Tim Puffer – Self Storage Investor in Lansing, Michigan and Managing Member of Focus REI, who also has experience in the insurance and risk management industry, talks to Neil Henderson and Brittany Henderson, the hosts of The Road to Family Freedom podcast. Tim discusses how he transitioned from house hacking to investing in self-storage, how he learned and found financing, and what an average day in his life looks like to keep business running smoothly.

Post-Interview Analysis

• Key Lessons Learned: Just jump right in and learn while you go and be ok with pivoting if things aren’t right for you. Remember who your ideal type of tenants are.
• How did they acquire their knowledge or what knowledge did they need to acquire? A lot of what Tim learned was by doing and watching YouTube. He also took the Scott Meyers 3-day course.
• How much money did it take to get started? The storage facility cost $1.3 million and required 20% down, which came to putting about down $260,000. He didn’t discuss how much of that amount he specifically contributed.
• How much time does it take now? Tim’s wife manages the facility. Neil’s and Brittany’s guess is probably a few hours a day spread out over the course of a day.
• Could they do this strategy from anywhere in the world? Right now it is a little bit location dependent. 

What you’ll learn about in this episode

• What was Tim Puffer’s a-ha moment about getting into real estate? 
• What was the first piece of real estate that Tim bought? 
• How much rehab did Tim have to do and what was the total cost? 
• Did he buy that initial property cash or with financing? 
• What lessons did he learn from his duplex investment? 
• Is there anything Tim would do differently if he was starting all over again?
• Did he have any construction or handyman background before he started? 
• How did Tim Puffer go from house-hacking to self-storage? 
• How did he find his first self-storage deal? 
• Tim gives a description of his self-storage property. 
• What was involved in the financing of the self-storage facility? 
• Did he have to raise any capital to cover rehab costs? 
• Did his partner have any experience in self-storage? 
• What was Tim’s experience with a recourse loan? 
• Does TIm utilize onsight management or automated management? 
• Does he rely on his website or does he use a kiosk?   
• What does a day in the life of a self-storage investor look like? 
• Does he think that he will go outside Michigan at some point? 
• How long does he think he could be away from the facility and still have everything working smoothly? 
• Is the facility open 24 hours? 
• When he purchased it, was it stabilized? 
• What advice would he have for a retired landlord?

Help Us Out!

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Recommended Books

• Rich Dad, Poor Dad by Robert Kiyosaki

Resources Mentioned in the Show

• Scott Meyer’s Self Storage Investing Training

Connect with Guest:

• Email: Tim@Focus-REI.com
• Website: Focus-REI.com
• LinkedIn: Tim Puffer

*FTC Disclosure: This post may contain affiliate links. If you make a purchase after clicking on the links, Road to Family Freedom will get a small commission. We are dedicated to finding the coolest products for families looking to building financial freedom through real estate and we never recommend anything that we don’t love.

I feel like a lot of people are afraid to talk to other people. And it's like that's one of the great things about life is talking to other people and building relationships and not not expecting anything out of it like I don't meaning him. I didn't expect anything out of it. But to talk real estate because I like real estate one of the learn more, I didn't get into it too for him to help me raise money or lend me money or anything like that. It was like, hey, I want to learn more about real estate and talk about it and see in doing that, see how I could help him as well.

I'm Neil, and I'm Brittany,

we are a family on a journey towards financial and location independence. Each week, we interview successful real estate entrepreneurs about their chosen investment strategy, and rate it based on how much money it took to get started, how long it took to educate themselves, how passive it is, and whether or not they could do it from anywhere in the world.

Welcome to the road to family freedom. If you like our show, the easiest way for you to give back is to leave us a rating and review on iTunes head on over to rode family freedom comm slash review for links and instructions on how to do that we would be so grateful. All right, and that thought of us Let's hit the road to family freedom.

Before we get to this week's show, I'd like to make you an offer. You can video chat with me if you like. It's something people do with me all the time and it's completely free. Every Wednesday evening. This is a free strategy session done over video chat, anything and everything you want to talk about in regards to real estate investing. There's no sales call here. There's no ulterior motive, I'm not going to pitch you on mentoring program. This is really just a way for you and I to connect. I talked to real estate investors all the time at Ria meetings. But there are only so many meetings I can attend having a family and a full time job. And I prefer the one on one connections anyway, doesn't matter if you're brand new investor just starting out or an experienced investor. I can act as a sounding board or a deal you're looking at or maybe just answer some questions you have about real estate investing, head on over to road to family freedom.com slash connect and fill out the form there to schedule a call. I look forward to speaking with you. Greetings, friends and families. I'm Neil and I'm Brittany, you're listening to the road to family freedom podcast. Our guest this week has a background in the insurance and risk management industry. He jumped in real estate in 2016 purchasing a duplex as a house hack. After coming face to face with the realities of toilets, trash and tenants, he has since transitioned to self storage. He's part owner of one facility and as a few more in the works Tim puffer Welcome to the road to family freedom.

Hey guys, thanks for having me. Happy to be here.

