Valuing Self-Storage facilities

[Justin Onyeador]

I’ve been interested in wholesaling—or even holding commercial real estate.. specifically self-storage facilities. But I’m curious about what to look for when valuing properties and how to know when you’re getting a good deal.

I’m on bizbuysell, and some of them have almost completely filled rental units and it shows the cash flow & gross revenue. But how do I know if it’s a good investment? How do I valuate whether I’m getting a good price for it?

[Greg Dickerson]

Originally posted by @Justin Onyeador:

I’ve been interested in wholesaling—or even holding commercial real estate.. specifically self-storage facilities. But I’m curious about what to look for when valuing properties and how to know when you’re getting a good deal.

I’m on bizbuysell, and some of them have almost completely filled rental units and it shows the cash flow & gross revenue. But how do I know if it’s a good investment? How do I valuate whether I’m getting a good price for it?

Thats entirely up to you and what you consider a good return. Everyone has different return requirements. For me I like to see 20% annualized return on cash at a minimum for most investments that are stabilized. If its a development or heavy lift I shoot for 30% or better but thats me. Some people are good with somewhere in the 10% range especially if they are completely passive. That would be the return on your down payment or cash invested in the deal.