Purchasing a Storage Unit

[Corey Herr]

Attempting to purchase a storage unit this week.  Small town, about 4,000 people, traffic less than 4,600 per day.  Three competitors in the immediate area.  Every place is 90%+ plus filled.  I saw two facilities with 100 units each that had only four at one and nine at the other that were empty. The storage unit for sale is cheaper price than competition, some sizes by 10% and some sizes by 40% cheaper.

The unit for sale is 65+ units, i counted only 4 units that were not filled, two units double locked.  It is that full and the guy doesn't advertise, except sometimes on CL, it doesn't even show up on google maps when searching, not in the phone book either.  He only accepts cash, no website or credit cards.  Building is all steel and was built in 2005.  It still looks brand new and property in general is amazing looking.  To my knowledge it is generating between $2,500 and $3,000 per month.  Local taxes are $2,500 per year.  Setup is similar to competition, no security gates.  Only one of the competitors has an office, this one does not.  Competition are all located on opposite corners of the town and the owner claims there is a good relationship between all of them.

Asking price is $210,000.... $18/sqft, so am I missing something or is the deal of a lifetime?  I know small town rural facilities can be dangerous but like I said, this unit and all competitors are all full... not to mention if I raised rents to be closer to competition but still left them cheaper, that would increase the cap rate even more (14%+)!

Financially, I just happen to have 20% down payment... it will be hard but I can scrape it up.  This unit is not being advertised well at all, I heard about it through word of mouth so I assume I better jump on it while i can.