In the 60th episode of Cash Flow Pro, we talk with Scott Meyers, founder, and CEO of Self Storage Investing. Scott began his real estate career purchasing single-family homes until he realized he did not want to deal with the hassle of property...
In the 60th episode of Cash Flow Pro, we talk with Scott Meyers, founder, and CEO of Self Storage Investing. Scott began his real estate career purchasing single-family homes until he realized he did not want to deal with the hassle of property management. Today, he and his team have created more than two million square feet of storage portfolio.
Self Storage Investing's sole goal is to provide tools to self-storage investors that will allow them to achieve financial freedom. The company has products, events, and coaching programs to help investors learn about self-storage real estate.
In this episode, we discuss:
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Casey Brown 0:06
Hey there, and welcome to today's episode of cash flow Pro, your daily real estate investing podcast and YouTube channel. I'm here today with Scott Myers of self storage investing. And Scott and I were talking just a few minutes ago, and we actually had to up his numbers that he originally reported to us as what he has under management and currently has going on. He has 2.5 million square feet and over 15,000 units of self storage under I'm assuming under syndication ownership of some kind, and or at least, to some degree involved in so 2.5 million square feet of self storage space is absolutely mind boggling to me somebody that's that's looking from, from the outside in saying, you know, some of some of us think that that self storage stuff is kind of like self managing, I guess, in a way, but that's got to be a lot. So anyway, Scott, how are you doing today? Sir?
Unknown Speaker 1:13
I am doing fantastic. Casey, good to be here.
Casey Brown 1:16
Absolutely. Well, we're certainly glad to have you. And hopefully you can bring some value to our listeners. And hopefully we can get dig down through there and figure out what you got going on. And then potentially, if there's somebody out there looking to invest in self storage, or somebody out there looking to maybe get a little education from you, hopefully we can answer those questions. So once you start by telling us a little bit about yourself and how you got started in real estate.
Unknown Speaker 1:40
Sure. Well, Casey, like most folks to get started in real estate, it usually starts with one house. And that was my first and that was the one that I purchased and lived in. And then shortly after that, I took out a home equity loan and bought another house and follow the oh my gosh, we're going way back now Carlton sheets home study program, I got rental real estate in 93. And that was the first rental house that I bought shortly after my my personal residence, and then we rehabbed it, refinanced it, rented it out. So the burr method before became, you know, coined the burr method. Yeah, and we bought two more houses. And we had at that time, there, were still some assumable VA mortgages around. So why credit and that was able to grow and scale in buying a lot of single family houses using these VA mortgages in the beginning. And that that morphed into approximate approximately 75 Single Family rentals that we had at one time, and then we got into apartments, just thinking economies of scale would, you know, help with the management issues, challenges, and then, you know, with the cash flow when, you know, new roofs needed to be replaced, and you know, all the capital expenditures. And so once we get into the apartment side of the business, then I realized that all they did was just kind of magnify the challenges that we had. And we really didn't like the tenant toilet business, we just thought that it was a natural progression and a means to an end. But you know, if you're gonna be in rental real estate, there's not much else out there, and tenants and toilets, it's parking lots or storage. And yeah, you can't build a lot of value in parking lots. And so that's when I took a hard look at self storage, and went to the trade show and realized there wasn't really anybody teaching about this business. So I asked around, pumped around there as much as I could and got into our first project with a partner did extremely well and saw the light in the industry. And the rest, as they say is history. I love all my apartments and all the houses, and then move forward without a partner for several years buying several facilities until we recognize that you run out of cash at some point, right, Casey? Hmm, yeah, you realize, and we all do and, and at that point, we need to bring on some partners and some folks that want to be partners with us and have a little bit of money. And so that's when we got really good at syndicating. And, and the business took off. After that we had a very robust pipeline, and we're developing properties and have been developing properties for a number of years still acquire, we do conversions, and a lot of joint ventures, syndication. And really all things in between. The only thing we don't do is wholesale out. We do some joint ventures, but we usually don't give up anything that we find. Sure. And we have a lot of folks that bring deals to us just because we've been we have an education business as well. We've been teaching people about the business for a number of years too. And that brings us opportunities and deal flow. So sure, sure. If you type in Scott Myers and Google Scott Myers and self storage, you see that we we got a lot of stuff going on out there in the marketplace right now.
