WS1855 How To Scale Your Real Estate Business | Highlights Andrew Abernathy

How does a fifth-generation farmer transition into a real estate magnate? Join us in our enlightening dialogue with Andrew Abernathy, the trailblazer who embarked on an inspiring journey from tending fields of wheat to nurturing a flourishing real estate empire. Andrew’s gripping narrative, which began on a North Dakota farm founded by his family back in 1901, offers a fascinating chronicle of passion, grit, and unwavering determination that pushed him to find his true calling in 2017.


Discover the profound wisdom Andrew learned from one of North Dakota's wealthiest individuals, Gary Tharalds, who emphasized becoming a master of one thing to achieve success. This impactful advice was instrumental to the exponential growth of Abernathy Holdings and the seismic shift in their share price from $37,000 in 2012 to about $70,000 a share in 2017. Delve into the transformative power of having a passionate team, the art of effective delegation, and the critical role of a shared vision in business management.

In the concluding part of our dialogue, we underscore the importance of fostering a positive work environment and cultivating ambitious goals. We also discuss the intrinsic value of partnering with individuals who are driven by passion rather than mere financial motives. Andrew unfolds his investment strategies, highlights the importance of delegation, and underscores the significance of building a robust team. 


For Andrew's expert advice on real estate investments, click the links below to access the full episodes:


https://lifebridgecapital.com/2023/08/16/strategies-for-succeeding-in-real-estate-andrew-abernathey/

https://lifebridgecapital.com/2023/08/15/from-farming-to-investing-in-real-estate-and-self-storage-andrew-abernathey/

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Transcript

00:02 - Whitney Sewell (Host)
This is your daily real estate syndication show. I'm your host, whitney Sewell, today. We've packed a number of shows together to give you some highlights. I know you're gonna enjoy the show. Thank you for being with us today. Welcome to the show. Honored to meet you and to have you all, and I know something that's important to you is finding that one thing and the process of that. I'm looking forward to for you to help the listeners with that as well and what that means. But before we do, who's Andrew? Give us a little more on your story, real estate and then you have some farming piece to this whole operation as well. I'm looking forward to hearing about that too. 

00:41 - Andrew Abernathy (Guest)
Yeah, well, first off, thanks for having me on. It's an honor, Really appreciate it. And my story goes all the way back to North Dakota. Actually, my family founded a farm there back in 1901. My brother and I were a fifth generation. We grew up on the farm. I grew up to five siblings, or six of us and I farmed actually full time until 2014. And I did this other real estate investment stuff on the side, starting in 2009, when I was in ninth grade in high school, about 13. And by the time, 2014 rolled around, so a few years after that realized that it could be a full-time gig. So I actually had to retire from farming at the ripe old age of gosh. What was I like? 20? And focus 100% on what we do now, which is Abernathy Holdings, and focus on self-storage in real estate Wow. 

01:36 - Whitney Sewell (Host)
That's a quick version. That is a quick version. Your family founded this farm in usually 1908, 1905, something like that. 

01:44 - Andrew Abernathy (Guest)
Yeah, 1901, yep 1901. 

01:47 - Whitney Sewell (Host)
And your fifth generation? Are the other siblings going in your path as well? Are they all farming, or? 

01:54 - Andrew Abernathy (Guest)
Yeah, good question. My parents have been awesome with making, helping us follow our passion. So when we were at a dinner table as kids, my dad would throw out topics, and whatever topic, our eyes would brighten up and we'd cheer up and we'd look. He would realize that that's something we were passionate about. So they let us all down different paths. My brother farms, I'm in real estate, I got a sister that works at a church, one's a doctor, one's a teacher. I'm seeking both. Imagine we were all taught to follow our passion, not the money, and that's made us all very happy. 

02:25 - Whitney Sewell (Host)
That's awesome. That's awesome. I could kind of upset the family structure here. Right, You're the fifth generation. Somebody's got to keep that rolling. 

02:34 - Andrew Abernathy (Guest)
My brother's doing a great job and I did stay partnered. We're still 50-50 in the farm. I just became a non-active employee in 2014. So I'm still involved, but not every day. 

02:46 - Whitney Sewell (Host)
All right, well, so speak to the transition to real estate, then, maybe what turned you on to hey, this may be something I'm really passionate about, or knowing about this thing, or maybe that's getting to the one thing you're talking about, but what's teared you away from farming? 

