All Forum Posts by: Henry Clark

OP there are 5 self storage locations for sale in Maine in your deal range.  Let alone neighboring states.  There are management companies specific to self storage so it is hands off.  No rent control on self storage as one of your concerns .  

You have lots of great options near you.  

OP just followup items.

1. As mentioned Capex concerns

2. As mentioned, wouldn’t trust prior investors assumptions if they are not covering the nut.

3.  30% return.  Did you factor in the interest on your $1mm or are you bringing cash.   Did you factor in income taxes?  

4.  Very market specific risk tolerance on your tourism.   Lubbock TX or DC as an example.  

5.  I would have someone look over the package the current investor showed the VC group.  What broke down?  VC groups usually are on their game.  Thus must be an operational issue or market analysis issue.  

OP.  There won’t be any in country financing options.  They will require 50% down and 12 to 13% interest.

In country you have to do all cash deals there.

It is very hard to get cash out of Belize.  Ask if the buyers are wanting to be paid in country or in the U.S.  Use this as a bargaining tool.  

Also it is a buyers market down there.  If they ask $2mm offer them $1.4mm.   

If they want the cash in the US, see if they will owner finance.  Then pull your downpayment based on your US properties.  No US bank will finance in Belize since they don’t know the market. 

Be careful there are no title companies.  So determine how title and cash will be turned over.  

OP.  Attached is a post I wrote a while back.  Take it and contrast to your deal analysis.

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 26763 Highway 34, Glenwood, IA. 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.

OP.  Pull up Loopnet or Crexi for Maine.  There are about 25 properties that fit in your Dollar parameter.  I would look there first since you already understand the market.  Not sure what you mean you are out of the market area.  If so, then I would look near where you live.

OP.  See my response on the other recent post with the same question.

OP.  Start small and make your Big Mistakes Early.

Just like rolling a snowball downhill.  Starts small and then picks up in size and speed.

There is no way to start large.  All of us have to make mistakes and learn.  You don't want to drag others with you.

Step1: Your personal finances. Commercial is totally different than SFH. Your financials, reputation and experience are extremely important. You can't get into the game if you don't have those covered.

Step 2:  Start to build your own cash up.  Recommend you start with a House Hack.

Step 3: While doing the above decide upon your REI track. Depending on your personal situation and technical field, learn from the side or jump in. If you don't have a clear career path, then try to get a job as a property manager if you plan to do MFH.

OP.  Appropriately you have many questions.  Versus asking these questions, I would recommend you develop checklists and estimation tools.  Otherwise, you will end up with a lot of disjointed information and not know what you still don't know.  Make these checklists and estimations.  Make a separate post on BP and ask people to add to it or improve.  You personally want to make these so you "own" them, versus trusting people you don't know.

1.  Property checklist.

2.  Cash flow, P/L estimation tool.

3.  Financing tool.

4. Capex tool

5.  Market analysis tool

By doing these on paper and asking people for their input you will get 80% of your Failures done on Paper.

6.  Then pick a property off of Crexi or Loopnet where everyone can see the data and a location.  Do a deal analysis on them and ask people to review it and make comments.

Good luck learning.  Just dive in, but build a basis for learning.

OP. 
1.  Use your professional background and knowledge as a strength.

2.  Nasty properties let me show you an example.  I’m just out spraying some weeds at one of our properties.  I didn’t grass, was planning to build there.  
99% of all people will see weeds.

But if you know how to look and add

Value almost all of this is edible.  I see salad, pepper and mustard seasoning, coffee replacement, potato replacement, asparagus substitute, wild strawberries, rabbits, etc.  Where others see Nasty you need to develop your eye to see value.  Not the typical 3/2 repair job that everyone else is bidding on.