Discover the ins and outs of the self-storage real estate niche with seasoned investor Cameron Barsanti. From humble beginnings to managing a multi-million dollar portfolio, Cameron provides invaluable insights into the self-storage business, focusing on deal flow, mentorship, and partnership.
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Transcript
Slocomb Reed:
Today's episode is brought to you by Presario Ventures, a private equity real estate firm based in the booming Austin, Texas market. To learn how you can invest in the future of Texas with Presario Ventures, visit info.presarioventures.com forward slash best ever. That link is in the show notes. Today we are joined by Cameron Barsanti.
Cameron is joining us from Corrales, New Mexico. His company is Storage Life. They focus on value add self storage properties. The current portfolio consists of over 40 million in self storage in six states. Cameron, can you tell us a little bit more about your background and what you're currently focused on?
Cameron Barsanti:
Yeah, absolutely. And Slocomb, thanks for the introduction. Your pronunciation was perfect across the board. Happy to be here. I'm a fan of the show, I'm sure as all of our listeners are. So yeah, pleasure to be here today. Little bit about my background, you said it. I'm in Corrales, New Mexico currently with my wife and two kids. We were in California for 20 something years, but I grew up actually in the area here in Colorado, small mountain town, beautiful on the river called Pagosa Springs. If you haven't heard of it, I highly recommend going and skiing or snowboarding or rafting or you name it. So anyway, at 18, I moved out to California.
I dabbled in the entertainment industry for a long time. And about five years ago, I was collecting unemployment. I was an out of work actor writing screenplays and I just lost my wife's life savings in a feature film that I made. So you can imagine good times, great times. So I was in the dog house and about four years ago, thankfully, the smart one of the two of us, you can guess who that was. She basically had started listening to real estate podcasts like yours and others and quickly started understanding that we could actually start investing in real estate with not a lot of money. And that was a big aha moment for us. We didn't realize that. We had always wanted to invest in real estate, especially her, but it was more of like, when we have enough savings, then we can do it. So quickly we pivoted, she sat me down and basically without physically slapping me in my face verbally and mentally or emotionally slapped me and said, you're going to stop writing screenplays and pursuing these Hollywood dreams. And you're going to start pursuing real estate. So four years ago, we got into multifamily three years ago. I bought my first self storage facility in New Mexico. We've acquired 12 cents. We're about to acquire our 13th and Guam actually, and we're happily investing in self storage and operating across the country.
Slocomb Reed:
When did you start acquiring self storage?
Cameron Barsanti:
Three years ago.
Slocomb Reed:
Gotcha. And are you using the syndication business model? You're the general partner raising capital from limited partners?
Cameron Barsanti:
Actually no. Out of our 13 facilities, 12 we purchased. One of them was a syndication. I'm partnered with my buddy, AJ Osborne. And other than that, no. So we actually have managed to do all of the investing ourselves, which is just a simple primarily just my one partner and myself and that's been great for us It's been definitely a wild ride as we've often been zeroing out our bank account every time we purchase a facility But so far it's worked.
Slocomb Reed:
I'm curious to know more about that partnership structure. I have a couple of joint venture partners on apartment buildings here currently. How is it that you all are structured?
Cameron Barsanti:
So ever since the beginning, I have an amazing partner who I've been able to learn so much from, kind of became a mentor of mine as well and a friend. But what I realized very quickly or stumbled upon early in my career is I didn't have to be good at a lot of things. I just had to get good at finding deals. So from the get-go, my partner and I started partnering up together and the bottom line is I had found a great deal. So he was willing to partner with me. He was a 28-year investor at the time making an exceptional living as an investor, a flipper, a hard private money lender, you name it. So when I brought him a deal, he wanted to partner with me. So he would always be like, let's just throw in 50-50. And every time I'd be like, well, I don't really have the capital. But my wife and I, we eliminated 401ks and retirement accounts and did private money from time to time. Whatever we had to do, we'd always just pulling a rabbit out of a hat, somehow came up with this half of the money down for our deposit. Now, in terms of the workload of it, both my partner and I be really splitting the workload 50-50. Now, on the front end of it, I ended up doing a lot more of the work, managing the facility, running the facility, answering the phones, but it paid off because I was learning the business inside and out. And now as our portfolio has grown,
His wife, our CFO, happens to be doing a lot of our accounting and our books and all that stuff. And now she's got a full-time job. So it's came full circle. We've basically always put our own money in and worked equally hard on the asset.
