What if the best real estate investment isn’t the one with tenants, toilets, or employees, but the low-maintenance property everyone else is ignoring? Today’s guest is making thousands each month from one of these properties, and there are many more just like it. She’ll show you exactly how to find them!
Welcome back to the Real Estate Rookie podcast! Today we’re sitting down with Bree Hartman, who went from one “accidental” rental property to building a $6 million self-storage portfolio–all while pregnant, working her W-2 job as a personal trainer, and cold calling self-storage owners on her lunch breaks. She did all of this as a complete newbie to commercial real estate from the other side of the country!
Bree breaks down how she finds off-market self-storage facilities using a single tool, the exact cold calling script she uses to get baby boomer owners talking, and how she structured her very first seller financing deal. She even shares the five-point blueprint that shows YOU exactly where to invest.
If you’ve been sleeping on self-storage, our conversation with Bree will wake you up to one of the most underrated assets right now!
Ashley:
What if the asset class that most real estate investors completely ignore is the exact one producing $29,000 a month in net operating income? For today’s guest, she found her first deal using nothing but Google Maps and a phone.
Tony:
And what if she negotiated a $3 million deal with 0% interest in a 10-year balloon while she was pregnant and still working a full-time W-2 job as a personal trainer?
Ashley:
This is The Real Estate Rookie Podcast. I’m Ashley Kehr.
Tony:
And I’m Tony J. Robinson and Ricky. Today our guest is Brie Hartman. Bri went from one accidental rental to building a $6 million plus self-storage portfolio of over 100,000 square feet. She specializes in finding off-market mom-and-pop storage facilities that most investors never even look at and she structures creative deals that produce serious cash flow from day one. So Bri, super excited to have you on. We had a recent guest on self-storage, but your story is even more unique, so thank you for joining us today.
Bree:
Oh, thank you. This is so exciting.
Ashley:
Bree, let’s start at the beginning. You described your first rental as accidental as getting into real estate investing. So what happened and how did that one property eventually lead into self-storage?
Bree:
Yeah, so I think my just story is kind of unique where I didn’t come from real estate and I did a W2 employment for Fish and Wildlife. Actually, I laughed because I bought my second home right across the street, literally diagonal and I went back and forth. I’m like, “Should I rent this out? Should I not? ” So I ended up renting out our primary home. And during that renovation of that primary home, we did all the baseboards, I painted every single room. And while that I was listening to a podcast and they said self-storage, no toilets, no tenants, no employees, less problems. And at that point I’m like, oh my gosh, this might be my thing. I’d have to own 20 of these houses. And so we put that renter into that house. And that was that big point where we figured out we had baseboard damage with a service dog that did $7,000 of baseboard damage and we got a call at 1:00 AM.
And so that was my just big wake-up call during COVID of, wow, renting the houses is really hard.That’s going to be just another job. And so that’s really when I went out and I was like, “I got to find something else. What is that one thing?” And so I actually purchased a ticket to go to a self-storage conference while I was pregnant. I was 10 weeks pregnant. And I’m like, “Okay, it’s either now. When you’re pregnant, you’re like, I’ve got nine months to make something happen.” And so that was my big push and I flew randomly. I was either crazy. My husband was like, “You’re not absolutely crazy, but you’re pregnant. And so yeah, go to Vegas and go to this conference.” And that’s how I discovered self-storage.
Ashley:
Tony, you’d probably be more motivated in life if you got pregnant.
Tony:
I’m laughing because it’s funny. I always tell my wife, if I could carry the baby, I would totally do that. It’s very sentimental guy, but just that’s one thing that a dad will never get to experience. So anyway, that’s a story for a different day.
Bree:
No, but it’s actually crazy though, because when you’re becoming a parent, you’re first time parenthood and you’re like, “I need something that is not working right now. What is that? ” And so the joke in the family really was, is the baby going to come first or is the storage facility going to come first? And so what happened, which is absolutely wild is that, and my family knows when I put my brain to something, you make it happen. But I was a personal trainer, gym owner, and I was underwriting storage deals in my lunch hour. And from there it took us about almost nine months. And so I found the perfect facility, you guys in the middle of Louisiana out of all the places. I live in Sacramento, California and we actually ended up purchasing that facility in 2022, the very start of 2022 and on an SBA bridge loan to an SBA product.
