The Benefits of Boring Assets, is Bitcoin Dead?, and The Newest Biz for Major Cashflow w/ Shane Schrader

Dan Austin: [0:02] What's up, everybody?

Dylan Koch: [0:03] No intro music. We're just going into

Dan Austin: [0:04] it. I dude, I could okay. I don't know how to do this. Like, I don't know. Beep beep beep. We should

Dylan Koch: [0:10] probably introduce Shane too, by the

Dan Austin: [0:12] way. I will. If you

Shane Schrader: [0:12] don't know,

Dan Austin: [0:12] let me hold on. Wait. What is this? Hold on. What is this? Whispers of Dawn intro. Hold on.

Dylan Koch: [0:19] That is

Dan Austin: [0:19] not That's not our

Dylan Koch: [0:21] That's not There

Dan Austin: [0:23] it is. Oh, there it is. Okay. We're going. What's up, everybody? Welcome back to another episode of the collecting keys podcast. Friend of the show here today, Shane Schrader. What's up dudes? And Dilpil. Hey. You know, we're kinda doing this thing now with the podcast. Like, you know, we used to do guest shows, and then we moved away from guests because that that kinda just ran its course. Then we we brought in Dylan. And now we just kind of talk to people we wanna hang out with. So Shane, welcome. We really, I always enjoy hanging out with you. If you are a listener, Shane, you started out as a listener back in the is that where we connected with you first? You were a listener and then you joined Scale and all that sort of stuff?

Shane Schrader: [1:01] Yeah. Think so, man. Think at the time I joined Scale, it was like, I don't know, eight members. There wasn't a whole lot. It was like

Dan Austin: [1:07] Dylan, you, and like some other guys. Yeah. Basically people that we have on the show, honestly. Like the OG crew of scale is is still a great crew, you know. We were definitely gonna have to get a a meet up together just like a hangout with some some folks and and have a good time. But that being said, if you do wanna just hop on the show, you've been a long time listener, just hang out. We just wanna hang out with you. Like this is kind of what it's come down to. But also Shane's got some cool shit going on we're gonna talk about today. And then Dylan definitely has some good stuff going on. I do wanna open up because Dylan has, I don't know what it's called, created some some bets. You've made some bets on the internet with the Scott trench and I don't know. Did Jay Scott did Jay

Dylan Koch: [1:48] Scott did too. Yeah. He did. And I gave he I gave him two to one odds.

Dan Austin: [1:51] Okay. So Craig Kurlopp, I saw in the comments. Yep. Is the escrow for this. He's the he's the bookie. Does Craig know he's the bookie?

Dylan Koch: [1:59] Yeah. I texted him

Dan Austin: [1:59] when that was going

Dylan Koch: [2:00] on too. Was like, need your assistance.

Dan Austin: [2:03] Okay. So so for the audience that doesn't follow weird internet things, what's the bet? What's going on here?

Dylan Koch: [2:08] Scott Trench had posted like a picture of a Bitcoin graph with the price reduction and basically in there and Jess is like, hey, it's, you know, my DEX price targets 40,000 and all this other stuff. And I saw it early. So I one of the first ones to comment. I basically just said, hey, 10,000 bet that we hit 100,000 to hit 40,000 escrow of your choice. Are you in? And he politely, I guess not politely, he just declined. Yeah. Which like, to me, it's like, okay, well, if you have this probability that you think is a first certain thing,

Shane Schrader: [2:42] You're

Dan Austin: [2:42] gonna put it on the internet for your followers to who believe who, if you have good followers, they gonna like, probably listen to Yeah.

Dylan Koch: [2:48] So anyway, and then he had a comment section of like, I won't take that bet, but I will bet a dollar that it goes down. I was like, okay, fuck it. Just for like the fun of it, we can do this dollar bet to you. And then Jay Scott had also commented and don't I even remember what the comment said, but my interpretation was like, he said something where, oh, no one knows what's gonna happen next, but he also thinks it's gonna go down. He didn't directly say that.

Dan Austin: [3:11] Yeah. Yeah.

Dylan Koch: [3:11] And so I offered him the same bet. And he said he would do a $500 bet, but he wants two to one odds. He tried to turn it back to me and said, well, put your money where your mouth is if you're so confident. So I did. I took both public bets on their public quorum, and we have a mutual friend as the escrow. So we'll see how it plays out.

Dan Austin: [3:29] So two to one odds. So what does that mean? So basically

Dylan Koch: [3:32] Or I put up 1,000, he puts up 500. At any point, it closes, it hits 40,000 before it hits 100,000, he wins. If it hits 100,000 before it hits 40,000, I win.

Dan Austin: [3:43] I love it, dude. That's actually a really good bet.

Shane Schrader: [3:46] Let's do.

Dan Austin: [3:47] Yeah. Nice job, man. So what do you think is gonna happen though?

Dylan Koch: [3:51] I mean, obviously, I don't think it's gonna go to 40, but I also didn't think it's gonna break 60 ks either. So I mean, I could 100% be wrong on this. Right. But there's a couple metrics that if it broke through, I mean, would be kind of like, what's going on kind of a thing. Two hundred week moving average is one, which is still sitting around 60,000. So yes, if it breaks under that very short term, that's not a huge deal. But if it stays under that, that'd be okay, what's going on? And then realized price is another one which just studies a bunch of on chain metrics. Basically, it looks at people's average buy price, their average sell price, how long they've held such transactions and whatnot. And again, it's like 65,066 thousand dollars right now. So it dipped down to like 40 would be a, like, a standard deviation event. Like, that's like five or six tails to the right. And I just don't think that's gonna happen. I mean, it's a very low probability thing. So that's why I was okay with taking the bet.

