Inside Our Mastermind Events Part III: The Benefits of Membership

Announcer (00:07):

This is the South Storage Podcast where we share the knowledge and skills from the industry’s leading investors, developers, and operators to help you launch and grow your south storage business. Your host, Scott Meyers, over the past 18 years has acquired, developed, converted and syndicated nearly 5 million square feet of south storage nationwide with the help of his incredible team at southstorageinvesting.com, who has helped thousands of people achieve greatness in South storage.

Scott Meyers (00:42):

All right, everyone. Good morning. Good morning. Good morning,

(00:47):

Man. You know the drill. Let’s try that one more time. Good morning. Morning. Yeah, everybody Oxygenated, caffeinated. You can always fake it if you’re caffeinated. Man, this is a real deal. I didn’t think take so long, and I don’t remember this the last time we came out here for skiing to ever go through where we’re going through this time, but it’s been a real thing. What’s that? Huh? What is that? The lack of oxygen and the fact that I walk up a wooden flight of stairs and I feel like I haven’t exercise a day in my life ever. It’s been a few days. It’s been a few days going on here now. So do y’all enjoy the storm last night? Yeah. Yeah. Did anybody peek out or leave the curtains open and see it? Holy mackerel. What a show. What a show. Yeah. That’s incredible. All right, well we got a big day ahead. Really big day ahead. And now the video that we did not get to work yesterday, Willy Maine, in his water tank project. We’re going to play today, so

Willy Maine (01:45):

Yep, yep. This is in Kenya? Yep. Yep. Just outside of Naoc, Kenya, so the Masai people. So yeah, we’re 50 minutes from the Mara. Absolutely amazing. If you ever have an opportunity to do it, it’s incredible.

Scott Meyers (02:00):

Is this a ministry you support, you’re a part of?

Willy Maine (02:02):

It is a ministry we support. We’ve known Dave and Joy, the missionaries. Dave worked with me and my building business 35 years ago, and then they went on Mission Field. They were in New Guinea, then they transferred to Sudan and now they’re in Kenya for the last 10 years. So this site is a site they own. There’s one other building on this site, it’s 10 acres. Their plan is to have an active school on this site, January 1st, 24th. Awesome. So the buildings are, I don’t think they’re underway yet. They use in-country. Well drillers. And they put up the solar panels that’s service that they can service ’em if there’s an issue. And as, so this was our second tower, the 20 footer. We tried to build a crane out of some pipes, didn’t budget, so we ended up going back to our rope system.

(02:56):

We had to add a rope on top of a rope and because it’s, try to want to go up a little bit on an angle, which we didn’t think would be a good thing. And I was on the ground for this one, so I was safe communicating to the guys on the other one. They just stood underneath it after they couldn’t touch it anymore and just watched it go. And I was like, no, no, but not a good idea With these ropes, we weren’t able to use, we didn’t get through the pulleys. There’s pulleys on the back rail there that we had the ropes through for the other one, which allowed for the guys on the ground for better leverage with the pulley system and everything. But anyway, they’re just looped around it, but it was fastened up above that last angle, fastened up above and then down. It was just looped around. Thanks you for really

Scott Meyers (03:45):

Applause. Yeah, my pleasure.

(03:50):

Mastermind members making a dent in the world. I love it. I love it. Good stuff. Alright, a couple things that also didn’t pull up yesterday. So Brian Lee had to leave early from the last event. He had an issue with his eye, with his cornea, but he had surgery redone the second time around and successful he’s on the mend and was able to cutting it very close, almost wasn’t able to go on this graduation trip to Europe, but the doctor said he healed up a little quicker than they had expected. So prayers were answered there. And so success, another medical success. And also, I don’t know how many of you saw on Facebook or have reached out to Seth as well, but he and his beautiful bride now Claire, we’re wed, and they’re honeymooning now in Southeast Asia, so wish them well if you haven’t already. And if you didn’t get a chance to meet Claire, holy cow, she’s a rock star as well. And I said he needs to bring her back because she’s a sharp cookie. Those two are going to be a force without a doubt, not only in life, but in business as well. All right. Who had a good time last night?

