The Liability Litmus Test: How to Evaluate Storage Deals

A nuclear submarine doesn't go down because somebody picked the wrong paint color. It goes down because somebody missed a valve. My guest spent his career finding the valve that mattered before it became a problem. Now he does the same thing walking self-storage facilities before people buy them. Today, we're gonna cover what's actually a need, what's just a want, and why mixing up the two is one of the fastest ways to blow up your deal you worked hard to get under contract. I'm Joe Downs. Welcome to the Storage Moguls Podcast. My company's acquired over 20 storage facilities and over $70 million in assets across multiple storage niches. I've seen this business from a lot of angles, educated hundreds of students, and learned firsthand who succeeds and why. And that's actually what drove us to build storagemoguls.ai, which is an AI-powered community with the tools, the structure, and the guardrails to teach people how to buy their very first storage facility. I like to say it's like bowling with bumper rails. You still gotta bowl the ball, but we'll keep you out of the gutter. And that's also why we launched this podcast, to bring you the lenders, the brokers, and other industry pros, as well as the real people who've successfully purchased their first self-storage facility so you can hear their stories and learn this business from the folks living it every day. And I am looking forward in many ways to today's conversation with my guest, Rod Blunk here. The nuclear submariner. I think I said that right.

Yep.

You're good. Quick note before we get going here. Folks, join us tonight for the Monday Night Moguls show with my co-host, Kristen Blanca. If that name sounds familiar, it's because I'm about to interview and you're about to hear from her husband. We're going to cover a lot of things tonight on the show, including the entrepreneurial angle that Kristen and I fight every day and you all fight as well. And then why and how we found storage and why, what storage brings to us. And certainly, you know, for those of us who are in pursuit of a better way, whatever that better way is, whether it's financial freedom or more money or generational wealth, whatever, why we think storage ticks all those boxes in ways that other asset classes don't. But Before we get to that, we gotta talk to Rod. That's not till tonight. So here's, here's a couple facts about my guest, Rod Blunk. He's, he is one of our lead mentors at Storage Moguls. His specialty is due diligence. He is a retired US Navy nuclear engineer. He runs Warriors to Wealth with his wife, Kristen, which is, which is a nonprofit. Which Rod will, we'll get into that a, a little bit. Um, and he still goes onsite personally, still stress tests every checklist before hanging it over to, to a student. So today, again, we're gonna cover with Rod, we're gonna cover the, the needs versus wants of when you're onsite, when you're looking at that storage facility for the first time, you know, what actually has to get fixed before you buy and what you're just making, what you're just paying, I'm sorry, to, to make it prettier, which is mostly for you. Uh, not to say it's not for the, for your customers as well, but. For the first-time student, and I'm guilty as charged, it's mostly for you based on what you think you would do to make it more cosmetically beautiful, even though your customer might not care. Rod, it was a long intro, but welcome to the Storage Mobiles Podcast.

Thank you.

Hopefully your voice holds out before we get into it. Um, as you know, I do a true or false and a couple true or false actually on every episode. Um, so here's your first one. Brad, true or false? 1 in 10 American households rented a self-storage unit back in 2005.

True. I'd actually say it's probably higher.

It's true. The household penetration rate was just about 9% in 2005. And you know what it's up to now?

I would say 12. Yeah, I was gonna say 15.

Nah, not quite. 12, almost 13. 12.6%. Well, this is as of 2024, it was 12.6%. It's probably, Probably even higher, uh, obviously today, you know, maybe 14, 14 and change, 14%, that is. All right, Rob, on a submarine, if you miss the wrong detail, people die. True? That, here's your second true or false.

True or false? Yes. Yeah, that is true. It all depends on the detail, obviously. Right, right. Sure.

Well, what, this is a nuclear sub I'm talking about here. But by contrast, Rod, nobody dies if you buy a storage facility where the springs on the doors are broken or the doors are an ugly gray color, right? So how do you take that same engineer's brain, right? How do you, how do you, I don't know what, I don't want to say dumb it down, but how do you urgency it down, right? From life or death to deal or no deal. That's actually, that's pretty good example right there.

Yeah, I like that.

To sort out what actually matters on a self-storage deal from, to separate, I should say, from what really matters from what's just cosmetic. How do you go through that?

So one of the things I was, was a quality assurance officer on the sub, right? So I had last say on a lot of major work and that's a big deal. And it's, I look at it as the liability. Right? So back to the sub, if that wasn't done right, there's a liability and that liability is actually the lives of my fellow submariners, right? Or the sub or the mission or whatever we had to do, right? So yeah, maybe not as critical to a storage facility. Nobody's going to die, like you said. However, there's a liability to the business. So When you break out, like you mentioned, wants and needs, like that's always, that's my big thing, wants versus needs, right? It is, hey, I need to determine what is an actual liability to the business I want to buy. And guys, storage, yes, it's an asset, it's a building, it is property, but it's a business. And so when you look at it like that, What takes down my business? Is it, is it the paint? Is it rusty locks? Is it a tree limb that has some leaves fall under a gutter? Or is it drainage issues that are flooding my units? Is it a drainage issue that the cars, when they go to go drop off their stuff, are bottoming out and scratching or, or potentially causing harm to their vehicles trying to get to their units?

