The Capital Stack
The Capital Stack
114. Mastering Investment Strategies from Self-Storage to Multi-Family with Paul Moore
Use Left/Right to seek, Home/End to jump to start or end. Hold shift to jump forward or backward.
Connect with the host:
LinkedIn: https://www.linkedin.com/in/brandon-e-jenkins/
Website: https://www.birchprosper.com/
--
About the guest:
Paul Moore is the Founder and Managing Partner of Wellings Capital, a real estate private equity firm. He transitioned from a successful stint at Ford and co-founding a staffing firm—earning him 2x Finalist for Michigan Entrepreneur of the Year—to becoming a prominent real estate investor. Paul has completed over 100 commercial and residential deals, appeared on HGTV, and contributed to Fox Business and BiggerPockets. He also co-hosted the podcast "How to Lose Money" and authored Storing Up Profits and The Perfect Investment.
Connect with Paul Moore:
Email: invest@wellingscapital.com
Website: https://www.wellingscapital.com/
Episode Highlights:
✔️ How to find your 'Big Why'
✔️ True investing vs speculation
✔️ Surviving debt and financial crisis
✔️ Impact of FOMO on investment decisions
✔️Advice for new investors
--
💡 Interested in learning more about opportunities to partner in deals as a passive investor?
★ Join Our Investor Club ★ https://forms.gle/AEpWgPg7krd8YzPU8
I didn't know the difference. You know, investing is when your principal is generally protected or protectable and you have a chance to make a profit, but speculating is when your principal is not safe at all and you have a chance to make a profit.
SPEAKER_00How successful would you be if you had the blueprint for building wealth as a real estate investor or as someone who acquires small businesses? If you want to move the needle financially in your life, then you need to understand one thing: the capital stack. I'm your host, Brandon Jenkins, and this is where your journey to financial freedom begins. Hello, everyone. What's up and welcome back to the Capital Stack. I'm your host, Brandon Jenkins. And uh, you know, before I conduct these interviews, I usually try to find a means of adequately honoring the guests by sharing some of what they've accomplished, their contributions that they've made throughout their career. Um, and every once in a while, you know, I have a the privilege of speaking with someone who's just done so much that it's difficult to put it all into words. Um, and our guest for today is someone who definitely fits that category of being some someone who's very highly accomplished, very highly sought after, a thought leader in the business world and the real estate industry. And our guest for today is Paul Moore. Paul, how are you doing today, sir?
SPEAKER_01I'm doing great, but you didn't say made a lot of mistakes.
SPEAKER_00Uh-oh, I left that out. So uh I'll tell you what, uh normally I'll grab a few talking points from the from the guest bio, but I'm gonna I'm gonna share just a little bit more here because I think it's important. So Paul is the founder of uh, I'm sorry, founder and managing partner of Wellings Capital, a real estate private equity firm. He got a start in real estate after selling a staffing firm that he'd co-founded and built from the ground up. Uh Paul has completed over 100 commercial and residential real estate investments and exits, very important. He's contributed to Fox uh Business, the real estate guys radio, and is a regular contributor to uh bigger pockets. I actually tried to count all of your blog articles, but I lost count. Um but um very, very impressive there. He's produced live shows, video, blog content, and he's co-hosted a wealth building podcast called How to Lose Money. You love that name. Had over uh 200 episodes there. He's also the author, the author of Storing Up Profits, Capitalize on America's obsession with stuff by investing in self-storage as well as the perfect investment, uh, create enduring wealth from the historic shift to multifamily housing. And we spoke um on the phone recently, Paul, and and like I mentioned here before we started the recording, you know, I didn't even realize at the time I actually have your book. So really, really good to meet you and have this conversation. Um, but um, I'm sure I missed a few things there. So I just wanted to give you an opportunity to kind of share a bit of your background with us.
