BiggerPockets Real Estate Podcast - 138: Self Storage, Systems, and SEO with Michael Rogers

Episode Date: September 3, 2015

Self storage is one of the most passive forms of real estate investing out there, but only if it’s run correctly. On this episode of the BiggerPockets Podcast, you’ll learn from CPA and real estate investor Michael Rogers about the process of finding, rehabbing, and cash flowing self storage units—and they systems that have allowed Michael to buy 350 units and partially quit his job. In This Episode We Cover: Michael’s thoughts on having a part time job while investing in real estate How he bought a duplex while still a student What you should know about loan to value How to find the right sub contractors How Michael got into self storage Tips for investors looking to start with self storage Why you should be aware of the “Declining Spiral“ How he structures his system to get clients for storage rentals How auctions work when tenants don’t pay the rent What you should look out for in the self storage niche The software that Michael uses 3 lines of defense for self storage How to find tenants How he uses Search Engine Optimization to his benefit The numbers involved in his deals Why he’s an active BiggerPockets member And SO much more! Links from the Show BiggerPockets Forums BiggerPockets Webinar BiggerPockets Calculator 50% Rule BiggerPockets Podcast Automating Your Investing, Long Distance Rehabs and Spec Building with J Scott Growing Your Real Estate Company Into a $30 Million Dollar Business with Brian Burke My Latest BRRRR is Rehabbed and Ready to Rent BiggerPockets Files Easy Storage Solutions UncleBobs PublicStorage SSA Books Mentioned in this Show The Millionaire Real Estate Investor by Gary Keller and Jay Papasan Every Landlord’s Legal Guide by Marcia Stewart and Janet Portman The Essays of Warren Buffett by Warren Buffett Brandon Turner’s Book: Investing With No or Low Money Down Tweetable Topics: “When you are at that job and you’re doing that work, you got to give it your 100%.” (Tweet This!) “You always look at how much cash are you going to lay out and then what it’s going to bring back in time.” (Tweet This!) “Find out what the big guys are doing. You don’t have to reinvent the wheel.” (Tweet This!) Connect with Michael Michael’s BiggerPockets Profile Michael’s Company Website Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast, show 138. I think it's really like any investment in the sense that the real key is buying it right. You're listening to Bigger Pockets Radio, simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the hype, you're in the right place. Stay tuned and be sure to join the millions of others who have benefited from BiggerPockets.com. Your home for real estate investing online. What's going on, everybody? This is Josh Dorkin host to the Bigger Pockets podcast here with my co-host,

the punching bag, Mr. Brandon Turner. Yo, Brandon, what's up with that black eye, man? Yeah, I was walking downtown and got in a fight with some guys over, you know. Now, I was out playing Ultimate Frisbee, which is like soccer and football combined with a Frisbee. I don't know. It's a great game. I play with a bunch of, like, college-age kids around here. which is bad because I'm like the old guy.

But anyway, I was like four feet in front of a guy, and he took the Frisbee, and as hard as he could throw it, he launched it to the other end of the field, but my face was right in front of that trajectory. And, yeah, Frisbee nailed me in the face. I had a nice goose egg on my cheek, I guess you'd say. Nice. And now I have a black eye. So for those of you who are listening and out watching the show, you know, at some point, you should go and check out the show on YouTube once it gets up there and you get to see Brandon's fancy news.

shine. How you been, man? I've been good. I've been good. I went golfing last weekend. Nice. You know, with my black eye. That was awesome.

And I haven't golf. Oh, and I got a new dog. I got a new... People know Charlie. I talk about Charlie a lot, especially on the webinars, BiggerPockets.com slash webinars. Webinar. Anyway, I talk about Charlie a lot and I even show him on the webinar.

I got a new one named Ruby. And Ruby is a York. We think she's a Yorkie. Anyway, a long story there. We don't actually know exactly what she is, but she looks like my other dog, Charlie. She's cute. She is cute and she's small and adorable. You know, my dog ran away two weeks ago. I heard that.

Yeah, I was in San Francisco for the Inman Conference, the Inman Connect Real Estate Conference, where I was a speaker. I spoke about podcasting on a panel in front of a room of like a thousand people. It was great. Lots of fun. Yeah, fancy. So while I'm in San Francisco, my dog gets out,

and she's 12, and she's old, and she got scared or something. And she probably was on my driveway, and somebody went and picked him up, picked her up, and brought her to the pound. And so, you know, for like six hours, everybody's flipping out about where this dog is and we finally found her and got in the next day. But that's scary. I was not pleased to be away when that happened.

But yeah, anyway, things are great here and I'm just back in town. You're gone for like a year. Yeah, it was like two weeks of travel, California, San Francisco, which by the way, everybody, I still think is disgusting. We talked about this on a previous show. It is unbelievably filthy with lots of crazy homeless people who like to. to do crazy things to themselves and to other people. So, yeah, I wasn't loving that, but L.A. was great, and it's good to be back and excited to be doing new shows again because we haven't recorded in a few weeks.

We have not, yeah. And this is a good one to kick it off with. I learned a ton. I probably learned more in this episode than I've learned in a lot of them. Just because it's something I've always wanted to get into, never did. So people like this. But before we get into that, what do we go today's quick tip? Now, today's quick tip is just a short one. If you are familiar with the bigger pockets calculators, like the rental property calculator, the flipping calculator, we made some changes a little bit now. You can track a little bit easier your progress on the properties.

And what I mean by that is you can go back and see a list of all the ones that you've analyzed, all of them from the beginning. And you can rank them like, you know, which ones had the best NOI, which ones had the best, you know, the purchase price. You can order them, sort them. It's just a really good way to keep track of what deals you're making, what deals that you're working on and kind of what. status they're in in the process. So kind of cool. Check it out. Biggerpock.com slash

kelk, C-A-L-C. Right on, right on. All right. Cool. Well, before we continue any further, why don't we very, very quickly talk about the show, you guys, we really appreciate all the listeners and we count on your support to help grow the show. And we definitely hope that you'll take a couple of minutes to leave us ratings and reviews on places like Stitcher and iTunes and SoundCloud, particularly iTunes. and just want to share a recent review from iTunes from EDS 8513, the most informative real estate resource on the web.

The podcasts are priceless, and Brandon and Josh make it entertaining. Thank you for what you do. And big thanks to EDS. That was very nice. I'm glad we didn't pick the one that said, you guys suck and your jokes are horrible. We'll ignore that one.

We'll ignore that. You ever head out on a trip, lock your door, and think, cool, my most valuable asset is now doing, doing absolutely nothing. Because while you're off traveling, your home is just sitting there. Quiet, empty, not contributing, which feels like a missed opportunity,

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otherwise known as Mr. Rogers. Mr. Rogers has, he's been a longtime member of Bigger pockets as you'll soon find out. And he's been investing in single-family duplexes, he's done the burr strategy. And our focus today, a lot of it is going to be on self-storage because we haven't really spoken a lot about that. And of course, value investing, which is a very important theme for anyone and everybody. So we definitely hope you'll pay attention. We cover investing at a really young age. We cover SEO search engine optimization. So there's lots to learn for everybody. So tune on in and let's get to Michael. All right, ladies and gentlemen, he is Bigger Pockets member number 5302, one of the early guys. Let's welcome Michael Rogers. Michael.

Good to have you on the show, man. Hey, Josh. Hey, Brennan. Glad to be here. Glad to have you. Do people ever make the joke Mr. Rogers to you? Like, yes, especially as a kid, I used to get a lot of that. Okay. I'm used to it. Glad to have you in the neighborhood, Mr. Rogers. Today, we're talking about a number of things, but specifically a little bit about self-storage. And we're going to get into that. I know you do more than just that. So this will be a show that encompasses more than that. But I do want to pick your brain on that because from what I can tell, self-storage is a pretty awesome niche to get into.

And so I want to kind of find out if that's true. We'll talk about the pros and cons and all that good stuff. But before we get started, where are you located, where are you investing? And how do you get started? Sure. Yeah. Yeah, definitely I'm in self-storage a little bit. and I think that'll be a good topic to cover.

