Self Storage- Cargo Containers February 2023

Question: How many of you make $120 per month on your investments? Original investment say $4,500 all in. No maintenance costs. No cleanup costs after a renter leaves. You can evict them in 60 days. You can write off all of your nonland assets in year one. Appreciation ??- See below.





We have around 40, 20-foot cargo containers we use for Self-Storage for the last 7 to 8 years. Due to Covid the prices and availability to add more has swung significantly. When we first bought used 20 foot were around $1,800 to $1,900; moved up to $2,200 then Covid and supply chain issues hit. No more Cargo containers were for sale. They were either stagnant on Ships waiting to be unloaded or being used for Storage back in China, where most of them come from. Prices for a used 20 then went to $4,100 and none were available.

Terminology:
Below is a listing I received from a Seller of Containers. Just for background, 40 footers are really deep and hard to get access into, so we don't use them.
HC- high ceilings. If you ever build a home, these are the ones you want. Get about another 9 inches of space.
1New- China makes these things so cheap and the trade is so lopsided, China to US and not back, that a lot of containers are sold as 1 trip to the US. They are very clean, and you don't have to worry about what was stored in them. Nuclear waste, hazardous chemicals, etc.
WWT- Weather, Watertight- will have some rust.
CW- Cargo Worthy. Containers must be sold, once they are not Cargo worthy.

Why Cargo Containers?
1. First see if your zoning will allow them.
2. No property tax since they are not attached to the ground.
3. Can add as needed. A Self storage building, you usually have to add a whole row.
4. Setbacks- you can normally place them in areas you are not allowed to build. In setback areas, under powerline right of ways, odd corners of property, flood zone areas, etc. Better utilization of unusable ground.
5. Year 1 written off. The whole investment can be written off. Check with your tax accountant.
6. Short lead time and install issues.

Cargo Container Pointers:
1. Insurance- since they are movable, they are treated as personal property. You MUST cover them as personal property. Your insurance company will not take a claim on them as "Building" damage.
2. Banking- your banker may not want to finance these, since they are moveable and personal property.
3. Delivery costs. May cost around $60 each, if you have two delivered at the same time.
4. Setting costs- may cost around $50 each to have them set in place. Someone with a large excavator or crane can set and "LEVEL". Leveling is important. Otherwise, the doors are hard to open. Recommend you do at least 10 at a time to make it worth the contractor's time.
5. Ground preparation- need a support surface otherwise they will sink into the ground. a. If you have a concrete surface, your set., b. If asphalt have some metal plates about 12 x 12 and place under each foot., c. If dirt, level. Then have 4-foot bands of crushed rock or recycled concrete with the "fines" placed in a row at the front and the back. Set on top of them. Let's say about $100 per unit. Could be zero on Concrete.
6. Paint- you don't need to, but they look good if you paint them. About $20 of paint.
7. Roof- paint with Trailer roof paint. Looks black, turns silver. This will reduce the heat inside by 20 degrees immediately. 5 gallons can cover 2 1/2 container roofs.
8. Condensation- have small vent area at top, and one at bottom. Small enough so bugs don't come through.
9. Inspection before you buy- roof, floor, door handles and seals, if you need to replace the floor use normal treated plywood. Don't use Ocean plywood which runs $800 per 4x8 sheet.
10. Security- can use locks, but recommend you get 3-foot Chains and a lock.
11. Dimensions- 8 wide by 20 long. Had a client store and Escalade one time. Had to crawl out the back window.
12. Use "PB Blaster" to clean hinges. Then get a deep greaser to lubricate hinges.
13. Land utilization- put containers back sides together.
14. Market- anywhere. Adjust your rental rate from the $120 per month down to $50 per month. Land cost from $100,000 down to $20,000 and make "your" figures. Compare against a 10 x 15 drive up access storage unit price. 160 8 x 20 versus 150 10 x 15 size.
15. Must open and close both Handles at the same time. People will not like them because they are harder to open. People will love them because they are bug tight and more secure.

