Self Storage Income

The self storage industry is changing. From the Great Recession through 2021, those who bought self storage facilities saw massive rent growth, impressive appreciation, and, at times, a seemingly endless supply of renters. As the American population began to move after the lockdowns, self storage only became more attractive, and facilities were filling up left and right with occupancy rates and rents exploding. But now, things have changed.

Over the past two years, self storage operators have been hit hard. Rent drops, vacancy, and increased competition took away the “passive” income part of self storage investing. Thankfully, those who treated their facilities like businesses survived, while the casual investors either bit the dust or sold to stop the bleeding. Time-tested investors Andrew Freeman and Jon Marshalla from KO Storage were able to roll with the punches and survive a tough self storage market.

Today, we’re talking to Andrew and Jon about how they built their portfolio from zero facilities to over two hundred, plus the markets they’re targeting as the “mom-and-pop” investors slowly sell and large operators “consolidate” what’s left of the smaller facilities. Andrew and Jon even share what they’re seeing in 2024 and how they’re pivoting to control the controllable and not only survive but thrive as the storage industry continues to change.

What you’ll learn in today’s show:

• Why Andrew and Jon ditched multifamily real estate to build a massive self storage portfolio
• The “lost year” in the self storage industry and why so many operators got hit hard in 2022
• One CRUCIAL part of your investing strategy that cannot be overlooked
• The “acquisition runway” causing mom-and-pop ownership to dwindle 
• Why small markets, not big markets, might be even safer to invest in 
• Andrew and Jon’s 2024 plan to buy even more as deals become challenging to find 

Previous Episodes with Andrew & Jon

Episode 105 with Jon and Andrew

Episode 142 with Jon and Andrew

Where to find more about our guests! 

Andrew LinkedIn

Jon LinkedIn

Enjoy this podcast? Leave us a great review wherever you listen! 

Ready to buy storage? Have your deals personally evaluated by AJ and our team! 

https://www.selfstorageincome.com/feasibility 

Take advantage of today’s market conditions and invest with us: 

https://cedar.cc/invest 

Make self storage management easier than EVER with our podcast sponsor Tenant Inc. - https://www.tenantinc.com/ 

Today’s guest built a twenty-five facility self storage business in just two years! Even more impressive? He didn’t come from a real estate background, yet he was able to build a serious storage portfolio across multiple states, all by “taking the punches” as they came. If you want to quit your job and start investing full-time, this is an episode you CANNOT miss. You’ll hear how Faraz Hemani left his high-paying Google job to invest in small-market, mom-and-pop self storage facilities. 

The question is, did it pay off?

After making some good income at his tech sales job, Faraz needed somewhere to park his money. Like most people, he thought rental properties were a great option, but as the market began to climb, Faraz realized that he had no control over whether his portfolio’s price went up or down. He sold off his rental properties and found an asset he could control—self storage.

Now, two years later, Faraz has a self storage portfolio of over twenty-five facilities across the southern United States. How did he scale up so quickly? Which markets is he targeting? And how does a complete novice get that many facilities so quickly? If you want to learn how, stick around for this episode as Faraz shares his buy box, favorite markets, and which facilities small investors should target.

What you’ll learn in today’s show:

• How to quit your job and build a self storage business (and whether it’s worth it)
• Why self storage beats rental properties IF you can master THESE skills
• Faraz’s exact buy box and the “mom-and-pop” facilities new investors should look for
• Why Faraz DOESN’T buy in the big cities but sees huge success in smaller towns 
• Syndicating, raising private capital, and when it’s time to take on investor money
• The truth about entrepreneurship and why 99% of people CAN’T handle it 

Faraz’s LinkedIn

Pebble Ridge Capital Group

 Make self storage management easier than EVER with our podcast sponsor Tenant Inc. - https://www.tenantinc.com/

Check out Storelocal! Our national self storage brand. 

https://www.storelocal.com/

Ready to buy storage? Have your deals personally evaluated by AJ and our team! 

https://www.selfstorageincome.com/feasibility 

Take advantage of today’s market conditions and invest with us: 

https://cedar.cc/invest

Wondering how to start a storage business with no money? Surprisingly, most self storage investors start out with no or low-money-down deals. Even the wealthiest of storage investors rarely pay for a property in cash or use their own money to make the down payment. 

