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Ep 156: Self Storage Investing with Scott Meyers


Rental properties are not the only way to generate a profit from real estate investment. We speak with Scott Meyers, mentor at Self Storage Investing. Scott believes that real estate is the best possible investment, and self-storage is his preferred subcategory. In today’s episode, he tells us why and dives into a comparison of self storage with tenancy. We talk about how the storage landscape has changed during the pandemic, and explore the impact of recessions and economic growth on the storage business. Scott explains why self-storage parallels multifamily investment and tells us why he takes an opportunistic approach to all markets. Next, he tells us how he has benefitted from being in the business for years and having properties in different locations, before outlining some of the mistakes people make when doing due diligence. Scott informs us of self-storage’s loan to fault and loan loss rates and how they compare with other commercial asset classes and shares how he does value-adds in self-storage, the advantages of online accessibility, and why the zoning and permitting processes vary among cities. We dive into zoning, permitting, and personnel, and touch on navigating competition. Lastly, we discuss the slow death of retail and how this has impacted self-storage before talking about investing in new versus used storage facilities. We hope you join us for an action-packed episode today!



Key Points From This Episode:

  • Rent and population growth in Jacksonville, California.

  • An introduction to our guest, Scott Meyers.

  • Why real estate is the best investment, period.

  • How Scott discovered self-storage.

  • The benefits of self-storage over tenancy.

  • How the storage landscape has changed during the pandemic.

  • How recessions and economic growth affect the storage business.

  • Why self-storage parallels multifamily.

  • The opportunistic approach to looking at all markets.

  • The benefit of being in the business for years and having properties in different locations.

  • Due diligence mistakes: no due diligence, letting the excitement of a deal get in the way, trusting an appraisal.

  • Why a broker’s numbers are only as good as the numbers they get from the seller.

  • Self-storage’s loan to fault and loan loss rate, which is low among commercial asset classes.

  • How to do a value-add in self-storage: look for the mismanaged facilities, increasing rent and reducing expenses.

  • Online accessibility of unit rentals.

  • Why the zoning and permitting process varies between cities.

  • The role of personnel and which facilities can run unmanned.

  • Why you should wait for competitors to reach equilibrium.

  • The death of retail and how this has impacted self-storage.

  • New versus used construction and how this business model benefits Scott’s business.


Tweetables:

“I’m 100 percent in the self-storage business but did not start out that way, like many folks, when I got into real estate.” — @selfstorageguy [0:04:44]

“If I don’t like tenants and toilets, then that leaves me with parking lots and self-storage. I began to look into self-storage because you can’t really build a lot of value into parking lots. The more I looked into the business model, the more I liked what I saw.” — @selfstorageguy [0:06:15] “We’ve had the ability to rent units on a cellphone for years now. The technology has been in place. You don’t have to come into contact with an individual to rent a unit. We [were] touchless before it was cool to be touchless.” — @selfstorageguy [0:11:20] “We don’t celebrate recessions and we certainly don’t celebrate a pandemic, but we are enjoying the gift that the market has given us during this time.” — @selfstorageguy [0:11:38] “Self-storage really parallels multifamily. When you see multifamily going up, you see a self-storage facility that’s either parallel in the market or going up right behind it.” — @selfstorageguy [0:14:02] “In our position, we’re very fortunate that we’ve been at this for a little while, so we have facilities in many markets. Those are the markets we’re doubling down on, doing more marketing to try to get economies to scale.” — @selfstorageguy [0:17:25] “Self-storage has the lowest loan to fault rate and the lowest loan loss rate of all commercial asset classes.” — @selfstorageguy [0:22:25]

Links Mentioned in Today’s Episode:

Scott Meyers on LinkedIn Scott Meyers on Twitter

Scott Meyers Email

Self Storage Investing


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