My Self-Storage Investment Journey - Follow Along!

[LightHouse]

#dumpsterfire

Don't be rude....

 

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[amcg88]

• I pulled KY facility information.
• I follow up called five owners from campaign 3. I was unable to speak with anyone.
• I called a broker and briefly chatted with him about my investment criteria and any potential deals.

 

[amcg88]

• I pulled KY facility information.
• I follow up called four owners from campaign 3. I spoke with one owner who was not interested in selling.
• I called another broker and introduced myself to him.

 

[amcg88]

• I pulled KY facility information.
• I ordered an 87 count KY mailer on Saturday
• I follow up called three owners from campaign 3. I spoke with an owner who was not interested in selling.

 

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[amcg88]

• I pulled KY facility information.
• I follow up called four owners from campaign 3 (I called one yesterday). I spoke with one owner who was not interested in selling.
• I ordered business cards to hand out to people at the conference next week. I need to book my flight, hotel, & conference registration.
• I have still been able to get a hold of one owner who reached out during my vacation last month. I tried again today.

 

[amcg88]

• I pulled KY facility information.
• I follow up called one owner from campaign 3.
• I booked accommodations for next week's conference

 

[amcg88]

• I pulled KY facility information.
• I follow up called four owners from campaign 3. I spoke with one person who is not interested.
• I called a wholesaler to introduce myself.
• I spoke with a lender about the prior deal I was working on which my business partner still has in purgatory. I clarified and sent over the lender's questions to one of the owners.

 

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[amcg88]

• I met a number of different people at the conference last week. I spoke with all the lenders and brokers at the trade show.
• I re-prioritized the state list to those with smaller, presumably less competitive markets
• I have continued with pulling state data for direct mail campaigns and have kept on going with the follow up calls
• I had two owners call in response to a direct mail campaign today. One wanted a way too high price, I left a voicemail with the other.
• I have continued to do data analysis and created financial projections for the one deal that is still semi-alive for lenders.

 

[WJK]

• I met a number of different people at the conference last week. I spoke with all the lenders and brokers at the trade show.
• I re-prioritized the state list to those with smaller, presumably less competitive markets
• I have continued with pulling state data for direct mail campaigns and have kept on going with the follow up calls
• I had two owners call in response to a direct mail campaign today. One wanted a way too high price, I left a voicemail with the other.
• I have continued to do data analysis and created financial projections for the one deal that is still semi-alive for lenders.

Have you bought anything yet?

 

[amcg88]

• I am continuing to pull different states' facility owner information based on my state re-prioritization
• I had further conversations this week with a bunch of folks I met at the conference
• We backed away again from the one deal. Seller still wants too much.
• More lukewarm follow up calls.

 

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[amcg88]

• I have been grinding away, pulling facility information. I am almost to my target of 5000 letters mailed. I will reach it in a few weeks. After that point, if I am unable to procure a deal, then I will likely put this project on pause for now. A couple negative factors right now, 1) lots of competition and 2) high interest rates.
• I had four owners respond to my direct mail campaign this week. I requested additional information from them.
• Finished the PA mailer follow up calls, onto the next states I mailed.

 

[Antifragile]

5000 letters mailed. I will reach it in a few weeks. After that point, if I am unable to procure a deal, then I will likely put this project on pause for now. A couple negative factors right now, 1) lots of competition and 2) high interest

I promise you one thing: it’s not the market conditions that prevent you from finding deals.

It’s your actions.

 

[WJK]

• I have been grinding away, pulling facility information. I am almost to my target of 5000 letters mailed. I will reach it in a few weeks. After that point, if I am unable to procure a deal, then I will likely put this project on pause for now. A couple negative factors right now, 1) lots of competition and 2) high interest rates.
• I had four owners respond to my direct mail campaign this week. I requested additional information from them.
• Finished the PA mailer follow up calls, onto the next states I mailed.

