All Forum Posts by: Scott Meyers

Good Choice - Less Tenants, Toilets, and Trash.....

Reach out when you're ready to make that transition Gabe, we can help with that. 

Cheers!

Originally posted by Jason Arcuri: 

I would love to know where you get that 95% go bankrupt. No one I know has gone bankrupt that owns rental properties and is passion. I know people who aren't passionate about it and just ended up selling the properties but they made good money just didn't care for the lifestyle involved. I think you have a lot of good info here, so please don't take me wrong.

I just believe that if you don't have the passion, then you are less likely to want to learn and really work on the business end of it. I believe you are right that the money is in the bigger end things like warehousing, but that's not easy for an average person starting out to get into. At the same time, it also depends on your market. The last multifamily/apartment I bought makes roughly 25% ROI. Don't get me wrong this is RARE but usually I aim for 15 to 20%.

Jason, The stats are everywhere, the most recent one is here:  http://www.thereibrain.com/get-started/  

Furthermore, of those that make it beyond the first year, 80% of those folks fail within 5 years.  

Passion has nothing to do with it.  Bad Business People following Bad Business Models are what leads to this alarming rate.   Look around, well over 90% of the people that used to attend the Real Estate Investor meetings I have spoken to in the past 10 years are gone. 

I'm not trying to be a pessimist - but as they say, "the stats don't lie".   

I don't have to be passionate about Self-Storage (even though I am) I just happen to be smart enough to shift my focus into the asset class that out performs multi-family, single family, office buildings, retail strip centers, etc.  

Continued success - it sounds like you're doing well.      

Hey Ethan, 

I was 23 - Bought & Sold 82 Single Family Rentals, 434 Multi-Family Apartment Units, 2 30,000 sf office buildings, a 3 acre Parking lot for tractor Trailer Storage, 8 Condos, and 2600 + Self Storage Units. 

Once I bought my 1st Self Storage Facilty, I sold Everything except for Self-Storage, and now, Life is pretty darn good - No tenants, toilets, or trash - I just wish I would have started with Self Storage First. 

I'm now a National speaker and Trainer in the Self Storage Industry - My 2nd 7 figure business. 

Great idea you have here, asking others where they started, and after mentoring Hundreds of beginning investors like yourself, I'll just share a few tidbits of "experience" 

1.  Don't buy into the "Passion" Hype - Follow the best business model, and get REALLY Good at it.  Passion is watching your bank account rise, no matter how "Attracted" you are to single family homes, or apartments, or mobile homes... etc.  Look at the trends - The Money is in the simple businesses in real estate - Self Storage, Warehousing, etc.  Let all these other guys and gals have their tenant and toilet businesses - 95% go bankrupt in 5 years anyways ( Ask me how I know about this)...

2.  Get a Mentor.  Free mentors are great, but they can only take you so far.  Paying for a Business coach will shorten the curve and save you (make you) $ Millions over your career by starting with the right skill set, and having someone keep you accountable.  I have spent A LOT on coaches, and not 1 ounce of regret - they have made me millions. 

3.  Don't chase shiny objects - Choose a path and FOCUS (Follow, One Course Until Success). 

4.  Don't let other people's fears, or doubts keep you from launching.   The Naysayers will always be around with a firehose, ready to drown the flames of your desire to go out and make something of yourself - It makes them feel better if they keep you from succeeding so that they don't look like failures. 

Ok, this post is getting too long. 

Welcome to Bigger Pockets Ethan.   Go find a niche, pull the trigger, and then strive to get better at your craft each and every day. 

Now, Go CRUSH it Son! 

WHOA Engelo.....

And others - Yes, this is a great business model, and shipping containers work, but to spend $1,000, $30,000 or $1 Million thinking you can create demand is a BAD idea. 

Besides, Your #'s are off. 

I have A great deal of experience here, so I'll share a few things everybody missed. 

A CONVERTED Shipping container will run around $3,000. This is for a 40ft. Container with a wall and 2 roll-up doors.  Nobody wants to rent a shipping container as-is (the $1,000 unit you mentioned) and try to swing that big door open.  

You will need more than $10k for that site - it needs to be graded, leveled, graveled, and you need 2 rows of concrete footers to set the units on.  Otherwise they'll shift, sink, and then the doors won't open. 

A "Catchy Brand" is great, but you can't manufacture demand for storage.  It's a needs driven business, think about it.  

I also highly recommend you start with a feasibility study that looks at the market within a 5 mile radius to determine the population and the # of competitors, and ultimately, provide a sf per person ratio, BEFORE you decide to build this - otherwise, if the market is oversupplied, You're sunk before you begin - or at least it won't be as profitable as you think. 

Zoning - You need to have zoning for Outdoor parking/and or outdoor storage.  Some areas will also zone these as a holding yard (if you're using nothing but shipping containers) just like you would find in a port city that houses these shipping containers.  

