How to Think Outside the Box Investing in Co-WareHousing Space with Special Guest David Fisher

Join David Fisher of Kefi Spaces and host Attorney Kim Lisa Taylor as they explore some groundbreaking ideas in commercial real estate investing. 

David will share how you can buy large warehouses and carve them into small co-warehousing spaces. He maximizes profits for his investors by renting out spaces to entrepreneurs who need smaller spaces to make, sell, and ship their products.

Episode at a Glance:

• What is Co-Warehousing Space?
• How To Find Tenants for Your Buildings
• What Kind of Properties are Suitable for Co-Warehousing?  
• What Kind of Staff Do You Need to Man a Co-Warehousing Space?  

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👀 Watch this episode through our YouTube Channel. Click here: https://youtu.be/W8-PGTnBJpc

Transcript

 Kim Lisa Taylor:

Hello everybody. Welcome to Syndication Attorneys' free monthly podcast. Actually, we do this twice a month. And we also do a live YouTube stream where we talk about topics of interest to real estate syndicators and fund managers with the opportunity for live questions at the end of the call. I am attorney Kim Lisa Taylor. I would also like to introduce Krisha Young, our co-host and business development associate at syndicationattorneys.com.

Before we get started, please note that this event is both recorded and live-streamed and will be used for future promotion, posted on our website or in a broadcast available to the public. You can ask questions at the end of the broadcast by raising your hand or typing in the Q&A. Information discussed during this free broadcast is of a general educational nature and should not be construed as legal advice.

And today, our guest is David Fisher, who's a client of our firm, and we're going to talk about “How to Think Outside the Box Investing in Co-Warehousing Space.” We're always trying to introduce our contacts and our potential clients and our current clients to different [strategies], expanding their thinking. You don't only have to invest in one asset class. There's times that you should be thinking about diversifying both for your own healthy portfolio, but also to help your investors understand that there's other things they could invest too.

So if you would like to learn about a new unique product that David has created, I think this is a great opportunity for you and he's graciously agreed to share his “secret sauce.” So, David does have a fund that he's using to create this co-warehousing space, and we're just going to talk to him about his whole concept and what it does, how it works, why it's different. And we'd love to have your questions on this as well from the audience. So David, welcome. Welcome to our podcast.

David Fisher:

Well, thank you for having me.

Kim Lisa Taylor:

Yeah, we're super excited that you're here. And tell us about your background and how you came up with this approach and what it is.

David Fisher:

Well, my background, out of the military, I created a corporate jet brokerage company. We sell corporate jets and we do a lot of aircraft appraisals and work with attorneys on diminution in value, things like that. But in 2008 when the economy crashed, I remember selling an aircraft or working on selling an aircraft to a guy who invested in ... or built self-storage.

And I thought, "Who on earth would want to be in the self-storage business?" And after I researched it, I fell in love with it and I purchased a self-storage facility. And then I purchased the land to the left and the right of it. And I created quite a nice lot of land and I expanded it to include small warehousing. 

Kim Lisa Taylor:

Tell me how small warehousing is different than self-storage. Isn't it the same thing or?

David Fisher:

Well, a warehouse is different than self-storage in the fact that you can work in it whereby self-storage, you do not have an occupancy permit that allows anybody to work inside the unit. And so in small warehousing, you have to have egress, you have to have restroom access … under the same roof. There are requirements that are not required in self-storage. Okay. There's parking requirements for warehousing that's not required for storage. So it's completely different.

And we did it because we're in an area where we really felt there was a lot of entrepreneurs that wanted a space to launch their business, get out of their garage and things like that. We also created a co-working facility where they could get out of their spare office or spare bedroom and work in an environment where they could collaborate with others who are like-minded. And so we named that business E-Suites. And then the rest of it we named Imperial Storage Solutions.

And so what happened was we noticed that when somebody was moving out of our small warehouses, we asked them, "Why?" And they said they needed a loading dock. They said that they needed to expand and our walls didn't move. So what I did is I acquired a warehouse in the Houston Heights District -- 77024 is the ZIP code. And it is really a great area. In fact, it's one of the richest ZIP codes in America. We acquired a warehouse and we turned it into co-warehousing.

So what's co-warehousing? Well, imagine we work in public storage, getting married and having a baby. The space would be called Kefi Spaces. That's what we created. I didn't invent the industry, I'd like to claim that I did, but there were other companies doing it in different flavors.

What we did is we took a warehouse that had 10,000 square foot of office and we built glass walls and created co-working. And then the 40,000 square foot of warehouse, we subdivided into units that go from 100 square feet to 1,500 square feet, and we rent them out on a month-to-month basis just like co-working. But they have common areas.

