Self Storage- Deal 2, Last location and still learning
Start Small and make your big mistakes Early.
Deal breakers- market, finance, zoning, footings, road type, water/sewer availability, Storm sewers, Storm retention ponds, don't over analyze and don't get to greedy. Everything else you can mess up and not get to 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.
Well this one was me. So I will tell the situation.
Setup:
Found a great location. 8 acres. 4 is usable, the rest is up a 60 degree hill. About 4,000 vehicle per day traffic count. Right near the higher income population. Anchors on both sides (College, Humane society and a shopping outlet) to draw traffic. Apartment complex and timber on the back side. Land had been for sale for about 15 years (sucker??). Price was cut in half, 6 months ago. I made even a lower offer than list, subject to zoning "use" approval in Planned zoning. Accepted. City planning came back and said it was approved subject to me putting in a Water line. Need for Fire hydrant and a required bathroom.
Right there along the side walk is a fire hydrant. Why are they saying I need a water line?
The Fire Hydrant is the "Private" hydrant for the apartment above me. Coming "down" from the apartment. The same owner used to own both properties. Also the city requires a full water line along the whole road front when you develop. And you have to own it.
Back to the offer. Realtor and owner, you didn't know about this? I really, really, like this land and location. Re-opened the negotiation (phone call). I had already offered below list price. If I backed out the $130,000 extra the city said I would pay for the water line extension, the price would be getting close to zero and the seller would back out. Chalked it up to the cost of learning, and took an extra $20,000 off the price.
Cost of land plus the extra, I was still happy with the cost. Just a little mentally drained by the thought of, hey there's water right there.
Deal Breakers- make sure your Water/Sewer needs are accounted for.
Comments (5)
@Ashley Zhang
Considerations
1. Fire hydrant placement if needed. We can only build within 300 feet of a hydrant. That is not always a straight line if around buildings. Consider placement for future building needs
2. Water pipe size if doing sprinklers now or in the future
3. Future subdivision or sale. Size of taps and pipes
4. Sewer if in a flood plain do you need a lift station
5. Does this have road frontage. If either are not along the full length of the property you probably have to install the full length
6. Are you required to have storm or surface drainage
7. Storm pond needed?
8. Verify what is in flood plain or flood zone. You can’t change or build anything in a flood plain
I’ll have to write a post with the above. Good luck.
Henry Clark, over 2 years ago
@Henry Clark hi Henry, thank you for your fast response! Those are excellent questions. What's teh best way to find out teh answers? Talking to the city planning department? Or City engineers? Thanks!
Ashley Zhang, over 2 years ago
@Henry Clark Hi Henry, I am doing my homework and trying to read all your posts which is much better than any book on the market! I have a coupel of questions. The property I am looking to buy is 5 acres with 36 units ( 30k per acre?). the town planning department told me it's only allowed one water abnd sewer tap due to the flood zone. You mentioned the "make sure your Water/Sewer needs are accounted for". Can you explain why? thank you!
Ashley Zhang, over 2 years ago
Yes, talk with City Planning and Zoning. You will need to lay this out or have an engineering plat done. Then show to the Fire Department, Water/Sewer Department.
Henry Clark, over 2 years ago
Hi Henry, I have to pass this property after negociating with the seller since October. Only one bank agree to finance it, and the terms doesnt work. Basically I have to pay 1000 per month out of my pocket before the storage stabalized. even then, I will be break-even. if I need to build an expansion, bank requires a large % down payment that I cannot come up with. it would be a good start up facility, but the seller is asking more than it worth. anyway, I am contacting other owners for more opportunity. thank you for the help!
Ashley Zhang, over 2 years ago