I recently attended a very informative three-day self-storage workshop put on by Scott Meyers in St. Louis this past weekend. Scott has been doing self-storage for 10+ years and has grown quite a successful business including his coaching / mentoring programs and partnering with students to help them with end to end acquisition, turning around the property and exit strategies. He has put together an “A” team of support mentors which come primarily from successful students that have been through his program. Several successful students presented their cases (experiences) with the attendees. Many highlighted the fact that it’s like any other business, you need to understand what you are doing and get the right support, work hard and smart, but that prior experience is not required. It may not be a sexy business but the returns sure can be attractive.
I met a women entrepreneur from Canada that purchased a property in Tennessee and actually lived right on site to get her hands into everything including renovations and dealing w/the renters directly in order to really learn everything about it. She said you would not believe what was going on in that place before she got there including someone living in one unit and another one prostituting herself out of another unit. This owner had no prior experience but with Scott and his team’s help, she turned the eyesore around and made it into a profit-making machine. She was ready to market the asset and move on to the next project in just over a year or so. She turned a $600K purchase into a million-dollar asset by cleaning up the place, doing necessary renovations, and improving operational efficiencies that increased occupancy and rents.
Scott has various programs to meet the needs of his students. His high-end program costs $100K but targets only a few students where you are in a direct partnership with Scott and he and his team hold your hand through the entire process. Scott takes 20% as a partner position while the student gets 80%. Despite the cost, they do guarantee that you will purchase a property and be involved in all aspects of the project. This includes gaining access to their myriad of key partners to ensure your success such as specialty self-storage lenders and property managers to ensure your success.
There are other programs as well and one that caught my interest was their mastermind group. This resonated with me because my two main motivations for attending was to get more educated in this space while networking with successful students and mentors who are building attractive businesses and may need private equity to fund their acquisition plans. The mastermind group meets monthly (quarterly in person) and is run by Scott. The purpose is to bring deals and dollars together. Scott told me that they recently had 12 deals funded for $27M so this is a serious game. This attracted me as this would expose me to lots of deals to analyze and accelerate my knowledge on what good deals look like while providing an opportunity to meet successful deal sponsors that may need capital from my growing investor base. The program costs about $25K. I’m going to attend the next one in Indianapolis in September to get some exposure and evaluate the opportunity.
For those wanting to get into the self-storage game, I believe attending targeted niche work shops like Scott’s program are worthwhile. You don’t have to feel pressured to sign up for anything but worth exploring the niche further, see what success looks like and how experts can get you there faster. I initially was skeptical on these types of programs and coaching but having seen success in my multi-family apartment business as a direct result of hiring a coach to not only teach me the area but also provide opportunities to gain hands on experience, it’s made all the difference for me. The one thing also that folks overlook or don’t think about are the new friendships and relationships that are formed with other likeminded participants at these workshops and seminars. Coming out of this meeting I have a hand full of promising contacts that are already operating in the business of self-storage and are looking to folks like myself who are interested in the area and have investors eager to help them grow their business in exchange for providing attractive returns on their investments.
Scott mentioned a few things that resonated with me. One, self-storage is clearly the hottest area to be in today if you look at all the various real estate market niches (see my other blog post below on why it’s attractive).
Returns clearly are stronger than any other asset class and this has history behind it. You can play in this game as an operator or as an investor. With focus, passion and hard work all things are possible. One of Scott’s favorite lines for me, as he’s a racing care fanatic (Indy 500..he’s based in Indianapolis) is that “F1 cars go faster when they are lighter, so taking things away instead of adding things makes all the difference”. Ponder that one. Beware of the shiny object syndrome. Find a focus area you are passionate about like self-storage, get a coach, invest in yourself, put the work in, be coach-able and anything is possible.