03:02 - Andrew Abernathy (Guest)
Yeah, I mean I actually didn't learn or find my thing until 2017. And so this whole path was me doing a lot of things I was young, started at 13. I mean, the first thing I did I had four grand saved up when I was 13 from running grain cart and combine and I threw that into the stock market in 2009 when it crashed and I didn't know what I was doing. I mean I was buying, but I was lucky $0.04 to $0.90, spain, america, $3. And I was able to turn the four grand to $80,000 by the time I was in 10th grade in high school, and so that was a nice launching point for me. 

03:38 - Whitney Sewell (Host)
Wow, who told you to invest in the stock market and even how to do that at 13?, when I was 10 years old, I actually really you could tell I really enjoyed numbers. 

03:50 - Andrew Abernathy (Guest)
I was one of the passions at the table, at the supper table, and so my dad really involved me in marketing grain commodities from 10 to 14 and learning how that all worked. And so when the market crashed when I was 13 and 09, I recognized it. It was intriguing to me. I didn't know what the market was at the time, but it was all over the news and I was a curious kid. So I dove in and started reading about Warren Buffett and I read and understood the market. And then I asked my dad if I could open a brokerage account in his name and start investing and he said sounds good. So that's where I kind of got started. 

04:25 - Whitney Sewell (Host)
That's fun. I love that desire that you had hey, can I do this? And your dad even allowing it and even just encouraging you to go figure that out and continue that learning. That's incredible, and I mean, this really hits home. I have a 10 and eight-year-old boy's right now and a four-year-old daughter, so I'm always thinking about things like this too, Like those conversations around dinner table. I'm like man, how can I spur my kids in thinking that way and just encouraging them? So love that. I love to learn from your dad, so maybe I can talk to him sometime as well. 

05:01 - Andrew Abernathy (Guest)
He should be on these shows. If I could be half the man he is, or my mom, both just so amazing. Yeah, they're amazing parents. 

05:07 - Whitney Sewell (Host)
Yeah, yeah, maybe we can have them on some. But no well, all right. But right now, what about finding this one thing? What is that? Was it during this time that you were seeking this out? What does that mean? 

05:18 - Andrew Abernathy (Guest)
Yeah, so I mean again, I don't want to dive too in detail on each one because there's so many different stories along the journey but in 2010 and 10th grade I cashed out my stocks. It was 80 grand. I'm still farming with my brother. My brother and I took to farm over actually that year when I was in 10th grade in high school, and so I'm farming. I got 80 grand. We were renting my grandparents, my parents' equipment and hauling it to South Dakota to do some custom combining. 

05:44
I mean, I was working at the local John Deere dealership, I was doing anything to make some money and I found some apartments for sale in Bismarck and the oil boom was starting to take off, just like it did in the 80s in North Dakota. So I actually wanted to buy them and that was my first big investment where I actually found out I needed investor capital. I went to my local bank town of 200 people, asked my buddy's dad, who was a banker, and said I need a $1.25 million loan to buy these apartments. I found about three hours away in Bismarck, north Dakota, and I said here's 80 grand. And he's well, you're going to need a balance sheet and, like an air, 300 grand down. 

06:23 - Whitney Sewell (Host)
And I'm like, oh, geez. 

06:24 - Andrew Abernathy (Guest)
OK, so that's when I went and I didn't have the money for a lawyer because I already put the earnest money down in these apartments, uh-oh 20 grand non-refundable so if I couldn't find this money. 

06:34
I'm going to lose 25% of my net worth like that. So I went and printed off the 1956 Warren Buffett partnership agreement. I whited the names out and I started trying to find guys to raise money from in our area and I found one and he put in 300 grand and we went and bought those apartments and I was like wait a minute. 

06:52 - Whitney Sewell (Host)
How did you find this person again? 

06:55 - Andrew Abernathy (Guest)
There's a lot of farmers around the area. I got a lot of no's but finally I made the deal so good. Someone's like well, I went I. Basically my deal was I'll throw in 80 grand, you throw in 300. I'll run it for free, I'll manage it for free and if we ever, if we lose any money, my 80 grand can be first out. So he basically said, ok, like I'll do it Kind of hard to lose for that deal and it worked out. The oil boom hit and when I was a senior in high school we sold them for over $2 million to the city. They bought them to tear down and we made about a million dollar profit and I turned my 80 into about 500. 

07:35 - Whitney Sewell (Host)
Wow, yeah, good for you. 

07:37 - Andrew Abernathy (Guest)
It was incredible, so I love the drive. 

