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Aug. 11, 2022

Syndications & Self Storage 101 w/ Kris Benson

Syndications & Self Storage 101 w/ Kris Benson

Kris Benson is the CIO of Reliant Investments, a fund that purchases self storage and multifamily assets in the southeast united states.

Kris Benson recognized that “just because all the dogs are barking at the same tree doesn’t mean it is the right tree.” As Chief Investment Officer at Reliant Investments, he is confident in the risks he has taken, the career changes he’s navigated and the “tree” he has established his investment platform on.

After accepting his first job in sales “because I had diapers to buy,” Kris learned both the value and difficulty of cold calling while developing a “hunter” mentality at ADP. He joined the medical device industry with Covidien and later transitioned to Intuitive Surgical, famous for its DaVinci robot.

Kris quit his corporate job and elected  to find a way to stop trading my time for money and to let my money make money. He launched his commercial real estate journey, appreciating the value of investing in tangible assets. Kris started investing in small residential units over 10 years ago and expanded to commercial multifamily properties before making the jump to self-storage.

Partnering with Todd Allen, managing principal at Reliant Investments, Kris focuses his leadership and management skills on the commercial real estate company’s investment committee, which determines what self-storage properties to purchase while growing equity and creating passive income streams for investors.

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Transcript
brian:

Chris Benson, how are you?

kris:

I'm doing great. How are you Brian?

brian:

Doing fantastic. I've got a tree in the yard, but horizontally, but that's a problem that Hey real estate, right? Pass it on. it's all good, man. I'm excited to have you on we've met multiple times now and I know that you are actually one of the local leaders for GoBundance our local chapter here in Atlanta. And that's how we. I'm excited to hear about the wonderful world of self storage, because that's what you guys are into. Can you introduce yourself and walk us through where you're at right now and then we'll de deconstruct it.

kris:

Yeah. Be happy to so as you mentioned we are a self storage operator, so I'm the chief investment officer at reliant real estate management. We are a vertically integrated self storage operator, meaning we buy and manage self storage proper. Primarily here in the Southeast. We have 73 sites right now, just over 6 million net rentable square feet across eight states. But most of it, Brian, Florida, Georgia, Carolina's Alabama, Tennessee, Colorado is where the bulk of, or where the portfolio is right now. And we're growing we're we've had an incredible run the last kind of five years. And as many of the real estate asset classes have, and we're hoping to continue to grow.

brian:

That's very exciting to hear. And when it comes to real estate, asset classes, self storage starts like keeps poking its head out. And I wanna get into the whole asset class at large, in the back half of the interview. But for the first half, I really want to figure out, what got you. Like your backstory. What got you here? What drew you to this company in general? So walk us a little bit back about beginning your investment journey in real estate and how this all materialized.

kris:

Yeah. Happy to. My, my story of started with I was in sales outta college. So corporate sales, I actually. We, my oldest son is 21 and he'll be 21, June 15th. I'm 42. So if you do that math, Brian, that means I had my kid's senior year in college at a boy. So we grew up fast for sure. And essentially I got into sales cuz it was what I thought I could make the most money, to buy diapers and pay rent. That was, generally my thought process. And I had done a number of different roles in sales. My last real, job was with a company called intuitive surgical. They make the DaVinci robot. I'm not sure if you're familiar with the DaVinci surgical robot, but it was incredible organization. I was super blessed to be a part of it. But Brian, the story I'm about to tell is pretty much what every real estate investors tells and their origin stories are all very similar. was trading time for money and as far as checking the boxes, doing great, like I was making a bunch of money. Had good title and, on the scale of societal measures, things were good. But I was traveling a ton. Our kids were, I missed a lot of stuff. Just cuz I was out grinding and I still remember waking up when I was. 30 ish, 29 ish. And saying, I'm not doing this for another 30 years. There's no way. And it was like that knot in your stomach. You just knew something was wrong. And what used to really get me? Brian is airports. Like I'd be at an airport in some terrible place. Detroit or Minneapolis. No offense, but sorry guys. Yeah. Thursday night at. Eight 30 trying to get home and just being miserable and I'd see some guy walk by in a suit at he's 60. And I was like, Nope, I am not doing that. So for me, the journey started with Richette, Portea like a lot of guys where that was my eye opener. I was like, oh, passive income. Yep. That makes sense. And we went down a path that many investors do. We bought duplexes in the town that we lived in and upstate New York at the time. And I had. 22 units and hated all of them. I hated the tenants. I hated the buildings. I hated everything. And I wish I could give credit to who, who said it to me, but someone said big deals and small deals are the same amount of work. You just make less money and small deals. And I was like got it. Just need to scale. And it's so true, especially as we've grown, you only have so many hours in the day and you can work on. Things that make you a hundred bucks or things that make you a thousand bucks, but it's still the same number of hours. And we ended up building a 64 unit multi-family complex, and that was the beginning of the light bulbs for me, Brian, where I was like this is how you make money in real estate. And Yeah, it was I don't know how much further you want to go before you jump in, but that was the beginning of big boy, real estate investing and saying, got it. This is how can divest yourself away from the nine to five.

