The Most Profitable Self-Storage Investing Strategies (Low Maintenance!)
All right. I’m going to let everybody flow into the room. If you are here to watch Investing in Space. All things extraterrestrial, you’re in the wrong place now. If you’re looking at the rise of self-storage opportunities with Ryan Gibson and myself, you are in the right place. And when we talk about investing in space, we’re talking about self-storage space. So we’re not talking about Mars and doing all that. That’s a topic of another day, right? So we are going to dive in because this is a this is actually the number one major investment class as far as returns in the last ten years. I don’t think like real estate for sure, but I think that as an asset class, major asset class and Ryan, you’ll have to correct me if I’m wrong. All the bitcoiners out there are going to say, you know, that’s the best major asset class is traditional asset classes. This is number one. That’s right, number one. Number one among all other major asset class types in real estate. Just I don’t know anything about how Bitcoin’s performed. So but I’m sure it’s done really well, right? Yeah, I still remember. Yeah, I have some, but there’s people out there that did very well and. And that said, Hey, there’s there and we’ve got a bunch of folks on. All right, so guys, I’m going to dive in because what we want to talk about is how to make money in self-storage. What kind of opportunities out there in you have a technician with you here today, Ryan Gibson, who is absolutely awesome. He’s been working with our clients. Ryan, how many years is it? Because I remember pre-COVID, all that stuff we covered and I remember Hawaii years ago I think was 2016. Yeah, in 2017. Yeah. No, no, 20. Yeah, something like that. In one was my daughter was running around and she was a little baby with Michael son. So somebody says, number one, based on what metric return, right. Yeah, definitely. During a recession too. Yeah. So we’re going to dive into all this. And here, here’s kind of the rules. Yeah. If you have if you’re watching this live, ask questions in chat and Q&A, like comments to chat and we’ll handle them. If you’re trying to get Ryan’s attention, it’s going to be difficult. He’s going to be going over his presentation and going over a lot of numbers. But what you do is put in the Q&A, if you have a serious question, non clarifying question, but a serious question, put it in there on in that Q&A and then I will ask Ryan questions at the end of his presentation. So he’s going to go over all things the storage. And before you go, well, who’s this Ryan guy? Yada, yada, yada. Ryan Right now with Spartan, he’s the how do you call yourself the chief investment officer, Chief investment officer or co-founder, storage guy, president, whatever it might be. So I always know Ryan as the guy that started Spartan and he and Scott and they’re great guys and amazing just they’ve done so well for our clients. So I always like to introduce people that do nice things for our clients. And no, I don’t get paid on your investment. This is completely this is something I never will do. What we do is we advocate for those that help our clients. And Anderson, that’s a big thing. We really do care about that, that prosper in our mission. We have preserve, protect and prosper. You hear us talking all the time about the protect how to minimize taxes. Keep your stuff away from lawyers, snoops, Uncle Sam. But you don’t oftentimes sit here in here saying, here’s how you to make more money. And this is one of the groups that we work with who has just done phenomenal for our clients. I would say the worst return I’ve seen from an exited transit action is in the 20% plus annual return range. I’m sure you’ll go through some of those numbers, but that’s that’s what I’m seeing on K ones guys. So like Ryan can’t say, we made 10% or 20% or 30%. I could just look at the K one and say, you made 25%. I don’t, I don’t have to listen to what anybody says. I can actually look at the numbers. And I think that they do a great job, so they manage over. I think it’s getting close to three quarters of $1,000,000,000 now. Right. So over 700 million. That’s right. Yeah, about 700 million. We just bought three huge properties in the Pacific Northwest, actually two in Portland, one in Vancouver, one in Vancouver, Washington last week. So that part is pretty close to, if not above the $700 Million mark. So excited about that. And we bought two in Georgia last last week as well in the Kingsland area. So you guys are just absolutely on a tear. And this is this is why he’s here. He’s going to be talking to guests and yes, there’ll be a recording. Yes, it’ll be sent out. I’ll probably post this on my YouTube channel, too. If you haven’t been to my YouTube channel, just if you just type in YouTube and Toby Mathis, you’ll probably find me. Please like and subscribe, by the way. And then my partner Clint Goons too, has a great channel, but we’ll be posting this up there so you can go share it with other folks. But this is why we are so bullish on this is because it has been a phenomenal just growth in the last ten years. Has self-storage been. But it’s also still a great opportunity because we’re not even close to getting towards that top. And if there’s one thing about Americans is, man, we love to store stuff. So this is this is a great opportunity. I am invested significant late. Our firm is invested significantly in our clients have had great returns working with Ryan and his organization. So what we’re going to do is we’re going to hand off the why are we looking at self-storage? What are the opportunities? Why is it so different than traditional investing and kind of what what’s going on right now and then why now is actually a good time to invest? And I’m just going to hand it to Ryan and say, dig right on into that meet Buddy. I think you have a you already have good questions coming through. I’ll be moderating the questions and I may pop in once in a while and go, Hey, Ryan, here’s a really good question. Let’s answer it. Awesome. Well, thanks, Toby. Hey, I’m Ryan, and I’m going to be going into self-storage stuff, so I’m going to go ahead and share my screen. And I think everybody can see that now. Yeah, we could see my my presentation art. Cool. You’ll see it. All right. Well, we’re going to go right into it. So you’re probably the first thing that I like to show is just data. So people probably think, hey, is self-storage is kind of coming up everywhere. I feel like it’s all over the place. It’s in my neighborhood. They’re building it, my friends building it, Ryan’s building it now, whatever. And the reason why is because if you look at how much self-storage has increased in utilization from Americans over the last 30, call it 40 years, now you can see that that bottom left there. In 1991, the average American used two square feet per person. And now that net number has surpassed six square feet per person in 2020. What is it, 2021, 2020, something like that. And the projections are continue to increase. So if you’re like, man, I think self-storage is coming up everywhere and it’s filling up everywhere, you’re right, because more and more people are using it. There is a square footage per capita for self-storage and the big players in the space are these these guys right there. Public storage cube, smart extra space. NSA is another reads and you just see these big box publicly traded companies all over the place. And we’re going to talk about some other players in the space today. But just to give you a sense of my background, I was actually a pilot and learned how to fly and ended up becoming a airline pilot for Delta. And it was a Delta for a while and retired from the airlines effectively. And what made me want to kind of get into real estate investing is, you know, I just there was just some part of the job that I wasn’t getting. And so I read this book on one of my layovers, actually, and got inspired by Robert Psaki’s Cash flow quadrant to just start my own business and be an investor. And so we went out and basically built one of the largest self-storage companies or the 36 largest self-storage company now in America. And that’s kind of the to the some of the 12 states and the facilities that we’re in today across the United States were heavy in Texas, heavy in the Sunbelt, in Georgia, Florida, Tennessee. Again, we have some smattering of properties up in the Pacific Northwest. We’re building a lot of the PNW right now. And, you know, I did all this stuff while I juggled lots of things like juggled business, juggled flying, juggled my family, and just really grinded to to build a company well, while being a full time employee. So I actually share my story with everybody on passive income Pilots podcast. So Toby’s been on my podcast three times now and but, you know, I share everything that I’ve learned over the years on my podcast. And you can see here, if you scan the QR code, I have guests like Toby on there. Clint Coons has been on there from Andersen Advisors and really just, you know, love to share what I do. And, you know, my way has always been more time with family. I want passive income. I want to do things that I love and spend time with my investors and really build those relationships. That picture on the left hand side, there is actually our we do an investor ski retreat every year and that was in Lake Tahoe the other year with all of our investors. And we have a lot of Andersen clients that invest that were actually pictured in there bringing their families. So a lot of things that I love real fly ski, hike, get out there so and spend time with the kids. But before we before we get into like all this data, who here has used a self-storage? Maybe she’ll give me like a thumbs up a heart. You’ve ever used a unit. You’ve rented a unit. You know what I’m talking about. Okay? Like everybody, right? So I always ask this question because people are like, Man, storage is kind of silly, but like, if you think about it, one in every nine Americans actually uses a self-storage and throw me another comment. Or like, if you also have a garage or you had a garage when you when you were using self-storage, let’s see. Let’s see how many more. Okay. So about a 33% reduction and thumbs up, right? Well, you guys all meet the national average here. So 66% of people who actually use a self-storage also have a garage. So if you think that, well, this guy’s got a bunch of storage or a big garage or whatever, they’re not going use self-storage, just simply not true. No show of hands or some comments, you know. Why did you use self-storage? What was your whole point? Why? Why did you actually rent a self-storage unit and go take the time and move your stuff into storage and I can’t see the comments, but throw it in the chat. Let me know what what you had and I’m going to shout out some some things here. So, Passive Income Pilots is the name of the podcast, but okay, so cars, too many cars, relocation moved into a smaller unit. HOA rules, daughter came back from home. I was moving. I thought I’d use this stuff later, moving, etc., etc.. So the lot a lot of things like that, right? Decluttering the home move town, interim location, removing, storing a boat, cleaned out my brother’s house. Okay, so you guys all fall under the the categories that I talked about, but then I’m going to show you, which is there’s there’s four reasons why people use self-storage, death, divorce, displacement and downsizing. So everybody talked a lot about number three, which is displacement. You moved your daughter came home somebody somebody had a job change. Somebody went and bought a new home or sold a house, whatever it might be. So these are the reasons why people use self-storage. Yeah, plumbing issues, heirlooms, large furniture before we sell relocate. Right. It’s because at a life events, people are moving because they have something going on in their life and they’re using self-storage because of it. And that doesn’t go anywhere, right? So you’re not you’re never going to not have a situation where you need a self-storage facility in your life. And these are a lot of reasons that do it. This is actually 70% of our customer base right now. And what’s exciting about this is and I’ll get to it later, is displacement. There’s not a lot of displacement going on actually in America, and there’s a lot of pent up demand for self-storage that’s occurring because of the housing market. And that’s we see that as a massive opportunity. So so which generation? Baby Boomer, Gen X greatest generation, greatest and Silent Gen X? Who do you guys think uses self-storage the most? Show hands or throw in the comment. Think millennials use it the most. Baby boomers Gen Z who’s using self-storage the most? Baby boomers x x, Gen Z. Okay, some good questions are good, good, good guesses. So the answer is actually it’s pretty tied to millennial and Gen X, and the reason why is because of life events, right? So they, like millennials and Gen Xers, are now having families. So I’m I’m a millennial, I’m an older millennial. I’m the better the better adjusted side of that or whatever you want to say, I’m just okay But basically millennials and Gen Xers are basically moving you using self-storage because they’re having kids, they’re buying their first homes or moving, they’re getting their jobs relocated, they’re getting promoted at work, whatever it might be. They’re in there and the zone for using storage. So actually we look for cities like