07:39 - Whitney Sewell (Host)
I always point this out in guys and gals like yourself who, I mean, you were really young but, man, you had, you had drive and you were willing to go here and many, many times and even the the gumption to go put the 20 K down hard before you even knew how you were going to get. You didn't even know you needed more capital at that point. Right, you just thought I'll go find a loan. I didn't realize you're going to have to have some somebody else come in and so I just I love the drive to go make it happen. Even all the work ethic, some of that I we live on a small, small, very small compared to what you all were doing, but but I love the farming lifestyle for kids and everything that's learned in the work ethic and I just feel like so much that probably come into play here, even before you knew it was happening. 

08:28 - Andrew Abernathy (Guest)
Oh yeah, unknown lessons that I know now. 

08:31 - Whitney Sewell (Host)
Yeah, that's right, that's right man. So 20 K hard. The deal went great. You all sold it later. 

08:39 - Andrew Abernathy (Guest)
Now, okay, wow that went pretty well, right, yeah? So there I was heading to college and I had half a million dollars. This guy wanted to reinvest and pay me this time right, like, I'll pay you this time. And I was still farming. But this was kind of what I needed to start that transition. 

09:01
I liked farming, don't get me wrong. I just, for some reason, ever since I was a kid and I was reading about Carnegie and Ford and Rockefeller and Warren Buffett, I just I always wanted to create something that was worth a billion dollars. I don't know why, it's not even about the money. I just I wanted to create something huge. The challenge to me was so exciting. There's no other challenge in the world I could find as hard, and so I knew farming couldn't be that. You know that you can't organically grow a farm into cause. 

09:29
Farm is a 2% 3% returning asset. When it comes to farmland, it's a very asset. Heavy business. Scalability is tough, like I go on forever. So, anyways, so that's when I the guys, I'll put money back with you. And I went to a lawyer and I got a legit private placement memorandum this time and I said I want to raise $10 million. So I went back, I threw in my 500 grand. He threw in his 500 grand, and then I went back and when it was raining out around the farm, farming was good at that time so and oil was in the area, so it was a really good time to raise money there. And so I just started going farm to farm and I raised $10 million in about I don't know, it's about 14 to 16 months I raised raised the 10 million. 

10:14 - Whitney Sewell (Host)
Wait a minute. 

10:17 - Andrew Abernathy (Guest)
I'll stop there. 

10:18 - Whitney Sewell (Host)
How did you do that? I mean, is it just in this, when you're all the investors from the small town? 

10:23 - Andrew Abernathy (Guest)
Yeah, in that area, within a 100 mile radius, and you raised how much 10 million. 

10:29 - Whitney Sewell (Host)
10 million in 14 months. 

10:31 - Andrew Abernathy (Guest)
Yeah, and 18, 19. 

10:35 - Whitney Sewell (Host)
Tell us how you did it. How did you? How did you raise the capital? So even this guy wanting to put the money back with you, obviously the first deal went really well. He had to have some confidence that the next one was going to go pretty well Good question. 

10:50 - Andrew Abernathy (Guest)
I mean people. I've learned that people invest in people, not products, right and? And so when I was going to Ordo Dory was a here's my story, here's the stock market story, here's the real estate and Bismarck, and I just said the one thing about me is I'm resourceful, I, I, I'm nerd about it. I mean I literally devoted my whole life, from 10 years old to that point, because by the time I went to raise the 10 million, I actually somewhat knew what I was talking about more so, and I'm learning every day. But compared to when I was 10 years old and 13, when I was 18, I mean I read every book, I watched Harvard classes online, like I knew my stuff a lot more. 

11:30
And these people, for the first time ever, had an extra one to 200 grand line around, right, that was the average investment at the time, when the 200 grand a person and farming was good and they wanted a way to diversify. And nobody's ever tried to raise money in that area because you got to kind of be a local to know them and they've never had the extra cash like they had then. So it's just, the timing was perfect. So it's kind of a hey, let's throw 100 grand at this kid. Let's see what he can do. Well, you do that six, seven times, eight times and 10 times a day. There's a million bucks a day you're raising. 

12:04 - Whitney Sewell (Host)
Wow. So really these people, they already knew you pretty well, sounds like I mean you talk about small, so I grew up in a really small town as well, but maybe bigger than the one you are talking about. How many people did you say? 

12:17 - Andrew Abernathy (Guest)
200 was the place I went to school in, so 800, 800 people. 

12:22 - Whitney Sewell (Host)
Okay. 

12:23 - Andrew Abernathy (Guest)
Yeah. 

