Episode Transcript
Introducer [00:00:02]:
Welcome to the untold stories of Real estate Investing hosted by Wayne Courageous II, a place where active and passive investors come to hear the good, bad and ugly of real estate investing. Our guests consist of experienced operators and investors who want others to succeed by sharing their stories. If you're looking to syndicate deals or grow your your wealth passively in real estate, you've come to the right show. It's now time to sit back, take mental notes and enjoy our next episode of the Untold Stories of Real Estate Investing.
Wayne Courreges [00:00:39]:
Welcome back to the Untold stories of Real Estate investing. I'm your host, Wayne Courageous. Today we're going to be talking with Tom Dunkel, Chief Investment officer of Bellrose Storage Group. With a background in corporate finance and nearly 30 years of real estate investment experience, Tom brings extensive knowledge and expertise to Bellrose Storage Group, growing the company from startup to world class organization. Tom has specialized in discounted asset opportunities nationwide since 2006. His financial savvy, open, communicative manner and integrity have helped alternative investors achieve their wealth building goals. Tom is the Chief Investment Officer. A seasoned team of real estate investment professionals that specialize in acquiring underperforming self storage facilities in the Northeast, south and Midwest US and turning them their performance to achieve high teens tax advantage returns to its high net worth investor partners in a condensed time frame of two to three years.
Wayne Courreges [00:01:32]:
Welcome to our show Tom.
Tom Dunkel [00:01:34]:
Hey Wayne, thank you so much. It's great to be with you and listeners today.
Wayne Courreges [00:01:37]:
So tell us, how did you get into the space and your real estate journey up to this point?
Tom Dunkel [00:01:43]:
Yeah, well, appreciate the nice intro. I know it's a bit of a mouthful my background, but I'm solidly in my middle fifty s now, so I guess I have been around the block a time or two. But yeah, I actually started my career after business school. I was in corporate America for about 1112 years and had a great training ground there where I learned the mergers and acquisitions and the corporate finance world when I was working with an aerospace company that was growing by acquiring other companies. So very early on in my career I kind of got the deal bug. I really liked doing the transactions. I really liked kind of working with that kind of high caliber team. I was working with Harvard MBAs and Wharton MBAs and Chicago MBAs and private equity people and high level bankers and stuff.
Tom Dunkel [00:02:34]:
So it was really great environment. But fast forward several years. I had always wanted to do something on my own and then in 2006 I was with a company that ended up giving me the boot. So I got fired from that company, but it was the kick in the pants that I needed Wayne to finally go out and start my own thing. And so that was 17 going on 18 years ago, and I'm still out here kind of duking it out, doing transactions, and built a great team. Here at Belro Storage Group, we've now found our way to storage, which I'm happy to get more into that later. So, over the years, we've done a bunch of transactions and a number of different asset classes, and so we're really happy to be in storage right now, but got a great team behind me, and we're excited for the future.
Wayne Courreges [00:03:25]:
Yeah. So you said storage right now, and it sounds like you had other asset classes. So walk us through your journey of choosing the asset class that you're in today.
Tom Dunkel [00:03:34]:
Sure. Yeah. So when I got booted from corporate America, I did what a lot of entrepreneurs do that are wanting to get into real estate. I started in residential, so I started doing fix and flips, picked up some single family and duplex and triplex type rental properties. And then, of course, as I mentioned earlier, that was 2006. So those next few years were very challenging for a new entrepreneur. I don't care how much money I had or how much education I had. It just didn't prepare me quite for that big downturn.
Tom Dunkel [00:04:09]:
So, learned some hard lessons there, but was determined to kind of stick it out. So as I was kind of looking to reinvent after getting creamed in the residential space, I discovered what are known as discounted mortgage notes, or defaulted mortgages. So these are mortgages that went into default. They were sold off into the world as a non performing asset, and then there are companies out there that will buy that loan. They'll get it reperforming, and then they'll sell it as an investment to someone. With my last few dollars I had left over, I bought a couple of those, and it just sort of meshed really well, Wayne, with my financial background, but then also my desire to be in real estate. So it just kind of clicked with me, and I was like, hey, there might be a business here. And around that time, this was 2009, I met my now business partner, Joe Downs.