Casey Brown 4:28
Absolutely. Now I want to before I always get something and and a lot of times my listeners or people on YouTube watching will see me go like this, like I want to ask a question but always want to wait and be mindful of to finish what you're saying. But you mentioned the word convergence. Now I know that I know that self storage. Basically everything that we look at and see is new builds and so on, but we dive into conversions there just a little bit and what maybe what that looks like
Unknown Speaker 4:58
yeah, you know, Casey, that's that's probably are frightened that probably it is it's our favorite strategy. And that's because you know, you build value, we're nothing but value add investors and I think most investors are and so the most value you build in self storage is when you start with a piece of dirt, and then you build a facility from the ground up, and then you put a building on that dirt, and then you put an income stream on it. Problem is it takes, you know, maybe a year or more to get entitlement a year to build it. And then you know, two, three years before it begins to cashflow here, with a conversion project, we you know, we really get to circumvent a lot of that upfront work because something's already in place, or else, it's a variance, it's a vacant building. So the shell is built, you know, even if we had to replace a roof, put a new elevator in it and new lighting and then do the conversions of walls and doors, you know, we're talking in and out and eight or nine months from that standpoint, so we cut down the development process significantly. And then also, we're typically buying these things on the cheap, you know, they're they're out of service out of commission, Walmart's or grocery stores or some other type of industrial buildings, you name it. And so we get to buy it for less than we could actually build, you know, that portion of the building for so we get it for call it pennies on the dollar, but less than it would cost to construct it, we convert it and get it to market a little bit faster than Well, quite a bit faster than if we were to build it from the ground up. So for those reasons, that's why we love conversions. That's my favorite model. And plus, it's fun. I'm just I'm a junker. I don't know about you, but I like to find stuff and repurpose it and be able to put it back out there as a different asset class and rent it out. So we'd like that. And
Casey Brown 6:29
so it creates, I'm assuming it creates like a like a air conditioned, heated or climate controlled type scenario. All indoors?
Unknown Speaker 6:39
Correct? Correct. Yep. Yep. All temperature controlled. We sent him between 55 and 85. And so hopefully, we got to go to heating and air system. If not, then we just build that into the budget. And then by the time we're done, even if it started as an ugly building, what we ended up with is a class a climate controlled self storage facility.
Casey Brown 6:54
And do you go up with the roofline? I'm assuming
Unknown Speaker 6:57
we don't. But what we have the ability to do is to put a mezzanine in so some of these warehouses that are you know, 2530 foot clear, we can put a mezzanine in there and build that out, put an elevator in and now we've just doubled the square footage if it was just a tall warehouse.
Casey Brown 7:12
Yeah, yeah. So you're basically getting two floors. And, and, and wow, okay. And that's interesting. Because, I guess a lot of times when I see when I see self sorcerer, you're and you're talking like they come out class. So they so they might go in a class C warehouse type structure would come out a Class A self storage structure, and then you can almost bet that if they're an old Walmart or an old, old store like that, that the location is probably 30
Unknown Speaker 7:43
are correct. Yep, a lot of are not necessarily customers don't drive by and say, Hey, I think I need some storage and stop in, you know, like a store. But when they need it, and they look on their phone, or if they happen to look on their laptop, and then they recognize where it's at. It's in their path of travel that is close to the residence, it's close to the neighborhoods. And so, yeah, people don't want to travel usually more than a couple of miles to get to their stuff. And so if we're in the middle of the residential neighborhoods, you know, we do our feasibility studies and look at the the saturation and the density of storage and do our homework first. But yeah, typically, these are what we call infill locations, where they used to be grocery store, and everything's built out, which means that, you know, most everything has already been approved for storage, and nothing else is at this point, or they can build, but if we can convert a building, then we meet, we may be able to add storage into a market that is under saturated or in need of more storage, high demand. Sure,
Casey Brown 8:36
sure, man, that's great. I mean, that's, that's, that's one of those things that just, I guess it's kind of a deal by deal scenario where you where, you know, some deals are really, really, really good. And some deals are like anything else, I guess they're marginal, maybe they want too much, maybe the location is not the greatest, maybe it's located in an industrial park. And it's just not gonna work for self storage. But, you know, that's, that's pretty interesting. So one of the things that I think has really been getting big in the Self Storage businesses, the is the self service, I guess, if you will, like, like, you walk up, you walk them through a kiosk kind of scenario, and you put your card in and then and then anybody that assigns you, is any of that kind of coming around, or do you all have man facility?
