Whether you’re a novice investor or have some experience in real estate, through dedication, education, and perseverance, success in self-storage investing is within reach. In this episode of the StorageNerds podcast, we interview Luther, a remarkable student who successfully acquired five storage facilities within his inaugural year as a member of the StorageNerds program. Luther shares his story of how he got started in self-storage investing, faced challenges, and the strategies used to achieve success. He also offers valuable insights to other investors who want to purchase their first storage facility. This episode is a must-listen if you want to expand your knowledge on self-storage investing. Luther’s story is truly inspiring and motivating, with his insights poised to elevate your investing to a whole new level.
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Watch the episode here
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Student Showcase – How Luther Bought 5 Storage Facilities In His First Year At StorageNerds
We will go to my first ever deal here that I did. They are still here. They are moved now and I will explain this. I was driving down the road on the way home from work. My work was on the other side of town over there to the right. I was driving home from work and there’s this self-storage facility here. It’s not here anymore. I owner-financed this self-storage facility and I had three months to figure out where I was going to put it. I was going to put this self-storage facility on a different property because the owner didn’t want to sell the property but he wanted to sell the facility. It was a very odd situation. Stacy had never dealt with it before, and no one else had done what I did at first.
What was the conversation with the owner like? You drove past. What was the conversation like? How did you get this?
It’s super confusing and I hate that it’s the first ever one that I did. I drove down this weird dirt road with all these abandoned cars. He lives back in here. There’s a house right here and right here. I walked in there and I was like, “It’s an abandoned storage facility. No one was renting it. Can I buy this little piece of property up by the road here? I will buy this little piece of property.”
He was like, “I don’t want to sell the property because I’d like to use it for more cars to put more used cars on, but I will sell the storage facility.” I was like, “What do you mean?” He was like, “You can go out there with a drill and some tools, and take it down and go move it as long as you have a slab to put it on.” This is the hardest thing for me because I’m so new to all this. I have to figure out how to move this facility and all that. We worked out a deal, I bought both of these facilities for $10,000, so $5,000 apiece.
How big are they?
They were 1,800 feet a piece, so 3,600 square feet. I bought it for $5,000 apiece. He was like, “I’m not playing any games. You either figure out what you are going to do with it. Have it out of here in three months.” I was looking everywhere in the area for a piece of land that I could buy super cheap. I almost bought a couple of different parcels that were anywhere from $15,000 all the way up to $100,000 and I was going to get a loan on it or try to owner-finance it.
I kept driving around. Stacy will teach them to drive around. At the time, all I would do was drive around and look. I went up this way into Irvington, which is only a 5 to 10-minute drive here. On the side of the road was this little building. It was a storage facility on the side of the road, all abandoned.
You are 21 years old. How did you come up with $10,000?
I had been working since I could drive. When I was sixteen years old, I started working in a watermelon patch and I was getting paid $20 an hour plus if I worked the concession stand area it was $10 an hour. All the money I saved throughout high school and all that, I didn’t do a lot of stuff with it. I also did some stuff that Stacy doesn’t even know about. I bought a school bus and turned it into an RV. I saved the money from that. I had a good maybe $30,000 to $40,000 by the time I was 21 that I saved up from doing tons of work. I had four tax jobs at the time. I had a 1099 or whatever it is or a W-2.
I worked at a machine shop, in construction, and in the seafood industry. I have done a lot. I had a lot of money saved up. On top of that, my cousins and my parents also invested in me. He gave me a pretty substantial down payment that I could use on a facility. From all that compiling, I also had no bills. Growing up from 16 to 21, I had no bills virtually. I’d pay my gas or go out to eat and buy my food, but I wasn’t paying rent or anything like this. All that money that I could save at such a young age, people would usually blow that money on stuff, or whatever it is. Instead, I am a very good money manager and I put that aside.
That’s how I came up with a lot of this, but you also have to keep in mind that these facilities I was buying, the first ones only $130,000, and then it was owner finance. I only had to come up with not even $20,000 for the down payment. We will get into that too, and how you can scale with these small properties and still make substantial money and create value on the property as well.