Dan Austin: [4:41] Yeah. Yeah. I guess what causes it to go to 100 ks versus what causes it to go to 40 ks? Let's actually, let's just stick with what causes it to go to 100.

Dylan Koch: [4:49] I mean, I do think it follows kind of what I don't say The US economy, because I do think it's a worldwide phenomenon is doing and from a liquidity benefit. So like, technically, the Federal Reserve has been tightening their balance sheet. So they are hawkish, like less they are taking away more monetary units from the system than they're giving in. But there are other places like China that are printing a lot of money right now. But in aggregate, they're kind of canceling themselves out. I think the ultimate catalyst will be we are going to face some kind of next downturn, whether it be recession, not like COVID like, but like where they're gonna have to print a ton of money to keep up with the debt that they already have and pay the interest on said debt. And that will result in hard assets taking prices higher and Bitcoin will be one of those assets. It's not like a super robust thesis other than like supply and demand. So more people could will continue to use it. And there'll be more money into the system and Bitcoin will absorb some of that money.

Dan Austin: [5:44] I love it. Shane, are you a Bitcoin holder? No. I am a small Bitcoin holder. I'm not as big as Dylan, but I Dylan talked me into it. Now I'm here for the ride.

Dylan Koch: [5:55] Yeah. Yeah.

Dan Austin: [5:55] Like, lose it or not. I've always lost money in crypto. So we'll see.

Dylan Koch: [6:00] Well, the thing is, like, what do wealthy people do? A lot of times is they take asymmetric bets. Let's say you bought a whole Bitcoin at $60,000 What's your worst case? You're out $60,000 If the thesis is correct, and it does actually become part of the settlement layer of the world someday, then you're talking 7 figure Bitcoin. It might take a couple of decades, but like, that's a big payoff.

Dan Austin: [6:20] Yeah, it's huge payoff. Yeah. To your point, if as long as it's a portion that you're not like gambling your whole like savings of whatever that is to try to get into Bitcoin. Yeah, you're right. It's a huge bet that could turn out great. And the downside of $60 is one to 5% of your net worth, who cares?

Dylan Koch: [6:36] Yeah. And like buy 10, buy 20,000. Like you don't have to buy a full one. You can buy a couple $100 worth if you want to. I think a lot of people just see the historic, like, oh, it went from 4 to 20 in like two weeks. And like, they expect that to happen overnight. It just, this is not how it works.

Dan Austin: [6:51] I think that speaks to the nature of how people invest is, or they have like just these, they're not investing with logic. And so when it comes to Bitcoin or stocks, right? Know, we looked at, SpaceX is, definitely definitely feeling the burn right now going down. I mean, it's still, you know, I think probably performing as it could or should. Like it's not 200, which I think it came out of the gate way hotter than everybody. And I think it's because people are are investing, especially retail investors without actual logic or understanding they're they're investing out of emotion or they're looking at a graph and they're saying, well, it should do this. Yeah. Because it hasn't done that yet. Or, oh, or if you invest in this, like, say in Bitcoin, you're like, well, it went from, you know, a penny to a 100,000. There's no more growth left. Well, why is there why would you say that? Why would you assume there's no more growth left? Because it's had a meteoric rise already? What if that's just the beginning? Right? There's no logic to looking at a graph with no intelligence behind it?

Dylan Koch: [7:46] So like a good example of this is Micron. So like the memory stock, they produce a whole bunch of RAM for stuff. They've had a meteoric rise lately. I think they've touched over a thousand dollars a share. It looks like a parabolic chart. But the crazy thing is after they just reported their last earnings, their forward price to earnings ratio is still under 10. To put that in comparison, like all the Mag seven is thirty, forty, 50 plus. Right? So like from a valuation standpoint, you could still say like, wow, they from a price per share, they're actually still generating a ton of revenue and a ton of profit. Yeah. So who's to say that can't run higher? Well, if you don't have any of that context or NSF that you're investing in, then you're not investing, you're just gambling.

Dan Austin: [8:25] Yep. Yep. Which I'm down to do both. You just gotta admit what you're you gotta admit what you're doing at the time. Okay. So before we chat about some of your stuff, Shane, because the audience is dying to know more. Actually, you know what, Shane? I'm sure about who you are, but a little bit about background. I want I

Dylan Koch: [8:42] want I know like Mike's story. Why should people care what you have to say?

Shane Schrader: [8:45] Yeah. Yeah. Yeah. Exactly. Well, I

Dan Austin: [8:47] mean Yeah. Yeah.

Shane Schrader: [8:48] Feels kinda weird. I don't know. Yeah. Yeah. A little bit about myself, I guess. Just I've been a lie I was a lineman for a long time. Mhmm. Like many of us, came out of the w two world and went right in the deep end of entrepreneurship. Yeah. Wholesale for a while. Still am actually. And now just kinda going out different endeavors, finding what I really like and what I wanna invest in.

Dan Austin: [9:10] Yeah. So you you left the line trade, got into the wholesaling, made a good nut, and now you're kind of having some it seems like you've got yourself in a position where you've made some enough good choices over a long period of time that you have the ability to be flexible and make the choices, the easier choices. You know, not that your day to day is not hard, but I know a big thing you're doing is a, is your development play, which is super cool with what sounds like it's gonna be a legacy asset. So like, let's talk about that. Because I don't think Dylan even knows what you're doing there.

Dylan Koch: [9:41] I don't, man.