SPEAKER_01Yeah, we have one other thing in common. We both, well, I actually had a degree in petroleum engineering. You actually were a petroleum engineering. I spent money in petroleum engineering. But uh anyway, yeah, uh no, I had an engineering degree, which was my first mistake, and uh then an MBA uh went to Ford Motor Company, and uh after that uh had a staffing firm like you mentioned. And um at after about five years in that, we sold it to a publicly traded company, and I thought, I'm an investor now. This is gonna be great. And I wasn't. I actually thought I was an investor, I was actually a full-time speculator and I not a full-time investor. I didn't know the difference. You know, investing is when your principal is generally protected or protectable, and you have a chance to make a profit, but speculating is when your principal is not safe at all, and you have a chance to make a profit. And there's a big difference. And so I lost a lot of money with that mindset. I made money as well, so that was encouraging. But I realized as I was only 33 when I sold my company, I realized as I got down the road into more, you know, into my 40s and then even 50, I did not want to be a speculator anymore. It wasn't fun and it sounded fun, uh, you know, being an entrepreneurial investor, trying to get the same charge and excitement out of investments that I got out of being an entrepreneur. Part of the problem was, you know, I after for a couple of years there, I didn't have anything else to do. So I had to get some excitement from it, right? Well, you know, um uh the first uh Nobel Peace Prize winner in economics from the US said investing should be boring. If you're having fun, it's probably not really good investing. He said it's better to uh if you really want to have some fun, take $800 and go to Las Vegas.
SPEAKER_00Very accurate, very accurate. You know, I um I look, I have to repeat what you mentioned, what you said there, and we'll we're gonna dig into it, but very important point. Investing is when your principal is protected, speculating is when your principal is not protected at all. Very, very strong point there. And I kind of what what helped you come to that realization, right? So maybe for the benefit of the the listeners here, because we we're going through a period now where a lot of people could learn uh from that knowledge. So what what what helped you come to that uh realization?
SPEAKER_01Yeah, you know, uh in my 30s and 40s, uh for sure my 30s, um, I thought, well, this investment over here has got a chance to make a lot of money. And, you know, I didn't even take into account. I mean, I knew it could lose money, but the the case was so sound, what could go wrong? And I think, you know, I came to the realization, and I read this somewhere, uh um, rookie investors say, you know, and analyze how much can I make? Seasoned investors talk about and analyze how much can I lose. Professionals say, can I really afford that loss? And um, so we're our company, Wellings Capital, we're at the extreme opposite end of the spectrum right now. We're conservative, broadly diversified, and we try to invest in boring. Uh, how much more boring can you get than four pieces of sheet metal, a floor, and a door, uh, talking about self-storage at the moment?
SPEAKER_00Yeah, yeah. You know what? I tell you what, I'm I'm gonna have to agree with you. I think boring is very exciting, especially when um, you know, one thing that I love about self-storage, I mean, it said it's a it's a recession-resistant asset class. Um, right. I mean, kind of going into what we're seeing now um in the marketplace, I just think it's something that really has always made since you have low um, you know, and and I guess you're you're in both the development and the existing asset acquisition space for self-storage. Is that correct, Lord?
SPEAKER_01Bonnie Moore, as we continue to trend towards safer and safer, uh, that seems to oddly trend with my age. Um, we uh are we are we don't do any development. We we do pref equity now. We we in ours we invest in preferred equity. And even there, where a lot of people think it's either rescue capital or development, we don't do either.
SPEAKER_00So okay, okay. And so um, yeah, that's for me, it's just a I think I think it's an exciting asset class. I think it's getting, you know, historically, I know some of the questions were around how financiable it is, and it's become increasingly a favorite product, right? Even from the financing standpoint. Um, so so really solid uh asset class. Uh so so maybe we can talk more about kind of that shift then, right? And and and seeing that, hey, this is something that's valuable. Um, what what maybe kind of helped you to start down that path to see that, okay, this is something that I need to really dig into?