Tom Dunkel [00:05:05]:
We've been business partners over 13 years now. And he came out of the commercial real estate crash, and I came out of the residential real estate crash. Turned out we lived around this corner from each other. And so we would meet up at the bar on the corner and talk about, hey, what are you thinking about doing next? And when I started telling him about these discounted mortgage notes, he was like, you're effing crazy, and what are you doing? And blah, blah, blah. It's like, hey, you're a smart guy. Why don't you go do some due diligence, and we'll meet back here at the bar in a couple of weeks, and you tell me what you found out. So he comes back a couple of weeks later, and he's like, I think you might be onto something here. So we then started a company in 2010.
Tom Dunkel [00:05:49]:
It's now known as US mortgage Resolution. And that business has generated over $53 million of revenue over that time period, and we've transacted on over 10,000, probably 11,000 at this point, discounted or defaulted mortgage notes. And so we've built a nice little business there, which is great. But the thing with the mortgage note business is it's super volatile. So when it's good, it's really good. When it's bad, like, we could go a year or two without having any notes to buy because we're kind of at the whim of the loan sellers out there, mostly the big banks, right? So we were like, hey, we got to find a business that's going to be a lot more steady, where we can actually build a team, put a business plan together. All that business school stuff that I learned, we weren't really able to apply in the distressed mortgage business because we had no control over our pipeline. So we had looked at hard money lending.
Tom Dunkel [00:06:50]:
We got involved with a title company for a little bit. We actually went back and fixed and flipped some other residential houses. And then finally we started hearing about self storage. In about the 2017 2018 time frame, we started going to the conferences, started getting educated. We were like, hey, this business looks really interesting. 2019. We joined a mastermind group, and that's where my partner Joe and I realized, like, hey, we have some great skills between the two of us with, I can do the nerdy spreadsheet stuff. And Joe's really good with people and creating those relationships and raising the money, and he's kind of the visionary of the two of us.
Tom Dunkel [00:07:29]:
But we weren't really good at generating leads to find self storage deals. And, of course, once you find them and you do your due diligence and you buy them, now you got to run the thing. So through our self storage mastermind Group, we were able to fill in those holes and put a great team together. And then we were able to confidently go to market at that point in 2020 and start buying facilities. So now we've acquired 14 facilities about to close on our 15th, and we've built a great team. We're in seven states, soon to be eight states, mostly in the eastern US. And like I said, we're just super excited about our team and the self storage business in general.
Wayne Courreges [00:08:15]:
Yeah. And then from an operations standpoint, are you all managing all the properties in house, or do y'all work with local storage management companies? Yep.
Tom Dunkel [00:08:24]:
Yeah, good question. So we use what we call kind of a hybrid management structure. So we have an outsourced consultant that helps us identify managers to manage each facility. So we do have a human that's assigned to each facility, but they work remotely, and especially with technology these days. Wayne. Right. I mean, most people are now using their smartphone. They ask Google, like, storage near me, and then if they find a facility that's close and it has the unit that they're looking for, they'll just go ahead and they can rent it right there from their smartphone.
Tom Dunkel [00:09:03]:
So we're implementing those kinds of technologies so that that one person, we can leverage that one person into managing, like, three, four, five facilities at a time. So we're able to skinny down our expenses there for personnel, which, of course, everyone knows is probably one of your big expense line items.
Wayne Courreges [00:09:21]:
What technology have you found in the storage space where you could have that remote person and everything through the website, automated, where they can find a unit, lease the unit, but when they're actually having a physical issue with their unit or getting access to that unit, that's always where I'm a little like, you outsource this from a separate location, but sometimes you still need boots on the ground to help with those one offs.
Tom Dunkel [00:09:48]:
Yeah, 100%. I mean, you can't fix a gate over the Internet. And that's why we call it a hybrid structure, because we do have boots on the ground. About three, four days out of the month is what our managers are required to be on site. And so it's during that time that they can fix the gate or check on the fence or clear out the trash, adjust the cameras or the lighting, whatever needs to be done physically. And then, of course, if there's an emergency, they can drop everything and head over there. So we've had storms when trees have fallen and taken out part of a fence or part of some units. And so, of course, they can direct their schedule to get over there right away.
Tom Dunkel [00:10:34]:
But it's been working real well because, of course, the manager might be at our facility in Kentucky, but they could field a call for the facility in it's. And the caller doesn't know that they're in.
