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The Overlooked Real Estate Model: Turning Land Into Cash Flow · Brick by Brick - Wealth Building Conversations

• Loren Wernette: You know, some people are gonna mortgage their house to get going. There's gonna be others that do what you do and sell everything in order to get going. But there's a you have to have an underlying belief in what you're doing and in yourself. And it it's a big leap of faith in a lot of cases in order to make sure that happens. chris: Yeah, and I say no guts, no glory. You know, because the bigger the risk, then the the the the sweeter the feeling of like reward, you know, and and some people never taste that. They go to their job, they're nine to five, and they're and they Loren Wernette: Sure. chris: but they want the bigger life, but they want the client, they they want the view, but they don't want the client. Well, it comes with sacrifice and it comes with risk, you know, and and but Loren Wernette: Sure. chris: That's why you ideally follow a mentor or someone to go up the mountain. So it's just not as painful. I didn't have a how to do a storage yard. I was like, I'll be I'll I'll get the bruises along the way. Loren Wernette: Welcome to another episode of Brick by Brick. Today we have with us Chris Long. Chris purchased his family business from his grandfather. Business started in 1950 and is currently the founder and CEO of Long Yard Storage. Chris joins us from Tampa, Florida, as he is a Canadian originally, but is expanding into the US market. So Chris, thanks for joining us today. chris: Excited to be here and love the name of the podcast, Brick by Brick. I'm looking forward to getting into this. Loren Wernette: I I'm excited to have you. We occasionally have some Canadians on, but I think you're our first Canadian that's decided to move down from Canada down to Florida, which is a a bold choice. So chris: Yes, a very bold good choice. Bold choice, but yes. Loren Wernette: Good good good year to do it since there hasn't been very much hurricane activity yet. chris: It's been about five years now, so I've I've and it it's funny 'cause Tampa was like the safe spot and two hurricanes happened to hit Tampa at the same time. And I was like, I thought I'd dodge those. I guess not. Loren Wernette: Yeah. So all right. Well, I I'm excited to talk to you. I think it's interesting your business model, and kind of what you guys do and and we'll get into that. But do you want to give us just a brief overview of what long yard storage is and does? and then we'll kind of go in from there. chris: Yeah, great question. So what long yard storage is basically like I call the cash flow fast pass for financial freedom. It's basically like self-storage on steroids. So you take dirt, you put up fencing, and you rent it out. And it comes with all the bells and whistles of self-storage, except it's more cost effective and fast. And these things spit cash. And I was a contractor who needed the space. So I actually built the business around guys like me. And because I had enough skill in real estate, I was like, hmm. And I connected the dots and started building this out. And that's long yards in a nutshell. Loren Wernette: So when you're talking about that, give me an idea of what a site looks like. Cause I think we all know what self-storage looks like, big metal buildings with garage doors, right? But this is different. chris: Yeah, yeah, exactly. So picture self storage, right? You go up to the keypad, put your unit code in, open the gate, go to your unit. The only difference is instead of a roof, if it's a fenced in yard and there's plenty of them. That's self storage yards. And I just published the book, self storage yards. And it's basically teaching people how to get the first storage yard and and that's it. That's the model. You just need lots of land. You need a bigger property. Loren Wernette: And so th the customers are contractors basically. You know, you you're trying to you got, I don't know, some some contracting company, you've got a bunch of equipment and you don't wanna store it at your house. And so you're you're storing it on your site. chris: Pretty I call it storage for the big stuff. So like everyone, you know, think about the audience of everyone, mom, pop, whoever needs a place to put boxes. Well, there's a lot of businesses that need places to put big stuff. And that's when a storage yard is needed. And there's a big gap in the marketplace because you basically have to rent like one to three acres for three to five years, which is your alternative, or you go on Craigslist or Facebook Marketplace and you get, you know, Bob's farmland with no security. There ain't nothing in the middle. That's The hole in the market. And that's what we're solving. And that's small, medium, large size yards, month to month, 24-hour access, just like self-storage, but for contractors. Loren Wernette: Got it. So you started out as a a licensed carpenter. You took over your family construction company that started back in the nineteen fifties, ran that for eight years, and then you went suit through some insolvency on a commercial property. Can you kind of start there on how this matured from that starting spot? chris: Yeah, no, great question. So basically, like at 14 years old, I was working with my grandfather, not by choice. It was like you're coming in the work, come to work with me and you're you're doing furnaces in AC. And I like, Well, it is what it is. So one of the first jobs I did was crawling in a dark basement in the middle of winter, cobwebs, crawl space, moving heavy ductwork. And I just remember asking myself, like, why would anyone in life choose to do this? Like I was 14 and you know, I was like, this doesn't make sense. And then the power comes on. Boom. You light the switch, the heat goes on, the family upstairs is happy. And you're like, now I know why people do this. So at a young age, it was kind of like impact and building, and it was just like engraved. And my grandfather, when he was just older, he had Conrad heating. And when I I was always like I got into construction, became, you know, just did what I could to make money and make ends meet. And you just when I decide to I finally got licensed as a carpenter. I didn't go into HVAC because I love construction, but I hated work with metal. And then got license, and then I took over the name. And it was Conrad. It was no tools, it was nothing else. It was just the name that I took over. And that was in my mid-20s. And then I started buying houses, turning them in duplexes, and quickly realized I love real estate, but hate tenants and residential because if they don't pay, especially in Canada, they control the shots. So I was like, I want to play this game a little different. And then it kind of merged at once with basically, you know. Wanting to have more cash flow, but have wanting to have more control. And then with the business side, I needed I had like four trailers, I had containers and I didn't have a place to store it. I was like, how come storage chairs don't exist? So I built it. And while that was all ramping up