Questions: Why would you have "lots of competition" at the same time as high interest rates? Usually, the higher lending costs quell the other investor's interest in RE. Lower rates usually bring the hoards out of the woodwork. Or have the higher lending costs cooled off your personal investors? You've talked about taking deals to your investors, so I assume that you still need their participation. What is your goal here? Why are you doing this? What made you hone in on this segment of the commercial market? Which direction are you going to pivot next? How can you take advantage of your work so far? What is the spinoff?

 

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[jclean]

Questions: Why would you have "lots of competition" at the same time as high interest rates? Usually, the higher lending costs quell the other investor's interest in RE. Lower rates usually bring the hoards out of the woodwork. Or have the higher lending costs cooled off your personal investors? You've talked about taking deals to your investors, so I assume that you still need their participation. What is your goal here? Why are you doing this? What made you hone in on this segment of the commercial market? Which direction are you going to pivot next? How can you take advantage of your work so far? What is the spinoff?

You are a very patient woman, I don't quite understand why OP doesn't take your good advice.

insanity is doing the same thing over and over and expecting different results

What is the point of an accountabilty thread if you don't take anything from experienced people anyway.

Amcg88 aybe it would be an idea to link your determination to the good advice you have already received here.

 

[WJK]

You are a very patient woman, I don't quite understand why OP doesn't take your good advice.

insanity is doing the same thing over and over and expecting different results

What is the point of an accountabilty thread if you don't take anything from experienced people anyway.

Amcg88 aybe it would be an idea to link your determination to the good advice you have already received here.

I thought maybe he was a wholesaler. So, I asked a long time ago if that was true. No answer. He's sure not a broker, but that would be a good gig for him after putting in all of this work and research. He would have a built-in practice with a readymade lead farm. I just cannot figure out the why to all of this...

 

[Antifragile]

I thought maybe he was a wholesaler. So, I asked a long time ago if that was true. No answer. He's sure not a broker, but that would be a good gig for him after putting in all of this work and research. He would have a built-in practice with a readymade lead farm. I just cannot figure out the why to all of this...

This is the only progress thread with no engagement from the OP.

Typically people post these threads for one of two reasons:
1. To get feedback, improve by hearing experienced voices
2. To give back, to show from an expert perspective for others to follow

This thread is easily in the top 10 of least useful for anyone to read or participate. It’s a complete mystery to me, like you, as to the WHY this thread exists.

 

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[WJK]

This is the only progress thread with no engagement from the OP.

Typically people post these threads for one of two reasons:
1. To get feedback, improve by hearing experienced voices
2. To give back, to show from an expert perspective for others to follow

This thread is easily in the top 10 of least useful for anyone to read or participate. It’s a complete mystery to me, like you, as to the WHY this thread exists.

I've been thinking about your reply - and it's an interesting situation that seems very common. Don't most of the people around us get up every morning -- put on their pants one leg at a time and follow the same routine without asking any deep questions for years? Did they deliberately choose their path or was it simply the one of least resistance? Were there better options then or now? And unless something drastic happens along the way to force the query, some never think to question that journey. By acknowledging that the question even exists, they would be endangering the unpinning of their entire life. The consequences of even asking are too daunting. The answer might be a total annihilation. Lion, tigers, and bears. Oh my.

 

[jclean]

I've been thinking about your reply - and it's an interesting situation that seems very common. Don't most of the people around us get up every morning -- put on their pants one leg at a time and follow the same routine without asking any deep questions for years? Did they deliberately choose their path or was it simply the one of least resistance? Were there better options then or now? And unless something drastic happens along the way to force the query, some never think to question that journey. By acknowledging that the question even exists, they would be endangering the unpinning of their entire life. The consequences of even asking are too daunting. The answer might be a total annihilation. Lion, tigers, and bears. Oh my.

I think this statement between "know it all" people and "learn it all" people is very true.

The difference between the two concepts is growth. A know-it-all person may already have certain abilities, but they remain the same if he thinks there is nothing more to know. Meanwhile, a 'learn it all' person is focused on learning everything, constantly developing and growing for the better.

Also important is that people apply what they learn.

