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Cash Flow Champs

Cash Flow Champs Real Estate Podcast

Ryan Gibson is the President, Chief Investment Officer, and Co-Founder of SIG. He has organized over $200M of private equity for Spartan’s projects. Ryan has experience managing the development of SIGs projects in challenging markets.
For SIG, Ryan is responsible for investor relations and capital raises for projects. Ryan is also a highly experienced commercial airline pilot. Ryan graduated from Mercyhurst University with a bachelor’s degree in Business, with concentrations in Marketing, Management, and Advertising.

What You’re Going to Learn:

  • Navigating Financial Success with Real Estate Investment for Busy Professionals
  • From Airline Pilot to Self-Storage Icon: Ryan Gibson’s Career Transition
  • The Importance of Finding the Right Syndicator with Ryan Gibson
  • Life-Changing Advice from Self-Storage Industry Leader Ryan Gibson
  • Aligning Goals and Vision: Ryan Gibson’s Approach to Effective Team Management

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Show Highlights

Navigating Financial Success with Real Estate Investment for Busy Professionals

Navigating Financial Success with Real Estate Investment for Busy Professionals

Prashant Kumar- As we discussed earlier, the main goal of this podcast is to inspire and motivate. There are numerous busy professionals in the world, including tech experts, doctors, lawyers, small business owners, and many others who are constantly on the go. They may be accomplishing many things, but often struggle to find time to manage their finances. Many end up investing in stocks, with some making money and others losing. Their hard-earned money is often not working for them as they desire. That’s where real estate comes in. We aim to bring the fundamental benefits of real estate investment to these busy individuals and encourage them to take advantage of it. What would you like to say to these people?

Ryan Gibson- Congratulations to all of those who are listening to this podcast, as you’re taking the first step in the right direction. I recently heard a wise saying from Dwayne Johnson “The Rock” that people often have a “one day” mentality when it comes to investing. They think, “one day I’ll get around to investing,” “one day I’ll learn about syndications,” or “one day I’ll replace my active income with passive income.” But I’m here to tell you that today can be “day one” rather than “one day.”

As someone who worked as an airline pilot for 17 years, putting in long hours and constantly on the road, I understand the importance of replacing active income with passive income. It provides the financial freedom to do what you truly enjoy, whether it be spending time with family, pursuing personal interests, or focusing on self-development.

Alternative investing, such as real estate, is a great way to maximize the value of your hard-earned dollars, enjoy tax benefits, and attain financial freedom. It’s all about taking it one day at a time, and I’m thrilled to be a part of this conversation.

Paul Senior- Ryan, thank you for joining us. Can you share your expertise and perhaps provide one tactic or tool that could benefit our listeners?

Ryan Gibson- My background is primarily in aviation, but I have also spent a lot of time listening to thousands of podcasts and reading books to expand my knowledge. Today, my main focus is my investment in self-storage, where I have built a self-storage platform with my partner Scott. Our platform helps others invest passively in self-storage syndications, which allows us to purchase mom-and-pop self-storage facilities that are in need of improvement. We then aggregate these facilities into a larger portfolio, adding value through various means such as raising rents to market rates, fixing up the properties, and implementing advertising, call centers, revenue management, and ancillary revenue streams like tenant insurance. Our focus remains on self-storage, providing passive investors with opportunities in this market.

Paul Senior- Awesome, Ryan. With so many different asset classes to choose from, you’ve decided to focus on self-storage. Can you share what inspired you to pursue this particular asset class and how you got started in it?

Ryan Gibson- What inspired us to invest in self-storage is our background in careers where mistakes can have severe consequences. As airline pilots and military veterans, we understand the importance of risk mitigation. Our research has shown that self-storage has been recession-resistant during the last 25 years. During the last four major declines in GDP, self-storage occupancy in some cases has increased or remained strong. This is because self-storage is used during times of distress, such as during life events like moving, downsizing, relocating, and the COVID-19 pandemic. During the pandemic, self-storage outperformed every other asset class by a landslide.

Additionally, self-storage is easy to own, maintain, and evict. Unlike other asset classes, there were no eviction moratoriums during the pandemic, and government restrictions on collecting income were not an issue. This is because self-storage units do not have the same tenant-landlord laws as residential properties. The ease of ownership, maintenance, and eviction, as well as the lack of restrictions during the pandemic, are among the reasons why we chose to invest in self-storage.

From Airline Pilot to Self-Storage Icon: Ryan Gibson's Career Transition

From Airline Pilot to Self-Storage Icon: Ryan Gibson's Career Transition

Prashant Kumar- I would like to gain a better understanding. You are a former airline pilot and have since transitioned into the self-storage industry. Can you share your journey and the decision-making process that led to this change? Your impact in the industry has earned you recognition as an icon and you are well-known by many. Can you tell us about the leap of faith you took in leaving your job as an airline pilot and transitioning into the self-storage field?