Self storage DOESN’T require you to have millions and millions of dollars to get started, and in this episode, we’re showing you exactly how to build your self storage portfolio when starting from ZERO.

There are a few strategies you’ll need to know before you can buy your first zero-dollars-down storage facility. If you’re able to master these, you can easily pick up a storage facility for very little money down or sometimes zero dollars out of pocket. Want to use other people’s money to pay for your deals? AJ and Conner go over the two parts of raising money and how to raise capital once you’ve got a deal in hand.

Do NOT let this tough market go to waste. Now is one of the EASIEST times to get no and low money down self storage investments done! So tune in, and get ready to execute (even if you’ve got NO money!).

What you’ll learn in today’s show:

• How to start a storage business with no money or very little money out of pocket
• Why now may be one of the BEST times to get seller financing on a storage facility 
• The exact strategy AJ used to go from no facilities to hundreds of millions in self storage 
• Beginner steps we would take in 2024 to get our first storage facility deal done 
• Raising capital for your deals and how to get investors to put up the down payment
• Why you should always look for the deal first BEFORE you worry about the money

What we mentioned:

Finding Deals

Buying Deals 

 Make self storage management easier than EVER with our podcast sponsor Tenant Inc. - https://www.tenantinc.com/

Check out Storelocal! Our national self storage brand. 

https://www.storelocal.com/

Ready to buy storage? Have your deals personally evaluated by AJ and our team! 

https://www.selfstorageincome.com/feasibility 

Take advantage of today’s market conditions and invest with us: 

https://cedar.cc/invest

One type of commercial real estate is seeing skyrocketing demand right now: small bay industrial. Haven’t heard of it? You’re not alone. But for investors like Shea Lewis, one of our Inner Circle students at Self Storage Income, this often underrated type of real estate investment gives him great returns, high demand, and rock-bottom vacancy. But what is small bay industrial investing, and why are so many businesses fighting for small bay space right now?

If you invest in self storage, or plan to, this episode may change your mind entirely. In it, Shea goes through what small bay industrial investing is, why it’s experiencing “crazy high demand” in 2024, the deals he’s doing TODAY, and why you should get into the warehousing space BEFORE everyone else learns about it. Plus, most of the headaches of self storage investing almost disappear once you enter into small bay industrial warehousing.

Want to invest in an asset that has locked-in revenue for YEARS? What about one that has almost unlimited demand? Shea will tell you exactly what you need to know to get into the game and his buy box for buying these cash-flowing commercial assets that most investors overlook!

What you’ll learn in today’s show:

• Small bay industrial warehouses 101 and why they beat self storage in many ways
• The “crazy high demand” for warehouse space as small business growth explodes
• Shea’s exact buy box for finding and buying small bay industrial properties 
• The markets that have the highest demand for these assets and signs of a phenomenal deal 
• Small bay vs. self storage investing and the major headaches it completely avoids 
• The one thing you NEED before you start investing in this asset class

Ready to buy storage? Have your deals personally evaluated by AJ and our team! 

https://www.selfstorageincome.com/feasibility 

Take advantage of today’s market conditions and invest with us: 

https://cedar.cc/invest 

Make self storage management easier than EVER with our podcast sponsor Tenant Inc. - https://www.tenantinc.com/ 

Connect with Shea Lewis Here:

https://www.linkedin.com/in/shea-lewis-92379365/ 

[email protected] 

https://www.zequitygroup.com/

Videos mentioned in this episode:

Cap Rates in Self Storage

Today, we’re going over how to buy a storage facility, even if you’re a complete beginner with zero experience in self storage investing. From pinpointing your purchase price to closing and finally getting the facility under your management, we’ll walk through the six beginner steps anyone can take to buy a self storage facility in 2024. If you’re ready to buy your first self storage investment, these steps MUST be followed!