12:23 - Whitney Sewell (Host)
I think we were more like 1700. So we were massive Big city, so we did have a stoplight, a one. 

12:32 - Andrew Abernathy (Guest)
Oh yeah. 

12:36 - Whitney Sewell (Host)
So that, but it sounds like the relationships were already there and and what I one thing I wanted to point out there too, is that you already had a lot of relationships and you just went straight towards those, as opposed to so many of us. When we're starting in this business, we, we don't go that direction and we start a brand and we really start marketing in a big way when, man, we already and that's what we're trying to do is build relationships with investors, right, and add value to them, all these things. But I mean we forget the people that's already I already trust, right, or we already know that, already know who we are, that we've had relationships since we were little with right, speak to Kind of your marketing strategy to some of them. I mean, they didn't know you, but they probably knew you as 10 year old Andrew or eight year old Andrew, and now who's this guy? And now he's talking about investing big money here, right, yeah. 

13:33 - Andrew Abernathy (Guest)
So I went place to place, sat on a lot of tables and had a lot of coffee and cookies and sat in a lot of shops and their yards and we just talked. And I talked about at the time I was talking about value investing, I was talking about the Warren Buffett play I was talking about and the biggest thing they liked was, hey, I'm throwing all my cash in this. I had half a million dollars there that I've built up from four grand and they liked that it's. This is my money too. Because if I was going to him and saying, hey, I have no money, I'm not going to throw anything in, can you give me a hundred grand? That's a lot different pitch than hey, I'm going to throw everything I have into this, which is a half million. 

14:14
Here's my story of how I got it and here's how I think I can do it. Again and again, no guarantees and there's going to be a loss here and there, but if I can, we can win more than we lose will be sitting pretty good. So it was a lot of this relationship building when it can. I already knew him, like you said, but I don't know. I just kind of went and did it and I don't. I've never been a guy to think too much. I just kind of pulled up and told him what I was doing and they liked it. And if it wouldn't have worked, I would have pivoted and made it done. Done whatever to make it work. That's just. That was that's how I was going to do. So what was? 

14:50 - Whitney Sewell (Host)
the next buy, or or what were you going to do with this 10 million? 

14:54 - Andrew Abernathy (Guest)
Yeah, great question. So I was like 19. I we went next and bought a equipment dealership in Great Falls, montana, never been there in my life. A broker bought it to me. It was it started in 1947. We we bought it for about $3 million and the company at the time was doing 4 million revenue, about $400,000 EBITDA, and today, just to fast forward, we had 10 million in revenue now, and so that company's doing really well. 

15:26
But that was my issue back then, cause I also want to talk about my successes and my and the things that I didn't do well, as we bought that company. And then we bought some HUD buildings in Fargo, we bought some commercial properties, and everything was doing good. But you can tell from my pattern it was a shotgun pattern. There was no elevator pitch capabilities here. I was in way too many things. I could not tell someone what I did in two seconds, and that was an issue. 

15:51
I made a cold call, though and this leads into this in 2000. And when I was about 20, 21, I made a cold call to the. There was the top 10 wealthiest people in North Dakota. I called every one of them. The top of the list was Gary Tharalds. He's a local billionaire. And when I say local I mean he did not know me. This whole list was in Fargo, five hours away. They had no clue who I was or anything about me. 

16:14
So once I got my family and friends in to then to build a platform, I then said, okay, I need to now go meet people I don't know and build relationships for the next stage of this business. And the only one that actually gave me some time was the wealthiest, which was kind of fortunate. So I called the secretary of his office in Fargo. I said you don't know who I am. I'd like one of Gary's around, like talk to him, and she said he's not in, but I'll leave your number and name. And I'm like, yeah, okay, a few months later I get a call from Gary and we met. We started hanging out like every week or two weeks having pie and breakfast at the village in in Fargo, and he took me under his wing. And now to fast, you want me to stop? I don't want to get too deep into the story here. 

16:58 - Whitney Sewell (Host)
No, it's incredible that you took the initiative to to call even the wealthiest people that you could find right in the state and yeah, and I hopes that you get to talk to somebody, but incredible that that he did call you back. I don't know, I don't know if him, but it's incredible that he did that and it sounds like it's he invested some time with you, so he did. 

17:22 - Andrew Abernathy (Guest)
Yeah, his quick story is, he started in the 1982. He lived in North Dakota, raised, born and raised with nothing, and he started printing out hotels, and he built so many hotels at Goldman Sachs bottom for $2 billion or $1.6 billion roughly in 2006. And then he's done a lot of amazing things since, but just a crazy track record. And so, anyways, after getting to know him for a while and after going down this path of investing in a lot of things, our share price in Abernathy Holdings went from $37,000 in December of 2012, to give you reference, to about $70,000 a share in 2017. 

