What Banks Really Want From First-Time Storage Investors

Is a first-time storage buyer actually in a stronger position with lenders than an investor who already owns fifty properties? 

Joe Downs sits down with David Merkin, senior managing director at Eastern Union Funding, one of the country's largest commercial mortgage brokerages, who has placed debt on hundreds of storage deals across a network of 200-plus lenders. 

Merkin pulls back the curtain on what banks really evaluate in self-storage financing: the sponsor, the story behind the numbers, and a credible business plan. 

He explains why complex borrowers get rejected, what belongs in a lender-ready package, and why most deals die from self-disqualification…not weak fundamentals. 

For anyone learning how to invest in storage, this is the financing playbook that turns "who would lend to me?" into a fundable deal.

Listen For:

5:44 What does David Merkin say lenders actually care about most?

13:50 How do first-time buyers hold a hidden financing advantage over veterans?

20:34 What does a clean, lender-ready storage financing package include?

24:18 Does a mortgage broker beat your bank on storage loan rates?

26:16 Why do most storage deals die before the application is sent?

CONNECT WITH GUEST: DAVID MERKIN, SENIOR MANAGING DIRECTOR | EASTERN UNION FUNDING

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Transcript

Joe Downs (00:00):

Every year, thousands of people find a legitimate storage deal, right numbers, right market, a real opportunity, and then they don't buy it. Not because the deal was wrong, because they never made the call. The call to the bank, that is. They convinced themselves the bank would say no before they ever picked up the phone. I've been on both sides of that, actually. And today I've got a guy who's placed debt for hundreds of storage deals, sits in front of 200 lenders and watches that exact pattern play out. Buyers who ghost their own deal at the finish line. His name is David Merkin. By the end of this conversation, you're going to know exactly what the bank is actually looking for and it might not be what you think.

(00:59):

I'm Joe Downs and welcome to the Storage Moguls Podcast. My company has acquired and built over 20 storage facilities worth over 75 million in assets across multiple storage niches. I've seen this business from a lot of angles, educated hundreds of students and learned firsthand who succeeds and why. And that's why we built storagemoguls.ai, an AI powered community with the tools, the structure, and the guardrails to teach people how to buy their first storage facility. And that's exactly why we launched this podcast to bring in the stories and the experiences from the first time buyers, the lenders, the brokers, and other industry professionals who live in this business every day. All right folks, buckle up for today's conversation because David has helped finance a few of our deals and I've had dinner with him in Atlantic City and let's just say it was colorful. I kid, I kid.

(01:47):

All right. It was a lot of fun. It was a lot of fun. David Merkin is a senior managing director at Eastern Union Funding. He's one of the largest commercial mortgage brokerages in the country. He's been placing commercial real estate debt for about 15 years. As I mentioned, works with 200 plus lenders and is an active self-storage specialist. He sat on the equity side of storage deals as well, so he knows this business from both chairs. David, welcome to the Storage Muckles podcast.

David Merkin (02:15):

Thank you so much for having me.

Joe Downs (02:18):

I'm looking forward to this. So David, I prepped you a little bit for the show today and at least for what I want you to knowledge share with the listener, but I don't know that I mentioned the true or false questions I want to be throwing at you. So good luck and try not to embarrass yourself.

David Merkin (02:35):

Tring it on.

Joe Downs (02:36):

All right. I'm going to start with one if that's all right with you. David, in commercial real estate, true or false, in commercial real estate, the lender cares more about the property's income than the borrower's credit score. True or

David Merkin (02:56):

False? I'm going to say false.

Joe Downs (03:01):

Okay. Tell me why.

David Merkin (03:03):

I think that when we're dealing with community banks, really I would say number one is the sponsor more than anything. Banks do not want to be in the business of owning real estate. They just like money. They hate operating it. So if we have a credit score that's on the borderline, great. That's obviously something you can work with, but if a guy comes and he says, "Hey, I have a 450 credit score." Well, I mean, the bank- Deal's done. And they're like, "We just can't trust you to pay us off. We don't want to buy the property."

Joe Downs (03:35):

Totally agree. That question was kind of set up for it could go either way and I'm allowing it because it was poorly worded. I'll give you that. What about the property's income over a 680 versus a 780 credit score?

David Merkin (03:51):

I would say the property income at that point.