brian:

Cool. Perfect. That's a awesome origin story and a couple different areas that I wanna take you here. First. Let's start with the mindset shift between. We have the same hours in the day, instead of doing all these small little deals, I wanna do one big deal. And so it's not a natural progression normally for someone to go from 22 units, which I'm assuming you were just picking up small, multi after small multi, and then just be like, oh, I'm gonna develop a 64 unit that's jump. And that's a leap. So you heard this quote, you took action on it. What is the differentiator between. All these other people that are hitting singles after singles. And we're not downplaying that at all. It's good to be on base. What do you think is the main limiter in the differentiator between the people that finally, it, it clicks to just do the big deal and go for the big deal, as opposed to the people that just keep doing like 10%, more, 10%, more, 10%.

kris:

I'm not, I don't, I it's all gotta be what you're comfortable with too, Ryan, right? There's not a right or a wrong answer to that. If you're comfortable and you. Constitution makes singles feel good, do it. I just looked at it and said, how am I gonna scale this to the point that I wanted to get to. And I wasn't happy doing the part that I was doing. I think a big part of it is, things that people already know, fear is the biggest limiting factor. That's the, at least for me the hardest thing to get over when, whenever we're doing anything. Stepping out and saying, Hey, I'll figure it out. may not know all the answers today, but generally, historically in my life, at least we, I figured it out most of the time without too many catastrophic errors. I think the first thing is just being willing to say, look, I don't know everything today. But I'll take that first step. And then the next day, take that next step and figure out what you need to figure out as you go. Cause if you're waiting for all the answers and this is what I see a lot of with just people in all different phases, and we all struggle it to some degree. I think about myself where we are now on what I wanna do next in the business. I'm still in. Waiting phase. where I wanna understand more before I do it. It doesn't matter at what level of a game you're at. We all still struggle with it. I think it's just understanding that you're not gonna have all the answers when you have to take the first step and that can be, launching a podcast or buying your first commercial real estate project or buying your first duplex. And the only way to learn is jump in and figure it.

brian:

I find that interesting because normally somebody in your position would have the opposite temperament because how old were your kids at that?

kris:

When I was 30, Noah was 10 ish.

brian:

So yeah. So you had, you had a family, normally that's the big right. Is people are like, oh, I've got a family to support. I can't afford to take risk. What if it goes south? So that's why your perspective is interesting there, because normally whenever I talk to people, it was the opposite. They said, Hey, I had that family young. I started them young. That caused me to be risk averse, but you were able to push past that and through that. And that's why I wanted your perspective there. That's very interesting.

kris:

And I'm yeah, part of it too, Brian, right? Like my biggest fear in life is regret. I don't wanna look back and be like, Man should have tried that, if and I'm I've so I'm 42. When I turned 40, I had some interesting conversations with myself about, you're halfway, rough and tough. I know there's a lot of GoBundance guys listening who think they're gonna be 125 years old, whatever, give it a shot. You're probably not gonna have as much fun at 125 as you are right now. For me, I just wanted to make sure that I was squeezing what I could squeeze out of a, out of the lemon. Get all the juice out that I can. And if you look back at your life and say, Hey, I gave it a great run. That's all I want, it's not about money. It's not about that. That stuff doesn't matter. Especially as you get older and you have a little bit of it, it's just oh, that doesn't really do anything for me. And I think for me, it was just saying, all right, I'm willing to jump. Cuz if I don't 10 years from now, I'm gonna look back at 50 or at 40 and be like, shit, I should have tried that.

brian:

Man. That's a powerful perspective to have. I wish more people because the, there, this is a whole tangent that I've been going on recently. Daniel pink. He should be coming on the show. He's a, he's an author. He's coming on the show in a couple of months and he talks about the two different types of regret. And then there's the regret that you have for things that you've done. And you're like, oh shit, I should not have done that. You're like I shouldn't have gotten that bar fight. I shouldn't have gotten drunk that one night I shouldn't have dated this person. And then you have the different type of regret, which is the regret of things that you didn't do that you should have. And, I should have talked to that girl. I should have left that job. I should have followed my passion should have started that business in the first 20 years of life. The studies say that regret number one is most prevalent, right? Because it's people that are just we're not fully developed. We're just act, and we're like, ah, shit shit. Shouldn't have done that. And then the rest of your life, it's regret number two, that is the most lasting, the, what ifs, like where did it go? You and I had a conversation at a GoBundance meeting. I won't divulge like the details of it. I'll leave that extend up to you if you want to. But we talked about the concept of I believe you referenced Tim Ferris with an eight outta 10 life. , but that was very impactful for me. And I would love for you to share that because I immediately took that home and implemented.

