I purchased my first self-storage facility - and it is glorious!

[Nathan Gesner]

Investment Info:

Other commercial investment investment in Cody.

Purchase price: $550,000
Cash invested: $120,000

Fair Acres Affordable Storage has 150 self-storage units and three residences. The property has been mismanaged for years so I bought it for a good price with lots of potential. Only 40 of the 150 units were rented; the rest were occupied by the Seller or empty. The two largest residences were vacant.

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

No toilets, no inspections, I can easily manage the property myself, and tons of upside!

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

Cold-calling storage units. I simply introduced myself and asked if they would consider selling. This particular owner told me he may be ready in six months. I called him back after five months but got no response. I sent an email. A couple weeks later, I sent another email. A couple weeks after that, they emailed me back and said they were ready to sell. I called and asked for financials, then I studied the property, crunched numbers, and made an offer.

How did you finance this deal?

Conventional loan.

How did you add value to the deal?

Almost 70% of the units are vacant. I am working to get the current tenants to pay on time, catching up on delinquents, auctioning a few units off, and working hard to fill the vacant units. In my first week I've already increased the income almost $1,200.

What was the outcome?

Still working on it. I'll update in a year or so.

Lessons learned? Challenges?

I've managed a nicer storage facility with 200 units for over a year so I'm familiar with the challenges involved. I know it will take some time to fill the vacant units and get the current renters trained to follow my processes. The good news is that the majority of the units are vacant so I can fill them with renters that are trained correctly from the beginning. It's better than buying occupied!

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

I am an agent and represented myself.