How to Win Your First Storage Deal Without Big Money

A buyer finds a storage facility in Pembroke, Georgia, calls the broker and gets the worst news possible. It's already under contract. 99% of investors would hang up bummed out and never call back, but this buyer didn't. They kept calling the broker every few weeks just to stay top of mind. About a month later, that deal collapsed, and because they stayed in touch, they got the first call before it ever hit the market again. And that's how they bought their very first facility. And today I'm sitting down with the broker Behind that deal, Austin, whose team sells storage in 26 states. We're breaking down how relentless follow-up beats big money in commercial real estate. I'm Joe Downs. Welcome to the Storage Moguls Podcast. My company has acquired over 20 storage facilities, over $70 million in assets across multiple storage niches. And that's what drove us to build storagemoguls.ai, which is an AI-powered community that teaches people how to buy their very first storage facility. Let me introduce my guest, but before we get into it, folks, I don't want to forget for you to join us tonight for Monday Night Storage Moguls Show with my co-host, Kristen Blunk, where every week we tackle one question. How do people like us replace our W-2 income without buying ourselves another W-2 income? Don't forget, it's tonight, 7 PM Eastern on YouTube on the Storage Muggles channel. If you're not already a subscriber, you can register at storagemuggles.ai/live. And now to the man of the hour, Austin McLeod. Austin runs the self-storage division at Matthews. And they have great swag, by the way, when the weather is Just nice enough. I proudly wear my Matthews QZ. It doesn't hurt that Matthew's my middle name. He started back in 2018 and closed their first storage deal in his firm's history. Since then, he's closed over $800 million, and I think you corrected me in the green room, $850 million in self-storage transactions across 26 states. And for everybody from first-time buyers to the REITs. So his client base is literally the entire buying universe. And his team was the broker on that Pembroke deal, as I mentioned earlier. Austin, welcome to the Storage Moguls Podcast. Can you do me a favor? Tell everybody what Matthews does and what you do there. And I'm blown away by, I just learned something about you, you know, getting ready for the show. You actually closed the very first storage deal for Matthews.

Yep. Well, first things first, thank you for having me. Excited to come on. And as always, appreciate, you know, the opportunities that you've presented to us, Joe, and Matthews at the root of it is a commercial real estate brokerage firm. We do everything from retail to multifamily to industrial, of course, self-storage. We have a capital markets division where we focus on debt origination. So we do everything as a firm, but yes, I exclusively focus on self-storage. I was fortunate enough to kind of fall into the space back in 2018, and at that time it was a new uncharted division for Matthews. And, you know, that came with its challenges, but overall very thankful and blessed to have gotten into this space. And, you know, kind of crazy looking back 8 years ago to now. It's been a ride, but I wouldn't trade it for the world.

I kind of want to unpack that a little bit. It wasn't in my notes for what I wanted to talk about today, but I can't let it go. So, You joined Matthews as a self-storage broker, or did you join Matthews and then say, hey, I got a great idea, guys, let's get into self-storage?

Yeah, so I interned at Matthews and all the while leading up to when I was about to start as a full-time agent after my senior year of college, I was planning to do retail. So I was going to focus on Atlanta retail. I was going to be starting in the Atlanta office, focusing on Atlanta retail, and somebody suggested doing self-storage because retail at our company at that time was the most popular asset class for an agent to focus on. We had about 100 agents at that time and 70% of them were doing retail. For me, I thought about, you know, an opportunity to come in and try to do something new. So I, you know, was talking about it with a couple of people at the firm. And somebody suggested self-storage, which at the time I really had no clue what it was. I had never rented storage. My family had never rented storage. And so I had to Google what self-storage was. And after some research and a little bit of time spent, ended up deciding that it was a good opportunity and that I would run with it and give it a shot. But yeah, just kind of lucky that Somebody ended up suggesting it to me and I, you know, was dumb enough to take the chance and go and do it.

You know, what's funny is at exactly the same time, 2018, neither one of us had ever rented a self-storage unit and neither one of us could really describe what self-storage was. Yeah. I didn't, I didn't know the first thing about it other than I had been to a seminar and had a home study course on it. Yeah. Probably by, well, I know I did by that point. But that's so interesting. And we took two, two Similar but different paths in self-storage. Now, that's really cool. All right. You ready for your first true/false here? True or false, Austin? Back in 2021. So when you were just a puppy in self-storage, storage sales doubled in a single year.

True.

Is true. They probably did for you too, if you started with one. Yeah, you were probably doubling every year. Transaction volume doubled year over year in 2021. And that's according to the 2026 State of Self-Storage Market Report. What did that feel like from the broker's chair, by the way?

