BiggerPockets Real Estate Podcast

BiggerPockets Podcast 138: Self Storage, Systems, and SEO with Michael Rogers

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Self storage is one of the most passive forms of real estate investing out there, but only if it's run correctly. On this episode of the BiggerPockets Podcast, you’ll learn from CPA and real estate investor Michael Rogers about the process of finding, rehabbing, and cash flowing self storage units—and they systems that have allowed Michael to buy 350 units and partially quit his job.

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PATLive-LogoWe just wanted to give a shout out to our podcast sponsor on today’s show: PATLive. PATLive's team of superstar receptionists will always leave your customers delighted. Every agent goes through a rigorous training course before they can answer calls, and we've got quality assurance down to an art.

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In This Episode We Cover:

BiggerPockets-Podcast-Cover 300 300

  • Michael’s thoughts on having a part time job while investing in real estate
  • How he bought a duplex while still a student
  • What you should know about loan to value
  • How to find the right sub contractors
  • How Michael got into self storage
  • Tips for investors looking to start with self storage
  • Why you should be aware of the “Declining Spiral
  • How he structures his system to get clients for storage rentals
  • How auctions work when tenants don’t pay the rent
  • What you should look out for in the self storage niche
  • The software that Michael uses
  • 3 lines of defense for self storage
  • How to find tenants
  • How he uses Search Engine Optimization to his benefit
  • The numbers involved in his deals
  • Why he’s an active BiggerPockets member
  • And SO much more!

Links from the Show

Books Mentioned in this Show

Tweetable Topics:

  • “When you are at that job and you’re doing that work, you got to give it your 100%.” (Tweet This!)
  • “You always look at how much cash are you going to lay out and then what it’s going to bring back in time.” (Tweet This!)
  • “Find out what the big guys are doing. You don’t have to reinvent the wheel.” (Tweet This!)