Haven’t found a facility to buy? Tune into last week’s episode, where we went over exactly how to find off-market self storage facilities with the most profit potential. Once you’ve found the deal, the fun really starts. In this episode, AJ and Conner share how they come up with offer prices, why they NEVER trust a broker’s “pro forma” number at first glance, and the contracts you need to have ready when you want to get a deal done.

But before you close, there’s still work to do. We’ll discuss due diligence, how to exit a deal when things aren’t what they seem, closing, and what to do as soon as you send over the money so you can hit the ground running on your first facility.

What you’ll learn in today’s show:

• How to buy your first self storage facility even if you have zero experience 
• Calculating your purchase price and why you CAN’T trust the market 
• What brokers will tell you to convince you to buy a facility that ISN’T worth it 
• LOIs (letter of intent) and PSAs (purchase and sale agreement) and when to use them
• Everything you need to do during your “due diligence” timeline to confirm the deal is worth it
• How to ensure a smooth transition when you finally take over your first facility! 

How to Find Off-Market Self Storage Deals in ANY Market

How to Value a Self Storage Facility - Don't Overpay!  

Enjoy this podcast? Leave us a great review wherever you listen! 

Ready to buy storage? Have your deals personally evaluated by AJ and our team! 

https://www.selfstorageincome.com/feasibility 

Take advantage of today’s market conditions and invest with us: 

https://cedar.cc/invest 

Make self storage management easier than EVER with our podcast sponsor Tenant Inc. - https://www.tenantinc.com/ 

In this episode, we’re diving into one of the most frequent questions we get: how to find self storage deals. 

We’ll share the five-step guide AJ uses to find self storage deals in 2024 and show YOU how to copy it so you can get your next home run off-market self storage deal. If you’re waiting for your first or next self storage facility, this is EXACTLY where to start!

You’ve heard us talk about buying and managing self storage facilities, but where do we even find the ones we want to buy? Unlike rental properties, there isn’t some mass listing site that shows every self storage facility for sale (although many companies have tried). Most self storage deals are done off-market or pre-listing through a broker, meaning that you never even have the chance to see the deals getting done.

If you want to learn the expert secrets on how we’re finding self storage deals in today’s highly competitive market, bring a pad and some paper and copy our strategy.

What you’ll learn in today’s show:

• How to find your first or next self storage investment, no matter what market you’re in
• Building your “buy box” and how to know what you want your first or next facility to look like
• The geographic “opportunities” that point to a solid self storage investing market 
• How to “rank” the facilities in your market to see which has the highest profit potential 
• The ONE thing you need to bring to EVERY broker in your area if you want self storage deals sent to YOU
• How long it could take for you to get your first self storage investment under contract

Enjoy this podcast? Leave us a great review wherever you listen! 

Ready to buy storage? Have your deals personally evaluated by AJ and our team! 

https://www.selfstorageincome.com/feasibility 

Take advantage of today’s market conditions and invest with us: 

https://cedar.cc/invest 

Make self storage management easier than EVER with our podcast sponsor Tenant Inc. - https://www.tenantinc.com/ 

Everyone wants to know how to be a leader. They want the big business, the money, the ability to turn a scrappy team into top performers. But here’s the reality—99% of people don’t have what it takes to become a leader because behind the private jets and huge deals getting done are mountains of failure that most people will never see. So, do you have what it takes to become the next great leader?

In this episode, we’ll discuss the three levels of leadership. If you run a self storage facility, you’re likely at one of these levels. Whether you have 100 or 10,000 doors, you need these leadership skills to take your business to the next level and, more importantly, weather the storms that come with leading a team to greatness. Let’s get into it!

What you’ll learn in today’s show:

• The three levels of leadership and why 99% of people won’t make it to the top
• Why you MUST be comfortable with failing if you want to grow your business 
• What to do when one of your team members/employees is failing 
• Hiring, firing, and how to tell if one bad employee is ruining your business 
• Putting the business first and taking yourself out of the decision-making 
• How not knowing everything makes you an even better leader 

Enjoy this podcast? Leave us a great review wherever you listen! 

