Real Estate Investing School Podcast

Episode 118: REAL DEAL: Self-Storage Entrepreneur (Dec 28, 2023)

Main Theme & Purpose

This episode dives deep into the real, step-by-step story behind a successful self-storage facility investment. Host (A) welcomes Charlie (B)—a highly accomplished self-storage entrepreneur who’s built over 3 million square feet in the space—to break down one particular deal: how it was found, funded, turned around, and ultimately used as a springboard for much bigger opportunities. The conversation is authentic and actionable, focusing on the nuts and bolts investors can replicate themselves to build wealth and freedom.

Key Discussion Points & Insights

1. Background of Guest and Deal (00:00–02:50)

• Charlie is an established self-storage entrepreneur, admired as much for his business acumen as for his ability to maintain a balanced lifestyle (e.g., picking up his kids from school).
• The episode spotlights a specific self-storage deal Charlie acquired for $300,000—a “small” deal for the seller but a significant opportunity for Charlie.

2. How the Deal Was Sourced (01:55–03:55)

• Charlie was consulting on a different asset when a high-net-worth individual (nine-figure net worth) approached him to discuss either selling or partnering on a small self-storage facility.
• The deal had been poorly listed, failing to attract interest—creating an opportunity for someone attentive and knowledgeable.
• Quote:
  “This deal was actually kind of fine tuned for that. It actually was probably maybe even a little bit too small for me at the time. But when I look closer at, I saw a lot of potential in it.” – Charlie (B) [03:21]

3. Understanding the Seller’s Motivation (03:55–04:43)

• The owner’s time was far too valuable for a relatively low-performing asset, and he sought a win-win exit.
• Charlie’s background in brokerage, development, and management gave him credibility. The seller also believed Charlie might be a newer, hungrier investor.
• The property had significant upside due to poor current management and potential for expansion.

4. Initial Due Diligence—Assessing the Value (04:43–06:36)

• Charlie’s W2 job gave him financial stability, allowing him to hunt for deals without immediate pressure to “eat what you kill.”
• Considered multiple structures, including passive partnership, but ultimately acquired the property outright when the seller opted for a quick sale.
• Quote:
  “Within two months I can get this 95% occupied and it'll be worth, worst case scenario, like somewhere between 650, $850,000 just by basically actually like paying attention to the deal.” – Charlie (B) [07:19]

5. Funding the Deal (06:36–08:11)

• Purchased for ~$275,000 cash (discounted for fast, cash closing).
• Charlie used personal funds, but notes the deal would still have worked with hard money due to the margin and speed needed.
• Facility was just 30% occupied at purchase, with major value add upside.

6. Value-add and Turnaround Strategy (08:11–13:14)

• The facility had huge management inefficiencies—owners were literally leaf-blowing the property themselves.
• Charlie stabilized the property occupancy swiftly, then tripled its size through new construction.
• By today, the asset is worth well over seven figures (over $1 million).
• Plugged the equity from cash purchase into a construction loan for expansion, maximizing leverage and freeing up capital.

7. Creating Win-Win Scenarios (09:52–12:12)

• The seller “won” by freeing up time—not just money.
• Recognizing what’s valuable to each party is key in making creative, ethical deals.
• Host Reflection:
  “This is all real estate investing is, this is all creating a good deal is—win, win.” – Host (A) [10:22]
• Targeting high-net-worth individuals who may have “straggler” assets in their portfolios can be a fruitful strategy.

8. Lessons for Other Investors (13:14–14:51)

• Using all-cash can offer flexibility, especially when planning major improvements soon after acquisition.
• Lenders often accept an up-to-date appraisal (rather than purchase price) for loan calculations if you’ve held the property for 12+ months, making it easier to recycle your capital during refinancing.

9. Biggest Takeaways and Career Impact (14:51–16:13)

• The power of hustle and reputation: “Hard work is undefeated.”
• Over-delivering value—even when you could have taken more—leads to bigger opportunities, trust, and future partnerships.
• Quote:
  “If you're always trying to help other people, not look at only your personal gain, it will come back tenfold on you. And so that was the biggest takeaway from this deal.”—Charlie (B) [15:30]

Notable Quotes & Memorable Moments

• Charlie (B) on negotiating with the seller:
  “He could have made a lot of money too as well. What actually happened to result was I gave him a lot of good information, and he just like, 'I'm too busy for this. Just buy it from me.’” [05:05]

• On recognizing deal potential others miss:
  “A lot of people would have seen that deal, oh, it's only 30% occupancy. No, thank you…they might not even have realized or recognized there's more square footage to be able to go and build on and to add to that complex.” – Host (A) [11:47]

• On adding value and playing the long game:
  “Now we went from like, hey, I was kind of working as this guy…to now, like, we're legitimately talking about doing like h figure deals together…” – Charlie (B) [15:01]

Important Segment Timestamps

• [01:55] – Deal introduction and background on how it was found
• [03:55] – Explanation of why the deal was available and poorly listed
• [04:43] – First thoughts on analysis and initial due diligence
• [06:36] – Funding details and leveraging cash for speed and flexibility
• [08:11] – Deep dive on value-add, stabilization, and expansion
• [13:14] – Strategic cash use and construction loan mechanics
• [14:51] – Career lessons and the importance of creating value, reputation, and relationships

Actionable Advice for Investors

• Be attentive to “small” deals ignored by bigger players—they can have outsized returns for diligent operators.
• Win-win deals are often hiding in the “time” priorities of high-net-worth owners.
• Creative financing (hard money) can unlock deals even if you don’t have all cash.
• Value can often be forced through better management and expansion—don’t just look at current numbers.
• Building a reputation for hustle and integrity leads to bigger, better deal flow over time.

Where to Connect with Charlie

• YouTube (deep dives on self-storage): Twin Oaks Capital
• Email for office hours: info@twinoakscap.com (Friday 1–3 PM, booked 3+ months out)
• Instagram: @charleseagao

Episode in a Sentence:
A masterclass on how recognizing unappreciated opportunities, hustling to add value, and focusing on relationships can turn a small overlooked deal into a seven-figure win—and far bigger future ventures in real estate investing.