TGCI 88: Self-storage – Recession Resistant Asset Class?

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Episode 88: Self-storage - Recession Resistant Asset Class?

Copy of EP #18 - 2 Guests (1)

Summary

In today’s show, Pancham interviews Kris Benson – chief investment officer for Reliant Investments which is a subsidiary of Reliant Real Estate Management and one of the top 25 commercial self-storage operators in the U.S. in 2019.

Kris Benson saw the value in self-storage investing when he is looking for asset classes to invest in. He became part of the investment committee at Reliant, and in just 5 years, it has completed over $650,000,000 in self-storage acquisitions and dispositions!

In today’s episode, Kris shares everything you need to know about self-storage investing – its history, how it works, the market trends, locational strategy, and more!

You’ll also see why self-storage is the most valuable asset class so don’t miss this episode!

PanchamHeadshotTGCI
Pancham Gupta
Screen Shot 2021-01-04 at 2.08.01 PM
Kris Benson

Tune in to this show and enjoy!

Copy of Quote #00 - 1 Guest

Timestamped Shownotes:

  • 1:23 – Pancham introduces Kris to the show
  • 2:33 – How he got into the self-storage industry
  • 8:10 – How self-storage works (and how its industry has evolved)
  • 11:26 – The type of clients in the self-storage industry
  • 13:38 – How location affects his investing decisions
  • 16:44 – His analysis on the market trends amidst the pandemic
  • 19:37 – The details of his first ground-up development
  • 22:56 – How working out helps with his outlook and his success
  • 25:46 – Taking the Leap Round
  • 25:46 – His first investment outside of Wall Street
  • 28:03 – Fears he overcame from his first investment
  • 29:01 – How his investment in a healthcare company didn’t work out
  • 30:51 – Figuring out the type of investor you want to be
  • 34:14 – Kris’s contact information

3 Key Points:

  1. Self-storage is a recession-resilient investment that was able to adjust quickly to unfortunate events.
  2. Self-storage is about the convenience of clients that hate to get rid of their stuff.
  3. Finding the perfect location for self-storage is crucial in the industry.

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Read Full Transcript

Introduction

Welcome to The Gold Collar Investor Podcast with your host, Pancham Gupta. This podcast is dedicated to helping high-paid professionals to break out of Wall Street investments and create multiple income streams. Here is your host, Pancham Gupta.

Hi, this is Joe Fairless. If you wanna diversify out of Wall Street investments, then listen to The Gold Collar Investor Podcast.

Hey, this is Mauricio Rauld, founder and CEO of Premier Law Group and if you are serious about investing in real estate, listen to The Gold Collar Investor podcast with Pancham Gupta.

Robert: Hi, there. I’m Robert Helms, host of The Real Estate Guys Radio Program and if you want to have better results in your life, you gotta put better ideas in your mind. You’re in the right place here at The Gold Collar Investor Podcast.

Pancham Gupta:Thank you for joining me today and I really appreciate you for tuning in. Recently, down with 30,000 points for the first time in history.  It’s amazing sentiment across stock investors, it’s probably all-time high, people are loading up on stocks.  You know, last time in 2007, right before the crash, this is how it looked and you know, when it crashed in 2008, it wiped out hundreds of people’s retirement accounts.  And again, I’m not saying it’s going to crash, I’m just saying that that’s how it looked.  There were some asset classes during that time that did great and one of them was self-storage.  As per my guest,  the demand for self-storage is driven by 4 D’s: death, dislocation, downsizing, or divorce.  Kris shares his wisdom on the self-storage industry, where we are going with because of this COVID-19 pandemic.  Before we get into the show, a bit about Kris.  Kris Benson is the Chief Investment Officer for Reliant Investments,  a subsidiary of Reliant Real Estate Management and one of the top 25 commercial self-storage operators in the US in 2019.  Reliant has completed over 650 million in self-storage acquisitions and dispositions in the last five years.  Kris’s investing goals have always been about changing the paradigm of trading time for money in order to have time for more of the things that we love to do.  Likewise, investing in real estate has been Kris’s steadfast path to passive income and he is passionate about inspiring others to change their mindset around investing for the future.  Kris, welcome to the show.

