All Forum Posts by: Henry Clark

@P from prior topic.  You may decide to develop versus buy.  Several reasons to do this.

ZONING, I-3 RIGHT?

When ever I take a look at a new town to do storage, I take two approaches at the same time. Do I build? Do I buy? Do both of these at once and go with the one with the best return or impact. Preferably, I like to buy because this takes out competition, greater control over pricing, and hopefully they have some land to expand on. The expansion of an existing facility is always more profitable than the initial purchase or build.

A. Look at zoning either online or at the City or County courthouse look up both the Zoning Map and get a copy, if one exists of a Zoning template, which explains what each zone permits and may allow under a Special use or Condition permit.

B. Read each Zone in detail, unless they have a cross reference table showing “allowed” and “special use”.

C. Ask for the Future planned zoning map. This will tell you where you probably can ask for a change in Zone or for a Special Use permit; and have a greater chance of getting it approved.

D. Talk with the local realtors and they may know what is not on the above Maps and tables. Most cities don’t allow “Spot” zoning. So they don’t get sued. One city I know designated an entire area “Agriculture”, the lowest zoning possible, so they could control allowing what industries come.

E. Most of the time Storage is designated to an Industrial zone. But not always. I have seen it under Agricultural, Planned Residential, Commercial and some Industrial zones.

F. Look at a GIS map of the city. See if Railroads cross through. The Federal government gave both city sites and land along the tracks to the railroad. The Railroad then sold this land to help finance their construction. Look for any land that is still owned by the railroad and ask them to buy it. It won’t have a “For Sale” sign on it, but it will most likely be available for sale if it is not used as a work yard or siding. The good thing about this property since it is so old, it will be in the middle of the town, in a great location. It will probably be zoned “Residential”, but the Railroad will not sale it without putting covenants on it, that no human habitation (home, daycare, school, retirement home, etc) can be built there. Another good thing, is the Railroad does not pay property tax, anywhere. Put in an offer subject to zoning approval. Ask the Zoning committee to allow you to do a “Special Use” permit since the Railroad will never allow “Human Habitation” in this Residential zone. Also ask them to let you pay property taxes. Your units will be well landscaped and they will provide a noise buffer with the railroad.

G. Look at Non-Allowed zoned properties, next to Allowed zoned areas. Still look at these properties since Zoning committees may allow you to switch the zoning or do a special use permit. They do not regard this as “Spot” zoning, since it is next to an allowed area.

What do you do with this information?:

1. Now, that you know the zoning, look for any spots greater than 2 acres (“drive up” storage). Start checking on the prices, even if a location is not for sale. So you don’t waste your time looking at all locations, prioritize and pick locations that put you in a more favorable location between your future competition and your residential customers. Most storage facilities are Mom/Pop and were built with the owner in mind and not the customer. Examples: Gas station owner had two acres and built on one. Hotel operator had additional space. Etc. They did not necessarily build closer to their customers or for ease of access or street advertising. Buy them later when you have a footprint in the town. You don’t want to buy them first and have to go check on 30 units, 30 miles away. We built in one town, and before construction was done bought two other locations that were offered.

2. Line up your potential purchases in priority and start making short and time sensitive offers. You are now in power since you are not tied to one location or even one town. You have a 40 mile radius or whatever you consider a comfortable distance to manage.

3. The harder it is for you to find a location, the better. Less chance for “Stupid” money to build next to you, or out position you.

Zoning Adjustment Meetings:

“Just the Facts.” You will get to speak first, remember your an “Outsider” and don’t vote in that community. Take your time describing your facilities. The property and sales tax it will bring. Explain the current taxes and current look of the property. Show them a “Look” of the new facilities. No one may show up, or you might get 30 people to show up. You “personally” may have to notify everyone within a 200 foot radius or the City might do it. When the public speaks, don’t argue with them. They get their say. Hopefully your added property/sales tax dollars outweighs the public view point. When the vote (good or bad) is over thank each of the members, they’re not paid and most have businesses.

If the Zoning Adjustment committee approves or disapproves it, you then can go to the City/County board for another public hearing and a vote. Don’t waste your time, if the Adjustment committee voted against you. If the City/County Board approves, ask them to waive the need for future “Reading” meetings. The above two public hearings, possible two more “reading” meetings and the final “vote” meeting may take you 4 months, 4 weeks or maybe just two meetings. Depends on how often the boards meet and how much opposition/benefit there is.

