Do you know that you can earn extra income from your extra space?
STOW IT CEO Carmelo Mannino joins us to discuss how you can monetize your vacant real estate. He and his team provide parking solutions for people who are looking for an affordable and convenient way to store their vehicles while also giving passive income opportunities to hosts. There’s a huge potential in this market, and, as they continue to grow the business, Carmelo anticipates being able to expand to other markets across the United States. Tune in if you’re curious about vehicle storage!
[00:01] – [02:28] From Renting Out Backyards to Building a Business
- Carmelo shares how it started from a personal problem
- Realizing the big demand for vehicle storage
[02:29] – [11:49] Venturing into Vehicle Storage
- How they have scaled so far
- The challenge of getting both the renters and the hosts onboard
- Finding properties and building demand
- Carmelo on the greatest opportunity right now in the market
- What you need to have before start renting out your space
- People are always buying vehicles so there is always a demand
- The sales side of vehicle storage
- Being a resource and support to hosts
- Reaching out to the informal market
- How the company makes their money
- Their plan to expand 10x in the next two years
- Funding through angel investors and people who use and are satisfied with their product
[13:57] – [16:26] Self-storage Has A Supply Problem
- Taking a huge advantage of the demand
- Not owning real estate but earning through connecting renters and hosts
- Striving to become the largest provider in the industry
[16:27] – [18:12] Closing Segment
- Reach out to Carmelo!
- Links Below
- Final Words
Tweetable Quotes
“You got to think of these as like a business-to-business relationship. Even though it’s one person and one truck, it’s a bit different than storing your RV. That’s their livelihood.” – Carmelo Mannino
We like to say we handle all the headaches for our property owners, you know. If you’re going to buy a piece of land, all you have to do is move them in and assign them their spot. – Carmelo Mannino
“Self-storage has a supply problem, especially when it comes to vehicles. And we have this huge advantage in that we don’t have to purchase and develop real estate to gain supply in a city.” – Carmelo Mannino
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Connect with Carmelo!
Head over to the STOW IT website if you’re interested in becoming a renter or a host! Email Carmelo directly at carmelo@stowit.com and follow him on LinkedIn!
Connect with me:
I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.
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Email me → sam@brickeninvestmentgroup.com
Want to read the full show notes of the episode? Check it out below:
Carmelo Mannino [00:00]
We want to become the largest provider of vehicle storage in the country. And with that comes the most robust set of data of anyone that we’ll have in the country when it comes to supply and demand discrepancies and vehicle storage. So we believe there’s absolutely an opportunity whether it’s us or an outside investment group or some of our current investors that are self-storage owners and operators have expressed interest. You know, they want this data to know where should I buy my next yard?
Intro [00:24]
Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we’ll teach you how to scale your real estate investing business into something big.
Sam Wilson [00:33]
Carmelo Mannino is the CEO and co-founder of STOW IT. STOW IT is a marketplace for vehicle storage. Carmelo’s background is in digital marketing and consumer-facing applications. And he started STOW IT with two brothers in 2017. And they are growing rapidly. Carmelo, welcome to the show.
Carmelo Mannino [00:53]
Thanks for having me, Sam. Great to be here.
Sam Wilson [00:54]
Hey, man, the pleasure is mine. Three questions I ask every guest who comes on the show: in 90 seconds or less, where did you start? Where are you now? And how did you get there?
Carmelo Mannino [01:01]
Yep, we started by accident, personal problem finding self-storage. We started renting out basements, turned out to be a terrible idea. And then we pivoted to garages. So right now where we’re at is stone is an online marketplace where we help individuals with barns, garages, land, driveways, anything that can store an item on wheels, that’s RVs semis, cars, trucks. It’s got wheels, we’ve probably stored it, where we’re at right now is obviously a marketplace for vehicle storage and looking to expand. We’ve built a great business in Denver and starting to go beyond so the next few years is us expanding to more cities around the country with this kind of turnkey business model we’ve created.
