All Forum Posts by: Henry Clark

22 September 2020, 07:23 PM  Next is the trencher they use. This group custom builds a lot of their equipment attachments since they have a machine shop also.

a. They used to use a Terabite, basically a mini excavator with an arm and scoop. This took a very long time. They bought and modified this trencher just for the jobs they have done for me and use it for any other buildings they do.

b. Note the teeth. This is the set up for an 8 inch trench. The office due to the 2 inch foam had to be 10 inches. I missed taking a picture but they built extended teeth to make this a 10 inch machine. Then they just took them off, to get back to 8 inches.

c. This machine flies compared to the Terabite. The only problem they have run into is if the ground is wet. Then the machine has a hard time getting a grip to pull the trencher. They then will attach a tractor or skidsteer in front to give it more grip, or just wait a day till it dries.

d. The third picture shows they have measured the footprint of the building and have marked the trench with orange paint on the dirt. If you magnify the front of the machine you will see about a 10 foot bar out front. This is used as a guide for the driver to follow the line out front, since he can't see directly in front of his machine. Just like a gun sight.

e. Picture one you see the Augur wheels. One for each side. This takes the dirt that is being scooped up and throws it away from the trench. This keeps them from having to both clean dirt out of the trench (totally clean bottom) and also moves the dirt away from the trench so they don't kick it in as they are putting the rebar in. They used to have to move the dirt away with rakes and shovels. They built this.

Below are both our auction rules and a clean out policy.  Have only ever had one person leave trash and lose their $100, plus not be able to come back to the auctions.  We have kept filtering our customers.  Pay check or cash, if continually late, then we move them to autopay credit card or bank account; then we increase their rate and tell them to leave or auction them off.  This has helped us get down to the 4 out of 860 units since February.  This saves us a lot of work in the long run, not chasing payments down.

Auction Rules- Clark StorageLLC 10/10/2020

1. Pay in cash or local check (if I know you).

2. Must pay day of sale.

3. Show driver license.

4. Must clean out storage unit by end of day Sunday.

5. If not cleaned out by Sunday, you will be charged $100 for clean up fee per unit.

6. Or make provisions Monday morning to rent the unit. Call Henry Clark xxx-xxx-xxxx by 11 am on Monday, or it will be disposed and charged for clean up.

7. Owners/families of units may not bid. Must pay storage fees in cash and move out.

8. Reserve the right to not accept bids by individuals.

9. Reserve the right to bid, for myself.

Units purchased/Amount__?????__________________________________________________

By approving and signing the below, you agree to an automated electronic charge for the clean up fee in the amount of $100 per unit, if not swept out.

Approval: __________________________________

Print Name: __________________________________

Phone Number _________________________________

Address ______________________________________

Date: 10/10/2020

Show Credit Card to Auctioneer:

Credit Card # _______________________________

Expiration Date______________________________

Security Code 3 digit _________________________

Show Check to Auctioneer:

Bank Account # ______________________________

Bank Routing #________________________________

Driver License # ______________________________

Held our first auctions since Covid started. Haven't held an auction since February. Had 4 units out of about 860 total rentals. Only had one person we know moved out due to covid because one of them lost their job. Since we are full at all of our locations, any habitual lates we are having move out or have a significant rent increase. And/or be auctioned. This has gone down from about 15 units on a lot fewer total units when we first started. We have steadily filtered out bad accounts.

These 4 units were in three different towns, so I schedule an hour in between. The auctions only take about 5 minutes to do each. Only had 1 unit that didn't sell. Someone was scrapping small metal and wire in the unit. Luckily only about 1/2 truck full. Half metal for scrap yard and half junk.

Below is a 3 generation Auction buyer family. The grandma is shy, but the main buyer.

I have bids go in $10 increments and after the second time I say the number; I go 1,2,3 sold. Primary objective is to get someone else to clean the unit out, so we can turn around and rent. Not a lot of buyers, but it only takes one.

Got the appraisal back we need for the SBA to determine they will have enough collateralization to allow me to subdivide the Self Storage off, from the front ground.  Appraisal cost $2,500 but definitely worth it.  Again, they won't do the loan on the front property where I am going to do Contractor buildings, since they don't finance where other companies are operating out of.

Current:  Bought 8 Acres for $200,000;  then spent about $50,000 clearing, filling in low spots and bringing water and sewer into place.  We only have $200,000 into this ourselves.  Built 3 rows of Self Storage on 4 acres and opened in Feb.  In the rent up phase at 30%, which I'm happy with, considering Covid slowed rent up in the spring.  

