He Had No Money for His First Deal: 5 Years Later, He Owns 17 Properties

23:22Tony J. Robinson:Ooh, good one. Okay. I'm going to really try my best to make this simple. I'm not the king of short answers. Okay. So Google Maps, looking for facilities, distressed property. That's where we look. We look on Google Maps. We use a tool called Go Fish that scrapes Google Maps instantly. You can see the mom and pops, and we start calling those owners. There's a skip trace aspect to that. There's other tools out there that skip trace owner information. And then we start reaching out. Real quick, can you explain what skip tracing is? Yeah, of course. Skip tracing basically meaning we go, whether you're using Google Maps, Go Fish, any other tool, you find a mom and pop you like, you're like, okay, it's ugly.

24:12Tony J. Robinson:They have a bad sign. They have no website. there's definitely some value add there. And then we're going to skip trace, meaning we're going to find the owner information. We're going to find out who owns that property. And then we're going to get their contact information. We're going to reach out. Like we talked about earlier, various marketing channels. I read a cinema letter, postcard, a turkey, whatever you want, right? I've heard that's been done before. A phone call. And then we're going to get ahold of those owners. And we're going to then basically figure out what those owners want, what problem they have, and we're going to solve it with an offer, a different creative finance offers, a scenario that we could afford to buy it and they could afford to sell it.

24:55Tony J. Robinson:It's like a win-win offer. It's a negotiation, right? And so if you have people around you, you know, I'm going to drop in here the three most important elements of really my wife and my success. It was always mentorship, partnership, and deal flow. So if you have the deal flow, you're creating yourself, you're looking for deals, you have partners or potential partners, and you have somebody who's already done what you're trying to do. If you can just get a hold of that owner and you have a lead, and then you bring the other people in to potentially help you analyze the opportunity, you don't have to be so overwhelmed and stuck in an analysis paralysis.

25:38Tony J. Robinson:Like I gotta, I can start doing this six months later after I have this massive education. No, literally start finding facilities, get their information and start building rapport with sellers. Cameron, you said you pass on 90 % of deals that come across your desk in like a minute or less. Like walk us through that filter. What, what kills a deal fast and how can we save rookies from drowning and underwriting on deals that aren't even worth starting? So as you know, any asset class you're in, any business you're buying, the underwriting is crucial, right? So you have to get good at it or you have to be comfortable enough with it and you have to have a partner or two that are really good at it, right?

26:14Tony J. Robinson:We know that. That's really important. But before we're going into an underwrite, we're looking at what the property is making versus occupancy versus comparison to the other operators in the area, the other facilities. So what are they making now? And then what can they make in the future? Is their revenue going to go up because they're 60 % occupied and they're doing a bad job running units? Or are they 90 % occupied, but they have their rates are 40 % below market? What is the value add? How does that look? And then what are they asking? is the purchase price they want reflective of their current value and what is that upside we can come up with that pretty quickly we've even you know developed a range offer calculator that we a lot sometimes even on the phone will take a seller their gross revenue monthly or yearly and we'll basically plug in a 35 expense operating expense ratio and offer them a rough seven to nine cap rate off or based on their gross revenue, knowing it's in with striking distance of what we can pay, but it's on the front side.

27:30Tony J. Robinson:What is the value add? Where can we get that revenue to? What does the market look like? And number one, most importantly, that takes a little bit more time is what does the supply of sub storage look like versus the demand? That is literally the most important part, I'd say almost anything, supply, demand, supply, demand. Is there a ton of, is there limited supply of storage, but tons of ton of demand? That's a good market. Cameron, how do you, how do you track demand? I think the supply side is easier to see because you can just open up Google maps and see how many facilities there are and how big they are.

28:06But the demand side, like, you know, in short-term rentals, I can go look at something like in air DNA, and that's going to give me, you know, how many nights you're getting booked. In the long-term rental industry, we can look at population and population growth and job industries and all those things. But how do you, how do you gauge that on the self-storage side?