I found this property on the side of the road and I had three months to move those buildings off of the other property and find somewhere to put them. Within that time, I got with this owner and this property had grass growing up to the doors here. It’s completely mismanaged. There was grass everywhere and mud holes. It was a 6-inch drop-off where your car would bottom out.
I went in there. I called the owner of this property and met with them out there. He was like, “I don’t use it. I’m holding onto it for the real estate value because it’s on a main highway.” We worked out an owner-financing deal and I bought the property. I’m still paying for it. Everything is fine. You can see the original building is this red building. If I zoom out, you can see that it’s the original building.
When you zoom back in, you can see that the two buildings are now there. We put those up. All we did was transport materials. I hired three different guys. They are substantially cheap, and we weren’t licensed or anything like that. We are out of the city so you have to check your codes and stuff. If you are out of the city, you can do a lot of this stuff.
Those were my first two deals. The first one I owner-financed and we had a schedule. First starting on the first deal, it was $10,000 owner financed. I still had my other job. I was still making money. As I said, I had no bills. I’m paying gas and stuff, but a lot of this money I had, I’m saving. We worked out a schedule to where I could pay $1,000 over 3 months. That’s how we did it with no interest either. There’s no interest attached to the loan.
Is the first owner of the two buildings owner-financed as well?
Yes.
How did you get him to owner finance? Did you ask him, “Would you owner finance it for me?” What happened in the conversation?
At first, we didn’t even have a price for him because he didn’t know what he wanted to sell it for. The second or third time I walked back into his office, I explained to him how much it was going to cost me to move the material and pour the new slab and stuff like this. I said, “I have the cash right now if you want me to buy it in cash, but if you don’t mind, can we stretch it out over three months? I will pay a couple of thousand a month or whatever it was. I don’t remember the exact numbers.
With the job I had at the time, it was no big deal. It was almost like I was losing no money because I had what I had already saved up, and then I could just pour my paychecks into this whole situation. That’s how everything happened. It was the most complicated deal I will ever do because it was so crazy in the timeline and all the pressure I had on me and stuff. It was wild, and I had to build too.
There are people asking about that. Talk about the building and also talk about how you got this one owner financed as well.
Did I put up the buildings myself? Yes, I did. You can probably look. I have some stuff on Instagram. There are a couple of videos of me doing the work to put it up. How much did you pay to put up your billings and how much did you pay for concrete? I used to know these numbers right off the top of my head, but it was around $3 a square foot to erect and take down, which is super cheap. That’s pretty cheap.
Was it like some day labor? How did you find these people?
Craigslist. I found local people. They weren’t licensed or anything like that, but we live in South Alabama. Anyone who says they can do something, they can probably do it and they are not going to cheat you. It’s a lot of handshake around here. I also informed the people that I would be working with them directly.
To an extent, it’s like taking down a giant Lego building and building up a Lego building and the backyard. You can see it there, so you take videos and pictures and then you are putting that up in a different spot. It’s not that hard. You have to be careful about some stuff, but it’s not rocket science. It’s nuts and bolts and pieces. If you know where the pieces go, you are good to go. Most of the pieces were in great condition so we didn’t have to buy any other pieces or anything like that. That was a good question.
How long did it take to take it down and put it back up?
It took one weekend each. We got slowed down a little bit on the roof because you have to make sure. The roof is the most important part and that took another day or so. Give it three days and you will have it down and up, as long as the weather and everything goes right. It’s not as big of a deal as putting in plumbing and stuff for an apartment complex because it’s just metal.
How much did I pay for concrete? Concrete was pretty expensive, but I got a good deal on it. Again, he’s not a licensed person, but he did know how to do storage facilities. You have to put down a moisture barrier on the slab for storage facilities. I had to make sure that was the priority. It had to be a good slab ground up because I couldn’t cheap out on the slab. The slab is very important. It was $5 a square foot. Maybe $5.25 a square foot, and so that was relatively expensive. Me and that guy worked out a deal too, a payment plan. I can’t exactly remember what the payment plan was, but I and the slab guy did work out a payment plan.