Right.

There's a liability. I'm not going to be liable if my paint falls off, but I'll be liable if I'm hurting some of my customers' cars dragging through my facility. So once you get through that point, people start to understand, oh yeah, it might look sexier. I mean, I like sexy storage. It might look sexier if I have it painted and it looks so nice, but is that Is that going to keep me from buying it at my price? And again, I said my price because my price is key. And we can— that's a whole different discussion, right? And I know you've gone over that. So you look at it as what is actually my liability. And that's why I come back to what is storage, right? It's a facility that keeps stuff dry, keeps stuff safe, keeps stuff locked. Does it have to be beautiful? I'd like it to be, but the seller doesn't need it to be because he's already got people in the store using it. And when you go and evaluate those differences, now you understand that you're buying as a business a liability. And that's a new thing. That's a thing that a lot of new first-time buyers don't understand. And you have to walk them through that liability issue.

So do you have a Do you have a litmus test that you use?

Oh yeah.

Is it just the, the hairy, the hairy eyeball? Or, I mean, like, because here, let me paint some examples. Let's say you show up to a facility and, um, you know, uh, in my example in the opening, I talked about springs not working or ugly gray paint on the doors, right? Um, sure. Ugly gray paint cosmetically. An amateur, a newbie, someone like me looking at my first deal is looking at it going, well, that's ugly. We gotta paint that. Right. But you and I both know that's not necessarily what's holding you back because you have other customers there that are paying that don't mind the ugly gray doors. Right.

Right.

But an extreme example of that, What if they're tie-dye doors? Or what if they, um, what if they have swastikas painted on them?

Right.

That might deter business, right? That, that might be something that I would look at and say, ah, it's not just ugly. This is, this is sending, you know, or like if they were all graffitied, let's say, even if it was nice, well-done graffiti. Do you think most customers want to store At a facility with nice graffiti all over the doors.

So that's where you take the step back. What caused this graffiti, right? So there's 2 ways to look at it. Is it an opportunity now? Am I willing to take that previous liability and turn it around? New ownership and paint the doors, paint and rebuild the reputation. But that comes with a price. Is that the same price as the guy who doesn't have that down the street? No, you should be at a discount and you have to account for that in your value, right? It doesn't mean you are still buying a liability because the liability is now, can I afford to pay for this with my debt service because I can't keep people in it, right? That is a, that's a business liability of debt. So it's an overcomeable Um, ability, because on that example, I can paint the doors, but I'm gonna put that into my price. I'm not gonna go in there.

Well, uh, yeah, what I'm getting at is, so in the, in the tie-dye or swastika or graffiti doors, you're gonna look at that and say, that's gonna keep business away, right?

That's gonna keep business away.

That needs to be addressed.

That needs to be addressed.

Gray doors, mismatching color doors. We've, we see that. Not, it's not standard, but we see it.

Yep. Um, deal with it.

It would be on my list to deal with, but it wouldn't be as high on my list as let's say a spring working on a mismatched door because I can still rent the mismatched door, the, the, the ugly color mismatched color door, but I can't if the spring doesn't work. Right. Okay. So that's what I'm trying to get at is what's the litmus test that you use when you're walking through a facility? Or can you, right?

Can I? Yeah. One is, do I feel comfortable renting here? Do I feel like this place has my best values involved? Right. And that's, that's any customer in any business, right? You don't go to a restaurant if you don't like the food. You're not going to go to a storage facility if it tells you this is not going to sell it.

Would I eat there?

Right. Would I eat there? That's true. I put myself as the client. I hate guys. When I was going through boot camp, I rented a storage facility to hide my civilian clothes because I wasn't allowed to have civilian clothes for 6 months. Right? I would literally go into the storage facility, change into my civilian clothes on the weekend, go to Disney World and come back and change and go back on the base because that's what I had to do. But I felt safe at that facility.

Yeah. But now that we just said, would you rent there? Would you eat there? I think we need to be careful with that too, because some of us have, you know, Grey Poupon taste on a French's mustard budget, right? So we have to keep in mind that where we're buying these facilities may not be where you would rent. But if there's 100 units and 98 of 'em are full, 98 people chose to rent there.

Right.

Right. Or 90, or even, you know, if we're buying a value-add facility that's only 70% full, there's still 70 people out of 100 that chose to rent there. So, right. It's, it's still, even with ugly colored doors, it's still working for the majority of the people. Exactly. But it might, you know, and, and the 30 that aren't rented might be springs and maybe it is color of the doors.

Yeah.

Right. Or maybe it's some other physical feature at the facility that needs to be fixed. I think we've found that in large part, that's probably more marketing, right? Than anything else. Yeah.

