Podcast Summary
Successful real estate investing requires careful consideration: Carefully consider potential real estate investments and use updated calculators to track progress.
Buying real estate right is crucial for successful investing, as discussed by Josh Dorkin and Brandon Turner on the Bigger Pockets Podcast (episode 138). They shared personal stories about their experiences, emphasizing the importance of careful consideration in making investments. Additionally, they mentioned the importance of tracking your progress on potential deals using the updated BiggerPockets calculators, available at biggerpockets.com/calc. The hosts also expressed their gratitude for listener support, including leaving ratings and reviews on platforms like iTunes. Despite some challenges, such as injuries and lost pets, they remained optimistic and excited to continue sharing valuable real estate information.
Revolutionizing Real Estate Investing with Technology: Access high-quality leads, secure financing, and simplify insurance with DealMachine, Rent to Retirement, and NREIG.
Technology has revolutionized real estate investing, particularly in the areas of lead generation and financing. DealMachine offers unlimited access to reliable contact information and phone numbers for high-quality leads, while Rent to Retirement enables investors to purchase turnkey rental properties with no money down. Additionally, NREIG provides insurance specifically for real estate investors, simplifying the process and saving time and resources. These tools and resources allow investors to streamline their strategies and focus on building wealth through real estate.
Transitioning from full-time to part-time work in real estate: Communicate effectively with employer, maintain strong work ethic, and gradually transition to part-time real estate work while continuing employment for income stability
It's possible to transition from a full-time job to part-time work while building a successful real estate business. This was achieved by the intervietee through open communication with their employer and demonstrating the value of their specialized skill set. It's essential to have a good relationship with your employer and be in a position where you can have a productive conversation about your transition. The intervietee emphasized the importance of maintaining a strong work ethic and commitment to your job while pursuing your real estate ventures. This approach allows for a gradual transition and the continued income from employment, making it a viable option for those looking to balance both careers.
Starting real estate investing young can be advantageous: Start saving, learn banking, build relationships early for a successful real estate investing career
Starting your real estate investing journey young can be beneficial, even if you're still in college. This was exemplified by a guest who shared his experience of buying a duplex during his senior year, using his knowledge of banking and a smaller down payment due to loan-to-value ratios. He emphasized the importance of saving money, learning about banking, and building relationships with local banks as early as possible. This mindset can set the foundation for a successful real estate investing career, regardless of age. Additionally, the guest's philosophy aligned with Warren Buffett's value investing approach, which emphasizes buying assets at a discount with a margin of safety.
Insights from Berkshire Hathaway Shareholder Meeting and Self-Storage Investing: Entrepreneurs and capitalists should attend Berkshire Hathaway's Shareholder meeting for valuable experiences and insights. Transitioning from acquiring to building properties requires hands-on learning. Self-storage investing offers attractive deals and steady income during economic downturns.
Attending the Berkshire Hathaway annual Shareholder meeting is a must for entrepreneurs and capitalists, offering an exciting experience with various vendors and insights from industry leaders. Transitioning from acquiring to building properties involves learning the construction process hands-on, which aids in evaluating potential deals and managing projects effectively. Self-storage investing was an attractive option during economic downturns, offering good deals and steady income, making it a valuable addition to a diverse investment portfolio.
Effective self-storage property management is essential: Effective management of self-storage properties involves addressing late rent payments, tenant communication, and unit turnover to maintain clean, well-managed units and a stable tenant base.
Investing in self-storage properties can be more complex than it seems. Contrary to popular belief, self-storage investing isn't as simple as buying a run-down facility and making a profit from tenants' abandoned items. Instead, it requires effective project management skills and systems to handle the high volume of tenants, their frequent turnover, and the need to maintain clean and well-managed units. Neglecting these aspects can lead to a spiraling decline in the property's condition and tenant base, resulting in unpaid rent and a difficult situation to remediate. Properly managing self-storage properties involves addressing issues like late rent payments, tenant communication, and unit turnover, making it a rewarding but challenging investment opportunity.
Effective management and organization in self-storage: Planning, organization, and effective management are crucial for a successful self-storage business. A presentable and well-maintained facility, centralized location with receptionist, and systems for high-volume businesses are important.