Connect with Michael

Real strategies that work for real people seeking to build wealth through real estate investments. Co-hosted by Brandon Turner and David Greene, this podcast provides actionable advice from investo...
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    Richard Ball Real Estate Agent from Port Huron, Michigan
    Replied about 5 years ago
    I know that can of Sun Drop is definitely out of the ordinary but if I had one guess to get a free book I would have to go with the vibrator that is sitting on the island next to the gallon of alcohol….it appears someone may have had a good time. Am I right???
    Brandon Turner Investor from Maui, HI
    Replied about 5 years ago
    Well done Richard 🙂 Sounds like a party! I’ll PM you 🙂
    Michael Rogers Certified Public Accountant from Chattanooga, Tennessee
    Replied about 5 years ago
    Ha-ha. Great job Richard. You got it. Brandon – we’ve got a winner!
    Deshawn Lewis DHS/Investor from Bowie, Maryland
    Replied about 5 years ago
    Great podcast!!!
    Michael Rogers Certified Public Accountant from Chattanooga, Tennessee
    Replied about 5 years ago
    Thanks Deshawn. Glad you enjoyed it.
    Gene Ramirez Investor from Ventura, California
    Replied about 5 years ago
    Great Podcast.
    Michael Rogers Certified Public Accountant from Chattanooga, Tennessee
    Replied about 5 years ago
    Thanks Gene! Appreciate it.
    Andika Powell Investor from Dearborn Heights, Michigan
    Replied about 5 years ago
    Another accountant/CPA turned real estate investor! I am extremely encouraged to continue on my path, since I became a CPA two years ago. Great podcast! I can’t wait until I create and can tell my story of true real estate success.
    Michael Rogers Certified Public Accountant from Chattanooga, Tennessee
    Replied about 5 years ago
    Thanks Andika! Glad to hear from another CPA. Congrats on passing the exam and becoming a CPA. That’s a great accomplishment. The CPA certification has definitely helped me in my real estate investing career, so I’m sure you will benefit greatly from it as well. Best of luck!
    Mike Higgins Rental Property Investor from Green Bay, Wisconsin
    Replied about 5 years ago
    Any suggestions or thoughts on building storage units from beginning rather than buying distressed ones? My father has a spot of land on a busy road that he was thinking of starting with building one, then continue to build as they fill up. What would that look like start to finish, and would it be a good idea? Great podcast!!!!! Thanks
    Michael Rogers Certified Public Accountant from Chattanooga, Tennessee
    Replied about 5 years ago
    Hey Mike Higgins. Thanks for the kind words. You can definitely build from the ground up. I’ve not built a facility from scratch just because I have tended to do better by buying under-performing facilities that already have infrastructure in place. Units, gates, fencing, concrete pads, and land grading completed.) I have added on additional units on 2 of my current facilities over the past couple years. I can give you the numbers on those and maybe those numbers can help you for considering your project (my numbers will different than yours depending on where you live). Two years ago I built a 4,800 square foot building (34 units) for $77,000. That’s ~$16 per square foot. Please keep in mind that this is just the building. It did not include the grading or the concrete slab which were already completed when I purchased the property. I would guess you are looking at roughly $5 per square foot for the slab for a total of about $21 per square foot. Depending on the land, you will also need grading. If it’s a new facility you will want a fence ($15 to $20 per linear foot installed) and gate operator ($2 to $5k installed ) as well as security cameras. That 4,800 square foot unit had potential gross revenue of $2,200. Since I already had the infrastructure in place the additional $77k to build the new units. This means monthly rent was 3% of cost. This is above the 2% rule which is really good and made sense for me to add the additional units. ($2,200 potential monthly rent divided by $77,000 cost = 3%). To figure out the rental rates for your market, I would just call around and see what 10×10 and 10×20 units rent for and then put those numbers in your spreadsheet to see how much revenue you can get. My guess is that the first building won’t cash flow out very well, but as you add more and more buildings it will. This is just because you are able to spread the fixed costs of driveways, gates, fencing, security, office labor, etc over more units. Let me know if that helps. Best of luck.
    Mike Higgins Rental Property Investor from Green Bay, Wisconsin
    Replied about 5 years ago
    Incredible insight and information. I appreciate everything you laid out here. We have some estimates of building materials, concrete, fences etc.. My father is a contractor, so the building part of the project will not cost as much as the average person. Would love to touch base with you sometime in the near future.. Thanks again!
    Michael Rogers Certified Public Accountant from Chattanooga, Tennessee
    Replied about 5 years ago
    Glad it was helpful. Feel free to reach out to me if you ever have any questions. Thanks, Michael
    Joseph Gozlan Investor from Plano, Texas
    Replied about 5 years ago
    Can someone please post links to the lease payment service Brandon was referring to? The one where the tenants can go to 7-11 and pay their rent in cash?
    Michael Rogers Certified Public Accountant from Chattanooga, Tennessee
    Replied about 5 years ago
    Hey Joe. Do you remember where this was mentioned in the podcast (what minute)? If you do, I’ll go back and check. Thanks, Michael
    Brandon Turner Investor from Maui, HI
    Replied about 5 years ago
