Evaluate a Storage Unit Deal

[Ryan Baker]

Hi all,

Long time reader, first time poster. In keeping with my 2020 goal of actually starting (rather than fantasizing about) getting into real estate investing, I’m investigating a storage unit facility for sale. I have a couple of potential partners lined up, so excitement is building.

I have some experience in rental housing, so I’m not completely green to the industry. However I wonder what’s the best strategy for evaluating a storage unit deal vs a housing deal? I imagine the concepts are the same- compare income vs expense? Is there anything I’m missing?

Thanks in advance.

- Ryan

[Scott Meyers]

@Ryan Baker - well, for starters, we've got to have a little more information.  How is the local market for storage?  Traffic flow?  Egress and ingress to the site?  What financials has the seller given you (and what is missing in those financial?  Obviously, what is the vacancy (and is that number reliable)?  How will ownership break down (I.e. Will there be a managing partner responsible for operations, how (and when) will the monies borrowed be paid back?  And, what is the long term strategy - ownership or a "flip"?)

I agree with @Trevor Ewen. a feasibility study (I think we're saying the same thing) is an EXTREMELY useful tool, despite the cost.  

As you do more and more of these, you'll see there is really a simple system to evaluate a facility and determine not only the costs up front, but the profits down the road.  

Keep us posted - there are plenty of good folks on BP that are more than happy to help!