Unknown Speaker 9:21
Yeah, yeah, we've got a little bit of both. And you know, that that that transaction, Casey is a very low labor intensive transaction. It doesn't require a lot. It's not a lot more difficult or more steps than going in renting at a Redbox, you know, video rental. Yeah, people are renting those just about everything streamed now, but you get the idea. We've had, you know, ATMs and that type of self service at grocery stores and ATMs and you know, in multiple areas of our society and economy for years now. And self storage is really no different so that when somebody does need a unit, yeah, they're gonna find it on their phone. And many times they don't, they can drive over to our site, they can complete the transaction And even if the office is open, and there's somebody at the desk, we have the ability for them to be able to complete the transaction and to be able to rent a unit on their phone. And then given a gate code, as well as a code to the lock that is already located onto the unit in the back. So we do have manned and unmanned facilities. And there's a place for both. We'd like to have people on site on site managers and our larger facilities that have a lot of activity. And if they do, and it's a larger facility, then we want to have U haul rentals. And we want to have these other ancillary income streams, you know, selling boxes and moving supplies and having, you know, kind of a retail shop, having eBay services and pack and ship services, you know, there's a number of different ancillary income streams that we can have within that self storage facility that requires, you know, a couple of hours, a few minutes a day, a couple hours a week, to have a manager on site to be able to, you know, boost the income of that facility, and sometimes offset completely, or at least a little bit. The manager salary of being on site and helping customers.
Casey Brown 10:58
Sure. Now, these ancillary income streams that you're talking about, I heard you mentioned the word eBay, package ship and things like that. Now, do you currently have something like that? Is that is that a model? Like? Like, how does? How does that fit in because obviously, you've you've probably got bay doors where some of those trucks can get unloaded, and so on, so forth. But, but how that just almost seems like it's kind of, it's kind of getting outside of the thought process of selling locks and keys and, and dollies and blankets and that kind of stuff.
Unknown Speaker 11:34
Yeah, it is, to a degree. And so if our office hours are Monday through Saturday, and you know, anywhere from 830, or nine until five or so, it's really a service that is for the clients, I mean, we open it up, and we advertise it on our website, it's open to the community, if somebody wants to sell stuff, you know, they drop off a pile, and we'll sell it for them. And we take a cut of that entrance fee and a percentage, there's a number of folks that are running Amazon drop ship businesses and eBay businesses within the Self Storage Facility. So you know, this is this is the least expensive warehousing space they can get, and you can't find any other smaller warehouses,
Casey Brown 12:09
I think that's kind of an intermediary between running a massive warehouse and storing it in your, in your shed at home.
Unknown Speaker 12:15
100% Yep, so when the spouse says get rid of this stuff, your business has outgrown our home, then it goes to self storage. And that's, that's where we fit that, that need and that gap, fill that gap. And so what happens many times is their business takes off. And before they can hire somebody else, they got a lot of stuff that's waiting to be to be sold off. So we'll either sell it, or we can also pack it and ship it for a fee as well. And it takes up just a small area in our already, you know, the office that is already built, and where we have, you know, a retail location already built out with Box boxes and moving supplies. So, you know, they merely move down the counter when they're done helping a customer because there's no sense of urgency to get these out. I mean, at least not within that minute. And by the end of the day, you know, they go package anything up, ship it out, and then they we build back our clients, whether they walk in off the street, or whether it is somebody that is already running and storing their eBay or Amazon items inside the warehouse.
Casey Brown 13:06
Wow, wow, that's this, this conversation just went a direction that I really wasn't wasn't anticipating not even close to anticipating. Because the the repurpose model of, or the rehab model or the renovation model, whatever you want to call it, uh, for the Self Storage from, I mean, that just that that opens up so many doors, that it's just, it's unbelievable. Now, so And like you said, I guess the goal is the ultimate goal or the the beginning goal is to offset the manager salary. So now you've got somebody that's on site that's managing the property that's really not costing you anything to employ that person. And then of course, you're picking through people's goods and, and so on. And now I'd like a little bit of insight on of course, everybody, I guess everybody, probably not everybody but has seen the Storage Wars on on TV. Does that is that really kind of the way this goes as far as obviously, I know not every storage building you open up has a has a world war two battleship, and that's worth millions and billions of dollars. But is that really the way that works? And then is is have you ever found anything valuable in any of those units?