So Tim, tell us a little bit. How do you recall an aha moment for you when it comes to real estate in general?

I think it's a it goes back to where a lot of real estate investors get started. It's reading Rich Dad, Poor Dad.

I mean, every time.

It's, that's just what it was. It's one of my best friends lives in northern Michigan. And he kind of got into real estate as an accidental landlord with a condo. And he kept trying to get me to read Rich Dad Poor Dad. And I'm like, No, you know, out of college, I don't need to read anymore. And that's the thought process of a lot of people unfortunately. And so eventually have said, Okay, you got this real estate income coming in. That sounds great. And so I finally read Rich Dad, Poor Dad. And that was the big aha moment like, Whoa, I can't work a day job for the rest of my life and expect to get to the level of success that I want to get to. and reading that helped me realize that and helped me jump into real estate and get my real estate license.

So you started with a house hack, correct?

Yes.

Was that the first that was the first real piece of real estate you ever bought was that the first investment property

is the first investment property first piece of real estate was actually my wife and I bought a used mobile home to live in. So that was our first foray into owning a piece of real estate. And you know, that wasn't gonna set us up for long term success that we didn't keep keep buying it those individually. But yeah, the house hakko was derived from reading Rich Dad Poor Dad getting the real estate license, and we decided we wanted that passive income coming in. And so we started looking for properties that were listed on the MLS using my real estate license and couldn't find anything. You know, everything was either overpriced. They were really in really, really bad shape, and or just worn in the right neighborhood because with having the forethought of wanting to do a house hack I needed to feel comfortable with my wife walking our dog at night. And so we need to measure a few different things to make the property be the right one, on top of getting the correct rental rates and having the numbers look good. And so not finding anything, we decided to do a handwritten thank you card campaign, which is kind of different than most things. So people do like to just, you know, like yellow letters or things like that. I like love psychology. So like, people love to be thanked for something, it doesn't matter what it's for. And so doing, doing a nice thank you card. And you know, first line is, thank you for taking the time to read our letter, and then going into, hey, we're looking to purchase a duplex, we drove by yours, we really liked the property, if you have any interest in selling, please contact us. And we only did about 20 of those. And we had a 75% response rate on those things, just being really specific in our targets. And so we were able to talk to a couple people and find one in a really good neighborhood, near Michigan State University, and in a great neighborhood and got it for a very good price. We paid 118,000 for me, and which is at the time was significantly under market. But it needed quite a bit of work done to it. So it didn't have that component where it didn't need any work done to it. We had to renovate the unit that we weren't renting completely. And before being able to rent it out. Gotcha.

What kind of how much rehab did you have to put into it?

So we, we did pretty much everything and we did all new windows, on new flooring we did lvp and the kitchens luxury vinyl plank for the listeners who aren't familiar. So I will be in the kitchen living room. The lower level because it's a it's a bi level unit, and carpet in the bedrooms, all new countertops, cabinets, new back new central air, everything other than the other than new drywall.

Gotcha. And what did do you recall what the total rehab costs

were? So with that unit, we were in for about 20 grand? If you count, we recently renovated the unit we were living in for two do the house hack. And we were in for that one about 16 grand.

Gotcha. And so all in about 36 grand Did you come in with? Did you buy it for cash? Or did you put financing on

it? No, I wish we bought for cash. No, we actually did a FHA three and a half percent down. Great, great way to get started with with a you know, two to four unit super way to get started. And actually we got into it's taken a pretty big risk, we had a little bit of money in a 401k from a prior employer and I use that money as the down payment. And then we put a lot of the rehab expenses on 0% interest credit cards. And once we got the unit rented up, we went out and I was able to get a HELOC on the property and pay those credit cards off and then have the heubach with interest only payments on that.

Okay, don't try this at home kids. It's a

little thing. But there are tools, but you need to have a plan for you. You can't just go out and get it and expect it to work. You have to have a foresight and how the plan is going to work and make sure that you're actually getting the properties getting a good rental rate if you're doing this type of house x situation where you can pay that that payment off every month. Gotcha.

And credit cards can be really advantageous way to get some extra points in different things, but you have to be able to pay them off. Yeah.

That can be a great tool.

Yeah, as long as you understand the short term debt, you know it's surgery want to sort of get

in and get out.

So you're all in at about 120,000 purchase price. So about $160,000 purchase price plus rehab, have you have you ever had had it appraised? You obviously had to have appraised to get the HELOC correct?

Yeah, for sure. So we actually, this past April was it was three years of us owning it. We actually just sold it a couple weeks ago. So we we sold it for 175. Okay, so a little bit of Yeah, a little bit of profit and you know, at the end of the day we were able to live you know rents mortgage free for three years were PDS other the other unit paying for it. So the mortgage was about 1200 bucks a month and our rents on the other side was 1200 bucks a month. So we were living for it for free, other than paying utilities. Yeah,

yeah. So now, yeah, it gives you an opportunity to put that money elsewhere. Right? Save it and then and move on. So even if you broke even is probably, for sure. Makes sense. So that's when I got my real estate license. I

did try a little bit to be a regular realtor. And but I kept wanting to tell people to, to to buy a duplex and house hackers are first property and then using cash flow, and they use the cash flow from that. So by their own person I

know, that a lot of people do. no takers.

