How to Successfully Transition from Real Estate to Self-Storage Investing

What if failure in one business is exactly what launches your success in another? 

Scott Meyers sits down with Ramel Newerls, a former residential real estate investor who turned a frustrating eviction moratorium into a self-storage empire. 

From owning 40+ rental units to managing multiple storage facilities, Ramel shares how a single tenant’s need sparked an epiphany that changed his financial trajectory. 

He dives into the exact strategies that got him direct-to-seller deals, SBA financing, and how he’s scaling with confidence. 

This episode is an inspiring blueprint for anyone ready to ditch tenants, toilets, and trash for the clean cash flow of self-storage.

WHAT TO LISTEN FOR

:54 What triggered Ramel’s pivot from residential to self storage?

3:01 How did Ramel get his first deal through consistent follow-up?

7:59 What mindset helped him overcome the fear of transitioning?

14:48 How was the deal structured financially, and what creative tactics did he use?

20:08 Which marketing strategy actually worked to lease up units?

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Chapters

• 0:54 What triggered Ramel’s pivot from residential to self storage?
• 3:00 How did Ramel get his first deal through consistent follow-up?
• 7:59 What mindset helped him overcome the fear of transitioning?
• 14:48 How was the deal structured financially, and what creative tactics did he use?
• 20:08 Which marketing strategy actually worked to lease up units?

Transcript

Announcer (00:03):

This is the Self Storage Podcast with the original Self storage expert, Scott Meyers.

Scott Meyers (00:11):

Hello everyone and welcome back to the Self Storage Podcast. I'm your hostess, Scott Meyers, and today we have a very special guest, Ramel, Newerls Ramel. Welcome to the show.

Ramel Newerls (00:21):

Thanks, Scott. Thanks for having me. I'm really excited to be here and to share this opportunity to talk about the self storage business and all the great things we've been able to accomplish. Thank you.

Scott Meyers (00:29):

Well, Ramel, we've had you on stage. You are no stranger at the Mastermind being able to talk about your story and so long overdue to have you on the podcast to do the same thing. So with that, I'm going to turn it over to you. Give us maybe the 32nd to one minute your origin storage before storage. What were you doing? What triggered you to explore and get into self storage?

Ramel Newerls (00:54):

Yeah, so I've been in real estate for 12 years, but I started out on the residential side, so that was my thing, buying single families and duplexes, fixing and flipping. My very first fix and flip was a brownstone in Brooklyn, New York.

(01:11):

I made a good amount of money at it, and as I started buying more properties in the middle of the pandemic, I had about 40 properties between residents, between single and duplexes. And the pandemic happened, the eviction ban happened. A lot of people lost their jobs. A lot of people wasn't able to pay their rent, and I wasn't able to evict anyone due to monetary reasons. And that's when I started to figure out what else can I get into? And one of my tenants, I was looking to get him out of the unit. I offered him $2,000 cash for keys so I can sell it and start liquidating some of my properties. And he needed me to put his items in the storage unit for 90 days. So we started looking for a storage unit. Everything was sold out, and that's when the light bulb happened. I said, what's going on on this side of the business? And I started YouTube and Googling and I found Scott Meyers and I started to learn about self storage and no tenants, no trash, no toilets, and joined the academy. I learned, implemented the information in the academy and I was able to purchase my very first self storage business, three location portfolio and hit the ground running from there. Never looked back,

Scott Meyers (02:17):

So

Ramel Newerls (02:17):

The last four years. So storage has been my primary focus. I left residential in the dust.

Scott Meyers (02:23):

Yeah, nice, nice. Well, very similar story too. Mine as well. And a lot of folks here that have successfully gotten into self storage as I was starting in other asset classes, typically with the ones with tenants. And then yeah, begin to look into self storage. Either they needed it for themselves or heard about it and then all of a sudden they recognize, Hey, wait a minute, these things are all sold out. The rents keep going up. No tenants no till, no trash, all that. So let's talk about, so fast forward, over the past four years, what would you say has been your single biggest win that you've achieved so far with your first few facilities?