Sam Wilson [01:41]
Interesting. So what caused you to think of this business?
Carmelo Mannino [01:45]
So one of the founders was moving, and it was two brothers, myself and Dylan and Devin Eldridge and Devin was moving in his house closed three days before his new house opened, and he had to pay $400 for three days of self-storage, and he thought there’s got to be a better way. So he started opening up his basement to buddies and friends that he knew needed self-storage, and then that ended up with us opening up our backyards, and driveways, to vehicles. And from that, we found that self-storage was hard to do. It was, if you can imagine a buddy moves in, you’re gonna help them, you’re not going to make a lot of money. And it’s only gonna be for short term. Whereas with a vehicle, an RV, it’s much longer term, it’s a higher dollar value, and it’s less hassle for property owners.
Sam Wilson [02:28]
What, so you guys have built a platform, you’re the Uber of storage. That is really interesting. And you guys have built this out in Denver?
Carmelo Mannino [02:37]
We’ve built it out in Denver and a bit beyond, too. We touch a few niches like long-term airport parking, semi storage, where we have a national reach with both of those. That includes 40 locations around the country most of your major metros and cities. Whereas in Denver, we focus a lot on what we call our peer-to-peer model. So that’s individuals like yourself or myself renting out garages, driveways, barns, farmland. That’s one of our big ones. You know, we’re really a suburban business. People in the city that have the extra cars or have the RV, we help them go to find the spot in the suburbs to store their RV.
Sam Wilson [03:12]
Right. No, I think that’s absolutely brilliant. What has been some of your challenges, getting this scaled or even getting people to know about it?
Carmelo Mannino [03:21]
We’re really building two businesses at once, because we’ve got to get the property owners on board and establish trust with that community. And then we’ve got to get the renters on board as well. And, you know, we’ve built great technology, we’ve custom build everything ourselves to be a really good matchmaker in terms of finding what you need. While we’re always looking for more on both sides, more properties, and more renters. You know, if you live, let’s say you live in Memphis, you don’t want to go 45 minutes to store your RV, you want something pretty close to you. So we’re always looking for more property. So really, the challenge is just growing both sides of the market. It’s really a chicken and egg problem. And we encounter that every time we go into a new market. So for example, we’re expanding to Atlanta right now. And we’ve got some property owners and now we’ve got to build up the demand. And then once we fill those left to build up more property owners and more demand, eventually we get to a spot like where we’re at in Denver, where it kind of becomes a flywheel and starts running itself a little bit where you know, we’ve got great SEO, we’ve got enough property owners to where we almost always have vacancies and we’ve got enough renters that are repeat renters looking to always rent with us in the Denver area.
Sam Wilson [04:29]
But what’s the greatest opportunity that you see because I’m certain that as you touch all of these different things from you know, regular just vehicle storage or boat storage or RV storage to you know, industrial to shipping, I mean, you see you’re touching all of it. What’s the greatest opportunity right now in the commercial sector?
Carmelo Mannino [04:50]
Right now, it’s the semi storage. It’s the 75-foot truck and trailer you know, they go by big rig, tractor-trailer semi-truck trailer That’s a huge missing piece in terms of the supply. There’s just not enough supply for these guys, there’s 1.5 million drivers on the road and any given night, 500,000 places for them to park. And that’s why you see them on the side of highways, whenever you travel there, all the rest stops on all the highways, because there just isn’t… The inventory wasn’t built, you have these national large REITs that want to provide the highest return on investment, and kudos to them. And that’s what they should be doing. But they’re going to build five by fives and five by 10s. They’re not building 75 by 15, which is what a semi-truck and trailer needs. So that’s a huge opportunity. Right now we’re working with multiple funds right now that are looking to get involved in the semi storage industry.