Happy hunting. This is the most stressful and fun part of the process. You have very little control, but your decision on property will be the most important of the whole build/buy process. Add Control, by adding more location/city options. XXXXXXXXX is done growing, but you never stop looking. The best spot yet, is a cornfield where there isn’t a house for a mile. Would love to have built a 1,000 unit location there.

Remember, start small and make your big mistakes early.

@P from prior topic, use this to understand the capacity in your market and your best options.  Never go with one offer.  They have the power.  Work in several towns and once and be prepared to make several options with one week time limits on them.  You then have the power.  You are prepared to walk away from a deal.

Not going to give you the answer (maybe if you were Army or Air Force) LOL, but here is the approach.  At the end you will come up with a ratio.  There is already per sq ft metrics out there.  This one you will develop.  Understand it. And most importantly own it.  Once you get your ratio, track me down and we should have about the same ratio (x/100 population).  This should take you two weekends or three days to complete.

Market Demand- “Will they come?”

I'll give you the tool I use, but you will have to make an investment of your own time. Otherwise you don't own the data.

Step 1 "Capacity":
Count the units and sizes in that market. Get headcount by googling the town or zip code. Be aware if the town is standalone, or it might have a large population outside since it is a suburban community to a larger town nearby. Add those people in by using County or School area population.

Example:
Town 1:
#of units/headcount= 300 units in the area/ population 3,000= 10 units per 100 people.

Town 2:
500 4,000= 12.5 per 100
Town 3:
and so on.

Do every stand alone town in a 60 mile radius, or until your satisfied. You will get a High, Low and a average. I have a certain ratio per 100 headcount (not households, not age, not sex) I use when deciding to buy or build in a town. You will get to the same answer I have.

Luckily we are all the same. Death, divorce, fire, home sale, floods, layoffs, etc. No matter whether your Rich or poor, city or country folk. The ratio above works anywhere.


Step 2 "Existing":
In each town count the number of units by size. When I do my ratio I assume all units are the same. Count the 10/15/20's. Any smaller units just make them equivalents of a 10 x15. 3 5 x 10's= 1 unit

Although I am counting them all as the same, the reason, I say count by size is for when you build.

Now lets calculate "Demand":
Number of units needed (Step 1) minus Number of units existing (Step 2) = Quantity to build.

Town 1:
500 - 400 = 100

Town 2:
300 - 100 = 200

Town 3:
and so on.

This will help you pick which town you have the greatest potential for success. "Subject" to other factors that is where you want to either buy or build first. You only need to do the above once. I have kept this ratio in my head since the first time and make all my decisions using it, before I move into a market. If your in a large city, use this ratio. Pick the zip codes in your territory.

Many exceptions to the above.
a. My town has the highest per 100 count around by far, and I am still building. There are reasons.
b. I just built in a town that was not the best of the ratios. But the largest facility with 1/2 the business is 4 miles out of town by themselves.
c. There is a town that is Fully Saturated. No extra unit will ever be rented in it. I would love to build there. Everyone built 10 x 20's for some reason and they did it at the south end of town where the zoning is easiest. I can build halfway to the population who is in the Northend of town and I would hone in on 10's and 15's with some 20's. Everyone thinks they have less than they have. They will rent 10's or 15's first.
d. We are building our last location. Your eyes never stop looking. The best spot I have seen is a cornfield where you can't see a single house. Would loved to have built that one.

You don't know me.
1. Own the data yourself. Don't have me give you the figure. Question the logic, “all of us are the same”.
2. We are in 5 towns, 8 locations. Most are in towns of 5,000 or less. We are in Phase 1 rent up stage in our first large city location (630) and in building stage across town (330).

I have used this tool for all of the Buyouts or build outs above. "Put your money where your mouth is."


Ad Hoc- Traffic counts
Two locations, one with 70,000 Vehicles per day and one with 15,000 per day. Both in the same general area. I picked the 15,000; why? Learn the nuances. Start small and make your mistakes then.

Don’t trust me. Own the info, it’s your money. Everything in the Storage business can be validated.

@P, please see separate topic, I just posted.

Response to @P on separate post.

@P, there is a listing on LoopNet for a storage unit for sale in Pacific City.  Don't consider buying it.  Use it to sharpen your approach.  Go through the actual act to make an offer.  I'm going to make several separate posts and you do the homework.  You said you want to approach area owners.  They have already been approached many times.  Start with an offer, subject to your due diligence (30 days).  Ask them to be on your Facebook for your storage business venture.

Remember "Answers" are easy; its knowing the "Questions" before you go down the path.  "Start Small and make your big mistakes early."