Like co-working for example, they have conference rooms, they have aisles, hallways, they have a shared loading dock. It doesn't require them to sign a long-term lease. It doesn't require them to pay a utility bill. They don't have to pay triple net. We just mark it up in our rent and we bring in entrepreneurs, and 88% of the people who have come to our facility have already upgraded or added another unit.

And so we really feel like our mission statement, which is to help small to mid-size businesses grow and thrive, we're doing it. We're really accomplishing our mission. And as Zig Ziglar said, "In order to get what you want, you have to help enough other people get what they want." And so we want to be big, we want to grow, and that's what we're creating.

Kim Lisa Taylor:

Wow, that's such a cool thing. So just to recap and make sure that I understand, and everybody on the call understands, they have office space, they're separate from the warehouse space. Is that how that works?

David Fisher:

Yeah, yeah, if they want to rent office, they can rent office. If they run a rent warehouse, they can rent warehouse. It doesn't come included. But we do have common areas in the office and in the warehouse that if a warehouse-only tenant wants to come in and work at an open desk and we have some of those, they can do it 24 hours a day. They have access to the building.

Everybody has a secure access pass to the building who's a tenant, we know who's coming and going. We have cameras throughout the facility, but if you are not an office tenant, you're a warehouse tenant, you just can't go into somebody's office, obviously.

Kim Lisa Taylor:

Sure. So the offices, if they have them, they can lock and the warehouse spaces also. So you have movable walls, it sounds like you're solving the problem.

David Fisher:

We haven't needed to move walls yet, but we do have walls that can be moved. And sure, if somebody was in one unit and they're like, "Hey, I'd like to bust through the wall." We would work with them on how to facilitate that because our walls are pretty modular. They're not holding anything up. In our other facility, the walls hold up the second floor. In here, the walls go up 10 feet, yet the building is 23 foot high. So the walls just are there, self-supporting.

Kim Lisa Taylor:

So how about security? If somebody's got some proprietary thing that they're creating in their warehouse, are these spaces secure enough that they feel comfortable leaving that there and that nobody else can access it?

David Fisher:

Yes. Our experience is that they've been very comfortable. And before I launched this, I did research other companies that do similar and none of them had anything basically covering the top of the unit. I always felt that if somebody had a big concern, we could at their expense install chicken wire on top to prevent somebody from getting over it, but they'd really have to climb up a 10-foot wall to get into their unit and then climb back out.

And we've got cameras everywhere. And so if they wanted to get in, yeah, they could get in. We could put chicken wire up there, but technically they could even cut through the chicken wire. It's just never been an issue.

Kim Lisa Taylor:

So what kind of tenants and entrepreneurs are suitable for this, I guess, or maybe what kind aren't suitable for this?

David Fisher:

So in our case, we don't do high-pile storage. We don't allow anything flammable or hazardous. We do not allow anybody who wants to create a lot of noise, dust, dirt, things like that. So we've had people inquire that said, "Hey, I do woodworking." And we're like, "No, you're not a good fit. Number one, your tools are loud, and number two, you're going to create all this sawdust." And so we agree that that's just not a good fit.

The other thing is nobody can bring in something hazardous or flammable or chemicals that would mix together even accidentally could become hazardous or flammable. We don't allow anything that creates an odor. We share with the customers that it is a shared environment. Play your music low or put in earbuds because your neighbor may not listen to the same music you do and be a neighbor, collaborate with each other.

Don't bring in something that creates an odor because it's going to affect all the tenants. And so we're trying to create an environment where people work together and we will eliminate people that we believe will disturb other tenants.

Kim Lisa Taylor:

And so do you do some kind of a six-month lease, month-to-month lease? How's that?

David Fisher:

So we offer a month-to-month lease, a year lease, a two-year lease, or a three-year lease. And the only difference in rate is if they sign a month-to-month, we have the right to raise their rent with 30 days written notice. If they sign a year lease at the end of the year like an apartment, we would raise their rent based on street rate.

However, if they sign a multi-year lease, our agreement is that we will not raise their rate greater than 5% or CPI, whichever is greater. So we explained to the prospective tenants that all we're asking them to do is allow us to adjust the rate to the rate of inflation.

Kim Lisa Taylor:

And so how did you come up with the brand for your business?

David Fisher:

Well, our marketing company and my wife did this. We have a facility in Sugar Land, it's called Imperial Storage Solutions, and I wanted Imperial Warehouse Solutions, but the marketing company and my wife researched everything and they determined that the word kefi is a Greek word. I think they call it kefi in Greece, but it is a word that embodies the spirit of the entrepreneur, the enthusiasm, the drive, the passion, the love for what they're creating, what they do. And Kefi Spaces is that exact word in Greek. So my wife fell in love with the word. I was out of the picture.