It is sometimes frustrating to want to teach people something that are not open to this.because you know how much faster it would help them move forward

 

[Antifragile]

I've been thinking about your reply - and it's an interesting situation that seems very common. Don't most of the people around us get up every morning -- put on their pants one leg at a time and follow the same routine without asking any deep questions for years? Did they deliberately choose their path or was it simply the one of least resistance? Were there better options then or now? And unless something drastic happens along the way to force the query, some never think to question that journey. By acknowledging that the question even exists, they would be endangering the unpinning of their entire life. The consequences of even asking are too daunting. The answer might be a total annihilation. Lion, tigers, and bears. Oh my.

This is a far deeper topic and worthy of exploring. I think about this all the time. There are countless examples in my own life where I didn’t see something that if I did, it would have been a 10x improvement.

It’s easier to notice these things about other people, and harder to see it in ourselves. Yet it’s 100% there for all of us, just in different ways.

Anyone successful in RE seeing this thread is shaking her/his head. At the same time, how many times has it happened to you? Either the way you handled a deal, or a negotiation, or missed something that was visible in plain sight? Or invested your wealth poorly?

Example: most people lose wealth not by overspending. Typically they lose wealth by poor investment decisions that lead to catastrophic losses. Yet few people recognize this.

What is the solution?

IMO, there are only two ways:
1) Looking outside to learn
2) Looking inside to discover

Looking outside means reading books, meeting people and learning from them. Looking inside is working on your own awareness, using tools like meditation or prayer. Combining the two is most powerful. Meditation centers me to accept the world as it is, not as I wish it was. Reading books, great posts here and talking to smart people enables new thoughts, new perspectives. It changes you.

And isn’t that the “secret” to success? To achieve great things, we must be willing to change ourselves, to become capable of achieving those things. Change is always uncomfortable. This friction, this discomfort is how the best of the best became who they are, they kept at it, through discomfort long after their competition gave up.

 

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[WJK]

This is a far deeper topic and worthy of exploring. I think about this all the time. There are countless examples in my own life where I didn’t see something that if I did, it would have been a 10x improvement.

It’s easier to notice these things about other people, and harder to see it in ourselves. Yet it’s 100% there for all of us, just in different ways.

Anyone successful in RE seeing this thread is shaking her/his head. At the same time, how many times has it happened to you? Either the way you handled a deal, or a negotiation, or missed something that was visible in plain sight? Or invested your wealth poorly?

Example: most people lose wealth not by overspending. Typically they lose wealth by poor investment decisions that lead to catastrophic losses. Yet few people recognize this.

What is the solution?

IMO, there are only two ways:
1) Looking outside to learn
2) Looking inside to discover

Looking outside means reading books, meeting people and learning from them. Looking inside is working on your own awareness, using tools like meditation or prayer. Combining the two is most powerful. Meditation centers me to accept the world as it is, not as I wish it was. Reading books, great posts here and talking to smart people enables new thoughts, new perspectives. It changes you.

And isn’t that the “secret” to success? To achieve great things, we must be willing to change ourselves, to become capable of achieving those things. Change is always uncomfortable. This friction, this discomfort is how the best of the best became who they are, they kept at it, through discomforth long after their competition gave up.

I agree with you. The "secret" to success is the ability to change directions as you read the changes in the market. And yes, it is an uncomfortable and lonely road.

Here's my example. Before Covid, I had a major conflict with the local Landlord's Association. (That group has since dissolved due to the Covid crisis). But, here was my conflict. I knew that the market was changing. We were due for the "down" part of the business cycle. So I was preparing for that moment. I didn't know when it would hit. I just knew it was coming. The RE market was overheated and at a feverish pitch. OPM (other people's money) was flooding the lending market. I was worried about both the business and the credit cycles converging at the same moment.