SPEAKER_01Well, part of it was, you know, I had uh a couple million dollars in the bank at 33 in 1997, and I had two and a half million dollars in debt 10 years later in 2007, and I thought, uh, you know, and we're going or getting ready to plunge down the hole called the great financial crisis. We didn't know that, of course. You can never see the future. But yeah, when we did, I thought, you know, this is just not fun. I even thought about quitting real estate, quitting investing, um, as you can imagine. Um, but ended up debt-free 13 months later. We can talk about that later if you want. But at any rate, um uh yeah, I just didn't want to live on that roller coaster anymore. I didn't, I came to grips with the fact that entrepreneur, which I was sort of a serial entrepreneur, which I don't I regret that as well. But the serial entrepreneur, another name for that for me was Shiny Object Chaser. It meant that my knowledge on any one topic was very shallow. But I had a lot of knowledge. I knew about wireless internet in North Dakota. I also knew about multifamily in North Dakota, and I knew other stuff, but I didn't have one deep uh path. I was really, really knowledgeable about my friend uh and business partner, ran for governor of Colorado in 2018, and um he said he he rubbed shoulders with a few billionaires and really successful people. And he said, you know, they're not that much smarter than most of us. They're not, on average, more well educated. They just found a track in their late teens or early 20s, and they stayed on that track, even when the even though they had to endure the horror of monotony for decades, they stayed on that track and that's how they became billionaires. So here's a quick example. Charlie Munger has a friend, and I'm struggling to remember his name, but both of them are gone, of course, now. But uh Charlie's friend decided in the 60s hey, I don't want to be a real estate investor. Um, broadly speaking, I want to be a real estate investor that invests within a mile or two of Stanford's campus. That's it. And so this guy sounds kind of narrow to me. He didn't, you know, you can't call him a real estate investor or an ex or an investor, I should say you can't call him an expert in real estate or real estate in America, real estate in California. You can call him an expert on this one mile radius around Stanford's campus. And guess what? He became a billionaire with this strategy, and he didn't have to fly anywhere. So, you know, I really think that you know, just narrowing your focus, being willing to pass on opportunities. I got I got a FOMO thing built into me from childhood. You know, I don't want to miss out on anything, and so uh that was what really hurt me. And um, I think real, I mean, Bill Gates is another example. You know, Bill Gates as a teenager, he wanted to be in computers. There's three steps to becoming a billionaire. Here they are, write this down. Step one, decide what you want to do at a really young age. And Bill Gates did that. He said, I want to be in computers, that's it. Step two, find the biggest, wealthiest, most influential company you can to partner with. And he, of course, did that with IBM. Step three, and this is a surprising one, do everything in your power to help them be successful. And that's how Bill Gates, you know, leapfrogged past anybody at IBM to become the wealthiest guy in the world at a young age. And uh, so that's uh, but you know, it's even there's an element of boredom in that. I mean, he stayed with computers these 50 years, 55 years, whatever. Uh, but he also, you know, he passed, he said no to thousands of other things he could have done to distract him. And he also tried to help IBM success. You know, I mean, he tried to promote their name. And by doing that, he became, you know, very successful.
SPEAKER_00Yeah, that that is an incredible, or those are incredible examples. And I think you you really um touched on something that I think is probably the culprit, um, FOMO. Um, you know, that that's that's something that's difficult to overcome, right? It's because uh so it's one on one hand, it's the fear of missing out, but it's also kind of the fear of what if what if my focus, even though being laser focused is usually a good thing. There's that question of what if I go so deep that that um uh I've missed the hole, right? We're both kind of we both have our our starts in petroleum engineering, and you drill a dry hole, you're in you're in trouble. And so it's kind of this, it's kind of the the the other the other fear or concern is well, if I go super, super deep, have I picked the right spot? You know? So there's some there's some validity to why there's this fear of it. But I think that as you mentioned, and as you know, your your wisdom has kind of has shown here, that you're better off going deep if you go too broad, then you're just skimming the the surface.
SPEAKER_01Right. It's very true. And I just wrote that down because I'm writing a book called The Boring Investor. And I think you just gave me an idea for another chapter of the boring investors avoid FOMO. Maybe I can be a better name than that, but that's the idea.
SPEAKER_00Absolutely, absolutely. So um I I wanted to talk really quickly on something that you that you just uh mentioned there. And it's it's really uh you you kind of touched on how you had two and a half uh million in debt. Oh, you went from sorry, one and a half million in the bank and then two and a half million in debt, and then back to debt free in 13 months. Uh, can you can you expound on that story? Because that's that's a fascinating um sort of uh point to me.