Ramel Newerls (03:01):

It's been a few things. The one thing that I would definitely say is being able to get direct to sellers, just learning those strategies through the academy and the mastermind. And my prior experience in real estate, I built up a pipeline. I started out fixing and flipping wholesaling, so me being able to build great relationships with sellers helped me out. So following up has been a big win for me because my first acquisition was through a follow-up, a seller that I spoke with six months consistently follow up every single month. So that was really, really good. And then also having an opportunity to do some expansion. So now we're looking at this location and we're going to actually expand, add about 60 more units to it, learning about truck parking as well to now implement that. But the biggest thing I would say is just keeping that great relationship with sellers, even when they say no and just not now, and just keeping that consistent follow-up has been a huge win for me in the industry. So thus far,

Scott Meyers (04:02):

Yeah, the fortunes and the follow-up as they say. And we continue after mailers or first contacts even with our brokers working with the sellers on the properties or if we're dealing directly with them ourselves, there's several different touch points that we have throughout, over the course of many times, several years before we purchase a facility from these folks. And it's all about timing and just creating that relationship so that when it is time for them to sell that they contact you. So just I don't think that can ever be underestimated. So let's talk a little bit about what was life like before you got into self storage. You were in the tenant and toilet business and you shared a little bit about it, but what were maybe more of the frustrations or pain points which led you to self storage?

Ramel Newerls (04:48):

That's a great question. So I would say for me, I grew too fast, right? Because I learned strategies on how to leverage hard money, how to raise capital and keep my deal pipeline full, just implementing the strategies of being able to generate leads. So I had a lot of opportunities that came across my desk. And because I also had the capital and the strategies to raise the capital, I purchased so many properties so fast. So that's when I was able to get to a goal of acquiring 40 plus properties, but I did not realize I was missing out on the operational piece. So it's one thing to buy, but then it's another thing to operate. And now having to manage all of these properties and tenants are not being able to pay, or when you do have a turnover, you have to spend seven to $10,000 just to turn over a unit, a new kitchen, a new bathroom, new flooring.

(05:41):

And as I started to look at my bottom line, the math was not making sense. I was actually negative. I was cashflow poor, but equity rich, so that I did not like. And me transitioning to self storage is night and day. So as we are turning over units, we don't have to spend the same 7,000, $10,000 or more to actually get a new tenant in there, a new customer in there. So that's been huge for me and not having to necessarily deal with the eviction process where I know in the residential side, especially during COVID, the courts were closed down. So once the courts actually opened up, it took about six months, 12 months after that going back and forth to court just to get your units open. So that struggle is something I did not want to continue to go with. So being in a self storage business now, it's a much more seamless process. It's still steps in between when tenant don't pay, but it's got to pick your battle. I like the battle and self storage because it keeps more consistency going for me. And now I've just been focused on being able to add more to my portfolio and actually educate more about self storage

(06:55):

Because I've seen self storage facilities growing up and they're being built all over the place, but never thought about being an owner. And now being on that side of it is really powerful. So being able to educate and share more of that information you have, that's pretty much been my focus. And prior to that, as I stated, I thought I was doing really well because I had a lot of properties, but I learned a difference. Cashflow and equity, two different things.

Scott Meyers (07:23):

There's two completely different things. Growth for the sake of growth sake doesn't get you anywhere if you don't have the cashflow that follows it as well. And so like you said, there's certainly challenges in any business, and this is a business, I think many people do look at self storage as being a set it and forget it type of operation, but those are the ones that are treating it like a hobby. And so I'm sure you had some fears, some doubts, some unknowns, and wondering what those blind spots are as you looked at self storage. But how did you mitigate those and how did you weigh that against the potential returns and then decide to move forward?

Ramel Newerls (07:59):

It's in your buy right? So being able to negotiate on the front end is really, really good. So underwriting and understand how to analyze these deals. So for example, the three locations that I initially purchased, the seller here originally wanted $1 million for it, and I was able to negotiate and get it down to $850,000. So I was able to create $150,000 in legroom so that I can utilize two, be able to cover my interest payments as I was growing that facility because it was mismanaged. So just being able to underwrite effectively and have some reserves is important for anybody that's going into any business. But for self storage in particular, being able to account for that is very important. And I think having a marketing game plan as well. So for me, when we acquired those facilities, we did some commo and specials, so we would do 50% off for the first three months, just see how that would work out. First month rent free. We try different things to just raise occupancy as quickly as possible, but also again, having that reserves to make sure that we still can cover those payments as we are getting into full occupancy. So now four years in, this is where I'm starting to see the returns. And there's also a mindset is because you're not going to get the biggest returns right away is being okay with pitting your three year goals, your five year goals, and being okay with that process.