 

Kris Benson: Thanks for having me.

 

Pancham Gupta: I’m so excited for the show today.  I know we are going to dissect the self-storage industry here and go into your background.  So, before we get started, are you ready to fire up my listeners break out of Wall Street investments?

 

Kris Benson : I sure am, I hope I deliver.

 

Pancham Gupta: I’m sure you will.  So, before we get into self-storage and all that, you know, why don’t you enlighten my listener on your background? Like how did you get into this industry? And more importantly, the person behind that background?

 

Kris Benson: Yeah, well, I don’t know if I know who the person is behind that background.  I’m still trying to figure out what I want to do when I grow up,  but I’ll give you the background for sure.  So, I’ve had a pretty, pretty diverse background.  I came from a corporate end of things that came from a corporate sales arena. Most recently, I worked for a company called Intuitive Surgical, many your listeners may know them as they develop the Da Vinci robot, which is a surgical robot in the OR, pretty incredible technology for some of your tech listeners, if they were part of the engineers that built that, thank you. It was an incredible company, incredible technology, but you know, for me, I had a lot of success in the sales arena and you know, I distinctly remember waking up when I was about 30 and saying, I can’t do this another 30 years and you know what it was that got me, was late on Fridays, when I would be in the airport and when it was like six, seven o’clock, and I was miserable, I just wanted to be home and I wasn’t and I would look around the airport and there would be those guys or girls in their 50s and 60s, still in the airport at seven o’clock at night carrying a bag and I was like, that is not I’m not doing this. So, you know, for me that was sort of the impetus to say, all right, how am I going to build some sort of income stream outside of what, you know, I had done to that point and had seen some success with and for me, that was real estate and  I started just like probably many of your listeners did.  We bought a number of residential duplexes and the town that we lived in, and very quickly realized that was going to be challenging to bring to scale. I hated it. I hated it. Well, not from the beginning. But pretty soon after we started, I hated it. And mostly what I hated was the people part of it. It was soul sucking, and I wish I could give credit and I’ve said this a number of times, but I read or heard in our podcast, basically big deals and small deals are the same amount of work. You just make less money on small deals  and that’s where I was like, Okay, I got to do something different and that brought me into kind of the commercial multifamily arena which I know you have a lot of experience in and so we ended up selling that portfolio of properties and we only had 20 I think we had 22 units when we sold it but gave us a little bit of capital. and ended up building a 64 unit multifamily complex from the ground up and I know that’s a big jump, but fortunately, I had a really great construction partner who helped me built it. And, you know, he came in with the expertise, I came in with the capital and that was sort of when the light bulbs went off for me is like, Oh, this is how you do real estate and that project worked out.   We still own it. It’s fantastic. And Where is that? Uh, in upstate New York, a town called Rome, it’s out in Central New York.  I grew up in the kind of the middle of the state and it’s a town probably 25 minutes from where I grew up and on paper, no one would ever build anything there, but kind of an insider track.  I knew what was happening in that market and so we had an interesting investment thesis for that worked out. You know, from there, we invested in a number of multifamily projects, both as passive investors and direct and about five years ago, as cap rates continue to compress and still compressing the asset class, as I’m sure you know, is your underwriting deals. It’s great for selling not so good for buying and creating value. So, I just started looking at some other asset classes, mobile home parks, self-storage.  I looked at some industrial, and I really liked the idea of self-storage. And the thing that stood out to me was storage that I liked was the consolidation play where, you know, in storage, there’s essentially five publicly traded reads that own 25% of the market, and the rest is very fragmented. So, at Reliant where I work, we’re, we’re the 25th largest operator in the US. And we have just over 50 properties. So, there’s some operators like us, but then there’s still a lot of mom and pop type people, just like multifamily, right, like multifamily 10 years ago, you could go find that family that owned since the 50s. And you know, put some money into it and hasn’t done anything since the early 90s. And the bees haven’t collected cash. Those deals are few and far between now, and it’s storage, challenging, but not as challenging. So, for me, I looked at as sort of a runway piece.  So, we started investing in storage. First, I was an investor with Reliant first and then I had some experience raising capital along the way there. And they needed help building out that platform  and so Todd Allen, who’s the one of the founders of Reliant, and I, struck up a partnership, and that was three years ago. So as an investor first and now I work here.  So, you know, at Reliant, I’m in charge of kind of the capital market side of things so  you know, our Investor Relations Team rolls up to me, and then we work with the acquisitions team on the strategy on the on the buy side. So, it’s been a fun adventure, kind of getting to this point. And, you know, storage is a really dynamic market right now.

