that you and I met in a very high-level community, where I have nothing but great things to say, amazing people. If I’m being honest with you and with the audience, I felt I felt like I felt like I fell into a trap of feeling like I needed to grow in scale because that’s what I saw others around me doing. I violated an important rule: I didn’t honor my vision.
Alex Pardo [00:06:16]:
Right? So I’m a big believer that you need to have a clearly defined vision for your life, and then you can go out and create or modify a business to enhance that vision. And yet I don’t know if it was ego or what it was, but I felt like what I needed to do was grow and scale. And yet a couple of years later, I quickly realized this is the exact opposite of what I want. And, and brother, it got to a point where, you know, I had overhead of north of $40, 000 a month, right, just to keep the lights on. And at the end of 2019, when I looked back, and while our top line was very healthy, the bottom line, I made more in 2006 as a solopreneur than I did in 2019 with a team of 9 people and 40 plus $1, 000 of overhead. So, the business just no longer aligned with my vision. And after just a lot of prayer and consulting with the right people around me, I ultimately decided to completely unwind and shut down the business, in 2020. It had nothing to do with COVID.
Alex Pardo [00:07:24]:
And I remember thinking to myself, you know, here I am, I host this podcast, and I built up this reputation in the business. Like, what are people gonna think if they hear that I shut down this business? And what I quickly realized was that, a, people are not concerned about me. Right? Like, people have their stuff that they’re concerned about, so I was giving myself way too much importance. And, b, at the end of the day, it doesn’t matter what people think. Like, I asked myself an important question. I said, if I am doing what I’m doing today, 12 months from now, how would that make me feel? And it took me back to when I worked in my corporate finance job on a Sunday evening having to wake up and go to work, but this was much worse because I had created this business. And even though it was profitable, it’s just not what I wanted to do. So long story short, I shut down the business.
Alex Pardo [00:08:13]:
I got some really great advice from a coach of mine who told me, to enjoy the fruits of my labor, and take time to connect with God, like, don’t feel rushed to go conquer the next mountain. And I took about 5, 6 months off, mini-sabbatical, And, late 2020 is when I ultimately decided, hey. I’m gonna transition and go full-time into self-storage.
Jay Conner [00:08:34]:
You said something important a moment ago. You said that you realized that the company that you had built was not in alignment with your goals. Let’s dig into that a little bit. Specifically, what was going on that did not, that did not line up, or was not in alignment?
Alex Pardo [00:08:58]:
Yeah. Great question. I got into real estate like I would imagine many of your listeners because I wanted time and freedom at the end of the day. Right? Like, people always say I want x amount of money, but it’s what the money can do for you. And yet, I found myself on this, like, hamster wheel where I was constantly chasing deals. I was going through deal after deal after deal. And 1 thing that was pretty enlightening for me was when I launched the podcast, the Flip Empire Show in 2016, I remember 2018 is when I started to gain some traction, and I would have genuine joy and fulfillment when somebody would reach out to me about the impact a particular show or episode had on them and their business, that felt greater to me than closing the next deal. And I’ve always had a heart for service.
Alex Pardo [00:09:42]:
I’ve always genuinely wanted to help and pour into people, and that’s when I knew, like, I think what’s in alignment with my purpose is in working with entrepreneurs, like, helping them. And real estate is just a vehicle and a tool, so people might be surprised to hear that I am not passionate about real estate. I happen to be pretty decent at it, but it’s just what I do. It doesn’t define who I am. Where I get significant joy and fulfillment is having conversations like this, pouring into other entrepreneurs, having them pour into me and just growing, and building relationships. And so that’s what I ultimately decided to do I said, hey. I’m gonna use storage as a vehicle to allow me to connect and pour into people. So, I didn’t know exactly where I was gonna be when I started storage, but I was clear what I didn’t want, and it was a transactional business in nature.
Jay Conner [00:10:33]:
Tell me if I am interpreting your story correctly. When you say that when you were doing the wholesaling business, it was deal after deal after deal after deal that you and the team were chasing. And you said that didn’t align with your goals or didn’t, didn’t line up with who you truly were. Is are you were you saying that that business just wasn’t giving you the joy that you were looking for?
Alex Pardo [00:11:06]:
Yeah. I would say it’s a part of it. Look, I’m not bashing on wholesaling at all. III wholesaling got me to where I am today. It was a it was a cash-generating business, and I’m so grateful for everything I learned in that business. Right? But when I say it wasn’t aligned, it wasn’t providing cash flow. There were a lot of moving parts in the business.