Slocomb Reed:
Gotcha. So you and your partner from a capital perspective are 50-50. And then you share a lot of the operating responsibilities as owner-operators. Were you compensated by the partnership for finding and negotiating the deal?
Cameron Barsanti:
No, it's been a very simple process. It's been look, I want to partner with you. You want to partner with me, let's put in the money and let's just run it together. And it's worked. It's been very simple, very easy to understand. Now to kind of piggyback off your question, obviously.
I'm always open to other people bring me deals or if I were to bring a deal into a different kind of partnership and say, look, I've worked really hard for this deal. I have it under contract. I've put my earnest money into the deal. Can I get maybe three to 5% equity split or a little bit of compensation or maybe a finder's fee? Always open to something like that. But for us, it's just been 50 the whole way through.
Slocomb Reed:
Cameron with your portfolio now spanning six states. Are you still owner operating?
Cameron Barsanti:
Yeah, actually we are from the get go. One thing that was extremely helpful. The first facility we purchased, it was a partially converted bank owned furniture store. So we ended up expanding that twice into additional climate controlled storage. So I built that from the ground up. Answering the phones, understanding how to become really a good manager, a good salesperson, then operationally speaking, how to actually become a great operator.
So I've had a self-storage mentor my whole journey and it expedited my career exponentially and then the performance of our operations. So that allowed us to build everything from the ground up. And then as we started to scale, we were able to slowly build out the team. So first it was a call center and then maybe it was a manager. And then we got rid of the call center and we started bringing everything in house. And thankfully most of our facilities are remote managed. So we're able to havee our managers that answer the phones, they can run three to four of them by themselves. So we've been able to keep our expenses down to on average, our portfolio expenses are around 25%. So they're extremely low because we're doing everything in house.
Slocomb Reed:
Cameron extrapolating your $40 million portfolio across 12 properties, your average property is worth under $4 million. It's cool to hear that you have a light nimble operations style. I'm curious based on your analysis and the deals that you're looking at, how small of a facility is too small for your business model?
Cameron Barsanti:
Right now we would like to acquire over 50,000 square feet. We would look at anything 35 and over just because there could potentially be room for expansion or if it was a great opportunity, we wouldn't necessarily pass it by, but there'd have to be something a little bit extra exciting for us to go ahead and do it. Another example, when we're searching criteria, we're heavy on the acquisition side. That's really our bread and butter. And I help people a lot with this is basically if you're drawing around a buy-out box, you got to be really careful because if I have my acquisitions team only looking for 50,000 square feet and up there could be some opportunities that don't quite fall into that. So we acquired 80,000 square feet last year in California. Now, one was a 35,000 square feet facility and one was a 45,000 square feet. So we acquired 80,000 square feet of storage, but had my buy box been so strict, neither of those facilities would have even met our criteria. Now, in addition to that, we pay $2.4 million for these facilities that are worth upwards of $7 million and we've held them for less than a year. We're actually under contract to sell them at the moment. So it's tough. I really like to be as open as I can knowing that we don't want anything too small. Cause we're trying to definitely upgrade our portfolio a little bit bigger, a little bit better.
Slocomb Reed:
Cameron, whether the number is 35 or 50,000 square feet, what makes that the number, why is that the threshold on the bottom end?
Cameron Barsanti:
Great question, Slocomb. It really comes down to the revenue for the most part. So a larger facility, you typically, hopefully are generating more revenue. And that extra revenue allows you to do a number of things. Let's say you maybe want a part-time onsite manager. Let's say you're competing against some bigger operators, maybe some REITs. So maybe you want a little bit more money in your SEO, going towards your SEO. We have an operational manager that we brought on last year to help us with our portfolio and oversee our managers and our assets. So the bigger revenue, more opportunity to build more substantial equity long-term. So it allows us to do a little bit more and spend a little bit more in-house just based on the revenue.
