Learn Self-Storage Investing With Scott Meyers
Episode 530: Learn Self-Storage Investing With Scott Meyers
People should have a basic understanding and grasp of what they are about to break into. The different things you should consider when investing in real estate, specifically in self-storage, are discussed by our guest in this episode. Like most real estate business people, Scott Meyers also started with single-family houses. However, he gradually expanded his business, got into apartments, and eventually into self-storage. Due to the success of his venture, he created and ran his real estate investor association. Tune in and learn how Scott helps people know the ins and outs of the industry before actually diving into it!
March 31 – April 2, 2022 in Orlando, FL
Watch the episode here
I’m here with Scott Meyers. He has been here for a long time helping people understand and take advantage of the cashflow that can be had from the self-storage or storage business. I am a big fan of the storage business. It’s what I know that retires me at the end of the day. I don’t have to do anything if I don’t want to because I have over 1,000 units myself. I paid them off. I have no debt. When 1,000 people owe you about $125 a month on average and you don’t have any debt, it’s a good place to be.
It took me way too long though. I should be further along. I should have 2,000 or 3,000 units but I did it all by the seat of my pants and on my own. I would clear time for it because my main thing was I was buying and selling a lot of houses. I never paid attention to the storage business until I looked up one day at my tax return and said, “What does this line go to?” They said, “This is your storage business.” I said, “There you go.” You’re in Indianapolis. Give us a little background. Let’s talk about the storage business.
Let’s do that. The story begins in real estate with single-family houses as well. That’s how most people get into real estate, to begin with. Using the old Carleton Sheets method and his home study system back in 1993, I bought my first single-family house, rehabbed it, refinanced it and rented it out. We took the proceeds from the refinance and went and bought two more. It continued after that. We had about 80 houses. I decided, “I don’t have the cashflow and the free time like Carleton Sheets talked about. I got to be doing this thing a little bit differently. Let’s double down and go into apartments.” I figured economies of scale would fix that.
We started buying apartments and had about 400 apartment units and a few small complexes around Central Indiana. I realized that it wasn’t working for us either, even if we had property managers and property management companies. At the end of the day, it’s a labor-intensive business when you’re in the tenant toilet business. The buck still stops with you. We still have to write the checks. The bigger problems usually still land on my desk. I love real estate for all the reasons you mentioned, especially come tax time. We can depreciate these things. They appreciate. We can force appreciation in real estate and borrow money to buy them.
We put renters in our units whether they’re apartments, houses or self-storage to pay down our basis. There’s no better investment on the planet bar none if it weren’t for the tenants, toilets and trash in the houses that go along with them. When I looked around the real estate landscape, that left parking lots and self-storage. There’s not a lot of value that you can create in parking lots although they’re a good business for some folks. What got me intrigued with self-storage was because you can do all of those same types of things, force appreciation and value, improve them and increase rents. You don’t have all the hassles, challenges and time that goes along with managing people.
That’s when I began looking into the business. There weren’t a whole lot of resources at the time. There were the trade shows, associations that you can go to and magazines. That was a lot of training for existing owners, folks that are already in the business and managers. I went to the trade shows and learned as much as I could from mostly the attendees, asking questions, making buddies with the guy sitting next to me or the gal sitting across from me at the roundtables and asking them about the business. I got into the business and did well. As I ran my real estate investor association here in Indianapolis, people started asking how I was doing this.
We started holding workshops and teaching people how to get into the self-storage business. My second business in self-storage was born. That was teaching and educating people on how to find, evaluate, purchase and manage self-storage facilities. Through the years, we continue to invest heavily in self-storage. Our education business took off because we were the only game in town and people revealing the secrets of it. Before I knew it, this was about the time you and I met, I had two 60-hour week businesses and decided that it was unsustainable.
