Self Storage deal near Charlotte NC

[Cole Simpson]

I am looking into a self storage deal near Charlotte NC and from my understanding the numbers look fairly promising and seems like a good location, room for expansion etc. I would love to know what are the things I should be looking for? What is a good cap rate for self storage? What is a good NOI? What questions should I be asking? What books should I read? Thanks for any and all information.

[Scott Meyers]

Hey Cole!

Please note that I could type A LOT regarding this.  You should take a look at some of the other threads regarding Self Storage (Henry Clark, Mike Wagner, Scott Krone, just to name a few) on evaluating a Self Storage deal.

From a high level, you need the following bullet points answered (numbers where appropriate, narrative & thought-process, too):

1) What is the VALUE?

2) What are the FINANCIAL ASSUMPTIONS (how are you gonna pay for that)?

3) Where will you take this Facility in 3-5 years? PRO FORMA

4) How are you going to manage it (IOW, you're buying a business, get away from the spreadsheet and think this through...you need to be able to explain it to yourself, your spouse, the bank, potential partners, etc.)

5) "How am I going to make money?" (That question needs to be answered for whomever might have a financial interest in your Facility, see #4 above)

Again, high level, but that's the best way to describe it in layman's terms.  Answer those five and you're well on your way to whether or not this "LEAD" (and they're all leads until you determine if it's a "deal" or not) makes sense to move forward.

HOW you do that...well, that's a whole nother story.

Good luck!

Scott