28:23Tony J. Robinson:So there's, it's called the supply index, and that's really telling you the amount of self-storage in a market per person. Okay. So that's your, that's your square foot per capita. It's one metric. And thankfully there's some great websites, plenty, and more and more every day. You could probably build one in an hour with AI, but it's going to tell you the existing amount of square footage per person in that area. Just a quick example is like, if in that area, there's seven square foot per person of existing storage or less, we're really excited. And that metric is going to shift all the way up to 30, 40 square feet per person in crazy saturated markets.

29:05Tony J. Robinson:That's one, step one. Step two is how full are your competitors? So we're going to get online. We're going to make calls. We're going to see, do people have units available? You go onto a website and everybody has a waiting list. What does it look like? Every facility we call has plenty of availability, or as everybody say, they got one to two units left. What does that look like? So that's a little bit of digging. And then three, going back to the same websites, how much, if any, new supply is being currently permitted or built. Now, Cameron, what about when you're doing the actual underwriting on the deal?

29:41What about the numbers and mostly the expenses? What are some of the common expenses that are maybe different in self-storage than other strategies and that you see are the most common missed expenses when people are underwriting a deal?

29:56Tony J. Robinson:You know, a lot of similarities to single and multifamily, less utilities a lot of the time depends because a lot of times, again, there may not be a bathroom there. There may not be an office or an apartment there. But the two big ones that will catch people off guard the most is property tax and insurance. You got to be really careful. And the property tax nowadays, like it's certain states, it's pretty wild. And, you know, I'm even taking it a step further. I've even learned really when you think you know where property tax is going to go because you talk to a local assessor, I would also probably call a company that actually does property tax consulting, and they have potentially even better understanding of that.

30:40Tony J. Robinson:But that will blindside you and so will insurance, especially if you're in an area that loves tornadoes or hurricanes or anything like that. Those are the two biggest ones. A fun random one would be if you are so excited to buy your first facility in Montana because it's beautiful and you love to ski there, but you didn't underwrite how much snow you're going to have to remove in the winter. That'd be one that'd trick you. Or if you have climate control that's, you know, taking on an absorbent, it's expending an exorbitant amount of electricity or something. I'm laughing when you said snow removal because Ash always jokes at like on one of her first properties, living in Buffalo, New York, she forgot that like it actually snows out there, you know.

31:29It adds up quickly. On the insurance side, Cameron, and this is just for me trying to understand the model, is your insurance like just like traditional insurance where there's the structural insurance for like the walls of your self-storage facility and then the liability? Or are you also to some extent insuring the contents inside of that, like the owners or I guess your tenants, things inside of your self-storage? Or is that solely their responsibility through their own insurance for their own personal contents?

32:00Tony J. Robinson:For the most part, their own responsibility. So going back to what you said, structural liability insurance, there's some overlap sometimes if, say, a tenant loses something in a fire or something, that could be different. but that you know self-storage specifically uh at our facilities we offer tenant protection and that's something that's a third party it's a different insurer and they're going to uh cover the uh the tenants belongings and that's something that they pay monthly for yeah and it's good to know i just wasn't sure if like the the insurance providers would be forced you to keep a certain level of like additional coverage for the stuff inside because obviously that could get expensive no thankfully not yeah but now now what about for the financing piece cameron you mentioned that a of times you're having these conversations directly with the sellers with the owners which definitely gives you more flexibility and how you structure these deals so what what kind of financing have you used across your acquisitions is it mostly traditional bank financing are you going like you know all creative some blend of both like what what financing sacks have you used to take these deals down yeah definitely a little bit of everything we love to get creative love seller carries you know right now if i go to a bank it's probably going to be about 6.75 interest um i have a couple of deals locked up right now one is looking like it's going to be five and a half percent interest the other one's going to be 20 down those are like not amazing terms but they're better than the bank terms right so i'll always go that route if we can uh you need to get even more creative and do like a master lease like a lease to own if a property they want too much but you know the value is going to be there once you know you can give them a very low amount of money down to lease it up and then or to to you're going to lease that and then eventually buy it and then bank as well sba doesn't mean you have to go to a or a live oak it has sba loan or they also have a non-sba product we've gone that way what's neat is the more you play the game the more lender connections you have maybe a a mortgage broker that knows a bunch of lenders you can't even have you don't even have access to right all of the above um the the more you know the better and then also we bought and deal that first deal i mentioned that we bought for about 60 000 each me and my partner we expanded on a few times we have about two million dollars of equity in that deal so we've on numerous occasions take taken second notes off that deal and gone and bought another deal with no money just because of the equity now when you're when you're getting some of these financing options in place, how closely are they looking at you as the individual to say like, Cameron, you know, like, what's your credit score?