We started to combine the two, peel back my hours in both and merge them with working with folks that were wanting to get into the business. It’s also having an opportunity to partner with them to raise capital, syndicate and do joint ventures. That’s where we found ourselves. We’re doing less time in both businesses but doing better deals with better-educated investors and joint venture partners. Our business has exploded. We’re up over 2.6 million square feet and approaching 15,000 doors nationwide. With COVID, 2020 and 2021 have been our best years. They were the best years in the industry in storage. 2022 is off to a bang. We’re looking forward to what the balance of 2022 is going to hold for us.
There’s a lot to talk about in this business. I don’t know if you’re a proponent of the way I started or you would rather do it a different way. Let’s talk about that. I started at Canyon Lake, Texas and found that I could buy these mom-and-pops that weren’t so expensive. Granted, my first unit was fifteen little boat stalls in front of Comal Park or the entrance to this park where people would grab their fishing boat and go fishing. I would store fifteen fishing boats. I paid $8,000 for it.
I got the rents up to $45 or $50 a month apiece. It only took fourteen months to pay back my credit card because I didn’t have any damn money. I bought them with my credit card for $8,000. I took the money and sent it all to my credit card until it was paid off. It took about a year and a half. I owned it free and clear. I started thinking, “This is a lot different than renting houses.” These happen to have a dirt floor, chicken wire dividers and rusted and corrugated aluminum panels but the money were as green as any money I ever collected.
I noticed one thing. These people might lose their houses but they will be dead before they give up a boat. I started buying the little mom-and-pops, 25 units here and 35, whenever I could. Fortunately, the mom-and-pops would seller finance me the property if they would ever sit down and talk to me at all. I ended up buying eighteen little facilities around the lake. Although I didn’t have a lot of units, I started to have a big reach.
People would call me from one place and I go on full there, “Where are you coming from?” They said, “I’m coming from this place.” I would say, “You don’t want to be here anyway. You want to be over by your house, don’t you?” Functional obsolescence started setting in. The boats weren’t little Jon boats anymore. They had speakers, racks and all this stuff. I had to tear down some and rebuild some. I didn’t have any money in this land. That’s how I got in it. How do you suggest people start in the business?
Certainly, there’s no judgment here. You’ve done extremely well. It worked out for you, no matter how you got into it. Many of the folks that come to us don’t know what they don’t know. They get themselves educated first to avoid any mistakes. In commercial real estate, if you make a mistake in underwriting by $1,000, it’s about $10,000 in value you may have left on the table.
If you don’t know how to create value then you may be leaving $10,000 to $100,000 in value because of what you don’t know. I always suggest that people understand the asset class, the nuances of it, how to make money, how to not lose money, how to reduce your expenses and how to increase income but not to the point where you have to know everything and be an expert before you begin the business. You have to have a basic understanding.
Get some good folks alongside you and have good mentors and consultants. The lenders along the way assist to a point. Surround yourself with a good team to make sure that you’ve dotted your I’s and crossed your T’s before you get into it. Ultimately, there’s no substitute for good education. As you and I both know in teaching people over the years, you’re going to get educated one way or another. Many folks have heard this, “Either you get educated on the front end or the market is going to educate you.”
Many times, that’s much more expensive than paying for consultants and mentors. Make sure that you go to the events and trade shows and learn about the business before you get into it and assume that because self-storage is the best asset class and it has been the most profitable that you have this big wind in your back and the sale that you put up is always going to be great. It is until it isn’t. When it isn’t, that is not the place where you want to be.When things go bad, that's where you find out folks’ true character. Click To Tweet
You can screw up anything.
It’s all business and people treat many businesses as a hobby. There’s no business that’s a set it and forget it. You have to walk the four corners of your business and also shine light in the dark corners to understand what’s going on. You have to mind the store.
There’s choosing partners no matter the storage business or any business. Let’s talk about that. Who you decide to team up with is ultimately going to be the death of you or the victory because the business can only be as good as the partner that you pick. I know how I vet partners and we could talk a little bit about it. How do you suggest choosing a partner in this business?