like Portland, for example. We just bought a couple of properties in the Pacific Northwest. The average age there are 38.3. And that’s a perfect market for a place where people have a lot of storage need. We’re we’re building another property out in the southeast in Portland, Savannah, Georgia, where people need that space. Right. So baby boomers actually used to be our biggest customer, but now that they’re kind of settling down with their moving in their life events, they’re becoming less and less of a customer. But now millennials and Gen Xers are taking it. Yeah, well, who from? Savannah? I agree. Good market. We’re just about to build on there. All right. Now and again, that’s life events. So people people use self-storage because of life events. Yes. We have too much stuff. Yes, we can’t get rid of things. But generally what people do, they’re using self-storage no matter what’s going on, no matter how economically rich or poor their situation is, they’re going to use self-storage no matter what. And 30% of our other customers are using it for a business. So I didn’t see a lot of business use on there. But landscaping, company, sheet metal contractors, people have Amazon, Etsy or moving companies or furniture saving furniture staging companies. A lot of these companies are using self-storage because they have a business. I mean, I just had a guy call me, He’s got a bunch of classic cars that needs to use a self-storage space because that’s his business, right? So we have a ton of people that use it for personal business use. And again, I was kind of a doubter of the industry. You know, this was probably what my apartment looked like. It wasn’t as nice, you know, when I was just just recently married to my wife. And, you know, we didn’t have any kids, right? So we didn’t have any stuff. Like it was just this is just how life was. And then, of course, you have kids and your apartment looks like this or your house looks like this, right? You get all the toys and things. That’s actually pretty clean. But, you know, when you have all this stuff, you start kind of going, hey, like, I’m going to need self-storage because I need to renovate this thing and make a bigger house or whatever. So when I renovated my house, I put myself into self-storage and, you know, so I kind of thought it was a silly asset class. And thankfully we had owned our own self-storage facility at the time, and I was able to utilize my own place to store my belongings. And so that’s just one of the many reasons. And, you know, I joke as an airline pilot, I was flying during COVID, like right when COVID hit and, you know, I was flying an airplane down to Orlando and, you know, this airplane had 189 seats on it. And there was one passenger on the plane going to Orlando. And I was like, welcome aboard your private jet, You know, But I got to ask, where are you going? What’s so important? You know, nobody’s flying right now. It’s COVID. And she said, well, my mom just passed away and I’m moving down to floor. I’m flying down to Florida to put her stuff into self-storage. So when you think about why people use self-storage, like it never stops, like people are always using self-storage. And in fact, during COVID, we had a massive boom where we had more customers than ever and higher rents than we’ve ever seen. And, you know, I talk about furniture staging companies. One of the first self-storage is we built the first ten units got scooped up by a furniture staging company because they were building 10,000 houses within a mile of our property. So the furniture staging company literally just set up at our property since there was so much moving. Going on in storage is like a subscription service. So people the average cost of a unit nationwide is about $88 per month. And so if you think about it like the lower cost of a subscription and the more you can put it on autopay, the less you think about it, right? I mean, as most us Americans, we have so many subscriptions, you know, Netflix and Disney and all the things Amazon and Prime and and this and that, we kind of forget what we have. And, you know, it’s kind of like a gym membership, right? Where like, we sign up for this gym membership, we think we’re going to go and we never go. And then we want to cancel, but we don’t want to cancel because it’s really hard. And that’s kind of what self-storage is like. But it’s worse because not only when you go to cancel, do you have to like go to the unit and physically go there, but you have to move out all this stuff. So our average customer stay. I was just looking at it in our portfolio right now is 30 months, 30 months. So even though our leases are month to month, people stay on average of 30 months in our portfolio because once you move your stuff in, you really don’t want to move your stuff out, right? I mean, who wants to spend a Saturday with a U-Haul, you know, sifting through a bunch of stuff that you really have no idea what you’re going to do with it, Right? What do I do with this old couch? Do I put it on Craigslist? Do I put on whatever it might be? It’s just going to stay there and you just like, just forget it. I’ll just come back later and do it at another time. And then you end up staying there another year. But here’s here’s why we got into the business. We got into the business because we used to flip houses and build condos and do all those things. And, you know, we got into the business because we really wanted something that easy to own, easy to evict, easy to maintain. And these are the three E’s of self-storage. So that’s why we really choose the space. So, you know, when you think about it, you know, this is like your typical real estate things that you got to deal with, right? When you get into real estate, it sounds exciting and sexy and everything, and you get to get all this passive income. But then you have these things that get in your way, like toilets, leasing agents, appliances, water heaters, evictions, trashed units. Right. And these are all the things that people don’t talk about. And that are not as fun. And we went through all this stuff without having rentals. And in storage, you don’t have any toilets. We have like 30,000 units and we have maybe 25 toilets in our entire portfolio. If you had 30,000 units of single family homes or or apartments, you’re going to have like 60,000 toilets probably on average or maybe 45,000. So a lot of things to take care of. You know, we don’t have to have a person at our property. We can lease all of our stuff all without all automated. And we’ll talk about that in a minute. We don’t have any place you need countertops or anything like that in our in our in our in our facility. We don’t have any water heaters and we are not subject to eviction laws. So I just mentioned buying a property in Portland and everybody think, ooh, Portland. Like that’s a hard market to invest in. Well, kind of. I mean, there is no eviction. There is no eviction laws that apply to self-storage in the state of Oregon or in the city of Portland. So we can be in a market that has really good income and good population trends and we don’t have to worry about eviction moratoriums because we can kick somebody out if they don’t pay after 30 days, which is great. And the last thing is, is, you know, we don’t have these trash units, right? When somebody moves out there, they’re just moving out. There’s just we sweep the floor and and clean out the unit and turn it over. So this is how the facility this is how storage is performed over the last 40 years. Right. So when you think about every major recession we’ve ever had, you can see the Black Monday of 1987, the dot com bubble burst, the 2000, the great Financial recession of 2008 and then COVID most recently was the biggest downturn. Right. And when you think about how the GDP declined, that’s the blue line. And the goal line there on the screen is how storage performed during that same time. So it is it is something that goes into you know, it goes into recession resilient mode when the economy changes. Because here’s what happens. When the economy is really bad, people start doing things like they start selling houses or moving or downsizing or getting foreclosed upon and they have to move. They have to change. They have to they have all this stuff. You know, maybe it’s a stressful environment for the for for people and they get divorced or whatever it might be. So and then likewise, the economy is booming and people are buying things and relocating and moving same type of environment. And so this is kind of some of the penetration of customers over the last decade or so. You can see that we have an increasing trend. This is the trend and storage is only increasing. We’re seeing more households using self-storage. So dating back to 2013, 8.968.9, 6% of Americans use self-storage. Now that’s up to over 11%. And that continues to climb and increasing. But I talked about easy to evicted and I did I see some questions in the chat window here. And I think, you know, it’s important to kind of go over this like how does this how does this work? How does this easy to evict really? What does that really mean? Well, if you look at a storage lease, this is what it says. It says the stored property is subject to lean in favor of the owner. So that means that if a customer doesn’t pay, we can leave their belongings and auction them off, usually within 30 days. And so if they don’t pay, we can sell the stuff in the any money that we make on the collection are the sale of those belongings. We can get that money back to pay for our unit. Now I know everybody’s like, well, this is like Storage Wars, right? It’s like, Yeah, kind of. It happens actually a little bit. It’s a little bit less, you know, dramatic as that, right? Just like anything on TV, it’s not it’s not a little overdramatic size, but the same is true, right, where we have an online auction. Self-Storage auctions, dot net usually is where we sell our belongings. And people that they they file the Leanne’s in the paper and people can come to the property, come to the website and they can see what’s for sale. It’s not behind a closed door. They can actually see the goods and they can bid on it and buy it. And when they buy it, we, we collect the revenue. And any past rent pass, do rent is paid to us. And then any ding above that is basically goes to the to the storage renter. Right. So if there was $1,000,000 in there and somebody gave us a half a million dollars for it, we would get that we would get whatever we lost in rent and the rest of the money would go to the owner. So we don’t really make money on auctions, but we we get our unit back, right? Where if you think about it, like if you’re renting out a single family home or multifamily unit and you have to evict somebody, my God, that could take a year. You’re spending thousands of dollars and you could get a trash unit at the end and nothing, right? You could get nothing from that from the tenant. So that’s this is why we really like this. This is like this in almost every state. The next thing, like easy to operate. So if they fail to pay, we can restrict their their access to the property. So if you don’t pay after three days, we lock your unit out. So we have a gate software or whatever that if you don’t pay and after a couple of days you don’t you, you can’t get into your own unit, right? So you can’t even get access to the property until you pay and the owner is not responsible for any damage. So I saw somebody say, you have rats or whatever. But, you know, at the end of the day, we do our you know, we do our best job, you know, keeping pest control and of course, providing excellent customer service to our to our facilities. But, you know, at the end of the day, we’re not really responsible for any damage inside the unit, which is insane. Easy to maintain slab on grade metal buildings. We’re going to talk about the different unit types here in a second. But you’re not allowed to make as a customer, you’re not allowed to make any alterations to the space whatsoever. So, okay, we talk about space. I like to joke around about this a little bit. So we’re going to go over the most common unit types you’re going to see in a self-storage facilities and the different features and benefits of each one. So this is a five by five corrugated walls, slab on grade, right Metal door. This is a five by ten corrugated walls, slab on grade metal door known as a theme. They’re all the same. They’re all just a little bit bigger and different shapes. Now, of course, we have the inside units, we have the outside units, but you can see another ten by ten slab on grade corrugated metal walls, metal door looks pretty similar and we can put in a lot of these units in a facility. So there is our ten by 15 very common unit you see in a self-storage facility. And then there is our ten by 20 Now lawn is there in the picture to feature this unit. But other other than that, it’s a corrugated or gated metal walls in a and a roll up door. So just to kind of give you some perspective of where I’m coming from, I used to invest a lot in like turnkey rentals where someone finds you a house, you go buy it and you can kind of see, this is my house that I bought here in Cleveland, just outside of Cleveland. And, you know, I started buying little rental properties and, you know, it was great. It was it was it was leased up and it had a tenant and all these things. But, you know, when that tenant moved out, you know, I had no revenue for six months. It took me six