And so it was just a very crazy time. And so you never can choose. I think that was the first lesson parenthood is that you’re really like, “You know what? I could plan everything and try to make this perfect, but it’s like, you know what? You just got to go and you got to bet you’re on yourself and go all in. ” So I actually gave birth 10 weeks after we bought our first facility.
Tony:
Yeah, that’s a very busy newborn experience. And I want to go deeper on that first deal, Bree. But before we do, I think the question that’s in the back of my mind and what a lot of the rookies are probably thinking as well is that commercial just feels like something that is maybe out of reach for a lot of rookie investors and you had done one deal. So it’s not that you had amassed years and decades of experience before you made this transition. Why did you not feel that it was too big of a leap? Or what gave you the confidence to say that I can go from buying one single family home as a rental to jumping into a large commercial real estate property that’s thousands of miles away from where I live in my hometown?
Bree:
I wish I had a more complex answer, but I love that ignorance is sometimes blissful. It’s a mindset shift that you can really overcomplicate some items, but my biggest part was I have nothing else to lose. As a mom, I’m like, might as well let’s go in and just do it. But you guys, I was scared. I was scared out of my boots, I would say. And I signed away my home.This is the biggest part is I signed away my home. I literally got life insurance on myself. The SBA actually required to have life insurance and you’re very just unsure of it all. And then at some point you’re like, “You know what? Let’s do it because what if you don’t?” I think the better question to ask yourself, if you don’t do it, what is that outcome? And it’s the same, being stagnant or doing something bigger and better.
But there is something because my first home was you guys 300,000 in Sacramento, California to a $3.1 million SBA facility. And so I went in with two other partners that are not my family. So that’s another big part of leap of faith is to explore partnerships. And when you know a deal works, cash flows and it does well in good times and also it can actually make and break the bad times, that’s when you’re like, okay, you’ve done all what you can do and you’re jumping in.
Tony:
Walk us through that first deal. Again, you’re in California, you said the property was in Louisiana. How did you find this facility? Were you just driving around Louisiana one day and you stumbled upon it? Were you networking with brokers in that market? What was your process for finding that deal?
Bree:
Yeah. So actually this first property that we found, so I pride myself as a storage deal finder. I love to find deals in cold call off market owners. And so we would bring different properties and different facilities to each other, to my two partners that I met at this conference randomly. And so I thought I was going to be the person that brought the facility to purchase and actually my business partner did. He found it from a wholesaler and he brought it to us and said, “Hey, this one works at pencils. And if we all divide and conquer and all three of us come into that and then do an SBA loan with 15% down, we can make this happen.” And so that was the big push was we actually didn’t end up finding that one and then we actually went and found our other one, our seller financing one three months later and that was from cold calling.
Ashley:
Bree, how did you find a wholesaler that was even finding these self-storage deals? I mean, you think of wholesaler and you mostly think small, multifamily or single family homes. Was this a wholesaler that was specific just to self-storage or they just kind of went after a bunch of different asset classes?
Bree:
So I actually didn’t find that my business partner was the one that found that wholesaler. And so that’s what’s so unique is that when you partner up with other people, there you can also bring you deals, but yeah, they were very specific in doing self-storage. I think they did sell storage and industrial, but they brought that to the table and I was like, “You know what? I will pay a wholesale fe all day long if it works.” And I think that’s the biggest part because I’ve also have done some wholesale deals to other people which is ones that are not in my buy box and it worked all day for other people. Yeah, I think that’s the best benefit of partnership is you can divide and conquer and you can have three people that are deal finders out there to find that right property.
Tony:
So Bree, you mentioned SBA lending for this first deal. Two questions. Number one, why did you go SBA versus other forms of financing and what were the actual terms of that loan and of that purchase?
Bree:
Yeah. So I think that’s the best bet with self storage is that it’s a business as well as commercial real estate. And so you’re able to go get an SBA loan, which is a small business association loan. And you can either put the advantage of this is that the government helps you. They want to help business owners get in with a little bit lower down payment. And so we actually put 15% down. You put 10 or 15% down with an SBA loan. And that was the biggest reason was that I was in with two other partners, so three of us total. All of us were like, “How are we going to buy this $3.1 million facility?” And it was very much like, let’s go the SBA route even though there is some scary parts to SBA and some of those parts are like, is the loan fixed prepayment penalties.