No,

it's so interesting. You know, you have to have the right mentality people, you know, there's so many people that are just like, no, I, you know,

I could never do that. I don't want roommates. I have, right.

I've cousins of mine in San Diego, I love you cousins who are listening. And we were talking to their parents this last weekend. And they're all none of them are in the market. And they're in their late 20s. Because the markets so hot, right, and they want to buy a place, but none of them are willing to have roommates.

Yeah, we can find like you do, you know, you get a place that has a lot of rooms. And then you bring in some roommate, right? You know, you kind of get flexible and then of them are? Well, I don't know if it was none, but there was at least one that specifically was like, nope.

Yeah, you can, you know, bring on the right roommates and suck it up for a couple years. And really, you set yourself up for good, long term success doing that. Yeah. Yeah.

So what kind of what lessons did you learn from that? First, the duplex as your first

property. Tons of lessons learned from that? Your skill skills as well, because there during the renovation, we did a lot of the work myself. So I learned how to paint, lay flooring, put in cabinets. So I guess one of them is discipline while having a full time job, that's a big one. Because you're waking up at five in the morning, trying to do real estate stuff, maybe get a few things done on the unit, and then go to work at eight o'clock, and come home at five, go right back to the unit. And do more work until 1011 at night and then wake up the next day and do it all over again. And so keep making sure you're not just doing that one day. And that's it for the week, but doing it consistently so that you you get things done and aren't falling behind. And you're making a payment that you don't have any income coming into make for you. So discipline is huge when when doing something like that, especially if you're going to do a lot of the work yourself and get a lot of sweat equity in the property, focus, focus and discipline kind of go hand in hand, you're really focusing on tasks that you're doing and not getting distracted with with other things. And which is hard for humans where you know, we're like, squirrel, you know, you see you see a square off in the background. And so we're really focusing on your task at hand, getting it done, and then moving on to the next phase of the project and not getting bogged down and the future stuff.

So you were do pretty much DIY the whole way you're doing yourself rehabbers and do yourself landlords. Correct?

Yeah, exactly. Which which is, which is a great way to start out and save state property management fees, doing it that way. You'll learn a lot lot of skills and strategies with with doing that stuff.

Gotcha. Would you do it again?

I had to start over? I think I think so. I think so. I mean it's it's not easy. It's not easy, but it's the things in life that are worthwhile aren't easy, nothing is handed to you. You got to go out and go out and get it if you want want to achieve anything so i would i would definitely do it again and you know relearn all the lessons and the all the other pains that go along with doing a rehab for three months straight while working a full time job and then being a landlord and how to deal with the complaints and all that there. That's a part of it, but it's it's worth it in the end pushing through those obstacles and in helping you get to a better place.

Did you have any kind of a construction or handyman background at all? Or was it all how'd you how'd you have to do it had to learn how to do it

YouTube, just watching watching a little bit of YouTube and honestly just doing it. I mean like life if you want to get things done, you got to just take action and go do it. Yeah, it wasn't a great painter by any stretch of the imagination prior to doing that, but now I'm a pretty good painter and it actually I I enjoy it. I can I can cut a room and with a paintbrush in about an hour now. It's it's pretty therapeutic for me to put some music on and you know really get going. So yeah, just getting out there and learning and acquiring the skills and it doesn't matter what age you are or what background you have. You can acquire whatever skill you want and it's out there for free. Most of it is nowadays. There's literally zero excuse for not doing something you want to do or learning anything to help you achieve your goal. Yeah.

So how did you go from house hacking to self storage.

So all the good that comes with owning a duplex, there's also bad. So we had a 2016, it was March of 2016, we had smaller water backup, and in the duplex, the washer line overflowed a little bit. So Okay, awesome. Got that taken care of. But that happened. And I had the rip of the lvp laid in the lower level bathroom and relay tile myself, first time doing tile turned out pretty good. videos again, so did that. And then a couple months later in May, the toilet down there backed up, whole lower level, all the lvp that I laid spent a week lane, ripped it right up, yeah, ripped it right up and did back at it all dried up, cleaned up. And we're just waiting on tile to be laid. And I had a contractor do that. Because that was a lot of time to lay, and I'm not that skilled at laying tile. So pay somebody else to do that. During this time, we we had purchased Mr. Landlord, his package to kind of help us automate and get better processes and doing the rentals because the plan was to buy more rental properties at that point in the past weekend to some apartment buildings and things like that. And so we went down to his conference in Cleveland, while they're in between classes, get a call from our tenant, super upset, just not happy with anything. Hey, we can't use a whole lower level. This is this is bullcrap. Like, hey, we're contractors are busy. You know, we're just waiting on them. It's all cleaned up, everything's good to go. The drain lines taken care of because we had to have that what's called jetted. So what they do is they go in with high pressure water, and they will essentially smooth out the cast iron piping. And so we had to pay for that to be done, which was four grand to have that company. So and that's not a no easy expense to swallow there. But so had to calm him down. And I'm like, Man, this, I don't want to multiply this by 20 or 30, or 40, depending on how big the apartment or whatever is. And so just so happen. The next speaker was Scott Myers at the conference, and my wife looks at me and you know, for all you husbands out there, listen to your wives, they're they're pretty, pretty brilliant wife, my wife looks at me, she says we should do that. And I say, yeah, I think we should. It's very similar in evaluating apartments. There's certain yoga nuances to it, but you're still looking at cap rates, cash on cash, IRR, you're looking at all that stuff. And so we finished listening to him speak and bought his course. And that's how we got our start in that and going down to Indianapolis to his three day class and, you know, hearing firsthand on on the industry and getting some real first hand knowledge.