with the construction company, like I was I had 14 employees, we're doing 10 jobs, and then I did a large commercial job for a big box store. And it's really simple. When you sign off with the big box store, you're supposed to get paid. I got to sign off and I didn't get paid. And they're like, we can't pay you because the tenant didn't pay us. I'm like, that's not my problem. I work for you, not the tenant, not the client. And they're like, well, we can't pay you. So I had to do the only thing I could do, which was lean them. And Conrad versus a big box store, Conrad lost. But I'd still consider it a win because I am who I am. I'm where I am now because of all that. And now I'm just expanding my model inter internationally. So there's a world where I could have stayed on that path and just kept going in Ottawa and expanding my construction company. But I had a much bigger vision and it led me perfectly to where I am right now. Loren Wernette: Got it. So so talk me about the insolvency a little bit, you know, the numbers, what it actually took from you and what you got from it besides just, you know, idea of of how to move forward. chris: Yeah, so it's funny, I did a video during the insolvency because it was like it was almost like an identity shift because for the first six months of like when everything was like you cannot pay for gas and stuff anymore, it was like okay, this and I was paying everybody else myself. Fourteen employees, my payroll was just more than what was coming in. And then at one point it was just me and my daughter, and I'm like, I just I can't do this anymore. So it was there was like an identity shift where I was like, Okay, finally I need to like accept this. And and that took a while. And I remember doing a video. I'm like, Okay, in three years, I'm gonna be financially free. And I'm going to be, you know, have more income than expenses. And I did it when I is financially free. So within the three years of that moment of kind of like accepting it. So it was kind of a weird shift. But what I lost was like, you know, it in Canada, so there's two levels. When you s just to define insolvency, there's like full bankruptcy and there's consumer proposal. So for me in Canada, it was a consumer proposal, which basically means you settle for like anywhere from 10 to 30 cents on the dollar. You consolidate into like an interest-only payment plan for five years. With that, you kind of get to keep everything. So I had multiple, I had four pieces of real estate, but because they were all relatively new, I didn't have much equity in them all at that time because I was just kind of on the come up. And it allowed me to keep a lot of my assets, but I had to pay for the equity that was in it. So it was a little bit of like a formula from the bank side to be like, we're either going to liquidate or we're gonna allow you to keep it. But I basically had to make a payment plan. So I had like $350,000 of debt and because my income was swiped, I also lost a lot of my human capital, my team from like going all in on this commercial project that didn't get paid. So it was just like a storm that like I didn't have the people anymore. I didn't have the jobs like I used to, because I I put so much of my resources into this big job, I burned some of the bridges on like what was tried and true, which was my residential high end projects. So yeah, to answer your question, like I pretty much went back to one person. It was myself. And I kept the name Conrad. So by doing the casualt proposal, I was able to keep the name, which was really important to me. So I put the tool belt back on and I rebuilt it. And in two years, I was making more money than I was with, you know, having 14 employees with two employees just because of everything I learned and to really be really focused and say no a lot. So there's a lot of lessons and tons of lessons that came out of that. And to answer your question of, you know, what I lost is I, you know, I had to set myself back to ground zero. What I learned was to focus the right energy at the right place and also the biggest lesson, which I think should be a big takeaway, is learn to say no fast. Right? That was kind of one of the biggest lessons I learned from all the Loren Wernette: Yeah, got it. And so d those four properties you had to keep, were any of those did any of those turn into what became your first yard with long yard, or was long yard still not something that was on your radar? chris: So no, Long Airs was not even like fully on the radar. It was really early. And my brother and I both own the property and we're kind of like debating what do we do. And it was two duplexes. Cause when I got into real estate, I bought my first house, turned to duplex. I'm like, I like this. Did it again, second house turned to duplex. And then I bought like, you know, home out in the country with my family. And then I bought that commercial property. And we were gonna do like warehousing or flex. And we were kind of like going to the drawing board with what the best thing, what to do, because we just got it, we felt like a great deal. but storage yards were kind of like a planted seed out of the many options, but it wasn't like the thing back then. And it's funny because I actually was able to sell those two duplexes to help get me just to put the down payment and kind of like incubate. And then an investor came in because I tried pitching it to investors, but they're all like, You're crazy. I don't know what you're trying to do. I'm like, This is like simple. I need a storage yard. So like I had to like self-fund the buildo. And even like there was barely much. equity in it. So he was just kind of making a scrape by and making it Loren Wernette: Got it. And so so the one commercial property you had turned into your first yard. And so you purchased that somewhere in t October of twenty nineteen or sorry, October of seventeen. And then you got long air started in twenty nineteen. So what happened during those two years? It was there a lot of permits that needed to be had, or what was the what was the steps to get from twenty seventeen to twenty nineteen? chris: Yeah, so that was kind of like the transition phase. So I bought that commercial property in two thousand seventeen in the summer. And then I sat on it because I first of all I didn't have the money to do anything. I was going through all this life change. So like and then 2018, I think, is when I finally pulled the trigger and I just made the commitment because my brother and I were kind of at a debate. We're like, you know, what do we do? What can we do? What can we afford? And I'm like So I was like, we had to also figure that out internally between my brother and I. And and that's when I started I just made the mental commitment. I'm like, I don't know how I'm going to afford this, but I will just figure out as I go. And that was basically how the first location started. I had to do three things at once. I had to pay off my brother. I had to put all my money into this to prove concept. And I had to get a mortgage. And then the seller take Loren Wernette: Mm-hmm. chris: back owned it. Like it was a seller take back, right? So the previous owner owned the property and I was on the clock. So I sold everything I had after losing it all, went all in on this property. With a ticking Loren Wernette: Hm. chris: time bomb that basically said, if I didn't get a mortgage or was able to take him out, everything I put into this guy's property, he could just handle the keys, you know, dirt keys, and say, Thanks very much. Have a good day. So 2017, 2019 was like that transition. 