34:46What's your DTI? What's your, you know, your job history versus just looking at the asset?

34:51Tony J. Robinson:It depends. It's funny. And in like smaller, like more odd markets, so Guam for being one of them, they really cared more about their performance. They obviously did care about our financials too. I have something under contract in Alaska. I'm flying out there on Monday. They care more about their performance than us, but they're looking at both. And it's a great question because that was the one thing we're talking about getting started here. The beginning of our journey, sometimes it's intimidating because we're like, well, we don't look great on paper. We don't have a lot of money. How in the world are you going to afford a deal?

35:26Tony J. Robinson:You find the partner that's wealthy and they're all over the place. I promise you, Todd, who I met on the BiggerPockets forum that we already talked about. he when I started buying stuff with him my wife and I like holy cow we've hit the jackpot we can now uh we will qualify for any loan because we have a partner that um can can do it for us so you you found the deal you've underwritten it and you've got financing lined up most rookies think most rookies think that's the finish line the camera will tell you that's actually the starting line because storage isn't just the real estate it's also the small business sitting on top of the real estate.

36:06And we'll get into exactly what that means after this quick break. Quick gut check.

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40:21Sign up for your$1 per month trial today at shopify.com slash rookie. Go to shopify.com slash rookie. That's shopify.com slash rookie. All right, welcome back. So we just walked you everything that gets a rookie to closing day on their first storage facility. But Cameron, you've made the point that closing is actually when the real work begins because storage is a business, not just a property. So let's let's talk about what that means. So maybe frame this for someone who's never thought about it this way. Why do you tell rookies that storage is maybe fundamentally a small business layered on top of real estate?

40:55And what does that mean for how they actually need to show up as an owner?

40:59Tony J. Robinson:So our job is to take a business, a storage business that's not operating to its full potential. So we need to take over operations, we need to have a manager that cares, that can rent units and answer phones. We need to have a facility that's clean. It's really fun, CapEx of storage, rubbing it in multifamily, rubbing in the faces of multifamily investors. A lot of times our CapEx is like, all right, paint it, fix the lights, maybe some asphalt, maybe a chip seal, and let's call it a day. It's pretty sweet. So we do need to fix it up. We have to have it clean and tidy, but we have to run the business better than it was being around.

41:47Tony J. Robinson:So streamline everything. There's so many great now storage softwares out there that do kind of everything for you where you're running everything from a self-storage software. It's awesome. And you're renting units automatically online. Those software already have a templated website. So you don't even have to make a website. they do it for you and people can go onto your url they can click rent now that takes their credit card information so you're automating processes you're answering phones seven days a week not five you're you're you're you're knowing how to sell people you know a good product online and you're showing up on a phone and a computer.

42:36Tony J. Robinson:Because nowadays, if you show up on the phone, if my facility shows up on the phone or computer before anybody else's, I win. You pop up first, you win. I think you guys probably find that in Airbnb and everything else too. If you pop up first, you win. So it's a little bit of everything. You just have to operate better than the previous owner. Cameron, what is the tech stack that a rookie investor should have? What are some of these tools to actually operate the software that you would recommend for just getting started that you would need? I would have a skip tracer or two that's going to find owner information if you're going to really start pounding the pavement.

43:14Tony J. Robinson:Again, we like GoFish leads just because it's easy to use and quick. You can also just use Google Maps to find deals, but then you're going to have to, again, skip trace them. um you're going to really i don't know i think that's it a place to keep your leads right an excel sheet uh go fish as a crm but you could find other crms and what audio whatever you want to use you got to organize your leads because you're going to get more leads and then you're going to then you're going to lose the good leads that you forgot about six months ago right it's a game of follow-up and consistency and outreach so organization getting those together but it's kind of neat.