(05:00):

That was pretty fun. We could have just, and I were just saying we could have sat out there for another 3, 4, 5 days on the cheers, just looking around. That was fantastic. So thank you once again, Cheryl. Let’s give Cheryl a round of applause for orchestrating all that

(05:16):

Good stuff. Just good stuff. We appreciate it. Alright, so today we are going to go through our ahas. We have a presentations. Then again at nine o’clock, Travis with the Trivest is going to come up and share with him the new offering that they have at trives, which again, we’re really excited about tonight. I think some of our folks in here will be as well launches at 1215 to one 15. We’re going to do breakout sessions after that, more hot seats and presentations at 2 45. We’re going to do a podcast interview with myself and Ann Marie. And then we’re going to have our open forums again, so just kind of a wrap up questions. We’ll hit some of the major food groups again in terms of management, finance, acquisitions and equity. And then a best presentation will be awarded at five o’clock and we will all adjourn after that. Sound like a plan? We are going to hit our marks today. All right, so let’s start with ahas from yesterday. Yes, sir. Red.

Rick Gibson (06:12):

It wasn’t information that I didn’t know or hadn’t concepted before, but it was so timely. Tim talked about retaining customers and the inverted economy of people that are quite possibly paying more than street rates and having a retention script that it was at the right time, the right place, and it’s just gold, Tim. Just gold.

Scott Meyers (06:45):

Yeah. I’m going to comment on that in a little different way and very, very insightful and helpful presentation. And there’s a whole lot of stuff that is shared here and it doesn’t always have to, I’m not disappointed if it isn’t earth shattering, groundbreaking, something absolutely fantastic and new, but many times when we begin to implement some of the basic business principles, but then the advanced principles or just put it all together, that’s when all of a sudden somebody’s business takes off, 10 x takes off. And so I think one of the biggest benefits of being in a mastermind, and this is for myself again, this is why we created this, is that accountability. Because there’s stuff that I know I should be doing. There’s stuff that I’ve had notes on or it’s a part of a policy and a procedure, but if I haven’t put it in place or I’ve forgotten about it, it’s just that awareness is that front of mind once again putting that in place.

(07:39):

And so I need to be in this room for that just so that we have that Tim, he laid it all out and it was just like, oh geez, there it is again. And I know that we’re not following this, this, and this at the place right now where we need to be. And so it’s good reminders to take notes and then make sure that you go home and implement and you execute or delegate for somebody to do again. So yes to all of that. Thank you Tim for putting that together and Ed for just reminding us that not everything is new. This isn’t rocket science. This is a simple predictable business model. It ain’t easy. There’s a thousand plus steps in it, but we got to know what the steps are and then we got to execute on it. That’s why we’re here. What else? Somebody chuck him, James, chuck him the box.

James (08:33):

I thought Jake did a great job yesterday, especially on his underwriting, how he was grading the risk level and how they were underwriting properties. So I thought it was a really neat graph perspective. So I took a lot of notes during his presentation and even Catherine was talking about make sure we’re registered with Apple Maps. Something simple, but that’s crucial as a reminder. And then I thought the changes that Live Oak made, I mean those are some game changer changes that are like, bam, I was very impressed with the changes that will help improve the efficiencies and the ability to get more capital from an SBA loan side of the house. So it was really encouraging to see those changes. Really those changes are really impacting our industry in a good way. Yep.

Scott Meyers (09:24):

Agreed. Yeah, Jake was okay,

(09:30):

So if some of you were a little lost or felt inadequate or as if your game wasn’t up to speed and par with Van West, well then go watch that presentation again. I mean, he gave you so much information, dropped a whole bunch of nuggets and talking about where he is at in terms of ratios. And it’s not so much about the fact that we’re looking at T three NOI of four point a half percent and modeling out to six for the balance of the year is an exit strategy. You don’t need to know that four point a half and six, which you need to know the process and how they underwrite and how you can implement some of those procedures and processes in your business. And if you’re not even looking at those that those aren’t even on your scoreboard or KPI, well then there’s no shame in that. This is how we learn. So if you need help with that, that’s what we’re here for. But if not, then dig in. But make sure that you have those KPIs in place and you’re measuring those things. Those are the tools of the resources that we need right now.

