Ep 64: The Self Storage Business in Today's Market with Sergio Altomare
The U.S. market accounted for 90 percent of self storage inventory worldwide in 2018 and investors remain optimistic as experts forecast the market to be worth $64.71 billion by 2026. Today, we will explore this asset class with our guest, Sergio Altomare.
Sergio and his wife pivoted to the self storage industry in 2018 and have exponentially grown since then. We are privileged to hear about how they started, their discipline, strategies, and advice for people who want to invest in the self storage business. Click now and listen to our conversation!
💥💥 Remember, this is your MBA. Have a notepad handy, and get ready to take some 📝 notes!
Key Points from This Episode:
How Sergio and his wife started in real estate – just under 400,000 in triplex and under a million in multifamily.
How they scaled quickly to 50 million assets under management and five properties under contract.
Their secret sauce: discipline.
Their discipline in terms of strategy and how they evaluate the property.
Sergio talks about their self storage facilities – purchase price units, location, acquisition, and value-add strategy.
How Sergio evaluates a deal especially in a new market.
Leveraging on relationships with bigger brokers to find great deals.
The two sides of self storage: real estate and business.
Self storage, when it comes to real estate, is good in good times and great in bad times.
The four D’s why self storage is a needed service: death, downsizing, divorce, and dislocation.
Why self storage as a business is a very good asset.
How self storage is recession-resistant.
Sergio talks about the markets that they are in and their unit count.
Why are they focusing more on family offices instead of large institutional investors?
Tweetables:
“It's about being disciplined and being disciplined in terms of having a strategy, having a game plan, and responding to what the economy and the markets are doing, as opposed to what you think they're going to do.” – Sergio Altomare
“If you're disciplined in what you do, and how you evaluate things, then then you can be fine.” – Sergio Altomare
“It (self storage) is actually a bigger business than it is real estate.” – Sergio Altomare
“[Real estate] is a marathon, never a sprint.” – Tejas Gosai
Links Mentioned:
About Sergio Altomare
After transitioning into real estate as a side business in 2012, Sergio partnered with his wife Corinn to start Hearthfire Holdings, a boutique real estate investment and property management company. In just eight short years, Hearthfire Holdings has built a portfolio of more than $50M in assets under management and syndicated over $12M in assets, returning more than $2M in profit and 25 percent IRR to investors. Property types have spanned small multi-family, commercial, retail, and self-storage properties. Sergio has also flipped houses and rehabbed properties and multi-family developments.
Sergio began his career in 1994 working in the U.S. Federal Reserve System (FRS). During his 22+ years there, he worked his way up the corporate ladder in all facets of technology, including network engineering, information security, project management and architecture, and strategy. Sergio has worked on projects and implemented systems across the banking and financial industries, with budgets of more than $100M. Notable projects include implementing secure email, mobile strategy for the division of Banking Supervision and Regulation and enterprise collaboration for the entire Federal Reserve System.
In 2015, Sergio was promoted to officer in charge of technology strategy for the Treasury Services Division of the FRS. He developed a strategy to consolidate enterprise storage and enhance treasury operations and support. His experience, IT skills, and ability to navigate the corporate ladder have given Sergio the foundation to build a real estate business and scale it through strong systems, processes, and data analytics.
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