And so there’s a lot of pros and cons and learning objections that we had to, I think, sacrifice in order to get in. But I think it was during the craziest time, and this was in 2022 when you guys interest rates were going up from 4% all the way up to seven, 8%. And so it was that time where we actually ended up doing an SBA 504 loan. And so that’s the one where you can put 15% down and we actually ended up, you have a certain percentage of that loan is locked in for 25 years and then you have another percentage that’s locked in for five and it’s rotating every five years and refixes. And so it does, the cons of that is that you are locked in at a 10-year prepayment penalty. But that’s the thing is like, how do you get in?
How do you actually get into this industry when you don’t come from money, you don’t come from a real estate and there are some sacrifices, but I would do it literally over again, even though they asked for everything under the sun, I’m not joking you guys, documentation, DMV stuff, tax returns. They even ask you to put your home up and they also asked me to put life insurance down just in case anything happens. So I do think it’s a really good decision to think about what makes sense for that property, how are you going to make it cashflow? And then for you, how can you get in? Not only relying on other sources of funding.
Ashley:
Bree, do you want to break down the numbers on this first deal for us?
Bree:
Yeah. So this first property was, so it was a $3.1 million facility about over 55,000 square feet. And so it was divided between almost 300 units. Half of it is climate controlled and the other half was drive up. And then our biggest play on this deal was it was about 20 to 15% depending on the unit size below market rates. The owner himself was tired. He’s like, “Hey, I want to move to South Carolina. I want to get out of here and I’m wanting to sell now.” And so we saw that there was a huge need to put a website tech stack on there as well as increase the prices. And then immediately within the first eight months, we actually put in 67 RV and boat spots into that to add value right away. And in addition to that, we had a cell tower that also pays us money.
And so buying this, you guys in 2022 and then we’re here now in 2026 buying it for 3.1 million. We’ve been able to increase those prices about 67% over these past three and a half, four years. And so our next maneuver, because it’s different phases, when you put together a business plan, the first thing was, hey, how do we add value immediately? How do we increase prices by 15 just slowly just to get to market rate? The second part to that is how do you stabilize it? How do you fill it up to go into your more 90% occupancy? And then the third part to this you always want to think about is how can we add more units? So our goal is to add another 40,000 square feet of climate control to that facility in the next year or so. And so we’ve had a long seven-year kind of runway and then our goal is to sell it to possibly erate and to 1031 that to go buy some more storage facilities.
So it’s important when you think about buying a storage facility, it’s always about how do you enter and then how do you exit? What is it worth today? Always buying it based on that price. And then if you bought it and you put your business model on top of it, where can you get it to? What would that exit look like? And then making sure that you have a solid market with supply and demands in the self-storage industry.
Ashley:
Now, Bree, what about the second deal that you went into and you kind of mentioned it a little bit as to you got this deal from cold calling. What did you do for cold calling? Was this going through the yellow pages and just you yourself calling? Did you use skip tracing? Walk us through that process.
Bree:
Yeah. So I think a lot of people don’t think about that Businesses are very much owned by Baby Boomers and self-storage, RV parks. I mean, people have been putting this more into the news, but you guys, there’s about 68% are still mom and pop operators. And so that’s over 30,000 storage facilities throughout the US. And so I always say what we want to buy, our buy box is we want to buy facilities that are in third or fourth tier markets. And those are not in large metopolitan areas. Those are normally with a population of 5,000 people all the way up to 150,000 people that are growing. And so very, very easily we can kind of center in on where are these cities and markets that are actually growing and where are people moving to? And so we actually create lists like this. So we’ll go on Google Business, literally you can just open up Google Business because millennials, how do we find other businesses nowadays?
You literally, a Starbucks, right? You go into your Google Maps or Yelp and you look it up. And so if you click, if you’re looking for storage, you literally go into Google Maps, you put self-storage and you open up your screen and you’ll see all the storage facilities that are listed. And a lot of them, if you go down the list, most of them don’t have websites. And this is what’s absolutely fascinating is that you’ll kind of go into these markets and we like to prioritize storage facilities that either don’t have websites or they have a website and they have the rotating E or it says godaddy.com. And so we put those, literally prioritize those first and then we start calling them and it’s shocking how many business owners own self-storage that they’ve owned it for 10 to 15 years and they have a Facebook literally as their website.