I’ve seen the way that some folks have done it and it hasn’t worked for them. Two broke people with bad credit got together because they have a love for real estate and decided to go into business together. Neither one of them benefits the partnership. They either never get off the ground or neither one of them has a strong suit. The business fails if they happen to get into it, to begin with. The best partnerships, at least for us, are also the same way that we hire staff. We have our core values and mission statement pretty well dialed in and we live by them.
It’s not just some plaque that we put on or something that we revisit once a year in our staff meeting. We go over it on a regular basis. My staff members can recite it. If you don’t share our core values and can’t buy into the mission statement, then you’re not going to work for us and with us. Certainly, I’m not going to get into a partnership with somebody who’s not living that out. We need to understand that there’s a certain level of integrity. Most people know me and my faith. I wear it on my sleeve.
I’m not ashamed to share with a potential partner and say, “This is how we’re going to operate. This is what I believe in. You don’t have to believe the same thing but if I see that you’re going out and doing the opposite of what we believe in, which is not living by a code and that code is pointed North then we’re not going to do business together.” You need to get to know the person that you’re going to be partners with. Everybody says this. It is true. It’s not a cliché. It’s like a marriage.
It certainly is as ugly as a divorce if a partnership goes bad if not worse because there are more dollars at play usually and a lot more at risk essentially. It starts there. When it gets down to the brass tacks, it’s who brings what to the partnership. If your partner doesn’t bring a strong suit or has something mastered that is completely your blind spot or a deficiency in your business, to begin with then do they help you? Are you helping each other? Are you two people that are trying to go at the same speed? You’re going to be stuck because you still have a deficiency in some areas of the business.
You’re bringing in somebody who’s got a strong balance sheet because you don’t. You’ve got the cash, but they don’t have the cash. They bring the balance sheet and they’ve got development experience where you’ve got the operations experience. When you begin to put the pieces together, as the movie says, “You complete me.” The partners should complete the business and complement each other. To paint a broad brushstroke, be aligned morally and ethically and make sure that it is somebody who shares your core values and brings something to the partnership that you don’t already have.
That’s a whole mouthful right there. In some cases and some businesses like the house flipping business, you can partner with a person one house at a time. When it’s no fun or you figure out that this isn’t working, you can stop and don’t do any more houses together. In those deals, you’re in and out. You decide not to get back in again when you see that you have differences.
In some bigger deals, you don’t have that luxury. You’re either going in or not. You need to do due diligence. It’s not that hard to find out a lot about people. I’m always interested in how litigious they are and their criminal history and credit. It’s not because they’re people that have bad credit or bad people. I just need to make sure that whatever the debacle was is over.
How did they handle themselves through it as well? When things go bad, that’s where you find out folks’ true character. We will dive into that. I’ve got a couple of partners that have gone through bankruptcy. If you’ve been at this business for three recessions, then chances are you’ve come close to it or had a bankruptcy and even an LLC. I want to know how they handle that. Talk me through it. If I can sense from their story that they handle it with integrity, then I put all my money in to try to save the thing as much as I can.
If they said, “The minute things were going South, I wiped my hands. All my investors lost their money, but I wasn’t going to lose any of my retirement or savings to try to save it. I walked away.” There’s a difference in how you handle those. If you can discern that this is somebody who’s going to go to bat for the deal, then that’s somebody that you want to make sure that you keep close. If they’re walking away from their problems, then that’s somebody you don’t want to do business with.
At first, I’ll pay payments of $26 million to private lenders on a bunch of houses that I sold on wrap mortgages. I’ll be dead before they don’t get their money. I can come back if I keep my reputation. If I lose my reputation, it’s going to be hell to come back.
This is the long game no matter how you slice it.
I would rather lose my money than lose someone else’s money. I don’t want to lose somebody else’s money. Let’s say I don’t have any storage. I’ve had a reasonable amount of success. I have a decent amount of money on the account but I’m not wealthy by any means. How do you suggest I start in the storage business?