You are financing everything.
I didn’t finance the labor. The labor I paid per day. At the end of the day, I’m like, “Here’s your money.” A good thing too was they had all the tools. All I had to do was go buy new screws that we put in everything, new bolts, washers, and stuff if we needed them. Other than that, all those guys had their tools and everything. I didn’t have to worry about any of that.
You are a testament to what I say. All you have to do is ask and people will finance stuff for you. It could be concrete or it could be a storage facility. How did you get this one financed?
This one, I met the owner out there. He is a local in Mobile. Going back to the whole owner financing thing, I financed a lot of stuff now that makes me money. I try not to finance things that don’t make me money, but my point is to explain your situation. I’m not the best person at explaining my situation to people, but I try my best to explain what’s going on, “Here’s my situation. I can try to come up with the cash, but it’d be better if you could finance it. You make the interest on it.”
The more open you are in your situation, the way there’s no BS anywhere and it’s pretty straightforward. They can give you ideas of what you all can do for creative deal structuring. That’s what happened here. I met the owner out here. I explained to him. I said, “I got three months to figure out where to put two buildings. I’m going to turn this property into a nice-looking property. I’m going to cut the grass. I’m going to regrease all the doors. I’m going to put a new fence up on the side over here. I’m going to do all this stuff to make the property look better. I will buy it for a pretty good price.”
I was like, “Why don’t you finance it for me and you will have extra monthly income and that’s it.” No prepayment penalty so I could pay it off whenever, but it was a win-win for me and the owner. He had this property sitting around on the highway with nothing going on. I’m going to come in there and fix it up. All I did was explain to him my situation. No lies and BS about it. I needed to put two more buildings somewhere. Whether that was this property or the property down the road, I had to find somewhere to do it. That’s what I mean by explaining your situation. That helps a lot if you can be good at explaining stuff like that.
Do you remember what the terms and stuff that you all decided on this?
I wish I did. I used to know all this stuff and now I’m closing on my fifth one and I’m like, “There are so many.”
On this one, what did you pay for it?
I paid $133,000 for this property. It’s 5 acres on a main highway. This highway runs all the way from California to Jacksonville, Florida.
What’s the mortgage that you pay on this every month?
I pay $900 a month.
How many units do you have?
We have somewhere around 70 under the roof, and then we have all these parking spots too.
Have you made parking too?
Yeah. We will get to that. I remember too, this guy was smart. He knew real estate well. I had offered him 3.5% interest because at the time, keep in mind that this was a few years ago. He came back and doubled the interest rate. I signed on a 6.5% interest rate back at the beginning of 2022. You are either going to do the deal or not do the deal. I wanted to say that. He came back after I offered all his terms and he said, “We got to move the interest to 6.5%,” so I can save my ass.”
I remember us talking about this. I was like, “Just do the deal.”
Now, we have almost double-digit interest rates. Don’t let that stop you. If you can make it work, make it work and take a little risk. For sure, that’s what I would do. Speaking of that, then you got your boat and RV here. I cut all this grass, put a fence up, and put some wood in the ground with some rebar. That’s just parking spots. You can see some of them are longer. We have people parking stuff out here now. We have two boats.
Was there any county code inspection required? If you are in your town, I would check it out, but for this one, I have no clue. You should probably go through the permit process and talk with the fire marshal and all that. What they could do is make you put a fire extinguisher somewhere too. I didn’t put any ads on Craigslist. I found an ad for a handyman, and the handyman knew how to do everything, and he had a crew too so I didn’t have to worry about it. As far as the inspections and all that, you won’t have a lot even when you are in a town because there’s not much to inspect. As long as you make sure, there’s not a lot to inspect. There’s no plumbing and electricity in the units unless you do have electricity in the units.