Kim Lisa Taylor:

Okay. Well, and that is the right way to do a brand. We counsel a lot of clients on how to create their brands, and the first thing we say is do a Google search and find out who else is using those words that you like and make sure that there's not already people who are in your space that are going to get confused with you or your people are going to get confused and start calling them.

That's never a good idea. Or that there's some big giant company using the name that is going to send you a cease-and-desist letter as soon as you invest all this money in creating a brand. And then go look and see if the domain is available. Once you own the domain … It's not legally the same as having a trademark, but it is almost as good as having a trademark.

Once you have got the dot-com domain and you've started using it and you've developed a website around it that really keeps people out of your space because the dot-net, the dot-cos … all of those are not as powerful as the dot-com, but if you really want to keep people out of your space, you got to get those just to keep people away. And that is another thing I counsel people about is make sure that you do get the other domains that surround your domain so that other people can't just add an S and kind of create something to drive people away from your brand.

But yeah, so I always like brands that mean something to you because it's really great for you to tell your story when somebody asks, "Where did you come up with that name? What does that mean?" And when you have a good story, it makes them feel more connected and realize that you're passionate about this. So I think that's always a great idea. All right, so what is your website just in case anybody wants to check you out while we're on the call, how would they go there?

David Fisher:

My website is kefispaces.com.

Kim Lisa Taylor:

So K-E-F-I. Well, they're not all going to be able to see the chat. Let's just spell it out.

David Fisher:

K-E-F-I-spaces.com.

Kim Lisa Taylor:

There we go.

David Fisher:

And if they do go to that webpage, the very first thing they see is, well, other than a promotion that we're running, is a YouTube link. And they click the YouTube link, it actually takes them on a drone tour of the entire facility and the surrounding area. It takes them way up in the air, it takes them through the building. It does quite a bit with the drone, which we took when we first opened. So the place was empty and we're going to do another one as we're filling up. We're in lease-up right now. We actually opened the doors January 15th.

And I have to tell you, Kim, it is amazing how many lives we're touching because people are saying, "I've been looking for this very thing." Or they're like, "I didn't even know this existed." But I do want to say I didn't invent the idea. I did in my mind for a moment, but then when I started researching it and saw that some others were doing it, I went from invention mode to copycat mode.

Kim Lisa Taylor:

Okay, well, and you know what? There's got to be places like this all around the country. There's no way that any one person is going to own the thousands and thousands of warehouse spaces that are out there. And you can drive through any city and see vacant large buildings that used to be purposed for something else that would probably be very suitable for this kind of a thing, and maybe even available for some grant money or some tax credits or something like that if you can help revitalize a defunct building in a downtown area, right? Have you looked into any of that stuff?

David Fisher:

Yeah, we've looked at that and we've looked at different buildings. We've looked at different areas where there is some depressed economies because everybody's selling on eBay and Etsy and Amazon and walmart.com and everything else. And one of the things that our small warehouse allows you to do is start small and grow your business.

And the reason they need to go into a third-party warehouse, like what we're offering is because if you just bring your product to Amazon, you can't ship to a customer who orders your product on Macys.com or shopify.com or walmart.com because Amazon's going to ship to Amazon and they're expensive. What we do is we allow you to ship wherever you want and then in January, we're rolling out an offering, well, we'll actually do the picking, packing and shipping for you. It's called Kefi Logistics.

And so we're just starting to roll that out, and we're going to roll it out to our tenants, but we're not going to exclude anybody outside of us to do it. And for our investors, any business generated by the location that we started it in, it gets the benefit. For example, this is what we call Kefi Spaces, Old Katy Road Series 1 under the fund that we created with you. And so Series 1 is this physical location and any logistics that occurs at this location hits this P&L.

There is some mish-mashing between tenants. For example, we do have the location in Sugar Land, and if they're a tenant here, they can use the facility there, but they're limited on what they can do there. It's more of a co-working area. They can't go take over a warehouse, they have to rent that. But basically as we grow the entities and grow the locations, we want them to feel comfortable going to Dallas and going to Atlanta and going to Los Angeles as we expand this.

And that's our goal is to expand it, hopefully even to turn it into possibly a franchise because a lot of these immigrants who are really our target audience, they may go into areas that we've never thought of going into, like Timbuktu, Arizona. And if they do and they want to create it, we want to help them be successful. And so that's something that's down the road for us.

Kim Lisa Taylor:

So this is your first location, the building in Tucson, or not Tucson, Houston, right?