2019 was the grand opening. And it was the same time that I got an investor to come in and take out the seller take back. Otherwise, I would have had a grand opening and then someone else would have got my property, all because Loren Wernette: Right. chris: the nature of the beast. So it was a lot of things happening and that was kind of like a storming phase of the first location trying to make it happen with like limited resources and not knowing anything about the entire business model itself. Loren Wernette: It's it's such a I wouldn't say common story, but for people in real estate that are just getting started, like you you can't go into it expecting not to have to take some risk, right? You know, some people are gonna mortgage their house to get going. There's gonna be others that do what you do and sell everything in order to get going. But there's a you have to have an underlying belief in what you're doing and in yourself. And it it's a big leap of faith in a lot of cases in order to make sure that happens. chris: Yeah, and I say no guts, no glory. You know, because the bigger the risk, then the the the the sweeter the feeling of like reward, you know, and and some people never taste that. They go to their job, they're nine to five, and they're and they Loren Wernette: Sure. chris: but they want the bigger life, but they want the client, they they want the view, but they don't want the client. Well, it comes with sacrifice and it comes with risk, you know, and and but Loren Wernette: Sure. chris: That's why you ideally follow a mentor or someone to go up the mountain. So it's just not as painful. I didn't have a how to do a storage yard. I was like, I'll be I'll I'll get the bruises along the way. Loren Wernette: Right. But you had at least were in industry that knew what a storage yard was. Like I would expect a lot of people that are listening to this have never even heard of a storage yard. They think of st self storage as for personal belongings and grandma's you know, grandma's old plates, not for construction material. chris: Yeah, and I was fortunate enough. I did have a coach, Bruce Firestone. We're still great friends to this day. And he kinda gave me the he planted the original seed. He's like, This is like something great. And I was like, All right, you know, I'll I'll put it with the other options of the garden of seeds. but yeah, he he was the original and gave me the idea. Then he sold it to me with the most simplicity. It's like and that's why I say simple cash flow creates freedom. Because there's no big capex and there's no huge taxes. Like, you know, when you think about types of paths for investment in real estate, you wanna think of like what's the easiest path to get cash flow and to reduce all the unknown. With this, the unknown Loren Wernette: Mm-hmm. chris: is very minimal. And that's what made me so attracted to it. Loren Wernette: Yeah, makes sense. So walk me through that first yard, land cost, build cost, you know, rents, you know, what what are the numbers did the numbers look like or do the numbers look like on that that deal that you bet everything on? chris: Yeah, so we purchased it for $470 in 2017. Sat on it for about two years. I had to buy my brother out, but let's call it $470 purchase price. Okay, and then I had to come up with down payment kind of like bootstrap to get it going. And then it was around seven hundred thousand. Now I was scrappy. When I say I was scrappy, I was pulling my dunk trailer full of stone and the wheels were like two inches. I probably was probably borderline illegal. And I was doing anything I could to get it going. So my build costs for the first location are almost like you can't do it. I got used fencing. I do the fencing myself on the weekends and evenings. So I built this thing up for $700,000. Right, and that's 10 acres, fence, stone, gravel, everything else. I was as resourceful as humanly possible. And then so I was in it like 1.1. All right. And then it got appraised at 3.6. Now it was appraised at like a third done. So right now, using the same like NOI formula, it's like 5.5 million, and it's bringing in just shy of half million dollars a year. So I mean this thing pumps cash, but To give you the idea of the purchase price, the income, like what it costs to build out, and the income, I mean, I'm netting around $25,000 a month from that one location. Loren Wernette: Netting, got it. And it what's the how does the occupancy stay on something like that? Are those long term leases with these contractors? is there a lot of turnover? and how much I know you say there's no capex because it's just gravel and and fences, but what kind of maintenance or systems costs do you have on a regular basis? chris: Yeah, so the occupancy it's like It kind of stays within self-storage because if you're 100% your price too low, right? So like Loren Wernette: Mm-hmm. chris: you want to you want to price it till you're at around 10% occupancy roughly. So it is a bit of a numbers game and understanding what you can and can't charge. And there's a really big sales process and there's a really big education process. So our business and clientele are SMB, small, medium-sized businesses. They're some of the hardest to target. Now they are sticky, you know, but with time, we've also learned to like what tenants to avoid because You can get a lot of work from like the worst tenants and they just make your life miserable. The good news is like we, you know, with commercial real estate, like we it's not like a residential tenant, like we call the shots more, but they can still give you a hard time if they want to. So, you know, I don't it everyone's like, this is a set it and forget it. No, this is this is operationally layered business model and it's it, you know, has low capex and low expenses, but it still has like a good sales process and there are a lot of operations involved. But talking about the capex and repairs. I mean. You have a tenant that might back up into a gate or a fence. You you got it on camera, they're paying for it and comes out of their deposit. Right? You got potholes or like seasonal snow removal and stuff you gotta do. Just think of it like, you know, an outside storage for boat and RV or regular outside storage, and you just gotta maintain. You gotta cut the grass and make it look good and work good. And that's it, right? So it's pretty low overhead and low cost and low surprise overall. Loren Wernette: Got it. And so what what has been the feedback from like the where you're getting it zoned? Like are the municipalities that you're working with, have they been fairly easy to work with, or are they, we'd rather see