Joe Downs (03:53):

Yeah. And that's the way the question was really designed, but I can't argue with you. You're right. A sub 600 credit score or sub whatever, wherever that six number is, credit score is a deal breaker as well.

David Merkin (04:08):

Go

Joe Downs (04:08):

Ahead. Yeah,

David Merkin (04:10):

Joe, I would just also kind of add to that. It's also important to understand the story. If a guy has a garbage credit score because he hasn't paid his credit cards, that's fine. That's something you can massage. If it's, well, I own another commercial real estate and I'm four months buying my payment, that's really what scares them. So I think it's a reason behind the credit score is almost as important as the actual credit score itself.

Joe Downs (04:33):

That's great insight and that kind of lends perfectly into what I want to get into here. So David, here's the fear I hear constantly from folks and I want to put it on the table because I think it's stopping real buyers from making actual moves on deals, kind of like I said in my opener there. And I hear it all the time. I'm a first time buyer. I don't have a track record. Why would any bank lend money to me? By the way, this could have been a quote from me seven or eight years ago when I was sitting at my first self-storage academy going, "This is incredible, but who's going to lend me a million dollars?" So I do hear that from people that have found legitimate deals. I myself have thought those very thoughts. You watched this play out certainly over, I'm sure you've seen it a bunch of times and across 200 plus lenders that are in your network.

(05:26):

You gave us a little bit of what a lender cares about. What do they actually care about and what do first time buyers get wrong when they think this is what the lender cares about the most and it's actually these three things over here. So walk us through that.

David Merkin (05:44):

Yeah. I mean, I think a lot of times they're fitting in the box and saying, "Hey, this is what the lender's looking for and this is the lender's requirement." What I love about commercial real estate in general is it's very gray. If they look at a situation and say, "You know what? You're right, this is this guy's first time property, but he has an excellent business plan in mind." Because this is his first time, I probably wouldn't feel comfortable with him operating the property, but maybe he'll have somebody like your firm and he'll say, "Okay, this is my first property." The way for me to sell myself to the bank is to really have somebody who's experienced, they'll manage a property. Once you build up a reputation and a track record, all of a sudden then you can take much more control of your property.

(06:31):

Lenders were not born yesterday. They understand that every single borrower had to start somewhere. The question is how can you position your deal in a way that they get that comfort and that same meaning that they could help you grow? Banks in general are not transactional driven. They are relationship driven. They love the fact that they could take you on your first deal and then you're calling them up five deals later and they can walk by your property and say, "That was really incredible." And honestly, the reason banks are out there is to help smaller businesses to be able to really grow. So that's

Joe Downs (07:04):

Interesting. I want to dive into the relationship part in a second. You said it's not transactional. I think what you're meaning to say is it's not just transactional. I mean, obviously the numbers have to matter.

David Merkin (07:18):

Correct. Let me say it in a different way. When I go to a bank and discuss a deal, if I say, "Hey, these guys are not looking for a more meaningful relationship to grow, but they only want a one-off deal," that's a much tougher sale. Banks are very into repetitive businesses with the same sponsor.

Joe Downs (07:35):

So if they're going to put some effort into this from the lender side-

David Merkin (07:38):

Correct.

Joe Downs (07:39):

... they would prefer to know there's future business

David Merkin (07:41):

Coming. Correct. Which is why they spend a lot of time to really look into your business plan and really get to know you as a person.

Joe Downs (07:49):

So it's good intel. Let me go back to the one thing you said that kind of hit me was it's gray. It's a gray area. From where you sit and where I sit with the experience I have, that sounds great to me. But I know, and I can remember because it wasn't that long ago. I'm not that old yet. I can still remember things from eight years ago, some of them. Gray also sounds intimidating, but when I'm putting my first time buyer hat on, I don't know what that means. Can you help give us comfort? Yeah.

David Merkin (08:23):

So

Joe Downs (08:23):

What are the areas of gray and how do you overcome them as a first time buyer?

David Merkin (08:28):

When you're dealing with a bank, they see the entire picture of everything and there's much more flexibility. So they're not going to say, "Well, I'm not going to do the deal because the guy's not at a 700." And that brings it back to my example where they might say, "Okay, well, now let's understand the reason behind it. " Okay, so maybe you can't get up to that number by closing, but we understand that it's not real estate related so then we'll get comfortable with it. So when I mean gray is that if you can paint a very good picture as to why you are a good borrower for the bank, then there's absolute high level of interest in that. But I was saying it as opposed to residential, which is very boxed, this credit score, this liquidity, et cetera, et cetera.