months to find a new tenant. And I was scared to death because this tenant vacated in October and that was the winter time. And I no one wants to move in the middle of the winter time in Cleveland. And it took me six months to find a tenant and when the tenant moved in, made our the city come down, inspect the property and do a whole of and all this stuff. It took them 22, it took me 20 $500 to, to, to repair this property, to get to get it so somebody can move in. So I was crazy. So, so again, when I finally did get a tenant in April and they were in there for a year, my landlord called my property management company called me up and said, Hey, do you want to raise the rent? And you know how much and what are you thinking? And I’m like, I’m just thinking, my God, no, I don’t want to raise the rent because what if they move again and I lose my revenue for six months? And then I also have to have 20 $500 in repairs? I’m like, No, God, please keep them in there. Keep them happy. Like lower their rent for all I care. But for a self-storage facility, you think someone’s going to move over ten bucks a month? Probably not. Right. So we can change our rents every 30 days. In fact, our rents just went up June 1st. We sent out about ten. We have about 35,000 customers. We just sent out rent increases on 10,000 units effective June 1st. So we plan about a 17% attrition rate on that. Usually we see, you know, high single digits. People are moving out anyway. But, you know, we kind of monitor, you know, who moves out, who stays. But in general, $10 a month, 500 units, that’s $5,000 increase in monthly rent, monthly rent, $60,000 increase in annual rent. So if you think about how much cash you can generate just when doing a simple rent increase, this is one of the huge value add strategies that you can deploy in self-storage. So a little bit about kind of who I am, who my company is and what we do, investment opportunities that we provide for investors. We’re one of the fourth. We are the fourth fastest growing, privately held real estate company in America last year. And we’re the 126th fastest private company growing overall. And we’re the actually now the 36th largest operator of self-storage in the U.S. And our our national brand is called free up Storage. So if you have ever heard of free up storage, that’s what we operate all of our facilities under. But Smart Investment Group is kind of where we make the investment. This is my business partner, co-founder Scott Lewis. Tobi mentioned who Scott was in the beginning. Scott’s an Army vet, served in Iraqi freedom. He was a neighbor of mine that I met in D.C. and that’s how we got into this business together as neighbors. So if you want to meet your business partner, just knock on your neighbor’s door and see if they want to do business with, you know, just getting the we just kind of met serendipitously like that. And and so we started Spartan and we’ve really grown a portfolio nationwide of self-storage facilities. Here’s just a quick snapshot. About over 30,000 doors. We have about 150 employees now. And the slides a little dated. We’ve raised about 350 million from investors to go buy self-storage facilities together. And and we’ve made that that 100 an INC 500 now, I guess five years or four years in a row, you know. So like I said, we met flipping houses here in in DC So I was an airline pilot for four Alaska Airlines here in this picture, I was actually flying my daughter. It was her first flight, two month old over to Hawaii. And and I met Scott. I was actually living in the White House on the left there. And our first flip was the brown house in the middle. And he was on the house to the right. So we met his neighbors and our first project together was suppose was literally flipping a house in between us. And this just stuff just didn’t scale right? We really wanted to start a company that we could scale and be in an asset class that was one of the top performers in America. So we quickly switched over to self-storage and we do the whole thing. So we are a turnkey operator, so we find our fund and finish our projects. So we, we basically are a vertically integrated company. So we’ll we’ll find a piece of raw land and we’ll build a self-storage facility and fully operate it and lease it up. We’ll find existing properties like we just closed on last week where we’ll buy the property and then run the operations and improve it. And we share in our profits with our investors. So we share in the cash flow and we share in the upside potential as well. This is this is one of the due diligence checklist forms that that we share with our with our clients and our investors. Before we do anything with the self-storage property. We we put it through a thorough 700 point due diligence checklist. And if you scan the QR code, we can give you a copy of this and we can give you a copy of it later too. Just shoot me an email. But we take the property through all this due diligence in order to make sure it’s going to be a good one for you and for us. Spartan. So and Toby mentioned this at the beginning, a lot of our realized investments, I think the worst investment we’ve ever done, 12.1% realized annual IRR. And then our most recent self-storage project was like an 83% IRR. So crazy good returns. Usually we end up in like the 20 to 30% annual return range for investors, but we’ve had about 16 exits in in the real estate space overall. You know, typical things that we buy, we buy really nice class-A property like the ones that you see on the screen here, the one on the bottom right there, actually, we built that that facility just outside of Seattle. And on the bottom, we buy some mom and pop stuff, you know, believe it or not. But 70% of facilities out there are owned by mom and pops. These are people that built the property a long time ago and they just have no need for it or they don’t have any heirs to give it to or they just they have a basis in it where they want to make a huge profit. So they’re selling it. And these are under managed properties that typically need a lot of work or they need to just be run by a more professional operator. And that’s really, really make our money. And I’m going to kind of go into the just examples below. This is a picture of land just outside of Portland, actually in Sandy, Oregon, where we actually built a brand new facility. And so this is a this is an example of some of the things that we do. I mean, we probably build maybe 30% of the properties and we buy existing about 70%. But here’s a great example of what we built. We took this land here and we built this beautiful class-A facility in Sandy, Oregon. So you can see it on the front here, what we built. And then we also once we once we build this property, we will put our own national brand on it called Free up Storage, which is pictured here. And then we take the property through its lease up. So we’ll actually go out and and lease it up and, you know, take it through. So likewise but we’ll also do is will buy existing properties like this one. We bought the 735 unit property and it had all this raw land on it. So we decided to take this two acres of expansion potential and we put in two buildings. So you can see the buildings here and we actually added on about 240 units and that’s our construction team out there getting those units put up. And we’ll talk about this example later on in the presentation. But, you know, how does this really compare to multifamily single family, other investment types? So, you know, I think we all get into real estate for the tax advantaged. I mean, if I think of like if I am I show my podcast, I’ve interviewed dozens of people about why do you love self-storage? And, you know, I think we’re all into real estate for tax advantages, right? You know, that’s I think that’s one of that, you know, depreciation section 179 or whatever the the things that Toby talks about all the time, depreciation is huge, right? And so you get that on multifamily, self-storage, single family, you can actually get depreciation on self-storage. I’m going to go through an example of one of those. And so I think it’s all kind of tax advantaged in that sense, average day. So I’ve kind of changed my opinion a little bit on this. I actually think self-storage is probably got the better average stay out of all other asset class types, like if you think about multifamily or single family, yeah, maybe the average stays like 12 or 13 months. I couldn’t really find some good data on it at the time I looked. But our our specific portfolio gets about 30 months of average stay now, so that’s pretty good. And that includes properties we just built and things like that. So there is a there’s a really good average day economies of scale. This is where I think we start to pull away from single family because it’s hard to scale a lot of single family homes in one spot and it’s hard to manage a lot of single family homes all over the place. Right. But self-storage, you can get thousands of units under one roof or hundreds of units. And same with multifamily And but really, I think the differences are just automation, rent recapture and low maintenance. I think that’s why this has been a top performer is because you can put a property management software into your facility and it will just completely run itself. This is like property technology. You probably hear this word proptech, you know, what is Proptech Property technology is where you can automate things and self-storage is really one of those only businesses. I feel that really got this down and it really works for us. So we have kiosks and we have a call center and we have online rentals where 24 hours a day, seven days a week, you can move yourself in so you can actually book unit online, you can book a unit on your phone, you can book a unit on our kiosk machine and you can move yourself in whenever you want. And I’ll never forget the first self-storage facility we ever bought. My wife was actually our director of operations in the beginning and we were on a hike and she’s like, Hey, I just moved four people into Aspen Park, self-storage, which is one of the first properties we owned. And she said, I was like, What? She’s like, Yeah, I can see right here. They just move themselves in. And so and there wasn’t even anybody at that property. So if you can find another space that can, you know. Lisa Multifamily or single family home without anybody talking to anybody, they’d be crazy, right? But self-storage is one of those industries where you can do that rent recapture is basically saying like, hey, if you don’t pay, we can recapture the rent through the auction process. We can actually get our unit back faster and lease it again. When somebody doesn’t you know, when somebody doesn’t pay or moves out. So we can actually get to renting units faster than a lot of other industry asset classes. So and then low maintenance, we don’t have a set of appliances, a set of countertops, cabinets, trim paints, carpet. We don’t have any of that. And that provides us with a great low maintenance thing. So so you might be wondering, okay, so then that’s great. But then how do you actually add value to it to a an empty box, or how do you add value to air? And one of the examples I love to give is like when we go find a storage unit, we’re going to go look in a market where this property is maybe charging $30 a month for that unit and we’ll look around the market and we’ll look at all the other competition and we’ll say, Hey, the competition’s all charging $60 for that same unit. But for whatever reason, this mom and pop operator, they just like to be full with a waitlist. They don’t like to do any marketing. They don’t like to upset the apple cart. They just like to be at $30 a month and they’d be full. And we go to the market. The market’s charging 60. So what we do is we buy this property and say, hey, we can basically double the unit economic occupancy rate because we can charge 60 when like everybody else is charging 60. So we’ll raise the rent to maybe just 50 bucks just to be kind of nice and maybe that customer says, I’m moving out. But the reality is the person that moves in is not going to move in at that $60 rent. So now instead of having a $30 unit, you have a $60 unit and that’s where you can literally add value in storage without even doing any work. Right, other than buying the property and doing all the things that go into the real estate. But you’re not doing any physical upgrades to the property when you do this. You’re not repainting or redoing the inside of the unit or anything like that. You’re simply just mark to market. You’re taking the current rents and you’re moving it up to what the market is charging. And that’s what the beautiful part of the space is. It’s just such a fragmented industry with with mom and pop ownership that hasn’t really adopted best practice for what all the other operators are doing, which is, which is incredible. So get the move in at 160 and and life is good. Now, speaking of improvements, we still do make improvements and we have a value add strategy at Spartan where we will actually take like this old property right here in ceremony storage. We bought this from an older couple that was retiring. They didn’t want to drive across town anymore and we bought this this storage facility north of Denver. We a nice professional sign in there. We did some professional landscaping, professional fence and basically made the place better, right? We painted it and all that. We actually sold