You don’t do county inspections typically unless it’s an indoor climate-control unit. Especially in the middle of Alabama in a little tiny town, this is not how it works. I tried to build in little towns. I have called up the county and they say, “Go for it. Do whatever you want to do. No rules.”
If you are in a city, any city limits and stuff, you could probably still get away with it. I probably would. If it’s the primary market, you have to be careful. You don’t want to get all those fees and stuff.
If you are in a city or secondary tertiary market, you have to remember this is backward Alabama. There’s not a lot of rules over there. How are you managing this thing now, the parking?
I do everything that Stacy does. We have disc locks that have individual codes on them, etched the locks in, and we have a whole database for all those locks. Tenants can move in from their phones and they can get the gate code and everything to get into the facility. We do it the same way Stacy does, which my lawn guy handles all. He handles all that stuff.
He’s the boots-on-the-ground guy too.
Yeah. This is what I pay him. I paid $130 for the whole property to get cut. Keep in mind it’s 5 acres. It goes all the way back in here. I pay $50 for him to put locks on and take detailed descriptions of each unit, clean the units, and pick up trash. That’s $50. It will take them 30 minutes to 1 hour out of their day and they will get paid $50.
When people are paying these outrageous prices for boots on the ground, I don’t know what they are doing because this guy is my age. He’s more than happy to come out here for a couple of hours and take inventory of everything and pick up all trash for $50. First off, it’s under the table for him probably and second off, that’s $50 for an hour’s worth of work. You can see how easy it is to manage these things, but that’s how we do it.
We do it the same way Stacy does other than I don’t have a call center or anything, so I get calls all the time, which I’m working on that part. He comes out here twice a month. I don’t know how Stacy does this part, but I have him come out on the 7th and come out on the 21st. We do over locks on the 7th and then we take over locks off and check inventory on the 21st. We check inventory on both days and then he will mow on the 21st too.
Are you using software? What software are you using?
We use Storage just like what Stacy uses. As I said, they can move in virtually everything. That’s how we do it. We will have time to get to the other deals too. Are there any questions on this deal? I want to say too, there’s some cheap stuff you can do to increase income on these properties. That’s stuff like cutting the grass and making it a huge boat and RV storage field because that’s pretty cheap stuff you can do to make even more income. Think outside the box and see what you can come up with if you are buying these properties.
Are you doing insurance?
We don’t do any insurance, which I know I need to do. I’m so busy and I never got it set up.
Let’s go to the next two. Richard is saying how many units. It’s around 70 units.
It’s around 70 units. That’s without our parking. We have around 70% filled. We are still in the fill-up process. Security is a good question. There’s a solar camera here that captures license plates. There’s a solar camera here that looks over the general property. There’s a solar camera here that you can see on the boat and RV side. It has fish islands. They are all solar, so I pay nothing for my electricity bill on those.
All in all, your mortgage is $900 plus $130, your other expense, so maybe $1,200 a month or something to manage this.
My electric bill is $50 a month because we have lights and stuff. For some reason, each of these units has its alarm system. It’s a whole racket but I’m trying to turn them off and not deal with it. You could say $1,200 in expenses, and then you got your property tax and insurance. That’s a good ratio. That’s my P&L.
You can guess $1,200 in expenses, and you can also guess that our average unit cost is, let’s say we got 50 rented out. We are making over $3,000 a month. We are clearing $2,000 a month. That’s what’s going on. We are clearing $2,000 a month. All that money that we clear goes right back into the bank account and it starts getting me ready for another down payment. Off of this facility, all this money that will be made in cashflow, I put it right back into the bank account and get ready to use as a down payment.
Let’s do the next one so they can know those too.
Once I figured it out, I had my first properties there. I started moving out more because I was like, “I can do this remotely.” I started looking in all these little towns in Alabama. I called in Troy and now we have two facilities in Troy. I found this same situation or not the same situation because now, all I do is use Google Earth to find the facilities that I want to buy. I go around and look for them. I found this one that way. It had grass growing up on it too. The door on the side of the building was dented. The gate was crooked in the Google Earth picture.
