Real Estate Pros · September 10, 2025 · 22 min listen

55 Years of Real Estate Lessons with David Pelusio Sr. | Storage Unit Conversions

Show summary

In this episode of the Real Estate Pros podcast, host Q Edmonds interviews David Pelusio, a seasoned expert in the building and development space with over 55 years of experience. David shares insights into his current focus on mini storage ventures, the importance of market analysis, and the keys to maintaining a successful real estate business. He discusses the necessity of having options in real estate deals, navigating adversity, and the significance of building strong relationships. David emphasizes the role of family in his life and how it motivates his work.

Key takeaways

Buy vacated big box retail (Joanne Fabrics, JC Penney, Sears, Macy's) for pennies on the dollar because the building, parking, plumbing, sewers, AC, and sprinklers already exist—no new construction needed.
Run a marketing study covering a 1, 3, and 5 mile radius to check income, traffic counts, existing storage competition (rates, unit counts, occupancy), and what new storage supply is planned in the area before buying.
Converted facilities can be up and operating within 3-4 months of taking possession because units are retrofitted into the existing shell with drive-through unloading.
Use a two-phase model: standard mini storage units plus larger industrial/commercial bays for small contractors (roofers, siders) who need office space and inventory storage with unloading service.
Finance initially with hard money, then refinance to a local bank once operating to cut the interest rate roughly in half; investors get a return every six months based on amount invested.
Target exit timeline: get the facility under contract within 6-9 months of opening and close 3-4 months after that, then move to the next project; goal is about five such conversions in the next 1.5 to 2 years.
Always build options into a deal (refinancing, partial capital withdrawal, immediate cash flow from a management company) so you're never forced into a bad sale; profit is determined by what you buy it for, not just what you sell it for.
Use a third-party management company (ranked #6 in the country, operating in 40 states with 200+ units under management) to run day-to-day operations so you can focus on sourcing deals, development, and financing.

In this episode

About the guest

David Pelusio Sr. has worked in building, construction, and real estate development for 55 years, starting with his first house at age 16. He has built mini storage facilities since the 1980s and has also done fix and flips, shopping centers, condos, and apartments. He currently focuses on converting vacated big box retail stores (former Joanne Fabrics, JC Penney, Sears, Macy's locations) into mini storage and industrial/commercial storage facilities, with current projects in Rochester, New York and St. Petersburg, Florida.

Listen to the audio

“It's not what you sell it for. It's what you buy it for.”
David Pelusio Sr.

“I always say you got to leave a little meat on the chicken for the next guy to make money.”
David Pelusio Sr.

“If your back gets up against the wall, you don't have options. It's not a good deal.”
David Pelusio Sr.

“I invest in sticks and stones and bricks and mortar because I'm running that train.”
David Pelusio Sr.

mini storage conversionbig box retail redevelopmentmarket analysishard money financingproperty managementRochester New YorkSt. Petersburg Floridadeal structuring

Questions answered in this episode

What is a 'big box' conversion in storage investing?

It's buying a vacated large retail store—like a Joanne Fabrics, JC Penney, Sears, or Macy's—that closed due to competition from Amazon and online retail, even though the surrounding retail corridor is still strong with heavy traffic. The existing building, parking lot, plumbing, sewers, AC, and sprinkler systems are already in place, so you buy it for pennies on the dollar instead of building new.

How do you evaluate a site before buying it for storage conversion?

David runs an extensive marketing study covering a one, three, and five mile radius that looks at area income, traffic counts, competition (rates, unit counts, occupancy), and what new storage projects are in the planning pipeline. He calls these the five simple rules: radius analysis, housing counts, income and population, what's in the pipeline, and competitor pricing/space needs.

How fast can you get a converted big box storage facility operating and leased up?

David says within three to four months after taking possession they are up and operating because they retrofit units into the existing shell rather than building new. Tenants can drive in the front, unload in the middle, and drive out the back.

What's the exit and return structure for investors in these deals?

Financing starts with hard money, then gets refinanced to a local bank at a lower rate once the facility is operating and generating cash flow. Investors get a return every six months depending on the amount invested, and the plan is to get the facility under contract for sale within six to nine months of opening, closing three to four months after that, then moving to the next project.

Why does David emphasize having 'options' in a real estate deal?

He says if you have only one plan, you have no leverage; you need alternatives like refinancing to a bank at a lower rate, pulling out some invested capital, or relying on immediate cash flow from a management company so you're not forced into a bad sale. He sums it up as: it's not what you sell it for, it's what you buy it for—buying right gives you options even in a fast sale.

Who manages the day-to-day operations of these storage facilities?

David partners with a professional management company rated number six in the country that operates in 40 states and manages over 200 units currently. He says his time is better spent finding sites, developing, and arranging financing rather than managing day-to-day rentals.