Rick Gibson (10:27):

So big hats off to Stephanie Boldrini. I just love math. So all these little tricks you can use on underwriting and all this stuff. So Stephanie comparing high interest rates to then maybe the refi at a lower interest rate later. I mean that blew my mind. So I’m going to be chewing on that for a while because I think there’s a neat way to make a very compelling sales pitch to get in. Now as long as the deal works, there’s a lot of upside looking at high interest rates now the likelihood of going down that just presents more upside. So we’re really in a pretty good position.

Scott Meyers (11:12):

We really are. I mean a high interest rate environment because we are operating in an asset class that is valued based upon than up income and a cap rate. Well, the cap rate rises as the interest rates go up, which means that it’s a lower value, a lower pricing on the asset. So if we get over the fact that we just need to weather the storm of a high rate, if we’re using lending bank debt on it right now, then when rates go down, we refinance. I think Jacob mentioned that as well along with you, Stephanie yesterday, is that let, let’s pay attention to the cost per square foot. Let’s pay attention to the cost of the asset right now. And yes, we always do look at the capital stack and what it costs us right now, but this is short term. So we’re only getting short term loans on these. So pay attention to the asset and the cost and comparing that against construction, Tim,

Tim (12:00):

Gary’s stats and percentages on move outs, move ins correlated. Also just how much data you could take away from just that simple graph of if you want to put more ad dollars in or don’t send out rate increases during these certain months. That’s just next level stuff that I know it’s probably not a huge percentage, but those add up and compound over time to avoid mistakes. And the tax, what was it? I think Jake gave me a go one too. Ryan, was it Ryan Tax and Paradigm? I didn’t know there were third party services out there to look at the accrual and also just consistently on contract to fight yearly on taxes or at least stay on top of it where it’s like, oh, that’s something we need to do. And then the biggest one was the stabilized yield on cost. I would still woke up this morning like, wow, I have not thought about it like that. I think it was in the mid sevens. They like to see trending in 36 months. I can’t wait to get back home and just figure all that out. So it was a really cool metric.

Scott Meyers (13:15):

Yeah, good stuff. What else team? Well all in all great takeaways and I’ve got pretty much all those on my list as well in addition to others. So appreciate you guys. This is why we stress so much that you bring your A game when you stand here in front of the room because if you add up the hourly rate of everybody here in this room and everybody’s eyes and ears on you, these presentations need to be at that caliber and we appreciate you guys not bringing it. That helps us all. Okay, one more little nugget. Thankfully this isn’t really catching hole in too many places yet, but it has brought some hyper awareness. So cognitive clause, cognitive clause. Anybody run into this yet besides Rick Gibson?

Rick Gibson (14:07):

You will.

Scott Meyers (14:08):

Okay, so made me aware of this and after shaking my head three times, I was just like, is this like a test? I only had one bourbon

Rick Gibson (14:16):

Say three times fast.

Scott Meyers (14:18):

So what this is is this is a clause that is inserted into the loan documents by a lender and what it allows them to do is basically anything they want with a loan and calling it due. So it skips the judicial process, the statement, it’s a paragraph if not a couple of sentences. Basically

Rick Gibson (14:37):

The legal requirements are it has to be bold and set out and in both places it was one big paragraph right above the signature block, kind of like the last thing in the document.

Scott Meyers (14:53):

So Rick found this in one of his loans and sent it to, well, Rick is an attorney, retired attorney, but also sent it to his folks as well. And they began looking through this and basically here’s the bullet points. It’s a confession of judgment without notice or hearing, which means that the bank says we’re going to take your property back and you have absolutely no say, there’s no process in it, there’s no hearing, there’s no judgment rendered in order for them to be able to do so. It just says if the wind is blowing from the east and we call your note due, you can’t do anything about it for any reason. There’s no performance clauses, there’s no contingencies, there’s no loan stipulations that aren’t met. Debt service coverage ratios. If we want to call the loan due, we can do it at any given time and there will be no judicial process on your end to fight it.

Rick Gibson (15:36):

I think could also pull it General insecurity.

Scott Meyers (15:38):

Say that again? General

Rick Gibson (15:40):

Insecurity.

Scott Meyers (15:41):

General insecurity,

Rick Gibson (15:43):

Whatever they insecurity,

Scott Meyers (15:45):

Correct. Well, not even that. I mean could Yes, yes. And if the economy’s going back, their balance sheet is bad at the bank, they can just take it. They can just take it without any other reason. Is this similar to what was your challenging situation? Ones?