There are a couple of ways. One of the ways that many of our folks who come through our doors surprised me as to how they approach and look to getting into the business. We were investing maybe 3 or 4 years before we started holding these little workshops at our Central Indiana Real Estate Investors Association that I was the president of. It’s going through the steps and making sure that everybody is covered. There are the gotchas. They don’t know what they don’t know. We have been teaching people how to make sure they cover their bases. Real estate is math. It’s all in the numbers. Most of this is a math equation.Real estate is math. It's all in the numbers. Click To Tweet
You got to get good at underwriting and understanding the numbers. In storage, it’s equally if not more important to look at the market. You need to understand how to read and do an analysis of the market as well. It’s because you find a facility that’s struggling and is at 50% occupancy, it doesn’t mean you can take it up to 90%. If you look around in the other six facilities that are within 3 miles and they’re all at 50%, that’s a market problem. No matter how hard you work, you’re not going to be able to solve that. You’ve got to understand the numbers and the markets as well.
There has to be a base level of understanding of the business itself. It’s keeping your credit clean, doing the things that you mentioned, creating relationships with bankers and beginning to assemble a team as well as some capital so that when you either find a deal or a deal finds you, you have the ability to pull the trigger because it is more intricate. There are more pieces to it. If you don’t have at least a base level of team members in place and folks that are needed to get a deal across the finish line, you will fall out of a contract before that happens.
Even before that, it’s helpful to find not only a mentor but also a partner. You can partner with somebody who has the experience that you can bring into the deal or cut them in on a small part. You can utilize a portion of their team, expertise and Rolodex to get this deal across the finish line so that you can do the next one all on your own. Also, a different variation of that is we have had folks who come to our self-storage academies to learn about the business but then come to find out they didn’t want to learn about it to do it actively.
Maybe they thought that was the case when they came in and then they realized, “There are a lot of moving parts to this. There’s a little more risk. I’m carrying out that much more debt. If I buy an existing facility that is at 10% occupancy or a development opportunity, the lease-up risk is something that I may not want to take on as well. There’s development risk and lease-up risk and then signing on the note for all that. I would rather be a passive investor and let Scott or Mitch take on the debt and do all the heavy lifting. I’ll be an equity partner and come in as a limited partner.”
“I get all the benefits of that and the K-1 for depreciation at the end. If I want to go do my own someday, I have that baseline knowledge. I’m in it. I’ve got the experience. I’m recognized by bankers and some private equity partners that I want to bring in as being somebody who has experience in the storage business.” In the beginning, it’s learning. Don’t bite more than you can chew, find a mentor and a partner or be a limited partner and passive investor. Those are some of the great ways to go along for the ride and earn while you learn before it comes time to go do 100% on your own.
One of the key things I was looking at in some of the notes for this show was and it’s the same in every business, the upfront due diligence is to do or die. If you get that wrong from the beginning, you have hurt yourself. You may not even be able to recover depending on how wrong you get it. Sometimes when you have big enough margins, you’re in a place where the market is good or you bought the land that much undervalued, you have some cushion. I built a $2.8 million place with 283 units.
It’s brand-new out of the ground. It kicked my ass. I chose to be the general along with my partner. That was the worst mistake I ever made. I subbed everything out individually to the locals around here when looking back, I should have hired a company that specializes in building many storages and paid the general contractor what they asked within reason. I would have been so much better off. There you go. You don’t know what you don’t know. I got in there and figured out I was bad at a whole lot of shit.
I bet you would have been better off monetarily too. I’m not pointing out your faults. The toughest lesson for all of us is to think, “Why would I pay somebody else to do it when I can do it faster and cheaper?” You come to the end of the project and think, “This GC’s margin is 5%, 10% or whatever that is. He would have gotten it done six months earlier than I would have. I would have made more money above what I lost because it took me six months longer to do this than it would have been if I had hired the right guy.”