This has some specific comments for a new investor in Croatia.  Disregard, make this template your own.

@R, for your specific location, recommend you check the following areas for a site.  Again it is a question of zoning, cost, and entertainment flow.  Where you are at, is fine also.

Try outside the 696 and 275 loop.  Along I 96 and I 75.  Looks like that is the major routes out of the city to the lake areas.  You actually don't need a town.  Just a good on/off intersection, in the middle of nowhere.  Those people really don't want to haul their RV's and Boats back to Detroit on a Sunday traffic jam.  Further out you are, the better.  

Don't know your lake effect snow impact.  You really have to consider Snow removal.

Lived two years in Grandhaven/Springlake/Muskegon area.  Terrible snow.

@ R.  See separate topic posting.

@ R, forgot.  If we ever meet in Florida, you owe me lunch.  Key Lime pie and a Biminy bread sandwich; with a Red.

@ R follow up on separate post.  How to pick a location.  Also showing you customer considerations.  Use this as you plan your location.

CONSIDERATIONS FOR RV OR VEHICLE STORAGE

A. Pull through- The front, pull as far forward as possible, gives the person next to you an easier angle to turn into, from behind you. Align your front with the fronts of all other vehicles. Be courteous and leave enough room on the Driver side, so that RV can open their doors.

B. Back to back parking- our locations are set up at 60 degree parking. Also, they are setup for the driver to back in on their side, so they can use the lot next to them for alignment. This way you only have one blind side on the right side backing in. Otherwise you have two blind sides.

We have 20/30/40 foot parking at our location at xxxxxx. Each size has a different width due to how hard it is to park a longer unit at the very front angle of their turn in. 20’s- 10 wide; 30’s- 12 wide; 40’s- 15 wide. Although you could park an RV in any of these sizes, it is easier with a wider width to make the “front” turn. Or ask for an end parking spot, so you are doing a 90 degree parking, but have the whole drive way to back in with, without a turn.

C. Canopy- same issues as others, depending on if 60 degree or 90 degree parking.

D. Enclosed- Really a matter of width and depth. Keep in mind all measurements for storage are relative. For example: A 10 wide x 20 deep x 8 tall unit, with studs, roll up door and door jambs; is really 9 wide x 19 ft 6 inch deep x 7 ½ foot tall. Also if you have a 20 ft boat or Camper, its really 22/23/24 ft depending on Propeller, bumper or front hitch.

E. Surface- Rock or hard surface (concrete/asphalt); If on rock/asphalt put your tongue leg or stabilizer pads on wider pads to spread the weight out. These pads are needed on Asphalt since in hot weather they will sink into the asphalt.

F. Pest control- we put mouse bait out along the fence lines and under the units, mow excess weeds and grass. You should put both rodent and bug control in your unit. Dispose of all food sources, for long term storage. If you want to be really diligent with pest control, don’t park next to overhead lights. They attract bugs at night and then mice underneath. Put scented drier sheets in all compartments and rooms. Open all cabinets and doors.

G. Stabilizers- if doing long term storage put you stabilizers down. Most parking is in an open area and the units can rock and move with the wind. This will also help with taking pressure off your tires so they last longer.

H. Security- Put a lock on the hitch. Although you are in a secure location, RV’s and trailers are the easiest storage to break into or take without notice. Recommend you put in motion sensors or GPS tracking security. Check your vehicle at least twice a month. Most Security systems only maintain footage for 2 weeks due to camera memory capacity.

I. Propane Fuel Tanks- disconnect and store if leaving for long term storage.

J. Electronic Lifts- disconnect the battery if leaving for long term storage.

K. Insurance- most storage unit insurance policies do not cover vehicles. Keep your insurance, just have them adjust your automobile to fewer miles or just comprehensive coverage. Wind, Flood, tornado, Hail, or third party damage or theft can still occur. Traditional insurance coverage, RV’s normally stay a flat rate throughout the year, thus you will still need to maintain full coverage. Or, if you seek out a specific RV or rec vehicle insurance company, you can move in and out of winterization rates.

L. Pricing- use a 30 foot vehicle as an example:

-In the country about a $1 per foot on rock.

-With Paved access and parking spot, this might run $60 to $90

- Enclosed parking this will cost about $120 to $170 for a 30 foot.

- Enclosed parking for a 50 foot, might cost $225 to $350.

The price extremes are the cost of the concrete/asphalt road and the storage bay. Also the longer the unit the price goes up significantly because it takes more driveway width to park and the type of door changes in both size and type (remote operated). A 50 ft RV will require about a 70 foot wide driveway to back in.

