Self storage development - kicked tires long enough - trying to jump in

[Zack Gill]

Been around for quite some time and have made runs trying to acquire a SS facility and also considered developing in the past but now feel like its time. Will just flat out raise my hand and say I'm new... but have been studying for years on SS (have done residential flips/rentals), now or never to actually s or get off the pot haha. Learn with me, help me, will try and update this post as I go, hopefully to not the end that so many do (including myself) of falling off never actually building or buying. 

I've identified hopefully like mr Henry says, start small and make your big mistakes early, a small town in TX that seemingly could use more storage. From the ratio of 6 per 100 ppl, it seems the town could support ~200 more. Only one facility in town is quality built/newer (maybe 10 yrs old) and it seems they do not have more room to expand and by secret shopping so to speak them plus the smaller less desirable facilities are mostly filled up. My location in mind would be closer than the newest nicer location to town. This particular tract of land is a fairly rectangular 7 acres (400'x700', more than needed) and is owned by someone who stopped using it prob 10 years ago. They had cleared it, put some gravel in of some sort, fenced it with barbed wire on top, manual gate on tracks and flood lights in the corners. There's a fire hydrant right outside the fence so I seemingly don't have to worry about adding one of those. They have said to send over a competitive LOI and they'd consider it (on tax rolls for ~80k, small rural town).

Rates in town of a 10x10 at the newest facility are 109 and a 10x15 at 129 (non-CC with none available, although they do have some CC). Plan would be to come in at say 99 for a 10x10 and 119 for a 10x15 and so on. They also have covered outdoor boat/rv parking for a solid price. 

So the plan is to try and pick up this plot of land for 80-100k. The lot is overgrown at the moment so clean it up and then start with two buildings on one end (30'x300') and covered parking on the other side. We would buy the land outright and then through our local bank connection that we've done deals with in the past have them help fund the build out with interest only until with hit a certain lease up %. Have contacted the city and zoning is fine. Have contacted building and concrete companies and approximately looking at 28 per sqft buildings built. Looked into getting the gate motorized with keypads on both sides for ~5k. We would consider caliche for the driveways or possibly something nicer (chipseal 2$ft/asphalt 3.5-4$ft/concrete 10$ft). 

All in cost ~750k, revenue possible at 90% SS and 60% parking roughly 175, operating expenses on the conservative side of 50k leaves 125 for P&I and profit. Phase two would be to have these first two building fill up and then build possibly two more including CC. 

Lots more info but thats just a start to the thread. Poke holes, give advice... see where this goes with me.