95. Explosive Growth Wholesaling Self Storage with Fernando Angelucci

Join Mike Cavaggioni with Fernando Angelucci on the 95th episode of the Average Joe Finances Podcast to talk about the explosive growth that comes with wholesaling self-storage. Fernando is the CEO of SSSE, an investment firm specializing in institutional-grade self-storage facilities. He explains in detail how investing in the self-storage niche is done.

In this episode, you’ll learn:

• An engineer in the real estate industry
• Responses Fernando got when he was starting out
• The thought process behind wholesaling self-storage assets
• Historical performance of self-storage assets
• What is something Fernando wished he knew right from the start
• And much more!

About Fernando Angelucci:
Fernando Angelucci worked at Dow Chemical, a Fortune 50 company, rolling out a flagship product estimated to gross $1B in global revenue. When he was 23, Fernando started in real estate on the residential side by wholesaling and acquiring residential rentals. Fernando then went on to build a multi-family rental portfolio spanning the Midwest. In preparation for the next down cycle, Fernando and the team divested from residential real estate to focus on self-storage. Fernando graduated from the University of Illinois at Urbana-Champaign with a B.A. degree in Technical Systems Management. Fernando currently resides in Chicago, IL.

Find Fernando Angelucci on: 
SSSE Website: https://ssse.com
Impact Self Storage Website: https://www.impactselfstorage.com
Facebook Personal: https://www.facebook.com/TheFernandoAngelucci
Facebook: https://www.facebook.com/ImpactSelfStorage
Linkedin: https://www.linkedin.com/in/thefernandoangelucci

Average Joe Finances®
Our social media links can be found here: https://flow.page/avgjoefinances
Check out: https://averagejoefinances.com
Balance Your Portfolio with Passiv: https://averagejoefinances.com/passiv
Buying or Selling a House? https://averagejoefinances.com/realtor
Interested in getting your real estate license? https://averagejoefinances.com/prepagent
Use the same Audio/Video Editing Team that I use: https://editpods.com
Host your own Podcast here: https://averagejoefinances.com/buzzsprout
Social Media Management Tool: https://averagejoefinances.com/social-media
Podcast Book I'm Published in: https://averagejoefinances.com/daniel-larson
Buy an NFT of this podcast: https://ajf.uncut.fm

Free Stocks:
Robinhood: https://averagejoefinances.com/robinhood
Webull: https://averagejoefinances.com/webull

Consolidate debt: https://averagejoefinances.com/sofi-loans/
Get Life Insurance: https://averagejoefinances.com/ladder
Average Joe Finances Swag: averagejoefinances.com/resources/shop

*DISCLAIMER* https://averagejoefinances.com/disclaimer
If you are interested in writing for Average Joe Finances or joining us for an interview on the podcast, please visit https://averagejoefinances.com/contact
--------------
Tropical Sensation by Mike Leite soundcloud.com/mikeleite Creative Commons — Attribution 3.0 Unported — CC BY 3.0 Free Download / Stream: https://bit.ly/-tropical-sensation 

Transcript

Average Joe Finances: 0:00

Hey, how's it going everybody. Welcome back to the average Joe finances podcast. I'm your host, Mike, Cavaggioni, and today's guest is Fernando Angelucci. Fernando, always excited to talk to another real estate investor, especially somebody that's doing self storage, because this is something that's been in the back of my head for awhile. And I know a lot of people that listen to my show have been asking about self storage and I'm really excited to have somebody come on today and talk about it. So welcome to the show.

Fernando Angelucci: 0:25

Thanks for having me, Mike.

Average Joe Finances: 0:26

Absolutely. So the first question I'd like to ask you is the same question I ask everybody that comes on the show is I gave a small background about you and who you are but if you could share with us, maybe go into a little bit more detail. What's your story? How did this get started for you?

