Tag Archives: #RobertKiyosaki

Desire Investment Alternative…Consider Self-Storage

 Issue 94 – Investment Alternative

Introduction…”The bottom line is that if we go into a bad housing market, people have to put their stuff somewhere,” says Mednick, who is also president of the Orange County Real Estate Forum investors club. “When the economy is good and people buy too much stuff they have to put it in storage. You’re winning as the market goes down, and winning as the market goes up.”

A “safe” investment… For those investors looking for an alternative to being a landlord, self-storage is considered a relatively safe real estate alternative.

Self-storage is monthly rentals of interior spaces made up of concrete floors with steel or concrete walls.  That’s it.  Once a renter moves out, the manager can just blow out space and rent again.  Our make ready is a leaf blower.

If the renter fails to pay rent, then the property can be sold at auction to recoup all or part of the lost rental income including late fees.  In fact, this last Texas legislative session codified online auction as an allowable sale method.

The secret…It is a contrarian approach to the commercial real estate, but generally, our leases are month to month.   If we had a term lease, like most commercial real estate, then at the end of the term renters would be planning to move out.  With the month to month leases, there is no rush to move out.  They can always move out next.  And maybe five or ten years later, they will still be moving out next month.

In summary…Self-storage is a simple, but elegant alternative to other more complicated residential or commercial real estate.  To learn more and “Get 9 Little Know Secrets For Steady Real Estate income FREE” subscribe above right.

Source:  Joel Cone, “Self-Storage Is An Investment Alternative,” U.S. News Money, 11 Jan 2018

Closely-Guarded Secrets To Becoming Carefree Investor

Issue 89 – Why Those Who Discovered The Secret Are So Happy

Introduction...The meeting was held at ElFenix in Dallas, Texas on March 15, 2016. This was spring break week and attendance was unusually low.  However, the meeting was quite lively and those in attendance were very engaged and excited to be there.  The meeting had a warmth and supportive atmosphere not common to many business luncheons.  Many of those in attendance were owners & investors of this asset class.

I have never been around a group of owners & investors who were so:

  1. Carefree
  2. Stress free
  3. Disconnected from current market conditions concerns
  4. Happy
  5. Joyful
  6. Supportive of one another

Why have you not heard of this before?  Several reasons:

  • Generally, this is not an asset class promoted by Wall Street
  • Insurance salesman do not sell this product
  • This is not a product promoted by most brokers – in fact, very few understand this class
  • Few people even notice this product type when they drive by it or ask if they should have this their portfolio

Here is a true story.  I contacted a broker with a major brokerage firm that I’ve done business with previously.  He said, “Bill, we just don’t sell that product here.”  Later, I discovered that his company had a national group active in this area and one of the top Texas brokers was in his office right under his nose.

So, it is apparent that this is a closely-guarded secret.  In fact, in the state of Texas, there are only a handful of brokers who sell it.

One of these brokers told me, “Bill, I discovered this asset class 17 years ago.  Once I understood it, this is all I wanted to sell.”  I heard those words by several people, “once I discovered this asset class this is all I want to invest in or purchase.”

There are many reasons these owners & investors mentioned above are so carefree.  One reason is that it does well in both good times and bad economic times.  Also, the loan default rate is low single digits.

Click Here to watch the above video The Closely-Guarded Secret To Becoming A Care Free Investor.

Conclusion…You owe to yourself to find out what these happy, carefree owners & investors have discovered.  To discover what they know and “Get Little Known Secrets For Steady Income” FREE go to billmoist.com

Creating Community And Connections With Self-Storage

 Issue 87 – Creating Community

Introduction...Self-storage facility may not be the first place you would expect to create community and connections, but great managers and owners are doing just that.

Community created...I visited one facility that was for sale west of Fort Worth.  It was an older property in need of some repair.  And yet the owner created community and connections which resulted in higher occupancy and rental rates than the Class A property a few hundred yards away.

Many self-storage facilities in hurricane-ravaged areas are extending help to their community.  Expect to hear stories of help and goodwill during the lengthy clean-up and rebuilding process.

Creating community and connections...Here is the short list of ways we can create community and connections with our self-storage staff and managers:

  1. Support and raise funds for local charities
  2. Creating connections with local business partners, chambers of commerce, and service organizations through volunteering
  3. Creating connections through marketing relevant and engaging communications
  4. Creating connections through social media inviting local content
  5. Practicing the Golden Rule as Rotary so eloquently reminds business leaders each week

Conclusion...Any business can be used for good or evil purposes.  It’s up to owners and managers to set the best direction that impacts the local community in the most positive direction.  Yes, even self-storage facilities are “Creating Community And Connections.”