Alex Pardo [00:11:25]:
And even though we had a lot of systems and procedures and SOPs and team members, and I wasn’t the 1 necessarily, like, wearing the hats, talking to sellers, buyers. I was managing the team, and it just felt like it was a very challenging business to fully systematize and automate. Right? And 1 of the things that I now know about storage is that because of technology, like, you know, 3 facilities, I don’t have any employees. It just provides more time freedom. When I was wholesaling and I was chasing deal after deal after deal, it just always felt like I was having to go after the next 1 and the next 1. And it was a business that didn’t provide cash flow unless we were closing deals. And I really like what I like about commercial in general and specifically storage is that you can find the right deal, and it pays you month after month after month. And that’s what my wholesaling business was lacking.
Jay Conner [00:12:19]:
Yeah. That makes sense. Now something else you said was very important, and I want to unpack it or ask you to unpack it a little bit. You said in your wholesaling business, you really had built these pror to find the key to get out. Yeah. What do you mean by that? What what what represented the prison walls?
Alex Pardo [00:12:39]:
I was I had created a business I no longer wanted to be a part of. Right? Like, the model in general, where I got joint fulfillment was in working with the team members. Like, that’s the 1 thing that I did right is that I brought on the right people on my team, and I had a genuine desire to see them succeed. And I think this could potentially have been a fault. I went on too long with this business because I didn’t want them I wanted to provide this business for them to succeed, but I just no longer I wasn’t having fun in the business. I was constantly tired of, you know, here in South Florida, pretty cutthroat market, you know, people going around your back and trying to poach deals, and this last minute deals falling out of contract, or this or that. And, look, don’t get me wrong. I wasn’t trying to run away from challenges in business because I truly believe any business is gonna have its fair share of challenges, and I don’t wanna be on this podcast and pretend like I have everything figured out because that’s just not the case.
Alex Pardo [00:13:36]:
Like, I deal with my fair share of challenges and adversity like anybody else, but it was it just constantly felt like the same fires were being put out. No matter how many people I put in or the systems I implemented, it just felt like, wholesaling is not complicated, but there are a lot of moving parts to that business. And somebody asked me something very important. They said, hey, Alex. You’ve been in this business for 15, 16 years. Have you built it in a way where it could be sold? And I said, you know, all these years, no. Like, yes, I’ve generated a lot of money in this business, and it’s provided for my family. But while I have sellable assets within the business, no.
Alex Pardo [00:14:13]:
I don’t believe I’ve created and structured the business in a way that it was salable. And so that resonated with me. And I just felt, in addition to the fact that I was being taxed at the highest bracket, I just said, you know what? This is not the right game for me to be playing.
Jay Conner [00:14:29]:
That makes a lot of sense. Now you have got experience in knowing what it feels like to be in a business, even if you build it yourself not happy, not being fulfilled, not having joy, feeling like the business is running you, and you’re not running the business. You know what that feels like and you have also experienced being free of that. So, with that being the case, here’s my question: What advice would you give to anyone who’s listening to this show who is feeling that right now? They feel like they’re caught in a trap. They feel like they’re maybe in that day job that they can’t get out of. Or maybe they are an entrepreneur, and they have built this business, and they just don’t feel like there is a way out. What advice would you give them on how to get out?
Alex Pardo [00:15:24]:
Yeah. First of all, there’s a lot of empathy coming from this side of the mic because I know my initial gut reaction is to tell you to be bold. Like, in order for things to change, something has to change. I’m also cognizant and mindful of the fact that a lot of people listening to me, you know, have responsibilities. They likely have families, and kids, married, and it’s sometimes it’s easy to say, hey. Just make a hard pivot. Like, right exit stage left and, like, go after what you want. But I think it’s important that you start to build a bridge.
Alex Pardo [00:15:55]:
1st of all, awareness. Being very honest with yourself about where you’re at and then accepting accountability and responsibility for where you’re at. You are where you’re supposed to be because of decisions you’ve made or because of certain indecision. So I think first awareness about where you are, then getting clarity about where you want to be. Right? Like, 1 of the exercises that I go through on a yearly basis is the perfect day. Like, what does the perfect day look like for you? Create a crystal clear vision of what you want your life to look like without real regard to money or finances. But, like, how do you wanna live your life? What do you wanna experience? What do you wanna feel? And don’t filter based on, well, I’d like to live that life, but I can’t because, because insert any limiting beliefs or reasons why you don’t think that’s a reality for you. So once you get that clarity, I think you can start to, like, build a bridge and reverse engineer from where you are today to where you’re going.