Fernando Angelucci: 0:40

Yeah, absolutely. So I'm the son of two immigrants from Brazil. So when they came over here, I had the old school American dream in their mind and that's what they wanted for their kids, me and my brother. So go to school, get good grades, graduate and get a 40 year job retire with a pension once you're done, nowadays though, Kinda more of a pipe dream than reality for a lot of folks. So basically what happened was when I was 16 years old, I had a teacher that gave me rich dad, poor dad as a book, I was a reading teacher. I kept bugging her saying, I don't see how these fiction books are really going to help me in life. And eventually she cracked in and revealed that she was a landlord herself. So I blew through rich dad, poor dad, in like two days, someone that was a self proclaimed like slow reader, not good at reading. And it changed the way that I looked at my life and how I want it to make money and how I'm gonna control my time. So from there, I went to my dad and I basically said, Hey, I think I want to do this real estate thing and not go to school to which he responded with over my dead body. So he gave me the Henry Ford kind of response, which is you can go, you can get any color as long as it's black. He say, you can get any degree as long as it ends in the words engineering. So I ended up getting my engineering degree. But throughout that time I just started voraciously absorbing anything I could get on real estate, bigger pockets, any book, I get my hands on going to seminars and REIA meetings. And then when I graduated, I actually did get a job with the fortune 50 company that gave me a pension and a 401k match and everything my dad was looking for. But then within 13 months I quit to start real estate full time. And the way, I guess she got into real estate. A little heavy. I don't recommend most people do this, but overnight I applied for 64 credit cards and I got like 12 approved. And when they came a week and a half later, I cash advance $96,000 off of those cards to start my real estate business. And then from there I started wholesaling, single family homes and flipping single family homes, then buying single-family rentals and then upgrade into multifamily rentals. And then in about 2016, I was looking at my portfolio is pretty decent size is 60 or 70 units. And I realized that my passive income didn't feel very passive. I was working like 80 plus hours a week. I had constant headaches and calls from tenants and calls from property managers about stuff happening in my properties. And I just really. I really wasn't happy with where I was. So that's when I decided to make a switch and I jumped into self storage because I heard a mentor of mine say that with self storage, you have no tenants, no toilets and no trash. And those are the three biggest causes of my headaches and my current portfolio. So from that point on, I started wholesaling some self storage first, just to make sure that, I was underwriting properly and people that knew. The game better than I would be willing to pay a higher price than what I got the deals under contract for it. And after doing a few of those transactions, I was confident enough in my own ability to buy and take these things down. So I bought my first self storage facility for a million dollars in August of 2018, and then fast forward to literally two days ago, I just crossed over 112 million in assets.

Average Joe Finances: 3:41

Wow. What a background as I'm sitting here taking notes as you're going, and there's so much to unpack here just after the first question. This is crazy, man. But I love it. So your parents immigrated from Brazil, but you have an Italian name. So how did that work?

Fernando Angelucci: 3:54

Yeah, during the wars, a lot of people that were fleeing the world wars, they couldn't get into the United States, but they can get into places like Canada and Brazil. So I had a great grandmother that fled Italy and she moved to Southern Brazil. And my dad, obviously. That chain of the family. They, they kept it all Italian. So my dad's a hundred percent Italian, but he's from Southern Brazil. And then my mom is from Northern Brazil. They actually met in church in Chicago. So I actually didn't meet in Brazil. And then I was born here in the suburbs.

Average Joe Finances: 4:24

Right in, oh, that's cool stuff, man. Really interesting to just see how, how smaller world really is when you start piecing it all together, where people travel in from. And it's just pretty wild now, fast forward a little bit. So you're going to school at the age of 16, you cracked your teacher there to get her to finally admit that she does other things besides teaching. So she was probably in a much better place than most of her colleagues, right? So she was the landlord and she handed you rich dad, poor dad. And at the age of 16 you read it and you said in two days now, I think probably the big difference is, because like you said before the stuff that you were reading in school was all like, fiction and just stuff that wasn't really going to do anything for you outside of school. Besides help you get good grades and you wanted something that was going to be more. More realistic, something that you can use in the future. And your teacher gave you that book, which is awesome. So moving forward, now, you go to your dad and you say, Hey, I want to do real estate. This is a passion. Cause I know when I read that book, like I was fired up. I was like, oh my God, let's go. I was listening to BiggerPockets podcast and reading the forums just like you were doing. And I'm like, oh, this is amazing. Let's go. And then your dad just pretty much crushed your dreams right then and there and said, yeah, if it doesn't end in engineering, then you know, and you go into school and getting a job that's gonna, pay for your lifestyle, then it's not going to work. So you scratch that itch that he wanted. You went to school, got your engineering degree and then got this job 13 months later, you're like, I'm done. So like you tried it his way. Wasn't working out. Decided to follow your dreams. And that's really amazing, man. And since then, like what you've built over this the past, three years, as you said is just absolutely amazing, man. So just well done. Now, the way you started really made me cringe a little bit. I don't know if you saw, when you were talking. I was sitting here taking my notes in the face I made. When you talked about, you applied for what was it? 62 credit cards, 12 approved and took out $96,000 cash advance. On all of, oh my goodness, man. But wow. So what did you take that cash events out for? What did you actually purchase with that cash?

Fernando Angelucci: 6:19

Yeah, so I went to one of these, like three-day seminars, one of these gurus that, they're selling this education. And when I told him I didn't have money to buy the education, they said, there's ways that you can get money quick. And that's actually how they told me I can apply for all these credit cards is through one of these education classes. So the first 30 grand of that like 96,000 actually paid for five courses in real estate. It was wholesaling, creative financing, marketing, commercial, real estate. And then I think the fifth one was, I think it was like an underwriting or another form of marketing.

Average Joe Finances: 6:53

Okay. So the first 30 K went to that. And then what about the other 66 k what did you do with that? What was the first thing you bought?

Fernando Angelucci: 7:00

Yeah. Immediately went into marketing dollars. So I bought a list, started buying postage and envelopes and letters and started sending out just letters to any person that'd be willing to sell their house to me in the Des Moines Metro area.