SPEAKER_01Yeah, that's a pretty crazy story. So um, you know, I had uh I was investing around Smith Mountain Lake in Virginia. Uh, you know where that is, I think. And uh we had done some speculations. I mean, like buying a five-acre piece of land, assuming we could cut it into five one-acre tracks, which was not, it turned out that zoning did not work for that. And so dumb things like that. But anyway, we were uh, it was November of 2007, exactly 10 years after I'd sold my company. I found myself two and a half million dollars in debt with a partner. And about that time, a partner came to me, my partner and said, Hey, January 1st, I'm out. You can have all the property, you can have all the debt. I can't keep a I can't afford to make these debt payments anymore. And so um, counting my house and my vacation home and all my investments, I was two and a half million dollars in debt. I didn't know we were about to plunge off the cliff. I had somehow thought that the fall of 2007 could have been the worst part. Of course, we know it was much worse a year later. Uh, anyway, I was um one of my heroes is a guy named George Mueller. Now, George Mueller lived in the 1800s. In fact, he lived throughout the 1800s, and um, he uh this is a picture of him on my phone. Um, for those of you who are actually looking at the uh podcast. But um, George had a he had a lot of quirks and he really didn't believe in debt. So that was bad. But anyway, I thought, well, what would George Mueller do right now if he was in this situation? Well, he wouldn't have been in the situation, but um I thought, you know, he would do something completely countercultural, completely outrageous, completely something that didn't seem like it would work. But he um, oh, by the way, George Mueller raised uh about two or three hundred million dollars in today's equivalent, uh, all on basically uh for to taking care of orphans in Bristol, England. And he did it all without asking anybody for a dime. He just did it all, he was a uh he was a Christian, and he actually did it because he believed God would help him if he was doing something meaningful in his life, and and clearly did. So anyway, I had this crazy idea. So my two friends came to meet with me about the next week after that. And he goes, They're like, Hey, what do you what are you gonna do? You can declare bankruptcy. I said, uh, no, I'm gonna give my way out of debt. And they said to me and they looked at each other and they said, Come again. But uh, I'm gonna start giving a set amount to charity and to uh people and missions and things I care about. And I'm gonna give that set amount every week until we're either bankrupt or we are out of debt. And I really believed that something great would happen, you know, the uh law of giving and receiving and all that. And so uh just four weeks later, uh the fourth week of January, 2008, I was in a uh restaurant and I ran across a real estate developer and I told him my story and how bad things were. And he said, Yeah, things were bad for me too. I told him about that five-acre lot that I wish I could subdivide into five tracks. And he goes, Well, you ought to try this. There's a little known law you can use. And I said, Yeah, yeah, I know all about that law. It won't work for me. He said, Well, and then like I had this light bulb. Oh my goodness, what if, what if? Anyway, two days later, I was in the planning and zoning department with a hand with a drawing of the plat showing them what I wanted to do with my surveyor, who was like 68 years old and ready to retire with his hands, head and his hands behind me, uh, embarrassed. And I said, I want to try this. Anyway, the lady looks up over her glasses, she's pretty old too, and she goes, Mr. Moore, I've been working here for 35 years or something like that. And and nobody has ever tried to use our law that's uh to you're doing like an end run end run around our law. You found a loophole. And then she smiled and she goes, Congratulations. And so she approved it. And we actually were able to sell all five of those expensive waterfront lots in the very, very worst weeks of the great financial crisis. And within 13 months, I was completely debt-free.
SPEAKER_00That that is very, very powerful. I was over here taking notes feverishly, very powerful, giving your way out of debt. I love that, just as in general, that concept. And I and I think that you're that you're right about that. Um, there's something to be said for having a positive outlook, but also taking action on that positive outlook. You know, it's one thing to sort of sit sort of in a in a silo and say, hey, I know things good things are coming, but to to get up and actually take some action toward doing something good, I believe is a lot harder, right? Because even because it kind of requires you to step outside of yourself and say, Yes, I'm going through something that is really challenging, but how can I do something for someone else? That's not an easy thing to do when you yourself are going through something that is difficult. So I apologize for that. I think that's powerful.
SPEAKER_01Um, and I want to add to this, I I I had four young kids at the time, and I wanted to leave a indelible, an indelible mark on their mind of what um, you know, what happened. And so I wanted them to have a story they could tell their kids, you know. So that's part of the reason we wanted to do that.
SPEAKER_00Well, that that is a very solid story. And and I'll tell you to me, the other thing is um about finding solutions when your back is to the wall. Okay. I I believe that, you know, sometimes it instead of just kind of giving in and saying, well, it looks like this just isn't, you know, for me, it wasn't in the cards, you know, uh sometimes that pressure, that added pressure, is really the the it creates this environment that it just it's just kind of it it allows you to really start to think, okay, how can I solve this problem? So um again, I I love that, I love that story. I think you certainly did give your uh you know, your your uh uh children, grandchildren to something to kind of think about hey, how can I give, you know, despite what I'm going through. And that's something that we can all learn from, really, to be honest.