So, being a contrarian, I was diligently working on debt reduction to get ready for the coming shift in the market. The head of this group thought I was crazy. He actually sat me down to explain leverage to me -- like I didn't understand. He was doing a BRRRR program (buy, renovate, rent, refinance, repeat) with apartment buildings. He was totally contemptuous of my investment choice with my mobile home park. He explained that he had over 8 years in the RE business. I countered that I had 40+ years. I tried to explain that when there was a downturn in the market, he could have "calls" on his 80% commercial apartment building loans for his lenders. He might have to pay down some of those loans if the building's market values fell. I tried to explain the 1990s to him when I did the appraisals for several of the bank's internal audits. It totally fell on deaf ears.

He thought I was renting spaces in my park. I explained that I own the mobile homes that I rent out for low-income housing. Then he asked the golden question. How many doors did I have? My answer floored him. I had more working rentals than he had. Yes, they don't have the market value that he was building up. BUT, they also didn't have 80% financing to burden them.

I have seen many 8 to 10-year wonder boys over the years. They are both in RE and the stock market. They get a system that really works for them. In that part of the business cycle, they can do no wrong. Their demise comes when the market changes. They have no experience in how to pivot. So, they double down on their system waiting for it to work like it had in the past. Instead, it all falls apart. That's many times the bad investments you talked about in your post. They get wiped out along with their investors. Then, after they make their shameful exit, the next Golden-Haired kid shows up to start the whole process again with his perfect system. The new kid on the block has no experience or knowledge of the one who came before him. And the whole thing repeats again.

It's like watching a slow-moving, but predictable, train wreck. When I was young and didn't understand the market cycles, I got caught up in some of these moments. There have been some black swan events. Covid was not really one of those in my mind. Our government's reaction to it was the true black swan event The market was already poised and executing a turn. Covid, and the governmental reaction, accelerated those changes from happening over a number of years, compressing them into months. Yes, it was unexpected in its fury and speed of change. The important point is that it required thoughtful and meaningful change.

 

[amcg88]

Sorry for not being responsive to the thread lately. Yes, there are definitely other things I can do to get a deal. The reason I've said it's competitive is from talking with facility owners and other investors in the industry. For example, at the conference I attended I asked one experienced investor/operator for advice on how to find a deal right now and he told me either to pay a stupid amount of money or get lucky. I have taken people's advice, I just haven't posted about it.

Note that I am not planning to pause this entirely, I should have explained. After I reach my direct mail checkpoint, at least my initial plan is to 1) periodically re-mail owners, 2) consistently keep in contact with owners via calls, and 3) check in regularly with brokers. I have one other targeted strategy (at least right now) that I want to test out right after this. I do have some deals I am looking at from owners that have responded to my direct mail campaigns.

 

[amcg88]

• I finished my 5000 mailers. I think that will be enough to determine if the direct mail strategy works. I'm glad to be done with that because of how much time it was sucking up. I regularly receive responses from owners, though many are tire kickers or the facilities are too small.
• I moved onto strategies 2-4 below:
  • Contact government entities who own storage facilities
  • Contact banks who own storage facilities
  • Contact small/medium self storage chains to see if they have parts of their portfolio they want to sell off.
  • So far, I have found very few facilities for #2 & 3
• After that, if I don't come up with additional acquisition strategies, I plan to regularly contact owners over time
• I am then going to look for similar types of businesses such as airplane hangars, marinas, data centers, short term luggage storage.

 

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[WJK]

• I finished my 5000 mailers. I think that will be enough to determine if the direct mail strategy works. I'm glad to be done with that because of how much time it was sucking up. I regularly receive responses from owners, though many are tire kickers or the facilities are too small.
• I moved onto strategies 2-4 below:
  • Contact government entities who own storage facilities
  • Contact banks who own storage facilities
  • Contact small/medium self storage chains to see if they have parts of their portfolio they want to sell off.
  • So far, I have found very few facilities for #2 & 3
• After that, if I don't come up with additional acquisition strategies, I plan to regularly contact owners over time
• I am then going to look for similar types of businesses such as airplane hangars, marinas, data centers, short term luggage storage.

Don't forget about RV and boat storage facilities.

 

[amcg88]

Don't forget about RV and boat storage facilities.