Financing- Have a loan of $1.4mm; plus the $200k we put in for a total of $1.6mm.  On Interest only during construction period and Rent up phase (18 months or 65% full); then we will convert to the SBA loan and lock in interest rates.  Last rate 3 months ago was about 2.3% for 20 year fixed term for SBA 1/2.  2.3% for the banks half which is on a 10 term (SBA required), with 5 year increment renewals.

Appraisal:

The storage with the 4 acres is valued at $2.05mm at 30% full; and $2.25mm filled.  The spread seemed unusually light, but I'm not arguing since we have a total investment of $1.6mm.

The 4 extra acres up front was appraised at $580k.  To think 2 1/2 years ago in the middle of winter I was cutting trees down and pulling stumps.  Griping that the appraiser at that time would only do $225k for the land.  I thought all 8 acres was worth $400,000 total.  Adding a commercial facility on to the property helped increase the valuation.

Total appraisal of $2.63mm at 30% full on the storage.  With only $200k invested.  Plus a lot of sweat equity and executing.

Summary: 

SBA loan- Have enough value to cover for the SBA's 10% on the $1.6mm loan total.  $160k versus $450k($2.05mm less $1.6mm loan).  Banker will discuss with SBA and move forward to get them to release the front 4 acres.

Contractor 4 acres-  $580k valuation, should be enough collateral to build and fit out the Contractor buildings we want to build, so we should not have to bring any of our  funds into the deal.  Since this will be a Non-SBA loan, collateralization will probably be at 25%, thus a total potential loan of $2.32mm for the total project.  Might could pull $180k cash out, since our project will be in the $1.6mm range; but will leave in.  Might use this excess collateralization with this same bank on another property we are looking at.  This bank has a Loan cap rate of $8mm; thus they can do more projects with us, versus farming out any excess loan amounts.

What's Next:

Too late to get any construction going this year.  My plan once loans and Subdivision are final; is to start laying out the Contractor facilities, deciding on a building type/configuration and then at the same time start running the numbers.  Would like to get a Building identified, ordered, contractor selected, and engineering plans by February.  Get building permits by Feb/Mach and start dirt work in May/June with a Fall opening.

This is a new market for me. Thus will figure out rental contracts, best practices, marketing/pricing, insurance, NNN or?, etc. Will seek your input.

@Thomas Houpt

What town are you near?  Let me take a look in your area, properties I would dig into deeper, if they were near me.  You will need to come to a decision for land approach of either a "Buy/Hold" or "Fix/Flip".  First thing is to determine you funding capacity and collateralization.  That will narrow down your search so your not wasting your time on properties that aren't in your wheel house.

We live a mile outside a 5,000 pop town.  20 minutes away from 1mm pop city.

Two properties we are looking at, that I didn't note above:

a.  Farm land, over grown cattail pond.  Would like to buy and renovate the pond back to an 8 acre pond with ground around it.  Buy for $60k.  Put $60k dirt work and dam rehab.  Sell 4 lots for $120k each.  $2,000 in survey and legal to create a subdivision, to control the types of houses built there.  Water attracts.

b.  Farm land, actually several parcels next to each other.  I'm interested in one parcel that the road comes to a T in the middle of it, then branches into two roads that go around the sides.  Thus this property has three sides with roads on it.  Again do a subdivision to control house types, so not devalued by a junk yard and trailers.  Farm value $7k per acre.  If I had to $10k per acre.  Split 20 acres into 5 lots for $70,000 each.  In our county you can split down to 2 acre lots.  Might try for more lots.  Do Joint access per every two lots.  Pop in the entry so they can visualize.  Have access to Evergreen and Oak trees, have tree spade and do key areas for look.

Actually, just ran into a Cherry property, that is "bad" for most investors.  8 acres covered in Asphalt parking.  Zoned correctly for me.  My paving buddy did a quick estimate.  Just the paving makes the land a steal for my purposes.  Everyone is looking for the same properties, which they should for the numbers.  Look for the "bad" property, and re-purpose.

Unintentional.  Two different approaches.

The property we live on we bought back in 1993. Thus a buy and hold.  Although we bought this 48 acres for our home, we intentionally bought this land because it was near our small town and next to a 4 lane highway to the major city.  Thus we get to live in the country.  Get to a large market area for jobs and entertainment in 20 minutes.  And if we are out of milk, its just 2 minutes away.  Our Son only had a 2 minute drive to school.  We have now made a subdivision out of this 49 and another 31 we bought adjoining us about 15 years ago and make a "country" subdivision.  See "Journeys End" Glenwood, Iowa.  Very cheap land, now selling for $100,000 for 2 acre lots.