Alex Pardo [00:16:48]:
I can tell you, Jay, that people like you, right, like, relationships with coaches, with different communities I’ve been a part of, have been an instrumental part of allowing me to build that bridge because as cliche as it sounds, Jay, we don’t know what we don’t know. And I have blind spots like anybody else. And I think when you surround yourself with people that are a little bit further along in the journey, they’re able to spot those blind spots and share them with you, right, and give you certain things to consider. But at the end of the day, coaches, mentors, and community members, they’re not responsible for your success. At the end of the day, it boils down to you. And it’s about taking massive imperfect action. I almost need to find a better way to say that, but you have to kind of just do activity, like, put yourself out there, and then you’re gonna fail. There’s gonna be lessons learned, but you modify, you edit, and then you keep going and you keep going.
Alex Pardo [00:17:41]:
The last thing I’ll share with you is, that I’m not here to try to, like, shove my faith down anybody’s throat, but I truly believe at the end of the day, having a relationship with God. Right, just connecting with him, seeking wisdom and guidance from him, I realize that’s gonna turn some people off. I know you and I share the same faith, and and I’m okay with that because I truly believe that at the end of the day, like, that is the foundation. Right? With him, I believe all things are possible, and, and he’s just been a huge part of my journey and where I’m at today. And and, ultimately, it gives me so much confidence knowing that I might not know how to do something or how to accomplish a particular goal. But if I could just continue to take actions, I continue to stack the micro, actions, that’s gonna lead to the macro results that I’m after.
Jay Conner [00:18:30]:
Well, I appreciate you sharing where you’re coming from on faith, Alex, because after all, he said, if we’re ashamed of him, he’ll be ashamed of us. So we will not be ashamed for sure. And at the same time, you know, I believe most of the audience that we have here on the show are believers as well because by the way, Alex, I don’t know who in the world came up with the saying, opposites attract. That’s the most stupid thing I ever heard in my life. I wanna hang around people who are like me. Yeah.
Alex Pardo [00:19:00]:
I’m with you, buddy. I’m with you.
Jay Conner [00:19:02]:
Yep. So, therefore, we are here on the show. Now the name of this show, speaking of the show, is Raising Private Money. So let’s talk about private money for a little bit. So you recently raised $1, 450, 000 for a storage facility that you purchased. So, generally speaking, or specifically speaking, what are you I mean, you’ve raised a lot of private money over the years. Yeah. What are your favorite ways to go about raising private money, and what advice would you give to someone who’s never raised private money? How do they start?
Alex Pardo [00:19:37]:
Yeah. So let me start by saying that you are the expert when it comes to private money. So anybody watching this, like, listen to Jay, don’t listen to me. I do have some experience in raising private money, and I’ll kinda share with you what’s worked for me. But again, Jay, you’re you’re the expert in that domain. So for me, I truly believe and, hopefully, this doesn’t turn some people off, but I don’t believe that raising private money is the most important and valuable capital you can raise. I believe relationship capital is the most important and valuable capital you can raise. So my favorite way to raise private money is by tapping into relationships.
Alex Pardo [00:20:17]:
Now if you’re looking for, like, the easy button, if you’re looking for a strategy, a script, if you’re looking for some ninja tactic to just instantly raise private money, I’m not your guy because I have taken the long approach when it comes to raising private money. And I did it because I’ve been intentional about building meaningful relationships with people. I’ll also share that when I have been intentional about building relationships, it was never with the goal or with the intent that I was going to raise private money or for that matter, extract anything from that relationship. I’ve just approached relationships with a genuine heart that I wanna seek to connect with. I wanna seek to, like, understand people. I have a genuine interest in figuring out what are their goals, like, what are they interested in. And I’m just myself. Right? And so sometimes that might be hard to translate, but my biggest piece of advice for raising private capital and, really, for any aspect of your business is to be your authentic, genuine self.
