Industrial Investment Outdoor Storage

[Ronald Rohde]

I've been investing in real estate for 15 years. 5 years ago, I sold 6 SFR in DFW and plowed that capital into industrial NNN properties. I've found that SFR is a lot like autocross driving. Its safe, its simple, faster to learn and the penalties for mistakes are a lot lower. Commercial investing is like driving on the race track. Higher speeds, elevation changes, multiple ways to crash and hurt or kill yourself.

Both are car racing fundamentals, gas, brake, and steering. Neither one is better, it just depends on your individual goals and constraints as an investor. This is my long way of introducing myself. I'd next like to talk about how and why I buy the industrial properties that I do.

Currently, we are buying industrial outdoor storage in infill locations within Dallas Fort Worth, Texas. We are self managing either NNN tenants or semi truck and trailer parking. These are improved gravel sites, motorized gates, solar security lighting and SIM card cameras. They may or may not have a building, but either way, they are "low coverage" sites. The plan is to assemble a small portfolio then sell for a lower cap rate to a friends PE or another buyer. After that, we will solely focus on cash flow and building a large empire. We may sell individual sites, but only opportunistically for the highest priced end user or vertical developer.

We buy in-fill to protect our rents. Even if demand is flat, the supply of in fill locations continues to decline. Cities are not approving additional outdoor storage yards, but they are desperately needed for construction, heavy equipment, fleet parking, etc. We buy based on in place cash flow, combine seller financing or local bank debt with fixed 5 year terms. All recourse debt.

I have some staff to manage the tenants, but rely primarily on Easy Storage software for booking and cash flow/receipts.

Anyone have questions?