kris:

Yeah, you're making it sound like it was more exciting than it was. I think there was no it wasn't that good? That was a good one, man. Accrediting Tim Ferris. I just stole his thing, but. It was impactful. Yeah. No, I agree. It's a great lens to look at things. And Brian, you're still young, right? How old are you? 27.

brian:

Yeah. So

kris:

man, you should still be regretful for all the dumb stuff you're gonna do. You got plenty of time to regret what you're not coming to. I have no regrets.

brian:

I just only have the lessons, my friend . kris: Yeah, Tim Ferris says essentially of him using this was books. . If you're reading a book and rank it one to 10, you can't use seven. If it's not an eight, nine, or a 10, stop reading it and go get a different book. Cause he breaks it down in that you only can read so many books in your lifetime, right? There's only, most people have a finite resource of time that they can use to read books. And so don't waste. On something that you don't actually like or get a lot out of. And I was like, that's a fantastic way to look at life. Rank everything you do. One to 10, can't use seven, cuz everybody uses seven. It's just like the word man. Yeah, good enough. And so if it's not an eight, nine or a 10, don't do it anymore. And I look it's not feasible to do with everything. But it's a good lens when I'll give you an example. So this past weekend, my, my neighbor he just finished his basement, came out beautiful. He wanted to have like couples poker. If I didn't like him, or if I was thinking like, Hey, this isn't gonna be that fun. I wouldn't have went. I would've been like, ah, that's a six. I'm not gonna go to that. And it gets uncomfortable sometimes. Like my wife had a family event a few weeks ago where she went home for a birthday for family member. And she's do you wanna go? I was like, no, that's a five. I'm not gonna go do that. We'll see how far I can get away with it. But it is a good way to, to think about it. As far as, how you build what you do in your life, cuz ultimately Brian, and as you get a little bit older, right? Like you realize oh, that's all that I have is time. The rest of it is all irrelevant. And what you do to maximize that time, in my opinion, is what makes for fulfilling life. I agree with that. And the whole premise that you laid with this, like you, you thought it was a casual quote, but I immediately started ranking things in my head. As soon as you said that, and people like this is a Testament to, proximity is power. Get around people that are having these conversations, get around people locally. Cuz Chris and I are local here and we were able to meet up with our local chapter. This is a, this is, these are the conversations that move the needle forward and move the ball down the field. And I immediately went back and I thought, Hey, what is an eight outta 10 for me in my life because you and I, our group, GoBundance people listening to this podcast, none of us are going to be okay with having a good enough. We all want a great, a fantastic, a phenomenal outstanding life. And so I thought that was a huge takeaway for me, because I immediately was like, okay, what's the seven or beneath. And then I found a couple things and I eliminated them very fast. And that includes unfortunately, some relationships.

kris:

Sure. Yeah. And

brian:

That's a big part of it is if it's a relationship where you're like, you're just hanging on just for time's. It's time to move on. So speaking of moving on, you are developing, you make your mindset shift, you start developing 64 unit ground up development, right? Take us on the journey from going into this multi-family space to. Getting partnered up with reliant and then getting intrigued by self storage because I'm very intrigued by self storage. And I think it's a great area to look at as we move into this new economic cycle. That seems to be looming on us. Yeah.

kris:

So for me it starts with being wrong as most things in my life seem to be so very fair. F probably six years ago, I said, cap rates couldn't possibly compress any further than they already had at that point. Whoops. So in my head I was like, I gotta look at other asset classes where there's still meat on the bone. Multi family's done what it's gonna do. It's just going down from here. , I was a little bit too early on that one. But I'm a data guy, Brian, so I like looking at, historical numbers and how asset classes has performed. And for me I looked at really two asset classes that I really liked, which was mobile home parks and soft storage. And, 5, 6, 7 years ago, they were kinda like the redheaded stepchild of real estate. know, You had the core four. Office multifamily, retail, industrial. And then there was all these weird nuancey things like data centers and storage and mobile home parks and car washes. And they were all on the fringe of commercial real estate. And what I fell in love with self storage is there's really three pillars that I looked at, which was historical performance. You know what they've done over the last 25 years, which is an incredible number. And I'll share you the data in just a second. And then what do they do in recession? I'm a huge believer that everything's cyclical, right? So if it's going to happen in the future, if you believe, Ray Dalio and his approach to things it's already happened, you just have to look back far enough in history to see it. And so , With storage in 2000 7, 8, 9 storage did really well. That was proved out again. During COVID 2021 for self storage in the industry was one of the best in the history of the asset class and reliant as well. It was really looking at all right, historically, it's done well, it's got great recession resilience. And then the third pillar for me was it still had a runway. Right now about 30% of the square footage in the us is owned by publicly traded companies. So the there's five publicly traded REITs and then a U-Haul which is public, but they're not a re and the rest of the market is still very fragmented. So what that means for a company like us at rely on is you can. Essentially consolidate that market and just like any private equity strategy, you roll it up into something bigger and then all the big boy money wants to come buy it. Because a group like Blackstone, they have to, to deploy a billion dollars in the space is not easy. When the equity check is $5 million a deal. So they're very interested in these very large transactions. And so for me, That's what got me interested in the asset class and then reliant specifically. I was an investor first essentially I was a passive investor in one of their syndications and said love what you guys are doing. And at that point I was doing real estate full time and. Todd Allen, who's the managing principle of reliant and has built the company, him and his partner, Lou we just formed a good relationship and he needed help on scaling. And I said here's what I think I could do to help. Let's give it a run and jumped in. And I didn't, again, I didn't know everything, but. I'm a big believer. You bet on the people and love Todd and love what he stood for and what he was trying to build. And it's been a it's been a fun adventure ever since. Yeah we've been on a skyrocketing trajectory since then.

brian:

So speaking of data, I'd love to go into the data here with you. And also some on to that note, there was a. In our retreat. Talk about swag when it comes to

kris:

data. you mean what it stands for? Yeah. Yeah. Scientific wild. Ask guests. Yeah,

brian:

I loved it, man. I loved the candor because we're going into future projections. And then you were talking about the degree of accuracy that people can actually predict future profitability. And you were like, at this point, it's just, you just had swag swagger it down and everyone was like, what's swag. You're like, oh yeah, that's my scientific wild ask. Guess about what will happen with my crystal ball?

kris:

yeah. I Look, we're in this game where people expect you to predict the future. It's a fool's err, Brian, right? To say where cap rates or values are gonna be five, six years from now is ridiculous. Now everybody does. But that's not what you're betting on. Let me give you this. As an example, something you think about with reliant, we've sold 38 properties and our average IRR is a 33, which is bonkers right at the project level. That's a crazy number. We projected that on exactly zero properties, which means we've been wrong every time. We've sold 38 of these things and we've been wrong every time we sold them, but we've been wrong the right way. We've been wrong to the conservative end. So they've outperformed projections. So people like, Hey, you're a genius. Nope. We're still wrong. We didn't know what values we're gonna be when we were ready to sell. 'em. But we were just happened to be wrong in the way you made money. So people are like, Hey, you guys did a great job. Did we? We can be wrong the other way too. And I think that's the part where people get hung up on this projection thing. You're not betting on projections. Does it matter? Yes. Is it gonna be something that everybody is measured? It sure is. But from my perspective, with real estate, specifically in these passive syndications, you're betting on team and track record, you're betting on who are the people that are gonna make the decisions that ultimately impact do I make money on my investment or not? And are, have those people done. what they said. They're going to do in the future. Have they done that before? And if they have, you got great people and historically they've done what they say they're gonna do in the next five years. I'm not gonna say it's a hundred percent guarantee but generally it's probably gonna turn out. Okay. And there's always, black Swan events, right? I You could have been a great hotel operator and COVID happened. I mean it doesn't, it's hard to run a business when there's no revenue. I think you gotta just think about what I, if you're looking at these passive investments type opportunities, nobody knows no one knows what the future's going to be. And anybody who's guaranteeing a return. I was listening to a podcast yesterday, actually, where someone on an advertisement in the podcast said a minimum 20% return and immediately what I think. Nope. I will never ever talk to that person. Cause it's just egregious, like no one knows. Just a, that's my own lens of being somewhat cynical, but I think people just need to reframe what they're looking at when they say, all right, I'm looking for this kind of investment. What you're really want is the people who are gonna do a great job for you in that investment.

brian:

I love that. And it always comes down to people at the end of the day. It's always a people conversation. People produce the profits not the deals. I'm curious about your advice. I of wanna speak to two different people here. Now I wanna speak to maybe the recreational investor that is talking about. Maybe diving in themselves individually to self storage and maybe the person that's looking to dive into this syndication realm. What advice would you give to the person will start with the newbie, syndicator? What is a, what is the right way to go about this? Because what I see, I'm making an assumption that this is what you see too, is we see a lot of people out there running syndications that don't know what the hell they're doing, and they have no track record. So of course you would rip them apart. My challenge and my asked is what is a good path of progress for someone that is new and that is wanting to develop that track record and develop that trust. What is the path of progress for that person? So say as someone that's, maybe in your position they've been successful in multi-family maybe they have some single family they've been an operator before, but they wanna move into self storage, maybe move as an LP like you did, and then have a conversation with the GP, riding somebody else's wake and then break off. What would be your advice?