Well, it was very interesting coming out of that COVID year in 2020 because for that time period, really from March to June, deals kind of stopped in their tracks. Storage was lucky enough to be labeled as a necessity-based business and kind of stay open throughout that time period. Largely speaking, but there was a lot of uncertainty and you kind of had to navigate, especially from March, April, and May, like how to close deals. Title companies were closed, the local municipalities largely were closed. So deals kind of stopped in their tracks and it took a while to kind of get going again. But in 2021 and 2022, really it was You know, just crazy how many people were looking for storage and how many offers we would get on deals. You know, there was just so much capital in circulation. There were so many new entrants into the business in that time period as well. And, you know, it just, it seemed like there was almost no limit to how high some people would go for certain deals just because money was so cheap and you could go and get debt at 3.5% to 4%. So buying deals at cap rates in that range, 3.5% to 4%, was commonplace. So it was a very unique time period.

Occupancies were through the roof and with it went rates and yeah, that was nuts.

Exactly. It was the perfect storm, right? Your occupancy's at an all-time high, which causes your rents to go to an all-time high, and then your cost of capital's at an all-time low. So cap rates go to an all-time low. So I mean, some of the price per square foot numbers that we saw deals trade at, I don't know if we'll see again for some time. I mean, it was astounding in some of the numbers that, you know, some of these deals ended up getting done at.

Yeah, no doubt. That was very interesting times. All right, Austin, so this show is on purpose designed for folks who are you know, haven't bought a storage facility yet. They're curious, they're interested, they're, they're, you know, on the periphery, or maybe they're on the fence, or maybe they just bought their first deal or they're one or two deals in, or they're even mom-and-pop and they've owned forever and they're just looking for, you know, insights and how to manage their property better. And that's kind of like the general audience, but a lot of them are first-time buyers. So I just want to say this out loud and call it what it is. Somebody calls you Within 30 seconds, you can probably tell it's their first deal, right? What's going through your head in that moment?

Well, number one, do they have a game plan? And number two, do they have the capital to ultimately pull this off? You know, and I'll start with the first one. Do they have a game plan? Number one, have you spent meaningful time reviewing the deal? Is it something that you've kind of spent some time, thought about, determined that it checks your boxes for what you're looking for? Do you have a game plan for management post-closing? Do you have a game plan for CapEx? All things that kind of just require a little bit of time. Just be a little bit thoughtful about how you're going to pull this deal off. And then the second one is, do you have the cash? And if not, do you know where you're going to go? for the equity because these deals, they require equity. Obviously they require debt, but the cash is a big piece too. So that, those are kind of the first 2 things if I can tell that it's their first time. And we have no problem with working with first-time buyers. It's just they've gotta have a game plan and they've gotta have the means to close these transactions.

All right. Thank you for saying that. I was going to follow up there. So, because that's what I want people to hear. That's one of the biggest fears that folks have with calling a broker is, He's not gonna talk to me. He's gonna tell right away. It's my first deal. I'm gonna sound like an idiot. I don't know what I'm doing. Um, should they? They shouldn't be. What I just heard from you is they shouldn't be afraid to call you, but they shouldn't call you until they've— I shouldn't say that. I don't think this is my, these are my words, not yours. You can correct me.

Yeah.

I don't think they should call you until They've actually done a little bit of homework and you kind of said the same sort of thing.

I would say so. You know, if it's a deal that let's say is $5 million and it's in an area that you wouldn't have interest in and your max price that you can pay is $2 million and you're only buying in Georgia and the deal's in North Carolina, then yeah, we shouldn't be talking. But, you know, at least about that deal, right? Maybe spend some time, look at what else is available and we could talk about that. But I would say, you know, at least do an initial screening and make sure that the deal checks the boxes that you're looking for, right? If you have a minimum population density requirement where you want 20,000 people living in a 3-mile, all you have to do is look up the demographics. And if you see there's 10,000 people in a 3-mile and you're not comfortable with that, maybe that's not the right deal to reach out on. So just things like that, you know, doing a little bit of homework before reaching out, I would say helps. At least boost credibility a little bit.

So they should know what they can purchase, right? You mentioned that they should know how they're going to manage it. That matters a lot, right? And all of these things matter to you because why?

Because we are representing the seller and we don't want to waste our seller's time. We're trying to put our seller in the best position to ultimately go and close the transaction. And they've hired us to sell the asset for them. That's what we're trying to do. And spending time in escrow with a buyer that can't ultimately get a deal done does our seller no good. So we're trying to prevent a false start.

So what is the, what's the biggest difference then do you think between, and I'm obviously, I'm harping on this because I want folks who've never bought a facility before to understand all the angles you're looking at and also to build up their confidence to let 'em know, Hey, look, this is all you have to do is do this. Sure. And Austin's the nicest guy in the world. So what's the difference between a first-timer that you take seriously and one you don't? Is it the money? Is it how they talk or is it something else or is it a combination of all of them?