Resources and links

David Pelusio’s Website
David Pelusio’s Email: davidrlc@one.com
David Pelusio on LinkedIn
David Pelusio’s Phone Number: +1 (585) 435-2538

Full transcript

David Pelusio sr (00:00)

Okay, we’ve done a lot of anything to do with construction or real estate kind of development investments, we’ve done it all. But at presently, we’re back to doing mini storages. We’re presently buying or putting on the contract, which I call a big box. Big boxes like a Joanne Fabrics, a big lot of JC Penney’s, a Sears, a Macy’s, whoever has closed due to the fact that the…

Amazon and the internet has just destroyed their retail business. That location is still very strong. We go through and we do a very extensive marketing study, which gives us a one, three and five mile radius telling us the

David Pelusio sr (00:43)

income of the area, the traffic counts, and then it also the marketing study, which is very, very important.

Quentin (02:24)

Welcome to the Real Estate Pros podcast. I am your host, Q Edmonds. Super excited to be here today. Super excited about my guest. Listen, this gentleman has been in the building and development space for 55 years. With that comes a ton of experience, with that comes a ton of knowledge. But also, man, he has a new passion that he’s passionate about, an incredible just business structure and business plan.

that I’m excited for him to talk about. And so I just want to introduce you guys to Mr. David Pelusio. How are you doing today,

David Pelusio sr (03:01)

I’m doing great. I’m doing just wonderful.

Quentin (03:02)

Good,

good. Absolutely. How did I do with that last name, man? Did I get that right? Absolutely. Listen, what you don’t know, I’ve been practicing it for about five minutes before we connected. Like, I want to make sure I put respect on your name and just knowing how long you’ve been around, what you’re doing. You deserve all the respect and admiration. But I think it’s time for you to let our viewers know what it is that you do. So if you don’t mind, Mr. David, take us into your world.

David Pelusio sr (03:07)

You sure did.

Quentin (03:32)

You know, tell us what your main focus focuses these days what your passions are and if you don’t mind tell us What markets you’re operating in as well?

David Pelusio sr (03:42)

David Pelusio sr (04:25)

income of the area, the traffic counts, and then it also the marketing study, which is very, very important.

It tells us the competition, what the rate they’re getting, how many units they have, how many of them are full, and more importantly, what’s on the horizon. What is coming up? What is in the planning boards? How many do we have?

So the location we presently are working on is up in Rochester, New York, actually. I’m very familiar with that area, but lived there all my life. And I also live in St. Petersburg in Florida. I’m doing a couple of deals down here. I’m trying to get, but it really doesn’t matter where the location is. As long as they have those criteria’s in the survey and the specifications, it’ll work anywhere. ⁓ We then,

turn around and with because the fact that we don’t have to build these units, the building’s already built. You’re buying it for pennies on a dollar. The site works already done the asphalt, the plumbing, the sewers, the AC units, the heating units, because now it’s climate control, which you get more money per square foot that way. Sprinkler systems, if they got a loading dock, we then convert it into partially what I call industrial or commercial.

storage, little bigger ones, where little contractors can, know, a roofer or a cider can have a little office and have his inventory there and we’ll unload it for him while he’s working. He doesn’t have to come by and meet his trucks, as well as we have three, 400 mini storages in the same facility. So it’s a two-phase business. They’re very, very wanted by the institutions that want to buy these things because they are cash cows once they’re filled.

Within three and four months after we take possession, we’re up and operating because we just rectal fit the units. The mini-storages just get built right in there. You can drive in the front and drive out the back. Unload your stuff in the middle and you’re all done. We have a professional, which is rated number six in the country, who is going to be managing these facilities. And they’re in 40 states and they have over 200 units that they’re managing right now because I feel it.

my best of my time is not to teach somebody how to rent a 10 by 10, but for me to go find other sites and to do the development and the financing and all the things that go along with it. Once it’s up and running, we can refinance it and possibly, I’d obviously get a lower rate than the beginning because in the beginning it’d be hard money and I’ll take care of the financing and all the responsibilities of it. And then the

The ⁓ investor will get a return every six months ⁓ depending on the percentages, depending on the amount they invest. And then the idea is that we sell these units between a year and a year and a half. And that’s, ⁓ I think you could get under contract hopefully within six to nine months that it’s opened and then close within three to four months afterwards and then move on to the next.

Quentin (08:20)

Yeah,

absolutely. No, I love it, man. I love how you call these the big box projects. I love how you got it streamlined. listen, we don’t got to build it out. It’s already ready to go. And so I absolutely love that. And I love what you’re doing. And I know ⁓ what you make it seem easy. I’m you know, sometimes it’s not easy in this climate, but it may be easy for you. But I guess the point I want to ask you is what has been the key to keeping that machine running smoothly, Mr. David?