Wayne Courreges [00:10:51]:
Well, what are your thoughts? This we were talking about before the shows. I've got a storage facility in Huntsville, Alabama, and all the calls there go to our boots on the ground partner there. And as we build our Bryant college station storage facility, I was thinking about doing one of those call centers. Have you looked at those where they would field the calls? Twenty four seven. And then have sort of like the main. And then if they can't do what the customer point, then it gets escalated to that next person. Have you found that to be something viable versus having even that remote manager?
Tom Dunkel [00:11:36]:
Yeah, I'll get back to you on that, Wayne. Because as we speak, we're implementing a call center strategy because as our portfolio has grown. Right. We're trying to find different areas where we can be more efficient, and that's definitely one of them. So we're just now in the process of implementing a call center technology. So we should reconnect in about six months and I'll be able to answer.
Wayne Courreges [00:12:01]:
You need that person who'd be in that area still have that boots on the ground or to assist. But even when that person is boots on the ground, helping, assisting on something, they may not able to answer the phone. So that's why I go back and forth a little bit. I'm going to be calling some call centers myself and seeing how do we get somebody that fits what we're.
Tom Dunkel [00:12:25]:
It becomes a marketing game, right. So when that call comes in, that's a hot lead. So you want that phone call answered and you want the opportunity to be able to convert that customer. So if it ends up going to the manager's cell phone voicemail because they're fixing a fence or they're tied up with another customer, that's potentially some lost revenue there. So 100%, we're starting to look more and more at those kinds of KPIs, if you will, as key performance indicators and conversions and that sort of thing. As our company is growing and we're getting more robust around our tracking and our management.
Wayne Courreges [00:13:05]:
Yeah. So when you're looking for properties, what are certain key metrics, whether it's location, demographic location, near other sites? I ask things personally, like, I'm very selfish on the skull because I'm like, for myself. And then listeners listen in and they benefit from it too. But you all been so successful. What is your roadmap to finding great opportunities?
Tom Dunkel [00:13:33]:
Sure. Yeah. It's been a grind, to be honest, Wayne. The market's been really tough this year. Last year we acquired seven facilities this year. We're only going to acquire four. So it's definitely slowed down. But to answer your question, so obviously, location, right, is a huge factor.
Tom Dunkel [00:13:56]:
The self storage almanac. For anyone who's interested, you can go out there and buy the 2023 self storage Almanac, and you can find out all these stats that the inside self storage people, or is that who puts it together? Anyway, there's a group that puts together this almanac, and they're out there collecting all this data. And the data tells us that the number one reason someone rents from a storage facility is because they've driven by it. And then number two reason is because they found it online and that just seemed to be in a good location, and they had the unit that they were looking for at a price that they thought was reasonable. And then I'm sure I might be mixing up the order here, but it's not until you get to, like, number three or number four, where price is really the driver. So people, they want that convenience. They want the store to be in their circle of errands. If they're going to the grocery store or this store, that school or that church, whatever, they want that storage facility to be kind of in that path location, just like virtually every other kind of real estate is super important.
Tom Dunkel [00:15:08]:
So we do look at that, we look at traffic counts. But even before we do a deep dive on the facility itself, we are looking at the market. So we want to see the population is steady or growing, but we're looking for kind of that Goldilocks scenario, right? Because if the market is growing too fast, that's likely going to attract a bigger real estate investment trust or some huge operator that's going to come in and plop down like 100 or 150,000 or 200,000 square foot facility and suck up all the demand out of that market. So we don't want to see it too fast, but we also, of course, don't want to see it too slow or declining because ultimately that's going to hurt demand in that market for storage. But we're looking for solid household income, minimal poverty. We are looking for renters, decent amount of renters in that market, because renters tend to rent apartments, but they still have their stuff. So they tend to be good customers for self storage. So there's just a couple of the highlight things that we look for in a market.
Wayne Courreges [00:16:19]:
Yeah. So, like on the multifamily side, we typically want to see like two and a half X, three X of their salary for their rent when you're looking for salary or household income, is there an extra multiple that you're looking for?
Tom Dunkel [00:16:34]:
That's probably one of the differences, Wayne, between multifamily and self storage is we're not looking at it in that kind of fashion, because, let's face it, their rent might be two grand for an apartment unit, but their rent for a storage unit is only going to be a couple of $100. So we have that difference. So we're not really dialing it in that closely, but we are looking for kind of that above average household, median income, because we want people to, of course, have the money available to rent a storage unit. And that's another area where we're looking for kind of that Goldilocks scenario. Because if the median household income is too high, those people are likely going to be buying houses that have storage and they don't need a storage unit. But we don't want it too low either, because then when you run into delinquency and other kind of move out issues kind of thing. So it's another one of those not too hot, not too cold scenarios.