Mine was longer than that. We have all the same conclusions you’re saying. If you want to see the place I built, you can go to BigUnitSelfStorage.com. It took me way too long to get the thing out there. I got hit with massive consecutive rains that don’t happen in this area and with COVID. The DPS got hacked in the process. They held up in my driveway permit for eight months. At the time, I didn’t know that the DPS got hacked because they weren’t telling anybody. The reason why I couldn’t get the permit was they were jacked up in a technical computer. The good news is it opened. It’s full. It works. I have a lot more money in it myself than I thought I was going to have. It’s making $35,000 a month net. It’s going to make it all back sooner or later no matter how much I went over that pace.
That’s pointing back to what you said. That wouldn’t have happened if you didn’t do your due diligence ahead of time and built enough margin and cushion. It wasn’t like you were throwing darts out there and saying, “This is going to be close. If I get a delay by eight months, we’re sunk.” You build all kinds of contingencies into this thing and run the numbers several times. You understood, “If I have more of my own money in this and it takes longer, I’m still going to make money.” I want to make sure that everybody understands that as well. This isn’t fly by the seat of your pants, build it and hope they will come. It doesn’t work that way.
I stole the land. It was going to be hard to mess up. The unknowns around here and everywhere are that the site plan wasn’t level. The site work always, to me, seems like the biggest unknown because they don’t know whether they’re going to hit a rock. The price for that site work is going up. There’s no way to know what they’re going to hit when they’re chopping it down to grade. We didn’t have any luck in that department. It couldn’t have turned out worse. You’re looking at it. You don’t know. The other thing was I had a good partner. It was time to ante up an extra $100,000 apiece. He could come and I could come. I knew before I went into business with him that he wasn’t broke. He and I were pretty solvent.
I was sure that if there was a problem, we would both be able to write an equal check and go in. If I would have teamed up with someone broke, I would have had to write the whole $200,000 or get adjustments in the agreement, which may or may not happen depending on who you’re dealing with. I always like to know how long my partner’s legs are because some people put on some good facades. They drive some nice cars and have some nice watches, but they couldn’t write a check for jack. When you hit a bump in the road, it’s time for everybody to ante up $25,000 or $50,000 each because we went over budget. They can’t do it. That’s a problem.
Matching up a partner with the project and they bring something that you don’t already possess are the best types of partners to bring into any project.
Talk about your breakthrough moment in storage. Did you have that one a-ha moment where the clouds parted, the sun came out and you said, “This is my horse. I’m riding it all the way to the end?”
The first project that we had, we’re coming full circle to everything we been talking about, was when I first got into storage. I’ve been in commercial real estate and multifamily. The banks still didn’t want to take what they considered a risk on me buying my first self-storage facility because I didn’t have any experience in it. That’s what banks do and how they view it. I got a partner. We went in 50/50 on this project. He was well-heeled and had a strong balance sheet and a lot of cash. We bought a self-storage facility from a partnership where these two gentlemen were in the concrete business together. They decided to part ways.Self-storage is an asset class that everybody loves and has the lowest loan default rate. Click To Tweet
They were splitting up their partnership and their concrete business. They had built a self-storage facility. They were splitting that up as well and going through a nasty partnership divorce to the point where it was so nasty that they were driving the value of the self-storage facility into the ground because both wanted to screw the other partner out of making money. The best way to do that is to drive the value of the business into the ground and then sell it for a song so that neither one made money. We stepped into a facility that was worth $1.7 million, a conservative appraisal and bought it for $900,000.
We stepped into about $800,000 in equity and therefore $10,000 net cashflow a month right out of the gate. It was full within a matter of two months. We put a kiosk in it and reduced the payroll expense. We had almost doubled the cashflow at that point because we filled it up, raised rents and reduced our payroll. It was in an expanding area. We bought the vacant land next door and almost stole it, not quite the same as your scenario. It had a building on it. We converted to climate control and almost doubled the amount of square footage on the entire building or site.