Joe Downs (09:16):

Yeah. Residential I don't think is gray. I think everybody gets

David Merkin (09:19):

Like

Joe Downs (09:20):

It's credit score debt to income ratio. It either fits or it doesn't. When we get into gray and commercial, here's one thing that would certainly first time buyer, the fact that I'm saying first time buyer means we have no experience. You and I both know that falls into the gray area, but how do I overcome that? Why should I be comfortable with that being gray as a first time buyer? If I have a 700 credit score, if I've got all the liquidity I need to buy this first deal. So I look good on the spreadsheet, let's say, just the numbers, walk me through how I look good from the fact that I've never bought one before. I've never owned, operated one before.

David Merkin (10:05):

Right. I would say it comes down to business plan more than anything. So if you're able to go to a lender and say, "Hey, this is my business plan. I looked at this property." Let's just say mismanage. That's always a big one. People say that the previous guy mismanaged it. So the economics of the deal are very strong, but the previous guy, he's 90 years old, not involved in his property. The property management company basically has, they don't really report to him, et cetera, et cetera. But then I look at it, I live a mile from the property. I went through all this training within the space. I ran a tremendous amount of comps. I'm going to use a management company that's experienced, so don't only rely on me. So what I like to say is really your first deal, you're much more of an asset manager.

(10:55):

That's probably the right way to look at it. You're overseeing everything. And if in yourself you could say, "You know what? Here's an example that I like to give people. I like to say if you're bringing a property and you're raising money for it, that means you're putting your reputation on the line, you're playing with people's money. That's a very, very serious thing. What gives you that comfort level to take that money? Because if you burn your investors, that's gone. So if you can articulate and really feel that passion and believe that there's a true business plan here and it is a good deal, then most of the time you can also sell that to the bank and get them comfortable. But honestly, somebody has to be very honest with themselves. The biggest challenge I have found that people have in commercial real estate is when they buy emotionally, not logically.

(11:42):

So I might have an attachment to the area where I saw my friend bought a property and I'm so eager. I want to be like him. I want to buy it. But if the economics don't work and the narrative's not there, you can't do something like that. So I think that it comes down to really the business plan and being able to attack all the different traps in order to put yourself in the best position that, yeah, I as a bank, I want to lend to you because you have a sound business plan. Obviously crazy things could happen. COVID happened and things like that. But by and large, if it's a sound plan, it should be financial.

Joe Downs (12:18):

So if it's a sound plan and it's financeable, of all the deals that you've seen fit into that category that got rejected, what were the reasons that got rejected?

David Merkin (12:33):

Great question. So it's a litle bit similar to what you said about the debt to income ratio. So ironically, when you're dealing with community banks, the bigger challenge I have is people that own 50, 60 properties that are all in different stages of development. So when they take a look at your tax returns, this is specifically as it pertains to community banks, the debt to income ratio is a big issue. So ironically, it's easier for me to finance people who have a W2 job making $200,000 a year and this is going to be his first property versus a guy that owns 60 properties somewhere in development. So if you look at his tax returns, he has a crazy amount of write-offs showing almost negative stuff. And honestly, banks are not very entrepreneurial. They are risk adverse. So what I tell a lot of people, the borrowers, and when I'm getting a deal is I'll say, tell me why I should do this deal.

(13:28):

Sell it to me. Tell me why it's a very good idea. So the bigger challenges that we actually have is those people that have more complex financials. That's

Joe Downs (13:39):

So

David Merkin (13:39):

Interesting. It's completely backwards. But if you think about it, because banks are literally, they're just in the business of protecting themselves.

Joe Downs (13:50):

That's so interesting. So the first time buyer in this scenario potentially has the advantage.

David Merkin (13:56):

They absolutely-

Joe Downs (13:58):

Because you're not saying we just need you to fog a mirror, which would be on one end of the spectrum. On the other end of the spectrum, you're saying there's so much going on here. Banks are rejecting deals not because of the deal itself, but because of the complexity of the borrower and how much they have going on.