My background is I'm actually in Chattanooga, Tennessee, or just outside Chattanooga, Tennessee. I grew up in Cleveland, Tennessee, and I live in Udaw, Tennessee, which is all within the Chattanooga area. but I grew up in Cleveland, played a lot of junior golf growing up, played a college golf at University of Tennessee Chattanooga, got a degree in accounting, and then after that I went on and worked at a regional CPA firm, became a CPA, worked there about four or five years, then I went in basically kind of got a niche in internal controls auditing and went to work for a large insurance company in Chattanooga. So about four or five years there at a Fortune 500 insurance company, went to another health care insurance company in Chattanooga, and I've been there for last

four years, the last two years, been working part-time. I kind of was able to, I was very fortunate I was able to go from full-time to part-time. They let me do that. And it's been excellent. You know, as my business is ramped up on the real estate side, I've been able to scale back a little bit on the, I guess, the job, kind of standard job. So those have kind of been working together. So that's something I've been really fortunate to do.

I didn't actually just quit my job. I kind of have transitioned a little bit. But yeah, I guess going all the way back to college, I bought my first, duplex, built some triplexes and bought single family homes and done a lot of investing through the years and got about 350 self-storage units now and about 11 or 12 residential units. It's enough to keep you busy. But it's in a good spot right now. I feel good about where I'm out and I'm excited about doing more of it. That's awesome. That's really cool, man. And I'm fascinated because I don't think we've talked to somebody who's transitioned the way that you're transitioning.

And typically it's, I'm going, I'm going, I'm going, then I quit my job. You know, it's kind of neat to hear that you were able to go and work with your employer a way to work part-time and continue. So I'd love to hear a little bit more about that. How'd you do that? Sure, yeah. You know, first of all, my employer's been very gracious. They've been extremely good. And they've worked with me on that.

And so I've been able to go, I transitioned to where I work four days a week there. So I'm Monday through Thursday there. Friday, Saturdays, and Sundays is kind of family working on my room. real estate. I've got three kids and a wife, so that definitely keeps me busy there as well. Congratulations. Me too. Oh, you got three kids? I do. It's time-consuming. Yeah, the third one, you know, when I went from two to three kids, you know, that got kind of crazy, you know, because you're kind of playing zone defense at that point, three kids. So, but yeah, I was able to do that. I talked to them, you know, I was somewhat of a specialized skill set and said, I do,

this is kind of boring and the sense of accounting, but I do internal controls accounting, which is like Sarbanes Oxley. It's basically what that is. Yeah, it's internal controls where you're looking at financial statements, make sure they're recorded correctly. It's somewhat specialized,

so I guess they needed that skill set, and they were willing to let me work part-time. So it's been a good, you know, it works out well for them, and it works out great for me, and they were very gracious. And I was in a position at that company knew the management well enough

where I was able to have that conversation, with them. I don't know if that would work at all companies. And I think before somebody has that conversation with them, you know, you need to kind of have a sense of where you're at, where that company's at. Is that something they'd be willing to do? Because, you know, some places, you know, if they thought your heart's not 100 percent in that place, they may have the opposite reaction of that. Yeah. Well, you know, that is actually one reason why, you know, a lot of people, they get excited about real estate and they want to quit their job. And so they let their work slip, I think. I see that a lot, right? They're like, well, my heart's not in it anymore. So I'm not going

give my employer 100% where I look at it from the opposite point like I would encourage people to give 150% or 200% during that time because then you can have those conversations because you become invaluable to your company rather than the guy who just you know didn't care anymore because he's going to get rich in real estate and I think that's kind of you know it's the opposite I think in many ways you get any listener probably knows that the four hour work week was this struggle for me and and I think it's because of that you know the book I love most of what's in the book I love most of what's in the book, but there's some things about it that I really don't like, and it's outsourcing yourself, outsourcing your heart and soul to somebody else. And I have big issue with that. And, you know,

I want to press upon our listeners that exactly what Brandon said, you know, if you're going to be working for an employer while you're doing your real estate, you know, stick to your job, do what you're supposed to be doing, do a good job at it. And there are reasons for it. And you're the prime example of it, you know, being able to continue working. And, and, and, you, and, I bet you over time if you want to cut down another five hours, another 10 hours and so on and so forth, they'll let you do that until you're at the point where you're ready to go. And that works out great for you, because now you've got the income still coming in from work. You can use that to get financing for whatever you need to do. So I love it. I think it's great. Yeah, you're absolutely

right. That's the thing you get to make a good point. You absolutely have to. When you're at that job and when you're doing that work, you've got to give it 100 percent. And you can't be coming across of, hey, you know, I'm rich on the sides, so I don't really need to be doing this, because that comes across and they'll get rid of you real fast if you do come across that way. So that's an excellent point. Yeah, cool. So let's talk. Let's go back to your story a little bit.

You mentioned you were in college and you bought a duplex and then you talked about building a threeplex and then your units and so on. So in college, how'd you go about buying a duplex while you're a still a student? Yeah, it was my senior year. I was getting kind of close to graduation, and I was fortunate my father was actually worked in banking. He's a retired CPA as well, but he was in banking. So I understood a lot about banks and how they operate, and so I understood the loan to value issues and stuff. So I had a little bit of money saved up. I was able to put that towards it, and they were willing to do, you know, 85% of the appraisal. So I got it a good deal,

got 85% of the appraisal as opposed to 85% of cost. And so I didn't have to have a huge down payment. they've gotten a little more strict on that in the last few years about the loan to value. You know, you've kind of got loan to value can mean two things. One is if you're refinancing, here's what this thing's appraise for. The bank will then you 85 cents on every dollar. Or it may be if you're buying it, 85 cents on the dollar, what you pay for it. Well, that makes a big difference whether it's cost or what the appraisal is because a lot of times you get the appraisal higher than the cost.

You don't have to come up as much money. So that's how I was able to get into that and start out with a duplex. What is a duplex go for where in that area? I mean, are we talking, I don't know Tennessee that well. I'm assuming it's probably not like a $300,000 duplex. They're probably what, sub-100K or something? Yeah, this one, this was in 2001. I think it was a duplex for maybe 110, 115.

They're a little more now. Did you live in any of it? Were you house hacking that or did you just rent it out? I just rented that one out. Later on, I bought another duplex and lived in it. I did house hack, so I did do that. That's awesome. So what would you tell? You know, you've got high school kids and college kids who might be listening to the show. What would you tell somebody who's, you know, young person who's thinking about, you know, getting into it? Is it too soon? Is it, you know, a good idea to start that young? You know, did you make any mistakes because you were so young or, or no? Yeah. No, I would say number one is, you know, you can always start saving up money. You're always can use having cash on the side. So if, you know, if you're out there and you're 16 years old or whatever, start setting aside some money because whether you get in real estate or you want to become an entrepreneur

in any form, having that seed capital, that's good to have. You know, learn as much about banking as you can because that's probably where you're starting out. You're going to be borrowing from local banks. I've done a lot of that and building those relationships with them, learning about the business as much as you can. I think those are all really, really important. Yeah, right on. I think that a lot of people, they think, you know, someday I want to get into real estate, maybe 10 years from now, maybe 20 years from now or whatever. especially like the college kids, right? And so they don't save the money. They don't start living that mentality.

Because a lot of it's a mindset, right? Like, if you have the mindset as a college kid, like it doesn't matter how old you are. It doesn't matter if you're 12 years old. Like, it's kind of a largely mindset thing. So I think that's a fantastic advice. Absolutely. And I've been a big fan.

You know, my whole investing philosophy is kind of Warren Buffett. I know you've had several other people on here that kind of take that. But I've really, I think his idea of value investing, buying things at a discount or the margin of safety. am I not smiling enough or something? No, no, that's Warren, Warren the duck. That's 50-year anniversary Warren Buffett Duck. Did you go there?