Gotcha. So for those who don't know, Scott Myers is the Self Storage instructor. I won't call him a guru because I like I've got more respect for Scott.

Yeah, absolutely. I agree.

He's a genuine guy. And he knows this stuff about self storage. Yeah, definitely. So how did you find that first Self Storage deal?

Again, taking action. So taking Scott's course and going through it. And what's great about Scott's course is that it gives you enough to get going. It doesn't give you everything, it doesn't lay out step one, step one, a one, B, one C, there are certain things you got to figure out for yourself, which is what keeps a lot of people from getting started as they want their handheld and, you know, the there, the whole process done for them. But Scott's course gives you a ton of information to be able to get going. And so just following that, and cold calling facility owners sort of cold calling facility owners in my area and found a couple who was looking to retire. And so build a little rapport with them. And I see I was mostly again, my wife, she was the ringer and getting the deal done. Because if it was an older couple who had spent, they had a business there prior and then they built this self storage of buildings and so myself and my wife coming in, they kind of reminded them, we reminded them of them when they were starting a business together. And so I think that really made a big difference and being able to purchase that this from them. So it didn't, we didn't get it by mailers and like that you

literally just were just cold calling, owners

rep, just cold calling. And I didn't get to flow, which is pretty, pretty great. I didn't get too far into my list before finding them. So I still got quite a bit more to get through. It doesn't happen very often. That's a that's pretty, pretty rare. So I'm very thankful that we were able to find that and you know, thankful to them for letting us purchase it because they didn't have to sell to us. They could have sold anybody they wanted to. Yeah, yeah.

Can we can you tell us a little bit more about that facility? What, you know, the units, square footage, that kind of stuff?

Yeah, for sure. So it's 188 units. And that comprise is about 28,000 square feet. And there's also well was, but we'll get there about a 3600 square foot office building and a 1200 square foot pole barn on the property. When we purchased the place, and the the office building had three commercial tenants in there. And then the pole barn was also leased out when we purchased the facility. And it sits on five acres.

Gotcha. Do you want to can you tell us what the purchase price was? came out? Yeah,

yeah, it definitely, definitely can. So we purchased for 1.3 million. Okay.

That's a did you did use a SBA loan to acquire it? Did you?

You know, how

much did you have to put down?

Yeah, so actually, this is before I was still pretty young into doing commercial real estate at that point, we I had no idea too much about an SBA loan. So we actually did conventional financing. So for this deal, you know, I was able to find a great business partner on it. And I had built a prior relationship, and it brought this deal to them. And not asking for capital, because you can't just go up to somebody and say, Hey, I need money. They're gonna. Yeah. And so I brought it to this an investor, friend that I knew and he said, Hey, what do you think about this deal? He took a look at it. And he said, he thought it was a great deal, which just helped validate that I thought, my research into it, and he asked me what I was going to do for capital. And then that's where I said, I would need some capital to get this deal. And so we we partnered on on the deal to get into it. And so we put 20% down on it, and that did a conventional loan. got really great terms. There's some great local lenders out there with some great terms, we were able to get a 20 year amortizing loan with a 10 year term, which we were able to, then we wouldn't have to re underwrite or anything, we could do another 10 year term at whatever the current interest rates were at that point.

Okay, so they don't there's not a balloon payment, you just have to renegotiate the

right, right? Exactly, we'd have to just go to the whatever the current interest rate was, which we were able to get into it for 4.65%

at the time, and you've done some work on it. So your acquisition was 1.3 did you have to raise any capital to be able to do any renovations, things like that.

So when we took over the property, it was a nice value add deal and the fact that the prior owners weren't managing it in a sophisticated manner. So we took over the place we created a website, we raised the rates at the facility to increase the value. And so but by doing that, and creating some of these efficiencies and increasing the value by raising the rents, we were actually able to pull out enough capital to fund our expansion that we just started on this past week, where we're going to be adding a 92 additional units and 15 1000s additional square feet, which will get us to about 43,000 square feet at the facility. Gotcha. That's awesome.

So you taking over the like the barn and stuff or is that just

what barn? It's gone? Yeah, the barn the barn and the office building are completely demolished? Yep. So that's we had were those two buildings stood we had a bow and acre, because generally in the Self Storage, non climate control building, you can get about 15,000 square foot per acre, sometimes more depends on your setbacks and everything like that.