David Fisher:

Right.

Kim Lisa Taylor:

And so looking to expand, you said you have a second …

David Fisher:

Second location. This is our second location. Sugar Land, Texas is our first.

Kim Lisa Taylor:

Sugar Land, Texas. Yeah, we have a place in Yuma, Arizona, and there's some really large swap meets down there that I could see all of those vendors at those swap meets could use some space like this because when they're not there at the swap meet, they have to have a place to store all their stuff.

And there's more additional product I'm sure that they bring in each week as their products get depleted and they have to have a place for that. I really like this concept. I've actually worked in a co-working environment before as part of our traveling around the country for a while in a motorhome. I rented a place for a while in Ohio. We stayed there for four or five months.

And it was really kind of cool to have that cameraderie that you get with the other people in the space as well as just having access to a quiet office to work at that was next to a coffee shop and a place you could walk to lunch versus trying to work from my motorhome while I was in it. All right, so how do you find the tenants for your buildings?

David Fisher:

We have an advertising company that we've been with for a long time and they advertise for all of our different entities, the different brands. Kefi Spaces specifically was a challenge because when they were trying to look at how other entities brought in customers, there wasn't a whole lot of search data that you could do. For example, you couldn't really go into “co-warehousing near me.” It just didn't exist at the time. I don't even know if it exists now.

But what we do is we do a lot of Google marketing, but most of it is that we work on, some of it's paid ads, but most of it is organic. We do a lot of Facebook marketing. We also are on a busy street, and so we have signage and we get people that walk in. I would say that 25% of the people that have come and rented from us drove by. We get a lot of word of mouth, but let me tell you my secret sauce.

We have a CRM, which literally puts them through a track and we enter them into the CRM and they're able to opt out if they want to, but we basically send them information depending on where they click. And our goal is to get them to schedule a tour. And so the CRM walks them through that, would you like to schedule a 15-minute call? Would you like …? And it goes through that.

We also have a CRM that we set up for prospective investors. I, as a corporate jet salesperson, have a database of every corporate jet owner and their email addresses and their phone numbers in the world. Now, I'm not saying that they have a one-on-one relationship with me. And I'm not saying that they're going to fall over themselves to jump on this deal. They've got to be educated. But through what I learned from Yakov Smart, who is very smart by the way. Impressively…

Kim Lisa Taylor:

Right. And he's one of our past podcast guests, so if you haven't listened to the podcast we did with Yakov, please do. Yeah, he's someone you want to know.

David Fisher:

Basically, we know that the repetition cancels out reasoning power. And just keeping your information in front of them, letting them know about your deals, letting them know about your successes. I was just writing a report this morning to our investors and we've been growing by 14% as we're leasing up. And it's just good thing to let them know that even when some people in the White House are trying to ruin the economy, we've got entrepreneurs who are growing and they need our service.

And so I'm not going to say it's recession-proof, but I can say that we're doing a lot better than these office buildings who see a lot of people moving out of the offices and leaving vacant offices and strip malls and things like that. We're in a situation where we're catering to an entrepreneurial client and we're helping them grow and it's benefiting our business.

Kim Lisa Taylor:

Just so those of you who are on the call, maybe some of you are curious, this is a Rule 506(c) offering, correct, David?

David Fisher:

Yes.

Kim Lisa Taylor:

Yeah, so that it is available. I think you do have still some investment opportunities available, but it's for verified accredited investors only. So you can reach out to David through his website if you'd like to know more about the investing opportunities, and it sounds like it's a pretty tremendous opportunity. It sounds like you've got a very well-built-out business plan.

I love that you're expanding into the logistics section. What do you think? Krisha has a lot of experience with coaching and cultivating entrepreneurs and helping them achieve their goals. Krisha, what do you think about what David is doing? It's pretty incredible, isn't it?

Krisha Young:

Yeah, I think it's really awesome, and I love the aspect of bringing community together, and I love what you said about these are your neighbors. So get to know them and be respectful of them, obviously with the noise and the smell and all that kind of stuff. But then you hit on something about this is your neighborhood, so there could be potential for collaboration and you just never know what could come out of it. So I really like that ethos and way of networking with other people who could be doing super cool things and maybe you can share customers or share experiences or something like that. So I really love that.

I loved what you said Kim, too. I have a couple of notes here about that. The URLs like grabbing every URL. I've done that. I have hundreds. And David, what you were talking about when you said that when you first started doing some research on this, it's really cool because you had that proof of concept. So it's like sometimes as entrepreneurs I think we can get like, "Oh man, I thought I had the original idea."