this. There was a handful of Anderson clients that were in this deal. I believe the payout was like 22 or 23% annually, and they made cash flow along the way. They made like a seven or 8% cash on cash monthly distribution. Why we held this asset and then we sold it for a profit. And and this is this is the type of stuff that we do. These are kind of some of our sites you can see around the country, the Sandy site, some sites in Arkansas, Georgia, Texas and so on. And these are this is we just give it nice a curb appeal. We want to make it feel like this is a place that people want to go and store their stuff. Some of the properties we come by and it looks like this looks like, you know, some of these some of these offices are so nasty. I mean, we had one where we were there was like 12 cats that were living in the office and we had to like evict all the cats and rip out all the carpets and completely renovate the office. And who wants store your stuff in a facility where you walk in and it smells like, you know, a zoo. Right. And and so we do these office renovations that just make these properties look and feel professional and and give that to the investor or the customer a sense of security and safety when they walk in, because that’s really who your customer is. And storage is like a 70 year old woman who wants to come in to the property and feel really good about about where they’re storing. So we’ll do things like change the latches, we’ll redo the fencing, we’ll put in security lighting and really just give the facility a good look and feel. Here’s some other ways to make money in storage, and I’ll cover these a little bit later. But I know on the bottom I put the batter batter. Be assured that’s our tenant insurance plan. So we actually a lot of mom and pop facilities, they don’t offer tenant insurance. So when we come in will require tenant insurance and then we can’t require them to buy our plan. But what we can do is we can say, hey, if you use our plan, it’s really easy to sign here. And then that allows us to use a self-storage, you know, offered tenant insurance and there’s 500 units and 13, you know, if 500 people buy our plan, that’s $13 of extra income on 500 units that we can get every single month. And the insurance company gives us a split with the profit so we can actually get 70% of that insurance money that comes in from the unit. So when you think about value add strategy, there is a ton of it. And you can do things like U-Haul, sell merchandise, rent vans, things like that. So so let’s talk about an exit strategy. So, you know, okay, so we go by these properties who’s who’s actually buying them? Who’s actually, you know, if Spartan’s going out and buying all these facilities for mom and pops, then who’s actually going out and buying all these properties from Spartan? Right. And so we kind of yourselves as like an aggregator of this stuff. So we go out and we buy all these little tiny properties, we build them, we buy them whatever it is, and we kind of scoop up a lot of mom and pops because the big boys don’t really want to go buy up all these little tiny properties. They don’t want to take the time that we do to build them, to buy them all over the country. Right? What they want to do is they want to come in and buy big groups of assets at scale. And these are all the big REITs and publicly traded companies that are coming in and buying these assets from us. So we’ve sold eight in the last year alone, some of them actually our average cap rate in 2023 on the sale was 3.75% average cap rate. So they are paying a healthy, healthy premium for these assets and the ability to get scale in certain markets. And they love the fact that we’re aggregating a bunch of properties in the same spot. Like specifically, if you look at this map, these are just some of the assets that we hold. And you can see we cluster these properties together and that gives us benefits, right? Because if these are really good locations where there’s high traffic counts, good drive by visibility, and we kind of cluster together, then they can get efficiencies, right? So a reader buyer will go, Hey, and for us too, we can operate them a little bit better. We say, Hey, we have a we don’t just have this one store manager on an island in the middle of nowhere. We have six properties, for example, in Chattanooga, where we can have one district manager overseeing that entire region and then they can be checking in and kind of providing support. So that’s what the readers want and they want that economies of scale, that’s basically going to allow them to make additional income and overall give us better returns, which is what we really like. Now when we think about, you know, what are five ways you can make money on a single family home, Well, the answer is you can’t write your tenant moves in there, which is great. And if they move out, no more income. But for storage, you can actually diversify your income quite, quite a bit. And when you think about the tenant insurance that I talked about, selling tenant insurance, this is some of the five ways you can make money in storage. Ten insurance has to be top on your list. You know, renting units is number one, of course, all the time. That’s your primary business. But number two has got to be tenant insurance. That is, you’re going to be your number one way to make money, merchandise sales. You know, this is a good way to entice your customers, have a good, convenient location. You’re not going to make millions of dollars on selling merchandise boxes and tape and things like that. You’re not going to make a lot of your income on that, but it’s good to offer it. We also do boat and vehicle storage, so we do RV spots. We probably have a little over a thousand RV and boat storage spots. This is great for like excess land where the city might not let you build additional buildings or additional storage units because the storage units are always going to pay your best rent per square foot. But hey, if you got that extra land in the back that you’re not doing anything with, why not offer some RV storage, you know, 5000 bucks a month, whatever it might be, depending on the market. And there’s a ton of demand for it because there’s a lot of people that own boats in our bodies. Now. We rent out trucks. This is one of our branded trucks that we have at one of our properties. And we rent this out. We offer a free truck rental with the move in and that helps kind of lease up our facilities a little bit quicker. And the other thing we do is we have a lot of cell phone towers, so we’ll actually get paid a triple net lease for putting these cell phone towers on our property, which is incredible. All right. So we talked about it, right? We talk the talk we we kind of went through, you know, why self-storage, why people are using it, how people are using it in some different ways to make money. But I want to show you guys actually how we did one, how we actually bought a property. The real numbers that go into go into doing one of these properties. I got to show you a case study. So one of the properties that we bought in Texas actually is this one. And we paid 6 million bucks for it. And for those that are out there that don’t know anything about commercial, real estate, there’s really only one thing that I want you to take away from this. That’s, you know, NOI divided by cap rate is basically how you determine value in commercial real estate. So we bought this property, had $443,000 of wire net operating income. And so that that’s basically a 7.38% cap rate. So 6 million bucks while we paid about a 7.38% cap rate for this. We bought it in April and it was cool about this property that we bought was that it came with a car wash. But we really love the vacant land for expansion in the middle that you see there and it had U-Haul truck rentals on it. And so just to kind of walk you through this property, this was an existing property we purchased with our investors, had interior and exterior storage. It actually had about 735 units above about 81,000 square feet. And it had the climate controlled units. About 40% were climate controlled and about 60% non. And it came with this car wash, which we just we just sub parceled this out and sold it. And then it also had a U-Haul truck rental business so we could actually rent trucks for ancillary income. But the best part about this was there’s two acres here. So the two acres you see on the screen, we actually turn that into those two buildings and built additional units. And you could see that our construction company went out there. We built these units and we were able to build a really good mix of like indoor and outdoor units. So because we knew what the customers wanted, because we already had a full property and you can see that, you know, once we had those buildings built, we did some promotional stuff and got the facility leased up. And those are the brand new buildings. As the day after we put the put them on to the market. And, you know, we do things like Chamber of Commerce events and really promote the property so that we can lease it up. So how do you how do you like fund something like this? Right. So, you know, we have something in real estate called the capital stack, which is basically all the debt and all the equity you need to do a deal. So for this deal, we went out and raised money from investors. Our minimums are 100,000 and we basically raised $2.3 million from a handful of investors. And then we went to the bank next door to get a loan and we basically put together seven and a half million dollars. And you probably thinking, Wait, I thought you paid $6 million for the property. Why would you why would you get seven and a half million? Well, good question. So this is how we spent the money. So we spent the money on on the purchase price. We expanded the property for $1.6 million. We had 250 K set aside for reserves and 250 K for closing costs. Now, the due diligence here is something that you really want to make sure you get a handle on. If you put the property under contract, we put it under due diligence for about 60 days and we do everything property inspection, roof inspection. Actually we do a geotech, we do a survey, we do title escrow, we do financial due diligence, we study the market, we drive to all the competitors, everything that goes on and do diligence you want to do on a property like this. And we gave you that checklist a little earlier, but you can scan that code and if you can get it, if you didn’t see it earlier. But basically we go through all these things right in our due diligence. You can go to our website and download our due diligence checklist, etc., etc.. But when we put a property under contract like this, you want to actually go through all the financials too. So you want to go through all the rent roll. This is all a rent roll on a on a property. This is what all your customers are currently paying. They live on the property that are in that live on the property. But there are customers in your facility and you basically want to take a pop under the hood of the actual financials as well. So like your P.A., your profit loss statement, you want to see what the owner has been realizing and rent and expenses so that you can you can do that. So and then the last you know, the next thing I do is we study the market. So we’ll actually go and knock on all of our competitors and we’ll pretend a mystery shop will say, Hey, we’re looking to run a unit now. Do you have a units in? You know, they might say, we don’t have any units, we have a waitlist and, you know, get in line, buddy. You know, there’s nothing available. Right? And so we actually mystery shop to all the competitors and what we found and we find this in a lot of markets where, all right, I’m going to pop in here because it looks like Ryan may have just frozen. So I’m going to let Ryan get his stuff together. Maybe my team can reach out to him and see what happened to his Internet. You guys are seeing a frozen, frozen. Ryan, this is going to give me an opportunity to answer a bunch of your questions because there’s over 30 of them. Yeah, you guys are all seen frozen. Ryan So Jan Maybe call him and see if we can get that connection. Questions that I could answer real quickly. Just because there’s a, there’s a few oops, they’re on it now. He’s gone here. I just get my chat back up. Can men be frigid? Here we go. All right. All right. So I can see you guys have chat now. So let me go to your Q&A. Does Spartan allow IRA or for one K investments? All right. So he hasn’t gotten into investing with Spartan right now. Yes, you can invest directly with Spartan. They have three funds. And I’ll let Ryan go over what those funds are and who is eligible to invest in it. It’s accredited investors, but yes, you can use a self-directed IRA or 401k to invest in those. That’s not a problem. Our Spartans offerings for non-accredited investors at this time, I do not believe so. But again, we’ll get Ryan to clarify. That is if they do have any investment. The purpose of today is to talk about self storage. You can get involved in self storage whether you’re investing through a fund or not. So you could actually get involved by just learning the ropes of what is an opportunity in self storage and actually bringing them to groups like Ryan and either partnering on deals or finding deals that they can acquire and they do pay on. So there’s lots of ways that you could actually participate. You could just become if you’re a real estate