BiggerPockets Real Estate Podcast 533: No Tenants, Toilets, or Trash? It's Possible, Through Self Storage w/ Paul Moore
Nov 18, 2021
Paul Moore, an author and real estate educator specializing in self-storage, discusses the benefits of investing in self-storage over traditional real estate. He highlights the significant financial advantages, like massive tax savings and low maintenance issues since there's no need for tenants. Paul shares practical strategies for building a self-storage empire, the intricacies of evaluating investment operators, and the impact of small revenue increases. He also emphasizes the importance of aligning investment with purpose, addressing broader societal issues.
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Paul's Transition to Commercial Real Estate
- Paul Moore transitioned from residential real estate to commercial real estate.
- He built multifamily units in North Dakota during the oil boom and later sold them.
Commercial Real Estate Value Formula
- Commercial real estate operates on a value formula tied to net operating income (NOI) and cap rate.
- Increasing NOI or decreasing the cap rate increases the asset's value, especially with leverage.
Building a Portfolio for Institutional Buyers
- Create a portfolio of similarly managed, geographically clustered properties.
- This attracts institutional buyers like Blackstone, offering premium sale prices due to stabilized assets and lower cap rates.