And it's like there are no original ideas in a way. There are, but there aren't at the same time. And it's like, what's our spin on it? What's our take on it? How do we brand it? How do we market it? How do we do this differently or how we want to? And it sounds like you and your wife and your whole entire team have really taken this entrepreneurship spirit to heart and really pulled that into your overall mission and branding and energy of the business. So it's not just a co-working space or just whatever. It's something with a heartbeat it feels like to me. So it's very cool.

Kim Lisa Taylor:

Yeah, I think it's tremendous. The other thing you said that I think is critical for our listeners is that you have spent clearly some time, effort, money on putting some thought into your CRM and you called it a trap, and I would call it a funnel. We're funneling people that might be interested both in investing but also in becoming tenants. And you've realized you've got both these aspects of your business. You have to grow with additional investors, if you want to go acquire additional spaces, but you also have to grow with getting your spaces occupied.

And you've created these systems, and I know from our own personal experience that it's a big task to get those done, but once you get them done and you work with someone like Yakov or we have our own internal marketing team, once you work with them and get those things set up, then they can really help get people to where you need them to be so that they understand the value of your service and what you're offering and why they want to be part of it. So I applaud you for doing that because I know that is a really huge effort. So you're doing well.

David Fisher:

My wife on that because I'm the visionary of the company and she is the operations. I think of a car and she's the one who puts in all the transmission and the engine and everything else and makes it run. I don't want to deal with that. I know how I have the vision of how it's going to run, but she actually puts it together and that's how we work together.

Krisha Young:

That's smart. That's a super smart way to work. You hire the people to do the jobs that you don't want to do because that's their zone of joy and genius. And so now you have something that's actually tangible and not just an idea or a concept. Very smart.

Kim Lisa Taylor:

What I've learned as our business has grown, we now have 13 staff members starting out from one and well, two of us in 2016, we have learned that I don't need to know how everybody else does their job. I just have to have an understanding of “I need to get this done” and then I have to find the right person that can figure it out and implement it. So it sounds like you've got a really winning team there with your wife.

And I think that's a lesson for everybody that's on the call. If you want to be successful in the syndication business, you really have to have a clear idea of who you need on your team and their strengths and weaknesses, and you're trying to fill those positions with people that have those strengths, especially where you have weaknesses. So you've got to identify your own strengths and weaknesses first, and then figure out who else you need to bring in that can fill those other jobs. So it sounds like you've really started to do that, and I'm sure you're going to be adding staff as you grow.

David Fisher:

We outsource some of it, like we have a virtual CFO and we have a great accounting company, a firm and things like that, but as some things like bookkeeping became critical, we took it away from the accounting and we brought it in-house, and then the CFO we’ll take that and bring it in-house. And so we'll take different elements that we outsourced and when we're paying too much money as opposed to, hey, we could hire somebody, then we bring it in-house. And so that is our plan to do that and it works. The first thing I did was I basically looked at where we were weak and how we could fill the position and we did it and it's been successful.

Kim Lisa Taylor:

That's great. Well, okay, so we're going to just take a second here. So just do a little bit of ad for our firm and how you guys can learn more about some free services and things that we can offer for you. Just in case you don't know, I've written two Amazon best-selling books on raising capital legally. One is more of a beginner's guide that's called "How to Legally Raise Private Money." The other one is called "How to Raise Capital for Real Estate Legally." It's a more advanced technical reference, but if you want us to mail you one for free, you can text the word “syndicate” to our phone number, which is (844) 796-3428. And if you're looking on your phone, that actually spells 844 syndicate S-Y-N-D-I-C and the number eight. So text the word “syndicate” to (844) 796-3428. You will get a pop-up form that you can fill out, but you need to give us your address so we can actually send you the book.

You're going to answer a question and the question's going to say, "Have you raised money before?" If you say, "No," you're going to get the beginner's guide. If you say, "Yes," you're going to get the more advanced reference guide. If you want to buy these books on Amazon, they are available on Kindle. We've got them both. So you're available. And we are working on the second book right now as an audible version, so that'll be ready in a month or two, but it does take some time to get that done.

So let's go back to David and let's just keep picking his brain here because I think this is just really amazing. I love what you've done. I love the fact that you are an entrepreneur clearly, and you are helping other entrepreneurs, and that's not only just good business, but it's also a good feeling.

So I like that you're giving these startup entrepreneurs, and like you said, many of them are immigrants and they're here to fulfill their American Dream, and you're giving them the ability and the space to do that literally. So that's really great. So what about if somebody wants to emulate your business model or if somebody sees a warehouse in their area that they think might be good for this, what should they be looking for? What kind of buildings, properties are suitable and which ones aren't?