 

Pancham Gupta: Right? No, thank you for sharing your background there.  I can totally relate to when you said that you bought these duplexes 22 units you had and you know, it was soul sucking experience, right, and then you build this 64 unit with the construction partner, and then the light bulb went off  and then after that, your journey into self-storage because of the compression of cap rates. So, it’s great, you know, great, great background, and tell us about that, you know, for a listener who’s listening, and he doesn’t know much about self-storage, other than he saw, you know, driving by one of these facilities, and there is this big board says self-storage, you know, what is self-storage? Real quick overview, and what’s the opportunity there?

 

Kris Benson: It’s a garage in its purest form, it’s a garage that’s either heated or air conditioned, or it’s a garage that isn’t, you know, fortunately for us in this industry, you know, we as Americans are very consumer driven, and we hate to get rid of our stuff, right? So, I mean, extensively what storage is capitalizing on is materialism and, you know, I don’t know if it’s, you know, the fondness or, I don’t know, what creates the challenge of getting rid of things, but I can’t tell you how many times I’ve been in a storage unit where the value of the goods in the storage unit, you know, don’t exceed the value of one month’s worth of rent, but people keep paying for it, right? So, you know, at its highest level, that’s what storage is and it’s, it’s more Phantom. So, you know, storage used to be if you think about it, you know, kind of first generation storage, think about a guy’s house kind of out in the middle of nowhere. And behind it was a gravel pad and you had a number of drive up buildings, no climate control, and, you know, you’d go visit him inside his house to rent a unit. And you know that asset class has matured to a point where now you know, people are building on the corner of Main and Main in Big Top 25 MSA’s in the country, glass and, you know, glass and stone type buildings, three multi-story, and you’ll walk in and it’s as nice as any Starbucks that you’re going to go into, right. So, you know, it’s come a long way as the asset class has matured and I think a big part of that is, you know, storage is recession resilient or looked upon as so in 2007-8-9 storage performed really well in the downturn. And when that happened, a lot of light bulbs went out off with both on the development side and the investor side who said, Oh, you know, we can put money here. And in the next downturn, we’re going to be just fine. And interestingly enough, through COVID, we’ve seen similar type trends where, although it was slow, April, May, and June, July, August, September really picked up our delinquency rates, at least in our portfolio are less than 1%. So, you know, we’re really seeing a lot of that same resilience through COVID. And, you know, we’re recording this the beginning of December, so we’re certainly not out of the woods yet. But so far, so good. And, in turn, we’re seeing a lot of institutional capital interest coming into the space, you know, for those pension funds and insurance companies that can invest in retail and hotels right now. Yeah, that money has to go somewhere. Right. So, there’s only so many mobile home parks, industrial multifamily stores going to get some of that, too. So, it’s been interesting to see, you know, those dynamics, as storage has sort of matured from kind of a niche asset class. I wouldn’t call it one of the core four yet, you know, multifamily office industrial retail, but I think we’re probably getting there. 