It usually shows up in the due diligence under marketing that they're, I don't spend any money on marketing. I don't even have a website and I barely answer my phone.

Yeah. So, and that's why I always look at the majority. So if you're 70, 80 out of 100 units filled, I don't know if it's the colored doors. Yeah. Maybe the color of the doors is, is the difference between getting to, you know, from 80 to 90 or 90 to 100. Maybe.

Maybe. But I go—

But there's a healthy amount of people that are telling you every month it doesn't matter.

Exactly.

Right.

And they're, and they're happy.

If I had, if, if, if I got 100 doors and 70 have people in 'em and 30 don't, and 20 of the units, uh, are, are missing doors, broken springs, they're not rentable. I think that's probably more of the reason.

Yeah. Right. Oh yeah.

Than the color of the doors. Absolutely. So that, that's what I wanted to get through at this point is a lot of, a lot of first-timers, guilty as charged right here. We walk up to a facility. I remember I wanted to pave the first like 5 facilities I saw.

I, yep.

Folks, 90%, if not higher than that, of the storage facilities that we look at, Are gravel.

Yeah.

Hopefully.

Right.

Some of them are, you're not, you're not sure if it's gravel or if there's any gravel left, but hopefully they're gravel. And this jerk being so smart when he first got into the business was like, well, we gotta pave this because—

I've had a lot of people say—

I wouldn't rent here. By the way, I've never rented a self-storage unit, so I wouldn't rent here is my qualified statement. Having never rented anywhere. Like, who are you saying who would and who wouldn't rent here at a facility that's, you know, 300 units and 290 of 'em are rented or whatever. I'm gonna come in and pave it. You know, like, so I, I'm, I'm self-deprecating folks.

Yes.

For a reason, because that's the naivety that I demonstrated outta the gates because that's what I thought should happen. That's what I thought would make it. And by the way, it sure would make it more beautiful if they were paved.

It sure would.

They would all look nicer. Yeah. But it's gorgeous. It's a cost we can't bear and we don't need to bear it because the customers are there, whether it's paved or not, they're not expecting it.

And there's a litmus test to it too, right? What is the median income in the area? Right. If they're below, say, $47,000, you're probably not paved. If you're between, say, $50,000 and $85,000, the facilities in your area that you're probably competing with have anywhere from gravel to semi-paved. And when you're getting above $85,000 to $100,000 or plus, you're probably paved and a little bit nicer facility. But it's a litmus test. And there's 2 parts to that. One is what can the customer afford? And the other part is what's your competition doing? If you look around and you got 4 different facilities that you call and they say they have a waitlist and they're all gravel, is gravel important to me? No, not at that point. Right? Is there some driving nerve? No. How about nice looking gravel? Yeah, nice looking gravel is, and that's something I may have to do later on, or, you know, simply just regrade my gravel to make it look fresh.

Patch, patch here and there, et cetera.

Right, right. And that goes back to liabilities and otherwise, right?

Totally agree. All right, Rod, true or false? New self-storage construction is on pace to fall by more than half between 2024 and 2027. We're right in the middle of that.

I am going to say that is true.

That is true. New deliveries are projected to drop from 65.2 million square feet in 2024 to only 30, roughly 30 million square feet by the end of 2027.

I could definitely see that.

Which is good for absorption. Yeah. All right, Rob, walk me through a deal where somebody let a want, a want disguised as a have-to is a better way to say it. Almost kill a deal they'd already worked hard to get under contract.

Ugh, I got one. Kind of goes back to the paint, right?

Right.

Let me just quit it.

Go ahead. Unless it's, unless it's you, I was gonna say you could throw your, you could throw Kristen under the bus if you want. I wouldn't, I wouldn't advise you do it, but, uh, let's keep names out of it unless—

Oh yeah, absolutely. Absolutely. I can even, I can even do my own, right?

Okay.

