The Good, Bad, & the Ugly of Self Storage

In this episode, David Pelusio, a real estate veteran with over 55 years of experience, shares his strategy for transforming vacant retail spaces like Kmart and Sears into profitable self-storage facilities. He breaks down the process from zoning and deal structuring to construction, marketing, and raising capital.

David also shares lessons from decades of investing, including how he made over $1 million on a single deal, why sticking to strict investment criteria matters, and how technology, AI, and virtual assistants are changing the way investors find and maximize opportunities.

davidrealestatehomes.com

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Mike and Dylan Cunningham and Mario Macaluso, a board member of Charity Storage, discuss the benefits of donating storage units to charity. Mario explains that operators often have vacant units, which can be dedicated to Charity Storage, allowing tenants to donate unwanted items. These items are auctioned off on the Storage Treasures platform, with proceeds going to the chosen nonprofit. Mario highlights the program's success, noting it has raised over $1.2 million. He also discusses the insurance challenges in the self-storage industry and the importance of risk management. Additionally, Mario introduces the Roundup for Research initiative, aiming to raise funds for cancer research and the SSA scholarship fund.

Resources:

Charity Storage Website - https://charitystorage.org

Storage Treasures Platform - https://storagetreasures.com

Barry Hovind - Cure Cancer Research - https://curecancer.org

Roundup for Research - https://roundupforresearch.org

Guest links:

LinkedIn - linkedin.com/in/mmacaluso

Email - [email protected]

Peter Smyth, co-founder of White Label Storage, discussed the company's unique approach to third-party self-storage management. White Label focuses on tech-first, remote management, building their own tools to reduce costs and improve efficiency. They manage 300 facilities across 43 states, with 75% being unmanned. Smyth emphasized the importance of a balanced revenue management strategy, avoiding aggressive entry rates and frequent rent increases. He highlighted the need for quick follow-up on leads and the use of AI for specific tasks. White Label's cost structure includes a 5-7% management fee, with additional savings on technology and marketing costs.

whitelabelstorage.com

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In this episode Michael and Dylan Cunningham discuss tax strategies for self-storage investors with Heidi Henderson, Chief Marketing Officer at Engineered Tax Services. Heidi explains various tax incentives, including cost segregation, which can accelerate depreciation and reduce tax liabilities. She also covers the benefits of being a real estate professional, which allows for more deductions. The discussion includes the impact of the "Big Beautiful Bill" on bonus depreciation and opportunity zones, which offer tax-free gains for investments in designated low-income areas. Additionally, they touch on advanced tax strategies like captive insurance and charitable lead trusts for high-net-worth individuals. The discussion also touches on the importance of tax strategies for self-storage owners, suggesting that those not advised on these matters may need to seek new tax advisors.

Heidi Henderson

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John Lindsey, founder of Lindsey Self Storage Group, discussed his journey into the self-storage industry, starting in 1969 with his father. He highlighted the impact of rate hikes and elections on the market, noting a significant increase in transactions in 2025. Lindsey emphasized the importance of conservative development strategies, especially in oversaturated markets. He advised first-time buyers to start local, get pre-approved, and consider management companies. Lindsey also noted the shift towards AI and remote management technologies. Despite challenges, he remains optimistic about the sector's future, noting that good deals can be found if one navigates the debt aspect carefully. He emphasizes the importance of thorough title searches and hiring competent attorneys to avoid issues.

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Mike and Dylan discuss strategies for self-managed storage facilities with Rick Beal and Megan Smith of Atomic Storage Group. Rick emphasize the importance of fundamental marketing practices, such as optimizing Google business profiles and using quality backlinks. They highlight the need for efficient lead conversion through AI-based phone software and personalized customer service. The conversation also covers the challenges of managing 150 properties, including hiring practices, deferred maintenance, and balancing customer service with business profitability. Megan stresses the importance of documented systems and procedures to ensure consistency and efficiency. They emphasize the importance of affordable, reliable technology that aligns with business fundamentals rather than complicating operations. They stress staying updated with trends, especially AI, and adapting to market changes.

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Katharine Lau, founder of Stuff Storage and Sidney AI, discussed her journey from hotel development to transforming underutilized office spaces into tech-enabled self-storage facilities. She highlighted the company's growth from 25 units in a basement to 30 locations in seven major cities, emphasizing the use of revenue-sharing leases and technology to scale operations. Kat introduced Sidney AI, a customer-facing AI agent handling sales and customer service, trained on five years of call data. The company aims to expand nationally and globally, leveraging AI to enhance customer experience and streamline operations.

Tommy Nguyen, co-founder of StoragePug, discussed the evolving self-storage industry at the ISS show, highlighting positive energy and tech advancements, including AI. He emphasized the importance of accurate Google Business Profiles, unique content on websites, and effective concessions like 50% off the first two months. Tommy advised focusing on Google Ads over platforms like SpareFoot, stressing the need for transparency in pricing and rate guarantees. He also noted the impact of advocating for clear communication of fees and rates to maintain customer trust. The discussion focused on improving self-storage rental processes and customer experience. He also emphasized the importance of transparent pricing, with no hidden fees, and highlighted a client's success from 11% to 33% online rentals in a year. Key metrics for improving online presence include getting 10 more reviews monthly, auditing the rental process to ensure it takes no more than 90 seconds, and using AI tools to monitor online visibility.

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Kale Leavitt, CEO of Storage Reach, discusses the importance of online reviews for self-storage businesses. He highlighted that only 1% of customers leave reviews without prompting, while 70% are willing to if asked. Storage Reach automates review requests, integrating with management software to target move-ins, current tenants, and move-outs. The platform achieves a 33-35% review conversion rate, with a two-step process to mitigate negative reviews. Pricing starts at $60/month for up to 100 units, scaling to $99/month for over 250 units. Storage Reach also offers AI-driven responses and a citation manager for consistent business listings.

James Hatfield, an entrepreneur and educator in the self-storage industry, discusses the integration of technology to enhance self-storage operations. His company, LiveSwitch, specializes in high-quality video and communication solutions. James shares his journey from reinventing the 911 phone call to entering the self-storage space. He highlights the benefits of using LiveSwitch for remote management, customer interactions, and maintenance, emphasizing features like live video calls, QR codes, and AI-powered tools. James also plans to purchase his first self-storage facility to prove that these technologies work even in the most tertiary markets.

Connect with James!