Unknown Speaker 14:25
Yeah, well, to answer your first question, the the process that you're seeing on TV is, you know, largely what is in place in practice. So there's what we call the beauty of self storage is that in comparison to habitational real estate, whereas, you know, in houses and apartments, we go through the eviction process. Yeah. And so storage, we go through the lien process. It's a warehouse, and it's self storage. So we don't take what's called bailment. And we don't take care and responsibility, what's inside. And so for that reason, that allows us to then go through this process, the lien process, and it's different in every state, but it's almost identical Casey in every state. Sure. That is we Send out a certified letter, letting it go instead of just a regular letter and emailing them, no, they're late on day six, then we send out a certified letter letting them know that, hey, we have the right to cut the lock off and open to see if there's anything dangerous in here. And then if you haven't paid within 90 days, we're going to auction your unit off. Prior to auctioning the unit off, we send another certified letter out and letting him know, hey, you haven't paid, we're coming up on the day 75. And we're going to auction this unit off in two weeks and advertise so you better come in and pay your background late fees. And so at that point, if we haven't heard from him, we have the right by law to then hold an auction, cut the lock, open the unit and what you see on TV, as you'll see people ever going inside, right? They can't, because then if they breach the threshold, which is a legal term, then all of a sudden, we've we've breached our contract of calling it self storage and created a bailment meaning responsibility. So they just get to look around. And, you know, you've seen on the shows, and we've seen it now because of the shows and our facilities, you know, people are bringing little ladders to bring in night vision, every angle, like again, like, Oh, they're doing everything. Yeah, it's just crazy. And then blocking people out as much as they can. It's nutty. So the shows are good for entertainment. And they'd be good for those of us in the industry because it brings more folks
Casey Brown 16:08
out. So when you open the when you cut the lock off, check to see if there's anything dangerous in there, nobody goes in, they just open it up and just cry.
Unknown Speaker 16:16
Yeah, so we'll do that ahead of time, we have the right with a cut lock notice to cut it open and cut the lock off and open it up to see, you know, hey, is there anything nefarious in here? Are there any live boa constrictors that got out of their tank or anything? Just yeah, that would be you know, we just don't want anything to happen or have any surprises, you know, to date, we haven't really had any surprises, every you know, it hasn't ever happened, like I'm limited our facilities. But every once in a while you will find some drugs in in a unit, you know, not full blown meth labs because we don't have plumbing or anything like that. But you know, just some stuff that you might open up the door, or you'll immediately shut it again and move on to the next. So we just want to make sure that none of that we're not surprised by any of that.
Casey Brown 16:56
Yeah. Has there ever been anything valuable found in any of your units?
Unknown Speaker 17:00
Your second question? You know, I don't attend a whole lot of auctions these days, you know, back 15 years ago, 16 years ago, when I got into business, you know, we do it for fun, and we do it just to learn, you know, make sure that the process is being carried out properly. We saw there was a there was a gentleman who had a an antique racing bicycle collection and one that went for a whole lot of money. And there's another one where we live in Indianapolis and one of our facilities is near Brownsburg, which is the MHRA, capital of the world. All the Rage shops for an HRA drag racing are located over in Brownsburg, Indiana, there were some overflow. And so one of them opened up and there's engine box and car parts and fiberglass and all kinds of racing stuff. And I was really excited about that. But then the guy that the company that actually owned it attended the option, they bought it back on air, but they bought it back. So they do
Casey Brown 17:49
the profit over and above what so the unit, let's say that you open it up and there is there is the original Dukes of Hazzard car in there. For everybody sees it, it's right there. And this brings $100,000 But the storage Bill was only, let's say 3500. What are you all the does the profit go to the company.