Ryan Gibson- Not at all. Our journey began with a well-crafted plan and a strong business partner. My business partner was actually my neighbor in Washington D.C. We became friends and eventually decided to join forces in providing investment opportunities for our investors. Our goal was to build a portfolio that balances risk mitigation with a solid strategy. To achieve this, we regularly review and update our strategic plan every three years, making it available to the public through full transparency on our website, spartan-investors.com.

Initially, our investments were in the residential market, but we later shifted to self-storage for specific reasons. Our journey began with the purchase and renovation of a rundown property that was located between our two houses. We then gained more knowledge by traveling across the country, attending self-storage conferences, and seeking advice from industry leaders.

The key takeaway from our experience is to keep an open mind and heart, have a plan, and be willing to adjust and adapt as needed. There will be setbacks and failures along the way, but it’s important to stay focused on continuous learning and growth. Our success has been a result of a combination of education and action. So, my advice would be to always stay open-minded, have a plan, and be willing to embrace changes both personally and in your business.

Prashant Kumar- You mentioned that there are a lot of changes and failures in your plans. While it’s easy to focus on the positive aspects, it’s also important to reflect on the lessons learned from failures. For the benefit of our listeners, could you share how you have applied these lessons to your business? I believe this would be highly valuable information.

Ryan Gibson- Coming back to the point, let’s talk about the lessons learned from failures in building a company. A key failure I encountered was thinking I could just change my active income into passive income. It’s important to surround yourself with experts in the industry, those with 10 to 15 years of experience working for a REIT or a top brokerage. This applies to both real estate investment and passive investment.

When starting out, it may be difficult to pay a high salary to a highly experienced person, but it’s worth it in the long run. In retrospect, I would have strangled myself to find the best person right from the beginning.

For passive investment, it’s crucial to educate yourself and find the best operators. Don’t just invest with anyone who comes your way. With 37,000 offerings a year, there are a lot of efficiencies to be gained by finding the good ones. I learned this the hard way after investing in my first syndication as a passive investor, which turned out to be a Ponzi scheme.

Now, I have a different mindset and invest with caution. The lessons I’ve learned over the years have been invaluable and I hope that my experiences can be beneficial to our listeners.

The Importance of Finding the Right Syndicator with Ryan Gibson

The Importance of Finding the Right Syndicator with Ryan Gibson

Prashant Kumar- It’s not solely about growth, it’s about avoiding mistakes. While the growth of 5% or 10% is commendable, a decrease of 15% negates the growth achieved. Hence, finding the right syndicator early on is crucial. Can you also share some positive experiences from your journey? Were they a surprise? How has your experience been in these positive moments?

Ryan Gibson- If you’re searching for passive investment opportunities or planning to invest on your own, start by defining your mission, vision, and values. I initially underestimated the significance of this, but my business partner stressed the importance of focusing on these elements from the start. As we were plotting our course, whether it was in my garage or living room, my partner was insistent on having a clear mission, vision, and values in place. At the time, I thought it was just the typical business school stuff that I didn’t think was important. But I was wrong, it matters a lot.

Without a clear mission, vision, and values, you will be easily distracted by deals and opportunities, and won’t have a clear idea of the types of people you want in your life, working for your company, and doing business with. Your vision statement provides clarity to anyone working with you, while your mission statement outlines your goals and the types of things you want to surround yourself with. The MVV or Mission, Vision, and Values may seem like a soft skill, but it is critical to your success.

I have talked to many business leaders in Seattle during my real estate journey, and they often ask me how we were able to grow so fast and attract top talent. When I ask them about their mission statement, they often give vague answers like “to do good things.” How can someone you hire have any expectations or align with your goals if they don’t even know your mission? This is why having a clear mission, vision, and values is so fundamental to success. I can’t emphasize enough how important it is.

Paul Senior- Having a clear vision and mission statement is essential for success. It serves as a beacon that guides everyone towards a common goal, ensuring alignment and cohesiveness among team members. Our team is currently reading the “Rockefeller Habits” and following their one-page strategic plan, which has proven to be a powerful tool in bringing everyone together and fostering synergy. When everyone is working towards the same objectives, it makes a significant impact on the outcome.

Ryan Gibson- I love the Rockefeller habits as well. It’s exciting to have your team work on them individually and then see how different your perceptions are. That’s a fun experience, isn’t it?

Paul Senior- But I can understand why people ask you about your tremendous growth. Just from hearing you speak, it’s clear that you and your team have achieved a lot in a short period of time. I’m sure there was a point where you had to make a decision about who to hire first, who to hire second, etc. Can you talk a bit about how you approached that process and what kind of thinking went into it, so that you could launch the company to where it is today?

Ryan Gibson- There is always a debate about what comes first: the deal or the money. From my personal experience, it’s all about money. If you have a $2 billion deal in hand but no cash to do it, then you need to focus on building a bigger pipeline. The key to attracting money is to have a solid strategy in place and to be able to show investors and banks that your books are in order, your accounting is solid, and you can produce tax returns and K-1s in a timely manner.

Our first hire was an accountant with a strong background in bookkeeping, who started as an office manager but quickly took on more responsibilities. We had three founders, with expertise in finance, strategy, and capital raising, which was critical to our success in the early stages. We had no experience in real estate or self-storage, but by having a clear and concise business plan, we quickly became the 40th largest operator of self-storage in the United States. Our investors saw our plan and believed in us, and banks saw us as the most organized loan applicant they had ever seen.