Average Joe Finances: 7:14

Okay. So what kind of responses did you get? Especially just starting out? What were people saying to you?

Fernando Angelucci: 7:18

Yeah, it was interesting that I was had a little bit of a beaten down in the dirt type response. The very first call I got was from the Iowa attorney general because someone reported me for being a fraudster. And so the AG called me and was like, Hey. I got someone saying that you sent them a letter, they think it's a scam. What's going on? I said, no, sir. I took this class on real estate last weekend and they said to buy lists of people that have old houses and to send them a letter to see if they'd be willing to sell it to me so I could fix it up and sell it. And he said, That seems legit to me. And then he just hung up the phone

Average Joe Finances: 7:53

Wow. That must have been a scary first call to get from your letter, sending out, you got the attorney general calling you saying, Hey man, we, somebody said you're a scammer and you're committing fraud. I don't know how I'd feel about that. That might deter some people just a little bit. So what was the next call you got.

Fernando Angelucci: 8:09

Yeah, the next call is actually even worse. So at the time, the very first list that I pulled was a probate list from the local courthouse. And so the second call I got with this was this little lady and she called me how, she just finished up her probate of three years on her husband and she was just getting over the death of her husband. And then. My letter brought up all those feelings all over again, and I should be ashamed of myself for calling her. So the first two calls are not great, but I had this $96,000 hole burning in my pockets. I said, let's just keep moving forward. Trust in the process.

Average Joe Finances: 8:43

Yeah, man, especially so brand new credit cards so the interest rates had to be astronomical. So that $96,000 hole at, by the time you probably got to your first deal was well over a hundred K at that point, just from interest alone.

Fernando Angelucci: 8:57

It was interesting because my dad was such a good financial steward. And taught us very well when we were little, he taught us how important credit was. So he added us onto his credit card lines when we were like six years old. So coming out of college, I had an 800 plus credit score. So because of that, I was actually getting Mo most of the cards that I got were actually at 0%, for 12 to 18 months. And then after that 12 to 18 month timeline, then they jumped up to anywhere between 17 to 25 percent.

Average Joe Finances: 9:26

That's a good start though for, 12 months having a 12 to 18 months having 0%, especially investing in real estate can be huge because that's a lot of time, especially if you're gonna start doing some flips and stuff. So now speaking of flips, so you got into, was that the first thing you started doing right away was flipping and wholesaling on like residential properties?

Fernando Angelucci: 9:45

Yeah, the first was wholesaling. So I was wholesaling for probably two years before I did my first. And that's the way that I've been able to pay off all my credit card debt and start to see the nice thing about wholesaling is it takes very little risk, very little money. So you can dip your toe in the water to see, Hey, am I underwriting these facilities correctly? Or these properties correctly? Am I, are my assumptions, correct on repair cost estimates and you get a lot of great feedback from these cash buyers. The second advantage. Starting the wholesaling spaces. I made a conscious decision when I first started that any buyer that I wanted to get onto my cash buyer list, they had to interview with me first for 15 to 20 minutes. And I got a lot of information out of those interviews. I was able to basically leap frog 10 to 20 years ahead in experience because I'd ask these guys the same questions. How many recessions have you been through? How many times did you lose your shirt? Why, if you didn't lose your shirt, why not? And I started to learn the really good stewards of kind of the practices of money. Keep your fixed expenses down. Don't put too much, too many of your eggs in one basket, don't go extremely opt up opportunistic or growth, make sure that you're always balancing out with some good cash flow. So that was extremely beneficial for me, starting out.

Average Joe Finances: 10:55

Yeah, hold the thought on that, because I want to get to that a little bit later, especially as you're talking about recessions and everything, but, okay. So you started off, you were doing flips, right? And that's what helped give you like a better idea to whether or not you're underwriting correctly, as you're looking at some of these, these assets. And I really like what you did with having these, short 15 minute interviews with potential buyers and just picking their brains, especially for people that are experienced real estate investors, taking the time to pick their brains and figure out what worked for them, what didn't work for them, if they did fail, what caused them to fail like that thought that way of thinking is probably what accelerated you so quickly. And like you said, you were getting years ahead now because of the experience that you're getting, just learning from these other individuals. That's just, that, that was super smart man, to just put that together. So now, as you're doing the wholesaling, you said about two years later, you started doing flips, but when did you actually start buying, cash flowing assets for yourself? So you did the wholesaling and the flips, to pay off your debt, and get yourself to a better spot and start building capital. But when did you actually start buying properties that cash flow.

Fernando Angelucci: 12:04

Yeah, I actually started buying cashflow properties before I started flipping properties. So I think it was maybe 12 or 18 months in the very first cashflow property I bought was a five unit property in the middle of nowhere in Southern Iowa. It's called a small town Cod called Osceola. Actually bought it with credit card debt. It was 40 K cap. I had five units. They're all super tiny, either one bedrooms or studios. And that was my first experiencing, first experience operating a let's call it a class D rental asset. So I learned a lot trial by fire.