Wayne Courreges [00:17:28]:
Yeah. It makes sense that you're not looking from a rent. It would be a lot more. But on the flip side, it does make sense that if they have more discretionary income, they're likely to buy more toys or buy more stuff.
Tom Dunkel [00:17:39]:
Oh, for sure.
Wayne Courreges [00:17:40]:
Needs to be in areas and then just being near HOA neighborhoods where there's likely going to be divorces or moves, et cetera, where you need that extra space.
Tom Dunkel [00:17:53]:
That's right. Yeah. And storage, as you may be aware, it's becoming more and more adopted by households across the country. Whereas a few years back, it might have been only 8% of households were using storage. Now it's like eleven going on 12%. And it might not sound like a lot, like two, three, 4% increase, but when you consider there's 120,000,000 households across the US, every 1% move is 1.2 million new self storage customers. And just like housing, they're not building enough self storage facilities fast enough to absorb that demand. So that's another reason why we really like the storage space.
Wayne Courreges [00:18:35]:
Well, and we were talking about before the show and why we're buying storage or developing storage that are larger for us is like 20 x 50. But you have a lot of the businesses that also need storage as well. I remember before the show, you were talking about how that's going to be also marketing towards that. But if you want to share what you're seeing on the business side, needing storage and how that obviously your portfolio.
Tom Dunkel [00:19:04]:
Yeah, we're super excited about the business storage niche within the greater self storage niche. And we kind of stumbled into it because we bought a facility this past summer down in Wilmington, North Carolina, and it was a different kind of facility than we had seen before, where the unit sizes are more like 15 x 30 or 25 x 38, and it's a 14 foot door and with a high ceiling inside. And what it was is that 80% of the customers at this facility were contractors. They're plumbers, they're landscape guys, they're electricians. They need a place to park their truck, park their van, store their equipment and their materials. And so what we found was that those customers are gold because they are running their business. It's their livelihood out of this unit. So, you know, they're going to pay you on time.
Tom Dunkel [00:20:03]:
And because it is part of their business and whatnot, we're likely able to get a higher rent for that kind of unit. And they're going to stick around for a while. So they're going to be at this facility for a long time. And the data is showing us there that I think 60 or more percent of the customers there have been there longer than four years. So that's the kind of customer you have because you acquire them one time and you have them for all that time. And meanwhile, along the way, you're able to increase their rate. We do it twice a year. And so it's just a great niche within the storage niche.
Tom Dunkel [00:20:40]:
So we as a company are strategically now shifting and looking at that market. So we'd like to buy more facilities that are like this or build them, but even if we can't buy them or build them at what I'll call our retail storage facilities, which are your typical drive up kind of thing. Our vacant units that we have there, we're doing Facebook geo ads targeting contractors in those markets so we can, you know, Lynchburg, Virginia contractors. We have these storage units available for your materials and whatnot. Come on over and check us out type thing. So we're looking strategically and intentionally of kind of shifting our revenue mix from purely residential to having a nice mix of commercial in there as well.
Wayne Courreges [00:21:31]:
Yeah, I love that you're using the social media, using Facebook and technology. What are your thoughts on flyers, mailers that are going out or the door to mean, has that been successful in marketing?
Tom Dunkel [00:21:47]:
So our managers are trained to go and make friends with the neighbors. Right. And so they're not necessarily doing flyers, but they are just going out and saying, hey, we're the new owners of this facility over here. Love to refer you some business. Can you refer us some business or just those kinds of things? Because at the end of the day, these are all communities, right? And so we've made the mistake before of going into and acquiring a facility and not understanding the community and pushing rates or getting a little aggressive in that regard. And it's like, well, we probably should have taken the first two, three months and to get to know the neighbors, get to know the market at a deeper level before we kind of go and start pushing numbers like that. Because it is a community and you do want to get to know, you know, whether it's flyers or just stopping by and dropping off a business card or know it does seem to help on kind of the goodwill building side of things.