18:03
And then I, for the first time, made an investment that didn't work out because I had no focus. I bought into a helicopter company. The fund did, and, due to management change and non control on our end, the thing when voluntarily bankrupt, we did a class action lawsuit, and one we were actually right. The numbers were right, management was wrong, we won the lawsuit, but we got pennies on the dollar right. The point of the story is, though, our shares went down to $60,000, so 37 to 70, down to 60, down until the 18. And that's when Gary Therribson, after five years of a relationship, said Andrew, you're good at a lot of things, but you're not great at anything. 

18:42
And that is when myself and the company had a huge transformation and has catapulted us to where we are today. 

18:51 - Whitney Sewell (Host)
Wow, was that like knocky on the ground type of wisdom there? 

18:57 - Andrew Abernathy (Guest)
Yeah, I took it well, but yeah. 

19:01 - Whitney Sewell (Host)
Yeah, and how long? And tell me again. You said five years. You all known each other about five years at this point. 

19:07 - Andrew Abernathy (Guest)
Yeah, I was, I would have been 24. Yeah, it's pretty no trouble. Four or five, four to five years. 

19:17 - Whitney Sewell (Host)
And how did that change? How you moved, went forward, what was the path? Then and it sounds like you had a hard knock right and you're hard lesson learned, and it sounds like somebody that was way ahead of you spoke some wisdom, hard wisdom, right Into you at a good time and did that change you Did that. What happened? 

19:39 - Andrew Abernathy (Guest)
Yeah, the story gets really fun now. So again, our shares of 37 to 70 to 60 until 2018, our company had about a $15 million book value. And that's when I said okay, so I brought it down. I said, what do I want to do? I said, well, I've been really good at real estate. Like every time I've done real estate it's worked. So I go grab real estate and I said, what do I want to do in real estate? And so I had it down to assisted living and self storage. The reason I picked self storage is because self storage was 95% Monpa own, very fragmented In 2018, the major names the Marriott's of storage, the, which would be like a public storage, and like the Hilton of storage, which would be like extra space they started allowing third party management that year first time in history, just like Marriott and them did back in 1982. 

20:28
And I figured that would create consolidation and price management in the industry and also it's very simple, easy to build and you only need one employee per $20 million asset building. So I brought this to Gary and he said, andrew, I like this idea. So we jumped on his jet, we went out to California and sell like city and met with extra space and public storage. And on the way back, gary said Andrew, this is your billion dollar idea. So when I landed in Fargo, I started to sell everything, sold everything off, created a big cash pile. 

21:03
The one thing we did see keep was the equipment dealership, because we wanted to vertically integrate. So the one thing that Gary Therrelson did was he was his own realtor, he was his own GC, he was his own everything when he built hotels. So we wanted to create our own vertically integrated model. So we kept the equipment dealership. We have our own construction company, now our own garage door dealership, our own development team, and now we are pumping these things out. We're doing 60 million and ground brakes. This year we got 180 million and ground brakes next year. I mean we're on track to be the largest self-storied developer by 2026. Gary Therrelson did finally invest and now he's our partner 5050. And not only that Abernathy Holdings has swelled to over $100 million in book value, 200 million valuation between 2018 and today. So we've raised to date over $100 million, including Gary's JV, and I attribute a lot of this rapid growth from 2018 to focus. And yeah, I'd say focus is the biggest thing. I mean we had a good run there to 2018, but nothing like this. 

22:13 - Whitney Sewell (Host)
Well, you had a good run on the very first property. 

22:17 - Andrew Abernathy (Guest)
Yeah, yeah, true. 

22:18 - Whitney Sewell (Host)
No doubt about it, but you know it's interesting. I still think that your, your drive right to the next thing, even though it was scattered maybe at first, it's part of the path to your success. And just the drive to move forward, move, move, move and not giving up and I mean I hear it after interview after interview, those that are quote successful are have that right, they're driven and they don't care to hear. No, as you obviously didn't care to hear, or you just went on and kept pushing, and so I would give us a what would you do different? Anything. 

23:01 - Andrew Abernathy (Guest)
I mean, obviously it'd be easy for me to say I wish I would have figured out how to focus a lot sooner, but then again, I think I needed to feel the pain that the helicopter company caused me. I needed to feel what unfocus and scatterbrain looked and felt like, because if Gary would have told me how that feels me, staying focused probably would have been a short term thing. Right, you got to feel that pain. 

