Hey, welcome back to the Think Bigger Real Estate Show. I am your host, Justin Stoddart. There's no doubt that real estate investing is a very commonly well known strategy by the wealthy on how they became wealthy. One of the ways that people do that and one of the methods through which they invest in real estate that becomes a great avenue is through self storage. And I'm fortunate today to have on a gentleman who is the Chief Investment Officer of the 25th largest Self Storage operator company in the US and I'm excited to have him on. Before I introduce him, let me just remind you the purpose of this show is, that you know, you are the sum average of the top five people that you spend the most time with. My goal is to help you spend time with people that are going to stretch your thinking, that are going to raise that sum average, and help you to have not just bigger thoughts, but bigger actions and a bigger life and a bigger impact. That's what I'm passionate about this. That's what this show is about. If you want a regular summary, giving show highlights and action steps go to thinkbigger.realestate and you can sign up for that. So now getting back to our guest, his name is Kris Benson. Again, he's the Chief Investment Officer for Reliant Investments, a fantastic company out of just north of Atlanta, Georgia. Kris, I want to thank you for coming on the show today.
I appreciate the opportunity. Justin, how are you?
I'm doing fantastic. I love this topic was interesting in college, I was in the entrepreneurial school, I was actually a construction management major, business minor and one of the classes that I took was an entrepreneurial class, and they invited in a gentleman who was stood about five feet five inches tall. But he, despite his small stature, he was extremely wealthy. He had built a fortune off self-storage. And I always thought to myself, what a fantastic way you have real estate investments with no plumbing, with no tenants, and yet reliable. Tell me a little bit about your passion for real estate investing and maybe how you came to a similar conclusion about this particular form of real estate investing.
Yeah, for sure be happy, I would say for my passion of real estate came from probably a journey not too dissimilar than a lot of people, a lot of your listeners have. For me, it was trying to find passive income, right? I have the Rich Dad, Poor Dad, probably many of the people listening had, I distinctly remember waking up in my late 20s and saying, I had a corporate job that I was making a great living at was wildly successful. And I remember waking up thinking, I don't think I can do yours. And for me, it was how was I going to replace my income and stop trading time for money and real estate was that journey for me. We did a number of different real estate asset classes Justin, we worked with residential real estate, that was challenging, it was going to be difficult for us to scale wanted. And so we ended up divesting of that portfolio, primarily duplexes, quads, that kind of thing. And we got into commercial multifamily 64 unit apartment complex. And that was really when the light bulb went off for us in regards to understanding the value of scale in the real estate world. And so, you know, how I got to storage was we were investing in some multifamily projects across the primarily as passive investors. So we're taking capital and I had a group that kind of grew along with me as I went through my real estate journey investors who were interested in having passive income streams as well. And so we were investing in some big primary markets across the United States. And one of the operators that we had invested with essentially say cap rates have pressed to a place where we're not comfortable, we're going to stop buying. And for me, that was a wake up call, where I said, Maybe I should be looking at other asset classes. And that's what got me to storage started doing homework, I'm a data guy. So I love to look at historical data to try to predict what I think's going to happen in the future. In storage has, if you want me to walk through it, I'd be happy to but I there were really three kind of pillars that I that I based mom was self storage. And that's really what got us in the game, or got me particularly in the game of storage,
Tell us you know, I am I love that kind of your progression to this point of like, I need to be a real estate investor that's going to create the ultimate life that I want. And then even your progression to, you know, through that to finding the right asset class that really fit you talk to us a little bit about what those three pillars are, you've got a super curious about why, why you chose the asset class that you did?
Sure. So the three things that I looked at, or that I wanted to understand is one the history, right. So understanding in in the history of the asset class, how is it performed, there's a data set that I can certainly send you to the link of the link to and your listeners or subscribers can have access to it's called the National Association of data. And it's a public data, and it's on the publicly traded rates across the United States. So you can look up a read on basically any asset class you want. So residential housing, if there's a residential housing, read Self Storage office, reads agriculture, it doesn't really matter. But it's a really nice way to compare apples to apples, how an asset classes done. So in the last 25 years storage is performed just under 17% a year, which is a pretty incredible number. I my world was in multifamily investing. And multifamily had just done just about under 13%, which is still but I was surprised to see that it they've been outperformed and really any of the major asset classes with more than a track record of 20 years storage had done better than so that was the big one for me the returns. First first first pillar and look at is I'm a big believer, the market cyclical. So everything that's going to happen has probably happened in the past. So I wanted to see what happened in the last recession was storage. So went back and looked at that same data set on 2000 789, in stores last less than 4% of the market. And just to give you some perspective, apartments, what percent of its value, and then you know, to give you a baseline on the equities market, the s&p 500 was down just over 22%. So you know, you're not losing money and the money you are losing is you've done better than most of the other, you know, established asset classes are wanting to write returns, and I got some downside protection and the hypothesis on that downside protection really is around in America, we see people don't get rid of stuff. No, you catch people on the way up when things are going well, they buy things and they keep them in storage. And when people downsize. If they have to downsize from house to an apartment, they don't get rid of their things out. And so I think it's a view of there's going to be a better day, and I'm going to need this stuff. And some of its just I think our American materialism so that demand for storage really is a little bit elastic. So those are my two pillars. And then the third one for me, which is you know why I'm sitting in Roswell, Georgia is you know, storage, less than 25. The asset class is owned by six publicly traded companies. So there's five reads, that everybody probably has seen signs for cube, smart, public storage extra, those are the big reads. And then the six company, it's not a read, but it's public, that's u haul and everything knows them from the moving trucks, you've also has a pretty substantial storage portfolio as well. So those six companies own about 25% of the market and the rest org. So there are companies like us regional operators, right, we have 53 properties across the eight states where the 25th largest, right, so between us and number one, boys, and ...