Let’s see what it looks like now. Maybe it will be upgraded now. Now, it looks better because I came in there and managed it correctly. It’s this property here. We don’t own the building on the right. We do now but we didn’t at the time. This was a completely different owner over here. I called him up and same situation. I drove up there the next weekend and met the owner on-site in person.
He had no tenants on the property. He was holding this property for no reason. He was like, “I’m in real estate and I store some of our stuff in here but we don’t have any tenants.” He said he had six tenants or something, but he knew them all personally. Going into this property was probably one of the scariest things I have ever done because it has no income just like the last one. I was worried about it because I was like, “It’s far away from me. I’m going to have to fill it up.” Anyway, I met the owner. For this one, I had to get bank financed through a local bank.
He did not want to owner-finance this one.
He did not want to own finance no matter what I told him, and you don’t want to be too pushy because you are going to piss him off. It’s whatever his situation is. Maybe he wants to go buy a yacht or something with his money. I don’t know.
You don't want to be too pushy cause you will piss clients off. Share on XHow many units and how big is it?
This is almost 4,000 square feet in total. It’s like 33,900 or something like that, 3,800 or something. It has 30 units in total. The units are big. A lot of 10x15s and a lot of 10x10s. We don’t have any small units.
How did you get a bank to finance this if you didn’t have any income? Tell us the bank story.
First, I went to Regions because my parents set me up with Regions when I was sixteen. They were like, “Here’s your own credit card and everything. You use it. We had a great relationship with Regions. They are a pretty big bank. You might have them where you guys are at. I walked in there. I had my deal analyzer folder and all my paperwork. A real professional walked in there with a suit on. I sat down and I was like, “I’m looking for a small business loan for my storage company.” They looked at my stuff for five minutes and told me to get out the door. That’s what happened when I tried to go to a big bank.
I love the story so much. It’s the best story.
They couldn’t finance it because it’s not making money. I get that. I also had the after updates of what’s going to happen if what I feel is going to work works. I knew to an extent everything was okay because I did a lot of market research. I was calling around and everyone was full. I knew I could fill this thing up. Plus, it had no marketing. None of these facilities had any marketing. None of them were on Google or anything, and so I knew that. This was a few months ago, they didn’t want to touch it because stuff was getting a little sketchy and it’s even more sketchy now. They didn’t want to touch it.
That’s the Region.
Yeah. I then walk into a local bank in Troy, Troy Bank and Trust. They are somewhere downtown. I sat there for an hour with the head loan officer. I had my suit on and everything. I had my paperwork ready to go. I explained to them what the situation was and how I was going to make them money. The bank, in my situation, at least from what I have learned, I haven’t had that much experience, but they would want to know that you are going to make their money at the end of the day. Are you going to be safe? They want to get their money at the end of the day. I sat down for an hour, talked with them, and it was done, “We will get a loan out to you.”
Did you make an appointment or did you just walk in?
I just walked in.
Imagine what these people are thinking.
Shout out to Mark at Troy Bank if you’re somehow tuning in to this. Mark is a good guy. He was like, “We will do it. I will get you some terms out and you are going to have to see if they work with you.” This property was $120,000, but it’s a big risk. A lot of these units are broken so I had to fix a lot of stuff too. Even on the other property, it’s not all willy-nilly. That’s more than what people think it is. I had to stay in a hotel for a week up here to fix up the property every day up at 7:00. I’m out there by 8:00. I’m fixing springs. I’m doing everything. It’s all on my Instagram and everything. I don’t want everyone to think it’s easy because it’s not going to be easy, but you can create a lot of value.