David Merkin (14:17):

Correct. Let me get you- And

Joe Downs (14:18):

Here a first-time buyer has no complexity.

David Merkin (14:22):

Correct.

Joe Downs (14:23):

So if I'm reading between the lines here, what you're saying is if it's a financiable deal, all I need you to do as the buyer is have a presentable credit score, obviously demonstrate liquidity and the ability to carry debt service if the property doesn't. I'm assuming that you're looking at that.

David Merkin (14:45):

Correct.

Joe Downs (14:46):

And present a credible plan.

David Merkin (14:48):

Correct.

Joe Downs (14:49):

The gray area really comes down to, am I oversimplifying this or the

David Merkin (14:53):

Credible plan? No, no. I mean, I think you're spot on. So let's just back into what's the logic behind why banks rather a guy who has a W2 making $200,000 and then a job. It's pretty simple because what happens when the property doesn't go as planned? You have vacancies. If you have seven deals right now that are not doing well, the bank's going to look at it and say, well, when things aren't going well, which one of us are getting the TLC? You've got seven lenders, seven different projects. I don't want to be in line. I want to know that if you're having any debt service issues, either vacancy or collections, you're going to take care of me first. So if there's somebody that has a W2 job, I can consistently fee that you're making 250 grand a year when I underwrote the deal assuming that there wasn't a lot of profitability from the property, you can still service the debt, well, that gives me the comfort level that I need.

(15:49):

So yeah, the answer is if I have somebody that's making $200,000, $100,000 a year consistently, I feel more comfortable lending to him than I would a guy who has 40, 50 different properties, just a complexity. Banks are not very ... They don't like complexity. They like simple. Do your project, let me make my money and that's it.

Joe Downs (16:13):

And David, I'm going to get into this in a little bit with you. We'll expand upon it, but you just made me realize something I want to tease out of you right now. So would you say there's an advantage? So Eastern Union is a broker. Are you guys a direct lender too?

David Merkin (16:28):

No, we're brokers. Just

Joe Downs (16:30):

A broker. Yeah. And I mean just a broker, I meant you only broker. So is it fair to say that not all lenders in your network of 200, not everybody matches up the same way?

David Merkin (16:47):

Oh yeah. I mean, that's what's crazy and kind of cool about my business. On an average deal, we'll usually send it to a much larger group because of the fact that every bank kind of has a different parameter. So the answer is some banks are a little more entrepreneurial. We've seen banks that care much more about liquidity net worth versus the global cash flow. I mean, that's what makes my job fun is really the puzzle piece because all banks have different levels.People will look at me and say, "Well, can you pre-qualify look at my tax returns, look at my W-2, and can you automatically pre-qualify?" I was like, "Guys, I'll do a small snip test, but I'll give you an example. There are groups that will just underwrite on tax returns, not P&Ls, look at certain ad-backs and say, You know what, I don't agree with you.

(17:35):

I don't want that to be an add-back." Or they'll go through every one of your K-1s and say the amount of details that you have really varies from lender to lender. So when somebody, just because one lender says, "Hey, I don't like this guy's debt to income ratio across his entire, not real estate driven, but cars, houses, et cetera," the next bank will say, "You know what? We're a little more savvy. We understand things and we're much more focused on the sponsor's liquidity net worth, the project itself."

Joe Downs (18:10):

I've experienced that myself in financing different projects, just what they're looking for, what they push back on the more detail they want on certain things.

David Merkin (18:18):

Yeah, this is what the gray area truly means. Yeah,

Joe Downs (18:21):

That's interesting. Look, this business is incredibly learnable. I always say to folks all the time, this is not rocket science, but you do have to learn it and there's a right way to package these things and find guys like David. And that's frankly exactly what we build at storagemoguls.ai and that's why people gravitate towards us. All right, David, you ready?

David Merkin (18:48):

Let's go.

Joe Downs (18:49):

True or false, most small storage facilities in the US are still owned by private individuals, not institutional investors.

David Merkin (18:59):

True.

Joe Downs (19:01):

That is true. Roughly 70% of storage facilities are still privately owned. We're not competing with Wall Street deals here for the most part, folks.

