Bought 300 unit self storage facility for 3 million. Down payment was $34,000 and equity from another property. 3.5% interest only 1st two years. Gross rents per month was $22,000 when I bought it. I raised rents to $35,000 per month the day I bought the property. I own other self storage facilities in the area so we have also reduced our expenses with our synergies. It was a very good deal, on top of it all we are in process of cost segregation. Which we will get to write off about $9000,000

What made you interested in investing in this type of deal?

We have history of investing in self storage

How did you find this deal and how did you negotiate it?

Cold call, there was not much negotiation I payed asking because I believed there was huge value add with 50% increase in rents.

How did you finance this deal?

Bank that I have been working with for a long time. They understood what I was trying to do and had finance other self storage facilities for me. Also they had finance a self storage facility that I owned in the same town. They believed i was going to be able to push rents due to the fact that I already had units in the area for much higher pricing and was 95% full.

How did you add value to the deal?

Increased rents by 50% and decreased expenses with our synergies in the area.

What was the outcome?

Added around 2.2 million in equity at a 6 cap. 35,000 (rent) *12 (months)=420,000 (year)*.75 (expenses)=315,000/.06 (cap rate)=5,250,000- 3,000,000 (purchase price)=$2,250,000

Lessons learned? Challenges?

I would say focus on one or two aspects of real estate and get really good at it. We focus on apartment and self storage. Focusing on self storage helped me understand this was a really good deal even though if you just looked at the numbers it did not look that good at first.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

No, cold call. Off market

Home run with Self Storage Facility purchase!

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