something else here? And then I I want to also ask you a question about why it's so sticky with your customer. chris: Yeah, okay. So the first thing is municipality. yeah, they're kind of like gods in our world. So if I were to put a funnel, it would be like type of zoning, and then it would go local municipality, and then it goes building code requirements, and then it goes to type the property, right? And then there's certain language Loren Wernette: Mm-hmm. chris: that we target. So it's funny with municipalities. Everyone wants stuff built for them, but they don't want to see anyone doing the building, right? So it's like, I just want to see the pretty lady in the nice dress, but I don't want, you know. Don't give me the baggage. Well, sorry guys, but the contractors that build our infrastructure kind of need space. And you try to tell them that and they don't really care. So it doesn't matter what narrative or story you come across. Like the zoning is the number one deal killer. And we have a killbox. So yeah, it is almost like 80% of our business is just avoiding stuff that the pain we've already gone through. And it's not like a one size fits all. There's like multiple layers of what that looks like based on the area and the zoning and just the language of the the zoning code. So we have to be extremely strict with all of that. And and sorry, your your second question after that was? Loren Wernette: So the stickiness. So I want to come back to the zoning, but I want to talk about stickiness. What makes this so sticky? Cause if I think about like who who I would think would be this, you got a guy with you know, like a small electrical company, right? You got a couple trucks and some things. And what makes normal self-storage sticky is nobody wants to move their crap out of a storage unit. This, all their stuff's mostly on wheels and they can just leave at any time, right? chris: Yeah, but the good news is they don't have many alternatives. That's the problem in the marketplace. So sticky, it's like they're there, they're set up. I got people kind of like building little domes and setting up their yard as if it's you know, their home away from home. So these guys that they set up and it's just in a lot of cases, it's set it and forget it for them and just pay and let it do its thing. So yeah, most of our clients, like I have some clients have been there since I opened October first, twenty nineteen, like the been it's been five seven years and there's every month comes in so I mean once they're set up it's it's part of their expenses. Loren Wernette: Got it. Okay. That that makes sense. I just I'm imagining like I've just put my truck there for a couple of months and then I don't need it and so then I pull out and you get more churn, but it doesn't sound like that's the case. chris: No, and it's weird because like boat and RV people like that, but it's very seasonal, right? You have like an Loren Wernette: Yeah. chris: influx of clients, especially with like migrations, people moving around. But here, these are local businesses that are usually brick and mortar or logistic companies, and they need this land space. And they're the kind of the pain point is they're trying, you know, they're the options are get a bigger commercial space with more land, but The solution that they need is not necessarily that, and that's the only thing on the market where we are kind of that middle ground. So it's it's for like Loren Wernette: Mm-hmm. chris: companies on the up, coming up, it's for companies downsizing, companies moving. And like, you know, if you just think about a small, medium-sized, large yard, there is a lot of use cases for businesses that are set up for a long time that they're gonna need that space. Loren Wernette: Yeah, I would imagine that it's also a lot more scalable than, you know, I'm gonna go buy a chunk of ground, right? And then all of a sudden my business explodes and now I don't ha no longer have the space. If they're small and they wanna grow, they can start with you and then scale up to different size. I mean, I do you have different size lots based on on price probably? chris: Yeah, that's the thing. And it we see that life cycle. So we see one guy get a small yard and then his business grows, he gets a medium or two mediums, and he's on to a large. And we're just happy to see that. And that that's that's a very common, you know, theme in in the long yards ecosystem. So it it's cool seeing that evolution. And then it it grows with them. You know, they don't have this massive pain point. It's like literally in one weekend they move all their stuff, they have a difference in payment, it's month to month. The process is a phone call. It's not complicated brokers, lawyers, long-term. negotiating process, it's like a few clicks and a call and we have the solution. And that's one of the biggest things that our clients love. Loren Wernette: Yeah, great. All right, cool. All right, let's go. I want to go back to the zoning thing because I think this is a piece that's very critical. So you guys have a formula for you know whether a piece is gonna work on on zoning or not. Walk me through some of the the variables in that formula. And the one that comes to my mind that I would assume is how much of this 10 acres that I'm buying can I actually put something on? And how do you navigate that with the different municipalities that you're dealing with? chris: So it's a simple formula. Like whenever I hire somebody or I look at a piece of land, I try to look at what is the one number that is the most important and how I build out around that and use it as a score system. So for land, it's what is the net rentable square foot? And then it's either purchase price or lease price. Every property, when I'm looking at a new city, it comes down to that formula. What is the price to purchase or to lease per square foot first two net rentable square footage? And we've built those two tools internally. You might get a property that, you know, is a million dollars and for 10 acres, but you only have a half half an acre that's actually usable because of wetlands and everything else, versus the other side of the city where it's complete opposite. So on your surface level, you look at it like a formula and it's not and you need to have the nuances and the checklist to go through all those, like as a traditional due diligence process, like a house. You're like, okay, is the furnace good? Is the roof good? Okay, well, here's the actual bottom line, I'm willing to pay. It's the same thing for commercial land. You need to understand the setbacks, species of trees, protected animal species, you know, anything, entitlements, just all sorts of stuff that narrow it down to the assumed net rentable square footage. And you got roads and everything else you got to factor in. So when we're looking at a property, we use that as our number, like our North Star. Then everything else else comes underneath that. So we're looking and then we use that for multiple properties. And then it's a very simple way to review it to be like, This is the one and it's just non emotional, it's just numbers