All Forum Posts by: Michael Wagner

I don't typically get to where I need to follow up but I would if needed. My self storage investing strategy is a very low volume high margin game...so when I find a deal, I move my focus to that one investment for a while. As such I don't really need to do the "keep your pipeline full" machine style marketing. I usually find a deal from within the folks who reach out to me if from the in deliverables. They next step would be straight cold calling. Fortunate to avoid that phase so far;)

Yes, Direct to owner is where we are finding most of our deals right now.  That's not to say you can't find a hidden gem in the listed offerings, its just harder and harder to do as storage continues to "trend".... Direct mail with follow up cold calls to the undelivered letters seems to be my best bang for the buck!

I have at least partial ownership in 10 properties and every single one of them have faired very well over the last 4 months. Occupancy and Collected Rents are up at all but two...and those two are operating at status quo.

Note that our strategies involves very little leverage, small markets and discounted buying of value add properties as an intentional way to compound the resiliency that the asset class itself has inherent within it.

Recession proof? No! 

Recession Resistant? YES!

Originally posted by @Ari S.:

@Michael Wagner glad to hear that. If you had to boil down the #1 selling point in self storage, what would it be? I am guessing it would be that it is a very profitable asset type with low maintenance, no plumbing, HVAC and minimal electric. I think somewhere along the way people started talking about it as a recession proof and I think it is definitely more susceptible to a recession vs. multifamily or MHPs because it is discretionary

 For me, the single biggest selling point on self storage is the income to expense ratio!  And yes, that is a direct result of all the things you mention (plus legal advantages--> lien vs. eviction).  I would never say that it is recession PROOF but I would suggest that it is more recession resistant than MF (and probably every other asset class). I base this assertion on historical performance of self storage during past recessions which includes record setting low default rates in this asset class as compared to other mortgage backed assets.  I understand what you are saying about it being discretionary spending but don't know that that really holds water here.  It might be discretionary to you but perception is reality and simply put, storage demand is driven by transitions and transitions increase during recessions.  As such, as decrease in demand from the folks who do use storage as a discretionary consumable is offset by those who find themselves NEEDING storage as a result of downsizing, relocating, divorce (more marriages end as a result of financial challenges in a recession) etc.  This might be anecdotal examples but they are backed up by storage's performance during recessions in the past. 

I am part owner in 10 facilities and occupancy at all but a few are up over the last three months. The other two are flat. Collections had also improved. Some of our chronic late payers are paid ahead. Gotta love government money;)

I primarily run my own deals. Also partner with some of the folks that i mentor. Occasionally lend or JV on other projects but that less common for me.

 Yes, we are referring to the whole business...there's a good bit of debate to be found in the forums here on BP on whether self storage is real estate investing or a business. I contend that it is both and that all real estate investing should be treated as a business. Self Storage really is just owning space and renting it to others at a cost that exceeds your cost to own and operate it. It can be systemized and automated quite seamlessly. The blog I linked above will likely give you a good Intro!

 This would be a VERY long answer to a short question but if I can summarize it, I would point to the underlying fundamentals found in self storage.  The income to expense ratio runs in the 30-35% range whereas its 50-55% in multi-family.  This allows for an extra 20 cents from every dollar of revenue to serve as extra profit/margin for error! I also appreciate the benefits that come with not dealing in "habitational" real estate.  I'll take a lien law auction over an eviction any day of the week! I also like how easy it is to systematize storage operations. I only spend roughly 5 hours per week "mananging" my portfolio!  The blog below will give you some insight into the many other reasons I love storage.  I'd invite anyone with interest to start with the oldest and work your way forward:

https://www.biggerpockets.com/member-blogs/3915-all-things-self-storage

The most important advice I can give is for you to GET SMART before you dive in...and then keep getting smart.  And PLEASE, start with the FREE education available to you on this site and others.  I Love self storage and recommend everyone who wants to invest to look at it as an option.  Some of the underlying fundamentals make it very clear why it is among the best (and often the best) performing assets on the planet. You might appreciate this humble little blog I host here on BP:

https://www.biggerpockets.com/member-blogs/3915-all-things-self-storage

And please feel free to reach out to me if you have questions or just want to connect!