Rick Gibson (16:02):

Yeah, judgment.

Scott Meyers (16:07):

Okay.

Rick Gibson (16:09):

What they did in the documents. So anytime you do a borrowing, there’s the guarantee that goes with it. We were going to be the guarantor on this loan. The loan document to the LLC that was building this facility said that they had discretion to determine if there was a default, if they felt it wasn’t being built according to plans or maybe even fast enough. And in the clause in the guarantee, the LLC signs it as do the guarantors and they waive any defenses including the reasonableness of their discretion. So it is completely only

Scott Meyers (16:55):

Drafted by smart attorneys.

Rick Gibson (16:57):

It is completely a one-way street.

Scott Meyers (16:59):

Yeah, it is. So I want to give it some time, but not a lot of time because it’s only in a few states right now. So we could rabbit hole on this. What I wanted to do is bring awareness to this, so pay attention to it and more than anything, the lesson here is if you look at this just it ain’t pretty,

Rick Gibson (17:21):

It’s actually in 17 states.

Scott Meyers (17:23):

It’s in 17 states now. 17. Oh, I didn’t get that. Okay. So it’s in 17 states and not every lender is going to put this in here, but what you need to know from this slide in our short conversation here is you’ve got to review your loan docs and you need to make sure that your attorneys are reviewing your loan docs as well. I know this because I see it when people are still just assuming that well, the title company’s closing it, so we don’t need to take a look at the title exceptions. That’s a very well-known lender. They’ve been doing business for a number of years. We don’t need to do this, this, or this, or why would I pay engage an attorney at an hourly rate to do this, this and this. Guys. That is inexcusable. Every single closing, every single document has to be reviewed by your attorney. It’s just part of it. It’s just part of closing. So make sure that any and all of your documents are reviewed by real estate attorneys so that they can find these things. They can find the exceptions to the title and the ones that may trip you up and that can’t be insured over or anything else that is going to cause problems down the road when closing a loan, any loan

Speaker (18:26):

In Ohio. It’s part of the state law though, so that the banks rely upon that and it’s like, well, it’s the state law that we can have this. And so that makes it a little bit more difficult to try to get it out of your loan docs.

Rick Gibson (18:36):

Yeah,

Scott Meyers (18:37):

So choosing lenders upfront and taking a look at loan docs if possible as soon as possible is obviously key.

Speaker (18:45):

Can you negotiate that out?

Rick Gibson (18:47):

We are in the process of doing it now and we think we might’ve arrived at a solution. So the first one was with a private lender. I don’t know if it was a family office, but it was a private lender and the way they did it, they snuck it in the fifth version of the documents right before signature on that. The second lender, this just happened last week. In fact, we had a conference call Monday. I pulled over at the McDonald’s in Idaho Springs 20 miles from here to take the call. Anyway, this was a rather large local bank in Pennsylvania that put it in, but it wasn’t in their loan commitment letter or anything like that. There was no mention of that. And it came in when they finally did the documents and we were supposed to sign them tomorrow. That was when we were going to close it.

(19:41):

Now this is not in any personal transactions, so it’s outlawed in all 50 states and personal transactions. It’s only commercial transactions. So to get to your question about negotiating and out, ultimately the banks just want to make money on their loan. They don’t want to take property back, things like that. So the solution that we have proposed to them is let us set aside six months to a year of loan payments and oh, we also asked for a 30 day notice of default and right to cure. They seem to agree with that. Our solution is set aside the money for a year. That way you’re going to get paid the loan documents already. Say you get your attorney fees and costs if you have to do any judicial process. So that’s already in there. So we think we’re going to be able to negotiate it away, but we have not heard back from them.

Scott Meyers (20:38):

Alright, so we’re not going to belabor that any longer. This is for awareness unless it becomes an issue and then hopefully it’s not a presentation. Somebody has an ask of how do I get out of this because now I’m in it and they’re taking my property. So what I did want to go over, and we’re going to go over briefly because Cheryl has sent out the link to the new sort of a thing mastermind portal, and we have beef this up. I say when I say we, I mean the team and Cheryl have put in here any and all resources and put it together in a format in a way which is a much more accessible, and as I said yesterday, this truly should be, if you’ve got a question about something in the business, you can Google it or you can go here because somebody’s probably done a deep dive on it.

