Storage facillity investing

[Jacob Hufford]

http://www.mcginnisrealty.com/MILFORD-SELF-STORAGE-PROPERTY-1001-East-Masten-Circle-Milfor/

Someone please let me know what you think about this listing just doing some research came across this and want to learn about storage facilities and how to build an income for myself one day. Thanks in advance

[Henry Clark]

Your 20 years old and interested.

1.  Read every post on here that contains Self Storage.  "You" make the time investment.  Watch every podcast, read every book. 

2.  Do you have $175,000 for a 10% SBA loan?

3.  Start small and Make Your Big Mistakes Early.  Do you know the "questions"?

4.  Go to some seminars and training after you do 1 above.

5.  Back to your question.

a.  Why is its occupancy rate down?

b.  Why are they giving away so much discount?

c.  The expansion area, is it zoned correctly?

d.  Do you need Storm pond or is it grandfathered in?  I can't see.  

e.  Are there any other requirements such as above, if you build extra buildings/units.

f.  Looks under lighted, especially for up there.  $30,000

g.  Has a gate, but I don't see any security cameras or systems on buildings. $50,000

h.  Are you going to maintain or add additional management fees $50,000.

i.  Google Milford Delaware self storage.  On Google maps I don't see them.  This is good, you value add them.  You want to get to the top three so your on page one.

j.  Google Milford Delaware Sparefoot- no one and not this location is listed.  This is good, this location needs marketing.  It will be at the top immediately on Sparefoot for google searches.

k.  Google Milford Delaware Central Storage.  I can't find them this way or just looking for Milford Delaware Self storage.  This is good, they need a website.  Again easy Marketing value add.

l.  Building sizes.  They did 3 30 wides and 1 40 wide.  This makes for a good product mix.  10/15/20/30/40.

m.  Ask why they are listed as "Central Storage" versus DE storage on the google map.

n.  Is this an old MLS listing?  Look at the Google maps site.  Looks like they have already added 7 other buildings.  Know what you are looking at.  Visit the site.

o.  Property tax and insurance seem low.

p.  Add in Management costs and at the 7% cap rate, the value goes down, to near their listing price.

q.  On the peninsula, thus not a lot of potential buyers.  Plus small towns.  This is great for a three way value add play.  1.  Buy improve, raise rent., 2.  Buy/build in nearby/same town/towns so you control rent and raise.,   3.  Develop a group of towns and locations, then sell as a packaged deal.  Looks like you live in the area, so a perfect fit.

r.  I don't think this listing is still active.  But, from a revenue standpoint, with the management fee (unless its you), it doesn't meet my 8 to 12 year payback.  From a Cost standpoint; use todays building cost of say $830,000 for erected buildings; Land of $xxx,xxx; fence $60,000 all around; Electric at $50,000; Security at $50,000 (1 camera for every 6 units, plus license plate cameras and face cameras at entrance/exit); office/utilities $50,000; Grading $??,???; etc etc.  Probably gets you close to their $1,750,000 price ( but pretty sure this is an old listing); using cost plus a revenue stream.  Also with the "come" on the marketing/value add points.

I would recommend you buy a cheap piece of ground.  Always check zoning first.   See if you can do Cargo Containers or conex's on them, plus boat storage.  Use this to start small.  Learn and develop your business model on this, so your mistakes don't take you out of the game.  Pick the north side on "1" towards Dover AFB or on the east side towards the coast on 36 and 1.  Do an SBA loan at 10% collateral, put in around $10,000 to $15,000 of your cash.  This will not be a great money maker.  It will get you in the game and start your "real" learning, hands on with very little potential loss.

Start small and Make Your Big Mistakes Early.