Sam Wilson [05:42]
Yeah, that sounds I mean, easily adaptable in the sense that you by I mean, correct me here because I don’t own any of this, obviously have a background at one point in the parking business. But I mean, you’ve got a fence, you’ve got a yard, security cameras, and then marked off spaces, controlled access, is there anything I’m missing there?
Carmelo Mannino [06:01]
May be a person to move them in every once in a while. But once they do that they’re fantastic renters, what it is is called over the road drivers. And these are individuals where 90% of this industry is I own one truck and one trailer. And that’s how they make their livelihood. So once you move them in, you know, what we find is they’re on a shift, they’re on a schedule. So they’ll be there Thursday through Saturday, and then they’ll be on the road Sunday through Wednesday. And it’s a very consistent month after month. But you’re right, it’s a really low development costs, especially if you can buy heavy industrial or even some cities and counties light industrial allow it as well. If you can find that land, if you can put down the gravel put up an automated fence some security cameras mark the spots, you know, you’re in business.
Sam Wilson [06:45]
That is really, really interesting. You know, I mean, at this day and age, like a lot of truckers are now becoming accredited investors. That’s the thing, as well as that you have people that are making really good money driving a truck right now, and that are able to obviously pay good rent, what happens in economic downturn? How does this business get affected?
Carmelo Mannino [07:07]
As we saw in COVID, actually, you know, when we hit a little bit of a downturn there, actually more people went to the trucking industry, they were able to hire some drivers. But you know, 90% of things that we own is on a semi-truck at any given point in time. So even if that number goes down, there’s still a huge shortage. If consumerism slows down by a bit, there’s still a shortage of semi-drivers. There’s a drastic need right now for more drivers. So I don’t think that industry slows down at all. I think what we’ve also seen a huge invest a huge opportunity on the not-so-commercial side, is you look at companies like Winnebago and Mastercraft boats, they’ve got billions and billions of dollars of backlogged inventory. You know, you can’t buy a brand new RV until 2024. Right now, if you’re getting it custom built. So what we’ve seen is an economic downturn, people are still buying these toys, you know, they’re not buying so much stuff, they’re buying bigger items. And that’s these vehicles, the semi drivers, so that’s their career. And that’s their job. So, you know, if anything, they’re going to try and expand and try and grow. You got to think of these as like a business-to-business relationship. Even though it’s one person and one truck, it’s a bit different than storing your RV. That’s their livelihood.
Sam Wilson [08:18]
When you guys go to a new city, in this case, it’s Atlanta for you, right? How do you even approach penetrating that market?
Carmelo Mannino [08:25]
It’s a lot of sales. My theory on business is almost everything is sales. You’re always selling. But, you know, we’ve got to get the property owners first and foremost, and that’s how we think about it. We’ve got to have the inventory there to where when we attract the demand, they’ve got multiple options to store. You know, the big advantage of STOW IT in our marketplace over traditional storage is that we can offer the customers a wider variety of spaces. If you want a one-car private garage, we want to have that? If you want to share five spots in a bar and we want to have that. Traditional storage, we work with the traditional industry as well. We don’t run from them, we try to integrate them onto our platform. So the first part we think about is let’s get supply. In our market we call supply and demand for us our renters and hosts. We want to get our property owners there, start forming relationships with them. And then we worry about finding the demand and filling those spots.
Sam Wilson [09:17]
Tell me that process. There’s got to be a sales process or you know, how do you guys attract both sets? I guess both of them are customers. So how do you attract them?