agent, maybe this is something that you start looking for, knowing what kind of numbers they’re looking at. And one thing about Spartan is that all of their investments, from what I’ve seen, are completely they provide you with detailed financials on a consistent basis. I think it’s almost quarterly. And I see I’m actually in the market to invest the profits of the house. So this is this might be perfect for you. Right. And yes, I believe you can 1031 exchange into these as well. Now, the questions want to answer because there was a bunch of them involved tax. In fact, I reached out to you guys in chat and said, hey, there’s a bunch of tax questions. So let me explain this. When you saw the image of Spartan building, one of their buildings and you saw the cement going down and you saw the infrastructure and you saw a lot of the materials a lot of that is considered land improvement. And so when you see the parking lot, when you see a lot of the things that are attached just to the cement, those things could actually be classified as 15 year property under that under the Internal Revenue Code. Why is that important? Because in virtually all of their deals, I’ve yet to see one where he didn’t elect to have a cost segregation done. They break it out and those portions of the investment can be deducted in a much quicker time frame. It’s 15 year property and you can actually bonus it. Hey, Ryan, you’re back. I think I’m back. Yeah, I think. I think so. Hopefully the Internet loves us today, so it really does. I was just answering some questions there. I actually 35 questions right now queued, so I knocked out some of the tax questions. Do you remember where you were in your presentation? yeah. Yeah, they’re good whenever you’re presenting. It’s always fun when your presentation just decides to go, okay, it’s it’s always the little bit of sweat going down your back thing. So just briefly. Good. Plug it. We’re in real estate. So this is this is nothing like I know I’ll take this problem over anything. I mean, it sucks, but. But I did. I did want to go over some of these. Yes. Some folks are saying they didn’t realize there’s a Q&A. Yeah, the Q&A is where you put your specific questions of Ryan. I have a laundry list I’m going to wait for you to get done to go over them. But I did want to hit the tax because folks were asking about cost segregation, started showing the building in these buildings. How much of these buildings would you say is five, seven and 15 year property, which means it’s it’s much faster to depreciate than the rest of the building, usually at least 30%, at least 30%. And in some cases, I’ve seen it get higher. I’ve seen you guys get close to it, right? Yeah. I mean, we’ve had like 60%. But, you know, I like to I like to just aim low a little bit, just to be a little bit more conservative because, you know, you don’t want to over plan your taxes on, you know, something that doesn’t come to fruition. So but yeah, it’s pretty significant. You know, we’ve seen it 60, 65% on some things but very depreciable asset. Yeah. So if you’re an investor and you put money in, let’s say that you invested $100,000, there’s a good chance in that first year that you’d get back 30 or 40, $50,000, first year passive loss, passive loss, because you’re not a general partner in this. I don’t know if you even have that as an option for some people to participate, but for the most part, it’s going to be passive. There are ways to make that deductible against your W-2 if you qualify as a real estate professional. And in this particular case, you’d have to put at least 500 hours in between you and a spouse on all of your rental property. Have to aggregate them all together and treat all your investments as one. And there are ways to do it. But that is a huge incentive when you’re looking at investing. And in self-storage that said, totally, I’m going to get out of your hair and let you continue. You want to reshare your screen at wherever are. Yeah, yeah. Actually it is cool. I am. Can everybody see the screen again? Yeah, I think it’s up there. Okay, I’m going to share an example. I’m going to give you a real quick one and show how there was losses here in just a minute. But what I was talking about was like, hey, we’re looking at a new property we’re going to buy. How do we how do we know that there’s value to add? That’s really what we’re going through right now. And I think, you know, one of the ways that we do that, if you look at the screen, this is a five by ten unit mix. And when you look at six, if you look at the little bottom and this is $47 and 67 units, that means that 67 people or 67 of your units are paying $47 a month. Now, if you look at all the units above that, those people are not paying your $47 month. Now, when we looked at the market for a five by ten was actually going for $53. So not only do you have a bunch of customers that aren’t paying what everybody else is paying, which isn’t fair, but they’re paying less than whatever every competitors charging, right? So when we went through this, we go line by line by line when we take a property over and we figured out that there was $165,000 a year in rents right. So between what our rent the subject site was charging and what the competition was charging, and by the way, we had the best facility in the market. So it’s it’s important to know how you stand against your competition. But we had the best property in the market, but yet we’re charging less rent by $165,000 a year. That’s a crazy value add opportunity. And so what we basically says, well, we’re going to tell our investors, we’re not going to raise it 165. We’re going to just projects, right, for their purpose, their investment, $72,000 a year over 18. And what actually that does to value in real estate, if you that that gives you $6,000 of monthly extra cash flow and that adds $1,000,000 of value to your property, that’s NOI divided by cap rate, $72,000 divided by I think I you just stick a 6.38% cap rate that gives you $1,000,000 of value just by raising the rents to what everybody’s charging. And then we got a civil engineer. Next thing you want to do on a property like this, you got a civil engineer. We have one in house and we have our own construction company that basically looks at this site and says, Hey, how much can you actually build? You’ve got two acres, but what setbacks do you need? What easements, what, sir, you know what’s what is actually going to what can you actually build on the site? We are civil engineer basically said, hey, look, you can build about 40,000 square feet. And if you look at this picture, you can see there’s a line, a gas line that goes right through that land. And then you got to put in a little detention pond. So just know that like just because you have a bunch of land doesn’t mean you can use it. All right? You have to make sure you talk to a civil engineer on that. So what we said was, yeah, he says there’s 40,000 square feet we can build, but let’s actually underwrite 20,000 square feet and at the time this is pre-COVID construction prices. But we could build a 20,000 square foot facility for about a million bucks. Now, that would be about like, I don’t know, it’d be about 70 or $80 a foot, probably $80 to be conservative. So construction costs have gone up quite a bit. And then that would add that revenue of those additional units would add about $2.34 million in value. So totally worth doing. Right. And then when we look at a property, we’re going to do initial improvements, we’re going to paint the place, make it look nice. We renovated the office, we’re going to increase our rents to where they are in the market. We’re going to expand the property and then we’re going to add ancillary revenue like tenant insurance, like this property had no tenant insurance. And so the other thing too is, like Toby was mentioning, accelerated depreciation. This is all the five and 15 year life on the property. We got an estimate done at 1.7 million. We ended up getting a $2.1 million tax break in the first year. So when you think it, I guess that’s more than 30%. And I guess am I doing the math right of our components in the building? We’re actually depreciable so what does that mean? I means you, the investor. This is an investor who invested 50 K and they got a loss. So if you look here, they got about a $21,745 loss per $50,000 invested, largely due to depreciation. And what’s cool about that is, is this is the cash flow that they received, right? They got about 3600 bucks a year on that $50,000 investment. So they made between seven, seven and 8% return on the cash flow. And that’s taxable, right? This is taxable income, however, because you have the depreciation. And then they made some sale for profit or whatever, but because you had a depreciation of 21,745 bucks, you don’t pay any taxes in the first five years because that bonus depreciation basically shields your taxable gain from the investment that you’re making. Now, of course, I’m not a tax attorney, so you know mine, Toby, and hunt him down. But, you know, basically the way I understand it, passive income can be offset by passive losses and and you can get more creative with it and become an active real estate investor. But that’s not that’s not what I’m talking about today. But these are basically ways to shield your taxable income from your investments. And that’s why real estate is such a powerful tool. So this is how we made it work, right? So this is kind of our typical value add plan. We basically said, Hey, we’re going to buy this property, we’re going to raise rent $72,000 a year. Right? We’re going to we’re going to get in there. We’re going to raise the rents to market. We’re going to give ourselves 18 months, whatever. Right. But here’s what actually happened. We got in there and we just said, you know what? Why would we not raise everybody’s rounds to what everybody’s supposed to be paying right away? And we did that and we actually raised the rents $205,000 a year. So investors got more cash flow from that. And then we said, hey, you know, we’re going to expand this property in the back. There’s 20,000 square feet. We said, But, you know, we’re just talking to the construction company. And they said it’s more economic pull just to build it all at once. So if you’re going to build 40,000 any time you want to just build it all now. And so you know what we said, screw it, we’re going to do that. So we actually built all 48,000 square feet at the same time because it’s more economical to do it that way. So what? That increased our revenue by 30,000 or $300,000 per year. And then we had that existing money in place, right? So we told investors, Hey, this is our proposed plan on the left, this is what actually happened. And we said we were going to sell the property for about $10 million after we got the NOI up to 670,000. But we ended up selling the property for 14.4 million or about a 6.6% cap rate. So huge gain huge value in in buying this. So I wanted to transition a little bit and talk about some deals that we’re looking at now. So the way we look at properties, kind of how we we assess them, but this deals and this actually does deals in part one, we’re Georgia, which I saw somebody give a shout out to Savannah, Georgia. So this deal is actually just outside of Savannah in Port Wentworth. And I’m going to talk about how we came to find this property. So you can see this picture. This is a rendering of a property that we’re just about to put a shovel in the ground and start building. And these are this is kind how we look at returns for investors. So we try to target about a 20 plus percent return. We’re looking at ground up development. So this this deal projects a 21.8% annualized return and this is a six year hold. So if you’re an investor in something like this, you’re going to be in it for six years because is going to take us time to build the property, lease it up, and then eventually sell it with a yield on cost of 10.2%. That’s effectively like the cap rate on all the costs that we have going into the property based on our stabilized rents. And so you’re going to 2.3 x your money and basically six years. This is where the property is out. If you’re not sure where Port Wentworth is. But what we like is that this is our 17th property that we’re putting in Georgia. So we already have a whole team there. We already have people built. We’ve already built units in the Georgia. We’ve already we already have managers out there running the site. So really it’s it fits nicely into our existing portfolio of properties there. And and this is kind of how we we build the properties and we build it from the ground up. We’ve actually been trying to entitle this property for, we’ve been entitling this property, we’ve actually got it already entitled for 18 months. So we started, we found this deal 18 over actually almost two years ago and then put it under contract or whatever. And it took us 18 months to get all the city approvals in light. And so now that we have all that in line, we actually went and bought the land in March of 2024. Now we’re planning to break ground in July. So in two months from now and after we get our building permits and then it takes us about a year to build a property that size, that that facility is about 100,000 square feet, which gives us about 75,000 square feet to rent out because you got to account for the elevators and things like that. You can’t run the elevator so that space doesn’t count towards your gross square footage. So 75,000 square