All Forum Posts by: Henry Clark

 Depends on the buyer.   This was a local buyer.  They actually could have floated a 6 cap.  If in the same market area Self storage locations create synergies between the locations.  They now will own 80% of the market.  The last 20% won’t expand.  The new buyers will make money on the deal itself.  But then they can raise the rent just $10 per unit per month and create another $600,000 in value across both theirs and the ones we sold.  Next towns are 20 miles away.  And they are all full.  

1. What is both your current and proposed LTV%? a. "owned outright"- do the members have personal debt to support this, or is it both zero for personal and for the business?, b. Not sure what is meant by "After 70% ltv". Will the lender require 25% down, or will they allow cross collateralization with your existing equity positions?

2.  What are the terms/status on your current lessees?

3.  What is status of capex on the building?

4.  What is the cash flow after adjusted P/I?  

5.  Are there any Depreciation recapture or capital gain Tax dispositions that need to be resolved with the exiting member?

6.  Tampa Florida in your tag line.  Any impending Insurance coverage or increases?

7.  How valuable is this location in that market?  A/B/C market.  

8.  If current lessees move out, how much T/I needs to be done even before a new tenant?

9. What does your LLC Operating agreement say about dispositions? Anyone in the middle of a divorce?

10. What is the value as of today, if placed on the market, subject to sales commissions, capital gain taxes, Depreciation recapture, etc. How is the $10mm valuation determined. His exit value should be adjusted for those. Is this written in the LLC operating agreement on how to value. If not, take this moment to adjust, including in case of divorce, mental/physical health, etc. Have a well laid Exit path in the Operating agreement.

11.  What is your view of the Economic World?

Would have to view the property and understand the inherent tenant businesses.  Etc etc.  Don't need/want answers to any of the above.  Just thoughts that jumped out.

If they want I out, I would definitely help them get out.

Taking a break from working on our 2024 bookkeeping and taxes.  All of our self-storage run at basically 100% occupancy except for our most recent addition.  Was just going over with my wife both the increase in Occupancy revenue change and the 2023 versus 2024 Marketing spend for this location.  We are starting to get near max occupancy on this location.  The last year we increased 5% points in occupancy.

Our Marketing spend:

                               2024                         2023

SEO                       $18,000                 $21,000  Paying to get our website and location occupancy up as fast as possible from 0% to ??%

Bus Benches          10,000                   24,000  intentionally reduced number of benches last year.

SP aggregator          6,000                      8,000  as our occupancy gets closer to the top, less demand goes through this aggregator.  We pay 1.75 months of rent per new customer.

Total                      $34,000                $53,000

Once your location gets close to full occupancy for 2 or 3 years.  It creates its own Vortex of customers.  Returning, recommendations, Street presence, etc. to where it feeds itself.  At first though you want to spend as much as possible, so you're not paying the banker the full nut.

Talking with my wife we will drop all of the Bus Benches and the SP aggregator this year, around $16,000. This will fall straight to the bottom as profit. As long as our occupancy doesn't drop, we are ahead. Using a CAP rate of 7%, the $16,000 becomes= $228,000 of added value. If our occupancy starts to drop, we can increase google adds by month or reinstate the bus benches and SP Aggregator.

Our cheapest advertisement is our Billboard Road sign out front for $18,000 one time.

I always say it's your money.  Your always right even if you're wrong.

Let's check next year if we made more profit or if our Occupancy% declined.  If no change, we added $228,000 to our value.

Thanks for input, just curious.  Since I don't watch BP podcasts, I can't really compare for context and reader base.  I'm sure some people like to see a Forum comment and add discussion value, that way they are part of the discussion.  And others like to see a Podcast where the vetted experts are supplying their experiences and inputs, and you can listen.  So, each format is great.

What I like about BP Forum is there are 100,000's reading the post.  If someone says something off or incorrect, someone else with either more experience or different views can respond.  For Example:  All Blue houses make more money.

Lots of times, I tell people not to trust me, since my topics can be vetted, plus I don't know their personal situations.

Just surprised that people on the Forum don't have more Podcast visits referenced in their bylines. And the most recent are in the 270 range or below and not up to the 1,000 mark. Each REI investor will have definitely grown either in knowledge, experience, or current market situations since their last podcast.

I view the BP Forum posters as the free/easy entry into BP product lines.  They become more valuable if they have Podcast references on their byline. 

Thanks for your input on the BP Forum.

I've only watched one podcast based on a Post I was responding to referencing it.    I was just googling today and saw a BP podcast 1,000 episode, from about 6 months ago.

Some of the poster taglines mention they were a guest on Podcast 2xx as an example.  Question- The highest tagline I have seen is about 270 on a BP poster.  And I have only ever seen the tag line reference one appearance not two or more.  

Why aren't the BP posters on several podcasts?

Why are there no tag lines from say 2xx to 1,000 on the podcasts?