Like I, I can do 2. I can do a couple of 'em here. So, um, This one, right? Busy, busy, busy road. Busy, busy road. You can see it by pulling it up on the websites that are out there. They give you traffic reports. Visibility's great. Occupancy is okay. It goes back to your point that they're not, they weren't fully advertising, right? Their advertising budget was, I think, $1,000 for the year, right? We know that's not going to be a lot. I don't even think it was $1,000, maybe $500. So they're spending not a lot. They said that the guy's mindset was, hey, I really need to paint all the doors. I'm like, okay. But it was like, I want that to be in the price and I want to negotiate that out. But when you get there and you look at it, did it meet the requirements? And my requirements Dry space, safe and secure, surrounded, and nobody's complaining. There you go. It met those requirements. So the seller was selling it at that price. He knew he probably needed some paint. He knew his occupancy probably could go up with somebody running it in a different way, right? And he just got burned out or whatever the owner was doing. But paint on the doors wasn't a complaint. As a matter of fact, just jumping forward, when I was walking the site with him, We saw some customers and I had already picked out a couple of things, but I knew if I asked this customer a specific question, what I was going to get. And so as I walked around, I noticed some things and I told him, I said, hey, let's go talk to this customer and say, hey, we're new management. We're coming in here and we just want to know what your biggest complaint is. The complaint was a sunken drain drain area that now the cars are actually bottoming out on as they drove in. Had nothing to do with paint, absolutely nothing. But it had to do with a liability because these cars are dragging and hitting. So did we focus on asking for any changes with paint? No. But did we find a liability within the facility that allowed us to talk back to the seller and say, hey, I'm not sure you're aware of this, but Maybe the word's out on the street that because they're not going to facility is because they're grinding, they're bottoming out their trucks and their cars. We literally heard a car come through with a trailer bottom out. That immediately was, that's a problem, that's a liability. And we addressed it. And actually the seller was thankful for it and addressed it before he finished buying the property. But it was, We adjusted for the paint in his price. He did not have to adjust for the liability because that's regardless if he ended up buying that, the seller had a problem. And that now is identified that the seller has to identify that problem to any other future seller. So does he want to start over new? No, let's just get through the deal. Thank you for helping me. Let's go that way. So it actually worked in that benefit to refocus Liability, want versus the need.

And that was something that you, okay, so you refocused that buyer on property at that time, which is great. Masterful actually. And I love that you basically surveyed tenant or 2, it sounds like, to say, hey, what's going on? Hey, which is amazing. Which by the way, folks, little window into commercial real estate. Like for instance, at the office level, they have, when you buy an office building, they have what's called tenant estoppels. Doesn't, not just offices, any other commercial real estate typically, except for self-storage. We don't do this self-storage, although Rod just did it onsite very informally. But the tenant estoppel, it's an interview with the tenant. Say, hey, what's going on? How do you like being here? How's your lease? How's the landlord been? Are you happy with everything? Are they providing, you know, an office? I don't know what they're, you know, is the parking lot clear of snow or whatever?

Is it paved?

Whatever, whatever the question, are the bathrooms clean? Or, you know, are you happy with how they've been maintaining? Right. So you did the equivalent of that with, uh, uh, a customer right on site, which is brilliant, uh, because they're the ones that are the most honest and gonna tell you everything. Um, and then you were able to take that to the seller and, and, and negotiate. Uh, I, well, I don't know, either the seller delivered it fixed or, or—

Yeah. Delivered it fixed. Okay.

Yeah. Um, which is so interesting. So, so that was one way that you kind of redirected somebody on site And, and help that. By the way, was there any other talk of the, of the, it was door colors, right?

Yeah.

Uh, yeah. Was there any other talk? Did he bring it back up again?

No, no. He, he realized, hey, look, it seems he heard it from the, he heard it from a tenant.

So the tenant also, uh, pacified the buyer in that.

Okay.

So that's not what they care about.

Yeah. He's like, the facility's nice and clean. Right. They're not saying it's nice and clean and, oh God, I love what you did with the doors. They could do that, but that tenant wasn't impacted by the doors. Yeah. Some were faded. It's going to happen over years, but that reflects in typically these prices.

Right. Yeah. Rob, what's one thing you wish every buyer evaluated before they ever wrote an offer? Instead of after.

Yeah. So one thing I find out is not everybody— everybody thinks they're buying a new house, a new facility. They don't evaluate simple costs. And you can call them CapEx or potentially an upfront OpEx to close it, right? Unless you are keeping the exact name, which a lot of first-time buyers don't, Maybe, maybe not. There's a CapEx to changing the sign. There's a CapEx to putting down initial, or there's an OpEx to funding some of your initial utilities, $200,000, $300,000. So these add up. So when somebody doesn't put in $5,000, $10,000, preferably like $15,000, it's just, hey, I have $15,000. Or I work it into my loan, right? I'll tell the bank, or when I'm talking with the bank, that, hey, I want to have available funds, you know, so when we evaluate it, I'd like to evaluate it with available funds that I call a CapEx, right? So you have that capability. When people don't do that and they get right at the number and then they realize that, hey, this is an opportunity But I don't have the funds adjusted. There's a lot of scramble and usually people get a little hesitant and don't understand. They're not looking at the finish line. They're looking at the starting line. Everybody likes to get in a point that I want to run the race, but what's the finish? And that time in between is where all the numbers change. So when I would tell somebody that I wish you'd do it is, hey, look, make sure you account for $10,000 to $15,000 somewhere in your close. If I can get it from the bank or I had it extra and I didn't, I adjusted my price by that number so that I felt comfortable when I closed that I can take care of my upfront costs. Now, if you want to put a gate in, Great. The seller's not going to do it for you. Account for that. Right. But if you're going to say, I find something like— go back to this thing about the liability, be careful on the liability because that should be fixed regardless. And you got to put your mindset in. Now the seller side is, hey, if he's told me about this, if I lose this buyer now, I'd have to address this because every other seller I'd have to tell them about it. And I have to adjust. Do I want to waste more time getting to this point in my negotiations or my selling process that I want to wait more? Maybe they do, or maybe they realize, you know what, he's right. I didn't know it. I'm a remote person. I was relying on somebody to give me the information and they just didn't. I can account for that. So that's why I say always account for some type of unexplained cost, CapEx. I just call it as a CapEx. Sometimes it's OpEx to get you through that first month.