And so we know that is an unsophisticated owner and that unsophisticated owner is definitely not utilizing the SEO of Google Maps or anything that they can to actually rent up. So we’ll call them and just do, we’ll call literally cold called. So what I got really good at when I started, because trust me, no one wanted to talk to me because I didn’t own storage in the beginning. Once I bought my first facility, then I was like, okay, game on. So we centered in this buy box and I would cold call for two hours and it was prioritizing ones with no websites. And it took us about three months. And so I just started off that call very simply, kind of like just residential, like you guys do it, but it’s like, “Hi, hey, is this Greg at Main Street Storage?” And he’s like, “Yes, it is.
” I would say, “Hey, my name’s Bree Hartman. I actually own a facility down the way and I drive by once in a while and I just wanted to see if you would ever consider just an offer on your storage facility and then silence, let them fill in the blanks.” But it’s simple and they normally will say, “No.” And I’m like, “Hey, not a problem. How did you buy your first facility? How did you buy this facility? Tell me your story because I’m trying to buy another and I’d really like to know how you bought this one.” And so that opens up to a relationship. And so I really wanted to walk you guys through that. And so there’s so many times that I’ve spent meaningful conversations. We don’t care about how many people you call. It’s more about how do you have meaningful conversations that last more than four minutes because that’s a relationship.
And then you follow up because you bet you this guy that I connected with, he’s like, “Yeah, I love fishing and my wife wants to move out of state in Louisiana because her grandkids are in another state and I promised her that. ” And so I called multiple times and the gentleman was like, “Okay, fine, what’s your offer?” And so that was that perfect injection point where you’re like, “Okay, what did you have a price in mind? And then are you open to seller financing?” And he actually said yes to that. And so with that, yes, we were like, “Hey, if you’re open to being the bank, we can give you a little bit more money.” And so we ended up purchasing this facility. It’s about 30 minutes away from, we call it our mothership, our bigger facility that we first purchased. And he was very much open to what the deal ended up being.
We put three offers right in front of him. One was the bank. We always say, “Here’s the bank. It’s the lowest offer, 400K because the bank said, we can only pay you that. ” And then the other two were seller financing and the one was $500,000. The one that he actually picked was $500,000 with a 15% down. And so that ended up being $75,000 with a 5.5% interest rate for a seven-year balloon. And that is incredible because what he wanted was he wanted his fishing money. Every month he gets $2,200 a month, literally clockwork from our bank account. And he called it his fishing charter money that he was going to use with his grandkids. And that was his big motivation was I was open to doing seller financing because A, I wasn’t going to pay Uncle Sam and B, I had fishing money every single month.
And so what’s awesome about this facility is that we also increased the rates. They had no website. People were paying literally dropping off their payments on the first of the month. And so we were able to increase the prices, add some portable units to it and a website tech stack and some cameras. And our goal is to sell this facility next year in the spring for about 1.2 million at an eight cap. So nothing too crazy. But that’s something that’s beautiful as you buy it for half million, 500,000 and you’re able to cash flow, increase the prices, force appreciation over time, see the value and then sell it for 1.2. And then our goal is at 1031 to go buy and play the monopoly game to go buy another facility that you can go do that again and snowball that effect.
Tony:
Brie, incredible. And I have so many questions about the cold calling approach and some details on the seller financing, but we’re going to take a quick break and then we come back. We’re going to hear more from Brie about how she put this deal together. All right, we’re back at Rabri. And Bri, before the break, you just shared with us about how you were cold calling homeowners. And I think the part that a lot of people glossed over was that you said you would spend two hours a day cold calling property owners like self-storage owners for, I think you said like three months before you actually found the deal that panned out. And I think that’s the part that a lot of people are going to overlook is that’s a lot of time over quite a few months. If you’re okay with that, I just want to role play a litle bit if I can put you on the spot.
So let’s say that I’m one of these maybe slightly cantankerous self-storage owners that you’re calling and just let me know how you’d handle that situation. So let’s jump in before role play and see how it goes.
Ashley:
Awesome. I’ll be the phone. Ring, ring, ring.
Bree:
I love it. I love it. We’ve had so much fun. I love this so much. Wait, am I role plate? Am I
Tony:
The caller? Yeah, you’re Bree. I’m a homeowner. Okay, just the telephone. Okay.
Bree:
That was like, wait, I’m totally thrown off now. Hey,
Ashley:
Since Tony forgot his line of saying hello and answering the phone, we’ll start again. Okay. Ready? Ring, ring, ring.
Tony:
Yeah. Hello.