Wayne Courreges [00:22:53]:
Hey, listeners, it's Wayne Courageous. I just want to pause real quick to say thank you for listening to our show. I hope that you're getting a lot of value out of it. If I could ask you to go ahead and like, subscribe and share this podcast, that would mean a lot. It will get a lot of other investors like yourself learning about the process and the steps to successfully invest in real estate, either as a passive or an active investor. I also wanted to do a quick introduction of CREI Partners. I'm the Managing principal for CREI Partners and we started it back in 2019 with one goal, to grow your wealth passively in real estate. We do so by buying assets in multifamily, build to rent communities and RV boat storage facilities.
Wayne Courreges [00:23:32]:
And we do so in areas that have strong market fundamentals and also have strong partnerships with other real estate investors such as ourselves. We personally discovered that passively investing in real estate was a really great blend for people that are busy like yourself, and that you can invest passively in real estate and still reap the rewards of the returns, the tax benefits, et cetera. If you're interested in learning more about passively investing, check out our website. We do a lot of content through our passive investor coaching program, through our podcast, our blogs, and just other information that we do on a daily basis. Check out CREi Partners.com again, creiPartners.com. If you're interested in building the relationship and joining our investor club, there's a link there to join. We'll set up a call and continue building the relationship with you. We're super excited to have that opportunity and I want us to get back to the show and hopefully again, you're enjoying the conversation and look forward to connecting soon.
Wayne Courreges [00:24:29]:
Thank you. Shifting gears. For investors that are going into self storage, what are some risk that you're seeing that may be different than other asset classes that you share with your investors before they invest with you all?
Tom Dunkel [00:24:45]:
Yeah, sure. Well, I mean, we kind of just talked about one. So what was interesting in this market for self storage was after COVID, and then as inflation and interest rates really started kicking up, which really cooled off the residential home market, that really had a negative impact across our facilities, because if people aren't moving, I mean, that's a big driver for self storage demand, right? So if the transactions have now fallen off a cliff, there were not many people moving around. And so that meant not too many people were needing storage. So that was a negative impact. And so that was another reason why strategically, we're starting to look more at commercial customers because, of course, they weren't subject to that same kind of drop off. In fact, I don't know if you've tried to get a contractor over to your house to fix anything recently, but it's pretty tough. So they're super busy and they just keep kind of plowing forward.
Tom Dunkel [00:25:53]:
So that's definitely a risk that, frankly, we didn't really foresee, but that was how we are now shifting to mitigate that risk in the future. But we've had such a weird last few years, Wayne with COVID was kind of this Black swan event, and then now, then that run up in inflation. I mean, those are kind of some interesting things. But I guess the beautiful thing about storage, and another one of the things that attracted us to it, is that for 40 plus years, the occupancy rate at self storage facilities has meandered between 80 and 90% over that entire time period. So whether it was like a boom time or a bus time or anywhere in between, in good times, people use storage because they're buying stuff and whatnot and need a place to store it. And bad times, they're being downsized, they're divorced, they're being displaced, et cetera, then they need storage. So those are the reasons why we see self storage as being a pretty buoyant kind of asset class, even though it does have, of course, risks associated with it, just like any other asset class.
Wayne Courreges [00:27:08]:
Yeah. And the stuff that they store, typically, they've worked hard to acquire that stuff, or they have emotional attachment because they're heirlooms or something from previous generations. So after they're paying their rent, they're paying their storage, and usually at least on our deals. Like, I'm sure it's for you, it's automatic payment. There's a credit card on file or file, so it pays. And what I love about storage, too, Tom, it's like I don't have the emotional roller coaster of going through the eviction process with the courts. Talk to us about that, of like, what y'all's process for people that don't pay their rent time and sort of how y'all work through that.
Tom Dunkel [00:27:53]:
Yeah, I mean, that was one of the reasons, Wayne. I was a horrible landlord back in the day when I had my own rental properties, because I was such a softie. I just listened to any old story as to why the rent was laid or not paid. And so in the storage world, we're not in landlord tenant world, which is great, because most areas that court tilts heavily in the favor of tenants. But we're in lien law World, which is very clean and very straightforward. Basically, it varies a little bit from location to location. But generally speaking, if you don't pay your bill for 60 days, then your stuff can go up for auction. And then the beautiful thing, too, back to technology, is we do all virtual auctions now.
Tom Dunkel [00:28:42]:
So the manager will go in, take a few pictures of the stuff that's in the delinquent locker. Those pictures will get posted up on the auction site. And then there are people out there who go and they try to buy these things and hoping to find a golden nugget in there somewhere. And so they'll bid, bid, bid, bid, bid, and they'll win the bid for the unit. And this is the beautiful thing, is they then have 72 hours to come and clean out that unit because that's a big expense for us. Otherwise is when we're cleaning out units, that's an expense for us. We got to get our manager in there, and if it's like a really big job, we might have to bring in some outside help, and we might need to bring in a dumpster and just all that kind of stuff. So just having somebody being responsible for cleaning out that unit is huge.