Unknown Speaker 18:14
Now, unfortunately, it does not sell well, we cannot make money off an auction. So anything that goes over what was owed in back rent and late fees, goes back to the last known net by certified mail, I'm back to the last name and address of the person that rented the unit. If it comes back to us at that point, we still then have to, to the state and it goes to it is you know the the estate fund unclaimed funds or something that's exactly right. So that if anybody in the IRS or even in the family comes back, however, one attorney, not my attorney, but one attorney told me Casey that as an owner, you have the right first of all to bid on a unit if you want. So you have the right to bid on the generally a replica or the original of and if you set the time of the auction, because you own the facility, you could schedule that auction for two o'clock and publish it in the newspaper. And then have your auction at 2am. And you're the only bidder and you won the generally for 10 bucks. Wow. Okay, yeah. I wouldn't suggest to recommend that in practice. But, you know, when attorney is, you know, stated that this possibly could be done. But yeah, we wouldn't test it.
Casey Brown 19:24
That's not a viable scalable business model by any means.
Unknown Speaker 19:27
Not Not that it's not that way. No, it's not
Casey Brown 19:30
awesome. Wow. All right. So let's talk a little bit now let's get back to the to the to the guts of what what we like to talk about here and that syndication. So when you you mentioned that there was a certain point where you were like, Hey, I'm out of cash I'm I'm one buying I just I can't the bank is you know, amount of cash amount of equity that that can be tied up. What did that look like when you first started investigating that pardon?
Unknown Speaker 19:54
Yeah, so we we have really good lending relationships and are accredited, squeaky clean and we are bankable. But you know, eventually you run out of cash and you get down payments. So if I'm getting 75 80%, LTV loans, you know, you run out of cash at some point. And so you know, the time when I learned that I needed to syndicate is when we cranked up our marketing machine and add more deals, and I had cash to be able to put forth on top of a loan to be able to buy and so that was back in 2000. Oh, I guess I think about four or so. And so it's at that point that we began looking into the syndication model didn't want to get into a fund I didn't, that made me a little nervous of raising a whole lot of capital and then having to deploy it. I think that sometimes forces people to make bad decisions just to cover the cost of distributions. And so you know, we've we've always gone the route of individual single assets, single entity syndications reg D, 506, B's 506 C's, and we're raising anywhere from 2 million up to 5 million for these, you know, 5 million to $15 million dollar self storage facilities. And then they'll often in five years, preferred return on some not on all and offering an IRR. That is, I'd say competitive in the marketplace. But our goal has always been to be above what most others are offering in terms of our returns, because we want to raise the capital quick and move on to the next project and raise your capital all over again. So sure, sure how we started and how we got into and why we got into the syndicators out of the business.
Casey Brown 21:17
Did you start with a 506? B the first time?
Unknown Speaker 21:20
That is correct. That is correct. We start with a forensics, correct friends and family, we did that for the first probably I'd say two or three. And then we recognize that we can only go so far, even though we had a wide network with my education company. And we were writing articles for inside Self Storage magazine, and I was speaking for them. And so our name was out there. But we still didn't have what I felt was a deep enough list to be able to take down all the properties that we were finding and wanted to close on. So we went through a 506 C and then begin as soon as we could with the jobs act on me and to send that out there so that we could Yeah.
Casey Brown 21:52
Now how many? How many self storage buildings? We've got what you currently own. But obviously some have probably gone full cycle and then sold, how many? How many deals would you say you've done since you started?
Unknown Speaker 22:06
I think we're approaching 50. Now, in total that we've purchased and exited, and some smaller ones in the in the beginning, you know, anywhere from a million to 4 million or so. And then what we've been doing recently is, you know, about three to four times that so larger development projects, buying some portfolios or buying or selling a $20 million portfolio selling another $44 million portfolio when we've got others behind that. So the deals are getting the deals or I guess a little bit fewer, although about the same level, but much higher and more
Casey Brown 22:39
retired. Now, one thing that's been really popular here, I want to say lately, but it's probably been more popular than I guess I realized before I started really digging into the Self Storage space is is a lot of these folks like to buy Self Storage complexes that have adjoining properties, or have adjoining land to be able to add on to is that obviously that's probably part of your model as well, is that is that something you find a lot of or is that pretty rare?