Did you go there for that? I did not, but Mindy, who works for us, did. Yeah, I've been to two of them. It's been a few years, but I've gone to two. And you're talking about the Berkshire Hathaway annual. Shareholder meeting. Yeah, and I don't have any. I mean, I've got like the B shares.

I don't have the big ones. But that is, if you're an entrepreneur or you're a capitalist, that's like Disneyland. I mean, it's just so much fun to go there. They've got all these, there's so many people there. You get to see him talk. You do the whole experience of seeing, they bring in all the vendors.

So you've got, I don't know, Clayton Holmes, you've got the Justin Boots, Geico, everybody's there. So you get to walk through, and there's such an excitement there. It literally is Disney World for entrepreneurs and capital. So if you get a chance, I recommend people go to that. That's awesome.

That's awesome. So let's go to this building, a triplex. So, you know, you've got these small multis and you decide, hey, I want to build. I mean, how do you transition from just acquiring to actually building your own properties?

Yeah, I just, I learned along the way. I think it was just kind of, I found a contractor, and I really, he had all the contacts, but I was almost acting like the general contract in some sense. I was, you know, learning, okay, here's this sub, here's what comes next. You know, you start

out with the foundation, you move along the wall, and your sheet rock electrical, the order they go in. So I learned a ton and just kind of helped manage those people and I was paying them all along the way and learned that way. I think that was kind of the steps. And once you kind of get the way things flow, it's the same every time. There's variations, but the basic model stays the same.

Does that knowledge that you gain doing that? I mean, does that help you today in what you're doing? Does it help in evaluating potential deals? How does it assist you? Yeah, absolutely, yeah. it does because you know how much things cost. You know, if there's a problem with this,

here are the steps I've got to take, and here's the order they've got to go in. You don't want to start out painting something if you're going to have to rip the wall out or change out the electrical and do all these other things. You want to make sure you hit them in the right order, so you're not having to go back and redo things. And you just get those relationships

with various subcontractors. And I think you guys have talked about this a lot on your show, but getting good subs, you know, electricians, plumbers, painters, all those guys. I mean, that's really critical. if you're going to be doing this business, is being able to get those things and get those guys to show up on time, have them charge a reasonable rate, have them be relatively honest.

You find in those, that's very important to maintain. I like how relatively honest is the high bar that we've set in 2015 for contractors. Yeah. I mean, you know, they don't have to be completely honest, but just, you know, relatively. Yeah. I probably misspoke there, but yeah. Oh, no, I don't think you did, though, but that's the problem. Yeah.

mine are wonderful, but I've had some, you know, and there's, you know, just, and I don't know if they intentionally are that way, but I think maybe they're just optimistic when they quote sometimes, and then when they get around to billing, they're more realistic. You know, you know, I didn't know I was going to have to paint all four walls of that room. You know, I just thought, well, it was there, you know, when you looked at it, why would it change? So, I think everybody, it's been in real estate for very long. You know, I've been in 15 years, as experienced that with contractors. It's just part of the trade.

Yeah, cool, man. Well, so let's transition. And I know you've got a bunch of other residential units, but we really wanted to talk to you about the self-storage thing. You said you've got 350 self-storage self-storage. So let's talk about that. How do you get into self-storage? Why self-storage?

Yeah, like I said, I'm just, I'm always an investor. So I'm looking for things that as far as you look at how much cash do you have to lay out, and then what's it going to bring back in time, you know, after you pay out all your expenses, what's the revenue minus all of expenses, what's it going to do? And starting in about, I guess, the market crashed in 2008, 2009. In 2010, I started seeing some really good deals on things. A lot of property, particularly in our area, was sitting around. They've been sitting there while people are trying to sell it. So you're able to get it at really good deals. So I came across a smaller self-storage facility. It had a single-family house

on it, and then it also had like 50-something storage units. And we already had a, my family already had a small business town where I could collect rent from. where I could have people called, sign up leases and so forth. So that was able to bench off that and use that to get some additional income. So I just looked at it and said, okay, I don't remember the exact numbers. You know, here's what the price is. It needs to be fixed up. It's not performing.

All three of the self-storage facilities I bought have been facilities that weren't performing, so to speak. They were either totally vacant. They've been run down. They weren't fixed up. And I think it's a function of, I think self-storage is an excellent investment. I really do. and I've written a blog post about, you know,

it's anatomy of self-storage property or purchase. But I think a lot of people, when they get into it, they kind of see it as being, hey, this is going to be so super simple. You know, you don't have to paint the thing. You don't have any plumbing. You don't have to deal, you know, if the tenant doesn't pay, great.

You just auction them, and it's just like storage wars on TV. You're going to make a ton of money, you know, because they're going to leave luxury goods in there, and you can sell them for this huge amount of money. And it really, you know, it's not quite that simple. At the same time, if you're somebody that's good at project management, if you're good at dot in the eyes, crossing the T's and following through on things, you can do really well.

Because one of the things you deal with is, let's say you've got, you know, for a single family house, maybe you're running for a thousand bucks. So you've got one tenant you're dealing with. Whereas in self-storage, you've got 10 or 15 tenants you're dealing with. And those 10 or 15 tenants, they're cycling in and out. They may stay a month. They may say 12 months. They may say six months.

Typically a house, they're going to stay a year or two, three years. So you've got a lot of that going on. So you're having to get those units turned over. You got to get new tenants in. You've got to get them out. You've got to get them cleaned up. You've got people, they're moving all the time. Their phone numbers are changing.

Their addresses are changing. You're trying to get a hold of them. You're having to auction them. So there's a lot of logistics going on. So if you don't have systems in place to manage that, it's extremely, it can get overwhelming for somebody. And then I think that's when people kind of throw in the towel. And it kind of does a spiraling effect where things get out of hand, things get dirty,

they get messed up. That brings in the worst tenants. The good tenants don't want to be around a place. that looks like crap or it's not being run well. And you end up, what ends up happening a lot of times, you end up with a whole bunch of units that are full, but nobody's paying your rent. And that's where a lot of times when I purchase these things,

that's the situation that you're in is you're going in and you're remediating that by trying to identify the people, trying to clean them out, trying to get the people on a system paying on the first of the month. And here's what happens if you don't pay about the fifth of the month, you've got a late fee. On the 30th of the month, we're going to lock you out and just kind of going through that system.

And it's the same as training tenants. It's just a different form of training, right? Yep. Yeah, exactly. It's high volume training tenants. You know, you've got 340 tenants for an X investment where you would have much less on a smaller on a residential. I love that concept you're talking about, about like the spiraling decline, you know, like, because that happens in every, in every market. I mean, when I look for single family houses even like, but more so for the commercial property, that's exactly what happens is people, apartment complexes, whatever.

where people stop fixing it up, which then causes it to decline in value, which makes them stop fixing up even more because they have no money. And it just gets worse and worse. And so, yeah, I mean, value at investing. I love that. And the fact that you can do that, I've never really known anybody that's done it with self-storage to the degree that you have. And so I think that's great. So what, I mean, what does that even mean when you say fix up? When you're, when you're going to rehab a, I mean, is that new garage doors on it? Is it, you know, paint, roof, that kind of thing? Yeah, the first one had issues in the sense that I think about 20 or 30 of the units had burned down probably 10 years before that. They just kind of let them languish there.

