Self Storage Unit Number Analysis and Offer

[Gerald Lightfoot]

I am looking at a self storage unit in Splendora Texas.It has 149 units and currently 122 of them rented out which is $7800.00 in rent. The asking price is $650,000 which seems to be middle of the road in pricing. The owners are living in Montana and are selling investments in Texas. I believe retiring from the business. I have two questions, I am considering offering $500,000 to see how motivated they are and how do the numbers look? Any feedback would be appreciated. Gerald L

[Amy Kendall]

I would always run numbers, see where it actually makes sense and then knock off 20-30K, you don't want to offend people when making offers, I have had countless situations where we have sent in "low ball" offers to sellers, never to hear back, even when raising the offers later. How hot is the market in TX, for properties like this? I would look at how long the property has been on the market, how long a property like this normally sits on the market, and where the numbers actually work in your business.  If you are wondering how motivated they are call the agent and ask if this is a reasonable offer thy would consider at this time. They will let you know if it's worth even offering that price on, without giving yourself a bad name. Keep in mind if the numbers work, someone else will pay that, even if you won't.