Why Self Storage Is a Recession-Resistant Cash Flow Machine | Bree Hartman Interview

Bree Hartman| Storage School (00:00)
Absolutely. Yeah, great question. So I always like to say, like I teach in my storage school is get really good, right? I talk about deal finding. I thought that is very much my cheat code. When I first started was get really good at finding these off market deals and being able to take a good storage deal to someone else that has money.

Scott Bursey (01:50)
Hi everyone and welcome to the Real Estate Pros podcast. I’m your host Scott Bursey and today I’m joined by someone I’ve been looking forward to speaking with. Bree Hartman, who’s been making serious moves in the self storage space. What if you could build a multimillion dollar real estate portfolio using Google Maps and creative financing? Bree has accomplished just that. She is the CEO of Storage House and a specialist

in off-market acquisitions and seller financing. She’s here to pull back the curtain on why self-storage is the ultimate recession-resistant asset and how she manages a nationwide portfolio with high-tech automation. If you’re looking to scale beyond single-family homes, this episode is for you. Welcome to the show, Bree.

Bree Hartman| Storage School (02:40)
I’m so excited to be here. This will be fun.

Scott Bursey (02:43)
I think our audience is really gonna take something away from your incredible transition from the fitness industry to real estate, proving that with the right systems and a bit of Sacramento grit, you can scale a portfolio to hundreds of units in a record amount of time. Bree, let’s dive in, shall we?

Bree Hartman| Storage School (03:04)
Absolutely.

Scott Bursey (03:05)
So first off, for people who may not be familiar with your world, give us the short version. What’s been your main focus here recently?

Bree Hartman| Storage School (03:14)
Yeah. So just getting into the self storage space, I was a W2 employee. So I worked for Fish and Wildlife for seven years. And I always like to say, you know, once you understand a little bit about being a state worker, I didn’t know I was an entrepreneur. I quickly made that jump into, okay, I’m going to go open up a gym. Right. And so I thought that was like the vehicle is go, go be a gym owner. love fitness. And that became a busy owner, right? Because you don’t know about all

the systems and all the different things that you need. So learned a lot of valuable lessons and then was able, got pregnant with my baby girl and I had one accidental rental. And with that one rental, I was like, you know what, like I’m doing all this work for $400 a month. Like there’s gotta be a bigger, better way. And that’s when I found Self Storage. So now we currently own about a hundred thousand square feet all over the U.S. We’re currently buying more and more. We buy three to five good deals a year. And you know,

goal with this is to be able to remotely manage all my facilities from my house so that I can have more time freedom with her. So I know that’s the really quick and dirty way, but I’m just, you know, I think I always say I am a average business owner, right? That loves, you know, no toilets, no tenants, no employees and less problems and more cashflow, right? So that’s something that I’m very, very passionate about. And just being able to have slow mornings with my girl was a big reason of jumping into larger asset classes and going bigger.

Scott Bursey (04:44)
And that is the best reason. Awesome. What caught my attention about you was the way you’ve been able to scale from zero to over 400 units in less than a year.

Moving with that level of speed and precision, most investors would take a decade to achieve that, all the while being present with your daughter.

Moving from a physical gym to Sacramento to 400 plus storage units nationwide is a massive jump in operations. What was the one system or piece of tech you implemented that allowed you to manage that growth without losing your mind?

Bree Hartman| Storage School (06:14)
you

Yeah, I know that really good question. You make it sound really easy. ⁓ But it definitely was, you know, I think before I even acquired my first facility, it’s the skill sets, right, of being a business owner and underwriting deals. Because a lot of time, a lot of people, even when I started trying to find good storage deals, it’s like, what is the facility actually worth today? And then am I overpaying? Right? Like, what is a good deal really look like? ⁓ And so that was something I really honed in for a good, you year before I actually bought my first

facility and then it started buying you just go out there and buy another one and another one. But I would say the two skill sets like you asked was number one, how do you find good deals? So I became really good as a deal hunter ⁓ because this is a very important skill set. If you when I first started, no one wanted to talk to me because I was a gym owner, right? But if you get really good at one skill set, such as finding deals, you suddenly become popular because you have an opportunity at hand and you can take that opportunity to someone who has either money or is

Operations and say hey, I have this opportunity Do you want to partner and shave off a little bit of that equity together? So you possibly can come in with little to none of your own money because you found the deal So that’s skill set number one and then skill set number two is underwriting deals to know what a good deal looks like

Scott Bursey (07:33)
That’s just fabulous. Now every operator I know has a moment where things got real, Bree. You know, maybe a deal that went sideways or a time that you had to pivot fast. You mind sharing one of those moments with us?