Scott Meyers (09:27):

And it absolutely is a process for me. You're right. And so you touched on the underwriting piece, which is so important, and also having a marketing game plan, two of the things that are very critical and components of our mentoring plans. Tell me why you decided to get educated and come to us to get that help rather than just going alone.

Ramel Newerls (09:47):

I'm a firm believer in mentorship firm, believer in mentorship, and I've invested in mentorships years ago learning about residential. And I realized that it'll cost you either way, it'll cost you if you try to do it on your own. It'll also cost you if you invest in mentorship, but it'd be a lot less when you invest in mentorship. So I've always had the mindset of finding the expert that has done the thing that you're looking to do and invest and then do what they tell you to do consistently. I have that mindset, but what attracted me to you and Self Storage Academy was the consistency. So as I went on to YouTube and I watched the videos, you've been doing this for a very long time versus other people that may teach it don't have a full, I would say track record. So that was very, very attractive to me to see a full track record of helping other people be able to see success in the self storage business. And then I came out to Phoenix for the two day

Scott Meyers (10:43):

In

Ramel Newerls (10:43):

Person event, and that was really the game changer for me because seeing everyone in the room, it's not just about the information, yes, the information is great, but I think the environment is super powerful. Having other people, iron sharpened, iron still sharpened, still just having the right people in the room. And I felt that when I was there. Everybody just really have a desire for everyone to win. So that's why desire to invest and join the academy because again, I know mentorship is powerful, but having the right mentors is also important.

Scott Meyers (11:20):

And I agree. I am so blessed and thankful for the team that I have. And yes, I built it, but boy, a lot of these folks came to me without me doing a lot. I'm just so grateful. And then you and all of our students are the benefactors of, of this incredible team that we're surrounded with in the ecosystem, the community that you just mentioned. So let's talk about that first deal. How did you find it? Tell me how you underwrote it and then what gave you or who gave you the green light to finally go ahead and pull the trigger?

Ramel Newerls (11:55):

Yes. So being that I was already in real estate, I had my lead generation systems already in place. So I would do cold calling, I would do text messaging, blast direct mail, and I invested about two $3,000 a month and just market and generate opportunities. And I would come across motivated sellers. So I would hire a team of cold callers and they would call, and then once they filter out who's actually interested in selling, that's when I'll further that conversation. But this one particular seller for this acquisition, he wasn't interested when we first reached out to him, but we stayed consistent. So it was about six months of staying consistent and reaching out and having a conversation. And finally he just was super blunt and said, Hey, I'll sell it, but give me $1 million. And that's really what we needed because okay, you're letting us know what you're looking for and let's see if we can get you that number.

(12:49):

My goal is to make sure it's a fair deal. So we want to get you that number, but it has to make sense. But as I started underwriting, and this is with the help of the academy, Alex and KE actually helped out when it comes to the underwriting because we had found a lot of holes in the tax returns. So come to find out he was having his daughter manage the facility. As we started to dig through the numbers, we seen that the facility was not bringing in the money that was on the tax returns. It wasn't matching up with the p and l statements, and somehow money was missing. He had to fire some people in his team. But that allowed me to have some leverage to be able to bring the price point down because the numbers that you have on your tax returns and your p and l statements does not match up.

(13:38):

And I was able to bring it down a little bit further and then really being able to position it to where I'll give him some tax, we'll help him with some tax breaks. So we did a portion of it seller financing as well. So seller financing of it was about $25,000. Not much, but it was again helping him get to his number and also making sure that the bank will be to approve this. And that's another thing I would say is leaning on the lenders. So I utilize Live Oak as well. I'm with SBA seven A and them being able to underwrite the deals and tell me, Hey, look, we need to get it to this number. If we can get it to this number, we can make it happen. So having that support from the bank, me communicating with the seller, we was able to get it to the $850,000, so $150,000 down from the asking price. That's how we went about underwriting and utilizing the deal evaluator as well. All of the tools in the academy and in having the support, as I stated earlier, is just super valuable. And after maybe about 45 days of going back and forth through due diligence, we was finally able to agree to that number. SP was able to approve it, and we was able to close.

Scott Meyers (14:48):

So what does the rest of the capital stack look like? Eight 50? Well, you negotiated the purchase price, and so you did an SBA loan. What LTV did they put in place combined with the 25,000 that the seller was going to carry back? Where did the rest of the capital come from? Tell us about the structure, the financial structure.

