Purchased a Storage Facility

[Janel Page]

Investment Info:

commercial investment investment.

Purchased a Storage Facility

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

Someone I know owns a few storage facilities. I was making plans to buy houses and multifamily properties. My investor friend said I should buy a storage facility. Umm... What...?? I hadn't thought about it before he said something. This is why it's so great to meet with other investors.

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

During meeting introductions and networking, I started saying to everyone I wanted to buy a storage facility. In my mind I was thinking, "I will start saying it now, and will have time to do some research on how to find and analyze a good deal." Then an off-market opportunity came up. A fellow investor received an email with a "Request for Offers." After receiving permission, he shared it with me. I didn't have much time to respond, so I did some quick analysis and asked a few friends for a

How did you finance this deal?

Pioneer Trust Bank in Salem, OR. They are a local community bank. They have local folks who make lending decisions on local loans. I've had a good experience with them.

How did you add value to the deal?

Previous owners bought this as a distressed business & property & owned it for about 18 mos. (They sold for another good opportunity.) They did some good things to get it headed in the right direction. We continued on that path. We cleaned out front landscaping bed, removed a fence by front sidewalk, added additional signage to increase visibility. We made some small repairs, added additional ext lighting, upgraded office computer, improved some biz processes, implemented a rent increase.

What was the outcome?

Cash flow is good and improving. We are working up a rehab plan.

Lessons learned? Challenges?

I worked with the on-site manager for about 9 months. Then, he gave notice to take advantage of another job opportunity. I decided to work as the manager for several months to really learn the day-to-day operations. I continued to tweak and improve processes and forms as I learned. I gained a lot of experience with the A/R system and with eSign for leases. Now when an employee has questions, I have the answers. I am also better able to analyze future deals and value adds.

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

Yes. We (as Buyer) did not use a real estate broker. Seller hired a commercial real estate broker to help. This broker did a great job. She was practical, and helped make the deal work well for everyone. I really enjoyed working with her.

I also enjoyed working with the lender.

[James Ayers]

Hi Janel,

Congratulations on not only making what sounds like a good investment, but on also moving out of your comfort zone a little bit to try something new.  My wife and I live in Portland we we're interested in investing in the Willamette Valley (with our main focus being Salem / Keizer area).  So far we have one duplex in Keizer and we're currently looking to get another multi-family property sometime soon.

I've also thought that a storage unit would be a good investment, but I feel somewhat uneasy about the idea of having employees and a payroll.  Can you elaborate on how you made the transition from being the operator of the relatively "self-run" business of multi family to being the operator of a business with business hours / payroll / etc?  Also, was the financing for this deal the same as what you would have with a multi family deal greater than 4 units?  I don't think I'm ready to go this route yet, but it never hurts to get some extra information...

Thanks for sharing your experience,
James