SHOW ME THE MONEY:

ALL IN Cost:
$2,500 Container
$ 60 Delivered
$ 50 Set and levelled.
$ 50 average pad prep
$ 150 Driveways- Rock, $30,000 200 units
$ 300 Fence 2 acres, $40,000; Gate $20,000; 200 units.
$ 1,000 Land $100,000 per acre

$4,500 Let's round to $4,500; permits security, other miscellaneous.

NOI Per Unit:
$1,300 90% occupancy at $120 per month
$ 15 Insurance- $3,000 for 200 units
$ 50 Property Tax $10,000; primarily just land and fence, etc. not units.
$ ??? Management fee, add to your situation. This will probably be Mom/Pop location.
$ 20 Maintenance, snow removal, weeds, trash pickup or unit cleanup.
$ ??? Other- advertising, auctions, etc.

$1,100 Let's round to $1,100 NOI per unit.

Valuation:
I don't like CAP rate, but. Cost per unit $4,500; NOI per unit before depreciation and income taxes $1,100. CAP rate = $1,100 / $4,500= 24%.
Let's use a CAP rate of 7% though.
Valuation: 200 units at $4,500 cost= $900,000 Cost Basis.
Valuation: 200 units at $1,100 NOI= $220,000 per year; At CAP rate 7%= $3,142,000 Valuation.

Now the above has to be WRONG. A $900,000 investment is worth $3,142,000. In about 3 years. Actually, appraisal will come in around $2,800,000 at Opening. So, Appreciation- Day one.

No painting between renters. No dog pee. Non payors for 6 months to a year. Can you fit 200 storage containers on 2 acres? Can you rent for $120? Does land cost $100,000 per acre? What are management and Advertising costs? Does zoning allow? Can you find 200 cargo containers, as you need them? Question the numbers and the logic. Make them yours.

Start small and Make Your Big Mistakes Early.