Dan Austin: [9:42] Yeah. Yeah. Tell us the whole story on this thing. I wanna like, I've heard it three times and I still love hearing it. But kinda just how the deal breaks down, how you acquired it,

Shane Schrader: [9:49] all that sort of stuff. Yeah. Well, I guess I could back up just a little bit before, the acquirement of the deal. You know, I I took a good hard look at, what I wanted to do with investing, what I wanted to do with my life. You know, I kinda started figuring all that stuff out a lot of

Dan Austin: [10:02] How long ago was it where I remember I was in the sauna unit. You had called in, like, we were talking about, like, you getting into the commercial side. Like, you're join you're gonna join Mattier's group and stuff like that. I was like, was that two years ago probably? I think so. Maybe a year ago. Probably It a while

Shane Schrader: [10:14] ago. Yeah.

Dylan Koch: [10:16] And you were just an off market operator like us for a while, right? Like direct to seller, wholesaling, flipping, like that's kind of how we all got started.

Shane Schrader: [10:23] Yeah. Exactly. Yeah. I was right right behind you guys, which I'm very thankful for all the stuff you guys have taught me. And we had a great we still have a great group. That core group of dudes is like no other group I think I've ever been a part of. They're all studs.

Dylan Koch: [10:34] Yeah.

Shane Schrader: [10:34] But, yeah, just with our with our Washington laws and and the residential stuff, I was like, man, this space like, I love the space. I do operate still in the residential space, which is great. But the laws are just long term. It's like, this is not where I wanna be. So I, yeah, looked in the commercial stuff and kinda understood how that was. I'm like, man, these things are built to be cash registers. Like, that's just how they are. So it wasn't like understanding the underwriting within residential. It helped me out a lot with the commercial stuff. Mhmm. But it is a little bit different animal. And then every asset class within commercial, it's its own animal. So if you're gonna do retail, you gotta understand leases. You gotta understand your end customer is like a small mom and pop shop. So you better understand, like, what size they're looking for, what is the TI build out that they're asking for, that kind of stuff. Or is you're gonna go into, like, light industrial? That's a completely different customer. And I decided I like storage. I got with the storage guys, started seeing what they look like, what their lives look like more so. And I was like, yeah, that's that's a business.

Shane Schrader: [11:35] Like, I wanted a business, you know, because I like running business. I enjoy that part. And then I was like, oh, if it's directly tied with real estate, this is kinda cool. And they weren't spending a whole lot of time operating their businesses. I mean, that's kind of what I wanted to was more of that freedom of time. Totally. And that's what it the asset class I started going after. So I was mailing in Yakima, Washington. I knew the areas that I wanted something zoned in. I wanted m one zoning, light industrial. You kinda do whatever you want. It fit for storage. I ran into kind of a long story, man. This guy, I mailed him on a trailer. His son was living in it. I helped him out with getting his son out in that trailer. I think ultimately, ended up buying the trailer, which was great. He's a fantastic gentleman. He's now a mentor of mine in the storage space. Him and I have become really good buddies, and he's kinda been teaching me about it. He's like, dude, I built mine. He was a lube mechanic, basically, for big rigs. And he's like, I just built this, you know, one building at a time, and and now I have this thing that generates close to $15,000 a month in cash flow. And now I, you know, he's teaching me how to run the operations, which we spend probably eight hours a month on it. Mean, it's yeah, and people are gonna hopefully wake up to store, don't wake up to storage and be like, oh, we're all in on storage.

Dylan Koch: [12:52] I feel like storage has been part of like the sexy real estate crowd there for a while. And maybe that's just the, my social media algorithm. So I feel like everyone wanted storage there for a minute.

Dan Austin: [13:00] I think so. But you know, the interesting thing about it is, is I never have met anybody that's truly acquired it or acquired it and made good money because they they were buying it at a four cap thinking they'd make it a two cap, you know, stuff like that. Like, he's like, yeah, like the AJ Osborne and all those yeah. Like there's a lot of like on that side of things, I never like Shane's like the not the only dude because I know a couple other guys that have been quietly in in storage and it's pretty amazing.

Shane Schrader: [13:23] Yeah. It is a different asset class. I have ran into guys that have done very well, but they're buying, you know, pre COVID, you

Dan Austin: [13:30] know Sure.

Shane Schrader: [13:31] Before it became super hot or will the numbers still made sense. You know, now you have to pick something up with it. I'd say, like, at least like a seven cap for it to even make sense, you know, or have some good debt, you know, owner financing or something. But yeah, so I was also continuing to mail residential stuff to the wholesale business. Guy called me up and he's like, Hey, man. My brother had a stroke about a month ago. I'm in charge of the estate. I wanna sell these two houses. And I was like, Alright, cool. What are the addresses? Looked them up. Immediately, I knew where they were. I said, Dude, I'll meet you down there in fifteen minutes. And he's like, alright. Sounds good.

Dan Austin: [14:08] So I love it,

Shane Schrader: [14:09] Yeah. It was right in the middle of of of an industrial area. Got apple packers all around it, oil and gasoline stations all around it. So I was like, oh, this is it, man. And, yeah, I went in and it was two dilapidated houses. Actually, one was pretty decent. It wasn't that dilapidated. Made him a pretty fair offer. He was like, yeah, that'll work. And went in and bought him and I was in the development game. But I had already previously

Dan Austin: [14:36] When you bought those, did you know, like, this is exactly what I'm gonna do? Or was it like, hey. I think this is doable, but I'm just gonna buy these and and go on and kind of, like, dive into this.

Shane Schrader: [14:48] I had a pretty good idea. I had kinda like I call it, like, my development runway. Like, I had already put together a buy box, what it was gonna take, all the specifics that I was looking for. And then, of course, just, you know, knowing that area, I already knew how to use all the city systems as far as looking up where the sewer water was, knowing what electricity was around there, had some access to the grid.

Dylan Koch: [15:10] Could you have done this as a traditional residential sale that too, if you had to, like, or was it purely gonna be development?