Average Joe Finances: 12:38

Yeah. Yeah. And your first asset being a small commercial multi-family property. So being five units, that's, you can't go your typical way of, taking out a mortgage on that. So you have to do commercial lending. That's what, a way to start, and, a class D property at that. That learning experience must have been a very educational for you now, as you're moving along here, you start buying you, you said you got to what, it was about 64 properties before you switched over to self storage.

Fernando Angelucci: 13:05

Yeah. I think we had 69 doors was the total that we had before we, we started switching. So in 2016 is when I decided to make a switch. I ended up going to. The Indianapolis real estate expo. And I was peeking my head into the different rooms with the mini breakout presentations. And that's when I met my mentor. And, he was talking about no tenants, no toilets, no trash, the recession, resilience of self storage, the leverage available to you. Also the upside, most people think that if something has lower risks, lower upside, but what we found with self storage is that there's actually asymmetric risk return parameters. And at that point I said, I'm jumping both feet in, let's do this. So we called my partner. Steven said, Hey, it's time to start selling off our assets and switching over. So then we aggressively started selling all of our rental properties. And, started basically switching that, that powerhouse marketing company we had, that was basically supplying our, all of our wholesale deals. At this point, we were already, we were in, I think, five different states wholesaling. So we just switched all of that effort over to finding self storage properties.

Average Joe Finances: 14:07

Okay. So making that swap, so you went from. Doing the wholesaling and you had a company that was just strictly attacking that earlier, when we were talking, you had mentioned that you started, when you first started with self storage, you started with wholesaling self storage. Now I've never heard of this before. I've heard of wholesaling, rental properties and things like that. I've never heard of somebody wholesaling, self storage. I'm pretty sure it works the same way. What was your thought process behind that when you decided, okay, I'm going to wholesale self storage at first, before I start actually purchasing these assets.

Fernando Angelucci: 14:39

Yeah, absolutely. So again, I'm an engineer by training, so everything I approach is from a risk mitigation standpoint, number one. And then if I can cover the risk basis, then I look at, okay, how do we make money off of this? The easiest way I figured to understand the industry was to first get the reps in underwriting and doing these transactions, but with none of my own capital at risk, other than earnest money, if you will. So I would, I just literally switched all of my. And I'm one of those proponents of done is better than perfect. So instead of reinventing the wheel, I literally just took all of the processes and procedures I had in my wholesaling company, including the letters, and then just switch the word house or home to self storage facility, and then started sending them out to the list that I had purchased. And then they started calling us. One of the interesting things that I learned though, was it is a little bit different than the small single family or multi-family world where as small properties when you're a wholesaler, you're typically having a conversation around solving a problem, right? They owe money somewhere. They don't have enough money to pay the bills. They need cash fast. That is not the type of conversation you have with self storage owners. What I found out is as self storage facilities, even if you're trying to lose money, it's almost impossible to lose money at these things. So knowing that called me back was in any type of level of distress whatsoever. They're all cashflowing, they're all happy. And it was, instead of it being, let me solve your problem type of conversation. It was more. Let me take your daughter to the dance type of conversation, where they needed to know and trust you. They didn't care how money, how much money you had. They wanted to know that you're going to take care of their baby after they had given it to you. So the rapport building takes much longer. These transactions are a little bit longer from start to finish, whereas, a single family home, I could be under contract within 30 days and then, day one and then close within 30 to 45 days later and get paid. These ones are a little bit longer, maybe 3, 6, 9 month transactions, but the spreads are much larger. So instead of making. Already our wholesaling company was making a pretty large spread on average, most wholesalers, they make five, maybe eight grand per transaction. We were making 30, I think 32,600 was our average rip for wholesale deal in Chicago. On the storage side, we're pulling like 200 to 300 K a transaction, a metric closing, a 300 K wholesale here in

Average Joe Finances: 16:57

that's awesome.

Fernando Angelucci: 16:58

Yeah.

Average Joe Finances: 16:58

Okay. Now you said you're closing one here in the next three weeks. So I guess it's safe to say that not only are you at the point now where you're purchasing, self storage, assets for yourself, but you're still doing the wholesaling, as it comes up. So what is, okay. Because you're still because you're doing both now. What is like the, your go no-go criteria for saying, yeah, I'm going to wholesale this one or I'm going to keep this one.