So and are these going to be all non climate control?

Yes, they'll be all non climate control.

You're your partner. Does your partner have any experience in self storage business before he started this, he

did not. He did not his he is has experience in apartments, apartment buildings. So he's been known commercial real estate for 15 plus years and cut his teeth in residential where a lot of people do get their starts and move on to apartments and has done quite a few deals and apartments here in Michigan.

How'd you meet him?

So, like I meet everybody, I just cold call people essentially. He's got a pot of Michigan focus podcast well, was Michigan focused. But he has a lot of people on his podcast called the rental property owners Association podcast here, Michigan and listen to the podcast and loved it. And I knew he was pretty local to me. So I reached out to him. And we went out to lunch a couple times and just call the VEDA the relationship from there. That's great. It's awesome.

It's what everyone should do. Yes.

A lot. I feel like a lot of people are afraid to talk to other people. And it's like, that's one of the great things about life is talking to other people and building relationships and not not expecting anything out of it. Like I don't meaning him, I didn't expect anything out of it. But to talk real estate because I like real estate one of the learn more, I didn't get into it too for him to help me raise money or lend me money or anything like that. It was like, hey, I want to learn more about real estate and talk about it. And see in doing that, see how I could help him as well. And not only just take information, because you got to you got to you got to give to to receive. And

a lot of people who are farther ahead are totally excited about helping other people even just talking about what they're doing. Because those around them have probably already gotten bored of it, you know, that aren't their friends and family. So it can be a great way to get in with a mentor or just even just have someone that can share experiences with you. Right? You know, so that you're not lonely in your space.

Right? For sure. One, then at the end of the day, too. There's, there's enough real estate out there for everybody what and whatever level you want to be at, if you want to own two properties, or 100. There, you can do it. It just comes down to what level of execution Do you wanna operate at? Yeah.

So a lot of times when you bring in an investor who's such a large part of the deal, the bank will require them to sign on the loan. Is that was that your experience here?

Yeah, we he signed on the loan. And I, myself did I did,

okay, is it non recourse or non recourse?

It is a recourse loan.

I like to dig into those details. Sometimes all people

Yeah, for sure. And I think, you know, some people can get a be afraid of a recourse loan, but, you know, yeah, the downside is, if you if things go south, they could come after your personal assets after disposing of the asset, you're selling it. But that's why you make sure you can't run, there's no guarantees, but you do your due diligence to ensure that it's a good deal, and you have good, good cushion and good margin on it. So lower the likelihood of that happening. And, you know, just comes down to there's risk in your life every day, you have a risk getting into a car and you know, risking your life doing that. So you got to pick and choose where you want to do it.

So do you have onsite management? Or is it an automated system?

security cameras? That's right. Yeah. So we started out because we didn't want to just stop on site management. Cold Turkey is our the prior owners were there from a nine to five, every day of the week. And so we didn't want to just stop that. So we started out having my wife there for four to six hours every day. And we got a month in and we're like, nobody stopping in. Because we had set up our website where people could rent a unit online, or they call in and rent a unit. So we said Why are we doing this? So we just, you know, after about a month and a half, we said hey, we're just gonna go completely automated and off site. And we've been that way, you know, ever since going on two years now and have had no issues whatsoever, while people go online, rent their units, and call in rental units. We have occasionally we still have to run out there we have to leaf below units, get a nice leaf blower to clean out the units rather than sweeping it much quicker. And, you know, go out there to check on things and see if there's been any move outs and anything like that, but there's no one site management and we'll get to we'll continue that with with the expansion as well.

So you're really not spending a lot of time on on working in or on the storage facility.

Yeah, other than you know, making sure you know, the occupancy stays at a level where we want it and the rental rate so that we're in line with the competition and clean in the unit. And things like that it's not a ton of time doing that. I mean, it's been more time lately in the last four months or so doing the ash even more than that getting everything worked up for the for the expansion and all the civil engineering and the site work and the general contractor. But in general, when you have something that's stabilized, then an automated you're not spending a ton of time keeping the property operating efficiently. Yeah, it goes back to having systems in place. Here, you have your systems in place to help you make that

happen. Do you have an on site kiosk? Or are you just relying on the website to handle lease ups,

it's it's just the website. And I'm of the opinion, and there are people who may say otherwise. But I'm of the opinion that I don't, there's not much benefit of the kiosk, there's a group out in North Carolina, who I've talked to you, and I've talked with the owners out there, and they are real big into tracking things. And only 6% of their rentals happen after kiosks. And they have 10 plus facilities. And so when you're looking at pain, you know, five grand or more for a kiosk, I don't know if the ROI is there, when people will go to the kiosk. And instead of renting on the kiosk, they'll stand in front of the kiosk and take out their phone and write a unit or in front of the kiosk. So it's I think it's a cost that's unnecessary when people are going to use their phone or their iPad or their laptop, or just call in to rent a unit. And when people call in, if you actually answer your phone, you're gonna beat most of the competition out there, because there are a lot of places businesses that won't pick up the phone.

