Self-storage has been a space that not many people explore, despite the many great benefits you can get from it. In this episode, we are again joined by Fernando Angelucci, who has already done $75 million real estate deals in the self-storage space by the age of 30!
Fernando has already been on the show before and shared why he moved into self-storage from other real estate asset classes, but today, he is going to tell us how COVID-19 has affected the business.
Watch now to learn more about business in self-storage, how Fernando dealt with the pandemic, and how you can take your first steps in self-storage too!
“Towards the end of that part of my life, it didn’t feel like the passive income was very passive. I was working 60-70 hours a week on my rental portfolio.”
“As of recent, we’ve been growing very quickly to the point where other investors have asked us to participate in our deals, so we’ve opened up our deal flow to allow passive investors to make a really good return on their money while they sleep.”
“All of a sudden, COVID hit. That was a very interesting time for us. We didn’t really know what was gonna happen, but I had always been tauting the recession-resilience of self-storage and using historical data from the last 3 recessions.”
“Those that had assets did very well, those that did not, unfortunately were left behind.”
“Self-storage basically offers customers that are in transition a place to store their possessions, so that may be downsizing, changing their jobs, or upsizing.”
“One of the things that was interesting was occupancy levels at some of our facilities that we considered stabilized started to climb.”
“Self-storage is a lien law based asset, not a rental landlord-tenant law, so because of that we didn’t have rental moratoriums.”
“Self-storage does not operate with evictions. If you don’t make your payment, first, we’ll try to get in contact with you and if you avoid us, then we can actually move it to the auction block.”
“Self-storage is a hyper localized investment. Typically, 60-90% of your client base will come from a 3-5 mile radius from your facility.”
“We’ve seen a lot of commercial tenants. Our commercial tenants typically float around 17% of our total portfolio and we saw that go up to 22%, which doesn’t sound like a lot, but for us that’s a pretty large increase.”
“There’s also a lot of logistics companies that started using our facilities as kind of midway points, so they would drop off a lot of their goods at our facilities and rent 3-4 units, and then the semi-truck would come and pick up those supplies and goods at our facilities.”
“One of the things that we noticed was that the cost of construction materials went through the roof, especially steel, which is a major component of self-storage.”
“We found a lot of these big box retail stores that had done pretty bad during the recession. They shut down their doors but they had this prime real estate, usually on main and main, surrounded by dense residential with discretionary income, in the type of demographic demand drivers that we want.”