kris:

Yeah, I I think it, Brian, it goes back to end goal, right? What you're trying to do. I. If you can identify what you want the end point to be, and then reverse engineer your way there. It's a great place to start. Look, I think you're asking a couple questions. The first one is, what do you say to somebody who's new to syndication? Maybe doesn't have the track record. Look, if you don't have the experience, just be very thoughtful of what you're asking for people. Money is one of those weird things where. It is a representation of time, right? Because we spend our time generating that capital to be able to invest it. So if you do a bad job with it, you've stolen. That person's time. They can't ever get it back. Just understand the responsibility of that. Cuz it's a big deal. And there's a lot of trust that goes in that but everybody starts somewhere. And it usually starts with friends and family, bro, like Brian, if you said. Hey tomorrow, I need to go raise a half a million bucks. I'm gonna go do my first duplex or quad in, in the, Woodstock area, the Atlanta area. You're not gonna go randomly advertising. You're gonna go ask people who trust Brian. And and ultimately that's where it always starts is with friends and family. And then as you start to develop a track record, you can start to think about, okay, how do I start bringing? I think I know what I'm doing. I feel comfortable. If I take someone's money, I'm probably not gonna lose it. And I could, hopefully generate some appreciation for them. Then you start to bring some newer people in. I, what I would is. Being a syndicator is now just a thing. Like you'll see it all over YouTube and all over LinkedIn. And man, just because you have a podcast, no offense or a YouTube channel or none taken. Yeah. Or some sort of internet thought leadership platform doesn't mean you're a real estate operator. And so from to the investor side of this, I would be equally. Interested in, are you a marketing company or are you a real estate operator? And sometimes it's a balance of both and great real estate companies have created great marketing machines. That's usually pretty good. There's a lot of people out there that have created great marketing machines and the real estate. We'll see, , it's too early, too early to tell. But time will play that out. But I think it's just being thoughtful back to the advice part and one foot in front of the other. Don't go too fast. Don't just try to earn fees because ultimately, people are trusting in you to deliver for them. And when you lose capital, it feels bad. , there's , there's a lot of people with a lot of really verbal stories out there. Because it's just a blind trust and most people, Brian. If you go out to your network and say, Hey, I need some capital they're not gonna do due diligence on the deal. They're just betting that you did your homework. Just make sure that you did very good

brian:

advice. Very solid advice. Let's talk to the person that is looking to buy their first self storage deal. I have no idea how to underwrite one of these things. So you can speak to me directly. I know the concept, so speak to me as a newbie and maybe to someone, like I said, that's invested in multifamily before they understand the concepts of real estate and they understand all the, how businesses work and operate. What are you looking for? What makes a good deal for self storage and what are you looking for in value? Add opportunities when you're underwriting. Yeah. So let's

kris:

take a step back from that first and say, So there's been a couple GoBundance guys. Who've asked me this right, where they're like, Hey, I will you look at this self storage deal. And I, and the first question I ask is why are you investing in self storage? If you have a business that you are successful in and you're making a bunch of money, understand, do you wanna really be a direct investor in these asset classes? Not just storage. Or are, is it, do you want to just keep making money the way you wanna make money and deploy money, capital or passively? And this is where I go back to the 10,000 hour rule, right? Generally it takes 10,000 hours to make an expert, if you Brian don't know anything about self storage and you say, Hey, I wanna buy a self storage facility, I would say, okay, are, is that what gets you fired up? Do you wanna spend 10,000 hours figuring out how to run self storage? And if the answer to that is yes, go get it right. And we could talk about maybe the specific things you wanna look for in a deal. But if you're just enamored with the asset class, Do what you do that made you the money to invest in the first place. Don't dip your toe in and be a rec use the word recreational, which I love a recreational investor. Don't do that. It's gonna end really badly, right? If you have a business where you're crushing it, go crush it and deploy money with people who've already put their 10,000 hours. Brian, think of it this way. Dalio says this for those of you guys, not who don't know him, he's the, he, at one point he started Bridgewater capital. I think there's still the largest hedge fund in the world. I don't know, $180 billion under management or something. Stupid, small potatoes.

brian:

What's that? Small potatoes. Yeah. Whatever,

kris:

Whatever. But he always says, look, the stock, market's a zero sum game and you're not gonna beat. He's I have the smartest people on the planet working for me and you, Brian are gonna go trade in the market and beat me. He's Nope, put your money in an index fund. cause you're not gonna beat me. And I look at that the same way it's look is reliant. Perfect. Absolutely not. Some guys gonna go build his first storage facility or her first storage facility. We have 180 employees that all we do all day, every day is storage. That's it? One thing. And, here's a doctor, he's an orthopedic surgeon. He's I'm gonna buy a storage facility, really go fix knees and put money with a group like reliant or other, people who've put their time in. So for me, that's always like the balance of do you really wanna learn this? Cuz I did it right. And I didn't like it once I did it, I was like, oh, I don't wanna operate this isn't this is what I want. And so I'd push back on that and just say, first answer that question for yourself is where do you want you, you only have so many, 10,000 hour blocks in your life, right? And back to our time conversation, where do you wanna spend your time? If that gets you fired up to wake up in the morning and go do it every day. There's money to be made for sure. But if you're just like, oh, I just like the asset class go write a check to somebody, let them do it. That's fair.

brian:

That's very fair. And yeah I get the perspective. Let's talk to that person. Let's talk to that person that is in the hunt. Yep. Like maybe that maybe they're not, maybe they're not the surgeon and they're because I also have friends in this. I've got friends in every angle of everything. So I've got friends that are like you that are running the syndications. And I have friends that are saying, Hey, I don't have, I don't have capital. I don't have any of this, but I got hustle and I want, I wanna get cash flow and I wanna get equity and I'm willing to put 10,000 hours into this thing to figure this out and they do self storage. So let's speak to all of 'em cuz I do really admire that perspective though. Cuz that's one, that's not offered as much, but I completely agree with you. If you have career capital and you have a zone of genius that you've been operating in that made you profitable, or maybe you have another. Core tree trunk as Matt Aon would say, if you have another core tree trunk don't keep building new bridges. But if you wanna build this bridge, what was some advice that you can give to people to avoid falling into the fricking water while they build it? Analogy's

kris:

baby, the, I think that the interesting piece is you use the word hustle, right? So in every deal, and I think Brandon always used to say this, it was like there's hustle, there's money and there's knowledge, right? Yep. And generally there's somebody always has two out of the three. They may have the knowledge, they may have the hustle, they don't need money. You can always go get that third part of the triangle. And to your point I think for somebody new coming into the asset class, it's education first, right? Get yourself comfortable with the asset class, go partner with some people. If you can, who have the expertise and you bring them one piece of that hustle, knowledge, money, whatever one that you have or combination. But I think specifics in the asset class, Brian are not too dissimilar than any asset class. We're looking at all the same demographic data that everybody. Traffic count income average housing price to understand what's in the particular market, but with storage, it's very interesting in that. We used to look at a one, three and five mile radius around the site, to understand it's addressable market we've since changed that to drive time, because in some markets, five miles away might be 20 minutes drive. Nobody's driving 20 minutes to get to a storage facility. Remember, this is a garage, there's no amenities. This isn't like apartments where there's a school district, or, you can walk to shopping in restaurants and that's attractive. It's a heated and air conditioned or not garage. It's a box on a metal cement pad. And so it's really convenient to work or home or you're not using it, you're not going there. So from our perspective, it's understanding what's happening in that. We sometimes go 10 to 15 minute of drive time. To the facility and what's around it. That's really our addressable market. That's where we spend the most time understanding. Hey, who's going to fill this thing up. Or, if we build additional units, who's gonna rent those units and is this a market we wanna play in? I think that's where I would really start to get comfortable is underwriting the market and understanding how it's your addressable market is going to impact your business plan. And then, understanding. There's a lot of things in that underwriting package, as far as the competitive set, who are you competing against and the rates they're charging those types of things, where that's data that you start to get more comfortable with. But I, for me, I think what we do a really good job of is under we call it the story of the market, like understanding what the story is. So like when our acquisitions team, and we sit in an investment committee and have a conversation about a deal, that's the conversation, right? Is. Okay. Tell me the story. Like why does this work? And then, we start with that and then the details are built in around the story. So I think for that guy out hustling or gal who's out hustling, it starts with, okay, let me understand why I want to be in this particular market. Does that make sense?

brian:

That makes a lot of sense. And like I said, that's another, that's a unique perspective, but that's very valuable. So what are reasons that you shouldn't do self storage? Speak to that person and just tell them, tell 'em all the reasons that they shouldn't, who is self storage for

kris:

as an investor. You

brian:

mean? Yeah, so let's finish it. Let's put a cap on the person that is looking to get educated. Maybe they want to dive in and get educated on self storage in general. And then we can go ahead and put a cap on that, but why, what are the reasons that they shouldn't? What are the people that shouldn't do it? Obviously besides the ones that just are not willing to put in 10,000 hours, Yeah. I I

kris:

think the misconception and look, it's depends on what kinda level you're at with self storage is You don't really have tenants. There's no bathrooms. You don't have to go on clock toilets. So it's a hundred percent passive. It's not really true. Storage is interesting in that there're 30 day leases, right? So there is no 12 month lockup, right? Brian, if you rent a unit today on May 23rd, you can be out on June 23rd. So it's an operational business that just happens to be wrapped in a real estate play. And so there's a lot of churn around it. If you're not comfortable with the operational side, we spend a lot of time on, digital marketing. How do we get tenants access to the units rent online? They literally don't have to go to the office. And there are some cell storage operators, Brian out there who are completely automating the site. There's no people on site. So everything is done through, a kiosk model or a call center. And they've used technology to, to supplement the human element. And we do that to some extent as well, but, know, I think for people who just come in and be like, look, it's just a bunch of garages, I can rent it and never touch it. That's probably not. It's not passive, at least in our businesses, isn't at the level that we're at. I think that's one thing to keep in mind, as you're looking at this is, there's a, there's an operational business component to this and you gotta be comfortable, running and maintaining that aspect of it as well. And the real estate just happens to wrap the whole thing.

brian:

Okay. So come in being prepared. To either a operate the business and learn about operations of businesses or B have an operator in place ready to go, because it's not just gonna be hands off. I'm gonna do this seller finance, because that's why it's sexy. So that, and mobile home, Park's a very seller financeable that's essentially the draw. So like that. And I specifically wanted to ask that question because I. People that are listening to always have the reasons, like you said, all the data, why should I do this? Why should I not do this? Who is this for? Who's it not for? That's what the rubber meets the road. So yeah, I appreciate the perspective there. So moving if you were to look back, is there anything that you would've done differently in your wealth building journey or do you appreciate all the moments that you. Is this

kris:

philosophical or literal D all of the above look, philosophically, how I got here is going through all those things, right? So are there to your point around their regrets, are there things that I wish I hadn't done? Sure. But they were a lesson and I learned from them and move forward and hopefully took those lessons into, to, my decision making today. But I think, Brian, on, on. The overall is there something I wish I did? I wish I'd started sooner, right? The best real estate tool or the best investment tool is time. And, generally if I had started at 27, Everything that I owned at 47 would be worth more money. If I had started at 20, when I was 40, everything's worth more money, whatever I buy today at 42, when I'm 62, generally there's gonna be ups and downs along the way. But. It's gonna be worth more money. I think it's, I wish I had an understanding of what I wanted sooner but again, it's all part of my journey, maturation and journey. Maybe Chris at 21, wasn't ready to hear what Chris at 30 had to hear to say. Okay. I gotta do something different. And that's all part of, we have two boys and when you think of it as a parent, it's letting them go through their experiences and maturation until they get to a point where oh, that's what I want to do. Okay. Us telling them that's not gonna help. They're just gonna be like, yeah, I'm not interested in what you're saying. Yeah, I love it.

brian:

What's next. What's next for you? What's your three year vision here? Where do you wanna take it?

kris:

Yeah, that's a good question. We get to ask that a lot specifically with, what does reliant want to be when it grows up? I don't know. Sure. For me, Brian, and this is more philosophical probably than you're asking, but when I look at the next 40 years of my life, the lens, other than the Tim Ferris kind of rank it one to 10. Meaningful work, meaningful relationships. So if what I'm doing is those in those two buckets, right? I'm building good relationships and I feel like the work is worthwhile. Generally I'm happy and look five years from now, maybe that's different. With reliant right now, we're growing something and that's really fun. You don't get to do that too often, or at least most people don't get to do that too often in their careers. And so we're gonna, we're gonna grow this thing for all it's worth and see what we can do with it. I don't have an end point. It's interesting. So in, in our, for those guys who are part of go bonnets our local meeting, Was that my house, Brian, before the worldly ball event that we did. And we asked that question, what's life look like in three years for you? And my answer was this like, I love going to work. Like I'm not one of the guys who's trying to get out and, ski 600 days a year wow, that'd be impossible, ski 365 days a year. no, Tim

brian:

road could find a way to make it happen. He could ski 600 days a year.

kris:

That's right. I think for me, like I, I enjoy it. I enjoy the process, so I enjoy work. I'm doing what I want to do right now. And again, that may change and I have the freedom to go when I want to go. And, I'm good for about four days of vacation, Brian. And then I start to get antsy at about day four. We went serving Puerto Rico for spring break in Rincon. And about day four, I start to get I'm ready. Yeah. Like first few days. Awesome. Having a great time. Day three. Oh, this is fantastic. End of day four. I'm like, oh, I wonder where it's happening at work. And then day five. I'm like, all right, I gotta go home. yeah.

