Self Storage Units

[Richard Mann]

I have read and bookmarked several of the many posts I have read concerning investing in self storage sites. There is one that is for sale in my area and I would be interested.

How many years back should I go in looking at their books for rental history and profitability?

I assume I will need a commercial loan for this type of investment. Is there anything special I should prepare for in seeking this type of loan out?

I work as an insurance agent and make about 45K / yr but we have no debt.

Will I need to have a down payment? If so, what percentage?

Any information concerning the financing of this type of investment would be greatly appreciated.

There are many "rules" for sfh's are there any for commercial/industrial properties.

Thanks

[Greg W.]

You will want three-years of taxes.
-Verifiy occupancy, including economic occupancy (who is actually paying).
-Verify how many people are behind on payments.
-Make sure all late payers are paid up by closing or lien saled.
-Require all "empty" units be cleaned out and truly empty. No trash/junk left on premises.
-Verify who has paid security deposits and get those when transaction takes place.
-Verify how much each customer is actually paying. Many times the amounts are different than the listed price.
-Note deferred maintenance (roofs, doors, springs, latches, seal coating, etc.)
-Get phone, email, website, social media passwords and account information transferred to you in the transaction.
-Get all equipment, locks, keys, brooms, codes, etc. transferred to you.
-Implement new leases with customers ASAP and make sure the terms are up-to-date. Your state storage association may have a sample lease for you to use.
-Base your desired cap rate on other comparible properties, size and location.

I got an SBA loan for mine and had to put 20% down. It took a while but worked out well.

Good luck!