driven. Loren Wernette: So how when you're looking at that that number of how many square feet or whatever, how much money are you putting into due diligence prior to purchasing to assure that that number, that assumption you're making is accurate? And have you ever run into a scenario where, hey, I think it's gonna be, you know, forty five percent buildable or rentable or whatever, and then you get it and then the municipality's like, Well, actually there's other things and now it's like thirty two percent. chris: Yeah, we've gone through 10 of those in the last like two years of the municipality at the first is like, great, yeah, we are going to, you know, make your life easy, basically. And then you get in the bed with them and you start going back and forth, and the engineers are talking, and all of a sudden they want you to put concrete down on 10 acres, widen the road, and then pay for their family's backyard pool. Like, seriously, it gets that ridiculous. So, you know, we've had to focus so much on just like avoiding a lot of that. And it's successful for some people that are just more local that have their, you know, communities a little closer. But I mean, our first project in Central Florida, you know, we had an easement issue. So like we we had to pass a biking trail. And there were six different easements on it. One of them that's 10 inches wide, that's back from the 60s. We did not have previous approval. Therefore, we could not legally Get onto our own property because of this granted permission that we can no longer get. And it didn't hit the grandfather clause because of just Florida law. So then we had to, it triggered site plan approval. We had to widen the road, cut a curb cut, put a second entrance, add a water detention, and then out of the year and a few hundred thousand dollars. All because, and you know what? The worst part is it's the title insurance didn't catch it with the cross-reference of the with the survey. And like, who would have thought that? Right. So like our kill list and our roadmap has gotten like so strenuous because you look at a property and it looks good on the surface, but this is the dirt game. There's a lot of stuff you don't know. And it that list goes long, right? So we've had to have a very strenuous purpose because process because you have one person that can put a lot of their life savings to one deal, and if they miss one step, they can lose everything. Right? You now bought a property you can't even use all over something as silly as what I just described. So yeah, our process has gotten really strict for that reason. Loren Wernette: Now I it as someone that deals with land development for vertical construction, same same story, right? You look at a piece of ground, it looks fantastic. You even talk to somebody at the city, they say you're good to go. And then I don't know how many times I've heard this story of, so and so bought that land. And then we found out after we purchased it that the city, somebody else you didn't talk to, there was actually a 10 year plan to put a s a highway thro right through the property, and now they can't build on it and they just drop half a million dollars on it, right? And and so that is the main reason why like on our lending side and a lot of other lenders I know they don't deal with land because there's so many in inconsistencies and so many like tripwires in that process that you've really got to have your finger on the pulse of and know what you're doing so you don't get caught. chris: Yeah, it it's wild. And that list just kind of expands with time because there's there's always seems to be something new every few months or like a new planning, you know, staff that comes in and wants to flex and just like it's like almost a casino with development. You don't know what you're gonna get. So we try to avoid that game, truthfully, and we just do that through acquisition and being a having a sniper approach with what we're looking for. Loren Wernette: Sure. Well, it's gotta be challenging too, because you guys are expanding, you know, globally, or not globally, but nationally, you know, in the United States. And even in like where I live, every little municipality has different UDO rules. and so as y a company like you that's expanding out, it's gotta be challenging to just try to figure out what all those are and all the little different markets you're trying to move to. chris: a hundred percent. And it just comes down to a checklist and being very thorough with it. But it it's the same checklist, you know, that we're we're hitting everywhere. But for sure. You wanna there there's a few layers you gotta go deeper before you kind of like decide to lock up a property. And don't forget, it's it's important that I wanna mention for any listeners too, is that like we don't have to buy the real estate. We have partners leasing the real estate. So think of like a laundromat, right? Everyone loves the laundromat Loren Wernette: Mm-hmm. chris: business, but you're not buying the laundromat retail. So us We partner with landowners or we do the lease model and then we bring the model and you know the long errors and then boom, we're we're cash flowing like really strong with a low build out and fast. So, you know, we can avoid a lot of these tripwires and still bring the solution to the marketplace without having to go through all of that. So that's one thing we're working on as well. Loren Wernette: So let that's a good transition. Let's talk let's talk about that because I think you know sometimes we talk, I hear you say franchise, other times you we've we've mentioned joint venture. you know, I think your website talks about you know different setup fees and then you know, six percent ad fee and and numbers for what you're gonna make. Talk me through what the model actually looks like. If let's say I'm someone in Georgia or whatever area you want to say, right? I've got 10 acres. and I want to do this or I wanna sell it to you. How does that work? What does that look like? what does that relationship look like long term? chris: Right, so what we've seen in the marketplace, and it it's kind of what we're basing our foundation on, is basically we do a revenue share. So it's really simple. We come, if you have the land, then we bring them business model and we do a profit share. And if you want land, we can help you find the land and do a profit share. So it's 80-20. We take 20% off the top, you take 80%, we run the business, we do the call center, all the virtual support, sales, customer service, marketing, checklist. You guys just make sure the grass is cut and the place looks good. That's our model. Loren Wernette: Got it. So I've got a ten acre chunk of ground that I am own free and clear. I bring it to you and basically I sit back and make sure the lawn gets mowed and the potholes get filled and everything else is taken care of. chris: You got it. And because we're approved by SBA, like long airs is on the SBA directory, you have to have some involvement to get the SBA loan. So we keep it like that. Loren Wernette: Mm-hmm. chris: And the tenants have to be month to month. So we design