Fernando Angelucci: 17:20

Yeah, for sure. So a lot of our buyers ask, why am I buying the stuff that you say no to? And my answer is because we're at different places, our investing journey and what we're looking for. So a lot of, there's about 70,000 facilities in the United States and a lot of them. In the beginning of my career would have been perfect. They're just small. 10, maybe 15,000 square feet. But now that I'm amassing a pretty large portfolio and I'm trying to get to this pretty large goal, our goal is to have eight and a half million square feet by December of 2030, which would equate in today's dollars to about a $1.4 billion portfolio. And then we'll exit a hedge fund to get to that number. I can't keep buying tiny facilities, 10, 15,000 square feet. So here's my back of the napkin go, no go criteria. Number one, it needs to be a minimum of 35,000 square feet day one, number two, within 18 months, I need to be able to expand the facility with the available land that it comes with to get up to 65,000 square feet. Number three, I need to be able to buy this thing at or below replacement cost. If it hits those three metrics, I keep it. If it doesn't hit those three metrics, I sell it to somebody.

Average Joe Finances: 18:26

Okay, right on. Yeah. So that's important though, that you have your key criteria that you stick to, that, you know what, whether it's go no-go for you to keep that asset or not, which is awesome because you're still getting these folks that are contacting you, that, that have the self storage facilities that don't meet the criteria of something that you would want to keep for yourself, but you can still wholesale that and continue to build and raise more capital to go purchase those other assets that, that you want to get into. So that's absolutely awesome, dude.

Fernando Angelucci: 18:54

And one of the things too is, people don't realize. Really most real estate businesses. Aren't actually real estate businesses. If you're going to be a high transaction volume player, your business is truly a marketing business, not a real estate business. So when people ask me, I was like, why don't I just go find my own facility as opposed to paying you a wholesale fee? I say, sure, try to get to it before I do, I pay $150,000 a year just in postage and stamps alone to blanket the market. I hit the lower 48 states four times a year. Every facility in the United States. That meets our criteria. We'll get a letter from us four times a year. So that's what people don't realize is the amount of marketing needed to do this is that's just the postage cost, right? That doesn't cost that doesn't count all of our staff in our marketing department, we've got seven full-time people in our marketing department, all of our cold callers, our underwriters, our acquisition reps. So we use the wholesale proceeds almost as a way to just get free marketing and then allow us to get the deal flow that we want. We're looking at anywhere between 20 to 25 deals a week, and then we get to pick the stuff that makes sense for us. And then all the other deals. They're not bad deals. They're just not the right size for us or in the right locations. So we sell them off to other investors. We had a wholesale deal that we sold to investor two weeks ago, had an 11%. So it's not like I'm sending trash across the plate here. I'm beating the market by five, 600 basis points in a market where let's say a broker will bring you a deal of value that deal at a five cap day one. You can buy them from me at a 7, 8, 9, 10 or 11 cap.

Average Joe Finances: 20:24

Yeah. That's pretty phenomenal numbers, man. So you're getting your, finder's fee, for being a wholesaler, but it's not. The person who's purchasing it from you by paying that extra 300 K is missing out on anything. They're getting a cash flowing, a really nice cash flowing asset from day one. So that's the other thing to keep in mind here. For those that are listening, He's actually, he's providing a great service with good deals. That's super awesome, dude. And now going a little further into self storage, right? As you were talking, actually, I'm rewinding back a little bit to when you were picking people's brains. Cause there was something that you asked that I wrote down and it's sticking out of my head here. And that was when you ask people, what, if you lost your shirt, what caused it? And if you didn't lose your shirt, why not? Now when it comes to self storage, how has it historically performed.

Fernando Angelucci: 21:14

Yeah, it's historically done really well. So if you look at the last, let's say. Three or four recessions. It has some of the best recession resistance of any asset class. So let's look at oh 7 0 9. A lot of people felt some pain from that period of time. The S and P 500 lost about 22% of its value. During those two years, self storage on the other hand lost only about 3.8% of its value. So something that's very easy to recover, but. The second piece is let's fast forward. Let's look at the recent COVID pandemic during the COVID pandemic, according to trap, which is a commercial mortgage backed securities research firm. Of the 1700 CMBS loans that were made to self storage investors in the first three quarters of the pandemic, only three were delinquent by more than 30 days. That's a 0.17% delinquency rate during that same time. Multifamily was defaulting at a rate of 1800% higher or 18 X, the default rate of self storage. So the recession resilience of this asset is absolutely phenomenal. I think the reason for that is self storage is something that serves people in transition and it's transitioned up or down. So when the market's going down and people have to downsize or change jobs, They're going to use storage, but then the same thing is true when the market's going up and people have money and they're buying goods and things that they don't have room to store, or they're moving to get other jobs that are paying better or they're getting a larger house because they need more room. Those people are also going to use storage as well.

Average Joe Finances: 22:46

Yeah, that's some very good points. Like it's, doesn't matter where the market is or where the economies is at the point, self storage is always going to be there. I guess to, to let you cry on their shoulder when you need them. So if you're downsizing and you need a plan, you have to put your stuff somewhere while you're in the middle of downsizing, self storage. If you're upgrading and it's, you purchasing more stuff, you're going to go buy a bigger property. Self storage.