Shane Schrader: [15:17] That was what was cool about it. I did do that as a as a residential sale. So I bought it with those houses on the land, and I had to do a bunch of looking up of the city codes. They're not really much different in any other city. They just grandfather in those residential homes to still play under the residential rules. And then if you want to convert it later to commercial, you can add on to those lots.

Dylan Koch: [15:39] Well, think that's the key here is you had very little risk, right? Because if your development play didn't work out like you planned, you could have done the residential stuff and probably still made money.

Shane Schrader: [15:48] Oh, yeah, exactly. Yeah. I still bought these house under market. Yeah. You know, so yeah, we ended up doing some boundary line adjustments. They were both, I think each parcel was like 0.9 acres. And then I ended up combining pretty much both of them. I left a little like 6,000 square foot lot on one of the homes. And so it just made that large piece that much more valuable.

Dylan Koch: [16:12] So what is sorry, didn't miss it. What is the play with these? And what are you developing on this land?

Shane Schrader: [16:16] Yeah, so self storage is the

Dylan Koch: [16:18] Building storage. Okay.

Shane Schrader: [16:20] Yep. Yep. Yep. Got that all designed out. We're just waiting for the city to get back to us on some things.

Dylan Koch: [16:26] How many pads? What do you call these? How many lockers?

Shane Schrader: [16:30] Units. Units? Yeah. So we're gonna end up doing the smallest unit we're doing is a 10 by 10, and the largest is a 10 by 20. We should have about a 120 to start out with.

Dylan Koch: [16:43] Wow.

Shane Schrader: [16:43] Yeah. And then we still have like, we're the one house is on the large piece of property. It's on the corner. Eventually, we'll knock it down, but we don't wanna knock it down because we're getting some rules and variances from that still being residential. So it lessens the load, I guess, on the new being considered a new development.

Dylan Koch: [17:02] Gotcha.

Shane Schrader: [17:03] So we should be able to cram in probably another, I don't know, 10 to 15 units there.

Dan Austin: [17:10] Oh, nice. Yeah. That's really cool. Okay. So it seems like this all worked out decently well. As far as numbers on the back end, what do you think this is gonna look like for you? Not necessarily like dollars, but like percentages. Like, okay. So you got the lot, all this sort of stuff. You're going to build this. I'm assuming in a refi, like what's your cash on cash end up being?

Shane Schrader: [17:30] Oh man. I haven't dived into those numbers for a little while, to be honest with you. It's been, but, let's see. So top of the head.

Dylan Koch: [17:36] What is the cost per bill too? If you remember that? I'm curious.

Shane Schrader: [17:40] Well, there's a lot of factors that go into that. I've been trying to nail that down because doing like like they're requiring us now to do curb and gutter. So that adds on to some things. Different contractors have given us not wildly different bids. You know, if we were just to go after, like, the building, I wanna say the building alone minus the footing for the concrete. I wanna say it was, like, $10 a square foot.

Dylan Koch: [18:02] Okay.

Shane Schrader: [18:03] Good. So like I said, it's just so variable between different contractors, and we're doing a lot of this stuff ourself. So that kinda cuts that down a lot.

Dan Austin: [18:12] So you're gonna clear the land, all that stuff yourself?

Shane Schrader: [18:14] Oh, yeah. We cleared yeah. We cleared the we cleared the land. We're putting in six foot fencing with all barbed wire.

Dylan Koch: [18:20] Are they gonna be climate controlled?

Shane Schrader: [18:22] No. No. These are just basic. They're just concrete and steel. No electrical to them. Nothing. I know it sounds it's kind of not what the new age guys are doing as far as climate controlled and charging more and all that. Our clientele in this area where we're at is we don't want to bring in like the smaller units per se. Right? Because you get these people that are homeless that are like, oh, yeah. I could just live in there or they're moving in and out a lot. It's things like that. If you get the little bit bigger units just from going off my my mentor's facility, we kind of have a lot of history with understanding what it looks like to operate. And he operates larger units and those units are stickier. You know, people put like a car in there or something. It's kind of boring actually. But that's what we looked at. As far as numbers though, I mean, I'll give you the the numbers on everything that we have. We bought the the larger lot for $2.20, which we've expanded that and short shrinking the other lot. We bought that one for $1.80, and that that one, I think, it didn't change actually, like, retail value of that ARV on that. Should push somewhere around $2.50. And then with this larger lot, I've been offered 700 just for the lot.

Dylan Koch: [19:32] Wow. That

Dan Austin: [19:34] Yeah. So You know, you got something good.

Shane Schrader: [19:36] Every neighbor has stopped by while we're out there working and he's like, hey, man. How'd you get a hold of this? Like, I wanted to buy this and I would have bought it. And one guy was like, dude, I'll give you 700 right now. And I'm like, nope. Then I had another buddy

Dan Austin: [19:47] That would be hard to say no to.

Shane Schrader: [19:48] Oh, dude. Totally. Right? Well, I knew what it I know what it's worth.

Mike DeHaan: [19:51] Yeah. Of course.

Shane Schrader: [19:52] And another buddy, he he stopped by and he was like, yeah. I want to rent some of this. I've got a trailer business or some shit that he sells dump trailers. He's like, Oh, man, I'll offer you $7.50. And I'm like, really? And he's like, well, maybe 700. But he's like, Yeah. I'm like, Nope.

Dylan Koch: [20:09] So I want to double tap on two things. One, so the first thing you said you mailed a guy who became your mentor. So like, that was an opportunity that you jumped on that most people might, like you recognize there is value there. And then two, even with this lot and, you know, talking to the guy, like I'll be there in fifteen minutes. Again, just like the speed at which you recognize the value. So that way you can jump on something, think is something I want to like portray to the audience. Like, if you have to go back into your homework for two weeks, that opportunity is likely gone.