Bree Hartman| Storage School (07:50)
Yeah, I would say one of our deals that we never we didn’t get, which is still like, you know, sort of to my heart. ⁓ But I was talking with the owner, had cold called this owner and had negotiated a deal kind of near Chattanooga, Tennessee, ⁓ and had been talking with them for eight months. And so we got really close to making that two point two million dollar seller financing deal at four percent interest. ⁓ The guy said yes, you know, to the letter of intent, signed the letter of intent. And then the big hardship

on that deal was he actually took her letter of intent and took it to someone else at his church and said, Hey, you know, I got an offer here. Would you want this offer or would you like to, know, or would I want, or should I take the other offer? And so he took her offer to his friends at church and gave it to him. And of course the guy was like, I’ll take that offer. So that was a little bit of a learning lesson, a little cringe, because it hurts, right? When you’re especially building relationships. So that’s something I learned very, very fast is, you know, how do you just

How do you get no and give intentions to a seller very you know fast from the beginning? So that does not happen right down the line. So you never control anything, but you can always set yourself up for success.

Scott Bursey (09:03)
Yes, you can. And you have that stepping stone in place. can tell. And your passion just resonates. And what you just described, Bree, that’s a master class in seeing value where others may not. It’s one thing to find a deal, but it’s another to get that yes from the seller. When you’re talking to these mom and pop owners who have run facilities for decades, what is the biggest fear?

they have about selling and how do you help them overcome that?

Bree Hartman| Storage School (09:38)
Yeah, yeah. So when you’re talking with an owner and we talk to owners every day, because we’re buying, we’re in the trenches right now, especially with our students. And so I would say, you know, a business such as self storage. So I think I just need to preface this self storage in a nutshell. It’s a business as well as commercial real estate, right? And so people forget about this and you have to, yes, it gets to be a cash cow,

but you have to put systems in, you have to operate it. You still have to give people, you know, good customer service when you buy this, this

asset class it and you also will be able to leverage because you own the land. ⁓ Some of the people that love boring businesses, ⁓ they talk about laundromats and people get all excited about laundromats and that’s fair, but you don’t own the property. You’re actually paying a triple net lease to someone. And so the advantage in storage is very much that you’re operating this business, you’re adding value to it very quickly and you’re forcing appreciation so that you buy it for 1.5 million and maybe now it’s 3.2.

within three to five years. So I just wanted to preface that just really quickly if some people don’t know about storage, but I think your question was, some of these mom and pop owners, and this is a big advantage right now is we’re going through the silver tsunami, right? We’ve got baby boomers retiring and a lot of these baby boomers don’t have websites and they don’t have Google, my business accounts ⁓ and they’ve been running this business and 100%, they’re so excited because they’re, I’m 100 % full. That makes an investor drool, right?

because their prices aren’t high enough. But I think to your question, it’s very much so, you owners, these are their business babies. This is what they either built or purchased and have owned for over 15 years. And so that’s provided for their family. And so they are very touchy sometimes because they want to make sure that they are going to be selling their business to someone that can, you know, not only make the business better, but treat their customers just like family, just like themselves. So I think that’s a big advantage.

right now is if you can go to that storage owner, shake their hand, have lunch, have dinner. ⁓ That’s a big piece that not a lot of people do. we had a firefighter, 45 years old, ⁓ go on his fifth call to talking to an owner and he said, hey, can I come up and see your facility? I’ll take you to lunch. And he bought two facilities within four months. And so that personal touch really goes a long way, especially in commercial real estate.

Scott Bursey (12:40)
absolutely it does. Yes. And that right there is the real barrier to entry for the real pros. It’s exactly what separates the weekend hobbyist from the career operators, Bree. The ones who are still going to be standing and thriving a decade from now. Let me ask you this. What are you most focused on solving or scaling next?