it in a way that fits the financing model, which just allows you to, you know, use a high leverage tool to basically make this happen. So and that's that's we keep it simple. That's what we're seeing like with marketplaces and everything else. But you know, we want to be there 10 years and hopefully you do too, because once you get the cash flow, you like it coming in. Loren Wernette: Is that what the terms on the partnership are? Is is a ten year term? And what does that look like at the end of ten years if say you guys want to part ways? chris: Yeah, so like ideally it's not ten years. You're like, thanks, Chris. I want to sell it and I want nothing to do with you anymore. So we we do want a non compete and we do want it to roll over ideally. so yeah, I mean the game plan is to to keep it going. And, you know, if there's a transition you want to sell or something, that's a conversation stupid is gonna come knocking and we're okay with that conversation. Right? People might want to buy it or go vertical. So you know, we are flexible with that being said, but we wanna make sure like a traditional franchise, it is a ten year minimum. Loren Wernette: Sure. And for where you're trying to find, like, talk to me about what a what an area looks like that one of these would sit in. Cause I would assume that you're probably not having one of these sit next to a municipal park or next to a, you know, million dollar neighborhood. And so let's say there's a piece of ground on the market. Who are the other people that are trying to buy that land and what are they using it for? chris: That's a really good question. So right now, you know, if you're in what's called the iOS space, which is industrial outside storage, you know, you're you're gonna get this right away because they're bringing in like hundred hundreds of like billions of dollars. So we're talking like JP Morgan, like big banks, they're coming in and they're buying this because you know, they're chasing this type of land because it's scarce, scarcity creates value. And they're also have a different strategy where they're just renting it to a single tenant, like a United rental. or a large trucking logistics company and they're doing a large, you know, three, five, ten year triple net lease. And and they're just doing roll-ups and they're scooping up all these mom and pops. Where we fit in is the same type of land, but just more differently shaped or in different areas. Right. So we so we don't have to necessarily compete with that buying pool. So You know, because they they have to have a different layout for trucks and for their companies. And traditionally, too, it has a warehouse or some sort of structure on it with land on the side. We could just be pure land. So, you know, that's kind of like our biggest shark in the pool that we're competing with right now for the type of land. And then, of course, you have your operators. Your operators need this as well. You got you know, United rentals, they're buying in some cases. You have waste management, you have a lot of companies and and the operators can pay the most compared to investors and to having it work on. number side because they just literally need it for their company and that they might take a loss on one out of 30 to make it work to take that territory. So it's got you got the operators, you have the iOS capital, and then you have the pool of what we're doing. But we're unique because we could take pretty messed up land and make it work. And a lot of people can't do that. Or they're not even interested in it. Loren Wernette: Yeah. I mean I I think one of the plays I would think and it depends in the neighborhood is, you know, can do I see this area or this land as in the path of progress and can I sit on it making cash flow for fifteen years and then sell it to a developer to go vertical or something if if the area is correct or if it's, you know, you think you could get it rezoned. But I mean I know that's the play that a lot of self storage unit owners have as well. chris: Well, yeah, like we are a land bank play. But if you were to compare a land bank until like and put the infrastructure costs side by side, you would immediately look at the numbers of us and be like, that's juicy. Our build out time is first of all like absolute almost. And the costs Loren Wernette: Yeah. chris: are like, you know, a twentieth or fiftieth in a lot of cases of other brick and motor. But if you at like a five, ten year horizon, the return on investment far exceeds on self-storage yards the self-storage, not to mention the develop you know, you you're tearing it all down. So like For us, it it's interesting too, because you have different markets that are shifting. No and you know, like we have a lot of people that will travel far to come to us. I will say that as well. So like you know you don't have to be like, will this exact area work? I got people driving 40 minutes to my location because they don't have a solution. So you don't have to be like hyper focused. And also there's only so many opportunities to begin with in your area in a lot of cases. So you can't it's not like a residential house where you can go in 15 different communities and look at five different offers. No, you only have so many of these pockets in your neighborhood or your city that actually are an opportunity. And when an opportunity comes, as you know, you need to be aggressive and move on it. So it's not about being perfect, it's about being decisive and taking action. Loren Wernette: Got it. Yeah, a hundred percent agree with decisive and taking action. So I think it's always just interesting to think about what what this looks like in five, ten, twenty years, right? 'Cause ten years seems like a long time until you look back ten years ago and you're like, that wasn't very long ago. chris: Yeah, that's how I feel when I look at my kids, man. It's like boom. Loren Wernette: Yeah, yeah, a hundred percent. So all right. so I think that all makes a ton of sense. I did want to ask you a couple questions on numbers, and and if you can't talk about it, that that's fine. So let's say someone has a buying a chunk of round, let's just say 10 acres for a million dollars, right? They come to you and say, Hey, let's partner on this. What does build out cost look like for you? And then I know you've mentioned, you know, half million dollars of rev or you know, per year. What does that actually look like in gross operating dollars that you're taking I assume that's what you're taking the twenty percent? chris: Yeah, so it look, you can get gross operating income of 10 cents a square foot, and you can get gross operating income of a a dollar a square foot. Your market in between varies so much, right? I will say in Jacksonville, we're getting around 30 cents a square foot, right? And for anyone listening that loves iOS, we get 2.6 times more income with more tenants. We're more diversified and we have less risk there. If if anyone wants to learn about my business, that just summarized the advantage. So You know, we're getting around, I'll tell you $25 to $30,000 a month for three acres of a piece of dirt. Like