feet is your sweet spot for a self-storage. That’s like just enough revenue to justify a couple of employees. And it’s a really efficient spot and then it takes us a couple of years, right? So if you’re in an investment like this and you’re building from the ground up, it’s you’re not just going to the day you open your full, right. I mean, that can happen. We’ve had that happen in a couple of our facilities, but generally it’s going to take a couple of years to lease up a property like that and then we get it stabilized in January 2028 and the investors start making cash flow. Now, this property pays really great returns. It doesn’t have cash flow right away, and that’s when you’re investing in storage for a ground up. That’s something that you might want to consider. So what we like about this property is that, you know, normally when you invest ground up, you want to make sure you have entitlements in hand. You have a land that you can actually put a shovel in the ground pretty quickly after building. Right. And the other thing that we like is the population growth. This area, if anybody’s familiar with familiar with Savannah, but there’s a military base here within like 5 minutes of our property. The airport is right there. And Savannah is one of the most busiest ports in America. It’s like the fourth busiest. And Gulfstream Honda, I say Honda is building their plant there. It’s already underway. So iron is coming in Gulf Stream and there’s a huge population influx of workers to the region and developers plan on building 4000 residential units within five miles of our property are actually three three mile radius of our site. And so that’s people, people moving to an area that’s where you want to build self-storage. The other thing that we like is that, like I said I was talking about earlier, there’s all these different companies that have moved into the area like IKEA. And if you look at just the population of Port Wentworth, I mean, it is J Curve almost right up into the right where people are moving in to Port Wentworth because of the growing demand for all the jobs that are coming to the market. But we won’t even touch a self-storage property unless the rents are over $20. We won’t build a self-storage property unless the rents are at least $20 annually. So when we look at Port Wentworth, we were getting about $20 rents where we think like 18 is sort of like the good, the good base, but we really want to be 20 and greater. So when you think about Port Wentworth, the $24 rents, it makes it really awesome. The other thing that we like about this site is if you look at the map and anybody from the Southeast knows or Florida, you got to be by Publix. Now that’s where everybody’s going, right? If Publix is dropping, dropping anchor in your market, that’s where people go. And you want to be in the area where people are are transacting, they’re buying retail, they’re going shopping, they’re going and getting their fast food. They’re going to get there, their cell phone, whatever it might be. So we’re actually right across from the high school that was just built. And then right down the street from a Publix that was recently opened as well. And then we’re right by a country club and wedge where 4000 houses are coming and you can see all the little brown spots around our subject site. And I can see there’s just tons of houses coming in. So we really like this location and we and we’re just really excited about this spot. Now we’re going to have the best property in the market. We’re going to build this nice institutional quality facility, and it just gives our our tenants something really attractive to to move into. So we talked about that. So usually what we do is we go out and we we raise you can see we’re putting about 45% of the investor equity into the deal and then we go find a loan for about 55%. So we put about a 45% down payment on something like this, and then we’ll finance it with 8% fixed rate debt. I believe we got about 7.75 on this. And then we’ll do like a seven year loan and we do nothing but fixed rate. The fixed rate that is really important, especially in time or interest rates might be changing. Okay, So on something like this, our investment minimums are 100 K, but we give you a little bit better returns. You do 500 K or more. And so I’m not going to go into all these like splits and everything. But, you know, whenever you look at one of our investments, you’re always going to have kind of a couple of different options based on investment amount. And a preferred return basically means you get paid before anybody else does and you get that annualized based on your investment amount. So 9% or 14%. So this is kind of ground up. So this is like a really good example of we find this really hot market where there’s a ton of demand for self-storage and we can come in and use our company or construction company to really build a brand new property in the market. Now here’s an example of a property. We just bought these two, three properties, the Pacific Northwest. Now, this was a crazy deal for us because we bought these. These properties were built in 2018 and. We got this rare inside line to buy these properties for a discount. So I don’t know if you’re if you’re paying attention to anything about real estate. We bought these at a 6.6% cap rate. These are brand new and fully at least 90% occupied properties, which is crazy, especially where we could get a rate, an interest rate for six point, three, 8%. So we actually already bought this. And these this one, we actually have a little bit of room left in this investment, but we we bought these last week, we closed on these on Friday and I wanted to kind of walk through why we liked them. So first of all, three locations, three sites and what we like about it was again, we already have properties in this market, so we have two properties, one in Oak Harbor and Bellingham that we’re building new on. And so adding these three properties in Portland, in Vancouver really kind of complement our economies of scale. We like to have at least 150,000 square feet in any market that we’re in. And so when you think about Portland, some big employers in Portland are like Nike, Columbia Sportswear, Intel, etc.. And so it’s kind of a really good diversified economy and it’s kind of got the nickname Silicon for us because there’s a lot of there’s a lot of blue collar jobs. There’s a significant employment population of white collar jobs. And I mentioned earlier about millennials. Right. Well, the reason why we like this market is, the average age is about 38. So when you think about the customer segment that most uses self-storage, it’s millennials. And when you think about a target rich environment, that really kind of attracted us to Portland, we also like the fact that it’s got really strong incomes, average household income across the three locations is $124,000 a year because millennials are in class-A apartments here and they’ve got good paying jobs. Just some of the things that we found in Portland, like number one for our number two for fiscal youth that cities, great universities, best cities for young professionals, great place to live. But what I love is I don’t know if familiar with this area. I mean, there’s a Pacific Northwest around on the on the call, but right on the border of Washington and Oregon, you kind of get this weird, this cool tax advantage where people who live in Washington get the no income tax and people who live in Oregon get the no sales tax. And what’s cool about doing storage here, you might think, well, it’s kind of a blue state. I don’t want invest there. It’s easy to evict. Remember, we don’t have a tenant landlord problem here so we can be we can infect our customers within 30 days if they don’t pay, which is great. The other thing we like is that Portland is beautiful, right? You’ve got Mt. Hood to the to the east. You’ve got the coast to the west. And I’ll tell you what, when I go on vacation, I live in Seattle. I go south to Oregon, Central Oregon, Portland, Kanab Beach, tons of cool places to go. And that is what attracts a lot of people to the area as well. Now, when you’re looking at storage, you got to see what your customer base is. So these are the three sites we bought. And when you look at the density of people that live around your sites, those are your customers. And so you want to make sure that you have a really healthy strong population immediately surrounding your site. There are three properties in Portland, in Washington that we bought are literally buried and major metro areas, which is fantastic. The other thing that we like to look at is how many new homes are coming in and between the two locations here in Portland, there’s over 25,000 new houses coming in or recently delivered in that market. That means more customers coming in and the best part, within three miles of our property, zero competition in the pipeline. And if you’re looking at self-storage, you should always consider that, hey, who’s coming into the market behind? Me, That could be a competition threat. And the last thing that we look at for location is draft traffic counts. So I would say if you’re looking at a storage property, there should be never be anything less than 10,000 cars that drive by your property every day. If there’s fewer than 10,000 cars, it’s just not a good location. Now, there might be some rare exceptions, like you have really, really small property in a really, really small market and there’s just no cars there. But generally you want to have at least 10,000 cars. This one of the one of the facilities in Portland that we just purchased, it has 156,000 cars. A tripwire today. That is a ton. Right. And so that gives you access to more customers. I mean, that is your marketing, right? I would say when you think about storage facilities, about 50% of your customers are going to drive by your site, know it’s there. And so when they have a storage need. They’re going to think, I can just go to that one place. But I drive by every day right by my house because people aren’t going to drive a million miles to go to a self-storage facility, going to go to the one and they’re in their backyard and the other 50% of your customers are going to come from Google search. So we emphasize heavily five star reviews and paid ads on Google because people are going to search storage near me and they’re going to just lock in and go to your site. Right. I mean, that’s like any American is going to look at, hey, what are the reviews and how far is it right? What are people saying about this place? They’re going to go for the high reviews and they’re going to go for cheap, right? So good promotions and and good ratings. And lastly, like I talked about this in the beginning, this place, we bought this at a 6.6% cap rate. So the average self-storage right now is trading at 5.3% cap rate. So that means that we’re that suggests about a $10 million discount we got on these properties. So we paid 44 million for it. And if you if this was trading at market value, we it suggest that we could get as high as $54 million. So investors are getting value day one, which is a really critical part about real estate. But anyway, that’s all the the all all had to talk about. But we do have time for Q&A. And I know that people are dying to get in here and ask a ton of questions. So I wanted to make sure that we had enough time for that. But you wanted to get in touch with me. That’s our QR code. You can you can scan that to get our due diligence tracker. I actually encourage this QR code to some problems with the other QR code, but feel free to scan that or you can always email me my emails on the screen. Ryan at Spartan hyphen investors dot com to get in touch with me or one of my teammates and there’s a website so yeah with that Toby let’s let’s jam on some questions Yeah let me put out a little legal disclaimer because this is going to go up on our YouTube channel too. This is not a solicited portion for you to invest. You can certainly talk to Ryan and say like what type of stuff they might have available, but that’s not the purpose of this. The purpose of this is to educate and in that vein, let’s talk about some things that are going to help educate them. Number one, this is I’m going to start busting through these. There are so many questions, Ryan. We’re not we’re not going to get through them all. I got to tell you that right now. Let’s go. Rapid Fire. Yeah. Prices for existing properties have exploded. What are they in that? I always like it when somebody comes up with a fact. The statement of fact. They’ve exploded. What are the considerations for purchasing existing properties versus buying land in building, starting a self-storage facility from scratch and then leasing it and selling? Do you do both? Yeah, we do. Yeah, we do both. I think it’s I think we’re living under the golden era of the time to build. And I think there’s only, there’s only one place I would ever build. So if you’re like, Hey, should I build here? I’m going to ask you one question and your one question quickly get to a yes or maybe or no, or maybe I should say, what is the cost of a ten by ten in your market if it’s not 160, $260 per month for a ten by ten, don’t build there. You’re not getting enough rent, right? So you want to get at least $18, $19 rent. So if you’re not getting at least $160, if the other competitors are not charging at least that per month in rent, it’s probably not a good market to build in. However, if you do find that market and you find some land for 1.5 to 2 and a half million bucks, five acres off a main road, good traffic, good visibility, you can make a killing. And that’s what we’re doing. We’re built, we’re popping those. So that’s Port Wentworth, right? 