Official Richart Ruddie Blog - Internet Entrepreneur

Ryan Blank "Storage King" Helping me Find Storage Opportunities

My good pal and self storage guru Ryan Blank deserves accolades for all of the great storage unit deals he's lined up for me over the last few years. Including one in an opportunity zone in Hyattsville, Maryland in Prince Georges County MD. not too far from Owings Mills and Pikesville where we grew up in Baltimore county. The project's pre-construction process was started last year when we closed on the development of the project and financed the balance using Peoples Bank.

 

The mall at Princes George's has a Macys, Target, Old Navy, DSW, H&M, TJ Maxx, Express, Ulta, Ross, Marshalls, and soon a self storage facility for our fellow PG County residents.

 

Ryan Blank has spent the last few years in business development and investor relations for the Poverni Sheikh Group based out of Baltimore. In a fairly short period of time, he has had a very specific focus on self-storage facilities and has helped build up a nice portfolio including this project I invested in located outside of Washington, D.C.

Fortunately from the very beginning, he has found a ton of great opportunities and so far they have all been big successes, as he is building an impressive portfolio up and down the mid-atlantic region from New Jersey, Pennsylvania, and Maryland.

 

The journey to getting where he is today took knowledge, work ethic, and dedication to becoming an expert in self-storage facilities and reminds me of the book Relentless where those who strive to be a king of their industry have to put in the grit and hard work to be successful. As he continues to grow, Blank and the Poverni Sheikh Group have continued to grow and expand.

 

Taking the Next Step with the Poverni Sheikh Group

Getting to the Poverni Sheikh Group took a little bit of time for Ryan Blank. He worked in finance, real estate investing, and other sectors of the business world before getting into business development and investor relations with the Baltimore based firm. When the opportunity opened up, he felt like it was a perfect opportunity to make the most out of a situation utilizing his skills to help others prosper and join in as LP's to build storage units.

 

If there is one aspect Blank fell in love with early on, it was fundraising. Getting the opportunity to work directly with investors can seem intimidating to some, but Blank relied heavily on his confidence that any project he presented could take off (and so far that has been the case). Proper funding is necessary to make dreams into reality, and Blank’s mastered that at this point and investors like myself have been very happy with the results.

 

Growing with Each Project

 

To keep investors interested and to please the Poverni Sheikh Group as a whole, Ryan Blank is learning to grow with each project. A relatively new completed one in Woodbridge, New Jersey ended up being a perfect example of being patient and finding the right investment opportunity for the company.

Sam Zell Am I Being Too Subtle Notes

I'm a professional problem solver and after reading Am I being Too Subtle he is one too. A great entrepreneur doesn't just recognize problems but provides solutions.

Sometimes you read a book and you feel like you know the person writing it. Books that resonate with you can have a lasting impact and help develop your career mentally, emotionally, and socially. This is one of those books where I kept on pausing to take photos of pages to take notes so that I can come back and do this post for when I want to pull up these quotes & ideas that he mentioned. Another book that I recommend that shared great life skills and advice is Stephen Schwartzman from Blackstone's book that I read first and found it interesting that he said he knew to get out and liquidate all of his real estate in 2008 when Sam Zell the king of real estate was getting out but at the end of the day Zell clarifies what what down and why in his book.

When people ask me what I do it's often a difficult question to answer since my life entails so much and there are multiple answers that I typically give one of which was similar to something he talks about in the book and Sam Zell says it perfectly: I'm a professional opportunist!

So here are the notes that I want to remember in perpetuity in permanent ink:

Sam Zell's first business was not actually apartments at The University of Michigan but rather he was in the magazine importing business buying and reselling playboys. This is where he learned one of the most important rules of business.

• Where there is scarcity price is no object. The basic tenet of supply and demand is the core principle of business philosophy
• If you teach your children that having fun is frivolous and drill into them diligence and intelligent discussions and education you will breed a winner.
• Be comfortable standing apart rather than searching for a common denominator with others
• Embrace the tendency to go against conventional wisdom 

Sam realized that he didn't take orders from leaders well and was meant to be one not take orders from one. So setting the record was the path he created.

Meritocracy was a big learning experience at summer camp in Wisconsin. Another book I love Ray Dalio's principles is huge on meritocracy as well.

• The basics of business are straight forward. It's all about measuring risk. If you've got a big downside and a small upside RUN. If you've got a big upside and a small downside DO THE DEAL.
• Always make sure you're getting paid for the risk you are taking on and never risk what you can't afford to lose
• Keep it simple a scenario that takes 4 steps vs 1 step is one that provides 3 more failure points.
• Opportunity is very often embedded in the imbalance between supply and demand.
• It could be rising demand against flat or diminishing supply or flat demand against shrinking supply.
• When there's an imbalance look where the two lines will intersect and then determine whether it is cheaper to buy or to wait.
• Be an owner, act like an owner, and when it comes to your investments, do everything you can to make sure everybody is aligned.

When there is too much reliance on outsiders who don't have enough skin in the game that creates problems.

• Companies need engaged owners and staff members
  Owners are willing to give up short term benefits for long term gains.
• An owner uses their vision to steward a company and guide management
• Owners do whatever it takes for management, their teams, and company to succeed while working with others who have skin in the game and ensuring their interests align

A leader can not let his emotions impact his stability. Have methods that keep you steady.

