118. REAL DEAL: Self-Storage Entrepreneur

Summary

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.

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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]

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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]

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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

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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.

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Where to Connect with Charlie

• YouTube (deep dives on self-storage): Twin Oaks Capital
• Email for office hours: [e-mail] (Friday 1–3 PM, booked 3+ months out)
• Instagram: @charleseagao

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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.

Transcript

[A]

What is up, everybody? Welcome back to another Real Deal episode. As you guys know, in this episode, what we do is we dive into one deal that is very, very real and authentic. And the purpose of it is so we can just get the nitty gritty of how they took down this deal, how they found it, how they funded it, and how they forced the deal. In other words, how they got creative. And the purpose of learning this is so we can go and replicate it and do the same thing and build wealth and freedom for our families and for our. And today we have a special guest. He's actually been on our long form podcast. He is very big in the self storage space. He has constructed over 3 million square feet of self storage that he's overseen and just crushing it in the space. But it's interesting as we were talking and we'll dive into a little bit, but one of the things that he loves being known for is, is the guy who can pick up his kids from school. And so I love that, like out of all of his accomplishments, he's like, this is what I love being known for. So with that being said, welcome, Charlie. How are you, dude?

[B]

All right, man. So I see that you're living the life on Instagram in Hawaii all the time, so I know. I'm surprised you have time to even do this from all your surfing and golfing.

[A]

Dude, you know what they say about social media. You can only believe so much of it.

[B]

Okay.

[A]

Yeah. It just.

[B]

Really? You're telling me that you golf and surf even more than what's on social media then? Is that what you're trying to say?

[A]

Yeah, I got to tone it back a little bit. I can't make you too jealous over there, so. I'm just kidding, man. Well, dude, I'm excited to do this. Tell us about the deal. Just give us a. A brief overview of it, maybe tell us what it is first and then we'll dive into, you know, how you found it and all that good stuff.

[B]

Yeah. So I had a self storage deal that I bought a few years ago. I was actually consulting on another deal for another asset, all class altogether. And then what happened was one of the sellers actually came to me and said, hey, I heard you do a lot with self storage. And I'm like, yeah. He's like, I have a self storage facility that I am considering selling or looking for something to partner with. I wanted, you know, your feedback on it.

[A]

Cool.

[B]

So this person kind of give you background on it. They're nine. They have a nine figure Net worth. And this deal that they were looking at, it's like it was such a small deal for them. They're trying to sell it for like 300,000. I think it was okay. It just simply didn't make sense for them. I mean, even if they made 40% cash and cash return, it just didn't fit in with the rest of their huge portfolio.

[A]

Yeah. Why did, why did they come to you?

[B]

Well, they had some working background with me through other people that had done a really good job with partners of their as well. They had heard just a lot of good stuff about what I've done for the other clients, both on the brokerage side, building, construction, management, and then also just on asset management too as well. And so when they saw that I did all three of those and also I did it in self storage. That and also they probably thought I was kind of like beginning our new investor. And so 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. And so the fact that they thought, hey, you're newer, this is tailored to you, this might be a deal that you can make a lot of money on. But for me it just doesn't make sense. Sense. I think that's why they kind of pictured me for it. And also the other thing too as well is that it was listed with another realtor and that realtor just did a terrible job listing it. Like if they would have done a better job listing it than it simply would have sold.

[A]

Gotcha. Okay, cool. So you took advantage of that opportunity big time. I love this deal because it is self storage. I know there's a lot of people, we don't talk about it a ton on here, but I think almost everybody hears, oh, self storage, it's good to get into. It's very recession resistant. All these different things. Right. And so I'm happy that we're talking about it because it's different than, you know, your typical duplex or single family home with this one specifically. And I also like that it's, you know, $300,000. It's very manageable for a lot of people. Tell us about it. So when they came to you and they said, hey, this is for sale for 300 grand, what were kind of like the first things that went through your mind and what's the first thing you did to figure out if this is going to be a good deal or something? You should Pull the trigger on or not.

[B]

You know, one of the things that has always worked out well for me throughout my career is that I had a W job, W2 job that was paying me six figures for a long time. So I like to use this analogy as a hunter, but I never had to eat and kill. Like, I. Whatever I killed, I could just store away for the winter. And why that was so important with this deal is that I've always looked at like, hey, how can I make this deal work for this guy? This guy's worth nine figures. Initially, it came to me to partner on the deal, but if I could find a way to make it completely passive for him and make money, which I actually was trying to propose to him, he could have made a lot of money too as well. What actually happened to result was I. I gave him a lot of good information, and he just like, I'm too busy for this. Just buy it from me. And so I was like, okay, you know, and then so I talked with actually our mutual partner and friend, because he's actually somebody I've partnered on a few times now. And I asked him, I'm like, no, I think I could make like 600,000, $700,000 pretty quick on this. You know, is he gonna get pissed if I like, make all this money on. And he sold it for me. This, you know, and he's like, no, he. He's all about, like, if you make money on it and he thought it was a fair price for him, he'll move on. And the other thing I benefited too as well is that I had represented them on my. On my brokerage side before, but because this property had already been listed of a realtor that just did such a bad job for it, it kind of absolved me of that 5 juice through capacity too. Because honestly, if I would have listed it and sold it, I probably could sold it for at least $150,000 more. They just did such a bad job. So, you know, the. The value was that I came to him, I tried to make him money, and he just said, hey, I'm too busy, but you buy, you make the money from it. And then what happened was I. I told it into a gold mine. We'll clear seven figures on it pretty easy. And now, now he's actually trying to do more business with me on the self storage, wanting to get back into it, but I'm much, much bigger deal.