24. Our market. We paid 1.65 million for the land, a ton people moving there. That’s where the park is going. That that is a great opportunity. We’re finding properties like we just tied up a property in Eustis, Florida in Central Florida, rents are $24. Bought the land for I think 1.4. That’s a great opportunity for buying existing. You know, it really just depends it’s really hard to find existing properties right now because a there’s not a lot for sale in B you’ve got to pay a premium. Still there’s no discount. You might find a discount here and there, but there’s really not a lot of distress in self-storage is not like a lot of foreclosures or or loans going belly up. But there’s opportunities out there. Don’t get me wrong, there is harder to find and you know, in the cap, rates are still really low and the interest rates are high. So you might be doing the math and thinking, God, this thing doesn’t cash flow. And you’re probably right because the interest rates are really high and the cap rates are really low and that’s called negative leverage. And I know I don’t I’m going fast on it, but I mean, it is hard to make the deal work on, you know, on an existing property. But there are some tremendous opportunities to build out there right now. So this is one of those things that if you’re somebody you’re not an accredited investor, you’re not looking to invest, but you’re looking for something that way. You might be to make money. This is one of those areas. It really you could go out there. Bird put properties under contract and sell that contract or groups like, right? So if you don’t only if you sell to us though. Yeah well we sold us. Yeah. You don’t have to nickels to put it together right. If you’re somebody that’s going to be bootstrapping, that’s what you do, You find out what somebody is looking for and then you go find it in your market. There were a bunch of haters from California, like, why not California? Like, I had a bunch of those and then a few from Arizona, they were like, Why not? Here’s why not California? Ryan What the heck, man? Yeah, You know. I love California. And in fact, if I go to on vacation, I’m probably going to California. So, like, nothing, nothing against California, quite the opposite. We just, you know, it’s hard to it it’s hard to develop there. It’s hard to invest there. It’s tax burden. We just kind of stayed away and, you know, kind of opportunities sort of find us sometimes. And we just haven’t found a lot of opportunities there. We’d love to go to Phenix or Arizona again. We just you know, we tried and got outbid and and just haven’t been in that market. There’s nothing wrong with it, though. You’re not going to chase you’re going to find the right deal at the right price and then you’re going to execute. That’s right. That’s right. I’ll discriminate against places. But the numbers, the I’m giving, the politically correct way. I like it. I like it. Our Spartans offerings for non-accredited investors they can be Yeah. So you do have to have a conversation with one of our teammates you got to get to know us so so just schedule a call with us and then they can be. Yes. There you go. All right. And then some people are asking about minimums is 100,000 really the minimum? And I have no idea. What do you know We’re. Yeah, So 50 K has been our minimums for a long time. But, you know, just ask us if you if we could take a 50 and you know, usually are we’re okay with that, but we just changed it to 100,000. But yeah for Anderson folks I mean we’re always happy to accommodate a lower minimum. Yeah. Here we go. 700 million equity deployed through Spartan or market value of properties. Market value of properties, market value of properties. What zoning do you need? Do you build or only buy existing in how many units? Well, we already answered that. And how many units of existing or how many acres do you build? I think you answered five. Yeah, five acres. You can be rezone. I mean look at ideally it’s industrial or commercial or storage zoned for storage like a lot of use. But like if you got, if you got some land off a freeway that like could be changed in zoning, we’ll buy it, we’ll look, we’ll look at, we’ll look at it. And the number of units, you know, unit count is it’s kind of meaningless. We look for square, you know, we like, like 50,000 square feet or bigger. You know, they could be really big units or really small units. So that might, you know, the unit count might be like 200 to 500. So don’t look at the unit count. Look at the square footage. About 50,000 is what we like. Fair enough. Here’s one. This is consumer use, right? This is a commercial warehouse. Is that you’re doing correct. Sometimes we buy properties that have like a commercial industrial space on the back or something like that. But yeah, these are this is mini storage, personal use all. And then what’s the exit? What’s the exit for you guys, What’s a typical time frame? And then you answer that and, then I have a follow up question. 3 to 5 years and we’re selling to everybody like 1031 exchange. We’ll sell to a local mom and pop who’s got three other properties already there. We’ve sold to the big REITs, we sold to the institutional buyers. Everybody’s buying these things. Yeah, 3 to 5 years. Yeah. It it is the hot ticket guys now. Yeah, that’s, that’s why it’s probably better right now to, to build if you can find the land because the numbers are great but you guys also have a fund that is a lending fund, right. Like don’t you self-financed a lot of these. Yeah. We have a debt fund. So if you just want to participate in the monthly payments of 9% we have a debt fund for that so you can just get monthly coupons from the that the loans that we make out on these properties 9% Yeah 9% paid monthly it starts right away. A lot less moving with interest rates high and people staying in their homes. How do you see this impacting short and long term usage? I love this question. So yeah, about 25% of our customers right now are gone. They’re just not transacting because home value or home sales are 38 or, a 30 year low, right. 28 year low, whatever it is, because interest rates are high. Right? Everybody’s on a fixed rate. No one wants to move. No one’s selling their houses, no one’s moving. Likewise, no one has distress, no one is losing their house or whatever. Right now. It’s kind of like we’re kind of gridlocked. So I like to say like we’re right at this this point of like we’re still getting lots and lots of occupancy and storage, but we’re missing like an entire customer customer segment. So if you’re a believer that interest rates are going to go down, fine, If they go down, the housing market’s going to explode. And guess what? Everybody who’s been leaving their storage moving needs to decide. All of a sudden it’s going to go crazy, right? If interest rates go down, if you’re like, I don’t think interest rates going to go down, I think they’re going to go up. Okay, great. If they go up, you’re going to get distress and then people are going to start moving. So the reality is, I think we’re I think we’re we’re getting severe pent up demand right now. And I think either way, I kind of want whatever we’re going to start doing. I can’t wait for it to start happening. So we could just get going, right. Which is like, can we just lower interest rates or raise interest rates? Just get it over with. So that we can get back to normal. Normal. And here’s the opportunity in wide ground up development is it’s so why we’re so focused on it. A lot of operators can’t get their projects done. They’re losing their permits. It is hard to permit their their construction costs are out of whack and they can’t get financing. So there is a huge cancellation of new storage starts. That means that you’ve got all this pent up customer demand and no one’s and not as many people are building. So you’re going have this major supply demand problem coming up with storage in the future. So I’m pretty excited about what’s going on. Yeah, I am too. I’m waiting for like the Fed keeps saying, like, I like reading their documents. They say we’re going to interest rates and they don’t. Yeah, but then again, they also said that they thought inflation was going to stay in the ones or something. Inflation was transitory right, Right. Driving us nuts. Yeah. They said, I won’t say it. They’re driving me if they’re any rent control. How often do you increase the rents? Whenever we want. Every 30 days we can adjust the rents. We just, we just raise rents on 10,000 customers effective June 1st. There is no rent control laws. I is the wild, less wild, wild West for storage. It’s a 30 day notice. Some states. Do they have easier laws to evict or are there states who avoid? Yeah. So the only differences will be the number of days for notice. And that’s it. There’s no eviction laws. We can we can kick people out. Just to give you an idea of how far back these questions go, right now we’re talking. Yeah, yeah, yeah. Who gets the excess cash if the items are sold out of a unit? Do you get you have to give it back to the renters or do you give it to the state or renter. Yeah, the renter gets it. Yeah, fine. Nobody just mail a check and then if they don’t, that’s a really good question. I have no idea. I’m sure the our I’m sure you can company I’m sure you have to send it to the state if they don’t claim it and then the state you’re right unclaimed funds they always hit me up for that because I’m on all the entities and I’m like yeah I can’t collect that If I did right what you paying the property managers like 20 bucks to 25 bucks an hour in benefits? Yeah, pretty typical. I mean, depends on the market. I mean we might pay a little less in certain markets and little bit more in others. Somebody looked at your website already and they said, you have a map and it says priority listed on it. What’s with that priority? that’s interesting. Probably. Probably because that’s where you own the property idea. Probably. Yeah. Or maybe markets that we’re focused on. Yeah, could be. Yeah, I have no idea. I wish I knew. What I would do is reach out to your friends team and say, Hey, let me know. Point it out. Yeah. For always improving our stuff on the website, somebody says we. I want to understand the tax advantages already went over some of that. I’m not going to belabor that. Where do I find listings for storage units for sale. Is there such a thing? Yeah. Self-Storage dot self-storage auctions dot com. you Want you want you want like like to buy property just google self-storage is for sale. There is like 25 different sites is a very messed up industry. Like there’s not like a redfin.com or a zillow.com. Like there’s like 25 different listings sites like self-storage dot com I think is one. And I don’t know if there’s a there’s a bunch you can buy them on, but just Google it. There’s like there’s no like one place you can I mean you can also go to what’s that commercial app that everybody uses is open that LoopNet is another one. Yeah. Who has access to the office if No no one is on site. No one does. Yeah. So we our offices are open from like 8 to 5 and then our gate. So like you can access your units from like 6 a.m. 9 p.m.. But when the office leaves, the office is completely locked up and closed. Yeah. So somebody is there, somebody is there when they’re selling tape and stuff. Do you have any problems with break ins at any of the units? Absolutely. yeah. Yeah. Traffic is a is a real thing that they have to carry insurance on that that’s why you require so that somebody is not coming out saying, hey, you were negligent. You didn’t you didn’t have enough cameras. Right. You’re not going to be to stop people from doing what they. Yeah. There’s always going to be break ins. You should plan for it if you’re planning to own one of these things. The same question. Where do you find these things? You already said? Do you ever have problems with people trying to live in the units? yeah, yeah, yeah. We kick them out. But, Yeah, we’ve had people that live in other units before. Yeah. And when you find it, you just deal with it. So if they say I have squatters rights, you can’t really, you know, fortunately not. You know. It’s been pretty. Hey, you can’t live here, you know, We’ll help you find yourself on your way here. But, yeah, I mean, when you own all this real estate, I mean, you’re going to have you’re going to have issues, right? You’re going to have all kinds of things that pop up. And you got to have a team in place ready to deal with it. And I think I think, you know, we have problems every day raised by joked about my presentation failed It’s like yeah whenever I mean you’re going to run into these issues and you know, that’s why you want to make sure your partner with somebody who’s like well versed and well worn on the playbook on how to handle, you know, tenants in units and, you know, living people and stuff like that So yeah. All right. There’s a there’s six more questions, right? We’re not going to get through even a portion of them. But I’m just going to really quickly, Bucky So they were talking about how much makes it worthwhile to invest in these, assuming that you were investing it at it out of your own pocket. What makes it worth it? Do you need multiple units? Do you have to have a whole bunch of self-storage or can you get by with just doing one or two? I mean, if you want a job, a 100 unit in the middle of nowhere, and then you’re going to be answering all the phones and you’re gonna be doing all the work. If you want to scale, get 50,000 square feet and make sure it has enough money generated to pay someone to be there full time and make sure it’s making enough money to get the property management software that’s going to set you back, you know, eight, 900 bucks a month. But yeah, if you want a job buy a real small one in the middle of nowhere, you’re going to be answering all the calls and doing all the work and figuring out who’s going to go sweep the units. But, you know, I think 50,000 square feet as a minimum to make it to make it not a job. Right. To make it. You know, and we run into this problem all the time. We were buying properties from old fashioned like from family offices. And they’re like, yeah, we thought we could manage this from and the properties in Tennessee and, and we’re just like, man, this is a lot more work than we thought and we’re selling it. And so you just got to be really careful about, you know, I like say, this easy to own, easy to evict, easy. But I got an entire I got 150 employees running this thing, right? Like, I don’t I have someone like Little Tom experience doing this. I don’t you know, this isn’t something that you just casually do from a far away on your first one, right? So make sure you have some scale and and definitely take some training. Go to like assess the inside self-storage association or self-storage association and take the classes and learn. And we spent two years learning this space before we did anything in it. We didn’t just jump in, you know, we took education for effective action. Be careful about it turning into a job. Okay, How much capital do I need to start? It sounds like you could invest in a fund for 50 grand. 