I go in there. I got my loan terms back. It’s 6.5% interest, 20% down. He wanted a lot down and I still had my money left over. I probably had close to $20,000 left over from the last property because I didn’t use it all. We are still constantly making money. We filled up on the other property. The first little facility we had with the red doors. We filled that up instantly. I was making good cashflow. I also still had a job. With all this money I’m making, I have no rent where I was living. I could put this money aside and keep producing down payments for properties because, at this age, I don’t have a lot of bills.
A lot of you probably have 30 bills every month, but back then, I didn’t have a lot of bills. Everything, I’m saving. Now, I have another down payment ready to go for another small property. That’s what we did here. It wasn’t at 6.5%. It was at 5.25% for this property. That was pretty good at the time. That was pretty standard. I signed on to it. I and the owner shook hands. The previous owner still has three units here. We filled this property up. I filled it up in maybe 3 or 4 months. We started having to raise the rent. That’s market research and figuring out.
How did you fill it up?
We had Google and everything. Also, I don’t run any ads. I have never run an ad on any of my properties. I do market research before I get into a property. If it doesn’t work from the get-go, I don’t care what price I can buy it at or any of this. If I don’t think it’s going to fill up quickly and keep a steady supply, I don’t buy into the market. I have never done any advertisements online or anything. Nothing. I have never done anything.
You just have the sign and the Google business listing.
That’s it.
In tertiary markets like in little towns, you could still do that. In secondary and primary markets, you need to do marketing.
I could make more money too if I marketed it. We could still raise rates even higher because we get our name out there more. I’m trying to figure out how to delegate stuff because I’m a very busy man right now. I’m trying to figure it all out. We need to offer insurance to tenants. We need to do tons of stuff in-house that I’m going to be working on this year.
It’s a lot to learn but I’m moving very quickly because of the window of opportunity. If I see a good deal, I’m going to make it happen. That’s the story of this property. I want to move to this one next door. This one for the longest time, he’s an awesome guy too. He has an electric gate out front of his property. He didn’t want to sell. When I met him, I was like, “I bought the property next to you. Would you be interested in selling?” “No, we are not interested. Sorry.”
What happened is I didn’t keep asking him. I would call him maybe once every two months. He then ended up wanting to sell. He did not want to own our finances as well. You can’t be too much because they are going to walk off and go put it on the market or whatever they want to do. I ended up getting this bank financed as well.
You can't be too much because clients will walk off and put it on the market. Share on XI closed on this one a few months ago. As I said, I’m moving quickly. I have only been with Stacy for a year and a half. The bank and Mark came to me. I came to work and I said, “I need another loan. I got another property here that I want to buy.” He was like, “You need to come in and talk to me or we need to hop on a call because I want to see what’s going on with the old property.” That’s what I did. I went back up there. It was a 3.5 to 4-hour drive. I was very dedicated.
Did you wear a suit this time?
At this time, believe it or not, it’s Alabama. They are crazy about football. I bought a suit that was the same color as the Troy Trojans, which is a red maroon suit because I was going to see if he’d give me a little discount or something because they are all crazy about football. I walk in there with my suit and everything, but always be professional too when you walk in because it will probably work out better.
I get in there and so I show him what the previous property is doing, and he is blown away and amazed at the cashflow and everything. He’s like, “This is insane. You don’t have any overhead. You filled this thing up that quick and all of this,” and so we talked. A week or two later he gets back with me and he is ready to fully finance this next facility with no money down. Instead of trying to come up with this down payment money, I’m calling cousins, family members, friends, and people I went to high school with to try to raise money and have a little contract.
What did you get the contract for this one? How much?
The first one was $130,000. The other one was $120,000, and this one is $133,000. I’m going crazy trying to find some down payment money within those two weeks because this one is starting to cashflow well and the other one is cashflowing well. We are making good down payment money. Keep in mind, I only have to come up with $20,000 to $10,000 down on these small properties so I can make some plays on them. Otherwise, if I’m buying a $1 million property, I’m going to have to somehow come up with $200,000, which isn’t happening at my age right now.
You are getting there.