Tom Dunkel [00:29:32]:
And then now we've got an empty unit. Basically, we just have to sweep it out, make sure the door is working, oil the springs and the rails and stuff. Now we've got a unit that's ready to rent so it can be cleaned out in the morning and rented later that afternoon, which is a big difference for multifamily.
Wayne Courreges [00:29:50]:
Yeah, it's huge. Yeah, I love it. It's concrete and steel, right. Maybe some lights, depending on the size of the unit. So, shifting gears, we just got a few minutes left. I wanted to talk about investor projections, returns, and obviously every deal is going to be different. But one thing I noticed in your podcast, one sheeter thing, is that two to three years is a very quick time from an investment horizon. So do you all hold your assets two to three years? Talk to me to that, because that's pretty amazing to hit return.
Wayne Courreges [00:30:27]:
It's just a short amount of time.
Tom Dunkel [00:30:29]:
Yeah. So we are what I call a value add shop. Right. So we're looking for facilities that are underperforming. Right. So they're mom and pop owned. They're not using the latest technologies. They might not have a website.
Tom Dunkel [00:30:45]:
Their major KPI key performance indicator is occupancy. They just want all the units full, so they're not really looking to maximize revenue. And so what ends up happening, especially after the last few years, when we've had a big run up in the rental rates for self storage units, is if they're asleep at the wheel for a couple of years, next thing you know, their rates that they're charging are like 30% plus below market. So it doesn't take a rocket scientist to come in and bring our professional management team, our technology platform, and just be able to push those rates up to market over a couple of years. And that just creates a huge amount of value because it costs the same amount to run the facility, whether you're charging $100 for a ten X ten, or whether you're charging $140 for a ten x ten. So all of that extra revenue drops to the bottom line. And so that's why it doesn't take us on what we call our plain vanilla value add opportunity. It doesn't take us a lot of time to go in there and implement those strategies, season the property for a little bit, and then exit at a nice high value so we generate great returns for our investors.
Wayne Courreges [00:32:06]:
Yeah, it's like a rinse and repeat type, especially when you have a team that's done it. That's right. They stick the team on it and they turn it around. Hey, question. I have, like, cap rates. How are you seeing cap rates in this environment over the last couple of years? Obviously, you have no, maybe you do, but you may not know what the cap rates are for 2024, but where do you sort of see them aligning out? Because that obviously plays a big role in the overall.
Tom Dunkel [00:32:38]:
It definitely does. And it's a timely question, Wayne, because just earlier today I was on the phone with one of our commercial mortgage loan brokers. And we just sort of catch up from time to time. What are you seeing out there? How's the market? That kind of conversation? And we both agreed on, unfortunately or fortunately, I guess it kind of is what it is. It's not fortunate or unfortunate, but we feel like where we're at right now is historically where interest rates have been. I mean, we might be a little bit on the high side, but in commercial real estate, wasn't unusual back before the artificially low interest rate environment we came out of to have interest rates at seven, eight, 9% for a deal. Now we're looking at, as an IRR shop, we're trying to generate quick returns, is what I mean by that. We are looking at estimating our exit cap rates.
Tom Dunkel [00:33:39]:
And so if our borrowing costs these days are 7%, 8%, our end buyer is going to be valuing our facility at like 8910 percent cap rate. And even though that drives my acquisitions team crazy to say that it's just how it works, right? You don't want to buy a negative leveraged facility. And what I mean by that is you don't want to pay an eight cap for a facility where your cost of money is 9%, because then you're upside down, like right out of the gates, and it's not a good position to be in, hopefully. I think for the health of the overall market, I think cap rates do need to go up, and that's just going to be kind of a reality that we need to wait for. And unfortunately, there's going to be facilities and multifamily properties and other things that are going to be coming online here. Not because the property itself is distressed, it's because the capital stack in that property is distressed and they're not going to be able to refinance. So it'll be an interesting kind of next couple of two, three years. Our motto here, and what we've heard from our other self storage colleagues, is survive till 25.