that that's pretty aggressive. And I I could share that because those are actual numbers coming out of a location. So, but it really varies. Now let's go to the cost. All right, million dollars for 10 acres. First of all, where's that? Because that's a great price based on what I'm seeing. But I know you're saying easy numbers, right? Ten acres. Let's call Loren Wernette: Easy numbers, yeah, sure. chris: it a forest. Okay, so anyone in my Loren Wernette: Sure. chris: world, like I have I built a tool. Like, by the way, I'm a I was a carpenter, so I built these tools to make it like stupid simple. On one side, you have what's called tier four. Tier four is like a forest, you know, the worst case scenario. And then you have tier one, which is like the beautiful canvas. It's graveled, it's ready to go. And then in between there, you have tier three, tier two, and each of them has an assumed net rentable square footage and income based on the market. So let's take tier four, a forest, 10 acres, million dollars. You have two build-out costs. You have the dirt and everything below the dirt. Let's say the canvas is not ready, right? That could be anywhere from $2 to $5 a square foot, right? It could be $250,000 an acre just in civil work. I mean, that's on the higher end, but you could be easily $2.5 million just putting in gravel, your sewer infrastructure, fire extinguishers. You might have to put some asphalt. That and you could be on the lower end of a few hundred thousand dollars, depending on the city. And that's why that funnel going back to the zoning, local building and code requirements, building permits, land is so critical. Because just like that income, your price for build out could vary so much. Even if the quarry where you get your stone is on the other side of the city, you know, that just killed the deal because trucking costs can 3x your build out costs, right? So yeah. You that's one part and then the long yards build out's the easiest part. I mean, you're usually a buck to a buck fifty, depending on the layout, how many yards, the security, but we like to cookie cutter that. that part is pretty predictable. So you can call anywhere from forty to sixty thousand dollars an acre for the build out. And and here's the thing, with with long yards with SBA on a lease, we could do a build out for like two hundred and fifty grand, three hundred thousand, and that's twenty to thirty thousand dollars you need to get a loan from the SBA. This is where like a lot of WT workers can come into the space and really clean house because if just that example I described where it's bringing in over, you know, the potential of over twenty five grand a month and you're in it for twenty five or thirty grand, that's a nice return, right? And that's what's happening right now. Loren Wernette: Yeah, no, I I'm I I get that from the owner side, the landowner side. I was thinking about it from your side of, you know, what the returns are. You know, if you're taking twenty percent of gross and you've got to put two and a half million dollars in, you know, I think you told me six thousand dollars a month ish return, well thirty thousand a month. I did the twenty percent, six thousand. Times that by three for ten acres, you know, like a nine percent return or something on an annual on an annual base, which is not not terrible, right? chris: Well we're seeing much higher. So like it depends on the income. So it really depends on the income because yeah, like it's over, yeah. I I yeah, it's it's still very strong. Like very, very because again, even if it's comparing it to iOS, which everyone loves iOS, we make two point six times more. If we take twenty percent, you're still two Xing as an average, like an iOS rate, with us having to deal with all the stuff, having more tenants, be more diversified. So in that particular case, if you're running the numbers as a scenario of your rental rate if it it jumps five percent five cents, that's a huge difference. So it really, really Loren Wernette: Sure. chris: factors up the the income per square foot. Loren Wernette: So one of the things I know that normal self-storage does is there's like an introductory rate of hey, come in for this price, and then they stair step you up as as you're there longer because they know you're stickier. Is that kind of something that this space does, or because it's commercial, is it more, you know, flat rated or hey, this is a one year contract that's gonna stay there and then there'll maybe an increase later? Or how does that that chris: Yeah, so okay, we we we're we're we're experimenting because we're in different locations and we're trying different things. In one market, we went to the highest that we thought was possible. And then we slowly dropped it and we're like, okay, here it is. Versus other markets, we went a little bit lower and then we kind of stair Loren Wernette: Mm-hmm. chris: step it. So, you know, I hear different strategies and there's different approaches and different masterminds, and it's kind of like what works the best, and because we're so new. And there's such an education and slow sales cycle. Like we have to approach it a little differently. but we so far we've seen good luck with hitting a ceiling and then dropping slowly. And we kind of like that approach, you know. Loren Wernette: Yeah. I mean, you said something earlier that you want to be at that ninety percent occupancy because you don't want to be at a hundred percent means you're underpriced. And so I think that's a really good KPI to you know, from what you said, it sounds like that's a really good KPI to kind of track. But if you've got these long lease windows, you certainly don't want to come in and, you know, give yourself a loss leader and then have to eat that for a year unless you think that the L T V of the customer is like, you timelines like five to ten years, then maybe that makes sense. chris: Yeah, and we do have a a good cost acquisition for lifetime value, but I mean they are sticky, but we're still kinda like there are different clients in different pockets that are stickier than others. So we're still very new, right? Like self-storage Loren Wernette: Mm. chris: is thousands of facilities and master plants and the data Loren Wernette: Sure. chris: is so rich and and there's so much intelligence. Us like, you know, I have sixty-seven clients in one location, thirty-five. If I'm talking about like data and all this stuff, like I'd be shooting out, you know, rainbows because we're still very new. And until I have fifty locations, it's not gonna be It's still kind of, you know, experimental and and a learning process. We are better. We know what to say to the right person and how to get them and the sales process. But yeah, it it's just gonna evolve with time like anything. Loren Wernette: Yeah. It's it's interesting. I would be curious how many of your customers are looking at you thinking, when are you gonna bring me some sort of interior storage space to match this? 