50. But yeah, otherwise zero. If you’re going to go be a headhunter. Yeah. Yeah. Number of units too small. If you said 50,000 and below, that means what is that, 500 units? Yeah. I mean, it depends, right? I mean, sometimes the average size of a unit is 200 square feet, so 50,000 square foot is going to be, you know, 250 units or whatever. Right. So you know, you just want to it just depends. Yeah, I would say minimum units generally 150 at least, if not more. So here’s a great one with that conclusion statement. How will the upcoming commercial real estate crisis affect self-storage capacity? Well, that’s a that’s a good question. If you find the answer, let me know. Yeah. So, you know, I, I just love it like, I mean, front of everybody. But God, if they’ve been predicting the real estate crash for the last three years. Yeah. I got called a clown on one of these. Some guy was just totally trolling me because I didn’t think the real estate market was going to crash. And I do believe that was three years ago. It’s like, you got to be kidding me. Come on, nobody’s got a crystal ball. No one’s got a crystal ball. Yeah, I mean, I think lending will get challenging. It’ll get harder, too. But I mean, it’s already happening, right? Like lenders are tight and these less of these are getting built, right, because people can’t get the financing. And, you know, so I think that’s an impact and people aren’t moving a lot, right, because there’s not a lot of housing selling. And so that’s lowering, you know, so a lot of things happening. But, who knows? Yeah, I just look at stats. Right. It’s not like foreclosures are going to they’re still really low, really real low residential, really like ridiculously low historically. But it went up 30%. And it’s because, like, there was like three and now there’s four, right? Like, right, right. It’s like, it’s a really small amount, but commercial. No I know we have a whole bunch of resets and we have these loans that they’re going to have to they’re going to have to refine at larger amounts. Yeah, that’s going to cause some shakeout. Is it going to cause a crisis commercial? Just I think it got smoked during COVID. We’re just not seeing it come back, which is there’s going to be lots of ways you’re going to use it. So storage really because of the weight loads, probably not good for like an office. You probably can’t do it, right? Yeah, it’s a little bit too heavy. I think it’s like £125 per square foot and office is usually like 115 to 120 or something like that. But yeah, if your bottom floor or basement works, but it’s hard to make it stack, you know, multiple storeys. So there are going to be a lot of open commercial, but we’re going to find ways to use it. That’s the thing. As Americans, yeah, genius will fine Just yeah, really quick. I see a cost in there about question about construction We actually will build your self-storage facility for you as well across the country and someone asked about the cost of the Seattle market and that’s a that’s a great question. We actually build around here and we can answer that question, but it really depends on your site. It just depends on where you’re building. So that’s a great one. So if somebody finds land, you’ll build it. Yeah, we’ll build it for them. Do you charge them just a set amount to build it. We don’t charge a set amount. We’ll just give you a bid for the site. So we’ll, we’ll and we do most of the site work, We’ll do everything. I mean, we’ll apartment develop it, whatever it might be, take it through you know turnkey so and you know we’re building around the country for anywhere from 80 to 100 bucks a foot. This depends on your site. Now Seattle, it’s going be a little bit more expensive because you get some taxes and some things like that. And if you’re building multi-story, cost is going to go up. And, you know, if you’re building downtown, your permitting costs and utility costs and all that stuff, I mean, it just really just depends on where you’re building and what the site work is and things like that. Fantastic, awesome microphone and great audio. Please share the brand and model. It’s the same one that Joe Rogan uses. Is it a shoe? It’s a sure, yeah. Yeah. Props to the so you know this is my podcast studio for for passive income so I got the I got the mic up All right. How long have you been in storage investing? Seven years. Seven years. And you’ve managed to get up to 700 million chimneys. Christmas ten years is ten years of Spartan and seven years of of storage. Somebody you should. I need to mention that there’s recapture when you sell a 1031 or an installment sale. Ray there’s there’s depreciation recapture any time you sell real estate that you’ve depreciated. So there’s always recapture the way you offset some of these things. You could turn 31 exchange, you can buy other properties and take that loss and offset your your taxable income that way. A lot of folks think, well, it’s passive, right? So it could never affect your capital gains. When you sell a property that’s passive and you have capital gains is considered passive. Capital gains. So actually you can use other passive income to offset it. But yeah, you should always be aware of your recapture, and especially if you’re doing cost segregation. That’s something you need to calculate though in most cost segregation, depending on what you’re buying, there’s not much value left. If you had it for five, a lot of that has been already depreciated and there’s no value in what you’re selling to somebody else that causes the recapture that was treated as ordinary income. So yeah, there’s always some little nuances, which is why you keep a tax person in your back pocket and make sure you’re you’re running that by them. Do You guys all at the last question about this because there’s so many. But I don’t want to keep everybody here all day. We’re a little not 8 minutes over anyway. Does Spartan or their principles have any skin in the game, in the investments? yeah. Hundreds of millions of dollars on loans, hundreds or millions of dollars invested in or own projects, lots of skin in the game. And it’s our livelihood is really what we live and breathe every single day. And if we don’t if you didn’t if we didn’t get to your question, shoot your. QUESTION You can shoot your question to Ryan at Spartan hyphen investors dot com and I’ll knock it out. I have a fun, fun afternoon answering questions via email. So you beat me to the punch. Guys, if you have a question and there’s 40 of them sitting here that are pending, reach out to Ryan. Or if you send it to my staff, we will make sure that we get you an answer if you want to. Somebody says the link is not working. Abbie, I’d like you guys probably broke it right now. I’m just kidding. Our staff will take a look. The the Abeyta link. Let me just see. I’m going to go to it right now. Let me see. Yeah, it works. I just clicked on it, so I just clicked on it to just it I was like, let’s see if it works. All right. So somebody says it’s not working. Maybe it works, but try typing it in or try clearing your cash and try it again. The length on the screen too, for the QR code. And that’s the same thing as a link. Somebody says, Do you? I lied. Last question Do you have to exit after five years? Yeah, well, you could probably. no, you don’t have to, actually. Yeah So we actually will offer like a 1031 exchange or some kind of entity sale that allows a an efficient rolling of your investment into something else, a tax efficient exchange. So yeah, we’ve done that the last few exits that we’ve had with investors. Your basis will stay at whatever. It’s pointless. So there we go. Yeah. So here’s somebody Leave the blue stake out. It’s out of your present. We weren’t saying. I know, I know what we don’t. We don’t. We Don’t judge in self-storage. Blue state, red state. Bring them all you just bought in Oregon. Come on and buy now. I know. Hey, no, no sales tax, No excise tax, no tenant landlord laws for US shares. We invest anywhere where the numbers are good, right? Yeah, totally. You can invest in any state, and no state is better than another, right? It’s just some states little. I mean, it’s funny, like we’re big in Texas too, right? I mean, and the property taxes are insane there. People think, Texas, you know, it’s the land of the whatever. They’d crush you in property taxes where we have attorneys, that’s all they do is fight our property tax assessments in Texas. I mean, it is a bloodbath where they get just the same thing. You got it. That’s exactly what you do every. And what is it? Yeah, every year. Every year they, they they reassess you and you got to go fight it and pay all this money. And it’s like, wait, I thought we were in Texas, you know, and you know. Yeah. No income tax there either like Washington, but man, they crush you in property. So if you think that you know, the one state’s more, you know, whatever advantage in the next you know you got to be ready because they’re going to get you they want their tax money and they’re going to try to shake you for it any way that they can. So you just got to be ready to pivot, you know, however you need to to to fight stuff like that. So and Florida is talking to Texas saying hold my beer right there. Some of those places. It’s like I think Dade County is like 3%. Is this something? Holy cow. Yeah. Yeah, yeah. There it is. Some states are looking for money. Yep. You got to be careful. All right, Ryan, thank you for coming on. And thank you for sharing. You always do a great And for folks that want to find out more, reach out to Ryan. You can reach out to our staff as well. Share this with anybody you think would be interested in self-storage. To learn a little bit about. Again, it’s not a pitch. We’re not trying to get you to invest, but we’re trying to do is get you to learn about an investment class that goes unseen. Doesn’t get a lot of the hoopla when they’re talking about what to invest in. But it’s still it’s really interesting and you should learn about it. It’ll make you a better investor if nothing else. And and that’s it. So thanks again, Ryan. All right. Thanks, Toby. Good seeing you guys.
Join us for an exclusive discussion with Ryan Gibson, where we delve into the incredible opportunities in self-storage space investing.
Learn more about Ryan Gibson and Spartan-Investors 👇
https://go.spartan-investors.com/l/1038393/2024-05-06/378m13
In the past decade, self-storage has emerged as the number one major investment class, surpassing even traditional real estate and other asset classes.
🔍 Discover the answers to burning questions like:
– What are the key opportunities in self-storage investing?
– How can you maximize returns and minimize risks in this market?
– What strategies are most effective for success in self-storage investments?
Whether you’re a seasoned investor or new to the game, this session is packed with invaluable insights to help you thrive in the world of self-storage investing.
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Show Notes:
0:00 Self Storage Investing Intro
6:24 Ryan Gibson
11:53 Why People Use Self Storage
21:00 Easy Maintenance
35:33 How to Add Value
59:06 Investor Deprecation
1:12:17 Where to Find Locations
1:34:29 Outro
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#selfstorageinvesting #selfstorage #investingstrategies
5 Comments
Is there a link for investors interested in self storage?
31:36 I watched that storage facility in Sandy go up 😊
Not true. Mobile Home Parks finished number one
How do I invest?
awesome episode! how does ryan feel about large rv/toy storage? thx