David Pelusio sr (08:51)

What keeps me running smoothly?

Quentin (08:53)

to keep the machine running smoothly. mean, you got a system in place. Like what keeps things running smoothly? Yes, sir.

David Pelusio sr (08:57)

Yeah, well,

well, the key is, is that I’ve been doing this for 55 years. So the experiences and a lot of these things, I hate this. I hate to use this analogy, but I can do it. My eyes close because of the fact that, know, you know, you know what a two by four looks like and you never forget it. Once you do, when you touch one and when you touch as many as I’ve touched, it’s simple, but not to a lot of people.

Quentin (09:10)

Yeah, yeah,

David Pelusio sr (09:24)

I know the manufacturers of the doors and the sidings and the walls and you just know what you’re doing. It’s just only because of experience. can’t, I could teach it by telling you what to do, but the experience makes it all happen.

Quentin (09:43)

And that’s one that you can teach. You can teach experience. Experience is what teaches you, right? And so you, like you said, you just been in it, you’ve been around, you can do it with your eyes closed. I love one thing that you said is that where you are, these big box stores, big box, hopefully I think that’s your word, that you are buying, it’s not because the surrounding area is not thriving. No, it’s definitely thriving. Like you said, you got Amazon, you got other different things that came in that kind of drive these places up. And so.

I love the fact that you were saying how they want you here. Like they want the storage facilities. Did I understand you correctly? Like people are saying they want these places in that area, yeah.

David Pelusio sr (10:19)

Yes.

Yeah, lot of the towns and local governments, they don’t want these big white elephants empty. They want them operating. And you’re right next door to all the other major retailers that are doing good. So you’re getting traffic, know, 30, 20,000 cars an hour or a day, whatever, 50,000 cars a day. That’s an amazing sight. And that’s what you’re looking for when you buy these things. It’s very important.

that you you follow the five simple rules, know? One, two and three and five mile radius, housing counts, income and population and what’s in the hopper? What’s in the horizon? And what is your competition and what are they selling and how much space you need? And if the percentages are right, ⁓ it’s a go. Like I said, it doesn’t matter where it is. It doesn’t have to be in New York. It doesn’t have to be in Florida. It can be in Wisconsin. It can be in Texas. It could be anywhere. ⁓

And they’re easy to identify once you do the right marketing study. And then you just go in and do it. And there’s plenty, plenty of buyers out there. And the cap rates on the sale are really high, but we’re going to give them a nice return if they buy it right. Because you got, I always say you got to leave a little meat on the chicken for the next guy to make money. And so there’s plenty of meat on the chicken for one, I sell it.

Quentin (12:15)

There you go.

David Pelusio sr (12:21)

And everybody makes a lot of profit. ⁓

Quentin (12:25)

Absolutely. So now listen, you’ve been around for a long time. I know it’s no obstacle you can handle, but I like for our listeners to get a perspective sometime of having to face adversity. And so I know there’s times when moments got real, when maybe like a deal went sideways or a time you had to pivot fast. Mr. David, you mind sharing with us a story like that?

David Pelusio sr (12:47)

Well, I’ll tell you what my first thing is, we always have to have options. When you’re in the real estate business, in the development business, if you just have one plan and one plan only, you gotta have options. Now, like in this case, we’re gonna borrow what you call hard money, which is a little more expensive to get started. Once that happens, we have to have options. Once the options hit, which is you open up the door and you got something you can finance to a local bank,

Quentin (12:53)

Hmm.

David Pelusio sr (13:16)

your rate could go down to half percent. Your interest rate could go down half what you’re paying. So there’s an option. By that option, you could pull out some of the investing money or leave it in. That’s an option. have this management company runs it, there’s cash flow immediately. they’re this way, ⁓ you’re not looking like you’re feeding the bear.

But if your back gets up against the wall, you don’t have options. It’s not a good deal. You got to have options and a deal. What if this happens? What if that happens? There better be answers for all of that. And we found over the years, we’ve made, obviously everybody’s made a couple of mistakes, but I’ve always had a lot of options. mean, it’s not what you sell it for. It’s what you buy it for. And if you buy it right,

You got options. If you got to have a fast sale, you can still make money. You still make as much because you bought it right. So those are key things. It’s not what you sell it for. It’s good. The market’s going to tell you what it’s going to sell for. You’re not going to tell. You’re not going to tell me what it’s going to sell for. The market’s going to tell me, but I’m going to tell you what I’m going to buy it for.

Quentin (14:31)

Yeah.

That’s that 55 years. There you go. Right. There you go. That’s that 55 years of stature coming out. I’m going to tell you, you ain’t going to tell me. I definitely, and honestly, that’s the kind of stuff people don’t talk about enough. This is what separates folks from the ones who dabble and the ones who stay in it for the long term. And so I appreciate your perspective. Let me ask you this. What are you most focused on solving or scaling next?

