Have a 62 unit self storage deal in hand

[Andrew Neal]

Hey guys, wasn't sure where to post this but I met with a self storage owner today who has a 62 unit facility in the North East. Numbers seem solid, only 3 years old, 95% occupancy the entire time, and looks to be around a 10 cap.

Two questions: how best to truly value this thing and is anyone currently in self storage?

[Brad Hayden]

@Andrew Neal

Andrew, a couple of questions upfront:

What is the upside? If it's 95% occupied, how will you increase the value?

How will you manage? Doesn't seem that you are local and a 62 unit facility is unlikely to support 3rd party management.

As for valuation:
Current Value:
Gross Potential Rental income - Economic Vacancy = Effective Gross Income
Effective Gross Income + Additional/Ancillary Income = Gross Operating Income
Gross Operating Income - Operating Expenses = Net Operating Income
Net Operating Income / Market Cap Rate = Value 

Investment Value:
This goes back to my original question of increasing the future value:

Hope this helps. Let me know if you have questions and I will send a DM with contact info.