David Merkin (19:09):

No. And look, the good part, it is for sure a challenge because a lot of these smaller stuff, you have the mom and pop set. If I told you the amount of deals I have where the previous owner just literally wrote on a pen and paper the rent roll, it for sure makes it a challenge. However, it enables the smaller guys to really get deals that have meat on the bone. Everyone has to start somewhere. And what you want to do is you really want your first deal to be able to build up that momentum more than anything. That's what I'm saying, the logical piece first, the emotional piece. These mom and pop stuff, honestly, I've seen a situation where it's just a matter of TLC. You don't have to do any major CapEx. You don't have to do a crazy amount of marketing. It's just you got to give it to TLC that it needs and all of a sudden that becomes your true value add and that's your launch pin to be able to continue to really scale and buy many more assets.

Joe Downs (20:03):

David, you keep it up. We're going to bring you on storage muggles as a coach and mentor.

David Merkin (20:08):

I'm

Joe Downs (20:08):

Loving it.

David Merkin (20:09):

That's basically my main job. That's

Joe Downs (20:12):

Great. All right, let me shift to the practical side

David Merkin (20:16):

Because

Joe Downs (20:17):

This is where most first timers actually get stuck at thing, not finding the deal, not even knowing what to offer. It's the moment they have to walk into the lender and actually ask for money, David. You know what a clean lender ready package looks like. So can you walk us through it?

David Merkin (20:34):

Yeah, for sure. So obviously the first thing we want is the current rent role and the profit and loss statement. Ideally, we like to see 12 months from a historical perspective in order to really underwrite that. Comps are very important. We run our own comps, but we also have found that clients that are able to put together their own comps, the lenders are like, "Wow, you've really done a tremendous amount of due diligence." Personal financial statement forms are very important as well, as well as tax returns. And as I had said, because of what we spoke about previously. And then with me and my clients, I put together an executive plan where you're basically going to outline the entire project, why this is a good deal, why the bank should do it. There's a lot of deals where maybe historically the cashflow isn't great, but what we'll put together in our package is a proforma, which is usually a three to five-year proforma.

(21:37):

Obviously, we got to be realistic in our expectations. When we put stuff out, we don't like to put comps at the top of the market because I'd like to try to match up with the appraiser as much as I can. But if you're able to put together those big pieces, that's really the starting point and the thing that's going to launch everything else.

Joe Downs (21:59):

So you said some interesting things there. A lot of them are just boxes that have to be checked, personal financial statement, tax returns, stuff like that. But you said if a borrower put together their own comps that really ... I forget exactly what

David Merkin (22:13):

The word you put- I mean, that's better, right? Because then they look at it and say, "Man, this guy's done a ton of due diligence."

Joe Downs (22:19):

So that's where I want to go with this. So is it fair to say as a first-time buyer, the more complete a package I put together with things like comps from more of a qualitative standpoint, is that part of the gray area that's going to make you look at me a little differently like, yeah, you know I'm a first-time buyer. First of all, should we disclose we're first-time buyers? But secondly-

David Merkin (22:49):

Yes, absolutely. I am realizing-

Joe Downs (22:52):

So you know I'm a first-time buyer. Are you and the credit committee looking at me differently the more thorough my packages?

David Merkin (23:02):

Yeah, I mean absolutely. But

Joe Downs (23:06):

To the point of that's probably helping me get the deal done, or if I don't send that stuff in, am I at a disadvantage? That's what I'm trying to understand. How much does that weigh in?

David Merkin (23:16):

So I will tell you, the main concept is you want to be as on the front end be as transparent and as detailed as possible, because if during the process the bank finds out something that was not disclosed, the deal's tough assuming it's something obviously that's a very big issue. So on the front end, the banks like to do a lot more due diligence because they don't want to spend their wheels either. And if you think about it, there's credibility. They have certain quota that they need to make different loan officers internally, not even on a commission level, but they all in the beginning of the year, they have certain goals. So let's just say certain banks will be like, "Okay, my team needs to do 30 million." So they realize that that 30 million, it's going to have to get approved. So the more information they have on the front end and the more detailed package, the more veil got comfortable and the higher probability of approval and getting the deal done, because execution is really the key above all for all parties.

Joe Downs (24:18):

David, true or false, a borrower who uses a commercial mortgage broker, that's you, typically gets a better rate than one who goes directly to a bank.

David Merkin (24:31):

So can it be a little bit of a hybrid answer on this? I would say like this, I would say that most of the time, yes, because you're bringing a bigger competitive landscape, okay?