What's the most expensive want you've seen someone talk themselves into treating as a need? And maybe that was the door scenario.

I'm just wondering if you have anything. No, I was going down another path where it was $150,000. I don't know, $140,000 for new roofs. And when you questioned, like we went through the whole thing of like, okay, I said, look, you're asking for a number here that is large, right? That's a big number, $140,000 in a and a big want. When you look at it and review from the vendors now, you know, here's, here's a little side note. I ask everybody to get quotes from the vendors to support what they want. Well, when you get a third-party vendor in, what are they going to sell you? They're going to sell you, hey, I'm going to keep it so it's safe, sound, and secure, or hey, I'm going to paint it so it looks like a Porsche. They're going to give you I'm going to paint it so it looks like a Porsche price. As opposed to, hey, I really, really needed to change out the tire. And so they took that number and started freaking out about it when realistically it only was— it necessarily required as a liability around $15,000. So a lot more into that one, but long story short is they figured out and realized what that was. And they ended up deciding that, you know what, that probably wasn't for them. But it kept— it didn't hurt them, but it woke them up on some other factors of the overall facility. Like there was some crumbling asphalt that they thought they can— well, we'll ask for the asphalt to be repaved. That's not going to happen either. But you have to really educate them in there, right?

Like along those lines, What, how do the sellers usually react when the buyers start asking to fix things that don't really affect how the facility operates?

You want to make a deal go south real quick? Do that. You want to make a deal go south real, real, real quick? Give them a number and say, hey, we need to adjust because of this. And do not give them any pictures. Do not give them any value. Do not say that, hey, I actually talked to a client and said that he's afraid to drive right here. Just give him a number and say, I need you to, we need to negotiate. That will tell that buyer, that buyer's going to go, all right, he's going to go south. And worse, if you don't call and prep your discussion and just throw a number and say, okay, this is what I got. All right, here's all my stuff. I want this. That is the worst thing you can do. That's human relationship you have. And I'm going to, and I don't mean to be mean, But you really need to sit back as a business person at that point. You're no longer a future buyer. You got to be yourself as a business. And look, how would I take that if I came up to you, Joe, and said, Joe, you're ugly, give me $10,000? Well, neither of those you're going to do.

Well, you do that all the time. You just don't ask for the money. You do that for free. Brad, true or false? Staffed self-storage facilities rent on average more units per month than unmanned self-storage facilities. Staffed versus unstaffed.

That's a trick question.

Is it? You got a 50/50 shot at getting it right.

Because of the tertiary market factor to this. I'm going to say staff actually does rent more because of the human interaction.

True. One operator's own portfolio analysis found roughly 11 more rentals a month at a staff facility versus an unmanned one. So, and I want to keep this on the physical, but since we, since that's the true or false, I just want to add on to that for the listener. We know that we're making a business decision. We're walking away from those 11 rentals because of the cost to staff it.

Yes.

Doesn't outweigh the cost of losing the rentals. So that's not true everywhere, folks. That's just a decision we make facility by facility. So when you, I, it's a great true or false question.

It is.

But it can be a misleading one, and that's why I wanted to clarify that. All right, Rod. So if you're not opposed, or if you're not supposed to demand every want upfront, how do you actually plan for them without walking into a deal with zero CapEx budget and then getting surprised 6 months later?