So, you know, I truly do think that a big part of it is showing that you've done some homework, you know, reaching out, let's say on a $15,000 deal.

What if I've missed something? Right. I did, I did, well, that's okay if you've missed something. I did a couple things. I'm trying, I'm new. I missed something. Are you going to bite my head off? Am I on your blacklist? Talk to me about that, that kind of interaction.

Yeah, I would say that, you know, if it's clear that you have done some prep and you've done what you can to ultimately determine that it's a viable deal for you and you call and you say, hey, I've evaluated this deal and Pembroke, Georgia. And I know it's listed at $800,000. We've done our homework. We've implemented our expense load that our management company has indicated that they're going to require, or we're going to hire a 1099 and we're going to pay her $500 a month. And we've inserted that. And based on the conversations that I've had with lenders, my interest rate's going to be 7%. So I need to buy this at a 7.5% rate. I'm assuming 65% LTV, so I need 35% down. So, and I have $250,000 in cash that I can show you proof of funds. I mean, that's, that right there indicates to me that you've been thoughtful about it. You've spent some time on it and you're showing that you're serious. If it's kind of kicking tires where, oh, hey, do you, what do you think the seller would take? What do you, What do you take, $500,000? You know, that's not going to come off the best way to brokers.

Right. So the deal's listed at $800,000 and I'll just take everything you just said, repackage it. And so Austin, you know, the max I think the lender's going to let me get to is $750,000. We're having a conversation, aren't we? You might tell me that's not good enough, but we're having a conversation, aren't we? Yeah. It's not that $500,000 to $800,000 and $500,000, by the way, I don't think is necessarily an issue if there's a well-thought-out, good logical reason behind that. That's why they offer.

Yeah.

I think what you're saying is don't just call me and see how low you can pick this thing up for, right?

Yeah, absolutely.

Absolutely. All right. So let's say I make that phone call. Uh, I can get to $750,000. $775,000, whatever, some number near list. But you tell me it's under contract. What's my next move?

Well, first I would say if you want to put in a backup offer, we typically welcome those. So I don't think there's anything wrong with putting in a backup offer knowing that the seller isn't going to sign it formally. But we have it in our hands. We can present it to the seller so they know who you are and we can hold onto it in case it doesn't work out with the buyer under contract. And then we welcome people following up with us and just checking in on how DD's tracking along and how the escrow process is moving along. And if we think that it's going to close, we have no problem with you checking in every few weeks or so. Just to get an update.

So here's what I heard, and I want to say it for the record for everyone listening. I had this conversation with you, Austin. I'm right at $775,000. I know it's listed for $800,000, but this is my max. And then you hit me with the hammer. Oh, Joe, you know, I'd love to present it, but we just signed the contract, right? We're having a verbal conversation. I should still send you that offer, shouldn't I?

If you're serious about it, I'd say yes.

Okay. And I wanted, I want folks to hear that straight from the broker's mouth. If that's a deal you're serious about, you've done the homework, you've done the work, you've talked to your lender, you've underwritten the property, you know the market, and you just couldn't get to $800,000. But actually, even if you could, it doesn't matter because it's already under contract. What I hate seeing people do is hang up the phone and not send the offer because now, Austin, you don't have my offer, official offer with my name and phone and email that you can A, share with your buyer and B, use to call me back. Because you know, I'm now serious in the event that that contract falls through. And I just see it happen time and time again. And that's why literally I will close the show. One of my taglines is send the LOI, send the offer, because I'm so tired of people not doing it after they do all the work. It takes 5 more minutes to prepare the LOI and send it.

Well, and it helps brokers stay organized. I know it helps me, you know, I file away all the emails I get. Obviously we, we file away all the LOIs that we get, you know, and I'm very much on top of my phone and my contact list, but I know that if you're going to send an email, send an LOI, it just adds to the touchpoints that you have with the broker and it's going to help the broker at least have one piece of communication from you that they save that they can reference in the future to come back to you if it doesn't work out with the current buyer at the table.

And by the way, I, I would think, especially if this is, you know, this was all, uh, a first transaction, a first interaction with you, uh, I would think, you correct me if I'm wrong, that it kind of, it, it adds, I don't know if it goes a long way, but it certainly takes a step in the right direction. In your eyes, you, you have to be looking at me going, all right, hey, this guy Joe Downs, he sounded prepared. He was right there. He just missed out on timing. He sent me the LOI. He's, called once or twice during the contract process just to check to make sure he's a serious buyer. That probably goes at least, again, not a long way, but a little way in your eyes, right? I'd say so.