brian:

And that's the entire premise behind this trip that we're about to take we're about to go travel. And my premise is it's a giant experiment. So what I'm trying to be here is the Guinea pig for everyone just says, Hey, like that sounds like a cool idea. Let's see, let's. Proof of concept essentially. So I'm gonna go do it, take extensive notes for record audio for people here on this podcast, four times a week and grow this company that I have right here. And then, just see, the pros and cons of it because I'm like you, I'm not, there's never gonna be a time in my life where I want to go, just sit on a beach for two weeks. That's just, I think that is. The last 10 years has bred as being sexy. I want passive income. Everyone says they want $10,000 to passive income monthly so that they can retire and go travel, lay on the beach. I don't think that's the move. I think the pursuit of meaningful work that fires you up, working with people that you enjoy and respect that's the pursuit finding passionate, meaningful work. So

kris:

I don't. We'll figure it out. Brian, look, you're 27 too. 35 year old. Brian might think something different and that is part of your. Maturation journey life, right? I mean that and 45 year old Chris might think different than 42 year old, Chris and that's okay. I hope we think different

brian:

what's that? I hope we think different. Yeah.

kris:

Yeah. Yeah. You're evolving, right? Yeah. I don't know if you watched 60 minutes, you're a little young for that, but 60 minutes.

brian:

I have watched 60 minutes before Chris, that

kris:

avoid not that young , but the last night they talked about this project called hope Chicago. So this guy he's he has, he had started five businesses have been wildly successful. He's a billionaire at 40, right? The biggest one was a, one of the largest cannabis growers in the world. He's from Chicago originally. He just, his foundation just built this project. They're gonna basically donate a billion dollars to do 30,000 college scholarships over the next 10 years in Chicago. And they're going to, south side Chicago, really rough schools and basically scholarship all the kids in the high school, not only the kids, but one of their parents. So mom, dad, guardian. they get to choose. And what he's saying is, look, Chicago is a mess, right? The people under age 18, I think the, one of the biggest things contributing to the death rate of children under 18 is gunshot wound. And he's that's ridiculous. And so he's literally trying to change. Generational by, generational poverty by educating, not only the kid, but the family members and his belief is, 10, 20 years from now, that's gonna pay huge dividends to the community. And what I thought about is like what a cool shift for him. , going from, he was a moneymaker, he was a Rainmaker. And then said, nah, I'm gonna change the world. Elon Musk is that guy too, right? Maybe a little bit weirder, but same idea like that guy could have just disappeared and had a couple hundred million bucks from his sale of PayPal. And would've been just fine. Instead, he decided to figure out how to go to Mars. And get rid of the internal combustion engine. Like those are two just massive projects that

brian:

are crazy. No traffic. He's trying to beat traffic

kris:

well but he looks at a problem and says, yeah we gotta fix that. Yeah. And, but he's willing to be the guy to do it. And that's I look at those kinds of things and it's that looks cool. Like I love when people are just like, oh, that's a problem. Like I'm gonna fix that. Even if it's an obnoxiously large one. Crime and poverty in the city of Chicago, but that guy's gonna make an impact. Now what a legacy, right? Whether it works or not, it's hard to imagine that it won't, that guy looks back at his death bed. Brian, he's probably not eh, should have, I should have done that. He's probably squeezed. He's probably squeezed the juice. That's why we do

brian:

it. That's why we do all this. We're not it's, we're not doing this to buy the Lamborghinis. We're doing this to provide impact. You can impact more people. If you have more wealth, if good people get good money, they can do great things to quote my friend, Chris harder, but we will end it there. My friend, I don't think we can get much more impactful than that. That's let's give a quick presentation for reliant. Who are you looking for? What can you offer them for the accredited investors that are listen?

kris:

Yeah. We're always raising capital. You can learn more at reliant, mgmt.com. If you are interested in passive investing opportunities with reliant real estate. And we're generally always have something open that we're raising capital right now, we're doing a hundred million dollar fund that will probably close out here at the end of the summer. And we'll have our fourth fund self storage fund for that'll be open probably at the end of July. Yeah. If you're looking for that opportunity to pass on or to partner on the passive side of things I'm biased, but I feel like we're a pretty good option.

brian:

fair enough. And we will have all of that in the show description and also in the action academy newsletter that goes out every Thursday, which all of you should subscribe to. Thank you, my friend. It has been a pleasure. Thank you for all your wisdom. Thank you for paving this path and setting us straight, man. Appreciate it. My

kris:

pleasure. Thank you, Brian.

brian:

Thank you, sir. It's been Chris Benson and Brian with the action academy podcast signing off.