So we kind of touched on this briefly, right? Just recently. Imagine yourself, let's take yourself out trying to buy those. Everybody owns a home. Let's say majority of people either own a home or rent an apartment. Okay? You walk in there, the owner may or may not have painted walls or otherwise like that. The owner may or may not put in the right blinds you want. You're not going in and thinking of buying this house and I'm going to do nothing, right? I'm not changing the carpets. They smell like cats and dogs. I'm not doing anything. No, you always have to know that I'm coming into this facility. I could see some immediate things that I want, my wants, right? We took care of the liabilities before it closed. Now I'm in my wants. And I plan for that, like I said. So we address that planning on when, you know, either you can do a lot with Google Maps and a lot with Google Earth, getting down and looking around it. And, you know, they're buying from a broker, they give you beautiful shots, great sunshine, all these things. They don't give you the ditch behind it. It's full of weeds. It's causing all the water to run over those units that have some rust, right? We've taken care of that. Now it's Have I staged my priority to what's going to make my business thrive? So the first thing, like an example with me, my own facility, I had a facility that I needed to put on 8 new roofs. Do you think that the owner was going to adjust his price for the roofs that I identified? There were 25 years on a 20-year shingle. So I adjusted my price, but I asked him and he said, no, you've offered this. You had the opportunity. So I adjusted. Now, did I plan that? Yes, I did. I planned it in my price and I planned it with the bank. I said, hey bank, if this appraises enough, I want to take the loan. Because if you look at a CapEx and let's just say $60,000 of CapEx, I'd like to take the loan on the bank. You spread that $60,000 loan over 25 years or 20 years, it's a hell of a lot less than having to come out of pocket to do it. So I was able to adjust my bank negotiations and I have my pricing to account for that so that I could take into my CapEx. That is strategic planning. And that is what communities like us Help you figure out, right? You have to be up and honest, right? Do I have the CapEx money here, or is it better to use my CapEx by saying that I offered $10,000 less but gave me $60,000 in CapEx of a loan that accounts for less risk for me to operate? That is where the community and having those brains like you and I, you're discussing, how do we take care of this? All right. We're partners in a facility. We knew we had to do some painting, Right? But we accounted for that in our loan. We didn't account for that as in the price. So we knew what we were going to do to make that Class A facility be a Class A facility. So you can't go in there just like you can't go into your house and say, I'm going to live in this house forever and not do a damn thing. Doesn't happen. Always account for some type of level and plan for that upfront. Either your own money or borrowed.

So I'm going to ask this question for the listener. That's, that all makes sense. How do I know how much to plan for? Because I can, I can plan for a whole bunch of things. I mean, eventually the roofs are going to need to be replaced, right? Might in the next 5 years. Well, I guess I'll see what the report says, but Am I starting to plan for that right away? I can CapEx my budget out of a deal, right? I, I could, yeah, I could end up with a $200,000 CapEx budget where, as a novice, as an amateur, because you're telling me to plan for this and plan for that and plan for this and plan for that. And the gate's gonna go and, or there is no gate or, you know, um, sign this, that, and this, this is drive-up non-climate, right?

Right.

Um, and the roofs are gonna go and I'm gonna have to regrade gravel. I just heard. And at some point, There's gonna be an area that's gonna wash out because of water, 'cause it's gravel, right? All of a sudden I'm getting quotes and before you know it, I'm at $150,000, $200,000 on a million-dollar acquisition, right? How I've just CapEx budgeted myself out of a deal, Rod. How do I know outside of, I'm part of Storage Moguls and I've got Jack budgeting it in 'cause he knows this is where this fits in this budget and where it gets amortized and You know, we'll do that in year 5 and council this. And then I got Rod who's taking me on site, who's showing me that's a want, that's a want, that's a need, that's a need that we're gonna negotiate. Seller has to deliver that. Outside of all that, I'm all alone. I'm all by myself. How do I know? Is there, where can I find this information? Or, you know, let's say it has no fence, no gate, no lights, and grass drive aisles. How do I know how much to To budget?

Competition.

What does that mean?

So you got to drive the area. You got to be aware of what's in the area. Like, I mean, and we could talk about that because all those have phasing plans, right? You can phase those efforts into your effort. But again, goes back to, am I in a tertiary market that has 10,000 people and they're paying $44,000 You know, their median income's $44,000. Okay. Then I know that they are probably meeting a high average. So I have to provide at the minimum my dry, clean, safe space. That's what they're asking for. That's what they're— that's what their need is. It's why they're there with you. Okay. You got to make sure that, okay, maybe I can do a recap of $20,000 in brand new roofs, but I could probably spend $5,000 and redo all the screws and give me the same outcome for that safe client. It's proportional to what the deal is. You don't have to always repaint your house. You don't always have to re-roof a roof. You find the right fix that makes the building safe, secure, dry, and That is going to keep the client happy, right? And you adjust your prices. Look, if I'm 40% or 30% or 20% below the competition, I could do a rate hike. And guess what I'm going to do? I'm going to tell my clients, I have this CapEx coming. Is it needed right now? No. But maybe in a month or so, this may happen. And I'm being proactive. I have to, right? I'm running a business. I'm running a business, my bills go up, but I have to be proactive. I'm telling my clients before I do this, why I'm doing this and the benefit that they're going to get. Have them buy into you building and taking care of their needs and that relationship grows. And that's what they do. Yeah, I was just, we were at our facility and they just re-roofed it all. That word gets out. Oh my God. You know, everybody in town's probably up for a re-roof, but Rod's already re-roofed his. Maybe I'll go there next because Tom hasn't done his yet and Rod's not at Tom's prices yet. Brand new roof or re-roof, I'm going there. You have to be strategic communications and drive the market.

Good, good intel. Um, what's the single, if you can think of one, what's the single biggest planning mistake Or lack of planning mistake, actually, you saw someone make after they closed on a deal?

After they closed on the deal?

Well, I guess the lack of planning would be before, but whatever. They ended up with the deal and didn't plan. What's the biggest mistake you've seen them make?

Man.

And you can change your name if you want in this story.