David Pelusio sr (14:35)

Or you don’t buy it. Or you don’t buy it.

Quentin (15:01)

Like, what’s the next real goal?

David Pelusio sr (15:45)

Well, the real goal is we would like to do about five of these within the next year and a half to two years. That’s the goal. I’ve done many, storages before. I own one actually right now that I’m up. It’s getting under contract. We’re negotiating the sale right now. ⁓ I’ve built them since the eighties. I had built units and I’ve also done a lot of other, you know, fix and flips and shopping centers and

Apartments, condos, ⁓ whatever you want to do. This one’s just cleaner and easier right now. So that’s why I’m focusing on this for the next couple of years.

Quentin (16:27)

Yeah, absolutely, absolutely. ⁓ man, that sounds good. That sounds, big, but also definitely, you know, doable with the right relationships, partnerships. And I mean, I know, you know, the next move it could either compound things or create total chaos depending on how you play it. But you’ve been in it long enough where I’m sure you know how to work within the chaos.

So I just got one more question, you know, before we get to that, ⁓ because, you know, there is a lot of people that listening and they’re early in their journey or they’re looking to level up.

And I think that benefit from hearing this, when it comes to building relationships and growing your network, what’s made the biggest difference for you?

David Pelusio sr (17:06)

My network, I like to stay with people that I get to know and become friends. It’s not just business partners. I like partners because I like ideas. I like another brain, bounce things off of. There’s nothing wrong with that. The only thing is, I like to drive the train too. I’m the guy who’s driving the train. So give me all your ideas and we’ll discuss it. But then I have to implement it.

That’s why I never invested a lot in any of the stock market. I invest in sticks and stones and bricks and mortar because I’m running that train. I know where that train’s going. And I have no control over a lot of things. And one thing I like to do is have control. And that’s why I’ve been successful. ⁓ that’s my story and I’ll stick into it.

Quentin (18:01)

love it, man, I love it. Mr. David, I have a saying that I adopted to actually help me when I’m about to make decisions is say, when you know who you are, you know what to do. And it sounded like to me, you know exactly who you are. ⁓ You know exactly what works for you. You like to drive the train. And I think, you know, when you know who you are, it makes it easier to say yes and say no, even when it comes to partnerships and relationships. And so, you know, we definitely believe in relationships. We believe in partnerships.

but they gotta be the right ones. They gotta be the right connection. So I hope that resonates with you, because that’s what I, when I heard you say that, that’s kind of what I thought about, you know? Yeah. So listen, yeah, ask.

David Pelusio sr (18:38)

Yeah, and the most important part in my life is family.

The most important part of my life is family. I’ve got two kids and six grandkids and they are the best, the best. I’m at an age where I don’t need to be doing this, but I’m doing this. People say, why are you doing this? I’m doing this for my grandkids. I mean, how many stakes can you? I mean, I got enough stakes. I don’t need, I don’t.

Quentin (18:43)

Woo! Yes, sir.

Yeah.

Yeah, yeah.

Yeah, absolutely.

David Pelusio sr (19:07)

I’m doing this for them and not only that, I’m having fun because at one point I had 300 employees. Right now I got

myself and my staff of maybe four five people. That’s it. And I love it.

Quentin (19:13)

Wow. Look at that.

Look at that. Yeah,

Well, listen, man, this has been awesome, Mr. David. Listen, before we wrap, if someone wanted to reach out to you, connect with you, maybe collaborate or learn more about what you’re doing, what’s the best way for them to in contact with you,

David Pelusio sr (19:33)

Well, we have a website,

me, it’s davidrealestatehomes.com. Davidrealestatehomes.com. And in there we’ll tell you all about me, all I’ve started when I was about my first house when I was 16 and all the way up to today. And it also has a way to contact me.

Quentin (19:51)

Yeah, I love it, I love it.

David Pelusio sr (19:53)

So all you

gotta do is go on that website and it’ll connect you to me.

Quentin (19:59)

Absolutely, absolutely. Well, Mr. David, I appreciate you so much, sir. Thank you for your time. Thank you for your story. Thank you for your perspective. We definitely need more people that’s doing it like you and doing it the right way. And with your 55 years of experience, like I said, you can teach experience. Experience is going to teach you. So I just want to thank you for just bringing just a sliver of your experience to the table so that we can glean from it. I appreciate you. No, absolutely.

David Pelusio sr (20:25)

Thank you so much. I want to thank you.

This has been great.

Quentin (20:29)

Awesome, awesome. All right, and to everyone else, listen, I know you found value from this, right? We just bought you a wealth of knowledge. Make sure you are subscribed. You do not want to miss out on these amazing conversations. So again, thank you, Mr. David. And to everyone else, we will see you on the next time.