And so, yeah, so I mean, if you're driving by, do you want to rent there and think about the people that are willing to stay there. And then the people that were staying there, they may pay when they want to, they may not pay. And it also had, this particular property came with a house that had a tenant in it that wasn't paying either. And I don't know why, but they never ever got her to pay. And she is somebody, you know, we could get into this, but we ended up having to get her to leave. I ended up going, you know, I got her to sign a month to month lease when she moved in and eventually just said, hey, this isn't working out. She was just very crazy. And, uh, and she wouldn't leave. You know, we had to, we had to actually get the sheriff out there to do the set out. And I set her stuff

out on the side of the road, uh, to get to get her to leave. But she, she was a very difficult individual. She'd been evicted, you know, 10 times before when I, when we got, because I bought it with her in it. And I found out when I was calling up, you know, to do the eviction process, calling the sheriff's department. They're like, I can't find, you know, is it, are you this person against her? I'm like, no, are you this person? They were going through like, you know, there's like 10 other landlords that had evicted her prior and she just gotten stuck there. But that was a real experience still with her. But we did eventually. It took 76 days on the time I told her to leave the time actually got her to leave. But she was a mess. But like you were saying back on the self-store, yeah,

we were going through rebuilt the units, changing out garage doors, redoing the walls, fixing it up, cleaning it up, laying out new gravel on the driveways, changing the roofs out, gutters, painting it, just making it look presentable somewhere. Because if you're going to store your valuables there, you want somewhere that looks nice. And in my opinion, it doesn't have to be beautiful, but it doesn't need to be stuff falling down or look really dirty. Nobody wants to put their valuables there. Yeah, yeah, right on, right on. So I just want to cycle back really, really quick. You had mentioned your family was in some kind of business.

you guys are collecting kind of rents and you didn't really get into that. And I hope I'm not prying, but I was just curious, what kind of business were you guys in, which made the transition easy for you to get into the self-storage? Yeah, and the town we're in, they're a small loan business. So that gives you somewhere where you've got a receptionist where they can come in and make payments and stuff. And they can make calls. And people call, ask for rent. They can immediately go there and sign their lease and ask questions about what are the rates and so forth.

So it works out well. you know, if you're going to start out small and self-storage, if you're not going to buy lots of units, you've got to somehow figure out a way to spread that overhead of somebody that's going to be able to answer the phones, take due leases. So you either need to buy a lot of them or you need to, you know, whether you own an insurance agency or you've got some sort of small office for appraisals or real estate or property manager or whatever it is, if you've got something along those lines, you can really bench off that and start a lot better. Otherwise, you probably need to ramp up and start out with 300 units to try to have somewhere. I know some people they do it, they do it all online.

They don't have a location. And you can definitely do that. The software's gotten better. We've got some good. Our software we use is really good. It allows people to go online. You know, they can find us online, then they can go on sign up online. We can, you know, it'll send them a contract to sign.

They sign it, send it back to us. And we can do everything online. In theory, that works great. But you really need hands on the, you know, boots on the ground to be able to be able to do it and manage it well because there's just all these one-off things that happen. So that's really worked out really well. Yeah, I've always thought like, you know, self-storage would be fun to get into, but then I always think like what I, I mean, I rented a storage unit one time back when, right after

college, I rented one. And I remember had to like meet the lady, was a little old lady, had to meet there out there by the airport and she had to unlock the thing. I mean, it was just a very like intensive thing for her to have to come and do. And there was, you know, 200 units there. And I thought, that sounds like a not very fun thing to have to go out there every day and meet tenants. I mean, yeah, that's, that's kind of what, held me back. So I like the idea of having a local business, if you, maybe your family or you own one or, you know, that can be a central location for people to go. I think that's kind of cool. Exactly. Yeah, you can't, you can't scale if you're having to go out and need every single

tenant because you're, you're renting these things, you know, a couple of day, all the times. And if you're, if you're having to go out there, leave your job and go do that, there's no scalability in that. So that, that's the thing on the systems and stuff with real estate because it's such high volume, anything high volume, whether it's your written apartments or you're written self-storage or whatever you're doing. If you're doing lots of volume, you've got to have systems in place where, hey, you do this, you do this, you do this, you do this. And somebody's like, hey, I want to do this, this, this the other way.

You're like, you know what? I think there's a place down the road that probably would fit you better, you know, that you might want to try. Because you do, you get, when you're doing that volume of people, you get people that are excellent. You get great tenants. You get good tenants, and then you get a certain percentage that aren't as good. You know, either you get the kind that don't pay,

and you get the people that are really, really difficult. They're very demanding to some extent. And we're kind of trying to rent. We stay on the lower end of the price point and try to give good value on that. And we tell folks that up front, we're like, hey, we may not be able to do every single thing you may get at this other place or meet your absolute highest goals. And if that's okay, if we can't, you know, we may recommend you go somewhere where you can get that. A lot of times they're not ever going to find him where they can get that. But it's better than saying no to them.

Yeah. Yeah. So at the end of the day, I mean, is there, you know, with apartments, your screen? tenants with commercial your screening tenants. With self-storage, I mean, I use self-storage like Brandon back in college, you know, for a few summers and it was great. And I walked in. I said, I want to run a unit.

They said, great, give us this money. I gave them the money. I went and I was done. I put a lock on the thing. I put my stuff in there. And then when I was done, I took my lock. I gave them my money. And it was a wrap, right?

So that's, I guess, an easy tenant. but what kind of screening is necessary above and beyond kind of that conversation you're having? Is there even a screening process? I don't remember. Yeah. So you're exactly right. Residential, it's a much more thorough screening process for a house or somebody's written. I'm going to pull a credit report.

I'm going to talk to their previous landlords. I'm going to get a really good idea on these people before I let them in because the process of getting them out is a lot more difficult. It's not easy to get them out in self-storage, but it's more defined. So each state's different on their eviction laws for self-storage, so it's state by state. But Tennessee, you know, you get after 30 days, you can overlock them. So you essentially put a lien on the property. You got to notify them, send them certified mail letter, say, hey, you know, hey, we haven't paid. We're going to overlock yet.

And then at 60, technically, I guess you can go ahead and do the auction. We don't ever get anywhere near 60. We're probably six months a year out, somebody before we'll auction them. And we're going to try everything we can not to auction. We'll work with them, you know, to say, hey, can you make some sort of payment? Can you try something? Because we don't want to auction it. That's not a win for us because all we're going to collect is up to what they owe us.

In theory, when you do an auction to recover money for what they owe you, anything above and beyond what they owe you goes back to them. So if you're auctioned somebody's goods at, you know, all these TV shows and stuff, when they're doing auctions, the folks who are payment received, you get up to what you're owed, and then beyond that, it goes to the person who's got the goods. Yeah, we've never gone that. But in the theory, that that's what the lien is. That property is being used to pay back what that person that's taken a lien on that property.

And paying it back has done it. And we never get more than what we're owed. I mean, it just doesn't happen because we'll get some, you know, we might get $400 on. But for the most part, you know, they're 20, 30, maybe $100, you're going to get off a unit. And a lot of it is, I'm sure in some of these areas you see on TV, there are great cars and luxury items kept in storage.

But for the most part, you're going to get a mattress. You're going to get a Christmas tree, a broken bookcase, a few of those, a lot of clothing. And so the people that are going to show up, people that do like thrift store sales, those are going to be your big buyers. They're going to go in, they're going to take that stuff, and they're going to put in some sort of thrift store and sell it out like that. But you don't get tons and tons of money on it. Interesting.

I like that show. I watched a few times that storage wars. There's like 30 of them now. There are a lot of them. There's so much drama, you know, and the guys are bidden out. I don't know. It's such like a drama-filled show. You're saying that's probably not real realistic, at least where you're at.

No, I think that's a lot like these home flipping shows. You know, there's some reality to that in the sense that you can buy a low, fix it up and sell it. But they got to make a good TV. So I don't know if they plant things in there or not, but they just do a lot of editing to get the really good ones. But that's a, I don't see that. Yeah, I mean, because that's an interesting point, right? If 99% of them just have a mattress and a broken bookshelf, that show would be terrible. So they must know what's in them before they open them.

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Funny. All right. All right. So moving on. I want to talk a little bit about like what are the cons of self-storage? Why shouldn't I get into it? What are the things to look up for? Yeah, I think it's really like any investment in the sense that the real key is buying it right. So making sure you don't pay too much. So I bought that first one. And then the second one I bought, this thing was, it was a 5,000 square foot commercial building up front. And then behind it, there was one building. And then they had two concrete pads built out where you could put more self-storage on. And they already had the fence around it. And this was in, I don't know, this is 2010, 2011 was out there. and they wanted 600 grand for this thing.