Slocomb Reed:
Yeah, that makes sense. What defines your ceiling? What is the largest property that you'll offer on?
Cameron Barsanti:
The only thing we haven't offered on other than a two or three facility portfolio are large portfolios. But other than that, we don't really have a ceiling. And in fact, for us, the bigger the better. That's really our motto, bigger the better.
Slocomb Reed:
That makes a lot of sense, Cameron. Part of the reason I ask, well, I have a follow-up question, but I'll say the reason my questions are coming in where they are is that I am an apartment owner operator in greater Cincinnati. And I know before the interview started, you said you'd been offering them some stuff up here.
But one of the questions I ask myself, because some of my property management portfolio is fairly far flung and a few of them are off the beaten path. I drive past a lot of self storage places and I don't know that they meet that 35,000 square foot mark and I call on every once in a while. I haven't heard back yet, but I would love to get into something like that. Operationally I'm already boots on the ground. I'm driving by the property in the service of my rental portfolio. So that's not as big of an issue. And I asked myself that question, whether or not self storage is something I should be getting into. So I just want to explain that's where my questions are coming from. Cause I'm sure I'll have more questions along that line soon, but when it comes to the largest properties, I've done enough interviews for this podcast to have interviewed a handful or a couple handfuls of self storage, acquirers and operators, and typically the ceiling is set by their targeted returns because bigger money doesn't need the same returns from that property that smaller money does. Maybe the best way to ask this question is what is the largest property you've acquired today? But I'm wondering where that ceiling is where you're just straight getting outbid by firms with different return needs.
Cameron Barsanti:
Yeah, that's a great question. Fascinating. So the way we've grown is.
I feel a little bit unique. I know I said it earlier, but our ability to scale in the last three years has hinged upon one thing and that's our ability to find deep discounted property. So for us, it's not necessarily where we're buying. It's about how deep of a discount we're getting for the most part. I wouldn't buy in a small town and I wouldn't buy in a severely declining population, but other than that, I can rattle off eight cities that I'm in. And I could almost guarantee you haven't heard of any of the eight cities. So my point is, because we're not syndicating, because we're not necessarily really market dependent, like I wanna hover around Phoenix, I wanna be in Atlanta, I wanna be in Nashville, or more of these popular areas because of all the growth, the Florida's, the Texas markets. So for us, we've really grown so quickly and had such incredible opportunities just because we are looking for deep discounted properties. Now, tying this into your question and the thought process of the larger the facility potentially would attract a bigger buyer that needs a smaller return because we're not syndicating. For us, I believe that's been a lot of our inspiration of taking these deals down ourselves. If I'm looking at a whopper that I know is at least a third base to a home run hit, we've just managed to pull all the equity in ourselves. Now that doesn't mean I'm not open to partners.
I have a lot of capital partners on the sideline wanting to invest. And as we continue to scale, we are definitely at the point, look, I think now there's gonna be a lot of opportunities where we can start bringing on outside investors. We just haven't gotten there. So again, trying to better answer the question and the conversation around. Smaller deals typically have more cashflow. The long-term equity return will be a little bit skinnier. You gotta watch your exit strategy as well depending on what kind of market you're in. But there's definitely something to be said about the bigger money that's strategically going into nicer areas, bigger assets that have a much lower return, but they overall feel like it's a much safer investment because you're going into a market that has a lot more stability. So over the 10 year projection, they feel like that asset is a lot more protected.
Instead of going into a market, let's say maybe like Albuquerque, New Mexico, there are a few REITs here, but there's not a ton. Extra space has dominated. So I hope that sheds light and answers that a bit.
Slocomb Reed:
I want to transition the conversation a bit here and I get the feeling that if I did decide to pull the trigger and get into self storage, that you're very well positioned to give me or listeners like me some advice here. So I want to ask for it. Let's start here in building my real estate portfolio outside of self storage. I have gotten comfortable with having those direct to seller conversations and doing some direct to seller lead generation. Also of course comfortable in conversation with brokers. But I understand how to operate a portfolio already at least of apartments. And I understand off market lead gen. Where should I start if I want to shift into self storage?