    Hey Joe – PayNearMe.com is who I use. Also – PayLease.com is also a good one, I hear!
    Joseph Gozlan Investor from Plano, Texas
    Replied about 5 years ago
    Thanks Brandon! I found the PayLease but was missing the PayNearMe.
    Joseph Gozlan Investor from Plano, Texas
    Replied about 5 years ago
    Thanks Brandon! I found the PayLease but was missing the PayNearMe.
    Michael S. Helton Real Estate Redeveloper from Reno, NV
    Replied about 5 years ago
    Great podcast! Always good to hear what people are doing in other areas.
    Michael Rogers Certified Public Accountant from Chattanooga, Tennessee
    Replied about 5 years ago
    Thanks Michael Helton. Appreciate it!
    Brian Coleman Investor from Baltimore, Maryland
    Replied about 5 years ago
    Wow, amazing show. Michael, very impressed…wow, you’re doing all that with 3 kids AND a part time job! I have my first child on the way. Great points on doing your best at your current job. I totally agree- you leave on your terms. I’m also a CPA and do part time work, I call it my “waitressing job”, while I build real estate (currently 20 units). I go through a temp agency, Kforce. I personally found this better because the “gigs” are short term and you don’t have to worry as much about politics. Again, great show. I’m a new member. Josh and Brandon thanks for creating this platform.
    Michael Rogers Certified Public Accountant from Chattanooga, Tennessee
    Replied about 5 years ago
    Thanks Brian! Congrats on your first child. Having kids is awesome. I am lucky in that my wife does most of the heavy lifting with our kids as a stay-at-home mom. I couldn’t do it. 🙂 Sounds like you’ve got a nice arrangement working the part-time CPA gigs. The CPA certification is great in that allows us to have greater flexibility to design the work schedule that fits your lifestyle. A lot of other careers don’t allow that. Keep up the good work growing your real estate portfolio. Michael
    Nick Heil Specialist from Corry, PA
    Replied almost 5 years ago
    Michael, Thanks for coming on the show! I’m a regular listener and I’ve been waiting some time for BP to do a podcast on self-storage. I was wondering what your thoughts are on portable storage. I currently own a small portable storage business with 34 units that I deliver with a roll-back tow truck. That is going well and I want to continue to do that, but I also want to branch into traditional self-storage facilities as well where I would also be able to leverage my portables out of. What are your thoughts on that and have you considered that at all? Also, it seems that construction costs and zoning requirements are increasing for self-storage in general, what do you think of the idea of purchasing a piece of land, and then placing a lot of portable units on it and run it as traditional self-storage with the ability to leverage the mobiles? It seems with the right set up, you could avoid certain zoning requirements and save money on property taxes, all while maintaining a totally mobile business that traditional self storage doesn’t offer. Loved this episode and look forward to hearing from you! Nick
    Michael Rogers Certified Public Accountant from Chattanooga, Tennessee
    Replied almost 5 years ago
    Hey Nick. I’m glad you enjoyed the show and thanks for the kind words. I don’t have any experience in the mobile storage area, but it is something that interests me and I have thought about. It sounds like you’ve got one of the biggest costs taken care of by having the roll-back tow truck to move the storage pods. The nice thing about your business is that since you already have the truck you can just add new pods as their is increased demand and grow your business incrementally. I agree that the portable storage business would tie-in nicely with a permanent facility. That way you can handle both types of storage customers. Not sure about the zoning rules for placing portable units on a piece of land and renting them out like traditional storage. How are you getting most of your tenants and how much do you charge each time someone moves their unit? Thanks for the comments and best of luck. Michael
    Nick Heil Specialist from Corry, PA
    Replied almost 5 years ago
    Hey Michael, Currently I get customers through word of mouth and my website. Starting off so small I haven’t had to do a whole lot of advertising but I’m looking to start doing more moving forward. The best advertising with these is getting the units parked in customers driveways. Most customers rent monthly and use them for storage, but some do have their units moved full as well. I usually charge a base fee that starts at $50 then I’ll charge a mileage fee as well. The base fee will also increase as the mileage gets longer as well. The thing about mobile units, it’s hard to get into the moving aspect of the business and compete with companies like uhaul where you can rent something for a few days for so cheap. I can’t be profitable in a move without charging a few hundred dollars, so I really try to rent more to customers who want to use them for longer term storage. Also, as you can imagine, there is a lot less labor time involved when customers just want the unit to sit on their property for a long time. Thanks for the reply! -Nick
    Michael Rogers Certified Public Accountant from Chattanooga, Tennessee
    Replied almost 5 years ago
    Makes sense. Thanks for the insight. Best of luck and keep us posted as you grow you business. Michael
    David D'Errico
    Replied over 4 years ago
    I had an idea about the cleaning fee issue you mentioned in the podcast. You said sometimes it’s hard to collect the fee after the tenant has moved out. Well what about charging an upfront cleaning fee or deposit and then refunding that to your tenant after they leave? @michael rogers