Absolutely. And the seller is now aware of you, familiar with you. And if it doesn't work out, most sellers are going to say, okay, what other offers do we have on the table? And if we've already received 2 or 3 other LOIs from other buyers, oftentimes that's going to be kind of the first people that get phone calls are the ones that already submitted other offers.

So folks, you don't need a track record to get a broker's attention and to build a relationship. You just need to be prepared, easy to work with, and still calling after everybody else hung up and moved on. Austin, true or false? A lot of storage owners who bought in 2021 and 2022 borrowed money at 3 to 4%.

True. It is true.

Short-term bridge loans at 3 to 4% now are, although they're now maturing at much higher rates in 2026. Are you seeing any of those offers, those owners, I should say, call you to sell?

We are. Absolutely. You know, it's becoming more and more common where some of that debt is rolling over, and if the facilities haven't performed as well as they hoped and they can't refinance without putting additional cash in, or they just don't want to, you know, pay double the amount of debt service each month, then a lot of those owners are deciding to sell. So it has forced some of the liquidations that we've seen year to date, and I think we'll continue to see that for Excellent.

All right. I want to give you a scenario here, and I don't want you to get bogged down on, you know, the, and folks, you listening too, I don't want you to get bogged down on, you know, it's always this way. It's not black or white, right? There's some details in these scenarios that could sway things, but I want to paint a general picture, right? So also I got 2 buyers. I got Buyer A, and Buyer A never calls you. Just sends an LOI on a deal that you have listed, and it's by far the highest number you got. All right. Then you got Buyer B. Buyer B's been talking to you for a week or two, you know, calling and asking questions about the offering memorandum, the deal, the market, the seller, the this, that really getting to know the asset. His offer comes in a little lower than ask though, but comes with the proof of funds, maybe a little. dossier or resume on who they are, their track record, whether they have ever bought a storage facility or not, maybe just on who they are as a business person and how they arrived at their number. And then this is where I know I don't want to get you stuck in one or the other here, but I am— this is more about the process. But the question I want to ask is whose number Are you taking to the seller, right? Whose offer are you taking? You have to take both to the seller, obviously. I was about to say that.

Yeah.

Who are you? I'm not letting you off that easy. Who are you? You're taking both to the seller. Yeah. Which the seller says to you, Austin, I don't know, this one's higher, but this offer seems more substantial in, as an offer and a person and a buyer. What, how are you advising the seller in that scenario? And again, I know it's sight unseen with different variables, but Well, I would say the second one.

I mean, it means way more to me that there's been, number one, phone communication. You'd be surprised some people, if they're people, they could be bots, they are sending LOIs and then you reach out to try to get them on the phone and they refuse. You know, you can't get some of these people sending in offers through CREXi or LoopNet. And that you just can't get them on the phone. So that's a major red flag to me and my team. And if we can't get you on the phone to talk through this offer and hear more about you and your game plan for the property, then how can I recommend that our seller engage with your offer? So that's number one. But number two, I mean, even if there was communication over the phone with that first buyer, But you could just tell that there wasn't serious interest or there wasn't real thought put behind it. It indicates to me that if there's one issue that pops up in DD, that first buyer is way more likely to walk from the deal. Or if it's not exactly what they thought, then, and they didn't spend any additional time on it versus just this other buyer that's clearly spent a lot of time, gone through the numbers, analyzed the P&Ls, analyzed the offering memorandum, analyzed the rent roll, actually spent meaningful time going through it and understanding it. You know, I think buyer 2 puts us in a much better position to ultimately close. And I have no problem recommending lower offers to a seller if I truly believe that the lower offer puts us in a position to actually get a deal done.

So that actually kind of answers my next question a little bit, but I'll, I'll kind of spin it for you here. Is it—

sure.

Do you, do your sellers and/or you, If you had to pick a percentage, do they care more about the number or the certainty of execution of the close?

Well, it does depend. I will say that some sellers are fixated on the price and if there is a big gap in price, then some sellers may go with the higher price and give that buyer a shot. Others are more fixated on certainty of close and they don't want to have a false start. They don't want to go through a PSA negotiation and DD for it ultimately to fall apart. And so it does depend seller to seller. If it's a small difference in price, like let's say $50,000, a lot of times even $100 grand, The buyer or the seller, excuse me, is going to choose to go with the buyer that they feel has the highest probability of closing.

Yeah. All right. So the delta between is what might sway. And I listen, I think I do it the same way. You're calculating your risk at that point, you know, for $500 grand more, I might be willing to go through that process again. Right? Yeah. But I see your point for $50 to $100. Yeah. It also depends on your situation. How about proof of funds? When do you actually want to see it? With the LOI or do you wait to ask for that?