Creating Wealth Through Self-Storage

Issue 86 – Why Use Self-Storage To Create Wealth

Introduction...The self-storage industry has experienced amazing growth.  Currently, 1 in 11 families, up from 1 of 8 families in 1990, use self-storage.  That means the number of families using self-storage has increased by 2,200,000 in a ten-year time frame.

Current owners…Property owners with just one property make up 63% of the total. These mom an pop’s normally rarely if ever raise rents and rarely make capital improvements that would allow further rent increases. This gives subsequent professional owners room for significant value add…or total revenue increase.

Owners with 10 or more facilities make up only 12% of the market. The rest, 25%, own 2 to 9 facilities.

The real estate investment trusts normally do not buy properties that are less than 50,000 square feet.  If we can add some additional space to get the mom and pop’s over 50,000 square feet, we may be able to sell to the REITs who generally buy at the lowest cap rates (highest purchase price.)

Who are the customers?…Generally, 80% of our customers are residential an 20% are commercial.  As a rule, 75% of our renters are within 3 miles radius of the property and another 15% drive from 3 to 5 miles to the property.

Conclusion…Self-storage is a growth industry.  Not only are the number of U.S. households increasing, but the percentage of households using storage is increasing.  And for the local buyers, like us, there is significant opportunity to raise rental income when we purchase properties owned by mom and pop’s

Source:  Review of Creating Wealth Through Self-Storage by Mark Helm.

Investors…Consider The Uncomplicated Self-Storage

 Issue 85 – Uncomplicated Self-Storage

Introduction...The uncomplicated world of self-storage recently became the most desirable way to invest in commercial real estate.

Two examples...

  1. One Fort Worth owner had is property 95% leased when a buyer came along and asked if he’d sell.  The owner estimated his property value to be $4,000,000.  When the offer arrived at $5,500,000 the owner said, “SOLD!”
  2. Another owner had accumulated 20 smaller properties in Texas and New Mexico. He was very happy with the management and the cash flow.  Until a California investor wanted to jump into the market and offered $25,000,000.  Again, this owner “SOLD!”

Why so much interest in self-storage…In the past apartments were considered the most desired way to invest in real estate.  However, there are many good reasons to branch out.

Self-storage has proven to be recession proof.  During boom times we buy more stuff to store.  During contraction when we are downsizing, we tend to store our extra stuff rather than sell it.

In a recent issue of the Self-Storage Insider, we reported…The Commercial Mortgage Backed Securities (CMBS) self-storage loans funded over the past 10 years have the lowest default rate of all property types at less than 1 percent.

In conclusion…Do you have self-storage in your portfolio?  If not, let us give you more insider information by contacting us at bill@billmoist.net.

How To Communicate More Convincingly – Part 1

Issue 83 – We Talk About Ourselves 60% Of The Time

When we talk, we are only repeating what we know.  But, if we listen, we may learn something.  Dali Lama

Introduction...On average, we talk about ourselves 60% of the time.  (Source unknown)  That doesn’t leave us much time to communicate convincingly.

Communicate…Here are five items that will drastically improve our communications.

  1. Don’t multitask.  Even if we are on a phone call, the listener can detect our distraction.  Our brains can focus only on one item at a time.  Trying to focus on two items, means we do two things poorly.
  2. Don’t pontificate.  Pontification sets us up as the preacher, talking down to others  Most people don’t want an education in a simple conversation.
  3. Ask open-ended questions.  The classic questions we can ask are;

Who?

What?

Where?

How?

Ask a question the other person or persons know a lot about.  What about your kids or grandkids do you love the most?  What attracted you to your line of work?

4.  Go with the flow of the conversation.  Join in where there is an opening.

5.  If you don’t know, say you will find the answer for them.  Everyone can smell and dislikes a poser.

In conclusion…Just employing one or two of these ideas, will help you communicate convincingly.

Source: Celeste Headlee Media

Click here to watch How To Communicate More Convincingly – Part 1

Why Self-Storage Investors Are The Happiest

 Highlights From Annual TSSA Conference

Introduction…The 2017 Annual Texas Self-Storage Conference was an amazing event.  The content shared was first class and meeting the participants was a real joy.

Click here to watch the rest of the story.