Bree:
Hi. Is this … Oh God, I’m the one that’s actually doing it. I’m laughing. Okay. Let’s do that one more time.
Tony:
You can pick up from your spot. Okay.
Bree:
Okay. Yeah. So hi. Hey, is this Greg at XYZ Main Street?
Tony:
Yeah, it is. Who’s this?
Bree:
Hi, my name’s Bri and I know this call might be out of the blue, but I actually dry pie your storage facility all the time and I’m just curious if you would ever be open to considering an offer on your storage facility.
Tony:
I mean, we get a lot of these calls and honestly, I’m not really interested in selling this right now.
Bree:
No, absolutely and totally understand. So I’m just curious. I just want to see. So getting into self storage, how did you actually buy this facility or
Tony:
Did you build it? Honestly, we inherited this from my dad who bought this a while ago and once he passed on, he left it to us and we’ve just been kind of running it for him as a small family business ever since.
Bree:
No, that makes a lot of sense. So I’m just curious, how are you guys doing with occupancy? Are you guys fold up? Because I’m trying to just purchase one in the area. I just wanted to see how
Tony:
The market’s doing. Yeah, I mean, we do okay. It’s a pretty easy facility. It doesn’t take a lot of time and I think that’s why we’re okay holding onto it.
Bree:
Yeah, no, absolutely. Well, I’m just curious, if you ever consider selling or even just want an offer, definitely what I can do is just send you over just a little bio, just who we are and what we own and I’d love to just keep in touch with you.
Tony:
Yeah. Just out of curiosity, what would your offer be?
Bree:
Yeah, so I can definitely give you an offer. I have a couple questions for you. So just curious, I guess, can you give me just the gross revenue that you’re actually producing each month?
Tony:
Okay. All right. We can pause there. That was good, Bri. I was just going to quickly- Yeah, no,
Bree:
I can literally do the revenue right now.
Tony:
Let’s do it. Yeah. And I was just curious, what does that language look like? Because I know when we talk to wholesalers, the things that they’re looking for, they want motivation, they want timeline, they want condition of the property, they want the price that the person is looking for. It sounds like you’re kind of looking for those same elements as well, right? Oh,
Bree:
Look at this. Can I just blow your mind just for two seconds. I’m like, let me just share my screen. I know you’re like … So we kind of do it a little bit similar. Let me open … Actually, hold on. Let me show you this one. So this is literally, we have a chart that we keep open on our computer and you can walk people through what that facility is worth within two minutes. So share. So here, wait, play with me too. Come on, keep going. I was like, so I’ll ask you, okay, how much, just curious, how much are you guys actually grossing each month?
Tony:
The facility brings in maybe five grand a month.
Bree:
About five grand? Okay. So yeah, that makes sense. And so that’s about from last year in 2025, you guys probably collected over like $60,000. Is that
Tony:
Right? Yeah. Somewhere in that ballpark.
Bree:
Okay. Yeah. So I’m just based on just a really quick, this is not anything set in stone, but just real fast, just to give you a gauge just to see if this would possibly work. I’m coming in at possibly 420,000 all the way up to 550,000. That’s just my range. Just like Kelley Blue Books, like cars, this is just my range without too much information. Is that even something that you might
Tony:
Be interested in? I mean, possibly. I guess it depends on how close to 550 we are.
Bree:
Yeah, no. So I definitely think I’m really interested in your facility and I would like to put some more numbers in front of you. Can I just get a couple more pieces of information and then what I can do is send over three offers and I think you might be really happy with this offer that we put together.
Tony:
Yeah, sure.
Bree:
Awesome. And so all what you need and so just to go forward is all what you need from an owner, especially in storage, is we don’t care about how they’re really operating it. It’s more about what is your unit mix? And when you say that to an owner, sometimes they don’t know it, but what’s your unit mix? How many 10 by 10s do you have at what price? And then what’s your occupancy feel? And we keep it super simple because just like Kelly Blue Books, it’s like we’d rather get them talking numbers because that excites them.That’s a business owner. They get excited about like, hey, they always think about when they are going to sell and what they’re going to do. And so if we can kind of share like, “Hey, this is not set in stone. This is a Kelley Blue Book. We can get more if you give me more information, but this is our range.” And so what this does is actually it weeds out the people that I call in unicorn unrealistic land where they want ridiculous recap rates and versus where they’re like, “Hey, he wants 550.” Okay, that’s in the middle ground.