I’m going crazy trying to figure out how I’m going to raise this money because you can’t let the deal slip. If you know it’s a good deal, you better be grinding every day to figure out how you are going to get the money. I don’t care if you have to call your cousin that you haven’t seen in four years or whatever. A lot of these people have money sitting in the bank doing nothing. Anyway, I’m going crazy. Mark calls me back a week or two later, “We are going to fully finance this thing for you. Here are the rates. Here’s everything.” I didn’t have to worry too much. We are cashflowing all of the properties still.
You can't let the deal slip. You better be grinding daily to figure out how you will get the money if you know it's a good deal. Share on XLook at the terms that he gave you. Tell me about the terms and stuff. Tell everybody what happened.
It’s 8% interest because this was a few months ago. They are also fully financing it. It was a higher interest rate and purchase price of $133,000 over 20 years. No balloon and no floating rate.
What’s the mortgage for this one?
The mortgage for this one is way higher than this because of the interest rate. This mortgage right here was $650. This mortgage on here was $1,030. This one costs $13,000 more than this one, but for the interest, this one is crazy. It’s an even smaller facility than this one. I’m paying more for it than this one.
All in, you are at 260 or around 250. You have all this land. You got to go out there and find somebody that’s selling your units again and then build it. It’s a super good deal. Do it again for this land right here. You still have all this land under right here so you will be able to grow, plus your 5 acres at your other property. You have two very good properties so you don’t need to worry about your purchase price. Now you just have to manage your properly and worry about your cashflow, which is what you are always talking about.
That’s another important thing to me. It isn’t that important to other people but I have to make sure these things cashflow because I don’t have a lot of streams of income. Make sure you have your priorities in a row and be like, “Does cashflow matter to me or am I good just holding onto this thing and doing whatever else you are doing in life or whatever. Having your keys set in and your priorities are good too. Let me get to the last one. Those are those two. I bought out the competition. Now, I’m buying one in Arkansas. Instead of going crazy for the down payment here, I got it fully financed so I’m moving that down payment to Arkansas. I’m going to have one over here in Arkansas. That one needs a lot of work.
You are closing on this one by the end of the month, right?
Yeah. This one, we are closing by the end of the month. I have already sent the cashier’s check and everything to him. This is owner finance too at 4.5%.
How did you find this one?
This is Stacy’s program. She found it. Three students passed on this deal because of how much work it needed. The roof on this side needs to be replaced because it has a hole in it, but three of Stacy’s students passed this one up. We were in a meeting and she was like, “I don’t know what we are going to do with it. We are just going to have to drop it off.” We had one pair of students that were in Mexico who didn’t want it, and then another pair of students who thought it had too much work. It’s a perfect thing for me because I’m going to go stay out there for two weeks and fix everything. I’m going to get a hotel or Airbnb and fix everything up.
How big is it? How many units and stuff?
This one is the biggest one that I have bought. It’s almost 9,000 square feet and it has maybe 80-something units and it has a lot of land. All these properties I’m buying have a lot of land. This is all of it right here, and then it has this highway. It’s a main highway that cuts through it, and this area is good too. We have a main highway.
It’s right on the main highway. That’s amazing.
We are going to put some billboards up and do some extra income for that. You have to think out of the box and figure out what you can do and then just do it. This will have a billboard here. The current owner said he has been contacted to put a billboard in and stuff. He hasn’t had the time to deal with it. Lamar Advertising has contacted him.
You must think out of the box, figure out what you can do, and then do it. Share on XThe owner is an investor too. He thinks the way that Luther is thinking. I told Luther, “This is what happens with a lot of owners. They are the type of people who will do the deal if you go and meet them.” When I talked to him on the phone, we connected very well. He told me the price and then he said he would split that into two. That’s why I told Luther, “You can get into that story,” and then when you go out, what did you all talk about?
When I first called him, he was like, “We are not thinking about selling anymore and all this.” What happened in this deal was Stacy had her program with the students. They get to pick on these deals. What happens is the students pass on these deals and it becomes months of not contacting the owner. I contacted him and he is like, “It’s been almost three months and no one has made me an offer or contacted me. We had made an offer but no one has called me back or anything.”
