Self Storage- Deal 4, Don't get greedy or Always make an Offer

Deal 4

Clarkstoragellc-  Start Small and make your big mistakes Early.

Deal breakers- market, finance, zoning, footings, road type, water/sewer availability, Storm sewers, Storm retention ponds. Everything else you can mess up and not get too hammered.

Some of these stories will be ambiguous because they are still "live" items. I am intentionally not telling you all of the details and am obfuscating some of the detail, just telling you the Deal story.



I had just started in Self Storage and had two locations. About 70 units total. We have since grown to 200 units in this local, not counting parking. A neighboring location 220 units came up for sale for $1.1mm. Just about 3 miles from me.

Setup:

a. Visited with them.

b. Went through the financials and management reports.

c. Clean operation. No room for expansion, totally built out.

d. Location was on the opposite end of town, near higher income neighborhoods.

e. If we had bought this, we would have had the three primary road ways covered.

f. Would have had about 70% of the market covered with room to grow at our existing facilities. If we are out in one place, we would send them to the other.

g. At the time $1.1mm was a bigger number than I had worked with. Only had about 2 years in the business. Wanted a "Great" deal for around $850k. Did not make them an offer. Wanted to wait 6 months, to let it stay on the market and soften their expectations.



Was visiting with someone about 6 months later and they said that location had sold for $875k. Whatever the emoji is for a sad face, put here.



Deal breakers- don't get too greedy, when there is a deal on the table make an offer so they know to come back to you. Although this didn't happen I will add to Deal Breakers- Don't get too greedy and also don't Over Analyze.