Ready to buy storage? Have your deals personally evaluated by AJ and our team! 

https://www.selfstorageincome.com/feasibility 

Take advantage of today’s market conditions and invest with us: 

https://cedar.cc/invest 

Make self storage management easier than EVER with our podcast sponsor Tenant Inc. - https://www.tenantinc.com/ 

The supply of housing is directly tied to the demand for self storage. The more people are moving, the more people tend to need a storage unit. But what happens if the housing market is being crazy, like it is today?   

Subscribe for market updates, tips, and more!

The housing crisis is not just a matter of super high prices. Since price is a function of supply and demand, and the demand of homes is higher than ever, the last piece is: supply! You solve the crisis by building more houses. There's not a low enough interest rate or tax benefit that can magically add houses onto the market.

How does this affect storage? Let's break it down!

Enjoy this podcast? Leave us a great review wherever you listen! 

Ready to buy storage? Have your deals personally evaluated by AJ and our team! 

https://www.selfstorageincome.com/feasibility 

Take advantage of today’s market conditions and invest with us: 

https://cedar.cc/invest 

Make self storage management easier than EVER with our podcast sponsor Tenant Inc. - https://www.tenantinc.com/ 

Big REITs can raise and lower prices whenever it suits them - but is this actually the best way to treat your customers? We don't think so.

Instead, we focus on operations - how can we improve, so the customer gets a better product??

Our operations team has been visiting our facilities to look at what we can do to improve the value we provide to customers. Are we missing a piece of equipment that would make cleaning easier? Are we making sure we respond to customers' concerns in a timely manner? Then, how do we pass this feedback along from customers to employees to managers? 

These are all critical areas of day-to-day business that hugely impact our customers' experience. This is how we compete with the big REITs. They have the means to slash prices that many operators cannot afford. But what you CAN do is to IMPROVE the value you provide for the money. 

If $90 can get you a bigger unit for the same cost as a smaller one, making this known to your customers when they're looking to purchase can be a huge win and help you stand out from the REITs that move you in at $50 then jack up the prices in a few months. As a customer, which company would you think more positively about? 

We talked about the Pros & Cons of buying out of state in a recent YouTube video, but in this episode, we dive deeper into the ins and outs - the caveats, the behind-the-scenes - of how we manage our facilities despite them being hundreds of miles away.

Enjoy this podcast? Leave us a great review wherever you listen! 

Ready to buy storage? Have your deals personally evaluated by AJ and our team! 

https://www.selfstorageincome.com/feasibility 

Take advantage of today’s market conditions and invest with us: 

https://cedar.cc/invest 

Make self storage management easier than EVER with our podcast sponsor Tenant Inc. - https://www.tenantinc.com/ 

Self Storage was hit during the COVID-19 shutdown. But during that time, storage saw a surge in demand, which put it ahead of many other asset classes. It reacted in a way that many thought not possible in a recession.  

But the problem is, the industry reacted very strangely. There became an assumption that you can succeed in storage with very little effort or improvement. As the economy shifts back towards the pre-pandemic normal, this approach HAS to change. The market will not simply work in your favor "just because."  

In this episode, we talk with Dane Elefante about how the industry has shifted in recent years, but more importantly, how the shutdown impacted the mindset of storage owners and operators. And how that no longer works today.  

Dane is the Chief Operating Officer at Platinum Storage Group. He has 16 years of commercial real estate experience in the self-storage property sector, and leads the firm’s data analytics business to integrate property-level, portfolio-level, and market data to inform sub-market location and design decisions.

Learn more about Platinum here: https://platinumstorage.com/ 

Ready to buy storage? Have your deals personally evaluated by AJ and our team! 

https://www.selfstorageincome.com/feasibility 

Take advantage of today’s market conditions and invest with us: 

https://cedar.cc/invest 

Make self storage management easier than EVER with our podcast sponsor Tenant Inc. - https://www.tenantinc.com/