I can see if there’s more value to be had, this could be a really good deal and there might be a spread that we can actually double down and buy and go buy more. So it gets them talking is like the starting place for us in commercial. And from the talking point, you can then build a relationship because now they take you seriously. And that’s a big thing I think is I think being a female in commercial. Being a female in commercial real estate, it has been very, I think, helpful actually. And so I laugh because I was like, “I’m a mom with a phone.” And I was like, I’m dangerous with a mom and a phone and calling them a lot of owners that are mostly men, mom and pop owners, baby boomers. It’s a pattern interrupt from a lot of these young brokers that are calling them and just wanting to … They don’t know very much about storage.
And so it’s very much about how do we build a real relationship? And then from there, how do you transition? You also know the talk and that you can actually deliver. And so storage owners want to talk to us. They want to talk to everyday W2 employees because that is who they are. This business gave them the best benefit for their family and they want to pass it on to someone like that versus a broker or maybe a REIT that has to go up the chain five times and it goes back and forth. A deal gets done in mom and pop land, I call it, with seller financing so much faster, like two months, three months faster versus having to deal with a lot of these syndicators that have to go to committees and get things approved. So I really think that we have an advantage right now.
It’s a buy time where people are restless right now, rates are refixing. There’s mom and pop owners that have been sitting on the sidelines kind of irritated because they know their facility interest rates are really high. And so right now it’s a sweet spot for doing a lot of seller financing deals and putting offers in front of owners and saying, “Hey, I can actually make you money and save you. ” The big part is save you from paying Uncle Sam and capital gains right now. So that’s how I like to structure some of these offers and present them is how do you make it clear and concise, take away friction, right, make them know you’re the real deal and can actually follow through and are excited because excitement, I call it smile and dial because people can hear your excitement on the phone and they want that.
They want excitement. They want someone to buy their facility that they know is going to buy it and pass it on and do very well to their community and their business.
Ashley:
Great. Now when you actually dive into the numbers and you’ve got somebody that actually wants an official offer, what are some of the important things that you look at, maybe some of the expenses that you normally wouldn’t see in other asset classes like a single family home that somebody who’s just getting into self-storage and needs to be aware of that these are something you need to calculate into your numbers?
Bree:
Yeah. And so first off, just to take it from a high level, self-storage gets to be a simple business. You guys, we are in the business of renting space. It’s a concrete floor, roll up door and cinder block on all sides. And so with no toilets and no lights very much. And so the expense ratio is also very low, which is nice. That’s our sweet spot between, I always say you guys 35% to about 42% is what we’re underwriting right now for our expense ratio, which is actually one of the lowest in the commercial world. Multifamily is I think 50, 55 and then hotels is that 60 to 68%. And so you have a lot more room to actually profit and also a little bit of error on your side too. And so the expenses that we normally see, the two things that are the big deal break are right now real estate taxes.
So if you buy it for the new price, real estate taxes will actually kill a deal and then insurance. In Louisiana, in the south, you guys, Florida I won’t even touch because our insurance has for a piece of paper that we pray we never have to use went up about 20%. And so those are the big, I think the deal killers that we really have to look at from an underwriting perspective. And then we button it down. It’s little things like tech stacks and like a website in lawn care and snow removal if you’re in snowy areas, but we really don’t have a whole lot of turnover. And that’s what makes me, I think just excited and bullish in self-storage is buying facilities. My whole goal, you guys, is after having nine lives and being a W2 for fish and wildlife and then owning a gym, owning a gym will really make you smart because it’s a hard business.
But I think it’s coming back to storage gets to be simple and that is the biggest thing is I love simple boring businesses with no toilets. And with operations, with AI coming into this world, I passed on a Glamping Resort, this is my shiny object that I was dangling around me. It looked beautiful, but I passed on it because my goal, my reverse engineer goal with my baby girl is to be able to run 15 storage facilities remotely from my house. And so just to tell this story is how can we get to have things simple with operations with the boots on the ground? And so that’s why we get to stay lean is we have a boots on the ground that does 1099 work for 15 hours a week. And then we also have a call center because normally your boots on the ground is really good and handy and your call center’s good at sales.