That project worked out very well. That was the shining moment. I got into it and started realizing that from the operation side, whereas in habitational real estate if somebody doesn’t pay you, you send them notices or take them to small claims court. Ninety days later, you walk out of small claims court and maybe they have destroyed the place in the meantime because they’re mad at you for kicking them out for not paying. The court says, “We will go collect from them and get them out now.” They’ve got a certain number of weeks to get their stuff and get out.
In storage, if somebody doesn’t pay you, six days later, you put a lock on their unit. They can’t get out their stuff. After 90 days if they don’t pay, you get to sell their stuff off and hopefully recoup your money back or at least we get close to what was owed to us in back rent and late payments. Lien laws and self-storage protect the owner or the landlord, whereas habitational laws, apartments and houses protect the tenant. When we began to do the math on that and looked at the amount of money that we were able to recoup because of the difference in the industry and the way the laws are written, that was the shining moment where we went full bore into self-storage.
The second piece to that was looking at the ability. It’s because the asset class was so strong for so many reasons that we mentioned that it was easy to attract joint venture partners and private equity partners to get to the level that we are now. We’re an asset class that everybody loves and has the lowest loan default rate and loss rate. It outperforms the other real estate asset classes from the REITs at the top level. If you look on the internet, self-storage is always at the top of the industry as a whole. It’s more profitable than the other real estate asset classes. I’m not being biased because I’m in it. Those are the facts.
How do you answer that? People say it to me too, “Is the storage business any good anymore? They’re everywhere. They’re overbuilt.” My answer to it is, “They’re overbuilt in some places.” If you want to go to Austin, Texas, you pay a demographics guy to give you a report to avoid that problem. What’s $3,000 to $6,000? They will tell you there’s always a push further out no matter what city. You get out on that leading edge, find someplace that no one has paid attention to or that they have but not enough people have paid attention to and take part of it.
This is not an easy business, but it is a simple and predictable business model. We pay $6,000 for these feasibility studies. The consultants do the research and we come behind their numbers. We’ve got enough experience as well. We know that if we put a facility here and look at the supply index 3 to 5 miles out, we can predict with a fair amount of accuracy how quick this thing is going to lease up, what the valuation is going to be and how long it’s going to take. We can plot it out. I’ll be darned if that happens if not sooner than what the projections show from our consultants. Long gone are the days.
What bank is going to approve some yahoo that comes in calling himself a developer and says, “I’m going to build 100,000 square feet of self-storage because I heard the businesses easy and put it right over here. Will you give me the money?” Banks aren’t going to do that. The city is not going to allow it. Nobody else is going to give you money unless you’ve shown and proven that it is the case. If you have to be dumb enough to do it and use your own money, you might be successful. Chances are you won’t or somebody who knows the business would have plopped one down there a long time ago. We’ve got some built-in guardrails into the industry itself to not necessarily avoid all that from happening.
Here’s what one of my bankers told me. You will appreciate this. After we closed on my 5th or 6th deal, he said, “Keep bringing them to us because we love these things. The bank loves having them on the balance sheet. You got to be a brain-dead moron to screw one of these things up.” I said, “Either that’s a compliment or you have a lot of faith in us. It’s one of the two. Either way, that’s what we will do.” Truly, if you do all the right things from due diligence, market studies and development, mind the store and learn about the business, it’s not easy but it’s not that difficult to not do it right.
It’s like anything else. If it was easy, everyone would do it and it wouldn’t be worth anything. It’s got its challenges, which is why it’s such a lucrative business if you get it right. If you’re going to learn how to play Parcheesi, you got to learn the rules and win. People, ask me all the time, “Do I get an LLC or a corporation?” I say, “It doesn’t matter.” Pick one, learn the rules and win. Corporations are better for holding some things and LLCs are better for holding other things. Still, my point was to learn the rules and win. It helps if you get someone in your corner.