We are only addressing the long term Parking portion of storage. Other items are specific to each vehicle such as water clean out, Tire/window shades, etc.

Quick non Parking list:

Wheel/tire covers; Vehicle cover.

Remove and store your tires.

Store with a full fuel tank to prevent condensation

Add fuel stabilizers

Place RV completely off the ground to prevent flat spots on your tires, if left for a long time.

Cover your HVAC, skylights, vents and windows to prevent exposure to sun and breakdown.

Boats leave your plug out, whether covered or not.

Site selection and Site building:

Surface, Canopy, Enclosed.

• Just talking Surface, not enclosed. 
  
  Have run the numbers about 10 times on Enclosed, but I would have to charge $225 to $350 per month and don't have that market here. Have only seen one location on the interstate near Oklahoma City that had that market ($150,000 to $500,000 RV's) and they were full. They have a lot of $1mm homes and lakes nearby. You have to do Concierge services for that market. Battery charger, turn fridge on before trips, Dump station, Concierge parking service, Tire/Oil/etc check, Big drive ways, electric in each unit, etc.
  
  Canopy, I have seen in Texas. Cant say much, haven't researched it.
  
  I have been in two other models. Old welding shop with 40 foot roofs. Spots are "crammed in". They park and  unpark for you.
  Another, is winter only. You go "in" the fall and everyone comes "out" the same time in the spring. They also have a lot of outside spaces. Both of these models were full.
  
  Attached below is an Inventory list of an exact 2 acre parking lot we have. Also the row configuration. See cut and past below.    Back to Back parking to use less driveways, even though everyone would prefer "drive through" parking.
  
  Might not apply if your on concrete, which would be great, but I'll throw these out anyway.
  Its on rock. Use 1 1/2 inch with "Fines". Cost about $20,000 for rock delivered.
  Put Geogrid underneath, so no potholes after 4 years. Otherwise, you need to put a base of 3 inch rock first, then the 1 1/2 with fines. Be careful if you blade snow.
  Payback is about 12 years.
  Not the best use of the land, but didn't need it at the time for storage.
  Put at 60 degree angle, otherwise you get a lot less spaces, since your driveways have to be wider. Example: If you do 90 degrees parking on a 50 foot space, you might need a 70 foot driveway. Also 60 degrees makes it easy for the driver. Also put the 60 degrees turn on the driver side window so they can see the turn.
  Put a Wire and posts down the middle of the shared back to back parking so vehicles stay on their side. Used other posts, stakes, number signs (reflective) to define each space.
  Mix. Went with even surface area for 20/30/40 foot spaces. Did not do any 50's for large RV's. Where we are at, most RV's are in the $10,000 to $70,000 range. Actually worked out pretty good. The 20's have a few vacancies.
  Price $20/$30/$40. This is in a 10,000 population community with about 4 no wake lakes to the East within 60 miles. Prices could be higher, but= No city restrictions on vehicles, which would increase your market. Plus we are in the country, where you can find a friend to park.
  Run light and security camera poles first.
  Definitely put a "License Plate" specific camera at a narrow point and other cameras and lights at that bottleneck. Our spot is fenced off from the Storage location, with one access point, no gate there. Recommend your NVR has a timeline with Red markers for motion on your cameras.
  Layout and capacity really depends on the lot shape. The same two acres, could probably get about 30% more if it was a rectangle versus a square, due to less turnarounds.
  
  
• Site selection:
• a.  Near two way intersection or cross light.
• b.  On the way to entertainment area.  Preferably out of city limits, so land and regs are cheaper.
• c.  Near the city or near the water.  Look at your hurricane impact.  You might prefer closer to the city, versus the water.
• d.  Level.
• e.  Preferably on the Right side of the highway or interstate on the way to the water.  Also after you get off the exit, a right turn back towards the city.  That way people see you prior to the off ramp.  
• Attachment:
  This is a relaxed layout, I did not try to cram the spaces in.
  