And I talked to the realtor and so forth. They're like, you know what? They're pretty. They're really wanting to sell this thing. So I came in at 200 and they were at first. They're like, we're not so sure,

blah, blah, blah. And I said, right now I'm okay. And then they came back and said, okay, you know, we're interested in it. So I went in and then at that point,

I went in and looked at it. And one in the office building, the ceiling was falling down and blah, blah. So it was all said and done. I was able to get it for 180 and put about 20, 20 in it and get it to work, which is really, really

good as far as cash flow-wise for that number of units, and then they already had the concrete poured for two more 4,800 square foot slabs. They already had all the fencing around, all the, that stuff was set up to where you got those fixed costs, and then you had that 5,000 square foot

office warehouse, where we turned that into climate control storage eventually. But we kind of started out small where we had that first one, we got that filled up, then we built out the second one, the next year, We built out the third one. The fourth year, we built out the climate controlled and the big warehouse. And we just kind of took it a little bit at a time.

But I think the biggest con with self-storage or any investment is if you pay too much, you get, we're not making enough to pay for what the true expenses are, whether it's, you know, I know you guys talk about the 50% rule all the time. But that's kind of true. You know, if you first look at something, you're like, that's crazy. That doesn't make any sense. There's not that much expense in this. But there is a lot of expense that pop up.

There's a lot of one-time expenses that happen every single year. that people don't think about. So that's probably the biggest thing. The second tough thing... Before you go to the second tough thing, do you mind just throwing out what some of those are, those hidden expenses?

Whether it was self-storage or just... Yeah, yeah, self-storage. Well, you know, one thing that we found is the gates. I mean, those things, the gate operators, you've got those suckers. I mean, I've always got somebody out there on those three facilities

looking at those things. I would say every three or four months, there's somebody out there. And it's not cheap. They're sitting out in the weather conditions. they, if those things aren't operating, you get phone calls. People want to get their stuff, or if they get stuck in there, you've got to have those working. And so you've got to have a good relationship with that gate person. That's always happening. You get vandalism. You get

people, for whatever reason, people don't drive U-Haul. Well, I know a lot of people don't drive U-Hauls every day, but when they get in them, they just turn idiots. I mean, they're just they bounce into, you know, they're going to hit your buildings, they're going to hit your gutters, you know, you got to put up these kind of idiot poles to keep them from side-swapping your building. Is that the technical name? Yeah, I think they call them bollards, but yeah, you got to have that stuff. You know, there's that. You're always cleaning them out.

You know, even, you know, we've got a fee. We charge people if they don't clean out. But trying to collect that, obviously, you're not, it's very difficult once somebody's left to try to collect that fee. But you're always cleaning them out. You're always getting rid of stuff. There's a lot of that maintenance on those. You've got the lights are going to go out. You've got various things like that.

But a lot of it is another thing is you're just dealing with so many people. And everybody, you can imagine if you've got 10 tenants for your 10 residential properties, they all have issues. You know, people have personal issues. And a lot of times those become your issues, unfortunately. If you've got 300 people, you've got that many issues you're having to deal with. So those are the kind of things that you have to deal with and have systems and processes in place. Yeah, yeah.

I love the emphasis you have on the systems and processes. You know, a lot of our guests recently here on the podcast have been the same way. And, you know, I'm a big systems guy. I know Josh is a big systems guy. We just love that concept of having things run just smoothly like an engine. I love that. Okay, so you said first tough thing and then you said second tough thing was, do you remember what that was? When I cut you off.

All right. So, yeah, we were just talking about the cons of it, you know, and it was having to buy correctly and, you know, making sure your numbers are good and then understanding all those hidden expenses. And just dealing with the people. I mean, most of the people are good, but you're getting a lot of transitory-top folks involved. it's a lot of collections. This is somewhat of a collections business to some extent. You're going to have a very large number of people that you're doing reminders.

Our software is set up. So kind of talking about those systems. The last day of the month, the day before the first, it automatically sends out an email and a text to everybody. So we make sure everybody signs up has an email address with us on a cell phone. And so they get that automatic notification. On the third of the month, they get another text message, another email saying, hey, by the way, this rents passed to you.

And on the 5th at 5 p.m. We're going to charge a $20 late fee, no exceptions. Because we tell people up front, We're like, hey, rent's always done or do you honor before the first. If you pay on the six, you're not a day past due. You're six days past you. Yeah, we do the same thing. Yep.

Because a lot of times people come in on the sixth, and they're like, I'm one day past you. Why is there a late fee? And you're, well, no, you're six days past you. And if somebody's got a really, really great reason, you know, if they're in the hospital or something, we'll work with them. But for the most part, it's, this takes care of it. And then on the fifth, we start, we'll send out manual. We'll send those emails out manually. But having that software is really important because if you're sending out letters and stuff,

or you're going to mail that crap, if you're having to call all these people all the time, that's really tough to do when you're doing volume. It's impossible to do it on any scale. So we do it. It's automatically set up to do that. And then we send them out emails out manually. We just click on the button after the fifth. We'll send them out periodically.

And then we get those people, you know, there'll be 20 or 30 people that are past you at that. Then we do have to start calling. But it's a lot easier to call 20 or 30 versus several hundred from the beginning. You know, as you're saying this, I'm looking at. at my own business and I'm realizing, you know, we spend 50 bucks a month, maybe on letters and stamps, right? Plus my wife's time of printing them and going to the post office, dropping them off, typing them up. I'm like, why don't I just, again, going back to the system thing, why don't I go and send out a letter, one letter to every single tenant and demand or ask or call or whatever

their cell phone number and their email address? I mean, they all have an email address. They probably do. I mean, that would probably right there just cut down, you know, several hours a month of work. Oh, absolutely. Yeah, and that'll free up a lot of time for her, a lot of money. And this software, we got, our software, I mean, it's only $49.50 a month for this stuff to automatically do that. So, I mean, I guess you can send an email or you can even have set up register automatically does it. So, I mean, that save you a lot of time. Do you mind me asking what software that is? Yes. I've gone blank. I mean, hold on, I can look.

I actually like that idea of the text messages also on the first saying, hey, rent's due, and then automated it. Yeah, I think I'm going to institute that. We use easy storage solutions. They're out of Utah. It's several guys out there. And they're really good for really smaller self-storage and residential. I use them for all my residential stuff as well. I put all my tenants on that, so they're all doing that.

Sorry, I didn't know that I'm talking about. That's all right. That's right. That's right. Hey, so you had talked about vandalism really, really quickly. Like security issues, vandalism. What, you know, is it just people, I mean, is it people breaking into other people's units? Is it people just graffitiing on the property?

What kind of vandalism do you deal with as a self-storage operator? Yeah, mainly, occasionally you'll get somebody that break into my unit. So we always tell people there's almost like three lines of defense for self-storage. One, you want to have a place that's got a good gate, good fence system. So somebody just can't walk in there. Two, you want to have a really good lock. You want to have a dislock versus a lock that's got a big old thing that I can easily get a pair of clippers around. And three, you want security cameras.

is determined. None of these things are going to absolutely stop somebody that wants to get in a storage unit. If somebody wants to get through that in that self-storage unit, they're going to get in. If they know something's in there, there's nothing we're going to be able to do to stop them. But you do get that occasionally. You get people that get their stuff broke into and you just have to work through it.

I mean, it's a, you know, and when we go through and say, hey, you really need to get that good disloc, it's much less lock if somebody's going to break into that unit than, you know, if they're just looking for an easy target, they're going to pick the little small lock that's got an easy thing they can clip. Okay, yeah, interesting. Right on.

What about security deposits? When you have a tenant move in, do they pay a security deposit or is it just first month's rent? No, we don't actually do a security deposit. And going back to your pre-point, how do we underwrite them? You know, as far as getting new tenants, when we first started out, there really was no underwriting. If you could show up and you had the money, we would do it. We've since kind of gotten a little stricter on that. We now require that you have a valid driver's license. And I think some of that's come back to be common sense that if somebody drives up to rent a storage unit and they can't give you a driver's license,

and that's valid. They're already breaking the city that you're in laws. What makes you think they're going to follow your rules and pay you and do that? If they're willing to take a chance on getting arrested or fined, they're probably not going to obey your rules either. So we've done that. We've noticed people that can only give us ID only and could not give us, you know, driver's license.