On our latest self storage location we bought an 8 acre farm lot in a larger town.  Grabbed a chainsaw and started cutting trees down, about 3 acres, and pulling stumps.  We only need part of this land so we built the storage away from the 4 lane road up front.  This is in case we build contractor buildings up front to rent.  We had to subdivide these two pieces since the SBA would not finance Subcontractor rental units.  Original land cost $200,000 for the 8 acres.  The front 4 acres we divided off 27 months later appraised at $580,000 for the bank.  We cleared the land.  Put in water and sewer lines to edge of property, put the rest of the property into commercial use with Self Storage.

If your near, but outside a small growing town.  Pick a property that has roads on more than one side.  On the right side of town, with other charm, trees, internet, easy highway access, pond/lake view, etc.  Then do a subdivision.  Not the traditional driveway down the middle.  This costs a fortune.  Just shared driveways for two houses along the road.

If your in town, find a junky commercial or industrial location with extra land and subdivide.

22 September 2020, 07:10 PMHouston we have take off.

Two contractors moved on site to do work.

The building contractor is putting footings in for the Office first. That way the plumber, electrician and security contractors can start setting up and trenching to the main hub.

The parking lots drains from the neighbors. We are putting in trenches to our Storm water retention pond.

I will break this up into a couple of posts.

Below is the office footing which just got poured.

a. Our building contractor recommends a floating slab, but our city requires all buildings to have footings. We would have needed them for the office anyways since it is heated during the winter. But for the rest of the project this will cost about $400,000 more than is needed per the building vendor.

b. The pink styrofoam is required by the city. This office will have a 10 inch trench with 2 inch foam and 8 inch concrete. All other buildings will be 8 inches. The city has no requirements on thickness. We could have gone with 2 inches. They just require a footing.

c. The builder is cleaning up a "Corner" form. They built these to put less effort into the corners. Otherwise they have to build a corner form. She is both cleaning the form which was pulled about an hour after the concrete was poured. Then she will spray in down with oil to make it easy to pull out on the next pour. Will show a picture of them pulling our of the corner using chains on the top holes.

d. Didn't show a picture, but down in the trench is a 20foot piece of rebar that is built in a "L" shape. The long side is in the ground and the short side will stick up about 6 inches on the inside of the building wall. The electricians will attached a copper cable to it and the building. This will ground the building from an electric strike. This will save all of the cameras and lights. Also this will prevent the opposite end of the building from the Lightning strike from being blown out.

e. What should happen next, is we would form and build the pad on top of this, before rain and dirt get on the top of the footing. But we will probably wait a week until the Plumber has a chance to dig underneath the footing (his preference, versus beforehand) and set the Sewer, water, etc inside the building.

f. Electrician will come from under ground outside the buildings and not through the concrete.

15 September 2020, 03:51 PMPaid for Permit last Friday. $19,000 which is under budget. This pays for the whole project, even though we will build part this year and next.
Our surveyors are out laying out the first set of buildings. Not real clear, but the tall stakes are the actual corners of the buildings. The smaller stakes are "offsets". In case you have to dig up the corner stake, you can triangulate from the smaller "offset" stakes back to the corner. They give you two of them at exactly 90 degrees to the building corner. Just measure equidistant from both, at 90 degrees and that is the corner.

Ground is a little soft from our recent rains.
Building contractor will start to move equipment in and setup to start putting footings and pads in.
Plumber is waiting on a Storm drain, then he will come put that in and the Office water, sewer, etc.
Retaining wall company has just a little new section of wall to build.

Paid 30% down for the building material. Back log puts us into late November or December to erect buildings.
Would like to get all Phase 1 building pads and roads in. As we get good weather throughout the winter, then assemble.
The office will be the first building assembled, so Plumbing, electric, and Security can start to use it for all control panels.

Will be tight with the weather. Would like to be operational on some units going into next spring, just to get our location "out there" with the public.

@Harshit Agrawal

If your dying to own farm ground, check out what we did with our ground.  Journey's End Subdivision, Glenwood, Iowa.

Here is the point.  By ground that has inherent value other than farm ground. 

1.  Pick a piece of property that has road access on as many sides as possible.  More than one.  

2.  Check out doing subdivisions in the country side.  We can only reduce down to 2 acre lots.

3.  Pick a piece of ground that is more of a rectangle along the road, versus a rectangle deep away from the road.  

4.  Don't plan to do a traditional subdivision where you do a hard surface road access.  This costs to much and you have to be able to split the land into less than 2 acre lots to make it work.

5.  With the long rectangle piece of ground, split into lots and do shared driveways for two lots next to each other.

6.  The land you pick, look for waste ground on the back side or a ditch with trees, or as many trees as possible.

7.  Water, sewer and electric they will need to pick up.

8.  Covenants.  Recommend you do covenants.  If I buy a lot and put a trailer or junk on it, I just devalued your lots to the side of me.