Dan Austin: [20:36] Totally. Right?

Shane Schrader: [20:37] Oh, for sure.

Dylan Koch: [20:38] And then follow-up, who's financing this? Is it like a local bank that you go to for this?

Shane Schrader: [20:43] No, I had some cash saved up from wholesaling, you know, I had about $150 saved up in cash.

Dylan Koch: [20:49] Yeah.

Shane Schrader: [20:50] So I earmarked that money for this project, some of that already. And then I had a HELOC on my primary residence. I think we had it for like, it's like $2.75. So we had that for

Dylan Koch: [21:02] So you're carrying costs in this are pretty low too. Like this Pretty low.

Shane Schrader: [21:05] Cheap debt. Totally. I ended up for a piece of it for that smaller parcel. I had some private money on that guy up in up in Wenatchee that I use. Yeah. He was like, yeah. No problem. I understand what you're doing. He's an ex builder himself developer, so he's totally cool with it. Yeah. So that he knew the price. I was he's like, oh, yeah, dude. I'll lend on that all day long. Whatever you want to do. So

Dylan Koch: [21:27] He hopes you

Dan Austin: [21:27] default. Yeah. Exactly.

Shane Schrader: [21:29] Yeah. Exactly. Yeah. Oh, yeah. He'll turn around and make $50 on it.

Dan Austin: [21:32] Yeah. You might have said this and I may have missed it. Are you planning to offload that the house on the corner or are you gonna keep it?

Shane Schrader: [21:38] You know, I thought about that because it would definitely put me in a better position with the other storage unit. But I'm at the point now where it's it's affordable to keep and it's rented out. So it's not like a huge deal, but I wanna maintain, like, the control of that whole corner block

Dan Austin: [21:52] Yeah.

Shane Schrader: [21:52] Of that Exactly.

Dan Austin: [21:53] Area. I like that plus in one day, it could be like a manager house or something like that.

Shane Schrader: [21:58] Yeah. One day, I'll probably just end up knocking it down and put storage, you know.

Dan Austin: [22:01] Right. Yeah. Once it makes more sense. Yeah.

Shane Schrader: [22:03] Probably. But yeah. It's definitely being prepared was a huge deal. Like I had done a bunch of studying ahead of time. Like I was actively looking for m one property to do just this. But yeah, that's being prepared is definitely helps.

Dylan Koch: [22:18] What is the timeline chain from purchase? You want these things up and running?

Shane Schrader: [22:23] Yeah, I'm hoping by the end of winter, we should have at least two of the buildings up and available for

Dylan Koch: [22:29] When did you buy them?

Shane Schrader: [22:32] I bought this October of last year, '25.

Dylan Koch: [22:36] So really like a whole entire year essentially.

Shane Schrader: [22:38] Yeah. Least. Yeah. At least. And then we'll get those other there's five buildings total. So we'll get the other three buildings hopefully bill out in the springtime. It was kind of funny too on the financing. This was an eye opener. I went to a couple small banks here in town and they were like, once they heard self storage, they immediately called me back. And they were like, yeah, we want this. Like, what is it? Interesting. I was like, Well, I'm Yeah, I'm like, Well, I'm building it. And they're like, Oh, man, we don't do construction loans. But the second that you get that thing finished, and get it operating, please call us. We will refinance that. And I'm like, Oh,

Dylan Koch: [23:12] I mean, that's good news for you. They're gonna be battling for the loan.

Shane Schrader: [23:14] Totally. Yeah.

Dylan Koch: [23:16] I mean, I don't know what the value is going be on the back end. But based on everything you said, that could be a non recourse loan, you know, like, on how big it actually is, which should be

Shane Schrader: [23:26] the Oh, golden exactly. This isn't that large of a facility even. Mean, it's pretty small compared to a lot of the facilities that are being built around us. You know, usually, if they're building out like three to say, like 500 units in a facility. But, yeah, man, I mean, I don't think it'll work. Our own facility should be like retail value, like it should appraise out probably 1.5 to 1.7.

Dylan Koch: [23:50] Great upside, Love that.

Dan Austin: [23:52] Yeah. And like I said, it's a legacy property for you. I can't imagine you'll ever wanna sell this thing. It's gonna it's gonna start kicking off cash flow. You're gonna have so much great equity in there that you can leverage to do other things with as needed.

Shane Schrader: [24:03] I mean, the idea is, you know, we'll get this thing done, know what we're capable of as far as self developing, understanding the rules and and laws around it. And then we're just gonna take that cash and do the same thing over and over and over again.

Dan Austin: [24:14] Badass, dude.

Dylan Koch: [24:15] Play your strengths too, because I mean, I remember talking to you in in scale, Shane, even with the residential stuff, and this is maybe more so for the audience, is you could look at a house and understand the rehab inside and out, and the cost to do that, whether it be electric, the plumbing, you know, in the kitchen, like, and a lot of people, including myself, when I first got started, I couldn't tell you the difference between a fuse box or breakers or drywall versus plaster. I didn't know any of that. Had learn it the hard way. So but like, point being is, you knew the rehab, which all the good successful real estate investors I know they master rehab at some point.

Shane Schrader: [24:50] Yeah. Oh, thanks, man. Yeah, that's a I take it as a compliment. I mean, it's, yeah, it was just something I naturally was into, I guess. Yeah. And I just leaned into that strength, like you said, and I looked at that and luckily I had some good mentors and telling me like, you need to lean into those strengths. And so that's what we did.

Dan Austin: [25:06] I want to lean back into your entrepreneurial business strength then because I want to hear it. I'm calling this like your pre hustle. I don't consider it a side hustle because I think this is going to honestly magnify the cash flow. And maybe I'm over exaggerating this, but I wanna hear let's talk about the tote stuff. Dylan's gonna love this. The the little tote business that you're getting into. That's kind of like it goes hand in hand with what you're doing here.