Fernando Angelucci: 23:10

And that's just like the downside numbers and I'm giving you the outside numbers are even better. So let's look at the last 30 years of return across multiple asset classes, the S and P 500 returned about 8%. Multi-family returned about 13%. These are average annual returns, self storage returned about 17 and a half. So what does that mean? And especially, I want to point out the difference between multi-family and self storage that difference 4% may not seem like a lot, but that's a compounding annual return. So if you had a hundred thousand dollars to invest in an asset class over the last 30 years, if you put that a hundred thousand in the S and P 500 today, you'd have about $550,000. If you put them in apartment buildings, you'd have about 1.8 million. If you put that same hundred K into self storage 30 years ago, you'd have a little over $4 million. So double the return of apartments, just because of that 4% compounding return.

Average Joe Finances: 24:05

Yeah. Compound interest is a beautiful thing there's a reason why it's called the eighth wonder of the world, man. So yeah, it could just a small percentage difference can really over, over time. Be huge in the difference in the amount that you make. So it's, yeah, that's definitely something to keep in the back of your mind with, with self storage. I didn't know the numbers or the percentages. So you telling me that, that's the first time I heard that, I didn't realize that it was 4% higher than multi-family, which is phenomenal. How does self storage perform during recessions or pandemics, like what we're dealing with right now. So I'm glad you talked about that. Now you've done so much in, in a short amount of time to get to where you're at right now and built this large company, right? You're at the point where you have over a hundred million in assets, under management, what was it? One 12. You said you're going to cross over into a phenomenal man now. Going through everything that you started very young, like you got that purple Bible at the age of 16 blasted through that. But still there's always something, that we feel like we could have done differently or just gone a different direction with. So what is something over the time period from the time that you read that book to where you're at today, what is something that you learned since then that you wish you knew when you first started.

Fernando Angelucci: 25:19

Yeah. And I actually have two answers to this question if you'll allow me to cheat a little bit. So the first is I needed to start trusting other people. Much sooner. And what I mean by that is in the beginning, I was hesitant to hire employees and I just do everything on my own because I thought all employees, that is a cost. And I wish my mindset would have shifted earlier and realizing that employees are investments, they make a return for you. They're not a cost. So bringing people onto the company sooner to. My company has scale that's number one. The second piece is I wish I would have started raising capital from investors sooner. I really started only raising capital in earnest from investors in the last, maybe two, three years. And if I was able to start when I was say 22, as opposed to when I was 27 or 28, who knows I'd maybe be at half a billion today, but I'm one of those people where I don't really believe in regrets. I am the person I am today because of the things, the actions and decisions I made leading up to this point. And I'm very happy with who I am and where I am in life. So no, no rigerts as my friend would say.

Average Joe Finances: 26:23

I was gonna go there, man. I was going to say, not even a single letter, a great movie reference for, we are the Miller's. Awesome. Awesome. Awesome. You got to it before? I did, so it's okay. It's okay. All right. So something to take away from that, you were hesitant to hire employees, so you were hesitant to outsource, right? And I know a lot of people that do this, I was the same way with my business, with building my podcast as well. I was hesitant to, outsource any of the editing or using virtual assistants for anything. And, so like for the first six months of running this podcast I was doing everything myself and it was killing me, so I'm still active duty in the Navy. I'm working, full-time doing my nine to five still. And as I'm doing the podcast, I'd come home from work and I'd just edit for two hours every night. Just for my next episode that's coming out. It was awful, man. And finally six months into it, I hired an editing team and they've just been awesome. So I just, I recorded the content. I sent it to them and I don't have to worry about it anymore. So there's that then two I was like, Hey, I need to figure out a way to get my podcasts out there to more people and get it marketed and get more people listening. And I was like, there's gotta be another way to do it. So I hired a virtual assistant that actually goes and posts my podcast for me on Reddit, different social media groups, and just goes and throws all my stuff out there for me. And I don't have to worry about it. And all I do is after the editing team sends me back my files, I upload it to the Google drive for the virtual assistant. Now she has all the files and she goes, and does her thing and she even made a TikTok channel for me too. So a separate from my own TikTok channel. So I was like, Hey, that's cool. And it's a, it's working out pretty good so far.

Fernando Angelucci: 27:53

Think there's two super important points there. So the first is energy management. So everyone talks about time management is BS. It's all about energy management. So as an entrepreneur, there are things that drain our battery and there's things that recharge our battery and the things that drain our battery not only do they take us two or three or four times longer to do than somebody else that likes to do that. But they also, which is my second point. They also have a very low the time value. So for example, if I were to go back through my last 24 months and see what my average hourly rate is, if I can hire somebody out to do something less than what my hourly rate is based on my current income, I am, I'm dumb not to do that because now I can arbitrage skill. And usually that arbitrage is very large. It's not only a couple of dollars.$200 an hour arbitrage someone in, we have a lot of virtual staff as well from the Philippines and they're great people, some something that someone in the Philippines can do for eight bucks an hour, as opposed to me trying to do at, a multi hundred dollar per hour earnings doesn't make sense.