23:26
So my advice is to hopefully get somebody down at the do that or feel it on a smaller scale. I'm glad I felt it when it was a few million instead of a few hundred, so I don't know if I do anything different. I'd like to say I wish I would have focused sooner, but then again might have detrimented the rest of my life. 

23:45 - Whitney Sewell (Host)
So yeah, no doubt about it. Any other, I think too the listener you would think, well, who's going to listen to me like that, a billionaire like that, right, and speak to building even that relationship? You got that call and what did I mean? I just think that was crucial. Right, you had a mentor. Right, you had somebody that had been there and done that ahead of you and I mean, it was operating at a whole different caliber right Than you at the time. But he obviously saw something in you To be willing to spend the time and energy and invest in you. And I just I can say that to numerous people that have taken me under their wing and I look back and I'm like I don't know why they did it at the time, but I'm thankful that they did see something right and that they did invest the time and helped me in so many ways numerous people have. But what was it about you? What gave him the confidence that, hey, I see something in this guy Because I just so many want him into it like that, right? 

24:47 - Andrew Abernathy (Guest)
Yeah, first off, if he went to Bansard, I would have kept calling till someone did just to have that lesson. And then also make sure you have mentors that you might like celebrity mentors. Warren Buffett's, a celebrity mentor of nine. Never met him. I really would like to, but I've read every book and I've learned a lot from him too, so you can read, you can learn about a lot of people and how they've built success. I thought I was even knowing them, but again, knowing one is huge. 

25:11
What he saw in me, I think, is Gary, and I think, like many billionaires when they get into that age group, is they really want to share things with the next generation, or most do right. They enjoy that. They want to tell their story and they really want to see it impact someone's life. Well, I think Gary's told his story to thousands of people. I think the difference with me is when he sat down and told me his story, I took him as actionable items. Every single day, every meeting we had, and I came back with results, or at least attempts of results, and I think every time I did that and he watched me grow from where I was to focus and everything I literally sold, everything, moved my family to Arizona and started focusing just on self storage because that was the right market. Like he saw me make crazy changes and sacrifices and like a lot of people he told didn't do anything. They just thought, well, it's a great story, and then they go back and complain about whatever's going on. I didn't do that. 

26:08 - Whitney Sewell (Host)
Yeah, they kept doing the same thing they'd been doing yeah and there was no change. So how would you teach the younger crowd now to focus on that one thing? What would be some advice that you got. 

26:20 - Andrew Abernathy (Guest)
Biggest thing is finding your passion, because the odds of success are a lot higher if you do something you're passionate about, and that's why one of my sisters is a teacher. She's not doing what I'm doing. I wouldn't be a good teacher, right? So that's what I'm doing. So, as long as you've already figured that out, I'm assuming if you're listening to this, you've already realized that real estate is probably your passion. So check, now the biggest thing is to figure out how to focus. I mean, I get emails more and more every day Now that we're getting more successful on here's the deal, here's this deal, and it's all a different thing, nothing to do with storage and I've had to learn to say no. These really wealthy people are really really good at saying no, but they say yes when it counts. So when I say focus on something, it's not saying yeah, just focus on real estate. It is finding asset class within real estate that you can be the best at. I mean, I was a jack of all trades and master at none. And yes, you can become worth 10 to $20 million and be a jack of all trades, and maybe that's your goal, right? You first need to have a clear goal. Do you want to be worth 10 to $20 million and you enjoy being a jack of all trades because it keeps you excited and stimulated? Great, then what I'm saying is no relative. It doesn't. It's not related to you, right? Because what I'm saying is that people that want to become worth four, five, 600 million, maybe even a billion or trillion, some days with inflation adjustments If that's your goal, you got to go down this lane. 

27:39
Wealth is created on something and preserved on many things. Diversification should not come till later. Even then, one time somebody said well, what about Warren Buffett? I mean, he's pretty diversified and yes he is. But if you look back to when he started in like 1975 roughly, he already had taken control of Berkshire Hathaway. He had blue chip stamps and a few other things. I mean his holdings were probably in four or five things and they were all the same simple business model. He was focused. He now has 80 plus subsidiaries because he's had to tack on with capital inflow over all the years. He wasn't a billionaire until he's 56. 

