A veteran of the San Diego real estate business, Ken Weiner struggled through the frosty real estate markets defining the 1990s.
After having felt that pain, Weiner in 2003 decided to switch commercial real estate investments to what he considers a safer bet , self-storage facilities.
“In today’s market, everybody wants to buy an apartment complex and the return is zero,” said Weiner, a principal and co-founder of San Diego-based JK Investment Properties, Inc.
The average cost to build a 75,000-square-foot self-storage facility is $4 million to $6 million, which is roughly half the cost to build an apartment complex, yet generates the same rent per square foot, he said.
The company’s private investors put in a minimum of $50,000. The annual return on their investment is about 13 percent to 14 percent, projecting a 10-year holding, he said.
“It’s a relatively low cash capitalization with a high cash yield,” he said.
JK Investment Properties has built 13 self-storage facilities, including one in Spain, but none in San Diego.
Weiner says he’s looking at high-growth areas with a shortage of self-storage facilities. Las Vegas, Bakersfield and Phoenix top his list right now.
While other San Diegans flock to Las Vegas for fun and games, Weiner spent time there last week to scout for future investments.
He has already built one storage facility there.
“It’s a matter of finding a good location, ideally in the back of a shopping center, where people drive by and find them,” Weiner said.
Name: Ken Weiner.
Title: Principal and co-founder (with Jeff Quinn).
Company: JK Investment Properties, Inc.
Address: 5469 Kearny Villa Road, Suite 208, San Diego 92123.
Phone: (858) 277-2700.
Prior experience: I have been in the real estate business for 25 years and founded Southwestern Equities Group in 1983, a real estate company focusing on mobile homes and recreational vehicles, and Ken Weiner Associates, Inc. in 1989, among other firms.
Average hours worked weekly: 50.
Source of startup capital: $100,000 from personal funds of the partners.
2005 expected revenues: $1 million.
2004 revenue: $560,000.
Number of employees: Three in San Diego, 10 in the field.
Web site: www.JKIP.com.
Born: Nov. 16, 1949, in New York City.
Education: Bachelor of Arts in psychology and sociology from the University of Pennsylvania in 1971; master’s degree in social work from San Diego State University in 1975.
Place of residence: Scripps Ranch.
Family: Wife, Peg; three sons, Ben, 26, Josh, 23, and Will, 17.
Hobbies: Meditation, Eastern philosophy, river rafting.
Reason for getting into the business: A natural offshoot of the other real estate brokerage.
How I plan to grow the business: By paying attention to detail and a successful track record, we are able to attract more investment capital that enables us to buy more projects. Also, forming partnerships with other capital sources.
Biggest plus of business ownership: Freedom to make our own decisions.
Biggest drawback: Total responsibility for all operations and the times it takes.
Biggest business strength: Flexibility and ability to act quickly. We initially “say yes” to every deal.
Biggest business weakness: Huge competition and the lack of being able to buy a portfolio of self-storage. This forces us to build them one at a time.
Biggest risk: Leverage investments in the event of a major market correction.
Smartest business decision: To say yes to everything, and partner with other experienced players in the industry.
Biggest business mistake: Leaving too much money on the table in negotiating our share of the promotional interests.
Toughest career decision: Staying in real estate throughout the downturn in the 1990s.
Biggest ongoing challenge: Finding the time to work with all the issues of a small business.
The most important part of my business: Attention to detail in managing our properties, our investment strategies, and assets.
My business works best when: When I put the investors’ interest first.
How your business has changed throughout the years: Still a startup.
Best way to stay competitive: We understand the markets and are innovative in our approach to marketing our product. Stay ahead of the curve.
How you measure success: Satisfaction at the end of the day and seeing the growing profitability of our portfolio for our investors.
Goals yet to be achieved: Building a large enough portfolio to generate stable long-term cash flow to our investors and ourselves.
My five-year business plan: To achieve the goals described above.
I would sell my business only if: Someone offered me the right price.
Guiding principles: High integrity and knowing that God is in the details.
Most admired entrepreneur: Robert T. Kiyosaki, author of the book “Rich Dad, Poor Dad.”
Important lessons learned: Stick to your core values no matter what other influences come your way and things will work out.
Advice for those looking to go into business: Do something you love that provides a needed service or product. Be prepared to work long hours, be creative and be prepared to be “tested” by people, markets, the competition and your own self-confidence.