I’m like, “I apologize. I’m interested.” I fly out there. I’m there for a day and I come back. While I’m there, I meet the owner on site. It was a whole ordeal. This whole road was closed down here toward the highway. My Uber dropped me off and I had to walk all the way to the facility, and he was just standing outside. He thought I was a robber or something. I was all sweaty. I’m tired.
Did you tell him the story that you had walked?
I did and then this is the issue too. Sorry. I don’t want to go too far off-topic. The point here is that you have to be dedicated. My Uber drops me off here and says to walk. I walk over here because he can’t get through. The road is closed. I’m like, “Whatever,” so I’m walking. All these roads are fine, but the main road was closed for some reason.
I’m sitting here walking around the property for 10 to 15 minutes and the owner is here just looking. I think the owner is a tenant. I’m taking pictures of the property. He’s like, “Who are you? What are you doing? You have been here for ten minutes walking around my property.” I’m like, “I didn’t know you were the owner,” and all this stuff. I tried to explain my situation and all this.
How did you get him to owner finance?
The same situation with the other ones. He didn’t want the to owner finance it at all. He was so against it. I explained the process. I also explained to him that wasn’t my first rodeo and that I have done this on a lot of the properties. I have owner-financed. He then warmed up to it, but when we first talked, he was very against it. A lot of people don’t have knowledge of it. I explained to him the tax implications and stuff like that.
Tell them the purchase price that you got this for.
The purchase price was $215,000.
That’s for 80 units. That’s amazing
If I hired a company, I would have to put $10,000 to $20,000 into it for the roof material and stuff. If I do it myself with some guys off of Craigslist, I can cut this stuff down far. It needs some work. Don’t get me wrong. You can’t see it all the way here, but the roof is leaking on that side and then some of these units are damaged.
You need to paint it.
Yeah. That’s it, guys.
What are the terms of the owner financing for this?
It’s 10% down, so that’s a steal because I’m only having to come up with $20,000. That’s no big deal right now because I have been pretty much saving all the cashflow from the other property. Every time I have got a new property, I store that money and I put it into another down payment. What I’m doing is making me able to get these bigger properties. That’s pretty much it.
Luther is a true testament that if you want to get into this, you can start small and work your way up. His story is the same as my story. If you want to do this, you can do this. It’s not easy. This is exactly how I started and there’s nothing wrong with going into small towns working your way up, getting some owner finance deal, and you will find diamonds in the roughs like this one. He’s going to buy this. It’s 80 doors for $200,000. That’s a great deal. It’s worth $800,000 to $900,000 once it gets filled up. It’d be worth a lot of money. He has a property as well too that he can add on to this one.
There’s also one thing I wanted to say to everyone on the show. These are people my age or older. There are no excuses. I’m saying this. We live in a very good country to help build wealth. If you take advantage and work at stuff, you can do this with many different companies. My family has never been some huge wealth thing or anything. My dad didn’t even go to college. He was a cabinet guy his whole life. My mom has an architecture firm. No one knows anything about real estate in my family.
I just studied my ass off. That’s all there is to it. I saved money and I put money where it needs to be instead of spending money on stupid things like people my age would be doing. Now I’m here making value out of properties. If you are in a tough spot or different scenario and you think there’s no way you can make it out, I want you to know that you can do this on many other companies other than storage if you focus on it and put your mind to it. That’s what I’d like to let everyone know.
Put money where it needs to be instead of going and spending money on stupid things. Share on XThank you so much. You are an inspiration and I appreciate you hopping on and letting everybody hear your story. I’m sure everybody that’s tuning in is inspired by what you are saying because you are an inspiration. I’m so glad that I met you in my life for sure.
Thank you. I appreciate being able to come on and everything.
We got to hop off because we got to meet an owner. You guys take care. We will see you at the next session. Bye.
Thanks, everyone.