28:16 - Whitney Sewell (Host)
Bringing people together, right? You even said before we started, that was like a superpower of yours. When did you learn that? Is it a skill that you learned or is it something just like you figured out? Hey, I realized I'm passionate about this thing. Did you read some books around how to manage people? What was that? What skill we all need if we're running a business, right? 

28:35 - Andrew Abernathy (Guest)
That's a great question. I mean, there's a lot of different management models and one of the first people that I fell in love with when it comes to business was, again, Warren Buffett I mentioned yesterday, and his model was very simple. I mean, he bought companies that had great management in place. Some of them he didn't talk to at all. He just wrote him a letter once a year Like if something happens to you, who do you think should replace you? But he just trusted the manager that already had a great track record to run that said business and all of his managers ran their businesses differently. Right, warren Buffett wasn't saying, okay, all of you change your management models, right? It was a very delegated system a spoke wheel, spoke model hub and spoke, excuse me. And so that's kind of the model I started with, grew to realize that I was actually really good at it. I mean, when we bought the equipment dealership, I hired an individual. At the time he was, I think, 34, luke Stewart came in, tripled the business and he still is running it today. He's got 27 employees and we talk every couple of times a week, but he's doing a great job, but he's passionate, he dreams about equipment. I mean you can see the passion right. I would never take him and put him in the construction role because he wouldn't be happy. Could he do it? Yes, but would he be happy? No? 

29:47
Same with the development company, same with the construction company. We've got five different leaders of departments, and I'm there, I'm a good cheerleader, I'm good with meshing it. So in our business storage, we have a land team that all they do is look for land. They find the site, they entitle it through the city takes about 12 months. Well then, that needs to all be passed on, and all the information and all the due diligence has to be passed on to our construction crew. And the construction crew builds. It takes another 12 months, and we need the rental equipment from the construction company to build it for the construction equipment. And then it goes to public storage to manage. Right? All of our buildings are branded public storage. We just own them. The point, though, here is all of these passionate managers. They need to be able to connect and have a similar vision, right? We all have the same goal, and we're fine, and that has been something that I've been very fortunate and lucky to put together. 

30:41 - Whitney Sewell (Host)
So, Well, I want to back up just a little bit. You talked about the guy that's running your equipment business. You know he was passionate about equipment, right, I love driving big equipment, by the way. 

30:52 - Andrew Abernathy (Guest)
Yes. 

30:53 - Whitney Sewell (Host)
But, but he was passionate about it and I think it's such a good point and not set off enough. Well, you're not going to go expect him to go run the construction business, right, and he may be able to do it. But it's very different when it's something you're passionate about, right, and something that you love, and you can just see it when somebody starts talking about something that they're like passionate about this thing, right. 

31:14 - Andrew Abernathy (Guest)
Yeah. 

31:15 - Whitney Sewell (Host)
It's almost, maybe a way you find their passion. But how have you done that? How would you say hey, how did you find him for one? But then, even in other parts of the business, other types of business, how do you know that this person's passionate about this thing? 

31:28 - Andrew Abernathy (Guest)
Yeah. So I've met these individuals a lot of different ways. Usually it's through someone. So when we bought the equipment dealership, my mistake was I actually didn't have a manager set up before I bought it, so that could have turned out bad. 

31:38
But I was very fortunate to get introduced to Luke Stewart. He drove from Idaho to Montana. We met once and I could tell that he loved it. I mean he's been in the industry since he could first work. He's never left it. He's a top salesman for one company and he's kind of went through the ranks from sweeping floors to management and I knew it was the guy that I wanted. You could tell he was honest and loyal and he didn't bounce around company to company. He had a great track record. All he wanted to talk about was equipment. You can just tell right, if you change the topic or do something, he always brings it back. 

32:10
That's passion, that is a subconscious passion right there. Another example is for when we started in self-storage I said I don't really know anything about self-storage, I should probably find a guy that does. And so I was introduced to Nate Mayhoos and he's been in storage for 15 years and when he talks about it I mean you could just feel the energy, kind of like me right now, talking about the business, like I love it, I'm energetic about it. That's them with what they do. They're all different. Passion comes in a lot of different packages, but you can see the package. The package is very bright, very obvious. To me, anyways, passion just shines through and then trustworthiness and work ethic and all of those things follow, but passion is always number one. 