You’ve got a book. It says 7 Steps to Avoiding Mistakes New Self-Storage Investors Make. I want you to go to 1000Houses.com/OwnStorage and go get your free guide, 7 Steps to Avoiding Mistakes New Self-Storage Investors Make. Over there, you will have access and be privy to all the different levels of education that Scott offers. You’ve got some boot camps. What do you have coming up? What’s next on your radar here with education?
Our three-day Self-Storage Academies are selling out, filling up and going gangbusters. All eyeballs are in self-storage, especially during this inflationary period. Folks are exiting the stock market. They got money to spend and actively or passively invest in self-storage. We have been the place for the past years. We are the nation’s go-to company for teaching people how to invest both actively and passively in self-storage. Sign up for our next Academy. We would love to teach you about the ins and outs of the business as well. It’s from my team. It’s not a pitch fest. There’s nobody that comes into these events except for my team. For three days, we show you how to find, evaluate, purchase and manage those storage facilities. That’s it.
March 31 – April 2, 2022 in Orlando, FL
For your free guide, 7 Steps to Avoiding Mistakes New Self-Storage Investors Make, go to 1000Houses.com/OwnStorage. Before we go, I like one of the takeaways you said you wanted people to take away. This is important for every business. If you don’t have this attitude, maybe you should think strongly about circling back around and picking this attitude up. It says, “Be purposeful and give back. Design a rhythm of giving in your business.” Will you explain this to us, please?
This has been at the heart of everything that we have ever done. We got into real estate because like many people, we’re entrepreneurs. We want to be able to at least have our own schedule, dictate what that looks like and then have time to do the things that we want to do. My wife and I want to raise our kids, go out and travel with them. We didn’t want the schools to ding them because we were taking them to Washington DC when they wouldn’t. We have homeschooled them.
Self-storage has provided us the freedom and the cashflow to be able to take our kids all over the world and do school at the same time. Also, as we’re traveling around the world, we’re a very mission-based company. We went on a house-building mission trip back in 2013. We broke our heart for that mission. We came alongside the folks that were doing it and then signed up with YWAM or Youth With A Mission. We pay for and fund these short-term family-friendly four-day mission trips down in Ensenada, Mexico.It’s going to be an epic year for self-storage. Click To Tweet
We go twice a year, build 2 or 3 houses and pay for everything for folks to come. All they have to do is get to California. We load you up on a charter bus and pay your way down there. We pay for the house, hotel, lodging, food and homemade tacos as well as churros. We give these folks incredible four-day short-term family-friendly mission trips that they may not have anywhere else and the benefits of any generational poverty, one family and one house at a time.
For us, we have the blessing of leverage and the folks that are reading this. If we can get more people to buy into what we’re subscribing to and will pay for it, they will come back, be fired up and decide to go do something good in their family, neighborhood, community and church. Some folks have come alongside us. We’re building 2 to 3 houses every time we go and 4 to 6 houses a year from other folks that are coming alongside and need our funding.
They’re building houses and bringing their own teams and staff. That has been at the heart of what we have done. We feel that there’s no way that we can ever out-give God. As we continue to have an open hand, the money flows right through it and allows us to be able to go out, do some good in the world, show some other people and open their eyes to what it feels like to go out and do some good in the world as well.
It’s a very emotionally rewarding act to give up your labor, money and heart. You got to learn to take care of yourself first and get that handled because you can’t help too many people if you can’t even support yourself. Get that handled and along the way, look back when you see how far you’ve gone, reach back and help a few other people up the ladder. That’s the only reason I’m in coaching. I don’t need more money. If I don’t ask for money then I don’t get what I want, which is someone driven enough to improve. It’s a tricky thing. I’m looking for the emotional reward of changing someone’s life for the better and helping them get up off the ground and be able to soar.
I’m not a millhouse. I don’t take a lot of people. I took ten people in 2021. It was a different year. I take ten people one-on-one but I only take the people that I know I can have a run at the Super Bowl with. I don’t want to sign up for a losing team. I do a lot of interviews. If I say, “I want to coach you,” it’s because we got what it takes to get way down into the Playoffs or the Super Bowl. I don’t want to play on a losing team for the money. It’s not about the money. It has been a good conversation. Is there anything you want to say to those people out there that have storage in their eyes and dreams before we hang up here?