Cameron Barsanti:
Wow. Okay. I love this question. I help people across the country invest in self storage.
My new found passion, I launched Storage Life in January specifically to help others invest. We have our own mentorship and mastermind program. This is what I do. I love to do it. I love to help people. Four of my members closed on a deal two weeks ago, an airline pilot, a fireman, a retired broker and a very successful e-commerce investor. So this has been an opportunity that I get to actually help people do this. I absolutely love it.
You asked a really great question, Slocum, about if you're ready to do it, what does that look like and talking to sellers. So for years, I was chatting with investors that I found had more than enough education to invest in storage, but they were still stuck. Somehow they couldn't start moving the needle forward. And a lot of them were actually action takers, but they didn't actually understand which action to take, almost like analysis paralysis whether it was conscious or subconscious. So what I've found is to try and keep things very simple. In simplifying, for the sake of this conversation, in my opinion, the most important part of any of our investing careers is your deal flow. I could have zero facilities and I could have 40 facilities, but we actually mutually would still share the same obstacle and that's we can only scale is as large and as fast as the good deals we can find. So for me, I'm all about deal flow, nothing else. Your money, your capital, your operational procedures, how to do it, how to figure it out, that's easy. I could teach you that in a five hour conversation, but the deal flow is literally, in my opinion, the keys to the kingdom. So I would say start by knowing how to understand and evaluate a storage deal.
just like you would a multifamily property. And once you understand really what you're looking for and what makes a good deal a good deal, it's just input versus output. The input is the amount of sellers you're talking to, and the output is the opportunities you get because of it. So simplifying it even further, it's just a numbers game. If I'm working with a new B investor, it's how many sellers are you talking to? How many offers are you making a week?
The more sellers you talk to, the more offers you make, the more opportunity you'll have. So I'm gonna just really quick add something to that. I know some really successful, both multifamily and self storage investors that started in wholesaling. And that is a business we launched about two years ago in single family. The wholesale company taught us, if you can't find good deals as a wholesaler, your operations, you'll quickly die.
So if you can learn to work a little bit more, I would say like maybe an aggressive broker wholesaler where you're really pounding the pavement and you're not only starting to generate leads, but the real tricks locum, the real bottleneck is once you start generating leads, it's the follow-up game. So if you can get good at generating leads, cold calling is my number one strategy. And then also consistently following up. It's amazing what kind of opportunity will present itself.
Slocomb Reed:
That makes a lot of sense. Last question before we head into the final segment of this podcast. In the interest of giving me and our listeners advice, what are the biggest mistakes that you've made along the way and the things that we should be learning from your mistakes?
Cameron Barsanti:
The majority of my mistakes come from my ability to organize.
I wish I had a more exciting answer, but for me, it's my weakness. You hear it all the time, lean towards your strength, lean towards your strength. Well, I've done that. My strength is definitely building rapport and finding deals. But because of the way we've scaled, I've also had to deal with a lot of the operations stuff and a lot of that has to do with just systemizing and organizing our information, our data and basically, let's call it our playbook. I'm not good at it. And I've gotten a lot better for my own personal use, but I will never be great at it. And I'll be working on being a better organizer, time block, nicer looking calendar, you name it, planner, my Google drive, my folders, stuff like that, but I'm really bad at it. So if you can find somebody else to do it, if that's not your strength or whatever your strength is not, and we hear it all the time, but if you can find somebody to start helping you from the get go, to build out your system, build out and structure out what you're doing, have your SOPs and everything you're doing from the get go and start, actually documenting it and putting it into a system so you don't have to go back and do that later when you're twice as busy and you're scaled four times as much as when you first started.
Slocomb Reed:
That makes a lot of sense. Cameron, are you ready for the best ever lightning round?
Cameron Barsanti:
I'm so ready.
Slocomb Reed:
What is the best ever book you recently read?