Yeah, I have been mailing those facilities recently, need to double back though and mail the other states

 

[WJK]

Yeah, I have been mailing those facilities recently, need to double back though and mail the other states

The most valuable part of your mailing campaign is having your list, your notes about the different facilities, and the owner's replies. When I was brokering and bird-dogging, I used that type of info as a farming tool to hone in on my prospects. You could even start an association with a regular newsletter that talks about that segment of the RE market, its particular concerns, and data. You want to be the "go-to" person in your niche.

 

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[amcg88]

• Right now I have five deals from my direct mail campaigns that I am researching. I have been receiving a lot more inquiries which correlates with my increased weekly mail volume, though I expect it to taper off since I finished the 5000 mailers. As expected, most callers/emailers are trolls. However, I made an offer on one and am negotiating with the seller a bit. Honestly I don't think he's willing to go low enough. I think one of the others is pretty good.
• I shifted the bulk of my focus to my other search strategies. I also found one facility which is owned and for sale by the county land bank. It is currently managed by a company. I had a few calls so far with a land bank employee. Right now, I am trying to figure out the current operating or whatever agreement is in place. It's also part of an EPA site, though there's no active cleanup on the facility parcel. I talked to the project manager and he said I would have to be cleared by the EPA prior to purchase. I have a couple others from my other sourcing strategies that I have been looking into.
• I also started looking at other storage businesses, though at a high level with ChatGPT. I am going to spend more time researching them individually starting this week.

 

[amcg88]

I am still receiving regular responses from my direct mail campaigns. I made two offers this week. One was not well received at all, and for the other, the owner is thinking about what a good price would be (my initial offer was a bit low for him). I have two good prospects including the latter. The oddball land bank deal is the other. I have been trying to get to the bottom of what their current operating agreement is. There may not be one. It's frustrating because my contact there is a government employee.

I also dove deeper into other storage businesses. I passed on the below ideas.

Airplane hangars:
For the majority of cases, it appears that the hangar owners lease the land from the airport or government. They don't actually own the land.

Data centers:
It looks like it requires technical knowhow (electricity, hvac, fiber, security, backup generators), high capex, and then you have to market to and negotiate with large corporations. Some of the facilities looked very expensive also.

Luggage storage:
This appears to be now disrupted by tech companies like Bounce, Luggage Hero, Vertoe, Nanny Bag, etc. I think all of which use an AirBnB model of storing luggage (e.g. storing your bags in a existing business' back room).
The few physical luggage storage businesses appear to be in leased commercial space, not in owned buildings.
People also store luggage at their hotels or at train stations.

I am going to continue to look into marinas and car storage. I got financials on one marina for sale today.

 

[amcg88]

• The numbers work more or less for the one deal though not under the SBA 7a program as interest rates are too high that bankers gave me this week. I am interested in both their facilities but I need more information on the second one (brand new facility) before making a combined offer.
• I am being patient with the land bank deal. I contacted the county to find the relevant attorneys but they told me to create a public records request which I cannot due to not living in that state. I got management contact information for the company though which I have been trying to pass along to the land bank employee, but he has been slow to respond to my calls.
• I’ve also been looking into laundromats, car storage, car washes, marinas, etc. Nothing too interesting yet.

 

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[amcg88]

• I'm close to making an offer on the one property (two facilities). The land bank owned property situation is odd, I spoke with the company that is supposedly running it and they said they're not running it and that there's a $15M EPA lien on the property. I think he was lying to me about part of the story or I am misunderstanding something, so I'm going to get more info from the EPA this upcoming week. I also have been getting more inquiries from potentially interested facility owners.
• I've been exploring adjacent business models throughout the week, gathering information on laundromat and car wash listings.

 

[Antifragile]

I am such an idiot, I totally forgot to add you to my Ignore list! This zero-value colossal waste of time thread is still popping up in my feed.

Not to worry, better late than never.

P.S. I have never done this before, so this is a first - but I highly encourage EVERY single forum member to click "Ignore" on this thread. Outside of advice given (but not taken) the OP posts are as useless as they come.