245. Self Storage’s “Lost Year” and Why Mom-and-Pops Are Disappearing w/Andrew Freeman and Jon Marshalla
Self Storage Income
AJ Osborne
4.9 • 591 Ratings
🗓️ 20 May 2024
⏱️ 71 minutes
🧾️ Download transcript
Summary
The self storage industry is changing. From the Great Recession through 2021, those who bought self storage facilities saw massive rent growth, impressive appreciation, and, at times, a seemingly endless supply of renters. As the American population began to move after the lockdowns, self storage only became more attractive, and facilities were filling up left and right with occupancy rates and rents exploding. But now, things have changed.
Over the past two years, self storage operators have been hit hard. Rent drops, vacancy, and increased competition took away the “passive” income part of self storage investing. Thankfully, those who treated their facilities like businesses survived, while the casual investors either bit the dust or sold to stop the bleeding. Time-tested investors Andrew Freeman and Jon Marshalla from KO Storage were able to roll with the punches and survive a tough self storage market.
Today, we’re talking to Andrew and Jon about how they built their portfolio from zero facilities to over two hundred, plus the markets they’re targeting as the “mom-and-pop” investors slowly sell and large operators “consolidate” what’s left of the smaller facilities. Andrew and Jon even share what they’re seeing in 2024 and how they’re pivoting to control the controllable and not only survive but thrive as the storage industry continues to change.
What you’ll learn in today’s show:
- Why Andrew and Jon ditched multifamily real estate to build a massive self storage portfolio
- The “lost year” in the self storage industry and why so many operators got hit hard in 2022
- One CRUCIAL part of your investing strategy that cannot be overlooked
- The “acquisition runway” causing mom-and-pop ownership to dwindle
- Why small markets, not big markets, might be even safer to invest in
- Andrew and Jon’s 2024 plan to buy even more as deals become challenging to find
Previous Episodes with Andrew & Jon
Episode 105 with Jon and Andrew
Episode 142 with Jon and Andrew
Where to find more about our guests!
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https://www.selfstorageincome.com/feasibility
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Transcript
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| 0:00.0 | That puts actual mom and pops probably down to 50% or less. |
| 0:04.0 | If you look at the mom and pops that are institutional grade, that's probably less than 10% at this point. |
| 0:10.6 | You go into major cities, everything else. |
| 0:12.4 | You actually, it is going to be hard for you to even find a mom and pop person at all. |
| 0:23.0 | Welcome everybody to self-storage income. |
| 0:25.4 | And today I have my good friends. |
| 0:27.3 | They've been on the podcast multiple times before. |
| 0:30.2 | They've also been at our event and spoke. |
| 0:32.8 | We got Andrew and John here. |
| 0:34.9 | Guys, you already know you're like my favorite guest. |
| 0:37.4 | We can talk forever. I love our conversations. We literally, before we even got on, we were already in one. It was like immediately like, oh, okay, no, we got, hold on. We got to wait. Like this is, this is good, good stuff. But for all the people that haven't urged you guys on the pod before, that weren't at the events, didn't see here you speak. |
| 0:55.7 | You guys want to do a quick introduction to you guys, how you got started, and then also |
| 1:00.4 | where you're at today because your story is amazing. |
| 1:02.5 | Sure. |
| 1:03.2 | I'll take it off. |
| 1:04.7 | I'm Andrew. |
| 1:06.9 | John, to my right, but might not be able to see that. |
| 1:10.5 | But long and short of it, John and I started an e-commerce |
| 1:13.4 | business that took off beyond our wildest beliefs. As we had success there, we wanted something to |
| 1:19.3 | parlay some of that surplus capital into. We both had a love and affinity for real estate. |
| 1:25.5 | John had some experience building up a multifamily |
| 1:28.4 | portfolio in Wisconsin. I was dabbling as well with multifamily condos in |
... |
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