[A]

Yeah, I love that how it's kind of come full circle, kind of backing up a little bit. How did you, how did you fund this thing? Did you partner on it with somebody else? It was, you said it was 300 grand is what you ended up buying it for. And it was probably worth maybe 450 at the time if, if they would have asked what they could have got out of it.

[B]

Yeah. So one of the reasons why I got it at cheap is that, you know, one of the things I always factor about, you've mentioned this too as well, is what is my discount for cash? And they wanted to close this really fast. And so roughly if I, I don't remember what the dollar amount is, but I think I got roughly a 30,000 discount to basically buy cash, which, I mean if I needed to go to a hard money lender then and pay like basically 10 points, you know, or, you know, whatever, 15, 20% interest, it made sense. So I funded it cash, it was true cash because I had it sitting in my bank account. So that wasn't much of an issue. The other thing about it too as well was that it was just so poorly mismanaged. It was at 30% occupancy. And when I ran the numbers, I'm like, 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. Not even like really hard, just like actually giving it some attention. And that's actually exactly what happened. But then the deal that, what really made the deal work out was there was actually a lot of room to expand the facility. So we tripled the size of the facility. So today, you know, if I were to exit from, I'd clear well over seven figures on it.

[A]

Man, that's awesome. Way cool. So you, you obviously, you looked at it a couple of different ways. Hey, this is a value add one. I can get this, this thing stabilized. Why wasn't it up to, you know, 80, 90% occupancy? Was it just because they were managing it poorly or.

[B]

Yeah, so that's a really good question because it helps give you perspective. But like, you know, these guys, if I had to value how much time their, their time is worth, it's well over $10,000 an hour. So this storage facility, if I buy it for $275,000, you know, owned it free and clear, you know, we were thinking it was going to make like, you know, 40 to 60 thousand dollars at NOI, which, you know, that sounds like a lot to maybe some that's, you know, doing Their very first deal. But for somebody who consistently does that on a single deal, all the time also. And you know, and also because they didn't have the system in place, that's not a lot of money. So they were actually doing the leaf blowing themselves or like, you know, like one of the partners and it just, it got to the point where I'm like, whoa, look at that, you know, nine figure guy over there. Basically blowing the leaves on the driveway. Just, it's just like so hilarious when you think about it like that. It's a poor use of their time. That's really kind of why, like it just made sense for them. So for them to lose money on that deal, to just not have to deal with the loss on time. It was a hundred percent win for them. And I realized that very quickly. So that's why I was able to really make it a win for both parties involved. And that's also why like, I also didn't feel bad about just buying out from outright because, you know, I asked the partners how they felt about it. And then secondly, I also offered them a scenario where they could make money and stay in, but they just didn't want to take it.

[A]

Yeah, yeah, no, that's great, man. And I like too how it's like you mentioned that you had the cash and you paid cash for it. And I think a lot of people hear that and they immediately write it off as saying, oh yeah, like I don't have that much money in my bank account. Obviously Charlie was able to get that because he's got a lot of money and that's how you get good deals, if you get money. And so I'm glad that you brought up like, hey, if I would have went and got hard money on this, I could have closed on it in the same exact amount of time. Yes, I would have paid a few points, but it's still worth it and you still could have made the deal work. And so I just always love pointing things out like that to where people understand, like there's no excuse to not get it done. And, and then I also like how you're like, hey, I just created a win win scenario, you know, for those guys. And this is all real estate investing is, this is all creating a good deal is, is win, win. Is this a win for the other team? Like, yeah, it's a win for them. He's stoked because he's wasting his time blowing the leaves. Like he's stoked because it's just not worth his time dealing with all the ins and outs of it, like, the juice isn't worth the squeeze for him in his situation, but for somebody else. Right. For you on the other end, it's also win because the juice is worth the squeeze. And so I think it's just like recognizing that, recognizing those situations. And there's probably a lot of good strategy you can pull from this and saying, like, hey, can I go target people like that that are worth nine figures that have these other, you know, properties in their portfolio that just aren't worth their time, but they're going to be worth my time. And maybe you go after people like that. Just a random thought, random idea. But I just love, love, love the concept of like, hey, I'm creating a win, win scenario here. And then we dive into how you actually force the deal. Because a lot of people would have seen that deal, oh, it's only 30% occupancy. No, thank you. Like, it's not worth it to me. You know, there's so much work in getting it up there, getting it involved, or 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. So I love getting into that. And like, hey, you actually, you didn't just buy this deal at a discounted rate, but you then took it a step further, right, which is to go and maximize one, by getting, you know, occupancy up and then two, by adding the square footage.

