Fernando Angelucci is the 28-year-old Senior Managing Partner of Titan Wealth Group based out of Chicago, Illinois.
Fernando Angelucci worked at Dow Chemical, a Fortune 50 company, rolling out a flagship product estimated to gross $1B in global revenues. At 23, Fernando left the 9-5 world and started investing in residential real estate by acquiring residential rentals and acquiring, renovating, and selling residential projects. Fernando then went on to build a multi-family rental portfolio spanning the Midwest. In preparation for the next down cycle, Fernando and the team divested from residential real estate to focus on self storage.
Fernando graduated from the University of Illinois at Urbana-Champaign in 2013 with a B.A. degree in Technical Systems Management. Fernando currently resides in Chicago, IL.
Episode Highlights Here:
Brett
Absolutely. And for now, for those kids who know for the first time would you give us a little bit more about your story in your current focus? Yeah,
Fernando
So when I was 16 years old, I read Rich Dad, Poor Dad. And it kind of changed the trajectory of my life. I’m the son of two immigrants. So they kind of had the old school American Dream kind of set for me, which was to go to school, get good grades, go work at a, you know, fortune 500 company, and then retire in 40 years with a pension. Obviously, that’s not really the game plan anymore. So went on to start investing in real estate started with single families and multi families. And then in 2016, I thought the market was going to crash in 2018. So I started unwinding my entire multifamily portfolio looking for something that was going to be a little bit more recessionary, resilient. And from there, I decided to get involved in self storage. So from that point on, we bought our first facility in August of 2018. And as of this recording, March of 2023, we’ve done over 220 million in self storage to date.
Brett
Excellent, fantastic, actually love, love that. That intro here. You know, for now, I believe we’ve all been given certain gifts in this life, these gifts that are given to us to be a blessing and help to others. So I’m curious, go back to the younger days, or even right now, what do you feel like the one or two gifts you believe you were given? And how does that help how you help and bless people today?
Fernando
Yeah, I think empathy is one of the most important skill sets that someone can learn. You know, it is a gift, but you also have to work at it. And once you’re able to really put yourself in other people’s shoes and experience what they’re going through, it makes it a lot easier to go through life. Not only on the negotiation side, but in personal relationships, things of that nature. The second piece is with self storage, it is an extremely localized business, you know, we pull the majority of our clients and customers from three to five mile radius around our facilities. So as a portion of our charitable giving, we always focus on the local community giving back. We rely on our managers to find things in causes that make sense to the local community. And that could be, you know, animal shelters, battered women’s shelters, working with local police departments for Toy drives, or back to school kind of events where we buy backpacks and sell them with school supplies given to the kids. So we’ve I mean, we’ve done a bunch of things, little league teams, hockey teams, you know, you name it.
Brett
Awesome. So empathy, put yourself in other people’s shoes, and as well as just giving back to local communities, for those that are in need and a chance to to help them out. Is that a fair summary? Yeah, absolutely. Excellent. So let’s dive into the topic at hand with all those two things in mind, which is investing in self storage. And by the way, to learn more about Fernando, you can go to S S S e.com. That’s Triple S e.com. Or just call him at 63040880906304088090. So Fernando, what’s the number one secret to investing in self storage?
Fernando
Yeah, well, people don’t realize that self storage has asymmetric risk return profiles. So if you look at the National Association of real estate investment trusts, they did a study that started in 1994, and they saw that, over that period of time, across different real estate assets. You have a different asset class. Say you have things like the s&p 500, returning between seven to 8% multifamily doing a little bit better at about 13% of average annual returns and then self storage all the way at the top was 17.4% return. Now that 4% between multifamily and self storage may not seem like a lot, but you gotta realize that compound interest is at play. So if you had $100,000, during that study period, the s&p 500 would return about half a million apartments about 1.71 point 8 million, but Self Storage would return about four to $4.1 million. So most people say, well, Fernando, if the returns are that high, that must mean the risk is also high as well. And that isn’t the case. So if you look at 2007 to 2009, the s&p dropped 22% and multifamily dropped about 7%. But self storage only dropped about three, three and a half percent. And then if you go to something a little bit more fresh in our minds during the pandemic, according to trap, which is a commercial mortgage backed research facility firm, they found that of the 1700 CMBS loans that were made to self storage investors. In the first three quarters of the pandemic, only three were more than three days delinquent. That’s a 0.17% delinquency rate. During that same time multifamily was defaulting at a rate of 1,800%, higher 18 times the default rate of self storage.
Brett
Wow. So those are some great stats I see if I can capture that. So the asymmetric returns slash risk. pendulum, if you will, and self storage is 17% during the study period, and which is about 4%, higher than multifamily, which is about 13, which is about maybe, maybe double or so or close to that from the stock market. And on top of that, though, the vacancy or lack of mass of people just taking all their stuff, and actually just, you know, organizing it or whatever, or whoever else, they would do stuff with self storage, right? They actually didn’t get out. Is that a fair summary?
Fernando
Yeah, that’s fair. And you know, one of the easiest reasons why I decided to switch from habitation based real estate where someone lives in my asset to non habitation based real estate, like self storage, is the difference in the guiding laws, right. So you move from landlord tenant law, or eviction law to lien or property law. So you know, when I was investing in multifamily, especially in Chicago, where the laws are pretty lenient towards the tenants, you know, there was times where we did everything, right, and it still took us eight months to get a tenant out of our unit, and then it caused a bunch of jant damage, and we couldn’t get that money back. Whereas with self storage, when someone places their possessions into my facility, I automatically get a lien against those possessions. So within five days of non payment, I can overlock their unit and tell them, hey, it’s overlapped, if you don’t pay within the next 45 days, we’re going to auction off your materials. And if they still don’t pay, we send them to auction and within 45 to 60 days, I have a new paying tenant in that unit. I don’t have to deal with eviction courts, it’s very easy. It’s clean, it’s fast.
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About Fernando Angelucci
Fernando Angelucci is the 28-year-old Senior Managing Partner of Titan Wealth Group based out of Chicago, Illinois.
Fernando Angelucci worked at Dow Chemical, a Fortune 50 company, rolling out a flagship product estimated to gross $1B in global revenues. At 23, Fernando left the 9-5 world and started investing in residential real estate by acquiring residential rentals and acquiring, renovating, and selling residential projects. Fernando then went on to build a multi-family rental portfolio spanning the Midwest. In preparation for the next down cycle, Fernando and the team divested from residential real estate to focus on self storage.
Fernando graduated from the University of Illinois at Urbana-Champaign in 2013 with a B.A. degree in Technical Systems Management. Fernando currently resides in Chicago, IL.
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