Shane Schrader: [25:25] Yeah. It's kinda goofy. You know, when I first started looking at it, I was like, that's kind of a cheese ball, like, side hustle thing. And so just a plastic tote, man. Like a like a flip pop heavy duty bin plastic tote. A little bit different than you can go and buy at Home Depot, but that's the idea.

Dylan Koch: [25:41] That's your what manufacturing selling?

Shane Schrader: [25:43] No, no, no. So we basically we rent these things out. There's already businesses that rent them out. If you need 25 totes for a move, it's, I don't know, 175 for two weeks.

Dan Austin: [25:53] Okay.

Shane Schrader: [25:53] Right? And then you just return them. We pick them up. We drop them off, we pick them up. And I was looking at that. I'm like, that's kind of a cool little cash generator. I know how to handle the sales and marketing on it. It's an easy company to run. But then I thought to myself, nobody's storing these things for people And Yep. We can do that. Why is nobody storing these? And I was like, well, is that a I started poking holes in it. I introduced the idea to a bunch of smart guys and they they were poking holes and they're like, dude, we could totally use this. And then it was a a lot of dads from college were like, oh my god, dude. I would drop this thing off. How do you drop this off at my kid's dorm, pack their shit for the summer, store it, and then give it back to

Dylan Koch: [26:33] them.

Dan Austin: [26:33] Yeah.

Shane Schrader: [26:34] And that's happened like four or five times. So I just thought nobody's doing this. And then I started like cracking the numbers and putting like what this might look like as a business. And I just said, well, I can fit a 182 of these things in a 10 by 20 storage unit. And that cost me a $150 a month of rent. We charge $6 a $6 a tote for every month.

Dan Austin: [26:55] That's amazing. So here's what I ran this by my wife because I thought it was a good deal. And my wife will tell me if I she thinks things suck. Right? And she's usually like, oh, like, giving me feedback. And she's like, that's genius because think about it this way. I don't know how your guys, but your spouses are, but mine likes to decorate for different holidays. Fortunately, we have a big enough house. We can fill it up with crap that we don't need. And we have like storage on here, a little outbuilding. But like, I'm always like, do you not have any more room for stuff? Right? But like, think about my grandma lives in a little apartment now, little home. Right? But she likes to decorate where she can store four totes. She doesn't need a bunch, but like four totes of Christmas supplies or Halloween supplies. And so like, just like families that have these things where they're like, I'm not gonna rent a full storage unit for my decorations because that just seems absurd. Right? But I'll spend $25, $30 a month for them to store these things and then cycle them out in and out as I need them, pick them up, drop them off. Like it's more arbitrage is what I see with it. You can you don't even have to own the unit if you don't want to. But also the way I think of it, you have like under rented storage units, like you were saying like those small ones that aren't great for your market, why not convert them to something where you're doing that? Where now you don't have to worry about a shitty tenant that's coming and going and all that sort of stuff. And you're able to maximize your cash flow on that unit that you otherwise wouldn't have because you had all those turnovers and all that stuff. So stuffing full of these totes, making $6 per tote, like that's I don't I just think it's genius.

Dan Austin: [28:18] Maybe Dylan doesn't think No. I mean think it's it's crazy different, you

Dylan Koch: [28:22] know? The whole arbitrage is like in lending, for example, it's like, okay, if you can borrow at five and lend at ten, you know, make the difference. This is kind of the same thing. Whereas, you know, you're getting $6 per unit, you can fit x amount in the units like, and it like cost Shane, he said $150. So what's your breakeven? They're like 20 toads, something like that. Don't know.

Shane Schrader: [28:41] Oh yeah, exactly. Yeah.

Dylan Koch: [28:43] Yeah. And everything else on top of that is profit.

Shane Schrader: [28:46] That's right.

Dan Austin: [28:47] That's right. Totally. Yeah. And I think like in the market like where Shane's at too, it works perfect because Shane's got a university in his market. So you do have a lot of college kids, but there's still the people. Like, I think just like normal everyday people that are like, I don't wanna have to store this. I don't have a lot of room. And they don't really have an affordable option that makes sense for them. And now all of a sudden it's like, oh, we'll store those for you. Like, I don't know. It's just like a nice add on to what you're already running with.

Dylan Koch: [29:09] It could be an upsell for the people who rent the storage units already. Yeah.

Dan Austin: [29:13] Totally.

Dylan Koch: [29:14] And if it's not requiring a lot of, you know, manpower or brainpower from you, like, why not?

Shane Schrader: [29:20] Yeah, I mean, it's one of those things too, like what we're running into, like, I've gone through, I've been working on this for probably about three months. I've gone through all these scenarios, listen to all these different ideas, like we've got this thing down to, I don't know what you would call it, call it like the pit of the fruit, right? Like what is, what are we at? What are we facing here is the real challenge. The real challenge is nobody knows about this. So now we're having to educate. Like, we're building a market that doesn't exist. To me, that was kind of exciting because everybody we talked to is like, what is it? Like, some people understand the rental of the totes, but then they're like, wait a minute. So you guys store these too? I'm like, yeah. Then I started explaining like the I use the holiday one, perfect example. And they're like, oh, wow. That would be great. Or like, hey, winter clothes, you know, you can clean out your closet. And they're like, oh, yeah. That would work out great. So it's just educating a lot of people on it, getting the word out. But the second we do that, everybody's like, oh, that would work great. And so we've had a bunch of phone calls already.

Shane Schrader: [30:13] We weren't set up to take orders. We're getting back to those folks and handling it now, but we are completely dialed now.