Average Joe Finances: 28:57

That is a key point. And where my head was at with it as well. Now I like what you said though, about the whole time management thing is BS and it's, the, what did you call it? The, energy management. Yeah, man, because when you talk about the, just your batteries and a drain in the back, cause I, I love putting stuff in metaphors. And as you're talking about draining batteries, that's the, I was thinking back to like, when I was doing all that stuff, myself and man, I really was drained. It wasn't so much the time it was how I felt when I was done. I was just like, Ugh, I'm emotionally exhausted. I just want to go to bed, hit the reset button and do it all over again tomorrow. And yeah, man, that's that is draining emotionally, physically, and of course time. Yeah, that's a, that's huge. I love that. So thank you for sharing that.

Fernando Angelucci: 29:40

Can I give you a quick, how I implemented that? I had a very good friend. I have a very good friend. He's an EOS implementer. His name is Gary Harper and he came in to implement traction basically into our business. And he gave me this very simple page print out. I had four columns and I had put down every task I did in during the day into each of these four columns and start eliminating them from left to, so the column all the way on the left is things that I'm not good at and things I don't like to do. So that combination, so that's the very first thing that you should delegate or eliminate. The next column over is things that I am bad. I'm sorry, things that I'm good at, but I don't like to do so that's the next set of comms that you need to eliminate or delegate. Then once you finish up with that column, you go to the next column, which is things that I'm good at. I'm sorry, things that I'm bad at, but I love to do right. These are the things that they give you energy, but you're just so slow at it that it's probably better. To give it to somebody else. Here's a non-business example. I'm playing, I'm not very good at playing guitar, but I enjoyed doing it. But I'll go pay to go see a guitarist in concert. And then the last piece is where you want to spend all your time and that's things that you're good at and things you like to do. So that combination that's where you should be spending most of your time of the day. And the rest should either be first eliminated. If it can't be eliminated, it needs to be deligated.

Average Joe Finances: 30:58

Yeah, I love that. I love that. And you mentioned traction, so I, that's still a book that's on my list that I have to go read, so absolutely ready yet. No, I haven't. I haven't man. It's actually, it is at the top of my list. It is the very next book I read is once a year there was, there was somebody who I interviewed last week who had brought that book up. And I was like, man, I keep hearing about traction. I got to read traction. I got to read traction. And yeah. And then you just confirmed it for me, man. Like I'm going to start reading it today for sure. So

Fernando Angelucci: 31:26

I read it once again. I have probably given away over a hundred copies of traction to people that ask advice on how to start businesses or start real estate businesses. So that the two books I always recommend to people starting a business is number one, traction, read it multiple times. And then number two is profit first by Mike Michalowitz.

Average Joe Finances: 31:42

Yeah, traction has got to happen. I, I don't want to have any regerts. So you've got to get out of that. All right. Cool, man. That is probably the longest back and forth I've had on that question so far, but it was awesome and so much value. All right. Now, going on to the next thing. So we talked about, what it is that you wish you knew when you first started now, what about, what would you say was the biggest mistake you've ever made?

Fernando Angelucci: 32:05

Yeah, this one's easy. Half-assing in too many things instead of full -assing one. So at the peak of my serial entrepreneur ism, if you will, I had five different companies operating at the same time. I had a wholesale company, I had a fix and flip company. I had a buy and hold company. I had an Airbnb company and then I had a hard money company. And then I started storage and one of my friends called me out on it. He said, Hey man, you're making really good money in storage. And I could see the potential for this thing to blow up into a huge business. Why are you wasting your time on all these other businesses? And I fought him for. Like a year and a half. And then one, once I finally shut down all, all those other companies were still making money. So it's hard to say no to money coming in the door, but they came back to that energy management. How many, how am I spending my time? What is getting me excited? And so finally, when I finally listened to Gary and shut down my other four or five companies, then the storage company went like this. It blew up.

Average Joe Finances: 32:58

That's fantastic. And the, I guess the key thing to take away here is that you really learned from that mistake and you took action and you were able to skyrocket your business, which is fantastic. Okay. Moving forward from there. Do you have any tips or tricks that you would recommend to someone who is just getting started? Let's say somebody like listen to the show and they're like, man, I want to get into self storage. This is, this interview was awesome. And tell me more. What would you say to somebody who's just getting started today?

Fernando Angelucci: 33:28

Yeah. So if you want to fast track into the storage business, you need to get into the storage business. I see so many people that get hit with analysis paralysis, and they're always just getting ready to get ready to maybe start a self storage facility. Just bought what I tell people is when you go buy your first facility, just assume you're not going to make any money on it now that's not going to happen, but just. Don't wait for this slam dunk home run deal. Do a first base hit for your first deal, because that's where you're going to learn. I, when I did all my education and learning about storage and talking to advisors and mentors, that was only about 20% of the actual business. I found out that. I learned the other 80% from running my first self storage facility in Yorkville, Illinois. Right? Ran it for eight months. I was the manager. I was doing everything myself or me and Steven were doing everything ourselves. It's not a hard business to learn, but just got to get in. Just got to jump both feet in. The second thing is to. Like I said, get in the industry and specifically the industry part of it. So there's all these trade shows that you should go to that self storage association at the national trade show. They have a couple a year there's the inside self storage association. I speak at both of those. Get there and start rubbing shoulders, other storage investors, see what they're having trouble with, what they're learning. What's not important on their minds. And then reach out to brokers, brokers there it's in their best interests to get you to a point where you can buy facilities so that they can get paid. So they're going to give you as much education as they can to make you a ready buyer for these things.