David Fisher:

Okay. First of all, they want to be in a building where there's neighbors. They don't want to be out in the middle of nowhere, okay? Because they're going to draw from a community within no more than a five-minute drive or five-mile drive, five-mile drive number one. So they want to get the demographics of the area and make sure that they're going to have people to draw from. Nobody's going to drive 30, 40 minutes to go to work in your warehouse, number one.

Number two, the space needs to be a minimum, minimum 50,000 square feet. They should really target buildings that are about 100,000 square feet. Most warehouses have an office component. They want to keep the office component, turn it into smaller office spaces, and they want to put a lot of glass because nobody wants to work in a closet. If they want to work in a bedroom with no glass, they can just stay at home.

The other thing that they want to do is they want to just — this is key — the units in the warehouse, you have to have a tremendous amount of them that are small because you're going to drive more revenue per square foot on the smaller units than you will on the bigger units, and the bigger units will be vacant longer, but you still need the bigger units because people are going to grow.

You have to have a space for them to grow, but it's not that difficult to knock down a wall. And so we're not building walls floor-to-ceiling. We're building walls floor to 10 feet, 12 at the most. I say 10. These are keys that you need to, so you want to be in the right population. You want to be in a space that's big enough for what you're trying to do. You need at least two to three loading docks, preferably a truck ramp if there's one. It doesn't have to be.

But I also have a U-Haul franchise or dealership here, as well as my Sugar Land property, because I know that a lot of the tenants need to get a truck and I want to be able to service them, plus we earn a commission on it, so it draws people in. A lot of people come from the neighborhood and they're like, "What's this?" And we show it to them and they were this there to rent a U-Haul. And we've gotten tenants from it.

They want to make sure that they have a lot of security, cameras around, cameras inside, keypad access or card access to get in and out. Tenants want to feel secure, especially since 75% of your customers will be female. And they don't want people just if they're working in the evening, just walking in the door, they want to know that we know who they are, and we secure that by way of using our card access and our card access, which in this case looks like this tells who entered, when they left, everything.

And of course we have cameras, so I want you to know that's kind of some of the keys to look for. I recommend acquiring the warehouse. They could lease it if they want to, but it's harder to make the numbers work because when they actually do all the slicing and dicing, they're going to find that if they allow for the proper hallways, which have to be a minimum five to six feet to get pallets through, then at the end of the day, they're going to be leasing out their net rentable square footage is 65%, so 35% of the space is common.

You got to make all of your money on the 65%, and I don't care how you slice it and dice it, that's where you're going to end up. If you're in a humid area, air-condition the warehouse, I know it's going to cost a fortune, but you charge more. If it's not air-conditioned, you can still be successful, but you got to charge a lot less.

Kim Lisa Taylor:

Okay. And so you said what would be the smallest space that you would offer?

David Fisher:

You mean in the warehouse?

Kim Lisa Taylor:

Yeah, in the warehouse.

David Fisher:

I'm going to tell you something funny. We built one unit that was 40 square feet just because that was all the room that was available, and we actually built it for one tenant. The tenant left the space within a month. He's now in 100-square-foot space, but that space re-rented so fast. People just, that's their budget. “I just need something to put some boxes in” or whatever.

But remember, our space is designed to work in. If people want mini storage, we're not competitive. We're charging anywhere in the neighborhood of between $3 and $6 a square foot in the warehouse, more in the office, and that's per month, by the way.

And so we do that, but they get all of these amenities — high-speed internet, coffee, break rooms, common areas, conference rooms, loading dock — we even supply the pallet jacks and the utility dollies. All of it's included at no extra charge, but we're making it up in our rent. So that's kind of some of the secret sauce there, but a unit that's 40 square foot actually is going to rent.

Kim Lisa Taylor:

That's amazing. And I can see that though. I can see where somebody's like, “Okay, I've only got this budget and I just need it. I know I'm going to grow, but I don't want to overcommit until I really need that space.” I can see where that would even be beneficial for somebody now. So, is there financing available for people who want to buy a warehouse?

David Fisher:

Absolutely. If you want to purchase a warehouse and you are going to operate the warehouse, and you offer the space in the warehouse on a month-to-month basis, the Small Business Administration will finance it. But the key is it has to be owner-occupied, which means you're running a business in the business. The U-Haul trucks helped with that.

Kim Lisa Taylor:

Right. Okay.

David Fisher:

Number two, you got to own the dirt. If you don't own the building, the banks don't want to talk to you. Number three, you've got to offer month-to -month. If you offer a long-term, like if require a long-term lease, the banks won't talk to you. Well, I should say the SBA won't talk to you. that's why the SBA does not finance apartment complexes or office buildings or strip malls or things like that. They require you to sign a long-term lease.