We interviewed Michael Wagner back on episode six. And that was exactly what what you just said exactly what he said. He said everybody has a kiosk in their pocket. Yep. And he held up his smartphone. And this in this day and age, you know, you don't really want the customers who are who are going to have to, they want to have somebody behind the desk, right? lease it up for them, and give them a lock, you don't really want honestly, you don't really want those kinds of customers, because those are the kinds of customers that are going to cost you probably more money than you make to high

maintenance.

Yep, yep. I got a great example recently where we strayed from our process. And we rented a unit a lady wanted to meet to run a unit to see the unit and wanted to pay cash. And my wife has a great heart and mental lady out there and and did that. And you know, we've had nothing but issues with this lady since then, with Oh, the the doors broke, well, the doors broke because you stuffed it full and a bed hit the back of the door and knock it off the track. And so that happened, we had to fix that. And then just recently she was in the auction for the lien process. So we do she's way behind on her rent and everything. And so by straying from our process, we created a headache for ourselves. When we know sticking to the process, we're going to have a less likelihood of having those headaches, because it's proven to not create those for us. Yeah, yeah.

So maybe we can talk a little bit more about your system. So you said the phone calls? Do you have like an answering service that works with you?

Yeah, not currently, we don't we're going to implement that in the future. But right now it's, it goes right to my wife. And she answers the calls. Okay. So because we have quite a few people who rent out right off the website, and the other people who both will call in and she's able to answer now get the units rented for us. But as as we grow, we're going to have a nice third party call center kind of handle handle the overflow calls for us that way, we're not missing any.

Gotcha. And how many calls would you say you get, on average a week?

Oh, say we're getting probably three to five a day. So 15 plus a week? You know, then that varies a couple people who might just have a question on who's a current customer, but a lot of people inquiring about unit rates and sizes and, and things like that, or if the technology is great, but you know, things can happen while trying to rent a unit online and the system kicks them out or something like that. So answering questions, but by doing that, from that as well. Gotcha.

So it's, they've got to bring their own lock. Correct.

So we like to do things differently from our people in our market and where we do we'll give them a free lock. And so what we do is people can't get into the facility until they pay online or over the phone. And at that point, they'll get their codes put into the keypad to get into the facility. So we just put their free lock into into all our vacant units. And then when somebody rents it, they can move right in and don't have to worry about a lock, because it's a benefit to the customer one, because they're getting a good lock. And two, it's another benefit to them. And the fact that by having the good disk locks on there, they're much, much harder to break into, because you need an angle grinder in order to get those open. And it takes quite a while. Whereas some of the just the regular master locks you can buy everywhere, you can just snip those pretty quickly and then get right in. So it's a good security measure for them as well. And

that benefits you because it makes you have good happy customers

who leave? Yes, good, happy

reviews.

So what does what is the day in the life of a self storage investor currently look like?

How will for me, you know, work in my day job and insurance right now. But, you know, in between that, you know, before that starts in the morning, you know, looking over, you know, see, make sure the facilities operating where we want to, and then you're looking for more opportunities for purchasing existing facilities or developing other sites or just out there trying to hunt and find the next the next deal. And that's in the morning before work. And that's on lunch. And that's after work doing that. There's it needless to say, there's not a lot of TV going on and in our household just because it's every now and then we will but it just takes time away from finding more deals and getting to the level where we want to be at.

So what are you working on, now you've got the expansion of the current facility that you're working on. And you mentioned earlier that there was also Was there another deal that you're working on?

now working on a couple deals, one we're working on is a ground up development of a vacant parcel. And we're actually in the middle of selling that parcel, we got it all entitled for self storage and got it all designed. And we're going to go ahead and flip that. And we've been working on it for a little while. So it's, it's nice to get a get a little nice steel like that under the belt and go on find another one. And other project I'm working on kind of in the beginning stages of his conversion project. So that's, that that's fun trying to work on that Navigate back, because that's a that's a really large project and a lot of moving parts.

What's the conversion from Is it like a warehouse store,

it's a it's a retail store. So it's a 30,000 square foot building currently, and we're gonna have to raise the roof on it, literally. We're gonna have to raise the roof about 16 feet to get the clear space on the inside that we need to get three levels of self storage.

He wants three levels,

we'd like to have more much more restricted by the municipality, of course. But yeah, three levels is what we're going to max it out to get the the net rentable square footage from the building, that helps the deal makes sense, because in general, you can with a conversion or if climate control building, you maintain 75% efficiency. And so what that means is that if you have a 10,000, gross square foot building, you're going to be able to get 7500 Square net rentable square feet of storage units from that,

gotcha, awesome. Are these units or facilities all near you? Or are you looking at things all over the country,

but you currently they're all in Michigan, so I've been able to which is nice been able to find opportunity here in my, my home state, and Nothing's more than a couple hours away from me. Um, so there. There are a lot of places where it's tough to find deals, but that can involve getting the creative and looking outside of maybe what you've been looking at before, to try to find deals and maybe looking at different size markets. And, you know, if you're looking in a secondary market, try a tertiary market or try a different secondary market that maybe has slightly different metrics than what you were looking at before to find deals. Gotcha.