Average Joe Finances: 34:59

Yeah, that's fantastic advice. And, to tie into your baseball analogy there, you said, Hey, you don't have to get the home run. You can get that base hit. Guess what enough base hits eventually you start getting RBI's right. And you're going to start bringing these runners home. And that you're going to start getting it. And eventually, who knows. The bases loaded and then you get that home run. You just got a grand slam. Just to take it all in base hits are important. So the key thing here is just get started. If it's something you want to do, just get started. Okay. Awesome. Now you've already given me some great information when it comes to like books and everything like that, that you enjoy. But I still want to ask this question and that is, do you have any favorite business investing or real estate related book? Or podcast or both.

Fernando Angelucci: 35:42

Absolutely. So I'm a voracious reader. I think I have like over 180 titles in my audible account and by reader, listener because I'm constantly traveling and stuff so I can get through them faster. Recently the one that I've really liked because it's the trunk and branch approach. And what I mean by that is instead of trying to reach for the branches to get information, go to the trunk that supports the branches. Access to all this other information. So here's a perfect book. Tim Ferriss is a big hero of mine. I follow him, everything he puts out all his podcasts, all his blog posts. So Tim, if you're listening to this, hit me up. Or if someone that's listening to podcasts, Connect us. He has a really great book or two very good books where he distills down all the interviews on his podcast, where he interviews the people that are top of their level in every industry. And he distills it down to one, two or three pages. In this book, as you're reading each one of these interviews, these top of their class people also give recommendations of what their favorite books were or what resources they use. So then I just go out and buy all of those. So the first one, he released like this called tools of Titans. And then the second one he released was called tribe of mentors. And both of them are absolutely amazing. I recommend everyone read them. They're huge books. They're literally like inches thick, but totally worth it.

Average Joe Finances: 36:55

That's great. I wrote those down and, for those that are listening, you should write those down too. Cause Fernando has got some really good taste in books. I can tell you that. Now it's funny though, too, cause you also said that you're going to listen that this, these are books that you listened to because you're traveling a lot. That's one of the things that I like about that too, as well as audio books are fantastic. I don't listen to music really that much anymore. Like when I'm in my commute to work or just driving anywhere, I've got a podcast or an audio book going. So that's a super important, it's just a great resource to have. All right. We had an awesome conversation, Fernando, I can't believe just what you've done, in this small time period, but you've got the drive. You've got the motivation. You're absolutely crushing it. So there's people probably listening and they're saying, man, I want to know more about Fernando, what he's doing. I want to know more about self storage, is there anything that I can do to follow him anywhere or anything like that? So if where can people find more information about you? Do you have a website you could share with us social media profiles, anything like that? Please let us know.

Fernando Angelucci: 37:57

Yeah, so you can, you could follow us on all our websites and social media spots. The newest company is called self storage, syndicated equities, and we actually have a really easy domain name is just the initials of that. It's S e.com. But what I find is. The more barriers you put in front of people to reach out to you, the more they fall off. So something I'd love to do for your podcast is actually give out my cell phone number. If you're cool with that it's area code 6 3 0 4 0 8. 8 0 9 0 that's 6 3 0 4 0 8 8 0 9 0. That is my real cell phone number. So feel free to shoot me a text or give me a call. I promise I'll answer in a timely fashion. If there's anything I can do to help you out, let me know.

Average Joe Finances: 38:41

You're a brave man, putting out your cell phone number, on the worldwide interwebs, but, Hey, awesome, man. Appreciate that. Appreciate the fact that you're taking the time to, just open up to anybody that wants to reach out to you. And also for taking the time to chat with me today on the podcast. I really had a blast. This was really informative and you provided a lot of value just sharing, what you learned over the years as you got into this, and you've touched on so many different aspects of real estate. And I just want to point that out. How, you made that switch, right? You went from wholesaling to, you started doing some small commercial multifamily properties to wholesaling self storage. To investing in self-storage and still wholesaling it. But the way that you've just scaled and scaled is just absolutely phenomenal. And to have somebody on the show, that's done something like that, man. I just want to say again, thank you so much for sharing everything that you shared and just taking this time to talk with me today, man. It's been a blast.

Fernando Angelucci: 39:39

Yeah. I've had a lot of fun, man. You're awesome. Interviewer. So appreciate you.

Average Joe Finances: 39:43

Thanks man.