How can new investors get started in the self-storage industry? What technologies are transforming the self-storage industry? What are the biggest challenges in self-storage management? Amy Jenkins and Kathryn East, co-founders of Omni Asset Management Group, share their knowledge.
Tell us a little bit about yourselves.
Kathryn: This is my 50/50 business partner, Amy Jenkins. We started our company after both of us realized that we wanted to provide a unique service to people. There have been a couple of challenges that people have been struggling with significantly, and so we beta-test everything on our properties. Feel comfortable knowing that we’ve tried it, and either we liked it or we didn’t.
You both have a combined real estate experience of 40 years and combined self-storage of 30. Do you mind sharing a little bit about that and what your company is doing?
Kathryn: I started my self-storage journey as an on-site, live-in manager. I was six weeks into running one facility, and then they put me into corporate management. I was running seven facilities. I was very quick to understand what self-storage really looked like from that manager’s perspective, making sure units were cleaned, making sure maintenance was done, customers were handled, vendors were taken care of, scheduling, and everything–really working hard.
That owner made $1.2 million in my second year there, which they had never seen before. They were very impressed and very happy, but after about five years, they told me that I could not get a raise because I did not have a college degree. And I said,” I understand that, I do. Let me try this. I’m going to go do something else.” Still in self storage, I became the Midwest Sales Director for StorSmart Tenant Insurance, which led me to be the executive director for the Missouri Self Storage Owners Association, which led me to help Nebraska and Kansas with lean laws and insurance laws for self storage owners, which then led me to mentoring and being able to invest on my own, partner with people. And now, I’m all in every day.
Amy: I’m a retired military, and during my time, I needed to create a job for myself. I got involved in real estate with my husband. We have a general contracting company, and we flipped houses. We were in the single-family and multi-family arena and did everything from ground up to complete and total rehabs. And then 2008 rolled around, and everybody lost their socks, and it was not pretty. I stumbled upon self-storage. I had bought a self-storage facility, and I sold it because I wanted the land that was next door to it so that I could build single-family homes. And once I ran across one of the leading companies that was out there, I told them what I was doing. They said, “You should have held on to that storage facility.” I can’t do anything about that, but I can learn moving forward. And in doing that, my role changed dramatically.
I became the director of operations for the company, got to learn all the behind-the-scenes, what to do, and how to do it. I also learned the business on the back side of the house, all of the management. I entered into the corporate side of everything. And we have about 4000 units, about 450,000 square feet under management right now. I have everything from an eight-story building to a 47-unit, little mom-and-pop.
That’s where Kathryn and I come into play in doing that. We can take our personal experiences and implement them into the business and show you how to optimize your business, maximize your revenue, and increase your operations structure to where it works for you in a good, positive way.
What about someone who doesn’t know about storage, how to manage it, or how to analyze and evaluate it, all the way to exit? Tell us exactly what your company provides.
Amy: The company’s name is Omni Asset Management Group, and it takes its name from evaluating all the way through. Evaluating is Kathryn’s playground. She is phenomenal in looking at something, running the numbers, understanding the process, and telling you what you’re missing and what needs to happen for this to become a cash-flowing property. She has that unique ability to find that facility, understand the numbers, and then say, “Okay, here’s where you are.”
Kathryn: There are always two things that you just cannot control: taxes and insurance. Even the person who doesn’t understand DSCR knows this. But there’s another one that’s massive that you can control so much better, and that’s the management piece. You can control every element of that. If you don’t want to do it, you can outsource it. But who do you outsource it to? We do a lot of that because we are utilizing every type of software out there with some company, and we’re utilizing all their services to make sure that we understand what that looks like. But that’s just one element. What type of market are you in? How do you get into the type of market that would allow you to optimize all of your profits by getting into a market that is specifically driven towards certain types of management? It doesn’t have to be unmanned, and you can have a third party. There’s a lot of misconception out there that you can’t do third-party just because it’s smaller. That’s not true at all. We found a way, and we’re so excited to be a part of this new financial modeling that’s coming out.