With the LOI. Typically, if you send it with the LOI, that's great. What I am going to do once I send the LOI or get the LOI from you and I'm sending it to the seller, I'm going to request it from the buyer right there. So, you know, that's something that for you as the buyer, The earlier you send it, the better. There's nothing, as long as you have the funds for at least the down payment, or if you're saying that you're all cash, you need to have funds for the entire purchase price. But you know, you're not hurting yourself by providing proof of funds along with the LOI. I'd say the sooner the better from a buyer perspective.

When a buyer shows you how they got to their number, and then in this case, I'm assuming it's, let's just make the assumption we're not getting to the list price because there'd be No point in this question if we were. Does that help you with the seller when you know, when you understand the, all the levers and dials that a buyer used to get to where they are? Does that help you explain to the seller why? Let's keep, let's keep using this $800,000 list price example.

Yeah.

Let's say I come in at $700,000. With a really good explanation as to why. The debt market's changed. The lender, I've shopped 5 lenders. I can't get 70 LTV. They're only lending me 65 to make the DSCR work, whatever. I got to get, this is the max I can do. Does that level of detail help you with explaining the offer to the seller and helping the seller understand, hey, the market's a little different than we thought?

Definitely. And because a lot of owners will ask, hey, why do you think they can't get to the list price? Or why do you think they can't get to my counter? And having that ammo from the buyer helps. And I obviously as the broker can make assumptions as to why, but if I hear it directly from the buyer and I can relate to the seller, hey, he's telling me that he's budgeting $100,000 in CapEx, $50,000 for doors, $20,000 for new lights and cameras and $30,000 for paint and roof touch-ups, then, and the seller says that, yeah, I mean, that's going to be needed within the next few years, then that can help them come down. And it also sets an expectation of, hey, this is what I'm planning to do. This is what I'm planning to ultimately go out and complete post-closing. And it also shows that you've been thoughtful and serious about the deal. Same is true on the debt side. If you're showing that because of the debt quotes or the terms that you're anticipating are preventing you from paying a more aggressive cap rate, then again, it shows that you've had some conversations, you understand where debt is, and you've actually spent some time on the deal. So yes, I love hearing explanations as to why. I tell buyers all the time, and this goes for my institutional Class A deals, I'm following up with the REITs and private equity groups wanting to get feedback because my buyer or my seller is asking me, hey, what did Public Storage say? What did Extra Space say? And I want to have that feedback and be able to relay exactly what the buyer says. So it's true in mom-and-pop deals and it's true in institutional deals.

Yeah. And thank you for that because this is what I want the listener to understand is it, Not only do you need to send the, you need to talk to the brokers. You gotta have these conversations. Ask 'em questions. I wouldn't challenge them on everything. That's not a great way to start a relationship. But, you know, one of, Jack, who runs our acquisitions, who you know very well, has a great, great approach to this, which is, you know, Austin, you're, you know, you're at a 6 cap on a deal, which yields whatever number, $800 grand, let's say.

Yeah.

And Jack can only get to 700. I love his approach and I hope you do too, where he says he'll call the broker, you in this case, and say, hey Austin, I'm at 700. Here's all the assumptions I made, but I'm not getting to 800. What am I missing? And I'd love your opinion on that because I think instead of saying you're crazy, Austin, I don't know what you're looking at, but there's no way this deal's worth more than 700. I think the approach of, Help me understand how you get, how you're at $800,000 or your seller's at $800,000, because all I'm coming up with is $700,000. What's your feeling about that approach?

I'm a fan of that as well, because that also gives me the opportunity to pitch them on the deal and explain why I priced it at $800,000 and why I think that somebody should pay $800,000. And It's a conversation at that point. Maybe I see rental rates 10% higher on the market today, and Jack's comps are only 5% higher, and I can show him data that support the 10%. That gives me the opportunity to, right? And we can compare notes, we could compare comps.

And I love that because you as the buyer aren't always right. Sometimes the more experienced broker is actually right, even though he wants more for the deal. And I think that provides that platform for you guys to exchange those ideas. And one of you is gonna walk, maybe both of you will walk away with an understanding of, oh, all right, you know, I see that you see it this way and now I see that you see it this way and maybe I can move towards the middle and maybe you can make the seller move towards the middle.

Something I just thought of as well, Joe, is sometimes buyers will look at these properties online, you know, on Google Earth or Google Maps, and they might be seeing what they think are CapEx needs and could be budgeting $20,000 for that project. But if you call me and you start explaining why you're coming up short and you mention that it's because the gate looks like it needs to be replaced, the seller could have just replaced it and you might not know that. And I can relay that over the phone. So absolutely call me. Let's talk about why you're coming up short. Maybe you're right, maybe I'll be right. Maybe we can meet somewhere in the middle, but I think communication is key there.

