I am a full-time real estate investor and owner of Always Open Storage, LLC. A year ago I was fairly oblivious to how the self storage industry worked, as I had spent my previous years in residential real estate.
However, I heard about a great business opportunity in the self storage industry and was referred to someone in my home state of Indiana to speak to regarding the business.
I met with Scott Meyers, who introduced me to the business and taught me all there was to know about purchasing existing self storage facilities. Just over a year later, here I am with a storage facility under my belt ready to buy another one.
People, like Scott Meyers, help others learn from their knowledge and experience in the industry. Studying the successes and failures of others allows us to put ourselves in a position to be successful.
How I set myself up for success...
Everyone makes mistakes, and there is no way around it. The key is to learn from those mistakes and do everything possible to not repeat them. Following the guidance of someone who has achieved success in the field will help you along the way. That is exactly what I did--by calling, emailing and talking with the experts, before I invested one cent into the self storage industry.
In addition to all the research, I also completed the Qualified Storage Manager's course from Inside Self Storage. The course provided education that is a must for anyone looking to break through to this industry.
After educating myself on the industry and networking as much as possible, I was ready to jump into my first property. So, in November of 2008, I started the process of buying my first self storage facility. Initially, I talked to the potential seller (who lived four hours from me) over the phone.
It took some relationship building and feeling each other out in order to structure the best win-win scenario for the both of us. It is always important to try to meet the needs of both parties for the best possible result. Communication and direct contact with the seller is essential.
Luckily for me, my hard work and constant communication paid off. On March 24th, 2009, I purchased my first storage facility located in Danville, Illinois.
My "Action Plan" for going forward
In the months leading up to the closing, I put together an "Action Plan." I evaluated the market occupancies, the demand for storage in the area, the location of the target facility, and how the facility would work within the community.
My primary goal was to determine how I could add value to the asset. In most cases, the income for the facility needs to increase, while the expenses are decreased.
The facility I purchased had been a mainstay in the community for many years, and although it was well known, it had started to lose its appeal. The property was located on a major road in town (which is a must), but it looked tired and needed new energy. The bushes were not trimmed, leaves were not raked, the signs were falling apart, and the list goes on.
As I jotted down all of the things I wanted to improve, I wondered how the current management was managing the facility. The answer I came up with was: Poorly.
I made several "mystery calls" to evaluate what type of first impression a customer might have when calling the facility. I was not greeted with a friendly voice. I had the distinct feeling that I was a nuisance, and the person on the other end was not trained to sell self storage.
The individual did not get my name, my phone number, or any other information for that matter. The call lasted about 30 seconds as the person rattled of the prices and hung up on me. Price, as you will learn, is the 3rd or 4th most important aspect to a storage customer and should not be given as a sales pitch.
There were other times when I called the facility and left messages, but they were never returned. Tenants are currently worth $600 to $900 in this market, and the staff at this facility did not take the time to get my name, my number, or even return my call! This is the epitome of bad business and will turn customers away.
I noticed that the facility's storage office was about a mile down the road. They managed other real estate holdings, but I'm sure that their primary focus was not on the storage business. The market was still strong, and people needed storage in the area. However, this facility remained at a mere 65% occupancy.
Checkin' out the competition
The competitors in the area had occupancy rates that were much higher than my facility. I called the competitors, and they did not ask for my name, phone number, or other details either! They answered the calls just like my target property did--short and sweet. They did not set up appointments, and there was no closing sale technique.
I thought to myself, "Wow, if their occupancies are much higher than my target property, and they did not display property management criteria, I think I can beat the pants off of them."
After a couple of months, my plan of action was ready to be implemented. I planned to hire and train a manager, improve curb appeal and customer service, and renovate an existing on-site office that was not being used. I planned to install a security gate with key pad entry to help deter crime and late payers from vacating and entering the premises without paying.
...and the moral of the story is
I would not have known what to look for if I had not armed myself with the knowledge I gained from experts in the field. If you are interested in self storage, contact industry professionals and others like me, who have gone through the process.
You will be surprised at how much information successful people will share with you--if you have the courage to ask. Following in the shoes as someone who is successful, learning from other people's mistakes, and having the vision to make a property successful are three main ingredients to become a self storage success story.
In just three short months after purchasing the facility, I was able to implement my plan and move fullsteam ahead. The new marketing efforts and management strategies were in place and working well. The staff exhibited the best customer service possible and followed the management program of a great friend of mine, Rick Jordan.
Even though I had read every publication possible prior to signing on the dotted line, I had still never managed a property by myself. So, I enlisted the help of Rick Jordan as a consultant for my new business.
Remember, learning from other people's mistakes and following the paths of people who have had the same experiences is the key to success. The fee that I paid to Rick was nothing compared to the value that has been added to my facility thanks to his expertise and advice.
I would like to thank all of the individuals mentioned in this article as well as everyone who has helped me along the way. I offer Jesse Luke, Brad North, Dave Curtis, and Dutch Mendenhall my greatest praise for their continued help on my journey.
The next time you are looking to purchase an existing facility, ask yourself: What can I do better than what the current owners are doing. Is there a problem here that I can fix?
I found the problems, fixed them all, and have the passive income to prove it. I wish you all the best of luck.
Casey Cavell is a nationally respected entrepreneur, commercial real estate investor, and self storage expert. To learn more about Casey Cavell and how he can help you solidify your financial future, visit www.CaseyCavell.com.