All Forum Posts by: Daniel Eley

@Chip Stroz

I'm in Brevard County.  The East coast of Florida - directly East of Orlando.

@Henry Clark

It sounds like you've had a lot of jobs over the years.  I'm glad to know that self storage was worth switching over to.  I've tried pondering why RV storage that brings in $0.75/sq ft would be worth less than traditional storage that brings in $0.65/sq ft, but I've come up empty.  Does RV storage cost more in maintenance or carrying costs (electric hookups, washing station), resulting in lower net income per sq ft?

Land costs here are quite high.  $100,000 per acre is actually pretty reasonable for commercial property in my area.  Most of the larger pieces of property in my area are $200,000 - $1,400,000 per acre depending on their location.  There happens to be a 7 acre parcel right next to the 14 acre parcel I originally wrote about (asking $770,000).  I will go through the vetting progression, but I will keep looking for other opportunities as well.  My concern with this property is that it is not directly against the highway (less visibility), and there isn't much residential built out in the area yet.  All of the residential is on the other side of the highway, but things are expanding towards this property.  In the next 10-15 years the area around this property should be mostly developed.  Even now, though, it is less than 15 minute drive from thousands of homes.

@Paul Moore

I also feel blessed by the great responses!  I have not looked into syndication, but I will.  I am open to any investments that bring passive income.  I am interested in self storage because 1) it seems like a fun project, 2) most of the work seems to be on the front end, building and setting up the right systems for success - then a manager can keep it running, 3) the returns seem to be very good.  Thank you for the advice!  I will look into syndication as well.

@Henry Clark

Wow! Thank you for the detailed response/advice.  That was incredibly informative.  It will take me some time to read over your posts a few more times to digest all of that information.  It is also clear that I need to learn more before jumping in. One thing that jumped out at me, was that you said at 0% occupancy (right after being built, and before signing the first tenant), that the project could be sold for $2.5 - $2.7 million.  But at 90% occupancy it only jumped up to $3 million.  I would have thought that a 90% occupancy site would sell for multiples of a 0% occupancy site.  Thank you again for taking the time to share your knowledge.

Hi Michael,

Thank you for the quick response! I really appreciate the feedback. You quickly convinced me that it was not that great of an idea! I would definitely be open to buying an existing facility. I haven't found any listed in my general area on loopnet, and I worry that it would be difficult to manage a facility that wasn't somewhat nearby. Is there another site that is better for finding storage facilities that are for sale? I also worry about buying a lemon/overpaying without realizing it (I learned a few lessons the hard way when I bought my 2 dental practices). That being said, I can certainly see the value in having established cash flow, rather than starting from scratch. You mentioned buying an existing facility, optimizing, and then expanding. I imagine optimizing means getting the vacancy rate as low as possible, and increasing add-ons like tenant insurance? As far as expanding, what if the facility has maximized the available footprint, and there is no adjacent land available? With no room to expand, and CAP rates at 5-6%, that seems like an expensive investment. I'm sorry if I'm asking stupid questions.

Hello, and thank you in advance for reading this!  I am a dentist, looking to get into self-storage as an owner/operator.  I own two dental offices, so I have business experience, but no self storage experience.  My goal is to put some work in up front in order to end up with a passive income stream that runs itself with minimal babysitting on my part (bringing in enough money for me to hire people to deal with the inevitable headaches).  The following is my general plan, and some assumptions that I have, based on reading other posts/threads.  Anyone with self storage knowledge, please let me know your thoughts (feel free to be blunt), and let me know if my assumptions are wrong.  Thank you!

      I am considering buying a large piece of land (14 acres) adjacent to the highway in Florida (flat land), and building it out in phases.  Phase 1 would be 1 acre of storage units, along with boat/RV storage.  As those units fill up, I would then build out the next acre, and so on and so on.  The asking price for the land is $1.6 million.  I have read that single story storage units will have roughly 40% rentable square footage from the total raw square footage (if all 14 acres were built out it would be 244,000 rentable square feet), and that construction costs will run in the $50/sq ft range.  I am ballparking that Phase 1 ( the land, to build out 1 acre of self storage, add a large gravel area for RV and boat storage, and fence all of that in) will be around $2.5 million.  I would need to finance the bulk of that.  I am assuming 20% down payment will be needed, and that the rate for an investment loan will be in the 5 - 6.5% range.  I'm sure that there are companies that analyze an area, and let you know whether there is adequate demand for a new self storage facility.  Do you all have any recommendations for this type of service?  Also, I saw on a different post that Scott Meyers has good workshops for beginners.  Do you have any recommendations for which workshops are most beneficial?  I looked at his website, and there are quite a few to choose from.  Thank you for taking the time to read all of this!