(21:25):

And I would start here or use this as a tool and a resource. So here’s how you get in. Take me to the iLearn portal. There is the magic link. Once you are in, please sign in and add in all your information correctly and by name. So if people are searching for you and for presentations, please know nicknames or online names or anything else, put your name in. You can add your company name as well, but please put yours in as well. So you access the portal, you have to click on the mastermind portal course. It says course because that’s what is set up as our raw backend at recognize that as a course it is not. You’ll go through, here’s where you find the member directory. So if you would like to get in touch with anybody to do a deeper dive on a topic or a subject or if you just want to utilize somebody as an accountability partner or get to know him a little bit better, you can certainly still email Keith if you’d like.

(22:17):

However, if you would like to bypass and allow him to be productive, then you can go to the member directory in the portal and you can find anybody and everybody in their contact information. So this in itself, just being able to have access to everybody in the room all in one place is we feel is a pretty big win even though it’s just a directory. But that’s how we get connected to everyone. Click here, download copy of the rules and membership agreement for reference. So just in case you forgot about what the rules are, the mastermind and if you’re trying to backdoor somebody on a deal, you can go here first and take a look at that and recognize and realize that this is what it means to not do that and that you will be banished from the mastermind. Now this is the biggest piece, which is anything and everything about where the events are being held as well as grabbing the agenda, the workbook, getting access to the live stream and that then consultations with Mino Live Oak as well.

(23:13):

So as we’re heading in to an event, you’ll grab everything out here from the portal or you can be on the portal and online, not now by way of either your phone or by way of your laptop. And you can follow along, you can even, I think Ed was following on the livestream link as well, because some things that the PowerPoints like Jake’s yesterday, that was in 12 font up here on the screen. Well, you can grab it and look at it at your laptop just like everybody that is home on the live stream as well coming events, all the details, yes, you can wait for the emails that’ll come out and eventually will drop one in your inbox. Or again, you go to the portal and get all of the details for the hotel dates, the events, everything that’s going on with the upcoming community gathering Zoom call recordings.

(23:58):

Richie will get these in a very timely fashion. He’s been on it and we’ve been thankful for that. So this is your resource of all things that self-storage covered virtually every topic ad nauseum and a couple three times by the rock stars in this room. So go in there if you have questions about marketing, about management, about development syndication, whenever that is, they’re going to be recorded and in here for you to go back and reference member webinar and a deal offering. If you have a project that you didn’t, it fell in between our community gatherings and you wanted to get it out in front of someone or in front of the group, then get in touch with myself or Keith or Cheryl and just say, Hey, I got a deal that I’d like to get out to the group. I can’t wait. And so we’ll do a webinar.

(24:46):

We did the most recent one was with Alex who had a deal that he was looking for partners or somebody to potentially wholesale to. But anytime you’ve got a project you want to put out in front of the group, and it could be like similar to a, Hey, I need help with this as well. I’ve got a question whether I should go forward with this or not, or if it’s a wholesale deal or if I should just let it go, then get ahold of us, we’ll rally the troops and we’ll put together a webinar and get you on. You can pitch the deal or discuss the deal and everybody can weigh in. But that’s how please don’t wait until the gathering. This is a community that is doing life and business together all the time. It doesn’t just happen here once a quarter. When we get together, we are constantly in touch and communicating and anytime we all need to get together, we’ll make it happen. All the recordings and PDFs located in the live Mastermind piece as well. And so the PDFs of the presentations, the PowerPoints that you then submit to us will be located there as well. So if you want to use those as notes, if you go back and listen to any one of those, you can download those as well. So let’s please give the entire staff and Cheryl a round of applause for putting together and amening my portal.

(25:58):

Guys, that’s not only a lot of money, but that’s a lot of resources. That’s a lot of dollars that went into that. And so it doesn’t matter to me one way or another whether you use it or not. But my gosh, everything else that is in here and the legal documents and the resources that we’ve been using and continue to put together are going to be in there as well. There literally will be within the next 60 to 90 days, hundreds of thousands of dollars worth of materials in there in addition to everything that we just showed you here. So utilize that.

Announcer (26:28):

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