Starting a self-storage business requires effective management and organization, especially when dealing with tenants and day-to-day operations. The speaker shared an experience of evicting a difficult tenant who had been evicted multiple times before, emphasizing the importance of having a presentable and well-maintained facility. He also discussed the benefits of having a centralized location with a receptionist or office to handle rent collections and lease agreements. The speaker also touched upon the importance of having systems in place for high-volume businesses to ensure scalability. The speaker's family's small loan business provided them with a centralized location and receptionist, making the transition into self-storage easier. However, he also acknowledged that online management is an option, but hands-on management is necessary for effective and efficient operation. Overall, the key takeaway is that a self-storage business requires careful planning, organization, and effective management to ensure success.
Effective tenant screening is crucial in property management: Thoroughly screen tenants for residential and self-storage properties, communicate effectively to find payment solutions, and avoid lengthy and costly eviction processes.
Effective tenant screening is crucial in property management, whether it's residential, commercial, or self-storage. While the process may vary, residential screening involves more thorough checks such as credit reports and contacting previous landlords. In contrast, self-storage tenants may have a less formal screening process. However, self-storage eviction laws differ by state, and the process to recover unpaid rent can be lengthy and costly. In theory, any excess revenue from an auction goes to the tenant, making it an unattractive option for property managers. The items stored in self-storage units are typically not high-value, and the buyers are often thrift store patrons. The popular TV show "Storage Wars" may not accurately represent the reality of self-storage auctions. Instead, property managers prefer to work with tenants to find a payment solution. Overall, thorough tenant screening and effective communication are essential to ensure a successful property management experience.
Buying at the right price in self-storage investments: Avoid overpaying for self-storage properties to ensure financial success and potential profits. Utilize therapy for personal growth and consider online services for convenience.
Successful investments, including self-storage, depend on buying at the right price. Overpaying can lead to financial strain and hinder potential profits. The speaker shared an experience of purchasing a self-storage property for significantly less than the asking price, allowing for improvements and increased cash flow. However, the primary challenge in any investment is avoiding overpayment. Additionally, the speaker emphasized the importance of therapy in discovering personal priorities and living a more fulfilling life, as well as the convenience and ease of online services like BetterHelp and Quantum Fiber Internet. Lastly, for real estate investors, securing a loan with ease and efficiency is crucial, making lenders like Host Financial valuable partners.
Managing hidden expenses and people challenges in self-storage: Self-storage requires careful planning, attention to detail, and effective systems to manage hidden expenses like gate operators and maintenance, as well as people challenges like collections.
Self-storage business may seem cost-effective at first glance, but it comes with hidden expenses and the need to deal with a large number of people. Some of these hidden expenses include gate operators, maintenance for damages caused by tenants, and collecting late fees. The relationship with gate operators is crucial to ensure smooth operations and avoid tenant complaints. Dealing with a large number of tenants can be challenging, especially when it comes to collections. Implementing automated systems and processes, such as email and text reminders, can help streamline the collections process and save time and resources. Overall, while self-storage can be a profitable business, it requires careful planning, attention to detail, and effective systems to manage the hidden expenses and people-related challenges.
Automating communication and tenant underwriting in self storage: Implementing software for automated rent reminders and demand payments saves time and money, while secure gates, good locks, and cameras enhance safety. Shifting to driver's license checks for tenant underwriting is more effective than cash-only requirements.
Implementing automated communication systems, such as email and text messaging, can save self storage operators a significant amount of time and money compared to traditional methods like mail and phone calls. For instance, using software like EZ Storage Solutions can automate rent reminders and even demand payment, reducing the need for manual labor and postage expenses. Additionally, the discussion highlighted the importance of security in self storage operations, with three key defensive measures: a secure gate and fence system, good locks, and security cameras. Another key topic was tenant underwriting, with a shift from requiring only cash payment to requiring a valid driver's license as a more effective way to screen potential tenants. Overall, these strategies can help self storage operators streamline their operations, improve security, and effectively manage their tenants.
Improve SEO for high-volume businesses: Create a presence on Google and Bing Places, maintain a functional website, write quality blog content, and earn quality backlinks to improve SEO for high-volume businesses, attracting customers and ensuring a return of 2% or better.
Search engine optimization (SEO) plays a crucial role in attracting customers, especially for businesses with high volume, such as self-storage or apartment rentals. To improve SEO, create a presence on Google and Bing Places, maintain a functional website, and write quality blog content. Quality backlinks from reputable websites also contribute to higher rankings. The key is to focus on creating targeted, high-quality content to attract and retain customers. Regarding the numbers mentioned earlier, the first self-storage facility was purchased for $180,000 and had 36-40 units. The rents were around $2,000 or more per month in gross rents, which is a good rule of thumb for investors. This facility provided a return of 2% or better. Keep in mind that these numbers may vary depending on the specific location and market conditions.