Carmelo Mannino [09:26]
Yeah, a lot of inbound marketing, well on our property owner side, you know. We write a lot about how do you safely rent out your garage or barn. We’ve got contracts you can find us stowit.com We’ve got a how should you price your space as stowit.com You know, a lot of great helpful tools. Most of the individuals we work with, we’re not using their land or their barn in their garage for storage before us. So they’re entering a new, really new business right so new income for them and a lot of our hosts pay their mortgage every month with us. So it can be serious income, and they need a company there to help them so we want to be a resource first and foremost, for our property owners providing great support. But it is reaching out to a lot of these what we call it the informal market. You know, Craigslist has a parking and storage section, Facebook marketplace, we will call warehouses that we know have, you know, additional storage, it can make additional revenue. But once you try it and you start making additional revenue, you realize it’s not a lot of effort, it’s very low risk. And the more energy you can get, the more income you can make. So you’re just limited by the size of your property. So yeah, lots of sales calls to kind of kickstart a market, eventually, you start getting more referrals in a market, people start researching, seeing you on Google. And then for the demand side, we do we use virtual assistants that post on Craigslist, that post on Facebook on a daily basis. We use Google ads, we use SEO, we write blogs, we handle all the marketing. We like to say we handle all the headache for our property owners, you know. Iff you’re going to buy a piece of land, all you have to do is move them in and assign them their spot. So you know, if you’ve got marked spots, you don’t even have to be there. But you don’t you know, if you’ve got a day job, you don’t want to hassle with the marketing, the payment collections, the evictions. These are all things that STOW IT handles for you. So they’re just on autopilot in the background.
Sam Wilson [11:11]
What is the take for you guys? Is it on a per, you just have a flat, Hey, this is what we always charge? Or is it on a per deal basis? How does that work?
Carmelo Mannino [11:21]
More of a flat, consistent rate. So whatever your list price is, so if you list a garage for $100, we’re going to take 10% per month from you. And we’re going to upcharge the renter about 10%. So each side of the platform pays a fee to us so that, you know we’re not just raking our property owners over the coals taken 25-30% from them each month, we’re taking 10% and then we’re up charging the renter on that same side as well.
Sam Wilson [11:45]
Got it. Yeah, that makes sense. You guys have to make money along the way. What’s the projection for you guys? What’s the next step in your business?
Carmelo Mannino [11:52]
Yeah, we want to 10x within the next two years. So we’re in a pretty critical stage right now where we’ve built a very turnkey business model in the Colorado area. We’ve got some niches in our business that are beyond Colorado that we’ve proven out, we want to take our peer model that we’ve built to a, you know, a million plus dollar business in Colorado, and build it out to 15 more markets around the country over the next two years. We think that this works in about 40 markets around the country. And it’s not your major, it’s not LA, it’s not Chicago, it’s not New York, it’s more of an Omaha business, as we say Nashville, you know, these areas where they get rural really quickly outside of a city center, and they’re growing markets. That’s where our business will thrive. And that’s where we want to expand it to.
Sam Wilson [12:35]
Got it, man, that’s absolutely awesome. I love the idea how have you guys funded 2017 until now. It’s five years of, you know, blood, sweat and tears into building a platform that’s just now about to take off. Have you done that?
Carmelo Mannino [12:49]
You know, initially, we did have other part-time jobs. And we’re doing some contracting work and other things, all of our backgrounds in technology and consulting or, you know, mine was in mobile app consulting, my development, my co-founder was in development, consulting. Angels have been a huge part of our business and where we’ve gotten the money has really been a testament to the product we built, because 80% of our funding has come from users of our product. So these are individuals like yourself that are somehow involved in real estate typically, but not in self-storage. And they might have a barn or garage they start using STOW IT, they start making money. And they say, Hey, you know, this is not exactly my wheelhouse. But I understand real estate, I understand what you’re doing. I want to invest in STOW IT. We take a guy like, I won’t give his last name, his name is Mark, and he’s in Castle Rock. He’s been a real estate developer for 30 years. And he has a huge barn. Well, he makes about $2,500 a month with us. So he’s just rolled a year back into STOW IT, did to $25,000 investment because he said hey, I’m gonna make $30,000 with you all that I would not have made otherwise.
Sam Wilson [13:51]
Right. That’s absolutely awesome. And you guys are gonna, if you can talk about this or not. And if you can’t, you can cut it. But you guys are in the middle of a funding round for your next kind of iteration of the business. Is that right?