They tended to go bad more often. So that's one thing we've done to kind of try to weed out some bad ones. Okay, okay. And then how do you find tenants? I know you mentioned earlier the internet. I mean, is that your main source? Do you advertise in the newspaper or what? Yeah, I think, you know, I think the evolution of renting self-storage is gone from Yellow Book. I think everybody was on the Yellow Pages, you know, 10, 15 years ago.

What's that? Yeah, exactly. That was a big deal. And those guys had a monopoly. I mean, if you ever had to deal with them back then, they really, you know, they were going to go up 10, 15, 20% a year. They take it or leave that kind of deal. And then since, you know, with the disruptive effect of technology, they've, you know, they're, I mean, they've still got a model. out there, but it's not quite as powerful or not near as powerful as it was. So search engine

optimization, that is, if you're in self-storage or you're anything high volume, I would say if you've got a lot of apartment buildings and you're constantly needing it and get a new pipeline of customers coming in, that's key. That's it now. I mean, you've got to be, when somebody comes in and stops in self-storage, Cleveland, Tennessee, which is where ours is, they got to see Chandler properties. I mean, and they'll see that one, two, three times on page going, they're going to see it from the Google Maps. They're going to see it just from just the normal search engine optimization where they can go out and see an article about you.

So you've really got to work that. And that takes a little time to get that built up. But once you get it going, that's pretty much where we're getting a very, very large percentage of our stuff is that SEO search engine optimization. So what are some tips that people can follow here that are listening, whether they have rentals of their own or whether they're doing any I buy houses website or whatever? What are some tips that they can do to get more search traffic? Yeah.

I think, you know, number one, you need to go out on Google places. You need to go on Bing places. These are things you can go on for free. You know, you go out there and you set the information up about your business, and then they're going to mail you a little postcard of the code on it. You're going to take that code. You're going to enter it in, and that's so they know that you really are located at that spot. And you're going to put all the information you can on there.

You're going to have a good website. You need to have a website that is functioning, which I'll check this morning, and mine's not. So I've got a quick call to my web guy. to say, hey, what's going on? But that should be back up by the time we run this podcast. But you got to have that. And you got to worry, you've got to be doing, you know, having a good blog where you're writing about stuff. And it can't just be a bunch of crap. You know, you can't just be putting stuff out through keywords in it. You've got to have stuff where people actually care about it. And that's a big thing. If you listen to any of these things like Google puts out

about, hey, how do you get ranked? They want quality content. They want things out there. Same way you guys. You guys put out quality content at bigger pockets. So somebody types in real estate investor investment websites, you all are going to show up. If you do that with your website, how to rent self-storage, what size of storage, you know, Donnie? These are kind of things people are looking for. If you put out good articles about that, Google's algorithms and little robots or whatever, they're out there crawling, those websites will find that, and they'll rank you higher. So if you do that, and a function of that is also having those backlinks, you need to have from good websites, you know, them linking back to your website. So if you're writing articles and so

forth and they're linking back. And it's got to be quality. Google's really started penalized or they penalized for a while of people that just go out and put a crap comment on every website they go to or try to get these cheap backlinks. They'll have the negative effect on it. But if you're actually putting a good quality content, you're active doing that, that helps break you higher with those websites. Yeah. Yeah. And that's, I mean, that's the key across the board for anyone listening on SEO is good quality, period. Targeted quality content. You said sell storage, not Chandler, but whatever it is, Tennessee, you're

right about storage in that area. You do the best job possible, and that's going to do it. What? We're starting to kind of get later in and got a few remaining questions I'd love to tackle before we finish up. You had talked about,

you know, we're talking about these properties and one thing we have not talked about are the numbers. So I hope, you know, you'd be willing to kind of go there with me on this. So you had mentioned, I think it was that first facility. You said you paid, I think, 180, put 20 in. So that's 200k into this property. That's what 50 units. So what kind of rents are you, am I, I may be misquoting you completely. And if so, I'm sorry. Yeah, that's right. I'm trying to think back the exact numbers. I don't have them right in front of me. But at that time,

I think there was 36, 40 units. Well, there was 36, I believe, in that one. We were getting a couple thousand. I would say it's probably somewhere around two percent, maybe like the two percent rule or something or better. So I can't remember the exact numbers. But let's say if you put, you know, if you're on buy something for a hundred grand, you need to be getting $2,000 or more a month in gross rents. We've been able to do that. It's hard because self-sort has gotten so popular to try to find something in two percent. We're really, really hard. And so I've, you know, in order to find those, I've resorted to just yellow lettering people in my market and saying, hey, if you're ever interested in selling or you want to have a cup of coffee and blah, blah, blah, and call me.

And that's allowed me because I just bought one about two months ago. And that's how I got it. I just sent him a quick letter and was able to get it. Yeah, I was just thinking as you were talking about this, I was like, I think I'm just going to find out all the self-storage facilities in my area and just write a letter to me. There's not that many. There's probably a dozen, maybe two dozen in my area. Because you have the infrastructure to manage a self-storage facility and everything else that you do. But anyway, moving out. I'll figure that out. Yeah. Hey, Michael, occupancy,

what, you know, at that 2%, you know, what kind of occupancy are you hoping for? Yeah, it's going to fluctuate, but typically 85% are better is what we're going to, we'll kind of consider that somewhat full. It's going to be near 100% during the summer during, coming to fall,

Christmas, wintertime, it drops down. So it's going to cycle a little bit and they'll pick back up in the spring when people are moving and so forth, but that's kind of where you're going to see your occupancy. great. And if somebody, if you're looking for kind of that stuff, let's say somebody out there saying, hey, I'm thinking about doing self-storage. I wrote down a couple of places you might want to go to. You might want to try like the SSA Self Storage Association. There's a inside self-storage.

If you just Google those, you go out there, there's kind of like blogs and information, you can learn about self-storage if that's something you're interested in doing. Cool. Cool. Very cool. Very cool. Hey, maybe my last question, I guess, before we go to the fire-round and Josh might have one more. But I want to know what you do personally in the business related to, I mean, are you the guy that actually, actually goes and signs leases and shows units with people, or do you have people that do that? Like, what do you do, Mike or Michael?

Do you like Mike or Michael, by the way? Either one's fine. I might have wanted to ask that in the beginning of the show. Yeah, you know, that's how I roll. Well, yeah, I'm involved, not so much on the day-to-day stuff. I will go out there and clean them out all the time on the weekends. I'm cleaning them. I'm not renting them as much.

And we don't go out and show people that unit each time. You know, we say, hey, if you want to see some pictures of it, get on the website, check it out, and you can come into the office and you can rent it there and we'll get you fixed up. So that's one of those things to kind of save yourself some time. You've got to get it to where you're not having to run around, do all these different hurdles to try to get a new tenant. Otherwise, you'll just work yourself to death and not make anything for your time. But yeah, and then the strategy of it, doing all. I do, I'm going to count it, so I like doing the bookkeeping and stuff.

At some point I'll probably have to outsource some of that. But I do those things. I make sure, you know, that the maintenance is getting done. I'm project managing it. So there's always things going on. I mean, just like you guys have got with real estate, your properties, there's always something breaking or there's something going on that you're having to manage the plumbers, electricians, the mowers, everybody.