I do want to promote a company, Cactus. It is an AI-generated underwriting tool. It reads our OM’s and our documents for us. You know how you’re always having to put in your unit mix, and it’s frustrating because if you miss one. It’s a problem. You’ll have to do that here; it does it for you. You get to play with the numbers a little bit better in this atmosphere because it has all different types of management built into it. It understands what it is you should possibly be doing or how you should be looking at this. If you want $2,000 a month, it spits out whether that property is going to do that for you or not. Speaks to the fact that Amy and I are constantly looking for the newest technology out there to run our facilities so that owner-operators can afford to still turn a profit if they lose 10% of their occupancy. That’s what we work on within our financial underwriting, and how we teach people to underwrite is like no other now.
Are you offering classes? Is it more of a holding hands? Can you tell me the tiers and the costs, so people understand what they should go to you for?
Amy: It’s not a one-size-fits-all. You have individuals coming in at different stages. Instead of lumping everybody into a class together, we’re one-on-one. We will walk you through the process every step of the way. If you are brand new to self-storage and you have no idea what Kathryn just talked about, I will walk you through. If you already own a facility but your numbers aren’t right, or you want to be able to increase, but you don’t understand yield management, we’ll come in and do a one-on-one consultation with you. We all understand and know numbers don’t lie. If the numbers don’t work, then we need to do something else.
Is there a specific dollar number for each person? Yes, but it’s going to be dependent upon what they specifically want or need. That’s where the à la carte thing comes into play. We want you to learn as you’re doing it. There’s no better way than being able to show you, walk you through it, and let you do it. 87% of the people that we take on are into a facility, whether it’s their first or an additional facility, within the first 12 months of being with us.
Kathryn: We even have some students right now that are with us, and we don’t call them students because we’re all students of the industry. But these are our friends and our clients. That’s just how we feel about it. We have some of them who decided they wanted to do a monthly plan. We meet with them every week based on what their needs are. We developed a plan for them and said, “Okay, here’s what we need to do to get you to this next level. Here’s the cost for it.” And they said, “Got it, done.” We’re not charging them this massive upfront fee for anything. It doesn’t look like that.
I’m doing my first ground-up development, and I tried to learn the lingo and everything with multiple people before I brought guests on the show, and I could not comprehend the process or any verbiage that was doing it. It is indeed by doing that you learn. As far as management, once they purchase their facility, can they turn into your management? Do you have a management company?
Kathryn: We have a third-party management company, as well. If they don’t want to use third-party management, we will help them find boots on the ground. There is a website out there called helpfulheroes.net. It is fantastic. It is EMTs, police officers, firefighters, and nurses. It’s people in their community who are looking to do side jobs. You can go on there for free and post what you have, how frequent it is, and how much you’re willing to pay, and these people will handle it for you.
That would be for someone who has a small facility; they would just go to your facility once or twice a week, or whatever else you may need locally.
Kathryn: Twice a month, or just on call. You can put any type of service that you need on there for your facility on that website, and somebody will pick it up. Because of who they are, we expect them to be the trusted people of the community. If you don’t have cameras on your property anywhere, that’s a problem. They’re on the property.
Amy: You don’t have to be a student. We will take on that as a client for the management of that, or if you want to be an owner-operator, we’ll help you set up and put all the systems and processes in place to get yourself and your facility up and running. We’ll give you the hands-on training on what you’re going to be looking for, what your daily audits are, etc. We’ll do all of that and set it up. And if they don’t want to do it, we can take on the facility and manage it however we choose in combination.
Kathryn: We will help with call center services. And again, all of these things are very à la carte. They don’t co-mingle with each other. It can be one or the other, or none or all, or however you want to do it. I do feel like an owner needs to understand their business, and so they should be doing a portion of that. I am not saying they should be going out and writing Facebook posts. Once you get to that level, you shouldn’t be doing that anymore. As an owner, you should act like an owner, but you should understand when they should be going out and how those reports read. I can’t tell you how many times I have consulted owners on just, “Can you help me read these reports and tell me what all this means?” I can.