I would say Thinking they knew more than the people that were trying to help them. And I don't mean it in a bad way, right? You just went through all this fire hose of data and then the indicators, the business indicators, the tried and true KPIs, right? Key performance indicators are saying, don't do this. But you heard Through word of mouth and my sister's brother's cousin's sister, who has a friend who saw this happen, that this is exactly how you run a facility. And they go and say, let's jack the prices 30%. Wow. Do you, did you not know what has gone on? This is not the Wild West of COVID This is the post-COVID where everybody is not moving as much. You're trying to keep people and you're trying to squeeze money out of people during an inflation period. Guys, that is probably one of the worst ones. It's just using bad advice, using advice from people who don't own and operate.

And we see that on the legal side all the time. It's the, it's the personal injury attorney doing the real estate closing for you. It's, yeah, it's, yeah, it's a shame.

Yeah, that truly is everywhere. Yeah. Yeah. Thank you for bringing it up.

It, it's almost, it's the e— the ego gets in the way somehow, or someone else's ego gets in the way. And that's the ego that you attach to instead of the people that do it every day.

Right.

True or false? Some insurance carriers will not even write a policy on a self-storage facility that has no fence and no gate.

True.

I did not know that. I, folks, I don't come up with these questions. I allow, I allow Claude to come up with them based on these self-storage market reports. Um, I, I did not know that. I don't deal this closely with it.

Yeah.

Um, the answer's true per Storable Insurance Specialist on a prior Storage Moguls episode, uh, which is even more embarrassing because I hosted it. Some carriers simply won't quote a facility without a fence and a gate at all, regardless of the price. I must have missed that when I had Terry on and you said it.

Yeah.

Uh, shame, shame on me.

Pretty good so far.

Rod, you're— yeah, 3 for 3 or 4 for 4. I can't even make the same claim.

Um, all right.

Um, Rod, last question. Um, and I want you to think about it before you answer. I don't know if you've listened to any episodes so far. Shame on you if you haven't.

I've listened to a couple.

This is the last. Do you listen to the end?

No, I tried to.

Well then, well then shame on you and we're gonna catch you by surprise here.

Okay.

So, um, there's a book called Be Your Future Self Now. Are you familiar with it?

I am. As a matter of fact, I think Krista is reading it right now.

I'm so proud of her.

And then I think, uh, it's on my to-do list.

Let's bump it up. So, um, the, the book's written by Dr. Benjamin Hardy, who co-wrote Who Not How, uh, and 10x Is Better Than 2x or Greater, right? Whatever it's called with, with, uh, Dan Sullivan. Um, this one I think is all him. And the beginning of the book is about MrBeast. You, you've heard of MrBeast?

Yes.

Okay. He's the most followed human on the planet on YouTube. Um, long story short about how he became the most followed human on the planet. Um, he's not even 30 yet. He's, I think it, I think he'll be 28 this year. It's gonna sound weird for me to know that. But I know it only because last year, I believe, is the 10-year anniversary of what he did. So, uh, when he was 17, he, he was a YouTube gamer.

Right.

Um, when he was 17, he recorded one night 4 videos of himself, uh, to be released into the future. So they were his YouTube version of Cortés burning the ships. I'm gonna be this in 6 months, 1 year, 5 years, 10 years. The 10-year was just released. Uh, and he did it when he was 17. So that's how I know he's probably coming up on 28. Um, so quick math, right? Right.

You're good.

May, may not be great with springs and, and insurance questions, but I'm pretty good with math. So in those videos, he, he basically set goals for himself and said, there's a little bit of I hope on this, but because he put it out there for the public to consume on those release dates. He had something to live up to, right? He didn't want to get 6 months, 1 year, 5 years, 10 years, and not have achieved what he said he could achieve. So it changed that night. Once he scheduled them, recorded and scheduled them, it changed how he behaved and acted about everything.

Yes.

Everything he did. So question I like to ask everybody at the end of this is in 5 years, you only have to do one. So let's pick the 5-year interval. It's tangible. In 5 years, where are you? If we got, if we jumped in a time machine and we had 5 years in the future and we were looking at Rod and Kristen's life, by the way, is Kristen still with you? I don't, who knows? Um, but if we're looking, is it single Rod all alone or is it still a big, one big happy family, but the daughter's definitely ruling the roost? If that's the case, what do we see? How many storage facilities do we own? What are you doing? Where's Warriors to Wealth? Where are you in StorageMoguls.ai universe? Are you still lead mentor? Are you still going to facilities? Who's Rod Blunk 5 years from now? What's going on? Tell us about what that picture looks like and then tell me what you're doing today to make sure that we achieve it.

