Storage Facilities in New Mexico

[John Claborn]

Hey everyone, I have a scenario I'd like some feedback on if possible. Our investment group has been approached about acquiring 4 storage unit facilities. 3 in Carlsbad, NM and 1 in Eunice, NM. 

We've are solely invested in apartment complexes in D/FW and Houston as of right now. The seller is a retiree looking to sell of his assets. He's a current health insurance client of mine as well, so we have to approach this very carefully. 

Based on our discussions with other investors in the area and real estate professionals, we've deemed the storage facilities as a pretty risky venture in these areas of the state. 

What are some good indicators of potential investments in storage facilities other than the obvious (unit mix, sale price, rents, NOI, Cap rate, etc.) What would be a good Cap rate on facilities in these parts if that can be determined without closely examining the numbers which we've yet to secure from the seller? We're brand new into this market, but we know the profitability in our hometown of Lubbock, TX, so we want to see if we can make it happen.

Any information would be helpful to us. Thank you!