Paul

Self storage owner, 11 storage sites across TX, LA, GA, TN, MS, WV

[Paul @CREHiddenAlpha]

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[Paul @CREHiddenAlpha]

@LynnA39927613 Very true

[Paul @CREHiddenAlpha]

We run 11 storage sites in low income areas. Some things I've learned:

Being poor is traumatic. Customers who miss payments are stressed all the time and are really anxious trying to pay their bills.

Being poor is expensive. Customers will pay late every single month and willingly pay fees. They think, the bill is due on the first, but I get paid on the 15th so the fee is unavoidable.

Paying early / on time is a foreign concept. If they get paid on the 15th, prepaying next month's bill when they have money seems crazy.

They know how to play financial defense. They lock their debit cards and unlock only when they make a payment. They chargeback valid charges when they really need money and then apologize and makeup the payment.

They rely on friends and family "run this $45 on my son's card, let me see if my brother has some money on his card" etc.

You can only fall for a sob story so many times. Customers will say their son's very last toys are in the unit, we will tell them they can grab them today. Then well...they can't come for a couple days, then a week, then their brother is out of town who was going to help them...

The only way to deal with low income customers is to have strict SOPs and never make exceptions. Every time we've made an exception for someone it's gone poorly.

You become both frustrated by the self defeating activities of some of these customers and saddened by the difficulty going on in their lives.

We totally love our customers and are always trying to help them where we can, but if you're the type of person who is used to only dealing with white collar labor / high income friends, you will have some adjusting to do to make your business work in these areas.

[Paul @CREHiddenAlpha]

@mcj3379 @whisperity @DWKemp Yeah I think that's what would happen

[Paul @CREHiddenAlpha]

@intellectKurius In general lease up deals are risky, many sites never reach the 80-90% occupancy they project

[Paul @CREHiddenAlpha]

@intellectKurius Stabilized it would trade at a 7.5-8.5 cap probably, depending on area

[Paul @CREHiddenAlpha]

@WellbornTodd I think often it’s even 2-3 days at a time

[Paul @CREHiddenAlpha]

@Toycat470772 @arch_viz This is also true

[Paul @CREHiddenAlpha]

@anunaki1704 True sometimes, and if it is, not their fault 🥲

[Paul @CREHiddenAlpha]

@RS30002 It’s a good idea we’re thinking about it

[Paul @CREHiddenAlpha]

@RickKiessig The modern world is complex and often designed to trick people

[Paul @CREHiddenAlpha]

@gaffneyfrancis Our SOP is that we don’t reduce someone’s bill or take partial payments. But, people get paid certain days and forget to call and pay us. So we record each day each customer promises to pay, and remind them the day before, the day of so we can make sure they get it paid

[Paul @CREHiddenAlpha]

@DWKemp This is a smart idea and one we’ve thought about

[Paul @CREHiddenAlpha]

@deejayakoni I think this is true to an extent and often shown in lottery winners

[Paul @CREHiddenAlpha]

@Cynthia31441378 Very well said

[Paul @CREHiddenAlpha]

@Susiehs You have to have a process you follow every time otherwise it’s all consuming

[Paul @CREHiddenAlpha]

@Joe546740735666 I think many are stressed by it but feel no hope of escaping it. It just feels like how life is for them

[Paul @CREHiddenAlpha]

@TheREDevGUY Depends on where the good deals are. All else held equal you would definitely want to be in a better area

[Paul @CREHiddenAlpha]

@arch_viz Many dealing with eviction / getting kicked out may store all of most of their personal items there

[Paul @CREHiddenAlpha]

@rplunkett57 Agree

[Paul @CREHiddenAlpha]

@JimKasper250124 Most of them don’t

[Paul @CREHiddenAlpha]

@ryman08 We don’t take partial payments unless they sign an agreement to move out along with the partial. Now we track promise to pay dates for every tenant and follow up like crazy w/ an automated system