Wayne Courreges [00:35:01]:
To every asset class. Yeah, depends on like, if you're a buyer in this time frame, this is all good news because you're finding opportunities to buy assets that at a much better basis than you were a year or two ago, if you're selling.
Tom Dunkel [00:35:18]:
That's right.
Wayne Courreges [00:35:19]:
It is providing a lot of stress on everybody, including myself. Sure, we're real estate investors in all different types of markets, but it's just the reality of investing and going back to the risk and things that there's things out of your control. Taxes, insurance, interest rates, et cetera. But I did have a podcast with a guy a couple of weeks ago, and it's just like, at the end of the day, you're working hard every single day to control what you can and take care of your investors. So regardless of the asset class, it's funny that you say this, survive till 25. So it really just spans all real estate right now, right? Yeah.
Tom Dunkel [00:36:02]:
And you hit on a good point there, which is like, Joe and I, we've been through a lot of ups and downs. We survived through the Great Recession. We've battled through ever since then. So I don't know necessarily where it comes from. I don't think you can read a book and get it, but our team here and one of our core values is actually grit. And so when things are not pretty and you still got to just grind it out and stay true to your mission and get stuff done. And so that's what we do here at Bellrose Storage Group when we're looking out for our investors. Because, by the way, we invest in our own deals, and we have close friends and family member that invest in our deals.
Tom Dunkel [00:36:41]:
So we have a very vested interest to make sure we get things done and grind through. So that's kind of where we're at this year and probably next year, and then hopefully can start popping the corks on some champagne after some successes that we'll start realizing in 25.
Wayne Courreges [00:37:01]:
Well, is there anything you want to share before we close up? One of the last questions I always ask is, what is your proudest moment in real estate? And we're happy to go to that question right now, or if there's other things you want to share before we get to that question.
Tom Dunkel [00:37:15]:
Sure. Well, I guess I'll get to the answer that in a minute. But, yeah, I appreciate the time today, Wayne. And once again, I'm Tom Dunkel. I'm the chief investment officer here at Bellrose Storage Group, and I invite folks out there to head to our website, bellrosestoragegroup.com. You can find our free ebook there, which is a super useful due diligence checklist to help people make sure they're asking the right questions when looking at an alternative asset opportunity, whether it's storage or multifamily or whatever else. So that free resource is there. Come and get that.
Tom Dunkel [00:37:49]:
And you can find us on Facebook and LinkedIn. We post a lot of value add content, what we're seeing in the marketplace, things that we thought were interesting, insightful, and valuable information, and then my podcast interviews, and then, of course, when we have opportunities to invest, those get posted out there as well. But I would say, Wayne, probably my proudest moment in real estate. I have to say it's kind of a continuing thing because kind of where I'm at in my career now, being able to build a great team underneath me. So now there are conference calls going on that I'm not on. Stuff is happening without me having to prod it, I think, you know, and probably next year, and if not next year, definitely there after that. I'm pretty sure, in fact, I'm certain that we are going to close a deal here at Bellroy Storage Group without me being involved in it at all. And that's just a testament to our team and our training and just the culture here where we really push people to be self reliant and take personal accountability for what they're supposed to be doing.
Tom Dunkel [00:39:06]:
And so it's super proud moment for me to just see our team develop and grow into those roles. And so frankly, I can spend a little more time on the golf course.
Wayne Courreges [00:39:18]:
Proud moments. And you're building up future investors and entrepreneurs. They're getting that ground framework from you.
Tom Dunkel [00:39:25]:
That's right.
Wayne Courreges [00:39:27]:
And they'll have the itch one day to maybe do their own thing, which is cool because you can look back and sure, I helped you start the fire to get you to where you.
Tom Dunkel [00:39:40]:
Yeah, that's right. 100%. Who knows, one of these guys could go and build some huge, amazing real estate business kind of with the foundation they've learned here. So that would be amazing.
Wayne Courreges [00:39:51]:
Well, I appreciate your time, Tom. I really enjoyed it. Got a lot out of it personally and hopefully the listeners listen in, but you have a great rest of the day and look forward to staying in touch.
Tom Dunkel [00:40:00]:
Thanks, Wayne. Yep, appreciate it.
Introducer [00:40:03]:
That's all for this episode. We hope you subscribe, share and leave a review of the show. For more information about passively investing in multifamily apartments, check out waYne's free ebook by going to Forward Slash ebook. Also follow us on Facebook by searching CReI Partners. This was the told stories of real estate investing.