And then you very much just manage those two pieces. And so that’s where it gets to be easy is that you don’t need someone on site at all to manage or to get people in. And so I can walk you guys through how easy it gets to be, but it really is a gate code that’s produced and a lock code that’s produced and you drive up with your stuff and you drive into your unit and you open up your universal lock and you move your stuff in and you put your lock on top, drop ours off or you get paid an upcharge and there’s QR codes along the whole entire premise. So there’s still customer service. It’s just based on when you need it. And self-storage is this is like millennials. I don’t really want to talk to a lot of people either. I know it actually doesn’t.
We both laugh about that because Amazon drops it at my door. And so this is this new Gen X and Millennials is that we want to be able to rent a unit, a storage unit and pull up, take care of it without having to talk to someone at whatever time we want to do it at. And so that is the new operations and the ability to have remote management and self-storage.
Tony:
Yeah. Bri, so like I own assets in the hospitality class. We have short-term rentals, we have a small hotel and my shiny object syndrome is kind of being peaked in this conversation because I love the idea of having maybe an asset that compliments the hospitality in that way, where it’s just like the exact opposite where we don’t have to worry about those kind of things.
Bree:
We laugh. You’re going to laugh at this. We call it a party in the front, hotel in the front, stabilize in the back, party in the front, stabilize my storage in the back.
Ashley:
That technically is your hotel, right? That
Tony:
Actually is my hotel. I literally have the hotels in the front and we have a small self-storage. It’s like I think 13 self-storage units behind.
Bree:
The best model ever. So I would be down for that model because it’s like reducing your risk at the same time as getting the hospitality revenue like brilliant. Absolutely brilliant.
Tony:
Yeah. And that wasn’t planned that way. Just the hotel happened to come with self-storage units. We’re going to take one final break, but when we get back, I just want to learn more about how you’re choosing markets, because you mentioned this before, but there’s some nuance here that I want to pick out. So we’ll be right back after a quick word from our sales sponsors. All right, back here with Brie. Now, Bri, you said you focus on third and fourth tier markets. So first, how do you define a third or fourth tier market? What is the definition of that? And then how do you ensure that as you go into these third and fourth tier markets, that there’s actually enough demand to support a self-storage facility?
Bree:
I love it. Yeah. So I call it the five-point market blueprint. And so what this is, is keeping it simple. We can overcomplicate as humans like everything, but in self-storage, we have to answer the simple question of supply and demand and is this market doing well or is this market oversupplied? And so what I like to look for is I specialize in teaching others too about buying storage facilities that are in third and fourth tier markets. And I don’t want to compete with rates. And so a lot of people say there’s this myth that storage is oversupplied and IC storage on every corner. And I’m like, yeah, it’s because you live in New York or you live in some of these large places that have keep smart and public storage. And so we don’t want to compete with them. So we are looking, you guys, in markets that are third and fourth tier.
So think about 5,00 people. The first point of the star is 5,000 people all the way up to 150,000.That’s a great little measurement there. And then the second point to this blueprint is, okay, we need to find markets with a population that’s growing just a little bit, even 0.01%. And that’s because people are moving there. There’s jobs to be had. People are making money and there’s a reason why that market is going to grow, which is very much security for three to five years. And then the fourth part to that is I like to look at, it does not always enforce that medium household income. Can people actually afford self-storage? And so that normally is, I always like to look at a medium household income, about 50,000 given break, it could be different, but I’ve had a lot of people buy facilities in, I would just say like Mississippi that they can’t afford to even rent.
And so that makes it harder is when you have to go to collections. And then the fourth thing to hear is being able to find these facilities that are unsophisticated. And in that market you want to find, is that market sophisticated or unsophisticated based on their website or even increasing prices and using a little bit of that dynamic pricing index. And then the fifth thing is that supply and demand. So how many facilities are there and then are they full or are they actually doing promotions? They can’t give away. I’ve seen markets where they have right now three months for 50% off and $1. So we don’t want to touch those. So those are the five different things that I really, really look for. And if you kind of stay very simple and you ask yourself those questions and you find markets that are doing well in all five of those categories, you’re going to crush it in the sense of actually buying in a market that has demand that’s going to last not only just one year, but three to five years when you buy and hold it for that position.
So those are a little bit where I like to look just to make it super simple.