Cameron Barsanti:
Best ever book, it's written by Dr. Sarno. It's not a real estate book, but it's about the power of the mind. He healed thousands of people with back pain and basically talks a lot about all of his studies. He was a Harvard doctor. He has tons of credentials and everything else, but a lot of the people he healed was actually the power of the mind, understanding that the back pain, for a lot of people, it was actually more related to a mental blockage. So what it allowed me to not only heal and do for myself, but understand, of course, we hear it all the time, but how powerful really our mind and our thoughts and our intentions are and where we on a daily basis focus and choose to focus our time and our mind.
Slocomb Reed:
What is your best ever way to give back?
Cameron Barsanti:
For this very moment, I'm helping people across the country invest in self storage, blue collar, hard workers, some really successful investors.
I have a gym teacher, I have a policeman, a couple of firemen. My best way to give back right now is helping people get into the game. Cameron, specific to the deals that you've done, the self-storage properties that you have acquired, what's the biggest mistake you've made and the best ever lesson that resulted from it? Oh boy. The biggest mistake I made was, in self-storage specifically, being in a rush to get rid of abandoned units that we had no way of getting ahold of the tenants and we did everything we could to contact them and feeling like I could trust my boots on the ground to make some very crucial decisions for me. It's a boring answer, but if you're in self storage, if you're getting into self storage, it's extremely important. You have to play by the rules. So caution over action every time when it comes to running an operation and working with your tenants. Make sure you're talking to a good attorney. Make sure your lease agreements are really where they need to be. Make sure you're just protected and you're really with a fine tooth comb going through all of your legal documents and making sure you're in good standing.
Slocomb Reed:
Cameron, to make sure I understand what you're saying, you mean the biggest mistake is that in a rush to get those abandoned units back to revenue producing, you moved faster than the law or your lease would allow. So you ended up in a legally compromised position.
Cameron Barsanti:
Yeah. What happened exactly is we had purchased a distress facility with usually what we do a lot of value add opportunity. And we took the information given to us and implemented that into our records of where the tenants were basically taking everything from the previous owners and putting it into our system without triple checking that all of their information was accurate. So it was really kind of a due diligence slash operational weakness instead of really just double and triple checking that every tenant that's supposed to be in every unit and that everything in the books we inherited were actually accurate.
Slocomb Reed:
Gotcha, that makes sense. On that note, Cameron, what is your best ever advice?
Cameron Barsanti:
Best ever advice is whatever it is, whatever asset class it is. If it's a multifamily, if it's single family, if it's self storage, learn enough to where you feel comfortable enough to start looking for deals and start talking to sellers. Know what a good deal looks like. Know how to analyze a deal, because it's all gonna come down to your underwriting and analyzing a deal. And then you have to find ways to not only start taking action, but to continue to feed your action. I'm gonna give you a few quick examples. Mentorship, partnership, and deal flow. Deal flow leverages you opportunities. Partners help you leverage a bigger operation or bigger opportunities than you could ever do by yourself. And mentor, it could be your uncle, it could be your grandfather, it could be your podcast, it could be Slocomb, it could be people you watch on the internet, or it could be people that you actually go and invest money and time into their program, whatever it is.
If you can leverage your mentors, your partners, and your deal flow and start creating not only momentum, but constant momentum. So it's not just about, hey, I'm gonna commit to going to the gym on January 1 because it's my New Year's resolution, but how do you continue to feed that commitment, to feed that momentum? It's about accountability and consistency, and you gotta start taking action, and you got to find ways to keep that action going.
Slocomb Reed:
Last question, where can people get in touch with you?
Cameron Barsanti:
Best way to find me is just on Instagram. My handle is storagelifecam, C-A-M as in Michael, storagelifecam. I love helping people out. If anybody has any questions or they're inspired or they're trying to figure out what to do or if self storage is right for them, send me a DM. I will answer everybody's messages and I appreciate the question.
Slocomb Reed:
That link is in the show notes. Cameron, thank you. Best of our listeners, thank you as well for tuning in. If you've gained value from this episode, please do subscribe to our show. Leave us a five star review and share this episode with a friend. You know, we can add value to through our conversation today. Thank you. Have a best ever day.