To anyone starting a business or raising capital, it is important to have a strong strategy in place and to make sure your finances, accounting, and presentation are airtight. This will help you attract investors and secure loans, both debt and equity.

Paul Senior- That’s awesome. You’re dropping some valuable nuggets for our listeners. We really appreciate that.

Life-Changing Advice from Self-Storage Industry Leader Ryan Gibson

Life-Changing Advice from Self-Storage Industry Leader Ryan Gibson

Paul Senior- Thank you for taking the time to speak with us. Let’s move on to our lightning round now, where we ask three simple questions of our guests. The first one is, can you share with us one piece of advice that has greatly impacted your life and how you believe it could also benefit others?

Ryan Gibson- One piece of advice that has impacted my life and may benefit others is to find a supportive peer group and constantly evolve. When starting out in real estate, find a local RIA (Registered Investment Advisor) and like-minded investors, but be aware of when it’s time to move on and seek more challenging experiences. I joined YPO, an organization that focuses on leadership development and puts me in a room with highly successful individuals, pushing me to be a better leader. Seek out business partners and friends who have accomplished more than you and have more experience, as having that ego check and vulnerability can greatly help with personal and professional growth.

Paul Senior- Share one of your personal habits that contributes to your success that you think may benefit our audience.

Ryan Gibson- I meet with my team every day for at least 15 minutes. We utilize a combination of Rockefeller habits and traction, including setting a “WIG” or Wildly Important Goal. Every Monday, I gather my sales team for a 15-minute check-in where we go around the room and share our WIG for the week. The WIG is the most important goal for each department, one that will move the needle and is not set aside. We write it down and the following Monday we assess our progress. Having regular check-ins and accountability within a group is incredibly powerful.

Aligning Goals and Vision: Ryan Gibson's Approach to Effective Team Management

Aligning Goals and Vision: Ryan Gibson's Approach to Effective Team Management

Paul Senior- Expand on that a bit because of course, some people come with their WIG and while some people achieve it, others don’t. In the case of a department or an individual who is repeatedly not accomplishing their goals, how do you handle getting them aligned with the company’s vision?

Ryan Gibson- You can ask in the team meeting about any challenges or obstacles each team member may be facing. This could be in relation to their “WIG” or Wildly Important Goal. It is important to identify and address any issues that may be preventing a team member from achieving their goal. For example, if one team member’s goal is to complete a webinar PowerPoint, they may ask for help from a colleague, such as input on a specific slide. Even if the goal is not achieved, it is important to focus on the future and find ways to overcome obstacles as a team. As a leader, it may be helpful to offer support and suggest strategies for success. In a recent scenario, one team member had a goal of contacting 12 people per day but was being held back by administrative tasks. The leader suggested structuring the day to prioritize calls during the day and administrative tasks at night, to help the team member stay on track and achieve their WIG. This approach can be highly effective when there is a clear vision for the desired outcome.

Paul Senior- Awesome! I’ll ask questions in the pre-season to determine if the person has a specific destination in mind. We are working with passive investors, busy professionals who need guidance on how to invest passively and generate passive income while maintaining their full-time job. Can you recommend any books or resources for these individuals to start familiarizing themselves with the concepts of passive income and wealth?

Ryan Gibson- We have published an e-book on how to evaluate a sponsor, which can be downloaded from our website. This book explains the different terms such as sponsor, KP, operator, and preferred return. It also provides information on where to find regulation D offerings and operators. In addition, we are releasing another book in the coming weeks that covers the basics of syndication, including the concept of a waterfall and examples. As a passive investor with experience working with over a dozen operators, I highly recommend this resource, as well as other books and educational content such as webinars and podcasts. Additionally, attending conferences, such as the Best Ever Real Estate Conference in Park City in March, is a great way to network with other passive investors and operators.

Prashant Kumar- What is your vision for the future? We previously discussed upcoming funds. This is your opportunity to share your plans. How can our listeners reach out to you?

Ryan Gibson- We are launching three funds in 2023 on March 1st. Investors who invest within the first 45 days of the launch will receive a higher return. Our focus is on storage, specifically self-storage. Our Spartan Storage Income Fund offers monthly distributions from existing properties for a steady cash flow. The Growth Fund, for those seeking more upside, involves building self-storage facilities from the ground up. And for those who prefer a low-risk option, we have a Debt Fund that offers either 8% or 9% annual returns depending on your redemption option. All the details and information about the funds can be found on our website, Spartaninvestors.com, where you can also join our waitlist. Our offerings page includes videos and information to give you a quick overview of the different funds.

Prashant Kumar- If anyone wants to connect with you, how can they do so?

Ryan Gibson- You can reach me via email at ryan@spartaninvestors.com or connect with me on LinkedIn.

Prashant Kumar- It would be great to continue our conversation, Ryan. You shared a lot of valuable information with our listeners on the Cash Flow Champs podcast.