SPEAKER_01Yeah, it's it's uh I'll never forget it. And um, it's happened to me again since then in a less dramatic way. So I uh it's something I'll never forget.
SPEAKER_00Yeah, absolutely. And I wanted to tie that into something as well, right? And this is about uh uh kind of defining what drives us, what motivates us, because you, you know, you mentioned a few different um crises, the credit crisis, and a few other things that happen at the macroeconomic level, things that we can't control. And even if we have the best intentions going into something that again is without outside of our control, uh, I believe that having our our clear motivation, having our why clearly defined is what helps us move forward, despite what's happening around us. Um and so, so why in your kind of uh perspective, why is it important then for an investor, an entrepreneur, an executive to sort of have their big why?
SPEAKER_01Yeah, you know, at 33, um, I had never made, I don't think I'd ever made over $100,000 a year. And I found myself in one day getting a check for, you know, like $1.8 million. And I didn't wake up any happier the next day. I wasn't depressed. I just wasn't any happier than I had been the week before or the year before. And we all know this, we hear it, but we want to test it and see maybe it's not true, but it really is true. Um, I don't have the exact quote, but Taylor Swift obviously has become incredibly successful. And then there was an interview not that long ago where she was saying, Hey, I'm at the very, very top. There's got to be something else. I'm not anywhere near as happy as I was, as I thought I would be. Now, Tom Brady, about eight years ago, or I don't know how many years ago, but he had six or seven, I don't know how many Super Bowl rings he had at the time, five or six, maybe. But he was talking to an interviewer and he got really thoughtful and he said, Uh, I I don't, I, I, I, I've got, you know, the interviewer said, Well, you've got X number of Super Bowl. A supermodel wife, you've got everything. And he and Tom Brady got really reflecting. He goes, Yeah, there's gotta be more though. And he looks at the ever and he goes, Do you know what it is? And so I think we all need a big why for that day, whether we're super successful or not, we need something bigger to live for. You know, we were designed and created to be givers and to be people who love others. And I think that people who love and give and do all that well are going to be the ones who are happiest. And even if they lose everything, they still have the most important thing in their life. And if they gain everything, they still have that most important thing in their life that nobody can take away money-wise. Um, this is not my only big why. But I mean, we have, I found out in 2016 or 17 how unbelievably horrific human trafficking uh is. Of course, lots of people know about that now. It's been popularized by movies and other news. But I mean, if you took the record profits of Apple, General Motors, Nike, and Starbucks up through 2020 at least, they've exceeded this now. The record profits through 2020, added those all together and doubled that number, that's the approximate profits every year coming out of human trafficking. And wow, it's a it's a tragedy and it's happening right under our watch. And so uh our company, Wellings Capital, has dedicated ourselves to try to raise awareness and try to raise funds to do something about that. So that's one of our big whys.
SPEAKER_00No, that that that is a very, very um important and a noble uh mission. And you're right, a lot of people don't realize just how um unfortunate and how much of a problem that has become. Um, and so I that again, just another thing that is very, very powerful about kind of your mission and your goal. Um and uh, you know, and I was I was kind of typing again what you said there, but I like that you mentioned here you have givers are fulfilled. Givers, people who naturally give are really the ones who are the happiest. And I want to add something to that, but by the way, because there are some people who don't kind of have the natural inclination to give. And what I would say is for those people that you can change, right? There's nothing wrong. You know, you you can most certainly look back and say, yes, I'm going through a lot, but making an impact on someone else will help me feel better about uh everything. You know, you're making a difference on someone else, it makes you feel better. Um, you know, and people who think that they can't give because they're not at a certain place, you can give regardless of where you are, right? So so I just um I I would have to agree with you. I think that once you once you are taking action because you are feeling a higher purpose, then that's when you really start to come into being happy with yourself, no matter what your circumstances are. Um I did want to talk really quickly about um this is kind of going a little bit backwards, but to talk about about your your book um about um storing up profits, if it's okay. Um because because again, I you know, like I said, it's we're we're in this time where in the in the uh especially in the in the commercial real estate space, where we're all trying to find, hey, which you know, we talk about multifamily syndication here on this platform, but we also talk about other alternative investment types. The self-storage asset class is a powerful one. So can you kind of share some of the reasons why uh talk talk about your book a bit, but also the reasons why that asset class uh is a solid one uh in this climate?
