All Forum Posts by: Deidra Swenson

Investment Info:

Other buy & hold investment.

Purchase price: $2,100,000
Cash invested: $350,000

We were super excited to find an opportunity to add more self storage to our portfolio. This opportunity was a gentleman looking to retire and sell off his self storage facilities as a package deal. Two of the properties were located in Northern MN and one in Northern WI. With them being spread out from each other, all of the offers he was getting were just for an individual location.

What made you interested in investing in this type of deal?

We wanted to continue growing our self storage portfolio.

How did you find this deal and how did you negotiate it?

Through agent relationship

How did you finance this deal?

Since we were willing to purchase as a package we were able to get him to come down in price (original list price was $2,250,000), give us seller financing for the whole deal, and put less than 25% down!

What was the outcome?

The seller owned the properties since 2016 and never did any rent increases on existing customers and his market rates were below market. We've already begun to raise rents and plan to refinance and pull our down payment out of the deal within 2 years.

Lessons learned? Challenges?

It was a win win for both because the seller wanted to reduce his tax liability and sell all three locations together and we wanted specific terms with the seller financing. When we initially put our offer in with the seller financing option he rejected the offer. After working with the seller's agent and going over the benefits of seller financing, he was able to work with the seller to come to an agreement with us.

Investment Info:

Other buy & hold investment.

Purchase price: $2,100,000
Cash invested: $350,000

We were super excited to find an opportunity to add more self storage to our portfolio. This opportunity was a gentleman looking to retire and sell off his self storage facilities as a package deal. Two of the properties were located in Northern MN and one in Northern WI. With them being spread out from each other, all of the offers he was getting were just for an individual location. Since we were willing to purchase as a package we were able to get him to come down in price, give us seller financing for the whole deal, and put less than 25% down! It was a win win for both because he wanted to reduce his tax liability and sell all three locations together and we wanted specific terms with the seller financing. The seller owned the properties since 2016 and never did any rent increases on existing customers and his market rates were below market. We've already begun to raise rents and plan to refinance and pull our down payment out of the deal within 2 years.

What made you interested in investing in this type of deal?

We wanted to continue growing our self storage portfolio.

How did you find this deal and how did you negotiate it?

Through broker relationship

How did you finance this deal?

Seller financing

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $379,800

New build twin homes, one level living. Built both sides but are owned as separate units. We sold our first house which we purchased in 2007 and kept as a rental and exchanged the money into this property.

What made you interested in investing in this type of deal?

One level living in this area has become more desirable. We needed to find a deal to do a 1031 exchange. New construction was enticing because it would be a low maintenance property to manage. The house that we sold for this exchange we bought in our early 20's as our first home. We kept as a rental for 11 years. Over that time it cashflowed great and appreciated significantly. This was a great time for us to sell and put this money into a new property.

How did you find this deal and how did you negotiate it?

Our realtor at the time knew about this new neighborhood being built and suggested it.

How did you finance this deal?

1031 exchange

What was the outcome?

These two units have worked out great as rentals and have been very easy to manage. Everyone loves the newness of them and the finishes.

Lessons learned? Challenges?

New construction can be a good option if the numbers work out.

Thanks Taylor. We are using one of our tenants for the on-site tasks. When we first acquired it we were doing it ourselves, it's located only 30 minutes away from us. Our future plan is to acquire more in the area and hire someone to watch over all the facilities.

Investment Info:

Other commercial investment investment in New Richmond.

Purchase price: $425,000

Value add self storage facility with 65 units. There were a lot of operational improvements that we were able to make right away. We started a website and transitioned tenants into setting up auto pay through the website. Rates were below market rent, so we increased rents. There were multiple tenants delinquent, so we re-trained the tenants and enforced late fees. There was no marketing being done, so we started advertising. We improved occupancy.

What made you interested in investing in this type of deal?

We were looking to move on from single family residential investments and into commercial investing. I had been thinking about self storage for a few years and when we saw this deal we saw the potential and value. We could see operationally how improvements could be made right away.

How did you find this deal and how did you negotiate it?

MLS automatic search. We put an offer in right when it came on the market and had it under contract before anyone else looked at it.

How did you finance this deal?

Commercial loan

How did you add value to the deal?

Improved occupancy, reduced delinquencies and enforced late fees, added a website and marketed vacancies.

What was the outcome?