20'20'HC40'40'HC45'53'StateCityTypeConditionQtyRate(U$)QtyRate(U$)QtyRate(U$)QtyRate(U$)QtyRate(U$)QtyRate(U$)ALMobileDC1New32$2,9009$4,450ALMobileDCCW1$2,8502$3,400ALMobileDCWWT28$2,100ALMobileDouble Door1New1$4,9001$5,700ALMobileReeferDamage1$2,800ALMobileReeferNon-working1$7,500AZPhoenixDC1New2$6,650AZPhoenixDCASIS1$3,700AZPhoenixDCCW2$3,5002$4,500AZPhoenixDCWWT2$4,000AZPhoenixDCWWT/CW1$4,300CAAdelantoDC1New13$4,2008$4,800CAAdelantoDCCW1$2,500CALong BeachDC1New20$3,3006$4,200CALong BeachDCCW8$2,20020$2,2502$2,450CALong BeachDouble Door1New18$4,75010$7,200CALong BeachDuocon1New2$5,500CALong BeachReeferWorking45$6,000CALos AngelesDC1New22$3,1001$3,75050$4,2509$18,000CALos AngelesDC1Trip(incoming)5$3,700CALos AngelesDCASIS25$2,400CALos AngelesDCCW2$2,900CALos AngelesDCWWT2$2,800CALos AngelesDouble Door1New5$4,6005$4,650CALos AngelesDouble Door1Trip(incoming)2$4,8503$5,200CALos AngelesDuocon1New9$5,200CALos AngelesOpen Side1New2$14,500CALos AngelesReeferASIS4$4,600CALos AngelesReeferWorking1$5,500CAOaklandDC1New2$2,9001$4,2502$4,4504$4,700CAOaklandDC1New(Damage)1$4,500CAOaklandDC1Trip(incoming)1$2,900CAOaklandDCASIS4$1,5001$1,700CAOaklandDCCW2$1,65010$2,4504$2,7001$2,900CAOaklandDCWWT5$1,95035$2,550CAOaklandDouble Door1New3$5,150CAOaklandFlat RackCW2$8,050CAOaklandOpen Side1New1$7,8001$11,000CAOaklandReeferWorking1$6,500CAOaklandUndermountASISCASan DiegoGooseneck 40'Road-worthyCODenverDC1New11$3,90016$5,2508$5,600CODenverDC1Trip(incoming)3$5,800CODenverDCCW2$3,2002$3,5506$3,7002$4,000CODenverDCCW(incoming)6$3,1008$3,300CODenverDouble Door1New7$5,5007$7,400CODenverOpen Side1New2$8,900CODenverReefer1New1$23,000CODenverReeferWorking1$8,7001$9,500FLJacksonvilleDC1New5$3,2001$4,700FLJacksonvilleDC1Trip(incoming)2$3,00019$4,450FLJacksonvilleDCASIS1$1,550FLJacksonvilleDCCW50$1,90025$2,7502$3,000FLJacksonvilleDCWWT8$2,600FLJacksonvilleDouble Door1New2$6,000FLMiamiDC1New46$3,00030$4,450FLMiamiDCASIS1$1,4502$2,900FLMiamiDCCW13$2,00025$2,7001$3,6002$3,700FLMiamiDCDamage1$1,000FLMiamiDCWWT20$1,90040$2,300FLMiamiDouble Door1New2$3,9002$5,400FLMiamiDuocon1New3$6,500FLMiamiOpen Side1New1$9,400FLMiamiReeferNon-working1$6,500FLTampaDC1New1$3,1005$4,650FLTampaDCCW7$2,1002$3,000GAAtlantaDC1New3$2,6002$4,400GAAtlantaDC1New (ASIS)1$2,400GAAtlantaDC5IICL3$3,800GAAtlantaDC5IICL(incoming)1$3,600GAAtlantaDCASIS1$2,250GAAtlantaDCCW1$1,9001$2,700GAAtlantaDCCW(incoming)4$1,550GAAtlantaDCDamage2$1,050GAAtlantaDCWWT10$1,7002$2,2002$2,550GAAtlantaDouble Door1New7$3,9005$5,300GAAtlantaDouble Door1Trip(incoming)17$5,200GAAtlantaOpen Side1New7$8,0001$13,300GASavannahDC1New1$2,4005$4,2001$4,400GASavannahDC1Trip(incoming)18$3,50030$4,200GASavannahDCASIS5$1,2001$2,400GASavannahDCCW11$1,4003$2,3005$2,5001$3,650GASavannahDCCW(incoming)2$2,200GASavannahDCDamage1$1,2001$1,800GASavannahDCWWT47$2,00014$2,500GASavannahDouble