Passive Income generated from assets is the key to building real wealth.
AJ Osborne is an insurance agent turned real estate investor who traded the lack of security provided by a job to create generational wealth through real estate.
Naturally competitive, he was a successful benefits insurance broker. He ate what he killed. If he wanted to make more, he sold more. Ultimately, he realized that he was limited by time, and he knew that at any time, his clients could leave. This left him feeling less than secure.
Wealth vs Rich
In the 2008 economic downturn, he recognized the difference between being rich vs being wealthy. Those who he thought were rich, lost the most. The survivors, owned assets that produced income regardless of the economy. Their income did not depend on their time. He recognized their freedom as true wealth. And, most investors passive income was generated through real estate.
Self Storage Value Add
AJ studied the real estate market and recognized the value add opportunity in self storage. The market was fragmented, full of amateur operators that left plenty of room for improvement.
He recognized that the industry has not customer service oriented. There were additional products and services that customers were willing to pay for, but were not offered.
He focused on finding poorly run self storage businesses, in underserved markets. opportunities, initiating systems, and producing predictable outcomes.
Today, he and his father run a portfolio of self storage properties throughout the west. They have a system.
- Acquire the under performing property,
- Install proven systems and additional sales opportunities.
- Drive revenue and increase value.
After each refinance, he was able to pull his initial investment capital out of the deal which gave him the needed capital for the next deal.
The Passive Income Stress Test
Until you test a system, you don’t know if it really works. For AJ, the passive income from self storage was tested when he was stricken with Guillain Barre Syndrome. For months he laid paralyzed in a hospital bed, in pain and unable to move beyond blinking his eyes. There was no way he could go to work to sell insurance.
Fortunately, his self storage business generated income regardless if he was sick. Not only did his income continue while he was ill, but real estate value grew.
If not for his self storage business, he and his family could have lost everything. The passive income and wealth created from his real estate proved to be more secure than a job that could disappear.
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