(24:44):

Yeah. So I would say 90% of the time. Let me tell you the 10% that's not. If you have a guy that is a crazy high net worth individual and he has $20 million parked with banks because banks love deposits. I mean, think about, that's really their lifeline. They're taking your thing and the money you give them and then they're going to lend it or invest it, whatever. So if you have a stupid amount of money parked with a bank, most of the time those guys are not going to lose the deal for 25 or 50 basis points. Now, if there are other restrictions, i.e. You hit your lending limit or it's not their footprint, then absolutely they wouldn't be a player. But if it's a super strong borrower that gives them other perks, most of the time they're not going to lose a deal based on interest rates.

Joe Downs (25:27):

Yeah, no, thanks for adding that caller. And I would agree and add this, someone like you with access to 200 plus lenders, you're also running a little bit of a competitive process, aren't you? So one

David Merkin (25:41):

Bank

Joe Downs (25:41):

Gives you one offer, competition creates better pricing and a better lender match. So I would agree with it being true and I also agree with your carve out there that, yeah, look-

David Merkin (25:51):

And I would

Joe Downs (25:52):

Also- Someone with a bigger balance sheet is going to command better terms somewhere else and that makes sense. David, last true or false. The number one reason a storage deal doesn't close isn't the deal. It's the borrower talking themselves out of it before they ever send the package.

David Merkin (26:16):

I mean, I'm going to say that's probably true because I think in my life, I believe most people are their own worst enemy.

Joe Downs (26:22):

Of course it is. It was a total setup for

David Merkin (26:23):

You to

Joe Downs (26:24):

Put the ball in the T. Yeah, no, it is true. The most common failure point is the self-disqualification and it's not self-defeating. It is self-defeating, but it's because of the lack of knowledge and understanding. Borrowers assume the know before the lender even sees the deal because they ... I think there's this mystique or this ... It's probably how people are with AI right now, a lot of people that haven't adopted yet. I hear people all the time like, "I don't know what to ask it. " It's

David Merkin (26:52):

Overwhelming.

Joe Downs (26:53):

And it's a mental block and I think that's what people have when it comes to these bigger deals for most people than they've ever thought about financing. You buy a house, maybe you mortgage two, three, four, five, 600 grand. You buy a storage dealer, you're financing it's in another bracket. There's a comma, there's another comma,

David Merkin (27:11):

Right?

Joe Downs (27:12):

So it's million, two million, three million, five million. I don't even want to think about how much I have financed right now. And it can sound and start to be intimidating and a little scary. And I think that's why people end up talking themselves out of it.

David Merkin (27:27):

Yeah. I think it's also because commercial real estate is patient capital. And I think these people, a lot of people have their life savings or stuff like that. If they're going to put it to work, they want to see instant results. Real estate's a long play. We've seen situations where a year two pro forma was awful, but they stayed the course and by year three or year four, they crushed it. So I think a lot of times people are like, "If we're going to put in this much effort, we need instant gratification." I think that that's almost humanly impossible in commercial real estate to get any instant gratification and will come, but you got to be patient and you have to be able to pivot and be smart, not emotional, logical.

Joe Downs (28:05):

For sure. And folks, if you find yourself in that category of, I'm not sure, come to storagemongles.ai, we'll fund your doubt so the bank can fund your deal. David.

David Merkin (28:18):

All set.

Joe Downs (28:19):

Last question. And I want you to actually think about this one before you answer. There is a book called Be Your Future Self Now. Have you ever read it?

David Merkin (28:26):

No.

Joe Downs (28:27):

Okay. Well, the whole idea, it's okay. It's Dr. Benjamin Hardy. If you ever want to eat, it's fantastic rea. The whole idea is that you don't wait to become the person you're going to be. You start acting like that person today, right now from where you are. Mr. Beast, you've heard of him?

David Merkin (28:43):

Sounds familiar.

Joe Downs (28:45):

You haven't heard of Mr. Beast? He's only the most followed man on the planet on YouTube.

David Merkin (28:50):

I got to check him out.

Joe Downs (28:52):

To be fair, I only know about him because I have two teenage boys who watch the insanity that he puts out there and I've stumbled onto it. And then I learned about this book. So when he was 17, Mr. Beast, he's only 27 right now, by the way. He's the most followed man on the planet. When he was 17, one night instead of studying for an exam, he created and scheduled four videos to be released six months, one year, five years, and 10 years into the future. The 10 year video was only released last October of 25.