43:52Tony J. Robinson:You don't have to have a lot, right? You have to, that's where you start. Now, as you get your first deal, right, then we're going into operations and you're going to need a management software. And really that's about it. So the tech, as you progress and you evolve your acquisitions in any asset class you do, it's going to be more robust. You're going to use more tools. You're going to use different tools. You're going to experiment. Some tools used to work that don't work now, right? But you can get started with very limited resources. Now, the business muscle that most rookies don't know they need is like the marketing and the revenue management.

44:35Maybe break down, how does a rookie actually fill a half-empty facility and raise rates without maybe losing a bunch of tenants in the process?

44:44Tony J. Robinson:I am fortunate that my ops manager worked for the REITs for 16 years. So some of the best of the best facilities. So I've learned stuff that I thought I knew that I didn't know, or that I thought I was doing right, that I wasn't. Uh, but before that I still had a lot of time because again, I was running stuff myself and going back to what we said earlier, you have to pop up first. So what does that mean? You have to hire somebody or, uh, to help your SEO and write your SEO, your online presence. You have to get Google reviews probably the most important thing you do. You have to get Google reviews.

45:23Tony J. Robinson:You have to show up on the websites, right? On Google Maps before anybody else. You have to look more established. Now the algorithm, everything's going to start pushing you to the top. And then, right? So now maybe you run ads, local ads, Google business ads, whatever it is. Maybe you use third-party websites like the kayak of airline tickets is like the spare foot. spare foot to self storage is like kayak to like travel right um you use something like that that's going to bring you uh leads and then physically you're gonna make the place look better you're gonna put first month free banners on turn the lights on have night lights make it look good maybe promotions right so it's a little bit of a physical presence and you gotta you gotta learn to pop up first on again the phone or the computer you have the ribbon cutting ceremony for under new management absolutely 100 chamber of commerce to come the photo op all that yeah it's pretty amazing you know going back to Shreveport just because now I know that Tony and I have yet another connection but um uh it we this property's rough and yet I'm so excited because it's like the traffic count is nuts we're on such a busy street and i looked at him like okay this thing's rough but like we are going to get bombed with calls and so on something like that especially like turning the lights on and making people feel welcome and we put a couple flags up because we had a big sign you know like it's pretty wild uh so every facility is a little bit different location location location true but i have a few facilities that have a horrible location physically that you would never drive by unless you're lost.

47:09Tony J. Robinson:But on the Google Maps, it actually looks like we're right in town. So it's kind of ironic. But anyway. Well, Cameron, thank you so much for joining us today on Real Estate Rookie. Where can somebody reach out to you to find out more information about investing in self-storage? Yeah. We love to help people. So really, when i say reach out i i i enjoy talking to young new or seasoned entrepreneurs always um best way to find me is really probably just instagram it's just cameron barsanti is my handle uh i i'm quickest there shoot me a dm um uh you can also check out my company which is just storagelife.com and there's plenty of info there and yeah i'm just happy to help i love the business it's been very good to us.

47:58Tony J. Robinson:I've met a lot of really neat, phenomenal people in the industry, very supportive. I'm very passionate about the industry, kind of a geek, a storage geek, and proud of it. Yeah, happy to help. So thank you guys for having me. I really, really enjoyed it. Always great to see you guys. Yeah, Cameron, always great chatting with you. Thanks so much for taking the time to share all your knowledge and your experience with our rookie listeners. Anytime. I'm Ashley. He's Tony. And thank you guys so much for listening to Real Estate Rookie. We'll see you guys next time. Hey, rookies, if you're watching this, we want you to apply to be a guest on the Real Estate Rookie podcast.

48:35That's right. Ashley and I are looking for amazing stories just like yours to be a part of our Real Estate Rookie podcast. Now look, you don't need to be an expert. You don't need to have done thousands of deals. Even if you've done one deal, your story could help inspire the next listener. As a rookie investor, especially if you just got your first deal, it is all fresh in your minds and you are the best person to tell your story, give your experience on how you got it done to help someone else get their first deal. So head over to biggerpockets.com slash guest. If you want to be a part of our show again, that's biggerpockets.com slash guest.

49:09And we'd love to have you on.