Door1New2$3,35015$5,150GASavannahDuocon1New6$5,100GASavannahFlat RackCW1$4,750GASavannahOpen Side1New3$13,500GASavannahReeferDamage1$3,000HIHonoluluDC1Trip(incoming)12$7,750ILChicagoDC1New32$2,4509$5,20048$3,9001$18,000ILChicagoDC1New(ASIS)7$2,000ILChicagoDC1Trip(incoming)6$3,6003$3,500ILChicagoDCCW2$1,3501$1,8501$2,0501$2,80010$3,700ILChicagoDCWWT2$1,3002$1,6002$1,900ILChicagoDouble Door1New66$3,2002$4,9008$5,000ILChicagoDuocon1New4$5,200ILChicagoDuocon1Trip(incoming)17$5,100ILChicagoGooseneck 40'ASISILChicagoOpen Side1New6$6,2002$9,200ILChicagoOpen Side1Trip(incoming)8$8,200ILChicagoOpen TopCW1$4,350ILChicagoReeferWorking2$9,000ILChicagoSide Door1New2$5,400ILJolietReefer1New6$20,0001$26,000ILJolietReeferWorking1$8,000ILWilmington ILDCASIS1$1,400ILWilmington ILDCDamage1$1,100ILWilmington ILDCWWT20$1,50017$1,6001$1,900INBurns HarborReefer1New10$48,000INIndianapolisDC1New1$3,2504$4,700INIndianapolisDC1Trip(incoming)17$2,900INIndianapolisDCCW3$2,10013$2,80070$2,900INIndianapolisDCIICL1$3,500INIndianapolisDCWWT3$1,80050$2,300INIndianapolisDouble Door1New1$5,700KSKansas CityDC1New41$2,8004$4,100KSKansas CityDCCW12$1,8503$2,1001$2,600KSKansas CityDCWWT2$2,450KSKansas CityDouble Door1New4$3,4006$5,500KSKansas CityDouble Door1Trip(incoming)2$5,250KSKansas CityDuocon1New1$5,100KSKansas CityOpen Side1New4$8,2001$11,750KSKansas CityOpen Side1Trip(incoming)1$9,500KSKansas CityReeferASIS1$5,300KYLouisvilleDC1New10$2,85013$4,650KYLouisvilleDCCW1$1,90025$2,7502$2,8001$2,200KYLouisvilleDCWWT2$2,500KYLouisvilleDouble Door1New1$5,700LANew OrleansDC1New1$2,8002$4,600LANew OrleansDC1New(ASIS)1$2,600LANew OrleansDC1Trip(incoming)2$4,600LANew OrleansDC5IICL1$4,100LANew OrleansDCASIS1$1,200LANew OrleansDCCW1$1,8001$2,400LANew OrleansDCWWT1$2,000LANew OrleansDouble Door1New2$5,700LANew OrleansOpen Side1New2$13,600LANew OrleansReeferASIS1$3,300MABostonDC1New8$3,8504$5,0002$5,100MABostonDCCW20$2,5004$3,200MABostonDouble Door1New2$6,100MDBaltimoreDC1New29$2,7501$4,650MDBaltimoreDC1Trip(incoming)1$4,300MDBaltimoreDCASIS2$1,400MDBaltimoreDCCW1$1,7502$2,6001$2,650MDBaltimoreDCDamage2$500MDBaltimoreDCWWT3$1,600MDBaltimoreDouble Door1New1$5,200MDBaltimoreDouble Door1Trip(incoming)20$3,800MIDetroitDC1New4$2,6005$3,900MIDetroitDC1Trip(incoming)5$4,000MIDetroitDCASIS1$1,0503$2,000MIDetroitDCCW24$1,6002$2,1004$2,7006$2,800MIDetroitDCCW(incoming)8$1,550MIDetroitDCWWT/CW2$2,100MIDetroitDouble Door1New9$3,2504$5,300MIDetroitDouble Door1Trip(incoming)1$4,900MIDetroitOpen Side1New2$7,7001$9,000MIDetroitOpen Side1Trip(incoming)1$6,3001$8,000MIDetroitReefer1New15$47,000MNMinneapolisDC1New29$2,8501$5,3002$4,400MNMinneapolisDC1Trip(incoming)6$2,800MNMinneapolisDC5IICL1$4,400MNMinneapolisDCCW1$2,7007$2,8501$3,200MNMinneapolisDCCW(incoming)10$2,500MNMinneapolisDouble