Alex Pardo [00:21:14]:
Seek to build meaningful connections and relationships with people. And I can tell you that storage deal, you said it, a little bit over 37, 000 square feet that I purchased at the beginning of 2023. That was probably 1 of the easiest deals I’ve ever done. And I say that because it I I so I raised 1.45 from 3 private lenders, all of which I have a really good relationship with, and it was probably less than 5 or 6 phone calls and a few emails that it took to secure almost 1 and a half $1, 000, 000. And I can tell you it wasn’t because the deal was so amazing. It was because they were betting on me as the jockey, not necessarily the horse. Yes. It was a good deal.
Alex Pardo [00:21:57]:
Yes. Their money is secure and safe. But it was the fact that we had built a relationship over time that they know I’m gonna do what I say I’m gonna do, and I’m gonna follow through and do right by them. Because 1 of the things I think people need to understand, Jay, and I’m not sure if maybe you have a different take here, but I’ve always believed, and feel free to challenge me on this, I’ve always believed that people are more interested in getting a return of their capital before they’re interested in getting a return on their capital. And what I mean by that is that at the end of the day, people are looking to eliminate risk, and they wanna make sure that their principle is secure. And there’s a variety of ways you can do that by putting them in first position, and there’s a lot of different things we can talk about. Right? But I think, first, from the perspective of a private lender, how do I make them feel safe and secure, and how do they know with confidence that they’re gonna get a return on their capital? And then I can talk about the kind of return they can get on their capital. But, that’s all a long way to say that my favorite way to raise private money is by just genuinely building meaningful connections and relationships with people.
Alex Pardo [00:23:03]:
And then you leave breadcrumbs. You plant seeds about what you do. Right? So the Bible talks about being humble, and I and I subscribe to that mentality. I also think that that pendulum can swing so far the other day that, like, I’ve had coaching clients that are gun shy or timid to share with people in their network, their ecosystem, that they are actively looking for storage deals, and I truly believe, Jay, that whether you’re a wholesaler, storage investor, whatever you do, when people think about your business or asset class, you are 1 of the first people that should come to the top of their mind, And the only way you’re gonna that’s gonna happen is by you putting yourself out there and letting people know what it is you do and how they could benefit from participating in your deals. So when it comes to private money, I’m never chasing it. I’m never, begging for it. I’m not asking for money. I am presenting opportunities, but only after I’ve built relationships with people.
Jay Conner [00:24:02]:
Well, you sound like Jay Conner, Alex, so I couldn’t agree with you more. And, you know, 1 1 thing you 1 thing you said I just really want to highlight for our listeners, and that is, essentially, your private lenders, they’re not investing in your deals. They’re really not. What are they doing? They’re investing in you. That’s where their belief is. That’s where their trust is. Their trust is not in that deal. Their trust is in you.
Jay Conner [00:24:34]:
Now, of course, we’re going to protect them. I’m not going to borrow an unsecured money. I’m going to collateralize their notes and take care of them. But, you know, as you said, when it comes to relationships, it’s because of the relationship that they’re investing. So, as we start to wind down, Alex, let’s talk about self-storage. So, you’ve done wholesaling. You’ve done single-family houses. You’ve done flips.
Jay Conner [00:25:04]:
And you touched on it, but I want you to highlight it. So why self-storage? So it sounds like what you were saying is that self-storage is not primarily a transactional business. It’s more of a do the deal and then that deal is going to take care of you a long time instead of just flipping it and then having to go chase the next deal.
Alex Pardo [00:25:29]:
Yeah. Well, it can. Right? So I think people need to be clear on, you know, whatever asset class we’re talking about, Jay, I truly believe that you need to define the exit before you get involved in the deal. Right? And so there are specific deals that I’ve gotten involved in so that I could increase the net operating income of that storage facility, raise the value, turn around, sell it, take that capital, and then now redeploy it into another asset class. There’s 1 particular, deal that I’m thinking about that it’s a long-term hold. It’s more of a cash-flow play. Right? So, why storage? Well, at the end of the day, storage is a business that has the benefits of real estate. Right? It’s an actual business.
Alex Pardo [00:26:09]:
Now when we talk about this business, I think it’s important to understand the day and age that we’re in. Think about Americans. Like, we live in a consumerism society. I don’t know about you, Jay, but, like, I feel like every day or every other day, my wife has ordered something new from Amazon. And, like, I walk up to my doorstep, and I have packages there. Well, people buy stuff, and it’s a very recession-resistant asset class. So if the market is doing great, people are consuming. They need a place to store their stuff.
