All Forum Posts by: Daniel Lioz

It will also depend on your exit and finance strategy. If your exit strategy is to sell the SS on leased lot/facility, it will be very difficult if not impossible. Financing will also be limited as most banks want a lease much longer then the financing term (so if financing for 20 year, they want lease to be at least 25 or 30 years), also probably forget about SBA.  As mentioned above the tax benefits are out of the window since it is not your property, the owner of the property will get it. You are also at the control of the owner of the property on lease increases and overall control.

If you are in high cost area, may I suggest you look at laws around storing equipment on land instead of real estate, so like storage containers and portable units.  Those may not require commercial zoning to the same degree and if those laws look favorable, just buy non-commercial property and fill them with portable storage units and call it self storage.  This way you own the land, the business, save on taxes as equipment can be depreciated much faster, financing for the units exists in form of equipment loans and land loans, you can easily expand with demand just by adding more units...etc.

Question, when you build your small warehouses for plumbers/electricians, etc...what are you putting into them?  Electrical and windows or are you also doing plumbing and water to each unit? How much electrical (regular outlets or more Amps)?

Thanks!

Just an FYI, Office buildings are built to different code from Self Storage on multi-level perspective in terms of floor weight limits, so might think about engineering review first.  Office buildings conversions make good use of mixed space conversions...stores on the bottom, one floor of small offices and apartments on top floors.  You can also consider storage on just first floor and office and apartments on floors above....so mix it up.

I am looking at a 1+ acre property in Texas to build-out self storage units or small warehouses. The land was deeded and is part of a larger lot that needs to be platted, surveyed and sub-divided. What is such process, how long does it take and how much is it usually cost???? Is this process usually contingent in the contract or after sale? How does title work with that? Thank you in advance!

If the expenses/income are accurate, deferred maintenance is accounted for and if 6% CAP rate is what is the going rate in your area, then yes. If your area has it more like 8% CAP rate, if a rural area, low traffic, etc., then the price will be ok. It depends on a number of things. Plus don't forget, the moment you buy it, your taxes might re-set to purchase price so expenses might go up. This is all based on numbers and I have no idea about this particular situation or your area, each market is different. I suggest to get more feedback and to research your market to better understand the valuation points.

So it looks like NOI is about $25,500 or 2,120 per month. At 6% CAP that price should be around $425K for as is. Right now drive-up construction is around $40 to $50 per square foot....which is higher then it was before at about 25 to 35. All these numbers depend on your area if they are higher or lower. It also depends on how much land costs in your area to see what is a good deal for purchasing future value, etc.

Can you split the 4 plex 3 into LLC and keep 1 yours in your name? Refi the 3 in LLC. Also, reach out to some local credit unions, not through a broker, they are more flexible since they keep loans internal. I know in Texas you can do cash-out refi of up-to 80% LTV, with local bank/credit union they should be pretty good with fast appreciation in the market to get accurate LTV.

@Dan L. There are many different options. By outside storage there are several different things like a big fenced in area (1 or 3 acres, with 1 or 2 gates) hundreds of non-climate controlled units of different sizes with rolled-up doors.  Or buildings with just roofs for drive-in RV's or Boats. Or just parking for cars or trailers without roofs....all depends on your market.  Experts in this area would be Scott Meyers or Henry Clark here on BP or  @Mike Wagner at https://www.thestoragerebellio... you can always just search this forum on Self Storage and you will get a wealth of information.

@Dan L.

With 11 Acres of land you can probably maximize the value by doing outside self storage and convert the building into Flex space with offices and may be warehouses.  It may cost you less to finish the HVAC and plumbing then to retrofit it for self storage.  You can build outside self storage for around $30 to $40 per sq foot or do covered parking for RV's/Boats, etc.  Plus I would think you can get a premium for storage and offices mix combinations.  Again, as mentioned before, it all depends on zoning and area.

22nd Annual Year-end Review of Self Storage, Trends and 2021 Almanac 

This was posted in one of Self Storage FB forums, so I decided to share here. I am not a producer of this, so thank you to the people who shared it and produced it (GASSA)!  This information is very insightful! https://universalstoragegroup....