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Commercial Real Estate Pro Network

Commercial Real Estate Professionals who work with Investors, Buyers and Sellers of Commercial Real Estate. We discuss todays opportunities, problems & solutions in Commercial Real Estate.
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Mar 7, 2019

Financial Freedom is the end goal for every working American.  Some day, you hope to have enough to feel secure that you can live comfortably without the stress or worries or need to continue to work.

Dr Ross Stryker realized that working as an orthodontist until he died was not the path to financial freedom.  The decision to go to a financial freedom seminar about real estate, changed his outlook forever.

Wall Street vs Real Estate

The American worker has been indoctrinated to regularly invest in the stock market for retirement.  Buy dollar cost averaging, starting aggressive, and as you reach the age of concern, dial back the risk to some municipal bonds that pay 3 to 4 percent.  Then when you retire, withdraw up to 4% and live happily ever after.

If you study this model closely, you will come to the conclusion that this will not allow you to continue to live the lifestyle you are accustomed.  You need to consider an Alternative Investment, maybe cash flowing real estate.

A Better Way

Passive income is the goal.  In real estate, the opportunities for passive income are numerous.  You can buy single family turn key properties, invest in note funds, etc working with people dialed into the market providing returns well above 3-4%.  This is a good option for someone looking for more control.

However, Ross recognized the challenge of scale that exist when investing in single family properties.  He liked real estate, but really wanted to be able to scale. Something he could share with others.

Self Storage

After sifting through multiple real estate asset classes, multifamily mobile home, retail and assisted living, he landed on self storage.

While Self Storage is a want instead of a need.  He recognized a positive characteristic about Self Storage: Americans love our stuff.  In good times, we buy stuff. In bad times, we don’t want to get rid of our stuff. As long as we have more stuff, the demand for self storage will remain strong.

Dialed into the asset class, he had to determine where to invest.  Looking for opportunities, his team identified that coastal and large metro areas were heavily saturated with existing self storage.  The underserved opportunity exist in the midwest secondary, tertiary and rural markets.

Opportunities in Self Storage

There are multiple ways to get into self storage.  You can buy an existing property, build new, or convert an existing vacant property.  

Limited supply is another benefit.  Self storage has been identified by many cities as unwanted.  They have passed building ordinances, rules and zoning laws, etc to make developing any additional self storage difficult for any future potential competitors.  

Operation of Self Storage

For passive investors, the obvious choice is to utilize third party management property management.  There are multiple name brand professional operators that have all the expected marketing and infrastructure to attract and manage clients and send owners the check.

BIGGEST RISK:  Each week I ask my guest what is the Biggest Risk they see that real estate investors face.  

BIGGEST RISK: Going it alone

How to manage the risk:  Get involved in a group of like minded investors and or mentor group.

BONUS RISK; Don’t go to big too fast.

How to manage the risk:  Start with something small that is manageable.

 

For more go to: https://www.smartassetopportunities.com/

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