Alex Pardo [00:26:37]:
If the market shifts and is not doing so great, oftentimes, people need to downsize from their homes, but they don’t wanna get rid of their stuff. So it is not uncommon for our customers to rent storage and stay there for years. So it’s a very sticky product, and I really love the fact that we’re not dealing with tenants or toilets. I’m not having to deal with long-drawn-out evictions. While I’ve done my fair share of fixes and flips, like, I kinda of say I’m allergic to rehabs. I don’t particularly enjoy them. And when you think about storage, we’re talking about, for the most part, concrete block buildings with metal roofs and metal doors. Right? I don’t have plumbing.
Alex Pardo [00:27:15]:
I don’t have some of the things that naturally come with houses and, you know, units where people live in it. And in storage, Jay, there’s built-in profit centers. Right? Like, so we charge late fees and auction fees and 247 and tenant protection and all these fees that at the end of the day, in commercial real estate, the value of the asset is determined by the income that it produces. It’s not determined based on comps and, like, what did that storage facility sell for? So we get to force the appreciation by increasing the NOI, the net operating income, basically, the bottom line, and that is what’s gonna determine, ultimately, the value of the facility. So those are just a few of the reasons that I like storage, but by and large, it’s a business that can lead to time freedom. I mentioned I think I have a 100 and little bit over 104, 000 net rentable square feet. I don’t have any employees. I have a third-party management company that manages the day-to-day operations, and the bulk of my time and energy is spent not just on coaching people to get their 1st cash-flowing storage facility, but in looking for the right opportunities.
Alex Pardo [00:28:23]:
Once you find the right opportunity and you get it stabilized, it’s a pretty hands-off business. In storage, there are not a lot of emergencies.
Jay Conner [00:28:32]:
I like the sound of that. Not a lot of emergencies. I mean, you might sleep better at night. Now, you just said it, I want to repeat it. So what you are now doing is you’re helping people purchase their very first cash-flowing storage facility. You help them do it in less than 6 months of starting to work with you and they don’t need any experience in doing it and they don’t need any of their own money. So how
Alex Pardo [00:29:00]:
do they find out about that? Yeah. No. Thank you for that. It’s and it’s a joy to, like, just pour into people and see them win. But if you go to www.storagewins.com, www.storagewins.com, there’s a very short application there. If you just take a minute or 2 to apply, we can schedule a call to ultimately see if it’s a fit. But, you know, storage is 1 of the things that I wanna share with people. You don’t need to do what I did.
Alex Pardo [00:29:26]:
You don’t need to shut down an existing business because what I now know that I didn’t know when I started is that a lot of the skills that I acquired as a single family investor wholesaling, all of those skills transfer over to storage. And with the 1 thing I could tell you with certainty is that there’s less competition, and the conversations with storage owner-operators is to me and to a lot of my clients a lot easier than trying to deal with a motivated homeowner. So I believe it’s my humble opinion that storage is the best asset class out there for numerous reasons. So, yeah, Jay, storage wins dot com for anybody interested in learning more about it.
Jay Conner [00:30:07]:
So if you’re listening or watching this episode, let me tell you something. You’re not gonna meet, anybody else that’s got any more integrity that really is genuinely interested in serving you and genuinely interested in your success. So, take my word for it, Alex Pardo has the most integrity. You want to, visit him at www. Storagewinds, and that’s plural, storagewinds.com. And of course, we’ll have that in the show notes as well. Alex, thank you so much for joining me here on the show today.
Alex Pardo [00:30:45]:
My friend, thank you for the opportunity. And, man, just so happy for your success, and I’m grateful for you for all the content you put out, and for the impact you’ve had on our community. And just wanna encourage your listeners to, like, hang on every single episode and word because, man, you’re you’re the type of person. You are the type of person that I wanna align myself with to continue to grow in my faith, in business, and just every aspect of my life further. So thank you very much for being a part of it.
Jay Conner [00:31:12]:
Thank you, Alex, and God bless you. There you have it, my friend. Another amazing episode of Raising Private Money. I’m Jay Conner, your host, and thank you for joining me and Alex. I look forward to seeing you right here on the next episode of Raising Private Money with Jay Conner.
Narrator [00:31:32]:
Are you feeling inspired by the knowledge you gained in this episode? Then head over to www.JayConner.com/MoneyGuide. That’s www.JayConner.com/MoneyGuide, and download your free guide that shares 7 reasons why private money will skyrocket your real estate investing business right now. Again, that’s www.JayConner.com/MoneyGuide to get your free guide. We’ll see you next time on raising private money with Jay Conner.