 

Pancham Gupta: Maybe retail is getting off that core four and sell storage getting added to that one. So you know, great background there. In terms of the evolution of the industry. Let me ask you this, like you said that there are a lot of people who have this love for stuff, and they don’t want to sell it. And sometimes it’s less than the value of what the one month’s rent is, I can understand in a certain demographics. That’s the case. But when you get to the level where you said, the cell storage facility, which looks like Starbucks, you go in, it’s like, really nice. We have air-conditioned units, and, you know, all that stuff. Do you see that in that kind of asset class door? What kind of clients are using that type of facility versus the client, let’s say, you know, who has in the far out in the town and, you know, rundown sun storage facility.

 

Kris Benson: I don’t know if there’s a necessarily a diversification where, you know, clients choose one over the other storage is a very micro market game. You know, we call it sharpshooting, right, all that matters is the one three and five mile radius around the facility, right, the NSA level that are like the city level, that it doesn’t matter, because storage is about convenience, it’s got to be there close to your work, or to your home, or you’re not renting from that facility, right, like, right there family, people choose their apartments based on thing, you know, school districts, right convenience to work and home. But there are reasons people will drive for an apartment community, right, right out of the way, but it’s in a great school district. All right, I’m going to move there. Well, storage, you know, it’s a garage. So, it’s really about finding that one, three and five mile radius. So generally, people aren’t choosing like, Hey, I’m going to drive 10 miles to go visit this rural facility that like you described on a gravel pad, because it’s cheaper, most customers aren’t going to do that, right? It’s one, three, and five mile radius that really matters. And from an underwriting standpoint, really what our acquisitions team is focused on is what’s happening in that particular market, to allow us to say, Hey, this is a market we want to be a part of, or a market that you know, maybe we don’t.

 

Pancham Gupta: Great. So, this is a great segue into that. My next question, which is, you know, how do you explain that how you look at one, three, and five mile radius? What data do you look for, like in zoning into one particular location? Or you know, what, this is the location where we will build it or buy this particular facility? What data would you look at and make a decision? Oh, you know, what, this is the one that we want to buy?

 

Kris Benson: I don’t think it’s one, there’s not one piece to it, right? What our acquisitions team talks about is building a story. So, data is part of it, right? So, things like everybody looks at population growth, job growth, you know, income, average household income, renters versus buyers, those kinds of metrics, traffic count, right? How many people are driving by your store every day, the things that probably any asset class are looking at. And then you know, the other big part of it for us is really understanding the supply side. Who else is in the market? Right, what the development pipeline looks like for that one, three, and five mile radius. And then also, one of the things our acquisitions team does, which is really nice is when we get a property under contract, we’ll get a list of all the tenants and we’ll map them right so you can see on a map clusters of where people are actually coming from so you know, what your service areas. And the good part about that is, if a new development is coming in, which is a risk right? You generally know where they’re going to be, right?  They’re going to  be on those high traffic count, you know, areas where there’s dirt to be bought. And so, you know, you can look on the map and say, Hey, am I at risk? If somebody builds one right here, are they going to take our customers because again, people aren’t going to drive by another facility to get to you, right? So, there’s interesting pockets that get created. And I’ll use an example property we bought in September, in Wilmington, North Carolina, where it sits on the top for anybody who may be listening. It’s I’m willing to Beach Road, it’s, it’s like an island, it looks like peninsula. And this facility kind of sits at the top of it. Well, when we did our math, 80% of our tenants come from south of where the facility is, all the competitors are north of us. Right? So, the competitors who are south of us are, I don’t want to use the word junky, but you know, Class B, and C type properties. So, and not really strong competitors, a lot of mom and pop operators. So, we’re looking at this thing, okay. All of this population is being serviced by this facility. And to get to the competitive set, which is all above us, they’re not going to drive by. And so, it’s trying to find stories like that, that helped us build an acquisition, you know, pieces, it’s never one thing. It’s about putting together the pieces of the puzzle. And then, you know, as an investment committee talking through, hey, how does that work? that helpful? 