Carmelo Mannino [14:02]
We are. Yeah, this is going to be our true seed round. It’s our first kind of large capital raise, you know, most of our funding to date has been, you know, Angels, smaller checks. Right now we’re looking to raise 2.5 million at 7.5 million pre-money valuation. And that really funds us for the next 24 months. It gets us into those 15 markets. We believe it takes us from a $1.5-2 million business to around a $20 million business. So we think it can provide a great return. Like I said, it’s a pretty easy, simple business to understand. Right? The hard part is getting the hosts and getting the renters but the demand is out there. Self-storage has a supply problem, especially when it comes to vehicles. And we have this huge advantage in that we don’t have to purchase and develop real estate to gain supply in a city.
Sam Wilson [14:48]
Right? I mean, again, going back to the Uber of storage, that’s your value play, is that you don’t have to build all of it. You just need to connect the two parties and then facilitate the transaction.
Carmelo Mannino [14:59]
Exactly. Yeah, we don’t own any real estate, but we make almost 20% on all the real estate we work with.
Sam Wilson [15:06]
Right. Which is fantastic. I love the model. What are you guys doing? Because I’m certain that as you get further and further into this business, people are gonna start coming to you with assets to sell. They’re gonna start coming to you with stuff that said, hey, you know, anybody that wants this? What are you guys doing with those, with that data right now?
Carmelo Mannino [15:23]
Right now, we believe that could be a phase two of our business. We want to become the largest provider of vehicle storage in the country. And with that comes the most robust set of data of anyone that we’ll have in the country when it comes to supply and demand discrepancies in vehicle storage. So we believe there’s absolutely an opportunity, whether it’s us, or an outside investment group, or some of our current investors that are self-storage owners and operators have expressed interest, you know, they want this data to know where should I buy my next yard. You know, we look at a market like Minneapolis, and it’s a pretty frugal market when it comes to vehicle storage, semi storage, it’s one of the most expensive markets in the country. And that’s data that a traditional storage company would not be able to get because they are not involved in that aspect of storage. So examples like that are really big, we believe that there is an opportunity out there to buy and own part of our own yards, build a more robust management software. And really, we still want to help individuals. But we see an opportunity out there especially in the commercial industry for us to eventually get involved in yards.
Sam Wilson [16:25]
Right Man, I love it. Carmelo, congrats to you guys, and the product you’ve built so far, best of luck to you in the next phase of your business and journey. And I think it’s really intriguing, just like you talked about how you get to connect all the different pieces. And maybe someday you’ll have more of an active part on the acquisition or, you know, partnering side of the physical real estate. But in this you know, what you guys doing right now you don’t have to own it, and you still get to look at the profit along the way. So that’s pretty cool. I think it’s also pretty cool just to hear what you guys see happening on the real estate side of things. So loads of fun. Thanks for coming on today. If our listeners want to get in touch with you or learn more about you, what is the best way to do that?
Carmelo Mannino [17:01]
Yeah, I am easy to contact my direct email is Carmelo, C-A-R-M-E-L-O, @stowit.com. You can email at info@stowit.com. Those are two great ways. You can sign up whether you’re looking to rent a spot if you’ve got an RV and you’re listening and you need space. Hopefully, we’ve got it in the city you’re looking for. Or if you’re a property owner, we’re always looking for more property owners around the country. We work with large firms, we work with everybody from what we call grandma with a one-car garage to companies doing billions of dollars in the parking industry. So anywhere in between that we can work with you if you have real estate so we’re always looking for more opportunities and ways to expand. So email me at carmelo@stowit.com We get the conversation started.
Sam Wilson [17:43]
Awesome. Carmelo, thank you so much. Have a great day.
Carmelo Mannino [17:45]
All right. Thanks, Sam.
Sam Wilson [17:46]
Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners as well as rank higher on those directories so appreciate you listening. Thanks so much and hope to catch you on the next episode.