'cause I would imagine that they also have things that they wanna keep out of the elements as a kind of add on component. chris: Yeah, well we have boxes. So long yards, we have long boxes and long offices. So you need a Loren Wernette: Got it. chris: long yard, long box, boom, marry the two. All right, let's we're good to go. So yeah, we do we do offer that at our facility. Loren Wernette: Got it. Yeah, so like a shipping container kind of thing dropped on. Perfect. That chris: Pretty much. Yeah. Drop it like it's high. Loren Wernette: that's a good business too. That's a real good business. So all chris: Yeah. Loren Wernette: right. so I know we're we're getting kind of close to where we need to wrap up time-wise here. one real quick, I wanted to ask you, you had a story about a brush fire and and neighbors cars that I wanted you to go into before we wrap up. chris: Yeah, so me and a guy, we I hired a guy and we're we're having brush fires. So during the equipment you're you're you're pushing trees into circles and you're slowly burning them. And so I'm watching it all day and then I'm like, I'm gonna go home for dinner, right? And I my neighbors know what I'm doing, so I'm excited about what I'm building. And so anyways, I'm eating dinner with the family and then boom, my phone pings and I look at it and my neighbor texts me. There's a local Facebook group, Greeley, smoke coming up. He's like, Is that you? And like boom boom boom. I'm like, Is that me? So I I drive back to the site. Sure enough, the guy I hired in charge, he had everything he needed. The fire caught the grass, went to my neighbor's property, started blowing up the cars. Loren Wernette: jeez. chris: And and so I get there, there's two fire trucks, about twenty people, I got drones flying over me, my heart's about to like sink. And yeah, I felt like a celebrity for a day, and the fire chief Pulls me in the truck and then and then here's the thing, you're supposed to have equipment, right? Like beside you, and Loren Wernette: Mm-hmm. chris: you're supposed to like, because I'm I'm kinda like bootstrapped in this place. And there is one tenant with a with a backhoe in his yard. And the fire chief, because I had to have a backhoe because it was there, he's like, is that your backhoe? And without hesitation, I'm like, yep. And I was like, he's like, okay, jump on it and start putting this fire out. I'm like, man, he called my blood. So Loren Wernette: Mm-hmm. chris: so I call the guy who owns it. I'm like, bro, you need to get here. Right now. He was there in 25 minutes. I don't know what how the stars were aligned. Jumps on the backhoe, Loren Wernette: Mm. chris: puts the fire out, and then by heaven's luck, I I spent $14 on a fire permit that morning. So I had my permit number, and the fire chief's like, Okay, you're good, good to go. And the poor neighbor, he was actually in trouble because he was stacking his cars. And this is, by the way, a scrapyard, it's not like a Ford dealership, right? So he had like four Loren Wernette: Right. chris: star cars stacked and And those started going off, but because he had them stacked, he legally could not do that. So it was kind of like shitlock, you know, it was like 800 bucks. And I just like, look, I'll pay you some money for scrap, you know? And he's like, No, no, I want Loren Wernette: Mm. chris: 20 grand. And I just ignored him, never heard from him again. But I was like, I'm not paying you for that because I know what they're worth. Anyway, so yeah, that that that could have been the end of the be that could have been the beginning of the end. Loren Wernette: But I bet that made your checklist now of things when you're burning brush fires. chris: Yeah, my god, yeah, yeah, yeah. Like I definitely had my my phases. Even once I bought an old skid steer and I was pushing logs towards the fire and I lifted up the bucket and then it started tilting forward and then I was like almost on two tires. I'm like, my god, I can like fall towards the fire and be trapped in the skid steer. I'm like sometimes you're just in go mode and like the hamster's not on the wheel of like danger that can happen. So yeah, I'm I I've lived life on a few risky moments, but th they they keep you living. Loren Wernette: Yeah, if chris: Yeah. Loren Wernette: if if you work for OSHA, just ignore this episode and move on with your life. The chris: Yeah. I will not be your fire chief, okay? Yeah. Loren Wernette: Yeah. yeah, I grew up on a farm. I know I know it all too well. Things that chris: Yeah. Loren Wernette: could have gone bad that you're glad that they didn't, so chris: me too, actually. My grandfather was on a farm, so half my youth was on a farm. So yeah, it's all all dangerous. Tractors and bailing and stuff that could have gone wrong. Loren Wernette: Yep. So all right, Chris. Well, if anybody wants to reach out and learn about you or learn about long yards or they've got land that they want to, you know, explore this opportunity with, or they wanna find land and explore this opportunity with, or whatever other, how will they connect with you? What's the best way chris: Yeah. Loren Wernette: to reach you? chris: So I have an offer. It's called Go Long or Go Home. And what it does is it really teaches people how to get into storage yards and it's not a big commitment. So they they get the game, they get our tools, they get the understanding, they come into the ecosystem. but if you want to learn more, if you have land, go to longyards.com. I do have the domain go long go home. It is being built out right now, so it's all just in transition. But if you wanna reach out, go to longyards.com, fill out a form and and we'll pin you. Loren Wernette: Got it. All right. Yep. So if you're anybody's interested in that, reach out to Chris. Chris, you also I think you have a book that leads into kind of that same funnel, right? Or is that for sale someplace? chris: Ye yeah, it's Sell Storage Yards by Chris Long. that book it's on Amazon now and it's live. So I just launched it not long ago and it's basically teaching you how to get your first storage yard and just learn more about the business and also educates you on how this is a two hundred billion dollar opportunity and no one's really looking at it. So yeah, yeah, you know, if you're listening to this, you're early. Loren Wernette: Awesome. So and I will make sure all that, including your Instagram handle, are in the show notes. So if anybody wants to reach out to you, they can easily find your information. really appreciate your time on the show today. It was really interesting learning about your business and learning about some of the things that are going on. It was not a space that I'm was aware of until today. So I learned something as well. chris: Thanks man, I really appreciate it. Love the name of the podcast, love what you're doing and thanks for sharing the the message. Loren Wernette: Awesome. And to everybody else out there, if you get any value out of this, reach out to Chris. chris: Yeah, yeah. Loren Wernette: and if you know of anybody that might get in value out of this, make sure you share the podcast. That's how we get more listeners. That's how we continue to bring you good guests like Chris. So until next time, that's it for Brick by Brick. chris: Awesome.