  Rows and Road Configuration
  A	Road	B	C	Road	D	E	Road	F
  This layout is on a 2 acre square.
  Roads are all the same width.
  All rows are set at 45 degree angles

  Unit	Description	Row:
  G001	1x20x1	A
  G002	1x20x1	A
  G003	1x20x1	A
  G004	1x20x1	A
  G005	1x20x1	A
  G006	1x20x1	A
  G007	1x20x1	A
  G008	1x20x1	A
  G009	1x20x1	A
  G010	1x20x1	A
  G011	1x20x1	A
  G012	1x20x1	A
  G013	1x20x1	A
  G014	1x20x1	A
  G015	1x20x1	A
  G016	1x20x1	B
  G017	1x20x1	B
  G018	1x20x1	B
  G019	1x20x1	B
  G020	1x20x1	B
  G021	1x20x1	B
  G022	1x20x1	B
  G023	1x20x1	B
  G024	1x20x1	B
  G025	1x20x1	B
  G026	1x20x1	B
  G027	1x20x1	B
  G028	1x20x1	B
  G029	1x20x1	B
  G030	1x20x1	B
  G031	1x30x1	C
  G032	1x30x1	C
  G033	1x30x1	C
  G034	1x30x1	C
  G035	1x30x1	C
  G036	1x30x1	C
  G037	1x30x1	C
  G038	1x30x1	C
  G039	1x30x1	C
  G040	1x30x1	C
  G041	1x30x1	C
  G042	1x30x1	C
  G043	1x30x1	C
  G044	1x30x1	C
  G045	1x30x1	C
  G047	1x40x1	D
  G048	1x40x1	D
  G049	1x40x1	D
  G050	1x40x1	D
  G051	1x40x1	D
  G052	1x40x1	D
  G053	1x40x1	D
  G054	1x40x1	D
  G055	1x40x1	D
  G056	1x40x1	D
  G057	1x40x1	D
  G058	1x40x1	D
  G059	1x40x1	D
  G060	1x30x1	E
  G061	1x30x1	E
  G062	1x30x1	E
  G063	1x30x1	E
  G064	1x30x1	E
  G065	1x30x1	E
  G066	1x30x1	E
  G067	1x30x1	E
  G068	1x30x1	E
  G069	1x30x1	E
  G070	1x30x1	E
  G071	1x30x1	E
  G072	1x40x1	F
  G073	1x40x1	F
  G074	1x40x1	F
  G075	1x40x1	F
  G076	1x40x1	F
  G077	1x40x1	F
  G078	1x40x1	F
  G079	1x40x1	F
  G080	1x40x1	F
  G081	1x40x1	F
  G082	1x40x1	F
  G083	1x40x1	F
  G084	1x40x1	F
  G085	1x40x1	F
  G086	1x40x1	F
  G087	1x40x1	F
  G088	1x40x1	F
  G089	1x40x1	F

@M, please see separate post I added to address your question on how large a location.  Thanks.

Follow up to @MM on another post.

Here are the major considerations in sizing "Drive up" storage locations.  Climate controlled is not part of this conversation, stay away from this, if you are a first time owner/developer.

1.  Are you in a major Metro area, or small community?  Zoning rules as far as the following requirements.

2.  Set back rules- obvious impact.  Impacts your rentable ground/units.

3.  Storm retention pond required?- This will offset your revenue projections, available units and also cost estimates.

4.  Shape of property; - Ranked:  Rectangle, square, all others.  I'm still learning 1st grade-  A triangle 3 acres doesn't come close to a Square in units.  Try for Rectangles.  You have to give up turnarounds.  A rectangle is your most efficient shape.

5.  Are hard surfaced roads needed;  Concrete or asphalt-  Cost of entrances must be offset by units.  The shape and layout, you want one road to service two sets of buildings on each side, to lower the road cost per unit.

6.  Security- secured gate, security system, fencing, etc.-  Your unit revenue and quantity has to be sufficient to offset the "costs" your putting in.  If your in small town USA, no security systems- fences, gates, or cameras can be the norm.  Example:  A $25,000 gate system you need XXX units to offset.

7.  Obvious.  In drive up storage, you never want to build all of your units at once.  I always use the following for my Phase 1;  Enough units at 65% economic occupancy to cover all costs (land, fence, security, roads, dirt work, (bank note P/I on 20 year amort), plus Property Tax, Insurance, maintenance, electric, etc.  Example:  If I bought just enough ground, to assume 90% occupancy gets me to breakeven cashflow, then I would not do the project or that size of property at that land price.

Your Phase 2 will only take a 35% occupancy to get you to cash flow break even.  This is the real money and also less exposure.

8. Do you plan to do Uhaul or other outside storage needs.

I generally will never touch a rectangle/square property unless it is at least 2 acres.  Just not worth the effort.  If I was starting off and wanting to "Learn" the business, I would do a smaller lot.

Any questions or expansions needed, please ask.  This is the fun part.  Later it is just $12 per hour work.