We purchased the facility at a 9 cap. In the first year applying the same cap rate we increased the value from $425,000 to $575,000. Now that we've dipped our toes into a smaller self storage deal we plan on pursuing larger self storage deals.

Lessons learned? Challenges?

This was our first self storage facility, so there was a learning curve on how to deal with tenants and how to operate the business efficiently and effectively. We had a lot of challenges the first couple months just tracking down people and getting the correct contact info. We learned that if we are firm with our policies and set expectations up front, we deal with a lot less issues.

Investment Info:

Other commercial investment investment in New Richmond.

Purchase price: $425,000

Value add self storage facility with 65 units. This was our first time getting into a self storage deal, so we dipped our feet in the waters with a smaller deal. There were a lot of operational improvements that we were able to make right away. We started a website and transitioned tenants into setting up auto pay through the website. Rates were below market rent, so we increased rents. There were multiple tenants delinquent, so we re-trained the tenants and enforced late fees. There was no marketing being done, so we started advertising. We improved occupancy. We purchased the property at a 9 cap. With all of our improvements, using the same cap rate we improved the value of the facility from $425,000 to $575,000 in the first year. Now that we've gotten experience operating a self storage facility we plan on getting into bigger facilities.

What made you interested in investing in this type of deal?

We were looking to move on from single family residential investments and into commercial investing. I had been thinking about self storage for a few years and when we saw this deal we saw the potential and value. We could see operationally how improvements could be made right away.

How did you find this deal and how did you negotiate it?

MLS automatic search. We put an offer in right when it came on the market and had it under contract before anyone else looked at it.

How did you finance this deal?

Commercial loan

How did you add value to the deal?

Improved occupancy, reduced delinquencies and enforced late fees, added a website and marketed vacancies.

What was the outcome?

In the first year we increased the value of the facility from $425,000 to $575,000.

Lessons learned? Challenges?

This was our first self storage facility, so there was a learning curve on how to deal with tenants and how to operate the business efficiently and effectively. We had a lot of challenges the first couple months just tracking down people and getting the correct contact info. We learned that if we are firm with our policies and set expectations up front, we deal with a lot less issues.

Investment Info:

Townhouse buy & hold investment.

Purchase price: $100,000
Cash invested: $15,000

Very low maintenance rental which has stayed rented the whole time we've owned it. The value has more than doubled and we've been able to do a cash out refi to help purchase other investments.

What made you interested in investing in this type of deal?

We were able to purchase this property in 2011 as a primary residence. We lived in it for 2 years. Our purpose when we bought this was to hold on to it as a long term rental property. We got into it at a great time for a very low price. The property has been cashflowing the whole time we've been renting it.

How did you find this deal and how did you negotiate it?

Listed on the MLS.

How did you finance this deal?

Conventional loan

How did you add value to the deal?

We immediately did a cosmetic rehab on the property and over the years have made cosmetic improvements. Stainless steel appliances, granite countertops, and LVP have helped attract great tenants all which have stayed multiple years.

What was the outcome?

We continue to hold this as a rental even though we're moving away from single family. It's a low maintenance property to manage and we've pulled out all of our money and then some by doing a cash out refi.

Lessons learned? Challenges?

In 2011 we wished we had scooped up way more properties like this! Back then we were just getting started and didn't realize the potential something like this had.

Congrats on the storage facility! We recently purchased a storage unit out of state as well. We're in MN and it's located in WI. Luckily it is in driving distance, but we've set it up to have to drive out as little as possible. We went with Easy Storage Solutions for the software and have been mostly happy with it. It has certainly made managing very easy and their customer support is great. Most new tenants that we get we're able to work through the setup process all remotely since it's all done through the software. We have on occasion had to meet someone there, but it's rare. Upon move-out we have them send a picture of the unit to confirm it's all cleaned out, so in most cases we aren't even going out to check on it. We contract out snow removal and maintenance issues. Once we got through the learning curve of the first couple months it has been very minimum time required to manage. Send me a message if you have any specific questions.

I'm having a hard time deciding which property management software to go with. I'm going to be taking over management of my 7 units, and we plan to add more units to our portfolio yet this year. I like all of the features of the growth package that Buildium has, but it's kind of pricey. The features that I would really like with a software package are: payment processing, eleases, tenant application and screening, maintenance requests, accounting, reports, resident portal, rental listings, and a website for my company. Are there any other platforms out there that offer all of this that I should look into?