4th Storage Facility

[Josh Anderson]

Investment Info:

Industrial commercial investment investment.

Purchase price: $525,000
Cash invested: $100,000

Turn around storage facility purchase. Currently 150 units, but will increase to 164 units by turning the existing unused office space into climate controlled units. Also going to be adding exterior parking spaces as boats and RV's are common in the area with no fenced parking offered in town.

$525K purchase price with roughly $150K estimated renovation budget. Renovation to include all new Janus doors, fence repair, office conversion, wall unit adjustments, and 12 months of interest payments. Should be a roughly $850-900k value property once stabilized (based on 8% cap rate, a 15% vacancy factor and 45% expense ratio, both of which are high for the industry). Other facilities in town are 99% occupied with this property currently 45% because of how it looks. This facility should provide the best value in town once renovated as it will be the only facility with a fence, paved driveways, outdoor parking, and online rentals.

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

Upside potential with improved management. Very hard to find turn around properties in the upper midwest at a reasonable price.

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

Wholesaler posted for sale on Facebook. Originally listed for $700K, but it was too high based on the work needed to be done so I just sat back and waited to see if anyone else was going to buy it (which they didn't) and eventually the wholesaler got the current owner to come down significantly in price and I jumped on it.

How did you finance this deal?

20% down payment on the total cost (purchase and rehab) and once stabilized going to look at refinancing into a SBA 504 note and get down to 10-15% down into it. If stabilization goes really well and we are able to beat our conservative numbers we may look at trying to refinance based on the appraised value to pull all our cash out.

How did you add value to the deal?

We will look to add value via curb appeal and improved management practices.

What was the outcome?

TBD