We are month-to-month, and the reason we're month-to-month is really simple. If a small business fails, we're not going to chase them. I mean, seriously, what's the point of signing a long-term lease? So you can sink your teeth into it? The fact is you can't. So we do it month-to-month because we have a storage mentality, and that's the way we run it.

Kim Lisa Taylor:

That's amazing. And is it because you're leasing it out month-to-month, they're considering you to be the operator of the business, and that's why it qualifies for the SBA loan?

David Fisher:

Right. Plus we sell boxes and moving supplies and shipping containers and U-Haul trucks and things like that. It would basically emulate a storage concept. And the SBA has approved self-storage as what they finance. So the key is to be owner-occupied and we are.

Kim Lisa Taylor:

You're running the business there. Okay.

David Fisher:

If you buy a warehouse and you say, “I'm going to get a guy in there or a gal in there and they're going to rent it for 10 years on a X number of dollars per month, triple net and blah, blah, blah,” SBA is not (interested) because you're not involved in the business, in the operation of the business. In fact, I have a keyword for you. It's called space as a service. We are offering space as a service because we're doing everything else for them, and that space as a service is the key to our differentiation.

Kim Lisa Taylor:

Right, right, right. That makes a whole lot of sense to me. So what about regulatory issues? Did you have any trouble selling this to cities, counties, and did you have to get certain permits and approvals to be able to do this?

David Fisher:

No, we really didn't. And we're in a strict city. City of Houston is pretty tough. All of the walls had to meet fire code, it had to have a certain sprinkler system in it, which it did already. We had to basically bring the building up to code. There was things like the back of the building didn't have a sidewalk. We had to pour a sidewalk. It's ridiculous. Nobody's ever going to walk on that sidewalk, but you know what? If there's a fire and they got to get out there, they don't want them to slip in the mud.

I don't know what everybody's religion is, but when it comes to buildings, the fire marshal is God, end of story. So they say they want it, even if it's not in your blueprints, they're going to get it or you're not going to get an occupancy permit. We fully complied, and I do have to say, I was pulling my hair out. See all this right here? I had a lot of hair before. No, I'm just kidding.

Kim Lisa Taylor:

Yeah, you got to get the fire marshal to bless it. But then you have the comfort of knowing that, hey, we've done everything that we can to also provide safety for our tenants because there have been warehouse fires where people have been doing the wrong things inside of warehouses and been trapped and injured, and you certainly wouldn't want to create that situation.

All right, so I think, do we have some questions? I mean, we've got some attendees on the call. If any of you guys have any questions at all, we would love to hear from you. This is your chance to pick David's brain. I'm sure he's a very busy entrepreneur. He's got a lot of really great ideas. So if you want to ask questions of him or ask questions of me or even Krisha.

One thing I will say while we're waiting for people to ask a few questions is, so David, it's interesting because we have a Mastermind that meets weekly so any of our clients can attend, and of course, we'd love to have you there. Also, it meets every Wednesday at noon Eastern time. And Krisha and I usually host that together and we share a lot of great ideas with our clients.

Krisha Young:

It's a lot of fun.

Kim Lisa Taylor:

One of the things that we're going to be talking about next week is what our lofty goals are. I had to think about what kind of lofty goal that I wanted to add into my future, and the one I came up with is I want to ride on a private jet. When you said that, it's like, "Oh my God, you're my guy. You're my connection to riding a private jet." So we're going to have to talk about that offline.

Krisha Young:

I wrote that down too. I was like, "Ooh, private jet sales. That's kind of cool."

Kim Lisa Taylor:

Have to arrange a tour to come to Houston and facility and get some people together that want to come and take a tour and see how you do it. So, Krisha, do you have questions right now?

Krisha Young:

Yeah, we do. We have a question here. It's from Sam G. It came in a little earlier, so hopefully Sam is still on, but if not, this is all being recorded. “Do you allow tenants to have customers visit?” That's a great question.

David Fisher:

Oh, absolutely. They're running the business inside and they're welcome to have customers visit. The customers are not allowed to get past our reception area until they're escorted by the tenant, but the answer is yes.

Kim Lisa Taylor:

Oh, now that's a great security feature. So they don't get to wander through and just see what all's around and shop. They get escorted to that specific space. That makes a lot of sense.

Sam G:

Thank you, David.

Krisha Young:

Oh no, you just said thanks. Okay, Sam said thanks.

Kim Lisa Taylor:

Okay. So any other questions out there for either of us or Krisha? Can you think of anything that you'd like to ask David that we haven't already covered?