Are the podcasts a totally different user/customer base stream than the forum?  Again, I have only watched one Podcast so can't compare them versus the forums, not from a content/context standpoint, but from a user/poster standpoint.  Thanks.

My son is looking to move to San Diego with the Navy as an E5.  He will know within a month. Looking for both Real Estate Agents in that market and fellow Military who do RE investing there.  He will get around $3,100 tax free Base housing allowance and will have $150,000 he can put down.  

Say he stays there 2 years minimum and then sells the property for what he buys it.  He will pay sales commission but get his BHA back and have lived for rent free.  Possibly get a second BR/BA he could rent out also.

1. Are there any Military REI facebook groups for San Diego investing?

2.  Any recommended RE agents in that market?  If you haven't worked with Military on the above types of deals, please don't reply.

3.  Can be a house or nice condo plex.  5 to 15 minutes to base.  Nice area for young people.  Community that will not lose value, but possibly gain.  Amenities in the area.  Restaurants, trails, great place to live, etc.  Ready to move in.  No Fix/Flip.

4.  2 Bed/2Bath, patio, parking- preferably designated,  Near base, but out of the way, not on congested street frontage.

5.  What local bank or credit Union (Navy possibly) do you recommend he goes with?  Lowest costs since he would be selling in 2 to 3 years.

6.  Any other angles to play using BHA allowance, or other military benefits?

Thank you.

OP

Today Feb 2025.  I have a worse outlook for 2026 and going forward than I did back in 2021.  Again we are reviewing our investments, potential developments, defensive positions.

My outlook is the stock market needs to come down 50 to 60% this year.   Inflation takes off 4th quarter.  Fed can’t raise interest rates to hold inflation down due to Fed debt levels.  They will start printing cash in the 4th quarter.  Matter of fact they should not reduce interest rates because that will fuel inflation.  

I don’t believe people or even care about their opinions unless they are acting on them.  We sold 3 locations that had little debt on them with great cashflow, stayed heavy in cash, our stock return was only around 11% versus 25% since we went conservative, have two projects banks have already greenlighted with no downpayment on our part using cross collateralization with other properties- built in $2.5mm equity creation in 3 years in those projects, on hold for now.  
.   
If I’m wrong we lose potential equity gains. If we are right we clean up in 2026.   If other people take aggressive positions and gain or lose money that is their risk assessment.  I wouldn’t consider it being punched in the face.  Just recognize your risk assessment.  

OP. I’ve passed on several great deals before.   So I’m not saying I’m smarter than others.  

July 2022 we sold our largest and best self storage development.  Was at 20% occupancy. If we waited 12 months and got up to 80% occupancy would have netted an additional $500,000.  That is how bad my view of 2022 and the next years looked to me starting late 2021.  

In our commercial loans we still had 1 to 2 years on our 5 year balloon periods.  Chose to take the 1% point increase in interest rates.  Renewed our next 5 year balloon periods and even extended one to a 7 year balloon.  

Paid some debt down, kept some cash, bought 3 more locations for future development.  Then sat still except for a subdivision development which has a long lead time.

Just bringing on line as a 75 acre country subdivision.  Lots only.  

During the last two years we have probably not “Gained” $2mm in profit or equity because we took a defensive approach.  Slept good.  Vacationed a lot.  Ready to push the Go button when we decide.  

Each of us have our own outlook.  I would just say each of us need to always look at our risk assessment.  Then go for it.  

OP. Send pictures.  There may be other options. 

Looked at them several years ago.  We didn’t since we already have teak plantations in Belize and didn’t need to add that type of diversification.  

Our Grafted lime trees put a little production in year 2 and 3 but nothing noteworthy.  Their return would be backend loaded years 4 thru 10 and further out.  There is more maintenance cost when they are small keeping the grass down.  Dont trust me.  Google.  Our Tahiti lime tree which is about 20 years old produced about 300 pounds of fruit.  But we don’t maintain the tree.  I would say only 1/2 would make it thru their quality check for size and color.  They have a very consistent package.  Hopefully they moved on to a juice processing plant for culls.  

They added their own sorting plant which made for a more consistent product size and color.  Thus more marketable.  

They looked like a good diversification investment.  Plus lime is increasing in usage.

Downsides.  Just to consider, doesn’t necessarily apply to them.     
1.  Greening disease-  worldwide citrus has been impacted by greening disease.  Their fields looked very healthy but a question you can ask them.  Bananas and coconuts have similar disease issues.

2.  You’re a captured producer.  Limes arent worth anything without their marketing.  Looks like they made great inroads into the European and U.S. markets.  Find their marketing name and last I checked they were in the large stores in the U.S.  

3.  Foreign currency translation

4.  Government support is great.  They are a large exporter for Columbia.  

5.  There were a few other good and bad items.

Believe the COO is on BP although he doesn't frequent. You might reach out to him.