We have been at this for years investing and teaching people how to do it. Through all that and the recessions, there’s no better time than to start now. The number one cause or excuse for people not being successful in anything, let alone self-storage is because there’s the fear of the unknown. They don’t want to start. Fear stops more would-be successful entrepreneurs and investors than anything else. We’re heading into a time period where self-storage is on fire. Interest rates are low and they’re going to be going up. It’s time to start building a team, getting out there and learning about this side of the business to take advantage of the opportunities that exist out there.
There will be some of the folks that didn’t learn about the business and got in a few years ago. When they have to refinance at a higher interest rate in 2022 or 2023, there are going to be opportunities to step into those projects. You need to be ready, understand the business and have some bankers that are interested in self-storage and hopefully some rich uncles or at least access to them like me and Mitch that can come alongside you as well. Begin to prepare. Now is the time because 2022 is going to be an epic year in self-storage.
Here’s the number one thing I hear from people, and I don’t know where we’re people get this, “It takes money to make money. That business takes a lot of money. I don’t have money to get in that business.” If that’s your belief system, then you’ve already sunk. I don’t know what to tell you, but you’re done. You have to change that and what’s here. If you don’t have money then you have to learn ways to get involved or become partners in deals where you can do something besides bringing the money.
Normally, when you don’t have money, you’re a professional deal finder/contract writer. If you want a piece of storage and you’re dead broke, go out there and steal a piece of land that’s primed for that or put together a whole thing with the land and get a package together. You may not be able to get 50% for that. Maybe you only get 10%. Start somewhere and get a piece of storage for doing whatever it is you did. You brought the deal to the attention of me, Scott or somebody. Get a small piece if not a little bit bigger piece.
You can also manage it after it’s built for a while or something. There are a lot of things to do. If you don’t have money then you have to come up with strategies that allow you to be successful with zero money. They’re out there. Robert Allen made a whole career off of the book called Nothing Down. It was about how to make money out of nothing. I love that book because I was so broke. I figured, “If he could buy real estate with nothing, I could buy the whole town because I was dead broke.”
I don’t know one successful person in real estate that started having a scarcity mentality when they approached the business. You need to have a mentality of abundance because there is an abundance of money, credit and experience out there. You need to harness it. That’s all.
That doesn’t necessarily take a whole bunch of money. I would like to thank you so much. I would like to thank LiveComm.com. It’s a mass texting and lead generation platform. It’s the reason my 100 houses a year average four days on the market. I’m capturing the cellphone numbers of people calling on my ads. When I have a new property for sale, I send out a text for $0.02 to a person letting them know I have a new property for sale with owner financing. I’ve got people fighting over those houses. I’m averaging under 15% in my down payments because of this tactic. I have 10,000 people that will not get off my list.
I send a text out saying, “If you’re no longer interested, reply with the word STOP and get off my list.” Ten thousand people won’t get off my list. I deem that they’re interested, and they prove to me they’re interested every time I put up a product because it doesn’t last but a few days. I get to pick and choose who has the most down payment or who I liked the best because I’m getting multiple offers on my homes. Check it out, LiveComm.com. There’s a video on the homepage showing you how I’m using it to work my business, but it can work for all kinds of businesses. It’s amazing. Check it out. I will see you next time down the road. Scott, I wish you the best of luck in 2022.
Thanks, Mitch. You as well. I appreciate it.
March 31 – April 2, 2022 in Orlando, FL
- 1000Houses.com/OwnStorage 7 Steps to Avoiding Mistakes New Self-Storage Investors Make
About Scott Meyers
Scott Meyers is known as the nation’s leading expert in Self-Storage. After becoming a penniless landlord in the Single Family Rental and Apartment business, he began investing in Self-Storage.
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