Investing in Self-Storage, with Paul Moore

Why would a commercial real estate investor, author, and syndicator move away from apartments and become a self-storage investor? https://www.youtube.com/watch?v=0y_47Zr3F6g Paul Moore, real estate investor and author of Storing Up Profits, demonstrates how to capitalize on America's obsession with stuff by investing in self-storage. So, if you want to find out what's to love about self-storage, learn the risks and downsides of self-storage, and get the scoop on how it performed during the pandemic ... tune in now! Table of contentsPrior Interviews with Paul MooreBook A Strategy Call Prior Interviews with Paul Moore Lessons from a Commercial Multifamily Investor, with Paul MooreWellings Capital: Opportunities in Commercial Real Estate, with Paul Moore Paul's Introduction to Self-Storage After selling his company to a public firm in his 30s, Paul thought he was going to get out of the game and focus on his family. However, he quickly realized that he wasn’t fulfilling his calling, and therefore was not being the husband or father he wanted to be. On top of that, he was bored.  This spurred him to seek a way to fill his time in a purposeful way that could also help him protect his family’s wealth. What occurred to him was real estate, so he started flipping houses and lots, and finally building houses. [4:28] “I found out something really important that everybody needs to know. If you don’t know how to tighten the doorknob on your own house, you probably shouldn’t build a house.” Eventually, he found his place in multi-family real estate. But after a while, he felt like what he thought was the “perfect investment” was no longer perfect because he had to overpay to get it. After research and time, his team discovered self-storage investments and created a fund to invest in that space. Bigger Pockets Paul started his work with Bigger Pockets as a blogger, sharing his wisdom on real estate. And every six months, he would ask, “Is there anything else I can do to serve you?” Because Paul was invested in their success, and helping Bigger Pockets succeed, they’d let him do videos, live shows, and write books through them. [7:17] “Bill Gates, he did three things to become the wealthiest person in the world. Number one, he decided at a young age what he wanted to do and he stayed in that lane… Second, he… found the biggest, most influential platform in the world that would be willing to let him partner with them. And then the third step is… not obvious. He did everything in his power to make them successful. Not himself, but them.” Why Self Storage? One of the benefits to self-storage, as Paul shares, is the short time frame the asset operates on. When you lease commercial property to someone, those leases are often a decade or two long, which means that rent is locked in. With self-storage, leases occur on a month-to-month basis, so you can raise prices as you see fit each month.  [10:58] “The thing I like best, though, is the fragmented industry. Now self-storage has about 53,000 facilities in the US. That’s about the same as McDonald’s, Starbucks, and Subway combined.” About 75% of these facilities are run by independent operators, and two out of every three independents own one facility. This means they’re classified as a mom and pop, and they don’t have to have a lot of knowledge to make a good profit. However, this creates opportunities for experienced investors to come in and acquire the property, and capitalize on any oversights to drive further profits.  What is Value-Add in Self Storage? [18:06] “The first time I heard value-add and self-storage, I think I laughed out loud. I mean, where are the countertops and cabinets and flooring and bark park and lighting and, you know, new appliances? None of that. We’re talking about four pieces of sheet metal, some rivets, a floor, and a door. Yet the opportunities for self-storage value-add are amazing.”