Yeah, yeah. It gets overwhelming. Awesome. Hey, so I think my last question on this, you know, we talked about cell storage pretty much, I think, fairly exhaustively. I'm just curious about building versus buying. Is there any advantage to just building from screen? can you do that more cost efficiently potentially or or does it just make more sense to buy

something that's there yeah again it's just running the numbers on the situation typically you know like i think most of your people have seen residential if you can find a distressed person or something that's not in its best shape you're going to buy it cheaper at a discount than going out and buying the land going out pouring the concrete building the units up putting the fence around it typically you can get it quite a bit more of a discount if you find somebody that's motivated to sell just like if you decide you're going to build a single family house versus finding a motivated seller like one of these we buy houses sites you're going to probably going to be able to find a deal i can't make one work where i buy one a raw piece of land and build it up to make it financially

work for me i can buy like the one i bought i bought it enough of a discount where it came with enough land and the pads set there where i could build onto it it made sense to add on to that facility but starting one from scratch currently in my market. I wouldn't be able to make that with enough margin to make it safe of an investment. Wow. Wow, that's fascinating. It's fascinating. All right, man. So before we go to the fire round, I've got one question. I said up front that you were, I think, member of 5,000 something or other. I mean, that's pretty serious. We've been around a long time at bigger pockets. You know, you have as well. So, you know, as somebody who's been on the site for many, many, many years, I guess, you know, what advice do you have for somebody else who, you know,

may just be joining and how they can get the most value out of a place like bigger pockets. Yeah, and I think you said, I think y'all are up to like 350,000 members. I didn't realize I was that early, but I knew I'd been there a while. But I think, you know, I told you guys offline on this, but, you know, I think Josh, you've done an excellent John Brennan, you too, coming in. Just having the tone of this community you've got is great. It's legitimate. It's not we're trying to sell you some sort of boot camp or some sort of marketing.

thing. And I think even the community itself is set up to where even if you're on the forums and you're seeing somebody type something and you see somebody kind of get out and left field about something that's wacky, you'll have somebody come in and kind of shoot them down pretty quick. So that's hard to find in real estate. If you top in looking for real estate investment, you're going to get 10 to 1, you're going to get somebody trying to sell you something. There's probably as many people are selling books on how to make money in real estate as there are people investing in real estate. So I think you guys have done a fantastic job on that. I would recommend anybody that's on this site.

Watch the podcast. All the podcaster are fantastic. I mean, this is, it's so easy to do. You can put it on. And this might be the best show that we've ever had, right? Yeah. Yes. I'm not going to say that.

But you guys do a great job on all the shows. I mean, you know, from watching the shows like Brian Burke and Jay Scott and all those guys. You always pick up something when you hear these people talk. You know, I mean, whatever the topic is, you're going to find one or two little details. And it's so easy. You can put it on, and then you can check your email, do your bookkeeping, whatever, and you just kind of listen to it in the background, and you'll pick something up. So to me, the podcast are by far the greatest asset you guys do, just from learning.

And then the forums are great and meeting people and so forth. But I learn more for the podcast probably than anything. Well, thank you. I learned a lot from podcast, too. I mean, this episode, I've learned a ton of stuff. So I'm like, I'm not even kidding. I'm really excited to go on. Which is really funny because this is the first time that we've talked to somebody

and kind of a new thing for me where I was like, you know, maybe we should have gotten the other guy because this guy makes me not want to do it. No, seriously. And I think that's a good. I think it's a beautiful thing. That is why this is such a powerful medium. You know, I think self-storage, I was really excited about self-storage. And then thinking about just there's a lot of day to day. There's a lot going on. It's not a kind of sick. I mean, it's far more time intensive than running out a single family property, or at least it seems to me, it seems like there's the potential for a lot more headaches as well. So it's fascinating.

I mean, you're not dealing with toilets, but you're dealing with, you know, a lot of other stuff. Am I crazy? No, and you're right. And I don't want to give the idea that, hey, self-storage is not a great investment. No, no, no. I think it's a great investment. It's like any investment. You've got to buy it at the right price where you can afford to pay people to do the things you need to do to make it work.

But you're right, though you're dealing a lot of people. and when you've got a lot of people you're dealing with, you've got more issues than just one, two, three people. Overall, it is a good investment. I want to communicate that people. But just like any investment, buy it right, don't pay too much. Yeah. And I wasn't trying to dissuade people from doing it.

I was just saying, like, personally, I'm like, oh, more people, more drama. I don't like drama or people, more headaches. Just you two. Thank you. Thank you. All right, well, my dog is barking in the background. Don't mind him. But I actually got a new dog, a new, like another Yorkies, and I have two.

So I don't know. Yeah, they're still getting used to each other. They wrestle all day long. All right. So let's go to the world famous fire round. But before we do, I do want to tell people, I know we did not talk about it at all this episode, but you recently have been doing or did the Burr strategy, the buy rent or buy rehab rent refinance strategy. And you have a member blog post that we're going to link to in the show notes on this,

which is at biggerpockets.com slash show. 138. Anyway, I want people to go check that out because your pictures are amazing, like the before and after, especially that the kitchen and the counter. Yes, I encourage everyone, go out there and look at that counter. See if you see anything that does not belong. It's something I've never, ever bought. I have never, yep, that is a first for me. So people can check that out. It's again, biggerpockets.com slash show 138. There'll be a link to the post called my latest burr is rehabbed and ready to rent. All right, with that, let's move on to the fire. It's time for the fire round. All right, the fire round. These questions come direct out of the BiggerPockets forums, which people should be probably jumping into

at Biggerpockets.com slash forums. If you have never participated in the forums, it seriously is really, really easy. Go there and you press the big green button that's the start a discussion, and you can ask any question in the world as long as it's semi-real estate related and not vulgar.

But pretty much anything you can ask. You're going to get people to jump in and answer your questions. People like Mr. Rogers here. So, all right. Back from the dead. I couldn't resist it. All right.

The fire around, today's fire around questions, they're all kind of related to self-storage. Some of them are. Number one, how do you figure out what price to rent a unit out at? And that could be self-storage or regular.

Yeah, well, self-storage, I'm going to look around. I'm going to call my competitors. I'm going to look at them. I'm going to see what's online, and I'm going to try to price it in that market. And that's where I'm going to stay. I'm just going to see.

And as things start getting filled up a little bit more. I'm going to go up a little bit more. But I would say, go out there, look, see what your competitors are charging, and you need to stay somewhere around that. We kind of stay on the lower end of what our competitors are doing, just to kind of keep them renting. But I think that's probably the best way. Right on. Right on. All right on. Question number two, do you think it's a good idea to invest in a storage facility in a different state? Do you always need to be available? So can you invest in self-storage at a distance, I guess is a better question.

You can. I've not done it. I don't think I will do it. I'm kind of going back to those points we talked about. This is kind of like investing in houses far away. You can do it if you've got good people boots on the ground, property management there that can watch it for you. I like being close to things. I like to be able, if there's a problem, I want to be able to get there.

Not saying I'll always be the person to go do it. But if you've got a major issue, it's nice to be able to get there within 15, 20, 30 minutes, as opposed to having a hop on an airplane to get there. Yep. Right on. Right on. All right.

Number three, once you get a property, where do you find forms for your unit renter's the sign. Oh, like a lease? Yeah. Okay. I think it's what they're asking. Yeah. You know, there there's several. I mean, I think even on bigger pockets, y'all, don't you all have some

links out there to leases and so forth? Yeah, there's a form section. I think I mean, slash forms. Yeah, and I think it's files, files. I think it's primarily for residential. And I don't know that there's anything self-storage specific. Oh, okay. If you're talking to self-storage,

I would go out and you might want to rent a few self-storages units in town. or it's maybe some of the big ones, like a public storage, or if you look at Uncle Bob's or these places, and kind of take a look at their releases and use that as, you know, don't plagiarize it. Obviously, you know, don't copy what they do. But get an idea of what are the things that are in there,

you know, get you an attorney involved to help come up with something. But, you know, you're not, this is not, you're not reinventing the will here. You know, go out and see what's working for the big players, the other players, see what they're doing. I say, hey, are there any little things in there that I haven't thought about that really ought to put in my lease to, but you know I'm not liable for you know if you have some sort of issue with it

putting those things in there I think I think that's really important to look at what your competitors are doing right on and I I want to press upon people to go and talk to an attorney you know I think it's great that there's all sorts of resources including bigger pockets where you can go and download a lease and look at it but at the end of the day you know if you want to get your backside covered you bring it to an attorney and you have the attorney review it so absolutely definitely be sure to to do that said I do want to also say that point you said about find out what the big guys are doing, you know,

you don't reinvent the wheel. I think that's an amazing tip for any real estate, right? Like, I mean, that's how I try to run my landlording businesses. I run it exactly let the guy who has a 5,000 unit property because they figured it out. Like, why am I trying to figure out something new? Like, I got this new way of landlording, you know, just do it the way that they do it because they've,

you know, they've mastered it over years and years and years and years. Well, you have a new technique. So you're a guru then. There you go. I've got a new secret way to do this. And I can tell you for three easy payments. All right.

