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All Forum Posts by: Bharath Mun

Bharath Mun has started 2 posts and replied 4 times.

I am currently considering an Self Storage facility deal. This will be my first property into Commercial space and that too out of state. 

I understand Storage facility is more like a business than just owning SFH rentals with property management. My first goal would be to automate a majority of the processes such as lock codes, online portal to schedule visits, tours & payments, submit questions. I am also looking for one or two local contractors who can visit the facility often either to show around for potential tenants OR to quickly take care of any maintenance issues.

Mostly I have been reading about owners managing Storage facilities in person but I would like to hear from Out of State owners. 

  • What cap rate and other attributes would you mainly look at in the deal to decide if it's worth considering ?
  • What are the mistakes/pitfalls I should be cautious about and keep a close eye on ?
  • What kind of maintenance issues have you experienced?
  • How important is it to have an on-site management (it would be around 150 units facility, if that matters, with a few temperature controlled units) ?
  • What kind of systems and teams have you built to make it as passive as possible so you can focus on next investments ?
  • Called about 7 regular property management companies but they have no experience managing Storage facilities. Do you have a PM or formed a team ground up?

Thank you. This is exciting and yet intimidating. So I want to make sure I could avoid any stupid mistakes that would cost me heavy down the line.

@Michael S. Thank you. I actually saw your comment on another thread and did my research. You are absolutely right, Decatur has seen downward curve from 2014 to 2019. However, it's seen an upward trajectory (around 1.1%) in past 2 years based on online Census data. So, I was wondering the significant growth of Huntsville and Madison in general is kind of getting the Decatur economy grow as well.

As an investor, Athens is a great option but most of the properties have priced in the future appreciation. It's statistically hard for me imagine a city/town 15 to 20 mins from Madison would continue to see a downward trend when the growth in Huntsville is phenomenal.

After I made this post, I have been talking to several investors in Huntsville market. There has been mixed opinions. Some say they don't prefer Decatur while others think assets in Decatur are currently on discount due to negative talk. One guy told me they talked to City administration and developer incharge recently and City is encouraging huge apartments build out while working on problems caused by the bad leadership over past decade.

Just sharing the info I got over past 2 days. I may be wrong. 

Thanks @Laurie McGuire.

Can you elaborate on what locations would you avoid primarily ?

My partner and I are looking at self-storage facilities around HuntsVille area. I understand this asset class was hot few years ago. Is it too late to invest in this space ? 

I am mainly looking at outer areas such as Decatur, AL. On that point, I see Decatur population has ups & downs over past few years. Not sure what the reason was for the downward population until 2019. However, I see an uptick of numbers over past 2 years (assuming online census data is accurate).

Is it a good idea to buy commercial space such as storage facility in Decatur? If yes, any particular areas to absolutely avoid ?