For everyone, they should definitely manage their very first facility for at least a full year, all seasons of the year, depending on where you are located to understand all potential problems facets: lawn, snow, 10 to lock out, how soon should a call center answer the call and manage the local person. That way, you understand how critical these things are when you’re looking for help.
Kathryn: That’s true, but not just when you’re looking for help. If your property is not successful, you’re not going to get another one. One of our clients, I did a transition for her. Now, she’s buying her second facility, and she would like to do the third-party management. And she’s been running it; she’s owned it for almost a year.
What are some of the biggest things that we should keep in mind with regard to evaluating a property and managing it?
Kathry: First of all, those two can be spoken of simultaneously, when you think about it. It’s generally the third-largest expense that you have, and it’s the most controllable one. If you have a facility that’s 120 units, and you’re trying to get to a 35% ratio, but the taxes are 15% of the money that you can spend, management is what’s going to go out the window. We all know that. That’s how that affects the underwriting side of it: the evaluating. And I find it’s the same issue whenever we’re reading these OMS. Pro forma is pro forma. You need to know what that property is worth today. That is the current retail value of that property. What you’re doing with your pro forma or your projections is based on the history of the underwriting process and nothing else.
Now, population growth helps, not being supply-indexed out to the max does help. StorTrack has now put in a whole other section where you can see where brand-new housing developments are going in the markets. That’s powerful to know, especially when you’re looking at facilities in a market. You do want to know where all that new housing is going. And it’ll tell you if it’s multi-family, single-family, or apartments. When we’re evaluating, it’s important that as you’re learning, as you’re developing, as you’re growing, and as you’re already in that journey, keep yourself educated.
Amy: I think the other thing, as far as the property management side, is that automation isn’t a one-size-fits-all. You have to do that market research that Kathryn was just talking about to ensure that the model fits that location. Do you have the right technology in place? Are you using a kiosk, smart locks, and a security system? How does that maintain that smooth transition for a tenant experience? Who’s going to handle that maintenance? Who’s going to handle that oversight? Is this all going to transition and improve the facility’s efficiency? And ultimately, the bottom line, because we all know and understand that anybody can buy a facility, what is the end game?
Kathryn: Most of the AI-generated stuff right now is free to use for your facilities. The question is, where do you get it? How do you know which one to use? That’s why I’m excited that Amy and I are so AI-driven. I’ve been using ChatGPT for two years.
Amy: Well, what works for a 45 to 100 unit facility does not work for a 700 to 800 unit facility. Those are things that you need to pay attention to, and we’ll help you with that.
Is there anything else that you think is important for our audience to know?
Kathryn: They should be going to state association meetings or to national meetings. If you’re not even in self-storage yet, you should be telling people that you’re looking for self-storage. You should be broadcasting that from every place you possibly can. All these things that we’re talking about, that’s where all that stuff comes out.
In the ISS (Inside Self Storage) conference this week, I guarantee you that in that vendor hall, there are going to be at least 20 vendors that are strictly AI-driven. But you don’t know about it unless you start actually going out there and actively getting involved in it. Go to your local self-storage facility. Talk to the manager there. If there’s no manager, call their number, see if somebody answers. Start learning the verbiage. Every time I hear somebody say that they’re buying a unit and I’ve never sold a unit, the unit stays. But make sure that when you’re out there, you’re telling everybody, I want self-storage. You never know who you’re going to run into.
That is exactly what I tell people. My biggest mistake was when I acquired some self-serve car washes, I didn’t even bother going to a conference before. That’s the number one thing you all should do.
Amy: Create your elevator pitch. Here’s what you’re doing, here’s what you’re looking for, and here’s what you’re wanting.