 

Pancham Gupta: Yeah, I know, that is very helpful. That makes a lot of sense. And that example of Wilmington property that you have, by the way, we are actually buying a multifamily right in Wilmington, MSA, North Carolina, we are under contract. So, when you mentioned women come like, wow, such a big coincidence. So, you know, that’s a great example. And you actually alluded to this COVID-19 story, right? And you guys are obviously buying now and acquisition, like you’re looking for more deals, how has COVID impacted I know, June, July, whatever, May, June, July probably was slow, because of all the restrictions, you know, and in 2007, eight in recession, where people downsized, they probably use storage facilities to store their extra stuff. And, you know, downsize to what kind of trend Are you seeing now? And what do you see like going forward? Do you see the increase in demand for self-storage?

 

Kris Benson: So, I’m biased? So, anything I say you should probably take or install. But look, demand of self-storage is driven by it’s called the four D’s, right? And those D’s are death, dislocation, downsizing, and divorce. Right. And so generally, in times of, you know, recessionary periods, 2007-8-9, right, people were downsizing, they were just being dislocated, they had to move in COVID-19, similar trends happening, right? People are dying, unfortunately, you know, people are downsizing, they’re losing their jobs. And you know, they’re moving, a lot of people are moving from major Metro flexes out into suburbs. And, you know, there’s secondary and tertiary markets. So, I think, as a whole storage is going to benefit from that. Right, you know, what we’ve seen kind of our small piece of the puzzle, right, we represent 50 properties across eight states, you know, we look to the REITs to kind of see what’s happening at the market level, right? Public storage has got 2300 properties across the globe. So, what we’re seeing is delinquency is staying very low, people are paying the rents for the most part, there’s some markets that have been hit more than others, but people are paying the rent similar to multifamily. And the demand is still very high. So, you know, our portfolio occupancy is actually up through q3 q4, than it was in q1. So, we’re seeing an increased demand. And what’s interesting right now is the average tenure. And this is being seen at our portfolio. And at the reap level, people are staying longer. And the risk there is we don’t know if that’s a change in behavior, or, you know, as COVID starts to open up, or, you know, get better, I guess, for lack of a better term, will there be a flood of move outs, right, where people who are saying, I’m not going to go get my stuff right. Now. Let’s just wait and see what happens. And then, you know, in q2 of 2021, there’s a flood of Rodosky we just don’t know that yet. But, but generally, the demand has been high. And we’ve seen that across the board, not only in our small world, but at the larger scale across the country as well.

 

Pancham Gupta: Got it. Got it. So, let’s move on to like, do you have an example with numbers a lot of listeners if they’re listening, they want to know the actual numbers and you know, a lot of people are engineers or listen to the show. And they love the numbers. You can pick a deal your first deal as self-storage deal, where you know how much you bought it for, if you already exited? How much did you exit for and What kind of returns that? What was the business plan? And what kind of returns Did you deliver?

 

Kris Benson: I’m sure if you give me just a second, I can give you the absolute numbers or I can give you a rough estimate.

 

Pancham Gupta: Yeah, sure, Chris, you can take your time. And let’s talk about your first deal that he actually saw through invested in all that the numbers for it.

 

Kris Benson: Yeah. So, it wasn’t the first deal I was a part of, but it was the first ground up development that I had seen on the Self-Storage side. And at Reliant were primarily a value add company. So, although we’re not putting hardwood floors, and granite countertops, and stainless steel appliances in our units, we’re seeking some sort of forced appreciation to get our analyze up in that sometimes put the shovel in the ground, sometimes that’s a management play. But this was, you know, uniquely interesting, just because of the timing. This was a ground up asset that we originally built in Naples, Florida. In it started, I think we bought the land in early 16. And we ended up building out a, you know, institutional quality asset. And the plan was a six year hold. And generally, we built it for let’s see, the actual numbers were purchased price and the cap X. The plan was 9.2. And we held that property about two years, we got it completed and ran it for about eight months. And then we got an unsolicited offer from one of the reeds to sell it for sensibly what we had the stabilized value in year six, but it was in year two. So, we sold that property at just under 19 million. And we held that that for two years now. But not all of our properties. They all don’t work out this way. But this one was a specific home run. I mean, from a number standpoint, at the project level, the equity multiple was 3.89 and IR in the high 80s. So just crazy numbers. But you know, it’s if you can find the right place. That’s why people have gotten into storage, right is because there’s a high demand for it. And, you know, we’re seeing that now in during COVID. A lot of capitals flooding the space, right. So, on the acquisition side, it’s very frothy, you know, there’s a lot of capital chasing deals, which is great if you’re selling more challenging if you’re buying,