All right. Last question. What are the first steps someone should take to invest in their first storage unit? Hmm. That's a good question. I would say learn about it. I would say get out there, talk to people that are in that business. Maybe they're not exactly your market, but reach out, read things online. Go check out the like that SSA or inside self storage. Those websites are out there. There's stuff. There is stuff out here on bigger pockets. Bigger pockets. I had a cough. Yeah, but bigger pockets, you know, there's, you know, you could listen to this. podcast. You could go out and learn. Don't go out, don't sign up for any major expensive boot camps or anything. If you've got the personality to where you like to learn and figure things out, that's typically what makes people get investors. If you're wanting to spend tens of thousands of dollars to do it the quick way, you probably don't have the work ethic in you to make it work anyway. So I would say learn it on your own, you know, try to figure it out, talk to people.

There's lots of people out there. I'll talk to you. You'll get it organically that way. right on. That's great. Awesome. All right, let's move on to the world famous. Famous for. All right,

the famous for these questions are asked of every guest and you're no different, Mr. Rogers. So number one, what is your favorite real estate book? Real estate, I came up with two, if that's okay. Not allowed.

Not allowed. Okay. All right. I would say that just one, millionaire, real estate investor, I think it's Gary Keller or somebody. That was a great one.

When I first read that, that idea of, you know, buying on margin of safety, looking at lots and lots of properties, then you go in, after you've looked at, you know, thousands and you pick out, you know, a couple hundred, you look at real seriously that kind of make the grade, and you get down, you keep turning down until you finally get that one. That's what investing's all about. It's looking at lots and lots of things, figuring out what's mispriced and then swooping in and getting it real quick. And then another one, if you're, I think it's a really good resource, is every landlord's

legal guide by Nolo. They put that out there. That's a good layman's terms, source. That's where you can actually get some, they've got some forms there. Now, you mention it on leases, standard communications with your tenants, and then they've got some state-specific laws that they put down a little index about what you've got to do with your deposits and what you can do in each state. Each state's a little different. But that, I've always found that to be a very good resource. Yeah, I have that, and it is a great resource.

Right. I like it. All right. Favorite business book? I would say, you know, essays of Warren Buffett. I really like that book. That's kind of taking all of Warren Buffett's letters to shareholders over the last 50 years and they kind of combine that into a theme.

You know, his idea of value investing is great. You know, it's the idea that you kind of know what the intrinsic value of property is or a stock or whatever it is and you let the market go up and down and you use the market to your advantage. You don't have to go in and buy all the time. You know, it's perfectly fine to let a property go by that you're not sure about. The big mistake is paying too much. You're getting something, letting one, latching.

All the way you're going to lose money in investing is making a bad investment. letting one go by, you're going to be okay. And that's very timely given the state of the economy, both local and globally. And this show comes out in a couple weeks. But this past week is the week where the market was down 1,100 points. We were down almost 10% over a five-day period. And a lot of people are flipping out. But at the end of the day, if you're buying for intrinsic value, then you're in a lot

better position, whether it be stocks or real estate. Yeah, I mean, when prices go down, that's when you're going to. you want to be looking, taking a real serious look about buying things. It's not when everyone's excited about them because prices are high. That's typically when you don't want to be in something. It's when everybody in the herd's looking at it and saying, gosh, this looks great. That's always a bad sign. Hey, what do you do for fun, hobbies?

Well, you know, like I said, I've got wife and three kids. So that keeps me extremely busy playing with the kids and so forth. I used to play a lot of golf. I play two or three times a year now. But I really, you know, the real estate, I enjoy it. You know, it's something that I love doing. I've always found interesting. I like talking shop with other real estate investors like you guys or friends or people I meet

kind of come and going. And I always recommend to people, you know, check out Bigger Pockets. When I meet somebody out there, I'm like, hey, get on Bigger Pockets, you know, go listen to those podcasts. Go get involved if you're thinking about getting into real estate because I think it is such a good resource. Appreciate that. Cool.

All right. Final question for me. What do you believe sets apart successful real estate investors from those who give up, fail, or never get started in the first place? I would just say, just having that persistence and determination. just look at them, stay after it, having that mindset that I'm going to do this and just keep looking at it. And it's okay if you let one slide by. You know, just keep looking at them, keep your eye open and you'll eventually find something if that's something you're really meant to do.

Right on, right on. All right, Michael, aka Mr. Rogers, where people find out more about you, man. Yeah, you can go on my main website, which is Chandler-property.com. And then if you kind of, if you're somebody that's getting into self-storage, you want to see the self-storage websites. Just go to the self-storage page. And then in there, there's three separate websites for each facility that you can rent from, and you can kind of see how you rent. And then my bigger pockets profile, you can go out there and just look for me on bigger pockets. And I may not get back to you immediately that same day, but I'll try to get back to you in the next couple days if you got a question. Right on. Awesome. And definitely do check

out Michael's Burr article. Looks like a hoarder threw up all over the kitchen and everywhere else. And Brandon, you should give away like one of those free books or yours. To anybody that correctly guesses first, what that is. I will. I will. That is in the kitchen. I will do that. In the comment section of this blog post, first person to correctly guess, you know,

one of these things is not like the other is we'll get a free copy of my book. So there you go. Wow. Right on, right. All right, guys. Well, listen, Michael, thank you so, so much. We really appreciate it. Lots of great information.

And you guys can find Michael on Bigger Pockets. or definitely hit him up on the show notes of the podcast with any questions at BiggerPockets.com slash show 138. Michael, thanks so much for coming on. All right, thanks, guys. Thanks, guys. That was Michael Rogers on self-storage investing, SEO, value investing, burr, and all sorts of other stuff. So big thanks to Michael for coming on.

That was cool. You're going to go buy some units now? I'm going to go buy some storage units right now, like today. At least what minimum, what I got out of that was, I want to just go and like, you know, I said I want to go find out the storage unit in my area like people. What I want to do is I want to do what he did. He said, he asked him if they just wanted to go to coffee. Like I would love to just connect with three, four of the guys or girls that are owning storage units in my area and just meet with them. I don't even know who they are. I think that's a good first step. I think, you know, and I think that's a great actionable step for anyone who's still listening to the show, which is if you are not on a regular basis making it a habit to go out and.

have coffee with other investors in your area, you should do that. Stop what you're doing. When you're done listening, get out there, find some people that are investors in your area and make sure to meet them because there's so much you can learn. A lot of people are freaked out about competitors. Well, you know, these people are your competitors, but they're also going to be your collaborators. So get out there and meet people. There you go. I love it. Awesome. Awesome. Well, cool, man. It's good to be back. Again, feels fresh, feels good to to be back behind the microphone.

Yeah, look at you. Fancy California tan and everything. Look at that. All shiny, and I don't even have a shiner. Yeah, yeah, yeah. You're not cool like me. Yeah, well, all right. All right, guys. Well, thanks for listening. Show 138, and you can check out the show notes

at biggerpockets.com slash 138. And we will see you next week on the new bigger pockets. podcast. Thanks for listening. I'm Josh Dorkin. Sign it off. You're listening to Bigger Pockets Radio, simplifying real estate for investors large and small. If you're here looking to learn about real estate investing without all the hype, you're in the right place. Be sure to join the millions of others who have benefited from BiggerPockets.com. Your home for real estate investing online.

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