Bree Hartman| Storage School (13:05)
Yeah, right now. So our biggest thing is, we buy two to five good self storage deals every single year. ⁓ And that is mom and pop owners with no website ⁓ that might need a little bit of love and a price increase. But what we’re kind of looking at in, I think it’s just a different eyes is, you know, when you buy these properties, how can you buy maybe other businesses that are verticals? Right. And this is the very smart approach is not you’re not only just buying a business, but what else

can you sell people? And so a lot of people don’t know that self storage has a lot of products. And so they talk about RV parks and all these things. And I’m like, yes, but RV parks are 65 % expense ratio. Self storage is 35 to 40%. So your margin, you can have a larger margin when you buy these boring businesses because you’re in the business to rent space, right? You just rent space. It’s a cinder block building, concrete floors, roll up doors and no toilets, no lights.

But to, think your question was, what is this opportunity? we have a couple of more buying properties that have additional land, so expansion. And so we will either put more climate controlled buildings or we’ll put RV and boat spots because everyone and their mothers in COVID, right, purchased a RV and boat and they need places to store them. And so this is an add on is, can we purchase a ⁓ gray water and an ice machine?

so that can be an add-on to our self-storage business. Or can we buy a tenant protection insurance company because we know that we are going to be offering our tenants tenant protection plans. So these are different verticals that we’re looking right now to buy and then as we have a portfolio roll up as an enterprise or kind of portfolio if you want to think about it like that.

Scott Bursey (15:42)
How exciting, that is just tremendous. What’s the next real goal for you? The bullseye, if you will.

Bree Hartman| Storage School (15:43)
Yeah.

Yeah, the bullseye, you know what? I always like to say self storage. I wanna buy businesses and run them remotely from my house. But two years ago, people kept coming to me and asking like, hey, how are you underwriting these deals? How are you buying them? And my big bullseye right now is we started self storage school. So no matter how many facilities I own, it’s exciting ⁓ playing with multi-millions, but I love helping people. So being a gym owner, like you just got a personal trainer, there’s that helping aspect.

So getting to help students buy their first storage facility has been so rewarding and that’s something that I really like to do is we’ve got a lot of deals right now. So we’ll take deals down together or I’ll help them be able to structure a deal with seller financing so that they can come in with $9,000. So just for one fun, know, shameless plug, this is so fun. I had a student that ⁓ just bought a storage facility in three months and he bought a 10,000 square foot facility in Texas.

which is about

90 units and he bought it for $90,000 with seller financing and he only had to put $9,000 down. And so that facility will be worth in three years about $325,000 with $9,000 down with seller financing and no bank. You know, the seller gets to be the bank. So I think that to me, like, I don’t know, to me, that’s like the best of when and that’s something that I’m excited about is doing deals with students and doing deals with students that will change their life because you just need one.

to do that.

Scott Bursey (17:24)
That’s big, especially when you already have the infrastructure in place. So that next move Bree is where the leverage lives. It can either perfect your operations or detonate your workflow, depending on the strategy that you deploy. Interested to know if you were starting over today with 50K and 10 years of experience, but zero portfolio, what is the first lead gen channel that you would turn on?

Bree Hartman| Storage School (17:54)
Absolutely. Yeah, great question. So I always like to say, like I teach in my storage school is get really good, right? I talk about deal finding. I thought that is very much my cheat code. When I first started was get really good at finding these off market deals and being able to take a good storage deal to someone else that has money.

And so what that kind of looks like is you can go onto Google, my business, and you can look for self storage facilities. And when you open up that self storage facility, you can look for one.

that have no website or they have a website but they have no ability to pay for that unit and so that can indicate that you are or they are an unsophisticated owner which as those are the ones that we want to buy and so if I came in right with 50k or zero right of my own money what I would do I’ll just tell you my steps because literally this is what I would do and is you know knowing what I know now is I would go to the library you know local library get a

library card, go on the internet ⁓ and go Google on to Google My Business, find those self storage facilities, pull it up on Google Maps, it’s free. And I would start calling, I would use the library phone or my cell phone if I had one. ⁓ And I would start calling these owners and just saying, you know, very simple. This is what I teach is, you know, hi, hi, is this the X, Y, and Z Main Street storage? And they’re saying, yes. so great. I know this call might be out of the blue, but I’ve just was wondering, I live in the area and I was wondering if you

would

consider an offer on your storage facility. Silence. Right? And from there that provides, they might say yes, they might say no, and if they say no, that’s okay because the next question that you’re going to ask is, hey, I just want to learn a little bit. I just wanted to see how did you come into buying this business or how did you build this storage facility?