(29:22):

He hadn't made it yet. He had a little following on YouTube, but he was nobody. He was just a 17-year-old kid. He was a gamer. He was one of those YouTube gamers, but that night he made a decision to start acting like the person he was going to be when he released those videos to be released in the future. So my question for you, five years from now, you're putting your 17-year-old Mr. Beast hat on right now. What are you doing five years from now? Not what do you hope you're doing? What are you doing? Where are you? What does your portfolio look like if you own storage? What does life look like and what are you doing today Part A is where are you? Give me a couple highlights, big things in your life. And then what are you doing today to make sure those things happen?

(30:11):

And by the way, if you do those, they'll happen before five years.

David Merkin (30:15):

Yeah. So a couple things I'm looking to purchase stuff on the side as more residual income. I would say that right now- Five

Joe Downs (30:25):

Years from now you own what?

David Merkin (30:29):

I would be very happy if I own six or seven facilities.

Joe Downs (30:32):

I'm going to get you to say the words. Five years from now I own six or seven facilities. Not I might, I will

David Merkin (30:39):

Be happy to. Six years from now, I'm going to own six, five, six properties. My goal- But you

Joe Downs (30:45):

Already walked it back one. All right, that's fine. Let's say six. All right. So five years from now you own six storage facilities of some ...

David Merkin (30:55):

Okay. And I would say just kind of more high level. My goal is to really double down on origination because I think the market's coming down and my dream is eventually to really focus more on a family life balance. Okay.

Joe Downs (31:08):

So five years from now you own six storage facilities, your production, we don't need the numbers, but your loan production

David Merkin (31:15):

Is- I would love to double down. Twice what it is today. Be able to put me away and then cut back and really be more of a present parent because I always think about this in a really, really dark way.

Joe Downs (31:29):

I'm going to recap this for you again so we get it right here. Five years from now, you own six storage facilities. Your loan production is twice the volume it is today. And because of that, you have so much free time, you're able to be much more present as a parent.

David Merkin (31:45):

Exactly.

Joe Downs (31:46):

Now what? That's all right. You're not the only guest I have to help this with. You have to make the statement, not the I would likes. The I would like tos, the nice tos, the goals

David Merkin (31:58):

Would be

Joe Downs (31:58):

Choose.

David Merkin (31:59):

Sure.

Joe Downs (32:00):

When do they start? Now we've got the picture. What are you doing today to make sure that happens?

David Merkin (32:07):

So on the buying side, I am networking a lot with brokers. I'm speaking to clients that we already have. Collaborating, see if they're willing to sell properties. We're doing that. And then in terms of doubling down on the origination, we're hiring more originators. This way we just get much more of a volume. We're also incorporating technology and AI to cut down our costs of our team. Once you have a lot more of AI when it comes to modeling and due diligence and things like that. So I'm hoping with all that stuff it's going to help. I mean, not hoping, got you. It will help my bottom line and I will

Joe Downs (32:48):

Achieve hopefully. Sounds like the production has been figured out. I want you to look at what you're doing for the portfolio, starting to build a portfolio because you're saying I'm starting to talk about it. So are you doing what it takes to own six and five years?That's my challenge to you and I hope you don't take it the wrong way. I'm not

David Merkin (33:11):

Trying to chastise you. No, I mean for sure. I'm trying

Joe Downs (33:13):

To inspire everyone, every listener, every guest I have on. Read the book. It is incredibly powerful. We all have it within us to become what we want to become, to own what we want to own, to be in places and lifestyles that we want to be in in five years. We control our own destiny. We just got to start doing it today as if we already are. So that's the impetus behind that. Spot on. So

(33:41):

Folks, what David laid out today, the financing conversation, it's not the wall, it's the door. It opens when you show up prepared, honest about your numbers and willing to let the lender say yes. So if this conversation moved something for you, go to storagemobile.ai. That's where we take people from zero storage facilities to their very first one. That first deal is the hardest one you're ever going to do and it's the only one that changes everything about your trajectory, folks. There's a seller out there right now who's ready. So stop watching, start moving, drive for dollars. Send the LOI. We'll see you next week.