Well, you hit a lot of things into that where I would be storage-wise. I will have probably, I don't know, 10 probably different facilities, but owner and, but as a primary general partner, and then I'm probably going to be in 15 or 20, but I'll also buy shares into other ones as limited partners to help diversify where those funds are coming from. But that will be paying for my bills. I will do some side consulting back for my Navy job that I like to do. I'll be— I'll have property. I'm going to have probably 100 acres. And that property is going to be what I call my Lifestyle Mission campus. And that campus is solely built to be a wake-up call for folks to identify and be able to focus on their mental, physical, spiritual, financial aspects of life. We don't teach this anymore. We don't. We don't teach it in the military. We don't teach them how to— we make everybody great W-2 employees and we could go down that rabbit hole from school to college, to W-2. No, we need creative thinking. We need an opportunity for people to understand that the 401 and the mutual funds everybody's bought onto is not going to give you the life you want or at a timeframe you need it. So that's the purpose of this campus. And it's also to help transition military families who don't know. They're great followers, great leaders, but nobody teaches them to go out and make the difference. We want them to give them that new mission. So this is their lifestyle campus. Kristin and I are still married. She has a passion and will be leading her section of that, which is our Youth to Warriors. Youth, I mean, Youth to Wealth, which is starting with the younger kids and getting them back into the mindset of, I don't need the W-2. I need to have a W-2 made to learn some basic skills, but I need those skills to get me to my mission in life. And from that, that growth will impact and impact others to basically become better and more human and talk and correlate and do things, need to be a place where people can walk and everything else. That's where I'm at. Uh, as for storage models, I'll always be a part of it. I love this shit like no tomorrow. However, I want to be able to train my future replacement. I won't be around here forever, but I will always show up and be available. But I want somebody to be the Rodfather Part 2, right?

I love it.

We gotta have that person come along, just like the Joe Father Part 2. We want them to do, because It's not about where I am today, it's how I impact the future. And if I'm not providing that, and that's the whole purpose of Lifestyle Mission, if I'm not providing them a means for them to achieve their goal or find it and identify and execute, then I really didn't do an impact. And it's not about truly how much money I have. Yeah, there's going to be money made on this, but the ability to go to sleep at night and just say, wow, What a great day. That's what's going to be 5 years from now. Wow.

Um, Rod, I have to tell you, that is by far the most complete and best answer that I have gotten yet. Um, so whoever I told that to before, I lied. This was the better one. I love that you clarified that you're still married to Kristen in 5 years.

She probably, probably won't say the same. I'm kidding.

I'll have, I'll have to re-ask her that question. First of all, I never thanked you in the beginning of the episode for your service. So thank you for your service. Thank you for your, um, not just for your service, but thank you for, for Warriors to Wealth because we as a country, our warriors need what you're doing. They need a whole lot more of it. Um, how can folks who are so inclined, um, reach you via Warriors to Wealth?

So it's literally just Rod, R-O-D, @warriors with an S, The number 2 wealth.com. And it's, you can find me and reach out through my website, which is warriors2wealth.com.

And so that's whether, whether you're a warrior looking to be a part of this.

Just looking for anything, right?

Or someone who could help you, or I'm sure you accept donations, charitable donations to help, you know, to help fund Warriors and this mission. No, that's great. I also forgot to introduce you as the Rodfather. And I'm so glad you brought that up because the Rodfather is a character in and of itself. And folks, you want the Rodfather. By the way, folks, if you are interested in buying a self-storage facility or just learning about it, or if you're curious, go to storageboguls.ai. It costs nothing. There's no, we don't ask for a credit card. There's a ton of information there. You can learn about us, who we are, what we do, how we help people. If you're interested in buying a storage facility, yeah, sure. There's pathways there. Uh, and we will ask for a credit card at that point. Um, but there's pathways there for you to do And if you do, and I think you should, if you're so inclined, you've just gotten a sample of what it would be like to have the Rodfather at a storage facility with you going through, you know, the checklist of all the things you look at, walking through and maybe even doing a customer survey if you see any. Rod, one last question. I told you that was the last one. I got one simple, quick one. Uh, I was asked to ask you, Jack asked me to ask you a question. He still hasn't gotten a straight answer to it. If he takes a ride on a submarine and he wants to look out the window, is he better off on the port side or the starboard side?

No window.

If you need to think about that one, that's fine. You can get back to Jack. Folks, thanks for joining us on this episode. Don't forget tonight you'll hear the other half. Rod's— what Rod might describe as his better half, uh, on the, uh, actually, on the Monday Night Moguls show with me, with Kristen Blunk tonight on YouTube, uh, 7:00 PM. Um, you can find out more information at storage moguls.ai or just go to the Storage Moguls channel, hit subscribe. You'll be notified when we go live. Um, reviews, ratings, like, subscribe, share. Of course, we would love for you to do all of it, but the review and the rating really matters most. If you wouldn't mind taking just a, a hot minute. Hopefully it's a good rating and review. If it's not, you know, you don't need to, don't waste your time, folks. There's a seller out there right now who's ready to sell, believe it or not. So stop watching, start moving, go drive for dollars. Always, always, always send the LOI if you did the work. We'll see you next week.

See you guys.