Real Estate Investing School Podcast

Episode 154: REAL DEAL - How Strategic Negotiations Saved a Million Dollar Storage Deal with Ben Gottfredson

Date: May 2, 2024
Host: Brody Fawcett
Guest: Ben Gottfredson (Big Ben’s Moving & Storage; Big Storage Ventures)

Episode Overview

This episode of the Real Deal series on the Real Estate Investing School Podcast features Ben Gottfredson, an entrepreneur who transitioned from running a moving company to building a portfolio of storage unit investments. The conversation dives deep into a notable self-storage deal in Salt Lake City that Ben was able to secure "no money down"—and how strategic negotiations, relationship-building, and creativity turned a near-disaster into a lucrative partnership. Brody and Ben break down the nitty-gritty of sourcing, structuring, and closing complex commercial deals while highlighting actionable lessons for listeners at any investment level.

Key Discussion Points & Insights

1. From Moving Company to Storage Empire

• Background: Ben started with a moving company, which naturally led to repeated requests for storage solutions from clients.
• Business Synergy: Realizing that handling both ends of the service increased revenue, he entered the storage business.
• Mindset: Treat every real estate asset as a business, not a passive investment.
  • Quote: “It really is… as much as every real estate asset’s a business, storage is a business.” (02:55, Ben)

2. Deal Overview: Salt Lake City Storage Acquisition

• Specs: 165 storage units, $1.7 million purchase price, Salt Lake City, UT.
• No Money Down: Ultimately secured with zero out-of-pocket capital.
• Behind the Scenes: Despite “luck,” Ben emphasized relentless deal sourcing and strategic action.
  • Quote: “This would sound like a really lucky deal...but you have to understand all the rocks we turned over...” (03:48, Ben)

3. Finding the Right Deal & Relationships with Wholesalers

• Deal Sourcing: Found via a wholesaler—illustrates the importance of relationships and consistent market signaling.
• Market Positioning: Ben made it widely known to wholesalers and sellers that Utah, especially Salt Lake City, was his target market.
  • Quote: “We’re telling people, 'Hey, we’re in Utah, Utah, Utah, the Mountain West.'... They thought of us when they saw that come across their desk.” (09:41, Ben)
• Lesson for Wholesalers: Professionalism and transparency are crucial; mishandling can implode a deal.

4. Negotiation Drama & Problem-Solving

• Wholesaler Missteps: The wholesaler failed to inform the seller of assignment changes, leading to confusion.
• Deal Collapse Threat: As closing drew near, the sellers discovered the wholesaler’s actions, threatening the transaction and considering lawsuits.
• Strategic Negotiation:
  • Ben took initiative to resolve tension—he met the sellers (two Greek brothers) for breakfast, listened to their frustrations/goals, and positioned himself as an ally.
  • Quote: “...The soft skills just to listen and to position yourself in a way where whatever their goal is, you get it done for them.” (13:42, Ben)
  • Result: Wholesaler bowed out; Ben and sellers became 50/50 partners; avoided legal conflict and met sellers’ objectives.

Notable Negotiation Quote:

“I go up to Salt Lake, take them to breakfast, like, listen to them, hear what’s on their mind, hear what their goal is... position myself as on the same team as them... And we ended up closing on the deal.” (11:22, Ben)

5. Deal Structure & Funding (No Money Down)

• Partnership Structure: Sellers fully owned the asset, so their retained equity served as “skin in the game.”

• Financing: Ben secured a bank loan for 50% LTV; sellers stayed in at 50% equity—no new cash required from Ben; bank considered seller equity as the down payment.

  • Quote: “...We got a bank loan for half of it, and we got that with no money down because they had no debt on it.” (12:57, Ben)

• Returns & Safety: Infinite ROI for Ben; sellers gained a large cash payout, kept future upside, and avoided lawsuit risk.

  • Quote: “My return is... how do you measure the return on investment with no money down. It’s like perpetually, perpetually great...” (16:42, Ben)

• Replicable Model: The approach is comparable to a creative form of seller financing, but tailored to commercial/paid-off properties.

6. Lessons & Actionable Strategies

• Soft Skills Matter: Listening and collaboratively problem-solving unlocks deals others would lose.
• Win-Win Mindset: Understanding the unique goals/concerns of sellers is essential.
• Creative Structuring: Older sellers often prefer no new debt, which the investor can use as leverage to structure deals beneficially.
  • Quote: “A lot of this older generation, they believe in paying things off a lot more than we do. So we can use that to our advantage...” (22:52, Ben)
• Team Strength: Ben leverages soft skills and builds a team for technical/financial support where needed.

7. Broader Lessons on Scaling and Mindset

• Commercial Mindset for All Investors: Regardless of starting with residential assets, aim to think big with processes and systems for long-term scale.
• Quote: “Go build the empire... adopt the mindset of a commercial real estate investor.” (24:10, Ben)

Notable Quotes & Memorable Moments

• Deal Sourcing Reality
  Ben: “We love [wholesalers] because they bring us deals, but they’re kind of goofy... but, you know, they just didn’t want to lose it, which is why they crossed some lines.” (04:51 – 08:31)

• Negotiation Turning Point
  Ben: “I just gotta take these guys to breakfast...So I can position myself as on the same team as them. Like, ‘Hey, I’m mad at the wholesaler, too. What should we do?’...” (11:05 – 12:27)

• Infinite Returns
  Brody: “How do you measure the return on investment with no money down?”
  Ben: “It’s like perpetually, perpetually great, you know?” (16:42)

• Using the Seller's Aversion to Debt
  Ben: “They would rather sell this asset or stay on and we could take a loan out, even if it’s at a higher interest rate. Because in their head... they don’t want to take on more debt. Debt is bad to this older generation, where we can leverage debt to be good for us.” (22:52)

Timestamps for Key Segments

• [02:17] Ben's origin story: Moving business → storage
• [03:48] Deal high-level overview ($1.7M, 165 units, “no money down”)
• [04:51–10:08] Finding the deal, wholesaler relationships, being known in the market
• [11:05–13:50] Negotiation & breakfast with the sellers; “soft skills”
• [15:34–19:41] Funding mechanics, creative structuring, and the win-win with the sellers
• [22:00–23:39] Turning plan B into a replicable strategy using seller’s paid-off equity
• [24:10–24:45] Ben’s final advice (“Go build the empire”)

Final Advice from Ben

• “Even if you think you’re just investing in residential real estate today, adopt the mindset of a commercial real estate investor. Because if you’re hoping to make any substantial difference in your life, it’s going to turn into a business, it’s going to turn into systems and processes... Make the jump as fast as you can.” (24:10, Ben)

Connect With Ben Gottfredson

• Big Storage Ventures on Instagram or @bengobertson
• Open to DMs; offers to connect for dealmaking and advice

Summary by: [Real Estate Investing School Podcast - Episode 154]
“Take notes and go build your empire.”