For sure. Especially if you're newer. I mean, I used to be embarrassed, but now I think it's fun to admit this. When I first started, I wanted to pave every gravel self-storage facility. So we gotta pave that. Yeah. And folks, you don't, you absolutely don't. Austin, you guys sold a deal in Newberry, Florida with seller financing. Should a first-time buyer even be asking about that?

I don't think that it hurts asking if seller financing is available. I think that it's a red flag for me if you indicate that you have to have Seller financing in order to do the deal, because that indicates to me that you can't get approved by a traditional lender or by the SBA. But I don't think there's anything wrong with posing the question of, hey, is the seller willing to finance the transaction? Some are, some aren't, some can, some can't. It's okay to ask, but if you indicate that you're only interested if they can, I think that is where there might be some concern from the broker.

So it's, it's okay to ask. It's not a red flag to ask if the, if the seller has considered financing the deal. It's only a red flag if that's the only way we can buy the deal. Yep, that's correct. Okay, fair enough. All right. True or false? More than half of storage industry leaders expect cap rates to stay about Where they are.

For how long? I would say true, but depends how long.

It is an interesting question. It's very subjective, but yeah, it is true. 56%, so just over half are forecasting stable rates. That's from a Cushman& Wakefield survey.

Okay.

Austin, you put real work into an offering memorandum, you know, the rent roll, financials, the whole thing. Then somebody calls and says, So what's the best price you could do? How fast can you tell whether that person actually read it?

Yeah, I mean, there are other questions that indicate that they haven't as well, but that's certainly a quick one. You know, that just tells me they're just kind of fishing, right? And, and just seeing how big of a discount they can get.

Um, and, and when they fish, is, is that relationship building when people are fishing?

Like, I would say no. Yeah.

You know, I think folks don't, Don't do it.

Call, call.

These guys are nice, normal, mostly normal. Sometimes, sometimes they're Braves fans, but we deal with it. Could be worse. They could be Cowboys fans, but they're usually nice, normal people. Just call and have a conversation with them. It doesn't matter if you're new or a seasoned vet. Call, introduce yourself, tell 'em you're interested in a deal that they listed, that they put a lot of time and energy and effort into and putting out a product and an offering memorandum. And have a, have a conversation about it. And to have that conversation, actually read it. So Austin, what's, what's something in the offering memorandum that buyers miss all the time and maybe it bites them in due diligence or frustrates you because it was in there and they didn't see it. And then they go, what's this? I didn't know that.

So, you know, just A couple things that come to mind. I would say maybe not reviewing where we put our assumptions, and I know most brokers, they all, everyone kind of does it a little differently, but most brokers do include their assumptions for their underwriting. And in some cases, you know, we're inserting certain expenses. In other cases, we're omitting certain expenses. So I would say review the assumption sections, understand You know, what assumptions we are making, understand some expenses that maybe we inserted that don't exist, or some expenses that we potentially removed because we felt they were irrelevant or one-time for the previous owner. I would say, you know, we always designate whether or not it's in a flood zone. So I would, you know, certainly encourage you guys to evaluate the OM, see if it mentions the flood zone. There's, you can easily check the FEMA flood map as well, but that's big because it's going to impact your insurance costs. And if your insurance costs are higher than you anticipated, it could change your returns. So that's a big one. Property tax reassessment is another one. For me, I mean, any deal that I'm evaluating or listing, I'm accounting for a property tax reassessment at some point. It depends on the state, but the vast majority of states that I operate in, they're either going to reassess taxes the following year following the sale, Or at some point in the next 4 years, again, depending on the state, North Carolina, Tennessee, some other states that are going to reassess every 4 or 5 years depending on the cycle. But at some point in our offering memorandum, we'll account for that reassessment. For newer buyers especially, make sure that you're accounting for that because when the county sees that the property traded for $500,000 higher than where they have it evaluated, they're probably going to come and reassess. That next year.

All right, let's say I read the offering memorandum. I've done a great job of due diligence. I mean, I literally checked every box. I've talked to you 9 times in, you know, a week and a half. Folks, don't call them 9 times. I'm just trying to accentuate a point. We've been in communication. I've really done my due diligence and I know what I'm doing and you've got it listed for $2 million and all, I've even had the conversation with you, you know, how are you at $2 million? What am I missing? And even after that conversation, I can still only get to $1.5 for who knows, various reasons. Do I send you that offer?