32:59 - Whitney Sewell (Host)
Yeah, love that. Where does Andrew fit in the business? Now? I want to back this up a little bit. You did all these things right and you were successful at most of them, right, you did a great job. But then you had this mentor tell you you're good at nothing, right? You're trying to do so many things right, so you focus in on the self-storage space and developing self-storage right. That is your one focus. What's Andrew's one focus within that? Because it sounds like, hey, I had to find somebody that was an expert in self-storage right and you brought in that expertise and that passion about this asset class. What's Andrew's focus in the business? 

33:38 - Andrew Abernathy (Guest)
Yeah, so every week I talk to manager president of each division at least a few times, right. So I mean just keeping up to date on what bids are. So we have the construction president, development president, got the CFO controller, we got everybody kind of doing their thing. So my job is to really stay involved. I still have investor relations. So we've got 80 investors in Abernavie Holdings plus Gary as a joint venture. I am fortunate. My wife and I still own 32% of the company. 

34:09
And then our management has prior success. A lot of our management has wealth built from prior success, so they bought into the company as well. So our company, our managing members, own about 50% of the company. But anyways, all the other 80 investors reach out and I know the gist of every division. And then, obviously, if they're short on money or need money, I'm the one that I've raised every dollar. So I go out and raise the money. I'm just kind of bouncing all over the place right now. So it's really fun though, because it's like I'll go into one office and we're sitting there talking about we're trying to get the construction numbers down $8 a foot here, and this is how we're going to do it. Then I'll go into the next one and they're like hey, we've got five sites in contract for our next dirt pieces, and here's all the ones we have. Now Go to the next office. We're talking about banking terms, so I can go on forever, but I'm just bouncing all over the place. 

35:03 - Whitney Sewell (Host)
Any other tips around managing all the employees that we haven't talked about? 

35:08 - Andrew Abernathy (Guest)
Actually, the only people that I work with are the presidents. Each of them have their own staff and I do not tell them how to pay them, how to incentivize them. I have advice here and there if they ask. Our incentive programs are different across each division. The only payment plans and incentives that I set are for each of those presidents that I talk with. 

35:30 - Whitney Sewell (Host)
The other 37 employees I have no connection with so are they incentivized, like in a bonus structure type or KPIs, something like that? 

35:40 - Andrew Abernathy (Guest)
So Mar, I'm a big believer in the best investments in your people. So when we, when every facility we build, we give away 3%. Some goes to the development construction right, Some of their team members. So every hundred we build will give away three, which is pretty good. And when I say giveaway, we loan it in. So our money plus 10% interest, plus the bank debt, all has to be serviced and then they would get their percentage gift above that, so kind of a profit share. And then we've also allowed the level below our presidents. We've allowed them to buy units in Abernathy Holdings at a more simpler long-term payment plan so they can own part of the shares of Abernathy Holdings, which owns everything. So we've done those two levels of incentive plans. 

36:26
Wow and then incentivizes people to want to get there because they want to have access to that speak to meshing these teams around the same vision. 

36:37
Yeah, so I've been really lucky. It's funny because I was watching this documentary on Branson Richard Branson the other day and there was a clip in there where they're like the guys of Richard Branson like when are you gonna get to space for his space companies? Oh, we'll be there in 2023 or whatever it was at the time. And then the camera goes to his team and the team's like what, we haven't even designed it, like we're not gonna get there by what he always does this, and then it goes back to Richard. This is how I get the team excited. So that's kind of me. The point is, I'm the guy that's like all right, I want a hundred of these by 2030. And I tell each division that and they're also doing their math, like the land guys like I need to find this many sites. The construction guys like I need this many people. But again, they're already out there. They're actually on track. 

37:30
So, to answer your question, I don't know how to pinpoint how we've done it, but we have a fun energy around the office and I always throw crazy goals, such as the one I just said, and everybody buys into it and wants to do. They wanna see it, they wanna build something bigger than them, and I don't call them employees, I call them partners, and that's just what they are to me. And every single one of them is gonna be crazy wealthy if we can achieve these goals and they can do whatever they wish with their capital. But every single one of the people that are presidents, like I've said, they've had past success. So, as Warren Buffett says, how do you hire someone that doesn't need to be there financially? Only way they stay is passion, and Warren Buffett's done that. He'll buy a company for three billion and the guy that he buys it from stays and runs it. He's obviously not motivated by money. He doesn't need more money, and that's what I look for. These guys are here because they wanna build something big. 

38:24 - Whitney Sewell (Host)
Thank you for being with us again today. I hope that you have learned a lot from the show. Don't forget to like and subscribe. I hope you're telling your friends about the real estate syndication show and how they can also build wealth in real estate. You can also go to lifebridgecapitalcom and start investing today.