Ramel Newerls (15:04):

Yeah, so $850,000 purchase price, we did 90% LTV with about $60,000 of working capital. So my total down payment was $95,000. And at that point when I purchased, the interest rate was pretty high, especially on the SBA side, it was a nine and a half percent plus prime. So we were at about maybe 11% at that time, which was pretty high. But it did give us some motivation because if the deal penciled out at that number, when the interest rates actually came down, we would be even more profitable, which now we're in that case. So $95,000 down, I was able to put down cash, and then the $25,000 I did over a 12 month span as a coaching agreement. So he agreed to coach me for 30 days, and then I was able to break up that payment on the side. And it necessarily wasn't, we didn't structure as a seller financing, it was more so a consulting because I'm paying you to coach me essentially, but it's a creative way to just get more money in your pocket, but also ensure that the bank is getting at the number that they're looking to get it at.

(16:17):

That's pretty much what we do. So now we're at the going on three year mark for SBA. So I'm now looking at different ways to maybe refinance or come up with some creative strategies to get out of that loan in particular. But yeah, that's how the capital stack was.

Scott Meyers (16:36):

Did anything surprise you when you drilled down into the due diligence as you begin to pour through the numbers and do the physical inspections?

Ramel Newerls (16:45):

Yes, absolutely. A few things surprised me. We always have to count the units. I think that was a big piece for me because a lot of sellers, mom and pop, they may not even know how many units they actually have. So

Scott Meyers (16:59):

Ramel, I don't remember the last time. It seems like it doesn't matter how big or small the facility is, the unit count is always off. I don't know how the sellers get it wrong, the brokers get it wrong, but we're off by at least one almost every single time. It's just crying out loud. Do you know how many doors you have or not? I just had to add that it never fails.

Ramel Newerls (17:16):

It seems very, very simple, but it is true. I was surprised that the unit count will be off of all things. So that was one thing. Let me keep this same tradition going as I've purchased more facilities, just keeping that same process in place to make sure that we count every single unit. That surprised me. Another thing was because this own in particular, he had multiple businesses, and so storage is more of his hobby business and we like to buy those hobby businesses and we're going to take it and make it our main business. However, what he did, he utilized his self storage business to get depreciation on some other investments that he did make. So that was some of the things that came up that we was able to figure out and be able to utilize it as a tool to negotiate. What else I would say. And really, I noticed that most owners who've been in the business for 20 years, 30 years, this owner in particular, he built these facilities himself and then they made a bunch of money on it, but just really did not manage it effectively. So I feel like that's an advantage that we have when it comes to just having the strategies and information, being able to really manage it effectively to get it to the growth that we know we can get it to versus someone that may not be that skilled as an operator.

Scott Meyers (18:39):

Was there any point during the process when you got through your due diligence when you thought, oh, this might not work? Or did you already know from the beginning that this one was solid and all the way through the process that this was a keeper?

Ramel Newerls (18:52):

I felt it was solid. I wanted it to be solid, I would say right, because I was eager to actually get in the door. So in my mind, I was not trying to allow anything to stop the deal. It was just figured how do we make it make sense? How do we overcome? But once we got down to the numbers and SBA was drawing a line in it sand and saying eight 50 is the most we can go, yes, we see what the pro forma is, but as of right now, the cashflow is not bringing in what we needed to be. I was a little worried about it, but again, being able to have the coaching in the academy and knowing what questions to ask and how to really build trust with the seller too, I think that's important. Building trust so they don't feel like you're just looking to get over on them. It's just really stating what the actual facts are and how can we have a win-win in the situation. So I had that mindset throughout the entire process, so I really didn't think of it going left. I was just figuring out how every way possible I could make it go.

Scott Meyers (19:48):

Right. So tell me about your marketing piece. How did you market the facility and what actually worked in that process, and did the reality actually match your projections during that whole process in terms of the marketing you put in place and then the lease up that followed?