SPEAKER_01Yeah, there are so many things we love about self-storage. Um, take this example. If you're renting, I know in DC the rents are higher, but if you're renting a thousand dollar a month apartment and uh, you know, I raise your rents 10%, well, you know, you may go, okay, that's like committing to an extra $100 a month, $1,200 a year. I think I'm just gonna move. Um, but if you're renting a $100 self-storage unit and I raise your rents 10%, you might not like it, but you're probably not gonna spend a weekend, rent a U-Haul, get your friends together, and um, you know, just to move down the street to save $10 a month. Besides, many tenants think I'm only gonna be here three or four more months anyway, till I get some time to clear this place out. And so tenants are really sticky. Where they go, they usually stay, and they usually stay for a lot longer than they plan to. And so um, that's one thing we like. Another thing is it's not recession proof, obviously, but it's proven so far to be recession resistant through past recessions. It didn't have it there, there was a downturn in 2008 in the self-storage realm, that is, but it bounced back stronger than ever and is just gone north from there through 2021, 22. Uh, it slowed down a little since then. You can look around. I'm thinking of uh that road that you come out of uh off 66, they're going south on 29. There's like how many huge new self-storage there are right there near you. And um, you know, we us too. And so it's definitely very, very local. You want to like, you know, you could go to Nashville and develop self-storage and be over, you know, you might be an overcrowded market. But if you go south of Nashville by 10 miles to like Bellevue or Belleville, um, there that's underserved markets, and there's other markets that are underserved. So we love investing in small towns like Beeville, Texas, population 12,000, and even Ishpaming, Michigan population, three or four thousand. Uh, we've had a lot of success investing in places like that. Uh, a lot of one really cool thing about this, Brandon, is there are so many mom and pop operators. There's 53 to 55,000 self-storage facilities in the US. Um, over 70% are independent operators. And of those, two out of three of the independents are one uh facility owners. And so those mom and pops often don't have the knowledge, desire, or resources to upgrade the facility, increase the income, and maximize investor returns. And so you can pay them a fair price for these facilities. Like I mentioned, the one in Beeville, Texas, it was acquired for $2.4 million from five feuding siblings, and uh and it was sold. I mean, it was actually re uh revalued, excuse me, appraised for $4.6 million just four months later. Uh and that's you know, the power of value add real estate buying from mom and pops. And so um lots of upside and self-storage, and um, we still really love this asset type.
SPEAKER_00Yeah, I tell you what, there's one thing that for me that is a huge draw to the to the self-storage space is that unlike, say, with multifamily, you have more sources, potential sources of revenue, right? So even in the office, you have products and things that you can sell or you can rent. I know some of them have a U-Haul that you might have a contract with to where you can rent your trucks out and you're taking some revenue there. I've even heard of some self-storage facilities um offering insurance themselves to clients and things like that. So I think that's that's one thing that to me is just really fascinating. You have it and that's and that's why that that opportunity when you approach a mom and pop, um, there there tends to be more opportunities because those kinds of revenue streams have maybe not been explored yet, or at least not optimized. Is that is that an accurate reflection of kind of yep.
SPEAKER_01It's absolutely true. There are so many value, uh valuable streams of income. You've got locks, selling locks, boxes, tape, and scissors, selling insurance, selling upgrade to the units. Uh, U-Haul can be huge. Um taking some of those five acres out back that the previous owner never thought anything about, and you know, graveling that and using it for industrial outdoor storage or uh RV and boat parking is massive. I mean, it can literally change everything. Um, you can expand the facility, you can rent to a cell tower, you can rent to a billboard operator or a uh put an ATM out front, you can uh put a propane filling station out front. There's so many things you can do. And uh it's just and think about this. You know, if we have COVID number two or something, there's not there's no eviction moratoriums on storage. We're only, you know, we're only throwing out or locking up people's stuff till they pay. We're not throwing anybody out of the house and or an apartment. So it really is very, very powerful as an asset class in so many more ways I haven't even mentioned.
SPEAKER_00Yeah, absolutely. And what what are your what are your thoughts on cape manned versus unmanned? Any any thoughts there?