Yeah. Do you think that you'll go outside of Michigan at some point?

I think so. I've been thinking about that lately to find some more opportunity. And it'll stay on the track of what I've been looking at here in Michigan and finding those similar opportunities like that with similar metrics and demographics in other states. Yeah.

Once you get sort of, you know, for, like, let's say, for the facility that you currently own, you know, when all your new stuff goes in, and you get everything's sort of outsourced. Do you feel like you could, you know, go somewhere else for a while? How long do you think you could be away from the facility and have it still be running? I think really without you Yeah.

So as long as we keep our systems in place, and we theoretically, we could move out of state, and have somebody local, and to go and clean out units, and wash the facility for us and do all that, and even take it a step further from that we there are security cameras, you can get now where it'll send you an alert whenever there's any movement. So we could implement that and take it a step further to be able to really be away and not have to be in the same city or even the same state as the facility and have it run efficiently. And that would be without hiring a third party management company as well. Just with the size of the facility we have and having the systems in place, it affords us the opportunity to potentially do that if we wanted to.

is the facility open? 24 hours?

Yes, yep. Okay, we have 24 hour access, some facilities will charge for hours between 10pm to 6am. But, you know, in general, we don't have that extra cost there for the customers. Gotcha.

And when you purchased it, was it stabilized? Or was it? What was it like? What was the occupancy? Like? Did you have to do any lease up things like that?

No, no, is 100% for when we took it over, which was, which is great as a buyer, which is very great as buyer. So I see that and I see, okay, there's room to raise rates here. Yeah, that's where a good good value add opportunity lies with being able to do that, because you're going to come in day one and, and raise the rates on people. And it's not to be be a jerk or anything, raise rates on them. But generally, in those cases, those people haven't been getting a great deal for 234 510 years from the prior owners, because they just, they were afraid to raise rates, because they're always scared of Oh, people are gonna move out. And that just doesn't happen. Because you if you raise somebody 10 to $20 on a storage unit, that's not enough to make them rent a truck on a Saturday, generally, and move all their stuff. Yeah,

well, and especially if you're also keeping with what's current in the market, you're probably you know, they're not going to find that deal. Again, anyway, that what they had you Right, right,

exactly. So if you raise them and keep them, you know, right at what the market is, or just below, they're not gonna move out?

Yeah, well, on the power of commercial real estate to is that just that $10 raise, you know, makes, you know, increases your noi by, you know, let's say $120 a year, and then you divide that by the cap rate, and you're looking at, you know, if it's like, eight cap and mumps, and you're doing math in public, you're looking at a substantial amount of money looking at, yeah, six, six to $8,000 in value of the property.

Absolutely. Well,

I love that that's, that's such a great facility start off with, because so many first time Self Storage owners are trying to come in and they're finding a facility that's really distressed from day one.

Right? And they're, you know,

they're they're trying, they're having to turn around. And that's a real challenge. Whereas, you know, you were fortunate that you came in, it was already stabilized. It was operating, it just had some great value out,

right? Absolutely.

What advice would you have for someone who is maybe a little bit of a tired landlord, maybe they have sort of started off down the path of small multifamily? Because they heard Brandon Turner say what an amazing, amazing thing it is. And now they're coming face to face with the realities of tenants, trash and toilets, and they want to explore Self Storage, how would you recommend they get started?

I think they gotta figure out what exactly they want to do. Because they could evaluate their situation and decide to keep doing small multifamily, and that's the best route to go. But if they decide they want to look at something different to get started Self Storage, I mean, doing Scott Myers course, even if you're not going to go out there and be the hunter and search for deals yourself just to get a good basic upfront understanding with great content. And then you turn that into finding somebody else who's investing in self storage and doing the upfront work and you can invest with them via investor forum. That can be a great route to go. If you're sick and tired of your storage or your apartment buildings. now's a good time to possibly sell those and you do a 1031 exchange and those into a self storage facility that somebody else has went out and found and vetted and and things like that. So I think that could be a good, great route to go for somebody. But if somebody wants to go out there and find the deals themselves, again, there can't speak highly enough of Scott's course, and the support and the actual education that you get from going to his three day course. And I don't I don't get paid for saying that either. It's just I think very highly of it.

I have some experience with Scott and his team as well. And I can also speak very highly of them. They're really, they're good people. So if you have the means, then by all means, get some education before you, you wade into this.

Absolutely. Well, Tim,

thank you so much for sharing with us today. If our listeners want to get to know more about you as their what's the best way they can reach out to you.

I'll give people a couple ways when we like our choices. So LinkedIn, I stay decently active on there, love meeting new people on there. People can reach me at Tim, at focus, dash, Rei calm, feel free to shoot me an email. Definitely respond back to people. And I think those are about the two best ways to get a hold of me view of quickly responsive to people. Okay,

awesome. Well, thank you so much. It was really nice to talk to you.