Tony:
Yeah, Bree, that’s incredible advice. And we hear a lot from folks on this podcast who invest in self-storage that they kind of have a similar approach of targeting these secondary or tertiary markets because they don’t want to compete with the big massive public storage type businesses. But I also just want to give you credit because your concept of just going into Google Maps and searching for businesses that don’t have the proper digital footprint. So again, we’re looking to buy another hotel hopefully soon. I just opened up Google Maps while you were talking and I’m in California, so I’m looking just along the California coast because I have this idea of I’d love to get a small hotel near the coast somewhere. And I’m in the Pismo Beach area, Grover Beach and I just typed in hotel and there’s a bunch that pop up and there’s all these little hotels that says like two-star hotel that looks a lot like what our hotel looked like before we bought it.
And one of them, you click on the website and it just doesn’t take you anywhere. It just doesn’t even exist.
Bree:
It’s wild. And that’s like the best PR mechanism. 80% of our storage tenants use Google Maps to find or some type of online phone to find that facility. And so if you are not there, not even popping up on Google Maps, which does happen. And then number two, if you’re not actually putting a website that leads somewhere with some decent reviews, you’re really positioning, you’re shooting yourself in the foot as an owner even from storage to hotels. But these are the ones that if we can prioritize those first and go after those in the sense of like, these are these baby boomers that are tired. And so we had a student that bought a … So this was super cool. On Facebook, literally there’s a Facebook strategy that we use to find these mom and pop owners and their website was a Facebook thing. And so he bought a 10,000 square foot facility for $90,000 with seller financing and he put $9,000 down.
And what’s so cool about this is that it started at 70% occupancy. And so he lives in Virginia. This was in Alabama. And so he runs it all remotely, but he was able to not just see this as an opportunity, but he’s like, how can I make it better? So he added four billboards along the road. And so he’s making $400 a month more off these billboards from that town that they put up. And then he also partnered with U-Haul. And so he gets a 30% rev share here. And so not only was he 15% under market rates, he increased occupancy. He’s at 90% now. He added billboards and then he also added U-Haul. He has three trucks out there. And so he’s going to be able to, in three years, I always say, if he’s slow operator in three years, he could probably do it faster, but his facility will be worth $300,000.
And so he has two options is where he can either exit and refinance. Don’t kill the pig, keep the storage facility, let it run, take 150L and go do it again, or hopefully buy it close to that facility, or he can sell it for 300K and then go and buy another one in 1031 and go buy something bigger. And so I think that’s what’s the opportunity here is that not a lot of … People think that they need all this money and you really don’t. You either have two things. You either have money or you have time. And so if you have time becoming a really good deal finder is only going to help you because you can actually be someone who people want to talk to and bring deals and you can carve off a little bit of your equity and say, Hey, Mr. Dennis that has a really awesome W2 that’s 200K, do you want to partner together and take this down with little to none of your own money?
I always say there’s always skin in the game. It costs money to buy real estate, commercial real estate, but how can we think outside the box? And I really think I’m going to get passionate about this because people try to find this home run deal and they spend so two years, they’re like, I want to buy storage and buy this home run deal and they don’t do anything versus let’s call these mom and pop owners and get just, let’s get a good deal. Let’s get in and let’s structure it right and let’s make it an awesome deal. And the reason why this guy made this an awesome deal is that he saw 15% below and he added more revenue. He was creative. He added that. So I think this is the biggest part as people are searching for this home run versus like, let’s go out there and let’s find a good deal that cash flows and then let’s make it a 10X.
Ashley:
Well, Bri, thank you so much for joining us today to give us this breakdown of what self-storage is and how to actually get in it as a rookie investor, especially the deal breakdown and the cold calling example was wonderful scripting it out. So thank you so much. Where can people reach out to you and find out more information about your investing journey?
Bree:
Yeah, I’m over on Instagram, so you guys, that’s me. I love when people come over and say hi. So just send me a DM, but it’s over on Instagram at Bree, R-E-E.theinvestor. And then I also just wanted to, I have an awesome storage calculator. And so if you guys want, I’d love to give that to your listeners just for learning about storage. And so if they want that, they can actually send me, this is my business phone number. They can send me a DM just to 916-579-7209 and just say storage and then just say bigger pockets and then I’ll send that directly to you. But this is super awesome. It could help you really figure out what that facility is worth. And then that’s what I want you guys to do is go out there, buy these facilities. My goal is to have more cashflow and storage owners in this world that are the true underdogs because I think that’s an awesome, not only awesome story, but you get to show your kids what’s possible too.
Ashley:
Well, Bree, thank you so much and we always love a good freebie, thank you so much. I’m Ashley, he’s Tony, and we’ll see you guys on the next episode of Real Estate, Ricky.
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