 

Pancham Gupta: Right, so this deal is sounds like a homerun to me, uh, how many units were these? And you have that data?

 

Kris Benson: I have the issues. I mean, it was a, it was just under 100,000 square feet. I want to say it was about 750 units all climate control three story, you know, stone glass, a nice, a really nice building in Naples.

 

Pancham Gupta: Got it? Got it. Great. Well, thank you for sharing that. Before we move on to the second part of the show, which I call taking the leap round. I actually have one question that I’m asking everyone. It’s this Do you have a morning routine that you follow? If so, what is it? And does it contribute to your success?

 

Kris Benson: That’s a good question. So, for me, it’s usually around working out you know, I wouldn’t say I’m diligent. It’s not every morning, it kind of depends what time I go to bed, but I’m trying I try to be up before six o’clock get a workout in, you know, in the shower and into work. Before that. It just changes my perspective on the day, it’s kind of my time to be alone in my head. And it’s always been a part of, you know, growing up played a bunch of sports. And so, working out was kind of always a thing. And if I don’t work out in two or three days, I start to get really wondering, I can feel it like unfortunately, it’s one of those addictions, probably a good one, but it could be worse, but when I’m not doing it consistently, it changes my mindset. 

 

Pancham Gupta: Got it. Well, you for sharing that. We’ll be back after this message. Do you ever feel overwhelmed by the thought that you have no time after work, and family time to learn about investing? Do you feel left behind that you are not putting your money to work for you? Do you want to create passive income, but you do not know where to start? If so, I have good news for you. I have created an investor club which I call the Gold Color Investor club for accredited investors. I will be putting together investing opportunities exclusively for this group. These are the opportunities where I have done my part of the due diligence for you and we’ll be investing my own money alongside you. If you are interested, please sign up on the goldcollarinvestor.com forward slash club. I repeat the goldcollarinvestor.com forward slash club. I will reach out to schedule a 30 minute phone conversation to discuss your investing goals. Once you sign up, this can be a good opportunity to diversify and take some chips off the hands of Wall Street to produce some cash flow. And in case you are wondering what an accredited investor is, accredited investor is someone who has earned more than 200,000 as filing single, or more than 300,000 filing jointly for the last two years. Another way to qualify as an accredited investor is if your total net worth is more than $1 million, excluding your personal home, it includes your stocks, 401, K’s, IRAs, cars, etc. Just not the equity in your personal home. If this is you, I would highly encourage you to sign up. So, Kris, this is the second part of the show, which I call taking the leap round, I ask these four questions to every guest on my show. My first question for you is, when was the first time you invested outside of Wall Street.

 

Kris Benson: So, in college, we actually invested in our first entrepreneurial endeavor, we had a couch selling business, the school that I was in, I worked for the physical plant maintenance guys as my work study program. And I asked what happens to all the couches that people buy furniture throughout the year that are in the dorms, and the guys that work with that we charge the students 75 bucks to take it out of your room. And then if we whatever catches, we get, we burn, and I said what? So, my buddy, and I actually ended up renting a whole bunch of storage tractor trailers, my cousin ran a storage company and rented us a bunch of tractor trailers in the school as parking on the parking lot. We took the couches for free. And so, people like that, and we put them in the trailers with a whole bunch of bug bombs. And then in the fall, we would come back and take all the couches out and sell them back to the incoming freshmen. And so, we need to put a little bit of capital in the first year like it was a risk, but we made a fortune. Well, a fortune for college kids. Each year, we sold some of the same couches, three or four years in a row, you know, we just get the same ones back and sell them another round. So that was probably the first, you know, outside the typical investing. I knew a little bit about stock market at that point. And I was playing around with day trading and stuff, but I didn’t know what I was doing. So that was my first step outside the traditional equities market