Building relationships for self storage deals: Exploring existing self storage facilities and networking with sellers can lead to desirable occupancy rates. Resources like the Self Storage Association and online blogs offer valuable information for potential investors.
Finding self storage units at desirable occupancy rates can be challenging due to high demand, but building relationships with potential sellers through personal letters and networking can be an effective strategy. Self storage facilities require significant infrastructure and management, making it worthwhile to explore existing options rather than starting from scratch in most cases. When considering entering the self storage business, resources like the Self Storage Association and online blogs can provide valuable information. Michael, the speaker, is involved in the business but focuses on the financial and project management aspects, while day-to-day tasks like showing units and signing leases are handled by his team. Building self storage facilities from scratch can be costly, and it's usually more financially viable to buy existing facilities at a discount.
A valuable resource for real estate investors: BiggerPockets provides a large, active community and informative podcasts for new and experienced investors to learn and network, focusing on education and authenticity.
BiggerPockets is an invaluable resource for new and experienced real estate investors alike. With a large, active community and informative podcasts, members can learn from each other and gain valuable insights into various aspects of real estate investing. The community's authenticity and focus on education sets it apart from other investment platforms, making it a go-to destination for those looking to expand their knowledge and network. The podcasts, in particular, offer a convenient and effective way to learn, with a wide range of topics and expert guests providing actionable advice. While self-storage investments can present unique challenges, they can also be profitable with the right approach. Overall, BiggerPockets offers a supportive and educational environment for investors at all stages of their journey.
Determining Rental Prices and Competitive Analysis: Research competitors' pricing and adjust accordingly, consider investing in out-of-state self-storage with reliable property management, consult an attorney for lease creation, and learn from industry leaders to create effective leases.
When it comes to real estate investing, especially in self-storage, it's essential to do your research and stay competitive in pricing. You can determine the rental price for a unit by looking at what your competitors are charging and adjusting accordingly. Additionally, investing in a self-storage facility in a different state is possible, but it's recommended to have reliable property management on the ground. When it comes to creating a lease for your renters, it's important to use available resources like BiggerPockets, but ultimately, consulting with an attorney is crucial to ensure your legal protection. Another valuable tip is to learn from the practices of established players in the industry to create a successful and effective lease.
Learn about storage unit investing before investing: New investors should read recommended books, understand value investing, and prioritize personal time.
New investors in the storage unit business should learn as much as they can about it before making a significant investment. This can be done through self-study, talking to experienced investors, and utilizing free resources online. A few recommended books include "Millionaire Real Estate Investor" by Gary Keller and "Every Landlord's Legal Guide" by Nolo. Additionally, it's important to understand the concept of value investing, which involves identifying the intrinsic value of a property and letting the market fluctuations work to your advantage. Warren Buffett's "Essays" is a great resource for learning about this strategy. Finally, hobbies and personal time are essential for maintaining a healthy work-life balance.
Stay focused and keep an eye out for opportunities: Successful real estate investors persist and determine, connect with others, and utilize resources like BiggerPockets to expand knowledge and build relationships.
Persistence and determination are key factors that set successful real estate investors apart from those who give up or never get started. Michael Rogers, a self-storage investor, emphasized the importance of staying focused and keeping an eye out for opportunities. He also recommended checking out BiggerPockets as a valuable resource for those interested in real estate investing. Connecting with other investors in your area through coffee meetings or networking events is an actionable step for anyone looking to expand their real estate knowledge and build relationships. Remember, competitors can also be collaborators. So, get out there and meet people.
Finding an investor-friendly agent for financial freedom in real estate: Connecting with a local market expert through BiggerPockets Agent Finder helps investors make confident decisions and get closer to financial freedom in real estate.
Achieving financial freedom through real estate investing isn't about market timing, but rather about consistently being in the market. Even in the face of changing rates and headlines, the goal remains the same. If you're ready to enter or advance in the real estate investing game, finding an investor-friendly agent is the next step. With BiggerPockets Agent Finder, you can quickly connect with a local market expert who can guide you through neighborhoods, analyze numbers, and help you make confident decisions. This free resource is exclusive to biggerpockets.com/deals. By securing an investor-friendly agent, you're one step closer to getting the deal and ultimately, financial freedom. Remember, past performance does not guarantee future results, and it's crucial to consult with qualified advisors before making any investment decisions. BiggerPockets LLC disclaims all liability for any damages arising from the information presented in this podcast.
