First Self Storage facility

[Andrew Bosworth]

After focusing primarily on single and multifamily rentals since I began investing a number of years ago, I became increasingly interested in self storage over the past year.  I did some research and homework and began calling local mom & pop owners in the Harrisburg, PA area where I live.

Believe it or not, the very first person I called I ended up purchasing from!  It took more than one call, but this was an unexpected start.  As fan (nerd) of sports statistics, maybe I should have stopped with this one call and finished my career with a 1.000 batting average...but I digress!

I targeted smaller facilities that would provide me with a bit of a runway for learning the business.  The property I purchased is 36 units.  I purchased it for $400,000, but with nothing out of pocket thanks to utilizing a 1031 from the sale of a few other properties.  The seller is providing financing at favorable terms.  

The property was very well run and maintained, though the owner moved out of the area years ago, so rents are below market.  Because of this, I would call it a light value add - at least in comparison to what I am used to in the world of apartment value-add projects.  

The value-add component will come operationally by increasing monthly rates as units become vacant, adding a website that will allow tenants to browse and rent units, sign leases and pay rent electronically.  I am also working on rebranding the property with a new name and logo.  Security cameras will be added to increase security.  I anticipate increasing existing rents over the coming months and taking a dynamic pricing approach to units as they become vacant.  

Once rents are at market rate, my GOI will increase by roughly 41%, with very little increase in my monthly expenses. 

In baseball terminology, I would call this a homerun single. I won't retire on this property, but it has a lot of upside, will allow me to learn the business on a small scale before growing (if I choose to) and I anticipate it being a solid, long-term hold for my portfolio.  The seller and I have formed a good relationship and he will continue to be a point of contact when I need it.  I am excited and blessed!

Feel free to message me with questions or to chat about RE.