 

Pancham Gupta: Wow! that was that was amazing idea, by the way that, you know, yeah, you got your taste of self-storage back then. It wasn’t such a; it was tractor trailer storage weights. Amazing. Yeah, I know, I wonder, you know, you actually you were doing a service to the students and to the staff because they didn’t have to burn them. And the students didn’t have to pay the $75. And so amazing.

 

Kris Benson: The best part about it was freshmen would come back a week early. And so, they’d be there with their parents. And the parents thought it was the greatest deal ever. So, we used to charge for delivery, like by floor. And you know, after our freshman year, everybody knew us. So, you know, we would get everyone’s couches. So yeah, it was it was a fun adventure.,

 

Pancham Gupta: Wait. Well, my second question for you is what fears did you have to overcome when you started that couch business? I mean you know, you invest,

 

Kris Benson: Rodents and bugs? I mean, that was our biggest risk, right is you couldn’t get like too many bugs in mice and rats in the trailer, actually, one year. And this obviously, I noticed isn’t the intent of your question. But we slept in the trailers because people someone either stole something, I don’t remember. But my buddy and I actually slept in the trailers because we had all the couches out on the lot. And we didn’t want to move them back into the trailers. And I think that’s what happened. Someone came at night and like stole the trip, like a couch or a cup of couches. So, we, we slept in the parking lot under the stars to protect our inventory. But you know, I think Pancham when you’re at that point to, you know, you don’t even know what to be afraid of Exactly. you’re young and you’re young and stupid as they call it but you’re I think young and smart. Alright, so my third question for you is can you share with us one investment that did not go as expected?  Sure. I got lots of those. 

 

Pancham Gupta: One, which stands out to you.

 

Kris Benson: Yeah, what I’m going to mention is, and this isn’t specific about equities, but this one always stands out to me and my wife never lets me Forget it. So, there was a company that my buddy’s cousin was the CEO of a health, a health care company that was developing a cancer treatment drug. And it was coming out of phase three clinical trials, and I invested, the stock ran up. I don’t remember the exact numbers, but I think I, you know, four or five times my money, and I held it, and I didn’t sell it. And the night before the phase three clinical trials were coming out, or maybe the day before my wife was like, sell this like take it off the table. I was like, I’m putting the kids through college with this. I’m hanging on. And he’s three clinical trials came out and results are terrible. And the next day the stock was not where it had once been. And so, you know, I ended up breaking even or maybe I made like 100 bucks or a couple 100 bucks, I didn’t lose all my cash. But the thing that it taught me was, you know, the old saying, you know, pigs get fat hogs get slaughtered. And so, you know, I’ve tried to be diligent about taking stuff off the table when I can and finding a way to reinvest that in a tax efficient manner, the name of that it’s still a publicly traded stock, I still have it on my tickers. Celsion. I don’t mean to blow them up. But it still has not come back to where it once was. But yeah, an interesting, good learning experience. I try to tell my kids all the time.

 

Pancham Gupta: Yeah, no, all of these are, you know, real world education seminars, right, like you did it and you have learnt your lesson, something good came out of that. So, thank you for that. And my last question is, what is one piece of advice would you give to people who are thinking of investing in main street that is outside of Wall Street?