Dylan Koch: [30:18] That's good. I love it. Yeah. And that just fits all the extra cash flow. And if you came to me, Shane, with that, like, no, because that means watch is going to buy more unnecessary stuff. But that just means that other people can do

Dan Austin: [30:30] it Yeah. So you can hide it though. Won't even see it.

Dylan Koch: [30:33] Yeah. Depending on who you talk to, you get a sale or no sale.

Shane Schrader: [30:36] Yeah, exactly. So we'll see how it goes, man. I don't know, something new, a different idea. I just wanted something that was reoccurring revenue. And it just led into that. And then I just kind of, it just popped up and I thought it was something we should run with.

Dylan Koch: [30:49] Yeah. With that, with the self storage, I'm assuming that's taking the bulk of your time. Are you still trying to do acquisitions for other commercial stuff? What's the game plan for to continuing to drive success?

Shane Schrader: [31:02] To tell you the truth, not not a whole lot, man. I mean, wholesaling. I kinda like my lifestyle. I I don't I'm not really pushing it to the max. Like, I just did a couple wholesales these last couple months and they paid alright, you know, more than paid the bills and just focusing on on the storage stuff, man.

Dan Austin: [31:17] Shane and I talked about this week or two ago where it was like, once you've built Dylan, you you you would have this same experience as like, once you've built like a network of people that know you as like the deal guy, you don't need to market. You have like a long runway. And if you stay active in the community, you can side hustle a lot of wholesale deals. Even to this day, Mike and I, you know, have been pretty out of it actively for at least a year now. I still get deals come across like, Hey, can you, my mom wants to sell a house or, Hey, can you help me dispo this? And it's like, you know, might be a little five ks bump here or there, or it might be a 30 ks deal. You know what I mean? It's just, they just like trickle in. And to your point, Shane, why you're not, you don't have to put a lot of effort into it. You're just staying active in the community and you're able to monetize those relationships and that brand and most importantly that you've built. So it's pretty, it's pretty cool.

Shane Schrader: [32:06] Yeah. You know, that's so important because the last two deals I did were brought to me. One deal we ended up wholesaling for 50. We split that, That guy that helped me, he didn't have to do anything. He was like, oh my god. This is this is how this works. And I'm like, yeah, dude. I set it all up for you. Like, don't worry about it. And then same thing. Another guy brought me a deal and I just we just closed it yesterday. It was $12,500 check for making two phone calls to a buyer.

Dylan Koch: [32:29] Yeah. It's pretty cool.

Dan Austin: [32:30] Right? Sometimes you're like, this is way more efficient than what I was doing before sending out $20 a mail and cold calling all that stuff. You're like, hell, from a time standpoint, like, this is awesome. But yeah, I think that's that's important though.

Shane Schrader: [32:41] That, also too, like you touched on the point of like brand and like guys know who you are. Like, I've helped out so many guys, like not bragging, but just like, I like helping the flippers out, like understand what they're getting into because now they'll bring me deals. They're like, hey, man. Is this something I should even look at? I'm like, no way, dude. It needs, like, $50 off that thing. Are you kidding me? So that is fun to me. Like, I enjoy helping those guys out, and it just I think that's what people see. You know? Now that now that I know who other flippers are, like, look at them and I'm like, I don't know if I do a deal with that guy. He's kinda shady. Like Yeah.

Dan Austin: [33:15] Right. Exactly. You could pick and choose too because you've seen it all. Nice, man. Cool. Anything else you guys wanna talk about?

Shane Schrader: [33:22] Just his economy. I like hearing Dylan's perspectives on the economy. I think he has, every time I listen to the show, I'm like, god, man. He's so spot on with us. So I don't know who you listen to, get all your info from, but, like, I I wanna talk to more about that, man. What what's going on right now? This is crazy.

Dylan Koch: [33:37] It's hard because I think there's one of the largest disconnects between, like, stock market performance and economic indicators than there's been in a long time. And a lot of it is still driven by the top of the K, the one percenters that just spend a ton that has its limits. And no one knows when those limits are gonna go. I think there's more uncertainty now than there's a lot of places. And I pay for a couple subscriptions I read. Luke Gromans being one that I follow, Leno is another. And then this, I listened to a lot of stuff when I'm driving around Cincinnati going to different projects. I gotta listen to a bunch of stuff. I mean, thesis is a lot of volatility probably in the next twelve to eighteen months, probably more to the downside than not. And obviously, it's extremely local if you're talking about real estate, but I'm talking in a broader sense. But I think it'll come with more opportunities. And I'm still like five-ten, I still think we're, it comes back to, there's too much debt, the debts very short term, they need to refinance that debt, and they need to do it with lower interest rates, and they're going have to print more money. So following that thesis, what does well is hard assets, that's real estate, stocks, Bitcoin is involved with that, gold, commodities, etc. So if you can expose yourself, just let the wind take you in the right direction, you don't have to be super fancy with Mhmm. And that's my overall investing thesis for the next five to ten years.

Dylan Koch: [34:53] And then on top of that, just invest in yourself so that way you can make additional money. You have money to invest outside of just making ends meet.

Shane Schrader: [35:00] Yeah. A lot of wisdom in that, man. It's like common sense investing. You know? You're just kinda watching it as a whole and saying, yeah. Let's go this direction. I love that.

Dan Austin: [35:09] I've always like, my belief is, like, just invest in things that are worth money. You know, assets, right? What go Dylan said gold, Bitcoin, stocks, whatever, and hold onto them for a long time. They seem to do better. You know? That's just how it is. Yeah. I, like, I've never been good at like, I'm gonna buy this stock and try to re trade it at some point. Like, I suck at that. I can't do it.

