Premier Self Storage

[Robert Karnes]

Investment Info:

Other commercial investment investment.

Purchase price: $450,000
Cash invested: $450,000
Sale price: $730,000

100 unit self storage facility

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

After my initial success with another storage facility I wanted to find a larger facility.

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

I became aware of the facility due to a real estate yard sign. I live in WV but owned a different business in nearby College Station.
Originally I offered much lower than the asking price. The offer was based occupancy below 40%.
The offer was rejected out of hand.
I moved on to exploring other properties.
About 5 months later the seller reached out to see if my original offer was still possible. I said yes.

How did you finance this deal?

I initially started to pursue an SBA loan. When I received the final approvals from the lender 75 days into a 90 contract I thought all was good. The lender told me no, they couldn't actually close in the 15 days left. The seller was not willing to extend and I was fortunate to be able to self-fund the deal.

How did you add value to the deal?

I took the property from 38% occupancy to 100% occupancy in about 18 months. I put in technology like online rental, security cameras, etc. Repainted doors. Installed corner bollards to protect the buildings. Added several outdoor RV parking spots.

What was the outcome?

At 24 months we sold for a solid profit. The timing worked out well because I also sold my other TX business.

Lessons learned? Challenges?

SBA loans always take way longer than expected.

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

Yes. Both on purchase and sale.
On sale I worked with a real estate agent who specializes in Self Storage.
Dave Knobler of Marcus and Millichap.