Yeah, it was great. It was great. Well, that

was Tim puffer of focus. Rei, you can find him again at Tim at focus dash Rei calm. It's great talking to him. I always love talking to self storage owners and reformed small multifamily people. So was there a key lesson that you learn from this interview?

I think one of the key takeaways that I had was just to just jump in, I think that's something that he seems to be pretty adept at is just kind of, say, seeing something that he's interested in and going for it. And then also, I guess, like being okay, with pivoting, when you figure out that that's not really what's working for you, and just kind of jumping to the next thing. So obviously, he's solidly in this thing now. But it was interesting to hear how he kind of just like, Okay, get started with the, you know, house hack. And then once they kind of decided that wasn't right for them, they got right into it. And and that probably lent them some, I'll say luck for both of those things. They call or did the the, they call them thank you letters to he's only they only got like 20 people on the duplex and had like 75% return, what? And then, you know, cold calling self storage facilities and getting someone pretty quickly within the first small amount of people, I can't remember what he said. But it, it made me want to cry. Yeah.

It's not normal.

It's not normal, usually, if you like said letters, and do all these things, but it's fantastic. Because they, because they kind of jumped in, they sort of had that momentum behind them. And really, were able to move forward quickly, which is fantastic.

For me, it was when he was talking about their self storage system, that they have an unmanned facility. And they, they sort of need a very specific kind of customer. And once they, when they strayed away from that specific kind of customers where they got into trouble. Yeah. And that's, I think it's important to remember whether or not you're your business's tenants or self storage that you know, the kind of tenants that you want, and you train them and don't stray from that.

Well, I mean, that's why you do applications when you rent an apartment or something like that, that they want you to, they want to know more about you, you can't really do that with a self storage facility. So you have to do that by the system that you use. And you know, if people can't get through your system, then they don't need your product. Or they don't deserve your product. Or they're not resourceful. And you know, like, if that's really something that they want to do, then they'll figure out a way to make it happen without having to go around your system.

How did you acquire his knowledge?

He A lot of it was just sort of like, like I said, jumping in as far as self storage, specifically, specifically, he did the Scott Myers, three day course. And you know, had lots of great things to say about that. And I know you've done that as well. So, and I think that kind of goes back when we talk about things a lot of it's like find a mentor, a class podcast, I'm sure you know, he obviously listens to podcast because that's how he connected with the person that is his business partner on his current facility. So you know, talk to people, listen to podcasts, take classes.

He also watched YouTube. Oh, yeah. As a DIY rehabber and landlord he basically just watched YouTube. Yeah,

yeah, the information is out there. Alright, so money. Do it. We were just talking about the storage facility. Yeah. So how much did that take?

Well, it took was a $1.3 million facility, they put 20% down. So that's $260,000. He didn't really talk about how much money he brought to the table. It was sound like it was mostly his partner's money. And judging from, how large their how much money they had from that, from their small multifamily, and when they sold it, they I don't think that Nestle. I don't think those funds came from that. So I don't think he came in with a huge amount of money. But he, he was creative, he had a deal. What he didn't have was the money. And when you have a deal, but no money, then you need to go out you need to find somebody that's got money, and you don't necessarily you're not going to just go to them and say, Hey, can you give me money? You're going to have to give up part of the deal. And 100% 100% of no deal is worse than 50% of a deal.

Yeah, yeah. And we don't obviously know their terms. But it sounds like it's kind of a silent partner situation. Sounds like they run the facility exclusively. So they're just the other person's money, man, which may mean that they take a smaller cut. And so yeah, all right. And then time. Time, how much time does he spend? I hit do they his his wife?

Yes, wife manages the facility sounds like mostly, we didn't get them to an exact

No, I mean, I would say probably, I would guess is probably a couple hours a day, but just be my guest. But it's over the course of a day, if they get that phone system. And they're not like fully, like managing it them. Like where she's answering the phone all the time that they there will probably be very little like if they once they outsource stuff probably comes and goes because like you said, like he said he has to they have to clean out the facility. Sometimes they have to do some different maintenance. So if they had like a maintenance person, and the outsource the calls and and help sort of situations, they probably not spend a lot of money a lot of time excuse

me on when I remember when we talked with Michael Wagner back in Episode Six, he talked about something that was he had just I think handed over those duties, answer the phone to a call center. Because he said it's really key. You want to pick up the phone when somebody calls. And because if you don't pick up the phone, they're just going to pick up a phone call the next Self Storage down the road. And so that's it's really key. I would I agree with you, I think probably a couple hours a day, I'd say probably around 10 hours a week. Yeah. And part of that is just looking for new opportunities.

Yeah. All right. And then is it location dependent?

I would say right now, I would say yes, a little bit. But we know that self storage can be done if once you get the systems up and running. It can be very location independent, often. All right. Well, that was Tim puffer again, thanks. Thanks for listening. Thanks for your time, Tim. And thanks for listening. Let's hit the road. And if you like this podcast, we would really appreciate it if you take just a few minutes and leave review for us on iTunes. It's really simple to do. Just go to road to family freedom.com slash review for links and instructions. Thanks for listening. We're doing this all again next week. Until then, safe travels.