Unknown Speaker 23:12
100% It's been part of the model. And that's, that's our favorite. Because if you buy if you're buying commercial real estate, as we all know, you buy it for the net operating income that's in place and bare dirt doesn't generate income. So yeah, you know, we can give some value to that. But at some point, if the cap rate gets too low, and the debt service coverage ratio isn't there, the bank won't finance it, and the seller won't be able to sell it because not everybody is going to pay cash for that. So from day one, anytime that we find, you know, a four or five acre facility that only has buildings on three or four acres, and we've got that extra acre or so. Or if we've identified I think, as you mentioned, Casey, you know, if there's an adjoining piece of property that may not be owned by that, that same owner, that we think that we can take down or we'll have a conversation within the meantime or even in the future, then absolutely, that's the most attractive because that is the best way. The greatest way to increase value is put up another buildings and put another income stream on the existing land or some that's buy it. And in some instances, we'll be able to do that down the road. And we just call it an annex site. And so they can rent at that office at that main site, but then they're gonna drive quarter mile down the road. You can see the facility from here, sir or ma'am. And that's where you're locating them if another two or 300. You found there. Yep, exactly. So a driver and a pitching wedge away.
Casey Brown 24:24
Yeah. And then and then. And then on top of that, that also, if you have an onsite manager, it allows you to spread that love even further.
Unknown Speaker 24:32
100% marketing dollars, payroll dollars, all of the above. Yep,
Casey Brown 24:37
yep. All right. So we've got pretty much everything down and the quick math in my head tells me that you all do a deal roughly every four months or so. If you were to average it out over the last 18 years. Is each one of those deals if that's about right, isn't it? That's pretty average.
Unknown Speaker 24:56
That's the average we got nine deals in the pipeline right now. They're going to close in the next 60 days. So that blows the averages out a little bit.
Casey Brown 25:02
Yep. Is do you have a you said each deal? is a separate syndication separate deal separate investors or possibly same investors from another deal. But do you prepare all the operating agreements and all of the PPM and everything each different for every deal? Or are they basic? Do they basically all stay the same? And you just maybe like, rinse and repeat?
Unknown Speaker 25:27
Yeah, so let me let me back up. So those properties that we're buying the nine that we do have a fun, we've done mostly single asset, single entity syndication, and we still do those. But we also have a $25 million dollar fund, which we're filling up as we speak right now. And we're gonna go take down about 13 to 18 facilities, so roughly about $80 million with the properties. And so those are, we've got a lot of properties that are coming into the fund and we still do some one off syndications. Then to answer your question, and we've had to, to, you know, over the years, to primary SEC offices, law offices that have created RPMs, and our syndications and the operating agreements are very, very similar. So, you know, there's a reason why they're so thick. And that's because of, you know, what, what folks have run into our marketplace that may get them dinged up a little bit. And so ours are no different. And we add some safeguards in there for ourselves and for our investors, and yet to handle what ifs with, you know, partner disputes, or if things go south, or if there's a, you know, a zombie apocalypse, you know, what are the steps that we take to make sure that the investors money are secured and safe and mitigate the downside. So we've, there's quite a bit that we've learned over the years, even though it's, you know, syndication of the model has been around forever. And we've been doing this for a number of years, you know, we still continue to add
Unknown Speaker 26:42
Sure, there's always new, there's always new problems,
Unknown Speaker 26:46
correct? Yep. All the time. And on paper, it just makes life a lot smoother. So sure. So to answer your question, yes, it's a tried and true battle tested operating agreement that looks roughly the same throughout and then our, our list of our limited partners that we send these out to when we hold a webinar, they're used to seeing roughly the same returns in terms of a development project and a conversion, which is basically the same, it has a little higher IRR, because it's a little riskier, and the preferred return maybe a little bit higher, and the equity multiple, same thing just will fall in line with that versus a value add something that's already built, it's, you know, 60%, occupied and rents are below the market, it's not a heavy lift to get that thing up to stabilization, and still get a 2x return on it, you know, take a shorter timeframe. And so for that, it's a little safer deal. So our returns are a little bit lower on that. So kind of two flavors that are that our list is used to seeing in terms of, you know, the offering itself. And then again, the operating agreement, no surprises there.