$150 per month - how does that compare to your competition?  How much are they charging per foot?   Maybe you can get $163,  Maybe the market will only bare $78. 

As for Toledo, we had a vacant Wal-mart under contract for $6/sf that we were going to buy and convert to Self-Storage.  After we received our Feasibility study and completed the first phase of due diligence, we decided to pull out - the demand and the demographics just wouldn't support it. 

THe beauty of sites built with converted shipping containers is that it is totally scalable, less expensive to develop, and you don't pay property taxes - they're mobile. 

But You need to do a LOT more homework before you just buy a lot and throw some containers on it and put up a free godaddy website. 

If you want to learn about the business, a good resource is  www.SelfStorageInvesting.com.  You can also attend the Self Storage Academy and the SSA and ISS Trade Shows. 

Keep us posted. 

Hi Robert S, 

The Pros  

1. No tenants, toilets, or trash.  

2. You NEVER have to evict - we use the lien laws to lock them out and sell their stuff to get paid. 

3.  It's the most profitable sector of all commercial, so institutional and private $ is MUCH easier to acquire. 

4.  You can use a kiosk to run them - Looks like a RedBox that leases units and dispenses locks. 

5.  The sector does better in a recession than in boom times - either way, it's inflation proof and recession Proof. 

Cons

1.  Not a Con for Self Storage, but I see many people like yourself stumble across a deal, and they buy it without ever learning how to evaluate a Facility and it's market - and they ultimately pay too much, or underestimate the demand in the market, thinking it will just "fill up" on it's own. 

2.  Your money buys A LOT More Units, so there is more to track - HOWEVER, the solution is property management software that handles this for you. 

3.  Any other CON, would be the same CON for any investment - You face competition, you need to keep an eye on employees, and you need to treat it like a business.  Market it like a pro, and work on improving it each and every day. 

Of Course I'm Biased, but I've owned hundreds of Houses, Hundreds of Apartments, Office buildings, parking lots, and large warehouses - and once I bought my 1st Self Storage facility, I sold everything else to build a massive empire of metal boxes on concrete slabs with no tenants, toilets, and trash - and it's the best move I have ever made (next to marrying my wife) 

In addition, here's a resource for more info:   www.SelfStorageinvesting.com - You'll find free videos and other resources to help you on your journey. 

But HERE THIS:  DON'T do this alone - get an industry professional to properly evaluate this deal, or a partner in the business. 

If you want to message me outside of the forum, I can point you in the right direction. 

Cheers, 

Hi Dave, 

This is accomplished with equity splits, generally 50/50 for existing facilities, and closer to 25/75 for ground up developments or conversions.  And yes, as you are finding out, the difficult part will be attracting investors when you have no experience in the sector (just being candid). 

It's Probably best to bring in an experienced developer or partner with experience, so that the capital raise goes much smoother.  In addition, you didn't mention that you have secured a feasibility study - I'm assuming you have one, and didn't mention it.  You'll need to add this to your offering memorandum, otherwise, potential investors may assume that you are going forward with a "build it and they will come" attitude. 

All this being said, many developers and investors such as yourself have come to us to partner with them on projects.  We provide both the knowledge experience, and access to capital  that will allow you to get the deal done - and you don't need to give up 99% of the equity in your deal as you mentioned.  

If you have an interest in talking further, you can email me, and we can chat about some possible options for you to get this project to the finish line.  We like your market and would be interested in working with you, should you see a fit.  

Cheers, 

Hi Lamar,

We Use InfoUSA.com almost exclusively, and several of our students use Reference USA.  

Happy Hunting! 

simply go to www.sparefoot.com to compare rates - It's like the "Priceline" for self storage. 

Amen to that! 

There are over 40 Different ancillary income streams in the Self-Storage Industry - Truck Rental, Selling locks, boxes, and moving supplies, lighting, shelving, records storage, pack n ship, ebay.....   which allows us to "10 X" the value of our facilities.   

Unlike Single Family homes, you have a ceiling in the market, and with Multi-family, you can raise rents, but people may leave. 

This is the sweetest spot in All of Real estate (In my biased opinion).....

Patrick, 

Good to hear the Storage Biz is treating you well.  Just to clarify, Each state has a specific lien law with regard to how you handle overlocks, and the sale of goods.   Just because a judge ruled in your favor doesn't mean you don't have to STRICTLY adhere to your state's law as it pertains to late notices, Overlocking, Applying the lien, sending certified notices of liens, the timing and the # of notices, and ultimately, how to conduct the auction and notifying the owner of any overages.  Failure to do so could wind up in a very hefty lawsuit.   Just wanted to clarify for you, and others reading this post, that being able to lock out our customers for non payment, and then auctioning their contents after 90 days is much more favorable than evicting a tenant, we still have to abide by the law, or face a lawsuit for not complying with the state statutes or "illegal sale".   

Continued success,