SPEAKER_01Yeah, so I wrote a book on self-storage, like you said, called Storing Up Profits. And one of the shortfalls, shortcomings of the book was um that we I said, you know, I don't think unmanned store facilities are that great. Uh, you know, you need somebody there to do the upsell, sell the retail items, handle the U-Haul. And that's true for larger facilities uh in general. But um I think I underestimated the power of, you know, the latest technology to make unmanned facilities more profitable. Um, I know somebody who has you know 12 facilities and they're only, well, they probably have maintenance people they're contracting with, but their main employee is just somebody who sits and stares at a wall of screens all day, interacts with tenants at the gate if they have a problem, and uh, you know, um just mans all those. And so I think it's very powerful. Uh, there's some new, I mean, it used to be when the this technology, when this idea of unmanned facilities started, they used to have um uh they used to have like a $35,000 kiosk you could buy at the gate that became quickly outdated. Now, you know, the technology is people can use their iPhones to pay, to rent the unit, to pay, to get in and out with a unique code. I mean, all kinds of stuff that, you know, I didn't know about when I wrote the book five years ago.
SPEAKER_00Well, and you're right, but but to be fair, some of it is like you mentioned, it's changed and improved. I mean, all right, that's kind of the the beauty of it. It's it's just, I mean, nowadays technology just changes so rapidly that even five years, it things, things can change uh dramatically. So what okay, and I'm I'm curious to get your take as well on kind of the the size. Like, like so are you are you kind of focusing on because I know there you mentioned earlier some of the larger, you know, the enormous units or I don't know, 400 plus units. And then there's kind of this maybe uh uh a sweet spot or so. What for you is kind of your your sweet spots like where you can play and and and really get the returns you're looking for?
SPEAKER_01So we're not an operator, we're a fund that invests in other people's deals. And most of the deals we invest in uh just happen to start at about 400 units. Okay. Where it becomes uh, you know, the economies of scale seem to work better. Um, and our largest uh facility or smallest that I know of. I mean, we have a whole bunch in our portfolio. The smallest I can think of is probably about 40,000 square feet. The largest that I know of is 165,000 square feet. Um, and so um I would say, you know, a lot of them are you know 50 to 80,000 square feet.
SPEAKER_00Okay, okay. Outstanding, outstanding. Well, um, I know we're getting kind of uh uh close uh to wrapping uh here, here, Paul. And I just once again, just valuable, valuable information uh that you shared, and I really appreciate it. And I want to uh ask you kind of my action, actionable question here. So if someone is listening to this, and uh we'll even play take it to self-storage because there are quite a few people, uh listeners to this uh uh this podcast that focus on other uh asset types. And so if someone's kind of on the fences, they're thinking about getting in, they've done some research on it, but they haven't taken action yet. What would you say to them about kind of going ahead and taking action and maybe investing in a self-storage facility?
SPEAKER_01I would say put a tremendous amount of effort into vetting the operator because a bad operator can take a great deal and take it through the, you know, take it south. An average operator can do the same, but a great operator can turn around a lot of mediocre deals. And so I would really bet on the jockey first. Once you're sure that they're great and their track record and their integrity, and you know, you've flown out to see them in person, then look at the deal and get some help underwriting the deal if you're not sure of all the details. But again, the more you can trust the operator, the more you can trust their spreadsheets.
SPEAKER_00I love that. So, Paul, how how can uh the listeners uh get in touch with you and and kind of hear more about you?
SPEAKER_01Yeah, they can go to wellingscapital.com and uh if they want some of these resources, including a self-storage special report, RV parks, mobile home parks, other stuff, you can go to wellingscapital.com slash resources. And if you want to follow me on Twitter, you can find me at PaulmoreInvest.
SPEAKER_00All right, thank you so much. That will be in the show notes. And once again, Paul, this has been an absolute, absolute pleasure. And uh, the listeners got a lot of value. I got a ton of value from it. And uh just once again, I appreciate your time. So thank you.
SPEAKER_01Brandon, it was such an honor to be here. Thanks, my friend.
SPEAKER_00As always, thank you so much for tuning in to the show today, brought to you by Bridge Prosper. If you enjoyed today's episode and you'd like to learn more about commercial real estate investing, please like, subscribe, and share. And we'll see you again next week. I'm Brandon Jenkins, and this is the Capital Snack, where we help you learn, apply, and prosper.