Casey Brown 27:43
Now, what you mentioned the list a couple of different times, and I know there's a lot of listeners out there that are that are currently working on building their list. Now, when were at what number? Do you feel like at what number of people on that list? Do you feel like things really started to get greased? Like, like, was it 500? Was it 1000? Was it 5000? What is the is there a secret number to that you think?
Unknown Speaker 28:11
I think there's a secret number, it's the active investors and and that's going to be different for everybody. So you know, as your build our list. And certainly there's there's a whole lot of folks Pacey that come to our website, and they put in their email address, and you know, so they're on our list, so to say are in our database, you know, and that they may attend a few webinars or they'll grab our information or education information and show up but they never do anything. So whether you got a list of 10,000, or a list of 3000, I think if you got 500 active investors and you're doing a decent amount of activity, you know, 134 deals a quarter, you know that that that usually will suffice just depending on the size of the deal and what you're looking to do. But yeah, we measure it more on those active and engaged investors. And so the folks that you know, will diversify and invest in multiple projects, and then of course, those that we've exited, and we've done very well, in terms of returns for them, they come back over and over again. And we've made a whole lot of money. So they usually invest a whole lot more money on back.
Casey Brown 29:05
Yeah, well, why wouldn't they, I mean, if you if they're in it to make money, and they're, they're a doctor that's got other interests that doesn't want to see after the money or see after the acids specifically, it would make no sense not to come back, especially if you've routinely made it your breath. You've came in make good splits, and so on and so forth. It just wouldn't make any sense. I think a lot of people get get greedy that that that's probably the number one thing that I've see is that people it's not the fact that you're not making money, but it's the fact that they start thinking about what somebody else has made. Does that make sense? And that's and that's the partners that I don't even want in my deals because it's like, Hey, man, we're doing all this work and we're putting everything together. So we want you to be we would definitely want to our investors make money. But you know, then when they start questioning, well, how come you made this and I you know, that's when it's so well one thing that I really thought through In the Self Storage business, and I like to give you my take on things, at least from an outsider's perspective, and then see what you thought. But so so this was the way I saw this going down. In my mind anyway, we had quite a bit of stimulus money to be poured into the economy, whether it was through small business loans or whether it was through actual money handed to consumers, and so on, so forth. And this is this was my thought, they people, people got their $1,200 or 50, whatever it was, and they took that money, and they went and bought stuff. Okay. And this country has a stuff in my opinion problem. Nobody ever wants to get rid of any
Unknown Speaker 30:41
union, my friend, that's what's that? I said, it's your opinion, my friend. That's a fact. Yeah.
Casey Brown 30:47
And so the only place to put that said stuff, and is in a self storage building. And people and myself included, my wife included, let me let me back up on myself, my wife included, has no problem paying 75 a month. So that's $850 a year, she has no problem not even thinking about paying $850 for a year's worth of storage for goods that at most are worth 500. And I'm talking about two or three years worth of storage for goods that are worth at most 500 If we were to set them out in the parking lot, and leave and give them to whoever walked by, we will be money ahead. Now is that does do you think that that kind of holds true? And it's like a mental thing or what?
Unknown Speaker 31:37
Yeah, well, let me say this. Casey, when you go home tonight on behalf of the industry, would you thank your wife personally for the money question. Yeah, so here's, it is human, it's all it's all about human nature. And it's been shifting, there's, there's been a lot that is driving demand for self storage. I mean, ultimately, we just run out of space for stuff. And, you know, the the in 2008 and 2009, when we came out of that recession, you know, average home size prior to the recession was 2200 square feet. post recession, we still have hovered right around just below 2000. So 1983, I think is the number that I saw in 1983 square feet. So, you know, we've got where we have smaller houses, our demand, you know, to your point, we have an insatiable demand for stuff, you know, we are the consumer economy of the world. And you know, we have a lot of marketing dollars that are behind all of the consumer products that will tell you, you'll be happier if you buy their stuff. And we do it, because we're brainwashed, and then we've run out of room for that stuff, then, yeah, either you know, the spouse, your wife will say, hang on and take all your crap, and I'm gonna put it in storage, or I rented you a unit, you're gonna take all your crap and put it in the garage. And that is, and we joke and laugh about that. But that is in terms of demographics, it is typically the mom and the household in in a in a husband wife or, you know, partners household, that's usually what it looks like. And so that that is a part of the demand, baby boomers, they're getting older, the kids move out of the house, they downsize, but there's still a lot of stuff that they you know, won't store in the air that won't fit in the new house didn't want to get rid of it. And then they downsize again, when they go into assisted living. And then when they pass on, when we settle the estate, you know, the kids divvy up the stuff by way of a will or whatever, there's still stuff that the kids can't fit in their house, and they won't get rid of it. Because it's sentimental reason, resources. They just don't have room for this new stuff. So they put in story. Yeah, and many times the decision is, well, we'll put it there until we figure out what to do with it. And then you never figure out what to do with it and their card. And you know, you see it, but it's just like, what are you gonna do? You're gonna, you know, it's like a tax, you're like, wow, it's easier to let it ride, you know, and figure it out. It's month, figured out next month, and yeah, three, four or five years and $5,000 down the road before you realize, yeah, I probably really shouldn't be rid of this stuff.