Krisha Young:

How do we get this tour on the jets?

Kim Lisa Taylor:

That's what I'm asking.

Krisha Young:

That's where my mind is now. Well, I do have a question actually. Because you have a family business, right? Because you have it with your wife. So how do you manage that in terms of keeping business and personal sort of separate or whatever? How does that work for you guys? What lessons have you learned over the years?

David Fisher:

Well, we're just about celebrating our 25th wedding anniversary come the end of this month, and I can share with you, and we've worked several businesses together. She's worked in my aviation business and she does things that I don't do. Mainly the fine details of the business, the operations side. Like I said, I'm the visionary. My office is about 30 feet away from her when I'm not at another location. I am at another location today, and sometimes I don't even see her all day.

Now when we get home, if we want to discuss something, we set a time for it, schedule it. Other than that, when we're home, we don't talk about work unless there's just something pressing, in which case I'll say, "Listen, we need to talk about this. When can we talk about it?" And then we do that — and I'm usually the one who initiates it because she's the one who enforces “no talking about work at home” role — and I want to talk about work at home. So she … I have to schedule it with her.

At work, then we can talk about work all the time. And if there's an issue, I'll sit down with her. We do have a team meeting with all of our managers, so we have managers at each location. We have a community manager, we have a general manager. And the community manager does just that creates community. The general manager runs the operation and we manage those folks. And we have a team meeting every Wednesday, and we're able to put everything on the table unless it's urgent that we have to handle it right away.

Kim Lisa Taylor:

Yeah, my husband and I also do some work together. He supports me in my business as both just a marketing advisor — he’s got 40 years of marketing and advertising experience — he also helps coordinate logistics and travel arrangements for staff and myself and has a lot of different roles. But we have one rule and that's like we don't talk about anything related to business after 10 o'clock at night. Absolutely.

But even before that, a lot of times we'll be in a conversation and I'll say, "I really just don't want to talk about this right now. I really just need to decompress and be done with the day,” and he will respect that. But there are times that we do have to talk about it outside of work. One of the boundaries I've set for myself is that I don't look at my emails on the weekends, and I really try very hard not to work after six o'clock at night.

And usually that's because my dog is coming up to me and kind of reminding me that it's time to stop the day and pay attention to me, and we need to go for a walk. And that's just a nice little break for me and then break into the rest of my evening. So anyway, yeah, you do have to learn how to balance that work-life/personal-business relationship, and it is critically important. So David, just once again, give us your website. Now, what if someone wants to invest or what if someone wants to know more about Kefi Spaces, would they go to the same place or do you have separate places for that?

David Fisher:

I would ask them to email me directly at David@Fisher, F-I-S-H-E-R, global G-L-O-B-A-L-L-L-C.com, or let me give you a more simple email address. They'll remember it better. My Gmail account is thejetbroker@gmail.com.

Kim Lisa Taylor:

That's a good one.

David Fisher:

Right. So I have both because some things actually get filtered out and the other one, but David@FisherGlobalLLC.com is my main corporate one, and then thejetbroker@gmail.com also. And then the third email address I have, which funnels into the same is david@westernaviation.com. So they can go check out all of those domains and they can reach out to me that way. My cell phone number, which I answer religiously, is (281) 794-2361.

Kim Lisa Taylor:

Well, this has just been a wealth of information. We should talk about how you should be starting to buy syndicate jets on your own, right?

David Fisher:

I've thought about it, but I've got to walk one step at a time.

Kim Lisa Taylor:

Yeah, we actually have had some other clients that were doing that for a while, so I'm not sure if they still are. But you can syndicate anything. You can syndicate yachts, you can syndicate jets, you can syndicate buildings, real estate businesses, all different kinds of things. So it's really whatever you want to raise money from private investors for. It's all part of the syndication process, putting groups together to achieve a common goal. And we can definitely talk to you and help you with all of those different things.

David, it's been a pleasure. I have learned a ton of stuff on this call, much more than I thought we were going to talk about today. I hope that everybody has found this to be really valuable. We do appreciate your time, and don't forget to subscribe to our podcast at "Raise Private Money Legally."

Also, our website at syndicationattorneys.com has a lot of free educational materials, including over 70 articles, many frequently asked questions, all of our previous podcasts, and you can also schedule an appointment with one of us there. So that's syndicationattorneys.com.

So thank you all for joining us today. We've loved having you, David. You've been an amazing guest. Krisha, thank you so much for being our co-host, and we'll see you guys all next time.

Krisha: Young

Thank you, Kim. Thank you, David.

Kim Lisa Taylor:

Good day. Bye-bye.