My saying is to remember your ABC's - Always be calm, cool, and collected. In Ray Dalio's book he talks about the importance of mental health and having a clear mind. Working out, running, or yoga. In the case of Sam Zell he's an adrenaline junky who loves Skiing and riding motorcycles.

• Look for micro opportunities from macro events. In Sam's case it was the deregulation of the radio industry where he struck gold and found a 1,237% return off of Jacor. Look for big picture influencers and anomalies that will direct the course of industries and companies.
• First mover advantage requires conviction in regards to his distressed asset fund and timing is everything in regard to accepting an offer to sell Equity Office. Don't allow your personal feelings to interfere with your investments or your duty to your shareholders.
• Sentimentality about an asset leads to a lack of discipline.
• Chairman of everything and CEO of nothing. Sticking to what your good at: Vision, Direction, Strategy.

Behind The Deals Chapter

• Stick to where you can add the most value. Sam spends his day listening to other people, He then asks questions, probes, and comes up with potential solutions.
• Pick great people to run your companies and in Sam's case he doesnt involve himself in the day to day but stays close to those who do. This is a very similar strategy and mindset that Warren Buffet has with Berkshire Hathaway.
• The Radius Theory of business  - Your ability to succeed is ultimately limited by the number of people between you and the decision. The farther away from you the decision is made the less you control the risk.
• You get buried when you delete too much or don't delegate enough

Culture is King, it's the heartbeat of your company. Meritocracy and open "kimono" policy.

Best predictor of success isn't IQ or being a rocket scientist but rather

1. Drive
2. Energy
3. Attitude
4. Judgement
5. Conviction
6. Passion
7. Cut to the center of an issue
8. Assess a problem and see what the risks are and then dissect it but don't get caught up in the numbers

Progress, improvement, and forward momentum. Like Michael Jordan in basketball he made everybody else better.

See opportunity and convert it to something tangible.

 

• Be on the lookout for anomalies and disruptions in a market or company. Be able to recognize the psychology of market extremes which can lead to attractive points of entry.
• Any event out of the ordinary is like a beacon telling you there's a new opportunity emerging.
• Be a good listener it can make all the difference in getting something done when somebody says no.

Immerse yourself in the life of a project and the book concludes with this:

An owner is consumed with making the most out of what he already has. An entrepreneur is always looking for a new opportunity always reaching.

While I have family in Chicago that is close with the grandchildren of Sam Zell I have never met him personally but had such glee from this book that I've called them up to see if they can help me get the book signed by Sam himself and thats how you know a book really resonated with you and you loved it. 

The Best Time to Buy a House is when the Mortgage Payment to Income Ratio is between 15-20%

Looking at the chart below from Knight Mortgage the best time to buy a house is when the Mortgage Payment to Income Ratio is between 15 and 20% if you followed that guideline you would have bought at great times in the market over the last 20 years. As mortgage rates rise now we are in a unique environment with sky rocketing demand in Florida and a lack of housing supply so that dictates that even with increased mortgage rates prices are not dropping drastically as of now we are seeing strong demand for housing and bidding wars on the properties we developed and are coming onto the market soon.

 

Funding Direct Central Florida's Boutique Mortgage Company

Funding Direct is a mortgage company based out of Central Florida bout 3 hours away from me. They are very boutique compared to the rocket mortgages of the world. We found that a lot of lenders trying to get approved for a loan end up going with a big name or a major bank only to be completely deterred by the massive amount of paperwork and headaches that they have to go through despite being told that it's a seamless process.

From my experience working with Bank of the Internet out of San Diego (now called AXOS Bank) that some of the mid tier and creative lenders are the best to work with. I was told based on a Wall Street Journal article to check out BOFI. I had a contact over at BOFI that I reached out to from my days in the structured settlement industry as they were also active in the secondary structure settlement market. Their loan portfolio was under a bit of fire in the WSJ piece but overall I have nothing but 5 star reviews and great things to say about them as a lender compared to Dan Gilbert's Rocket Mortgage and Bank of America's mortgage lending division which is the closest thing to a modern scam that I can warn others not to waste your time with.

So what's the deal with Mortgage Funding Direct?

Started by Tawn Kelly they are a top originator in the country. She's got over 16 years working as a mortgage lender. She's got 4,7000+ mortgages that have been originated and also owns the company Mortgage Direct Ventures who partners with construction companies, contractors, realtors, and banking institutions to create mortgage companies. They have over 35 years of combined experience which in the mortgage industry and after surviving the Florida market crash in 2008-2009 that feels like a lifetime. 

Photo of Mortgage Funding Direct LLC's website that is due for an update in the Web 2.0 world...

Overall the client who was buying a home I helped finance to build worked with Mortgage Funding Direct LLC and sang praises. As I remember the nightmare of dealing with mortgage brokers both good and evil it's nice to hear a compliment as it can be a huge pain in the ass to deal with.

They are not related to the mailers I keep on receiving for merchant cash advances and direct funding loans to "help your business with the capital it needs."
 
The merchant cash advance business probably got burned pretty badly during the pandemic with so many restaurants and businesses being completely shut down and not re-opening. We have to wonder are the merchant cash advance loans that did not sour did they make up for the attrition?