Ramel Newerls (20:08):

So there was a learning curve. I learned the entire process. So we acquired the facilities in August and we went into September. So the first 30 days is just really getting everything transitioned over the systems, the processors sending out letters. So by the time we was truly able to get our marketing in place, we're talking about September, October, and now it's the slow season. So then I had to be okay with really not increasing rents and letting things go a little bit because the slow season, it's up in Pittsburgh, so it's snowing outside. So I had to wait those couple of months. And then around April of the following year, that's when I was able to start implementing some cool marketing strategies. So we did one month rent free, and that didn't go as well as I wanted it to because we had just people moving out, getting the rent free and then moving out. And then I did $1 special or moving in first month, $1. That didn't work out. The best one that was most effective was 50% off first three months because it gave us more attention and more long-term success. So that's the one that we are sticking with and implemented into other facilities that I've been growing. But that was a big

(21:30):

Learning that just because we fill up a unit at a certain price point, that's not going to be sustainable long term. You want to get sustainable customers. So 50% over for three months was the best one from a marketing standpoint. And I'll also add the way we actually market the facility. So when now the customers come, we have to get them trained on the remote process. And that was also big for us because we run our facilities remotely. Prior to the owner, he had someone that worked there. So training customers on the QR code and scanning and teaching the process to go online and rent out the units, that was also a learning curve that we had to get the customers familiar with in that area, but we trained them on it and now they actually like it much better.

Scott Meyers (22:22):

Well done. And as you look back now in the past few years remote, what would you say is, if you could point to one, what is the single biggest or best decision you've made that allows you to either accelerate your growth or mitigated risk from the downside?

Ramel Newerls (22:38):

Investing in mentorship, I would appreciate investing in mentorship because having the right people around you in order to really help you out is going to be important. But in addition to that, I would say is building great relationships to have access to capital so you can be able to move fast when any great opportunities do come about so that I don't have to rush anything, go for any deals, that it is a tight deal and it doesn't make the most sense. I can actually choose what really is good for me at the time because I have the great relationships I've been able to build and have access through the creative strategies that we learned to be able to have capital. So those are the two things that I would say is super important.

Scott Meyers (23:19):

Yeah, yeah. Well, Ramel, once again, thank you so much for your time today. Congratulations. It's been an honor and a privilege to watch you grow and to continue to do well and excel in this industry. Not only getting in it from the beginning, but then also to just follow through on the processes and go through, literally, it's been great to watch you every step of the way, do your due diligence on your own due diligence and continuing to get better. And it's just been a joy to see success. And so if you would, what's one sentence you'd like listeners to remember after hearing your story?

Ramel Newerls (23:53):

Great question, Scott. I would say, I love to say this, the most powerful thing in the world is a made up mind. It's the most powerful thing in the world When we make up our mind on deciding whether it's going to be in a self storage business, whether it's you and being an entrepreneur, whatever, it's that we decide that's most important to us in our life is just really making that decision on it and not looking back. Once I made my mind to really make the self storage business my main focus and let everything else kind of go, that's when I started to see success. Because even in the academy and Keith at one point where Keith had to come to me and say, Hey, you're not spending as much time as you should be, right? Let's look at your calendar and let's put more time in. You're looking for the results. We got to put more time in. And once I put the time in, I started to see the results actually happening and the compounds much, much faster. So that's what I would say the most powerful thing in the world is a made up mind.

Scott Meyers (24:48):

Yeah. Yeah. My ex pastor used to say, you just know when you're nowhere, when something is right, you've come to the right decision. And then the courage to then act on it is to just move forward. That's the difference. Well done my friend. So good to have you on here. Sorry it's taken so long to get you back on the podcast after having so many conversations at the Mastermind and anywhere else. And so with that, my friends, you have been hanging out with Ramel Newerls who another one of our very successful students. It is also part of our mastermind as well. So if that is something that you are interested in, then obviously go check out the Self Storage Academy as well as the Self Storage Mastermind. So Ramel, if I could then leave everyone with maybe a famous quote or piece of advice that you've given that has guided you over the years,

Ramel Newerls (25:37):

G ps GPS, God's positioning system, every single detour, every single distraction is really in full your divine direction. So I believe in that wholeheartedly because when I felt that residential real estate was not doing the right things for me, and I was losing money, it was really God was positioning me for a new direction. And that obstacle became the opportunity in the self storage business. So that's what I would love to share with everyone listening in, is understand that God positioned you the right place where you are, and you right where you,

Scott Meyers (26:13):

Yeah, that's awesome. When you know you're in his will, there's a no better feeling. And so that's awesome. I appreciate you sharing that. All right, Ramel, thanks once again so much for your time. Have a merry Christmas and looking forward to being back in the same room with you once again at the Mastermind. Thanks my friend.

Ramel Newerls (26:27):

Thank you, Scott,

Scott Meyers (26:28):

All take care.

Announcer (26:32):

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