Self-Storage?

[Shannon X.]

I have always wanted to own my own self-storgae, however I don't have much knowledge about this area and don't plan on jumping right into it.. but I would like to know is this a good thing to invest in? how do you get started? do you buy one that is for sell or build new and small and continue to grow? any info on this would be fantastic.

Thanks BP

[Scott Meyers]

Hey Brandon, we've owned thousands of Self Storage Units over the years, and so I thought I'd give my $.02..... 1st of all, What is the trailing 12 Cap Rate on the facility? If it's strong (10% or greater) then give him his price and figure out terms that will work for the both of you.

As for the SBA, with the SBA 7a, they will allow a seller carry back of 10%, but you will most likely need to also invest 5-10% as well. It depends upon the strength of you, the property, and the bank's underwriting criteria (sorry to be so vague, but the SBA and the banks that underwrite them aren't exactly predictable).

Regarding your comment about it being maxed out in income - I respectfully disagree - RAISE RENTS! the beauty of Self Storage is that our leases are month to month, so we raise rents about every 7-9 months, depending upon the property.

Also, It sounds like you have room for expansion, but it just isn't zoned for it? In virtually every deal we've been involved in, once the parcel has been zoned, it's zoned for life. You simply need to have town approval for expansion. By the way, if they don't want permanent structures, I'd look into portable storage units that are considered personal property, not improvements. By the way, you can lease them and depreciate them over 7 years, and since they're portable, you avoid property taxes.

Keep us posted!