and then let them explain because that builds that relationship. And even though they said no now, the whole goal at the end of the call is to get them to know you, know, like, and trust you so that you can get their email address or that you can get that contact. And they think about you and their local community when they go to sell or when they get sick, when people have strokes, people go through divorce. There’s a lot of different things that happen that can change someone’s mind, you know, three months from now. So and in a nutshell, that is what I literally would do.

know today if I had to do it again.

Scott Bursey (20:15)
In a nutshell, point well taken. What a great recipe, Bree. Now, I know a lot of our audiences, either earlier in their journey or looking to level up perhaps, and I think they’d benefit from hearing this. When it comes to building relationships and growing your network, what’s made the biggest difference for you?

Bree Hartman| Storage School (20:37)
Yes, in my network.

I like to call this, it’s called relationship capital and it’s one of the most important capitals that you’re going to have in your life and business. And it’s very true. I fully feel that. And I call it instead of ROI, I call it ROR. It’s a rate of return on relationships. And so this is an important piece. And what I do is I really like going, I think everyone should be going to their self storage association conferences to meet all the self storage owners, the operators, what’s going on in the

industry. I’ve done that from day one. I didn’t even know what acquisition meant. And that’s how I got into it and getting to know the key players because you’re going to meet owners there as well as a lot of other people there. And then another big thing is, you know, finding people doing what they’re doing online and you saying adding value to them. know, say like, hey, Bree, I saw your buying facilities and, know, I wanted to send you this article. You know, how can I how can I help? You know, how can I help you? You know, on X, Y and Z. So

providing

value and getting in front of people that are doing what you’re doing. It’s not about finding the biggest guru because sometimes you know this is the fluff is that they’re doing things that they did they’re talking about things that they did ten years ago versus being in the trenches and then and then there’s 40 people below them but it’s finding someone that you relate to and that you can kind of plug themself yourselves in to their community or what they’re doing and I think that gives you your cheat code honestly.

Scott Bursey (22:07)
And that’s something you just can’t fake. At this level of the game, proximity is power. The math of the deal only gets you so far. It’s the depth of your connections that determines what actually gets to the closing table. All right, before we wrap, if someone wanted to reach out, connect with you, maybe collaborate or learn more about what you’re doing, what’s the best way for them to reach you?

Bree Hartman| Storage School (22:23)
So true.

Yeah, no, absolutely. So I’m on Instagram. That’s me. And so I love when people come by and say hi. So if you can give me a follow and then just say hi in the DMs, but it’s Bree B R E E dot the investor (bree.theinvestor). And then also if you go to selfstorageschool.com. So we actually have a storage school cohort that is live right now. So if you are interested in applying to self storage school, let us know, put in an application and then we’ll see if it’s a good fit. So those are the two places that I always like to interact.

and say hi and add value. But I also, know would really like to do this, you know, for your listeners, because I know they’re go getter people, is I wanted to give out my self storage calculator. Yeah, to anyone that wants to take a look at understanding like what is the facility worth today. So if you guys want to reach out, just send me a DM or go to the link below in the show notes and just send me a DM called calculator to 916-579-7209 and just say calculator.

and I’ll send you that directly to you guys.

Scott Bursey (23:37)
Perfect. Well, listen, Bree, I appreciate your time, your story, and definitely your perspective. We need more people in this space who are out there doing it the right way. Thanks again for being here.

Bree Hartman| Storage School (23:51)
Thank you so much for having me.

Scott Bursey (23:53)
And for those of you that are tuning in, if you got value from this, make sure you’re subscribed. We have more conversations coming up with operators just like Bree, who are out there building real businesses. We’ll see you on the next episode, everybody.