 

Kris Benson: Yeah, I think the first thing you have to decide on is are you going to be a passive or direct investor? Right? You know, there are plenty of people who have great careers, and they love them, right. And they have no desire to leave, right? Whether it’s tech or, you know, I’m a business owner, I’m a physician, whatever the case may be, but they want this access to alternative investments. And, you know, what I would say is, I’m a subscriber to the 10,000 hour rule, right? It’s, it’s really hard to be an expert, right? takes a lot of time. And if you want to put that time in to learn how to do multifamily, or retail, or industrial, or any sort of real asset or alternative strategy, crypto, great, do it. But if you know that, you’re not going to put that time in, then man, you’re, you’re gambling a lot. So, you know, what I would suggest is find those professional partners you can partner with, you’re going to give up some returns, for sure. But you’re probably going to make a lot less mistakes, because they’ve probably made those mistakes already and have learned much more. And for me, that was, I remember that decision of like, okay, I don’t want to be an operator, right? Like, I hate the management of P and L. Like, that’s not fun for me at all. Like, I like the deal. I like raising the capital. And so, I needed to partner with people who liked the operation side, because that’s not my bailiwick. So, you know, I think for people, you first make that decision, am I going to be passive? Am I going to be direct, and then educate yourself, but not too much, you need to jump like I talked to so many people who just analysis paralysis their way out of anything, and nothing ever happens, right? So yeah, you know, a saying we say with Investor Relations all the time is like perfection is the barrier to progress. So, it’s never going to be perfect. So, jump, and then you’ll figure it out, right, and you’re going to learn the most, and you’ll make some mistakes, but you’re going to learn the most in the middle of it. And like you said, that’s the real world. Those are the real world educational seminars. You know, one thing I’ll leave you with this story is, I don’t know if you read Tim Ferriss, but one of his books, and I don’t remember if it was four hour workweek, or one of his tribal mentors, something like that he talks about, when he got into VC money, he put aside a certain chunk of cash, and basically said, this is my college tuition. And so, if I lose all the money, you know, the amount of education I take out of that is going to be more worth way more than what I would have spent on a college tuition. And then I’m 100% positive, I can grow out of that. So, I think you need to look at it that way as those experiences are teaching you for whatever’s next. I mean, you just have to keep going. So, you know, for me, that’s a big one is figure out Active Passive, figure out what you want to do strategy wise, and then educate, don’t be stupid, but then you got to get in, and you got to start to figure it out.

 

Pancham Gupta: Go it.  I know I think that’s a great, great advice and 100% agree with you because being an active investor takes a lot of time, a lot of time in your duplex story that you mentioned initially. Kind of talks about that right. So

 

Kris Benson: Your listeners right now who have duplexes or quads or whatever, like Yep.

 

Pancham Gupta: Hahaha right. So, thank you, Kris, for this. how can listeners connect with you? How can they reach if they want to find out more,

 

Kris Benson: Yeah, if you’re interested in Reliant in our platform on the investing side of things, we work for the number of accredited investors reliantinvestments.com, we’ll get you information on the firm our track record etc. If you want to connect with me directly. LinkedIn is really the only social media platform that I use. It’s Kris with a K KRIS BENSON if you Google that, and anything Reliant, you’ll find it there as well. And we’re fairly active posting stuff as well. So, between the two you can find us

 

Pancham Gupta : Wait. Thank you, Chris for your time here and adding a ton of value and you know, telling us about your journey and the Self-Storage industry and all your Naples Florida deal and the four D’s that dislocation

 

Kris Benson: downsizing and

 

Pancham Gupta: Downsize and I’m like, you know, I can’t read my own handwriting. Yeah. So, yeah, so downsizing and divorce, right. So great. And you know, have a great day.

 

Kris Benson: I appreciate it, you do the same.

 

Pancham Gupta: I really appreciate you for joining me today to learn a bit about self-storage industry. I hope that you got some value from the show, and all the things that Kris had to share. If you have questions, don’t hesitate to reach out my email is p@thegoldcollarinvestor.com  again, it’s p@thegoldcollarinvestor.com this is Pancham signing off. Until next time, take care.

 

Thank you for listening to The Gold Collar Investor Podcast. If you love what you’ve heard and you want more of Pancham Gupta, visit us at www.thegoldcollarinvestor.com and follow us on Facebook at The Gold Collar Investor. The information on this podcast are opinions. As always, please consult your own financial team before investing.

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