Self Storage for Metrics

[Account Closed]

Self storage after rehab target metrics (IRR, CoC, Equity Multiple, Cap Rate)?

[Michael Wagner]

I'm not a fan of CoC as it can "allow debt to make the deal". I prefer to look at Gross Rent Multiplier (of 4-5) as a way to "sniff" the deal and then use a cap rate based before and after valuation of the property to assess its merits. I'm probably the odd one out as I factor in Return on TIME Invested as highly (if not more than) Return on Money invested. Of course this is because I spearhead the acquisition and turnaround/deployment of remote management systems that ultimate handle the day to day operations.

As for specific values for each of the metrics you mention, that is going to be entirely dependent on the investor, their risk tolerances and security offered.  VERY generally speaking, we've had easy success raising debt from private investors in the 8-12% range depending on repayment terms and security/collateral position. Similarly, we target 16-22% projected returns for equity investors and often exceed those conservative estimates.