Call me first. Let's have a conversation about whether or not we should put it in writing. And the reason is, for me as the broker, my seller might be very price sensitive and it might rub him the wrong way, especially earlier in the listing process, to receive a, what they perceive as a lowball offer. And so it could put the agent in a tough position. It could frustrate the seller and it might end up hurting the buyer and their chances of winning the deal. By submitting an offer there. In other cases, the seller may welcome all offers. They may be very motivated, and I'll tell you, absolutely send that in. I'll get it to the seller. I'll get you feedback. So it really does depend. It's deal by deal. That's why I recommend just ask the broker if you are, you know, half a million dollars off. I might already have an offer or 2 higher than that as well. And I don't want you as the buyer to waste your time writing up an LOI. So I think it's worth just having the conversation, asking the question, saying, hey, I'm at $1.5 million. You're listed at $2 million. Do you want me to submit an offer? I'll give you an honest answer, yes or no, and I'll provide my reasoning. And that way you ensure that you don't rub anybody the wrong way and that you also don't waste any time in the process.

So do you, in that scenario, when you're saying call me, it sounds like you're standing behind that $2 million number.

Right.

Are there scenarios where that's the seller's number and you might say, yeah, send me that offer because the seller's nuts and I think it's closer to $1.5 million and I need to establish market?

I mean, in some cases I really try not to take listings that I don't feel are sellable within a reasonable range of the list price. And I always provide a projected trade range that I anticipate the property selling for. And I generally like to confirm with the seller that they are willing to transact within that range. And so, you know, it might be a little bit different from other, for other agents, but generally speaking, I do try to, you know, establish a reasonable range with the seller and still try to push price as much as possible for them. And, you know, I feel like There is a little bit of wiggle room. Don't get me wrong, I've sold dozens of deals at list price, but more than often they, most properties end up trading a little bit below. And so, you know, I think that again, just having that conversation is imperative to understand the broker's thoughts and for him to, you know, best advise on what to do there.

All right. I think this is a fun one here. Is AI Making this easier or harder? Are buyers sending you 27 questions ChatGPT wrote for them? And in some cases, yes. All right. And then how are you guys using AI on your side?

Yeah, so, you know, I would say the fundamentals of brokerage haven't necessarily been impacted too much by AI, meaning you're still selling real estate to people. And so the conversations, the outreach, the calls, you know, so much of our time as brokers is spent on the phones. Like that obviously has not been impacted neither positively nor negatively by AI. There are certain, you know, things that maybe AI has made a little bit more frustrating. Like you said, having ChatGPT pump out questions that maybe could have been answered in the offering memorandum. Or with a phone call. But there are certainly things that AI can do for us on the brokerage side that has made some of our process more streamlined, especially on the underwriting side of things. You know, analyzing rent rolls, especially in a time period where advertised rental rates, web rates, as so many people refer to them as, are significantly below in-place rates and what customers are paying. And so analyzing rent rolls and really understanding what those achieved rates are is extremely important. I used to do it by hand a few years ago. Today, ChatGPT and Claude can do that in 20 seconds. So that's really helped expedite things. We found some cool AI tools that have helped us with property tax reassessment projections, Pulling rental rate comps, creating rental rate trend graphs and analysis for us. And there's still a lot of personal touch that I put on our underwriting and I don't think it'll ever be fully streamlined where these storage assets are priced off of AI. I think that there's just too many variables that go into pricing these deals. to rely solely on an AI engine, but it certainly can help you streamline it and be more efficient and productive and get through these valuations at a quicker pace.

Makes sense. All right, last true or false. True or false? The big institutional buyers are going hardest after storage deals under $10 million.

False.

You've, you have 3, was that 3 for 3 or 4 for 4? You nailed 'em all.

4 for 4. Okay.

4 for 4. Yeah. Institutional capital actually competes much less aggressively under $10 million. It's just, folks, it's just not a playground they can play in. And that's the advantage that the first-time buyer has. And that's why, that's why at storagemuggles.ai we talk about that kind of even lower range for the first-time buyer, like under $3 million is, is, is where Even the regional guys have, uh, have trouble competing. All right, Austin, there's one more question. Not true or false. It's not true or false. Not that simple. It's not multiple choice. This one you actually have to put your thinking cap on. Have you ever heard of the book Be Your Future Self Now?

I think I've heard of it. I've never read it.

Okay. It's called Be Your Future Self Now. It's by Dr. Benjamin Hardy. He was a co-author of Who Not How with Dan Sullivan. Sure you've heard of that one. I'm sure you've heard of MrBeast though. Yes, I have.

Yeah.