Door1New2$3,3001$5,900MNMinneapolisDuocon1New12$6,900MOSt. LouisDC1New1$2,5001$4,200MOSt. LouisDCASIS2$1,300MOSt. LouisDCCW1$1,7005$2,5001$2,600MOSt. LouisDCDamage1$2,100MOSt. LouisDouble Door1New2$3,8001$5,500MOSt. LouisOpen Side1New4$6,900NCCharlotteDC1New12$3,2501$4,750NCCharlotteDC1Trip(incoming)1$3,150NCCharlotteDCCW1$3,0002$3,050NCCharlotteDCDamage1$1,700NCCharlotteDouble Door1New1$4,500NCLinwoodDC5IICL4$4,850NCLinwoodDCWWT/CW12$3,150NCWilmington NCDC1New3$3,40013$4,400NCWilmington NCDCCW25$2,000NCWilmington NCDCWWT6$1,600NEOmahaDC1New6$3,4001$4,5006$4,800NEOmahaDC1Trip(incoming)4$3,1003$4,500NEOmahaDCCW2$2,1004$2,8006$2,850NEOmahaDCWWT1$1,500NEOmahaDouble Door1New1$3,8002$6,000NEOmahaDouble Door1Trip(incoming)1$5,300NEOmahaOpen Side1New1$10,300NJMonroeDCASIS1$1,000NJNewarkDC1New7$2,8502$4,4502$4,250NJNewarkDCASIS16$1,2002$1,8007$1,900NJNewarkDCCW16$1,75012$2,200NJNewarkDCDamage1$8001$1,700NJNewarkDCWWT1$1,70010$2,000NJNewarkDouble Door1New3$4,4501$5,100NJNewarkDuocon1New7$7,800NJNewarkDuocon1Trip(incoming)25$5,200NJNewarkFlat RackCW1$4,900NJNewarkOpen TopASIS1$2,200NJNewarkReeferASIS5$4,800NYBrooklynGooseneck 40'ASISNYNew YorkDC1New15$2,9002$4,200NYNew YorkDCASIS14$2,000NYNew YorkDCCW1$1,9001$2,100NYNew YorkDCDamage1$1,800NYNew YorkDCWWT1$1,750NYNew YorkReeferWorking1$9,700OHCincinnatiDC1New1$2,9505$4,450OHCincinnatiDC1Trip(incoming)1$4,300OHCincinnatiDCASIS1$1,300OHCincinnatiDCCW3$1,9002$2,1505$2,350OHCincinnatiDCWWT8$2,300OHCincinnatiDCWWT/CW1$1,300OHCincinnatiDouble Door1New6$3,7004$5,500OHCincinnatiDouble Door1Trip(incoming)2$3,600OHCincinnatiDuocon1New6$6,900OHCincinnatiOpen Side1New6$7,600OHClevelandDC1New3$4,250OHClevelandDCASIS1$1,8001$1,800OHClevelandDCCW7$1,8001$2,400OHClevelandDCWWT21$2,0501$2,300OHClevelandDouble Door1New3$3,600OHColumbusDC1New32$2,850OHColumbusDC1Trip(incoming)1$2,800OHColumbusDCCW7$1,7509$2,600OHColumbusDCWWT2$2,1003$2,300OHColumbusDouble Door1New8$3,5001$5,0001$5,250OHColumbusDuocon1New2$6,900OHColumbusOpen Side1New1$7,850OHColumbusOpen Side1Trip(incoming)1$9,200OKOklahomaDouble Door1Trip(incoming)15$7,000ORPortlandDC1New1$3,900ORPortlandDCCW3$3,550ORPortlandDCWWT3$3,3501$3,4001$3,450PAPhiladelphiaDC1New8$5,900PAPhiladelphiaDCCW4$3,250PAPittsburghDCCW(incoming)1$2,600SCCharlestonDC1New12$2,6001$3,80018$4,200SCCharlestonDC1New(ASIS)1$2,500SCCharlestonDC1Trip(incoming)2$3,800SCCharlestonDCASIS6$1,350SCCharlestonDCCW3$1,6002$2,15051$2,500SCCharlestonDCWWT1$1,35050$2,450SCCharlestonDouble Door1New1$3,60012$5,200SCCharlestonDouble Door1Trip(incoming)1$3,5501$4,950SCCharlestonOpen TopWWT1$2,300SCCharlestonReeferWorking3$9,000TNMemphisDC1New1$2,7004$6,0003$4,000TNMemphisDCASIS2$1,5001$2,000TNMemphisDCCW2$1,6501$2,5001$2,900TNMemphisDCCW(incoming)10$1,550TNMemphisDCIICL1$3,700TNMemphisDCWWT1$1,7001$2,100TNMemphisDouble