Casey Brown 34:00
Yep, yep. Well, good deal. Well, listen, Scott, I want to first of all, I want to start by thanking you for being on our episode today. And I can tell you that that if there's if there's one thing you know, you know, self storage, and you know, very, very, very well, especially and I love the fact that you reference research into people's home sizes and things like that, because ultimately, at the end of the day, all of that feeds to what you're doing. So I'm going to ask you a couple of questions we ask every guest that comes on there. They're really easy, and there's no right or wrong answer. But the first question is, what is the best book that you have recently read or currently reading?
Unknown Speaker 34:41
Yeah, you know, I go back to traction by Gina Whitman. I'm sure many people have mentioned this. And then the entrepreneur operating system. That's how we run our business. And, you know, that was a game changer. It's the book that I give out the most as well. And, yeah, we continue to go back to it over and over again,
Casey Brown 34:55
traction. Awesome. That's, that's That's great. All right. What is the best, what is the dream vacation that you have either taken or hoped to take?
Unknown Speaker 35:06
Yeah, the bucket list is to get to the Formula One race in Monaco. And oh, wow, that's going to happen the next couple of years. So that's, that's the vacation. That's the trip that's top of the bucket list.
Casey Brown 35:16
My wife and I were in Monaco, back about six or eight months ago, there wasn't a race COVID was still a very alive and well, at the time, but we were there. And I'll tell you what, I mean, just a just a lifestyle and a place like absolutely no other.
Unknown Speaker 35:38
I'm MBs. And let me also say I have no desire to you know, walk around thinking, Oh, I wish I could or what have you. It's just it's one of those magical places that you just got to go visit to see it. Not that I desire
Casey Brown 35:50
it, you know, and I have to put your eyes on it. Because if there's like nothing, it was like nothing else. We actually stayed in a little town called cap dial, which is right to the I think is right to the south of Monaco just I mean, like 200 yards from the border. So anyway, very, very neat place. And very, you know, but
Unknown Speaker 36:09
before I go, so I'll be hitting you up for that.
Casey Brown 36:11
Absolutely man, you call anytime be glad to help. So real quick, I would like for you, I know that you have that you said you have this fund either launched or coming. And obviously you are the Self Storage guy and we have your website as self storage investing.com. But if somebody won't hurt something they want to reach out to you and speak to you with or maybe hook up in one of your programs or something like that. What's the best way for somebody to do that?
Unknown Speaker 36:37
Yeah, you know, still go to self storage investing.com We got a lot of free resources to learn about the business and our contact information is on there. And then we're on all the socials mostly as the storage guy or self storage guy on Twitter. We've got a YouTube channel out there as well, LinkedIn, you'll find me I'm out there on all the socials and pretty active in DM. So if there's anything I can do to help out or any way that you want to work with us, send me a DM in any any way or any of those fashions you want to
Casey Brown 37:03
awesome. Scott, thank you so much for your time. I can't thank you enough for coming on here and helping our guests to learn more about self storage, investing. And again, maybe listeners if you heard something that Scott said that resonated with you or something you'd like to learn more about, more about his fun more about his business more about his company, reach out to him, he told you right there how to do it. And again, thanks for listening, Scott. Thank you, sir.
Unknown Speaker 37:24
My pleasure, Casey, we'll see you soon.
Transcribed by https://otter.ai