Okay. So the beginning of the book, Be Your Future Self Now, which I highly recommend you read, it actually talks about MrBeast and how he became MrBeast. He was just a kid and he was a gamer. And one night he recorded instead of studying for an exam or something, and instead of filming himself gaming, he recorded 4 videos and he released them at intervals into the future. So the first one was 6 months. The next was a year, the next was 5 years, and the next was 10 years. So he recorded them all the same night, but then really set them to be released on YouTube at those intervals: 6 months, 1 year, 5 years, 10 years. All right. And effectively what he did, Austin, was he burned the ships. He said, this is who I'm going to be at each of these intervals. And he put himself out in the public and then he had to go live up to it. So the question I ask every guest that comes on, Um, and I'm, and I'm, I don't tell them this because I'm not sure you'd come on if, if you had, if you knew you had to answer it. I kid. But is, I don't want to answer all 4 of those. I just want to take one interval, the 5 years. Okay. So 5 years from now, if we got in a time machine and we went 5 years in the future to 20, what is that? 31? Geez. Um, we find Austin McLeod.

Who is he?

Where is he? What's he doing? Is he still a self-storage broker? He's, you know, today he's at $850 million in sales. You know, I don't know if you want to talk about if you're still doing it, what the sales look like. You married, kids.

Yeah.

Who is Austin McLeod 5 years from now? Hold on. And what are you doing today to make sure you become that person?

Sure. Well, I was going to say, first things first, God willing, I'm a father. I'm getting married in April to my fiancée Tess. Very much looking forward to that. So, you know, 2031, like I said, God willing, I'm a father, I'm a husband, and absolutely still a storage broker. You know, I love the business. I love deal-making. I have great clients that I enjoy working with and I enjoy the hustle and I spend a lot of time on my business and take it very seriously. And I love the competitive nature of brokerage, so I'll absolutely still be in the business. Hopefully I'm at $2 or $3 billion in sales at that point. God willing, I cross a billion in the next 6 months. And I hope the ramp up to get to that second or third billion is much quicker than it took me to get to the first one. What I'm doing today to put me in a position to achieve that is, I still work very long hours. When I started in this business, our CEO Kyle was a huge proponent, still is, of new agents working 14 hours a day. We feel like it's imperative for someone like me that was 21 years old when I started in this business competing against 40, 50, 60-year-old guys that have been in the business forever. You know, the only way to try to catch up to them is to work harder than them, work longer than them. And I still try to implement that.

Work more reps.

Yeah, exactly. Right. They say 10,000 hours to become an expert. The way to get there fastest is just to work more. And so I still think that's true today. I was sending emails last night till 11:30 PM, So I'm still grinding and working as hard as I possibly can, especially before I have kids.

And you already got the fiancée, so that covers the marriage and hopefully the kids.

Exactly. Exactly. So yeah, I think still at Matthews, maybe we're a public company at that point. We'll see how the next 5 years progress. But I I pray that the biggest change in my life is a ring on my finger and kids by my side, but I'm still selling storage deals and still at Matthews.

That's great. That's great to hear. Austin, before I let you go, how can people find your deals, your listings? How do they get on your list?

So if you want to get on my immediate distribution list, please reach out to me. You know, my email and phone number, we could probably provide in the footnotes. But you can always just search Austin McLeod Matthews. My profile will pop up. All my contact information is on there. You can reach me on LinkedIn, send me email, text messages. We post all of our listings on our website, www.matthews.com. And then we'll send out an email blast. So if you want on my list, just reach out to me. I'll put your email on there. And we list some of our deals on CREXi and LoopNet and And TractIQ as well. So, you know, generally speaking, if you search Awesome Cloud Self Storage, you should be able to find me.

Awesome. I really appreciate you joining us today. I was looking forward to this one. Folks, you heard it all here. You gotta build a relationship before you need it. Then you send the offer. Make sure you have the conversations with the broker. You just heard from the man himself. He's not gonna bite your head off. Don't forget your proof of funds, who you are, how you got to your number. That's how the first-time buyer wins. And also don't forget to tune in every week because this is where we're covering all the storage verticals, self-storage, boat and RV storage, pro storage, truck parking, small bay flex, light industrial, you name it. Please, if you wouldn't mind, like, subscribe, and share. Sharing matters and it matters more for you. You heard it here and you hear it every week. You need to share episodes like this. Anything you're watching on YouTube, you gotta let your network know that you're in this business. If you want to get into this business. We have a workshop this coming Friday, so October 16th, October 16th, White Marsh, Maryland. You can, we'll put the link in the show notes. I believe the URL is go.storagemoguls.ai/white-marsh-md for Maryland, but click on the link. It's in the show notes. And don't forget to join us Monday night for the Monday Night Storage Show with my co-host, Kristen Blunk. Folks, there's a seller out there right now who's ready to sell. So stop watching, start moving. Go drive for dollars. My favorite thing to do. Always send the LOI. We'll see you next week.