Door1New4$3,4001$5,400TNMemphisOpen Side1New6$7,600TNMemphisOpen TopASIS1$2,400TNNashvilleDC1New1$2,9502$4,650TNNashvilleDC5IICL1$4,500TNNashvilleDCCW1$2,2007$2,9003$2,950TNNashvilleDouble Door1New3$5,500TNNashvilleDouble Door1Trip(incoming)1$3,500TXAustinDC1New2$3,5001$4,8006$6,100TXAustinDCWWT25$1,90017$2,90010$3,100TXDallasDC1New4$2,7006$5,9509$4,700TXDallasDC1Trip(incoming)45$4,600TXDallasDCASIS2$2,150TXDallasDCCW4$1,8001$2,5001$2,80024$5,500TXDallasDCWWT18$1,600TXDallasDouble Door1New29$3,9006$5,500TXDallasDouble Door1Trip(incoming)1$3,900TXDallasOpen Side1New16$8,1002$11,500TXEl PasoDC1New20$3,2507$4,800TXEl PasoDCCW1$4,000TXEl PasoDCWWT8$3,800TXEl PasoDouble Door1New1$4,200TXEl PasoStraight frameASISTXHasletDCCW1$2,950TXHasletDCWWT50$2,500TXHoustonClipon5IICLTXHoustonDC1New20$2,35013$3,5001$4,500TXHoustonDC1New(ASIS)1$2,0002$4,300TXHoustonDC1Trip(incoming)20$3,30030$4,30012$15,700TXHoustonDC5IICL1$3,000TXHoustonDC5IICL(incoming)20$4,000TXHoustonDCASIS1$1,2501$1,8001$2,000TXHoustonDCCW2$2,5005$2,05020$2,4005$2,850TXHoustonDCWWT50$1,25050$2,000TXHoustonDouble Door1New12$3,4002$5,0001$5,200TXHoustonDouble Door1New(ASIS)3$4,850TXHoustonDouble Door1Trip(incoming)20$5,200TXHoustonDuocon1New1$5,300TXHoustonExtendable 40-45-48Road-worthyTXHoustonGooseneck 40'Road-worthyTXHoustonOpen Side1New11$7,5001$9,600TXHoustonOpen Side5IICL(incoming)2$6,200TXHoustonOpen Top1New5$10,500TXLancasterReefer1New10$48,000TXLaredoDC1Trip(incoming)1$3,10050$7,000TXSan AntonioDC1New2$3,2001$5,250TXSan AntonioDC1Trip(incoming)1$5,800TXSan AntonioDCWWT10$1,700TXSan AntonioDouble Door1New3$6,000UTSalt Lake CityDC1New2$3,7001$5,7002$5,300UTSalt Lake CityDCCW1$2,8501$3,50032$3,800UTSalt Lake CityDouble Door1New2$4,2006$6,800UTSalt Lake CityOpen Side1New1$12,500VAChesapeakeDCASIS1$1,2002$2,100VANorfolkDC1New1$2,5001$4,200VANorfolkDC1New(ASIS)1$2,400VANorfolkDC5IICL1$2,300VANorfolkDCASIS11$1,3006$2,200VANorfolkDCCW1$1,60015$2,55012$2,800VANorfolkDCCW(incoming)2$2,800VANorfolkDCWWT1$2,3006$2,400VANorfolkDouble Door1New1$3,5504$5,150VANorfolkOpen Side1Trip(incoming)1$17,500VANorfolkReeferWorking1$8,000VANorfolkSlider 20'Road-worthyWAChehalisDCCW5$2,850WASeattleClipon5IICLWASeattleDC1New10$3,65010$4,5006$5,400WASeattleDC1Trip(incoming)6$3,1003$4,5002$4,550WASeattleDCASIS1$1,7003$2,100WASeattleDCCW1$2,1003$2,5002$2,6004$3,950WASeattleDCWWT9$2,40050$2,550WASeattleDouble Door1New2$6,100WASeattleReeferASIS1$3,300WASeattleReeferWorking1$5,700WASeattleUnderslung5IICLWATacomaDC1New2$4,500WATacomaDC1Trip(incoming)1$3,200WATacomaDCASIS1$1,650WATacomaDCCW1$2,000WATacomaDCWWT1$1,8501$2,6002$2,750WATacomaOpen TopDamage1$1,900WATacomaReeferWorking1$6,100