[B]

Yeah, and to add to that too as well. The reason why I participate cash too as well, is because I knew that if the property leased up very quickly, there was a very strong chance that I was going to build construction. And then so I didn't want to have a loan and then turn around and six months later initiate another loan, go through all the hassle. And so that 275 that I put into it, that served as my equity injection on the construction loan anyways, because if you've ever done construction loan, let's say that you want to do a million dollars of construction and they give you 75 LTV. Well, I use that property free and clear as my equity injection so I can immediately start doing draws where if I were to have a debt on it, they would say, okay, well now you got to put in this additional amount of capital in to do that. So that was part of the reason why I just paid cash because normally I don't like to just have my money tied up, but I had significant reserves at the time and it just made Sense, because I knew that I could be transitioning to construction financing in a few months.

[A]

Dude, I'm glad you brought that up. I'm glad you brought that up because I'm very much like, let's get the best use of our cash, the highest cash on cash return. And so someone here is like, oh, you paid cash for something. That's not very smart. Right. But I think you just explained that. And so for those of you listening that don't know what LTV is, it's loan to value and it's a ratio, right? What they're going to require a lot of times to go loan money from the bank. But I did the exact same thing, man. And the cool thing with that too, is as long as you've owned it for at least a year since that transaction's happened, they're not going to a lot of times take what you bought the property for, but they'll reappraise it. And so if you got it at a discount and especially like in your situation with that one where you know it's worth, it's obvious it's worth a lot more money, especially if, you know, you've gotten the occupancy up now, they're not just taking your insert of cash, but they're actually taking what the new value is. And, and they can count that as your 25% down, which gets really fun and really exciting because then, you know, you're just able to go and create more money and you have to put even less cash into these new, you know, new construction projects, which is awesome. Sweet. Dude, I love that. I love, love this deal. Super glad that you, you broke it down for everybody. For you. Like, what's your, what's probably the biggest thing that you would say you learned from this deal specifically that you kind of took moving forward, slash, that other people could also take from this deal and learn from it and apply it into their own investing.

[B]

You know, I think one of the trademarks in my career is that people do not question my work ethic and they like that I'm a heavy owner operator, even though I'm not nearly as heavy owner operators. I used to, I mean, I got a staff that basically manages lot of deals for me. But I think the biggest thing is something you take away is that, you know, hard work is undefeated. Like, if the, the everybody in this deal recognized this guy will hustle, this guy will basically get it done. And now we went from like, hey, I was kind of working as this guy. He kind of looked at Me, like, as maybe as like, you know, stepson that, you know, like he does some business with or whatever to now, like, we're legitimately talking about doing like, you know, h figure deals together, you know, so, you know, from basically providing value to them and offering them a situation that was really, I think, even a better win win situation, which is partnering with them and not just taking the deal outright for them, that. That really kind of set the standard for that. 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, is that I did everything I possibly could to add value for the seller. Keep in mind the seller that was represented by another agent on this particular deal. And in the end, now, I mean, you know, I. I could easily see us doing like nine figures of deals like over the next decade.

[A]

Wow, dude, that's. I mean, if we missed the whole beginning and just this podcast with just the last three minutes, it would 100% be worth it. That right there and pulling that out of the deal and what you learned, just that piece of advice, I think it goes so far, right? It's the same thing as. It's the same thing as is, you know, flipping a house and making money right now versus holding onto a property that cash flows for the rest of your life type thing, right? It's like those relationships, they keep on giving, keep on giving. And I think that so many times we undervalue that and we just don't realize how important that is. And just like, good ethics, good, like people notice. People notice. When you work hard, it goes a long ways and like, the world's too small. You just realize you. You run into people again and you work with people again and it just comes full circle. So I love that you took that away. I love that advice. Charlie, dude, this has been awesome. Thanks so much for sharing, sharing your. Your deal with us. I know you have hundreds to be able to choose from if someone wants to connect with you or kind of follow you. I know you're always doing. Doing awesome stuff. I. Yeah. On so many different levels. But what's the best place for somebody to be able to do that?

[B]

You know, if they're looking at self storage, specifically my YouTube channel at Twin Oaks Capital, that's the best spot you want to learn about self storage. And, and if. If they really want to get deep into the weeds, like we get deep into it. Like, I, I don't like to talk about, like, you know, really high level stuff like we get deep into it. That is also where all the articles I write when I get questions from. So I don't typically take calls direct from people. They can do that. The other way is if they want to simply email me@info infoinoakscap.com I do office hours one to three every Friday. I know I'm booked over three months out, but if they're willing to wait, I will give them 20 to 30 minutes to talk about anything they want. So that's out there. And then Instagram @charleseagao. Last name actually is Charles C K A O. Those are the three ways to get.

[A]

A hold of me, dude. Awesome. Awesome. Yeah, I definitely get on that waiting list. That's, that's worth a three month wait for sure. So dude, thanks so much. Appreciate it. Appreciate your friendship. Stoked to kind of keep it, keep it going over the, the future and all the cool things that we have coming to works. But thanks so much brother. Thank you guys for tuning in and we will catch you on the next one.