Dylan Koch: [35:31] I mean, 99% of people suck at that. And like, they don't share their losses on they might hit a winner for $10 once, but they don't tell you it took you $20 to get there.

Dan Austin: [35:40] Very true. I always talk about my time at the blackjack table when I win, you know? Yeah. But like, you're right. Especially at this point in time, it seems like to me just, I'm not that you should be worried about idle cash because I think idle cash is great because it gives you opportunity to just take swings and I've been stacking cash too. But when you have opportunity to invest in good solid things, like just do it. Because I'm listening to Dylan's perspective, which was last year, I think you said, or a year before that was like, we're in a decade of inflation. So inflation's gonna keep going up, which I believe it is. We're not shaking it. Inflation doesn't go away for in a year, it doesn't go in three years. Like you just have to deal with it until it really runs its course. So I think we're there. And we just gotta, you gotta ride that wave and just keep buying things that go up with inflation.

Dylan Koch: [36:24] The difference too, I think a lot of people, one of my favorite quotes when it comes to like the macro stuff is not enough people look at like history, like are the most under read books and monetary history is history books. So like what happened in the past when some of these certain instances happen? And a lot of people go back to, if they talk about inflation, they go back to the 70s. And so inflation was really bad in the 70s. They had Paul Volcker's head chair, and he was deemed a hero for taking rates to 12% to fight inflation and bringing that back down. Gold did very poorly in that situation, but stocks did very well. Bonds did terrible, even though they paid 12%, 13%, 14% on inflation adjusted basis, they got wrecked. Right? And so that's when you hear your boomer parents say, Oh, my interest rate was 12%. It's like, Okay, well, you bought real estate with it, you still made a killing. If you bought the bond, got screwed. But my point in bringing that up is, and these numbers are gonna be directionally correct, not totally correct. But the debt to GDP in the 70s was like 30%, right? It's over 100% today. So that same playbook can't really be used in the same fashion. And we were a net exporter, right? We made more stuff than we made now. We're a net exporter back then. We're a net importer now by a lot. And right?

Dylan Koch: [37:33] So some of the dynamics that we have with even other countries aren't the same. So Lynn Alden's famous for this part is like, are in a decade of fiscal dominance, meaning like, not the Fed might be printing money, but it's the Treasury who's issuing all the bonds that the Fed has to then buy. Right. And so coming back to the point of that statement is, if that is true over an area of fiscal dominance, then the tools that were used in the 70s and the Fed driving interest rates up aren't going be the answer that they were back then. And so there's a, there's a like, the thing that loses here is the currency, which is a dollar. So debasement of dollar. So if your denominator is dollars, find stuff that has that that is going to keep its purchasing power versus the dollar.

Dan Austin: [38:13] There you go. There it is. Well said. Wisdom from Dylan. If you understood that, go get them. If you didn't, you to hit up Dylan at dylandoesdeals on Instagram and he can share you with his newsletter that Dylan's are you gonna be coming out

Dylan Koch: [38:25] I next should.

Dan Austin: [38:26] Yeah, you should come out of the newsletter.

Dylan Koch: [38:28] Want So what unit economics, like let's say you can get people to sign up for a newsletter at $10 a month. It takes a thousand people. You're making $10,000 a month out of eight Okay. Billion people in the Yeah. You can do

Dan Austin: [38:39] that. Yeah. All right. I'm looking forward to it. We got to sign off because Max is going kill us. We've got forty eight minutes here, which is going to be a great episode for those that are listening. Shane We

Dylan Koch: [38:48] got nine minutes of downtime of the audio that's

Dan Austin: [38:50] We not did.

Shane Schrader: [38:51] That's true.

Dan Austin: [38:51] Max is cutting all that junk out. Yeah. And all the stupid stuff I said, Max will edit it, make it sound smart. But Shane, for real, man, always love hanging out with you. Love chatting with you. We gotta definitely do the, the meetup here this summer with some of the local guys. So do you want anybody to reach out to you? You got any handles or anything like that you wanna pitch?

Shane Schrader: [39:07] Man. I'm not on social. I don't do all that stuff. I'm like the backwards investor, man.

Dan Austin: [39:11] Yeah. Perfect. I love it. Shane Shane, the backwards investor trader. If you wanna hook up with Shane, you're in Central Washington, you wanna do some deals, hit me up, investor man Dan on Instagram. I will connect you guys. I won't I won't talk

Dylan Koch: [39:22] to you about direct number. Just DM me.

Dan Austin: [39:24] Exactly. Just DM me. Alright, boys. Good chatting.

Shane Schrader: [39:28] Alright. See See you guys.

Mike DeHaan: [39:30] This episode is sponsored by Sir Lenzelot LLC, also known as SLA Capital, which, if you didn't know, is Dan and I's private lending company. So, yes, we are sponsoring our own show, but what you're gonna do about it? It is our private lending company that offers hard money and DSCR loans to real estate investors of all types. So you can be a new investor, an experienced investor. You can be buying flips. You can be buying rentals, whatever. We can do everything. And not only that, but the rates that we offer are just as competitive, if not cheaper, than pretty much every other company out there. So whatever big company you've been working with, bring us their term sheets, I guarantee that we can probably beat it. We have the same connections they do. We just don't have all the overhead and middlemen. So if you wanna come and check us out, go to slacapital.com/keys, and I will know that you came from the show. And by seeing that you came from here, when you get the closing, you will save $500 on your first loan with us. So slacapital.com/keys, we would love to fund your next deal. Thanks for listening, everyone. If you want more from us, you can shoot us a follow on Instagram. I am at Mike underscore invest. Dan is at investor man. Dan and Dylan is at Dylan underscore does underscore deals. Choose to follow and send us a DM to let us know what you think of the show.