 

Why Self-storage is Safer Than Other Real Estate

Issue 80 – What Safety Means To Investors

Introduction… The Commercial Mortgage Backed Securities (CMBS) self-storage loans funded over the past 10 years have the lowest default rate of all property types at less than 1 percent.

This compares favorably to the 4.5 percent average delinquency rate for all commercial real estate and 3.9% delinquency rate for multi-family.

Why…why is self-storage 4.5 times better than other real estate?

This is counter-intuitive.

Click here to find out why…why is self-storage 4.5 times better than other real estate

If this intrigues you, how may I help you?  Bill@billmoist.net

How To Have Better Conversations

 Issue 78 – ROI of Better Conversations

Introduction…Award-winning journalist and author Celest Headlee is the keynote speaker at the Big Ideas in Storage at the Texas Self Storage Association’s Conference on October 19th. CNN voted her the most-watched Ted Talks in 2016.

Q & A With The Author

Q. How did you become an expert on good communications?

A. While working as the host of the public radio show, “The Takeaway,” I wanted to hone my interviewing skills.  The information I found did not work.  So, I started consulting brain science on how different cultures communicate.  I ended up with new insights into a good conversation.

Q. You said most people don’t converse very well.  What do you mean by that?

A. First, we mostly talk about ourselves.  60% of the time.  Boring. The other person knows what they want to say, we’re just waiting for us to take a breath so they can talk.

Q. What advice do you have for becoming a better listener?

A. Try to listen to the underlying message behind someone’s words.  What are they really saying?

Q.  What is conversational competence?

A.  The ability to communicate a message clearly and to understand what others tell you.  Our messages get garbled and we have a hard time listening to what is actually said instead of hearing a partial message.

Q.  Do you have any additional conversation tips?

A. 1.  Be there in the conversation or go elsewhere.  We’re really not that good at multi-tasking.

2.  Check your bias.  The belief that your intelligence protects you from erroneous assumptions can end up making you more vulnerable.

3.  Hide the phone.  Don’t just put it down.  Put it away.

In Conclusion…Communication skills are skills that last a lifetime.  They can be so-so or better.  But, it’s probably worth the effort to improve.

Source: “How To Have Better Conversations,” Self-Storage News, Sept/Oct. 2017

How Self-Storage Construction Can Improve Your Cash Flow

 Issue 77 – Cube Smart, Arlington, VA

Introduction…Tuesday Texas Self-Storage Association met in Dallas for their annual “Trends in Self-Storage Construction” update panel.  What we learned can increase your cash flow.

Major trends…The major shift is the increased size properties the REITs and other public entities are building today.  Three or four years ago, a 100,000 square foot storage facility was considered large.  Now, 200,000 to 300,000 square foot storage facilities are being built by many operators.

To watch the video, click here now.

This means more 4, 5 or taller storage facilities are being built in high-density areas of the city.  How this can improve your cash flow follows a little later.

The largest cause of cost escalations…This surprised me and it may surprise you.  The largest single cause of cost increases for self-storage in urban areas is architectural control. Instead of putting up an all steel building as in the past, now cities are requiring brick, stucco, and/or expensive exterior materials.

Some cities require these higher cost exteriors on that which can be seen from the street.  But, others require it for all the buildings plus articulation on the front facing area.

Increase in insulation and number of bathrooms also have been added by some. As well as structural fire suppression systems.   But, these items are much less expensive than the architectural control items above.

What about green initiatives in self-storage construction?  Generally, the primary driving factor in building storage properties is keeping the construction costs as low as possible.  In many areas of the country, the cost of going green outweighs the savings.  However, one developer who builds in the Texas Rio Grand area builds solar and wind energy in all their new projects.

However, in North Texas solar and wind are not economical, so he doesn’t use it here.

How to increase your cash flow?  This message was expressed by several of the panel participants.  The advice was to stay out of the urban areas where the REITs are building or are likely to build.  During lease up, which could take several years, they will cut rents by 50%.  Then later, manage rental rate increases.  That is similar to the retail category killers that put many mom and pops retail out of business.  Be on guard.

In conclusion…So where should be build and buy storage properties today?  Stay out of the 50 major urban centers.  Focus on the tertiary markets as we have done and are doing today.  This little tip could make you or save you tens or hundreds of thousands of dollars.

To learn how you can get passive residual income from self-storage, “Get 9 Little Known Secrets For Steady Real Estate Income – FREE”  at self-storageinsider.com.

To watch the video, click here now.