All Forum Posts by: Geoff Andrist

Agreed with Ken.  Get those financials and start digging!

I've seen many owner expenses wrapped into properties like this. Our latest had a stipulation in the employment agreement with the onsite manager that they had to pick up the out of state owner from the airport and drive them around.... yeah... But that just means you can immediately add value to the property by filtering out waste, thereby adding to the NOI. Easy fixes like that are gold.

Vacancy rates, yes that is strange that it's so low.  Consider contacting the local police department and see if there's any issues with the property.  Could be another value add.  Do a market survey and check pricing and vacancy in nearby competition.  A good market survey is worth the effort (or cost).

Landon,

I'm in WA state and have some connections that we can share and am currently working in the self storage space.  Send me a pm or email to discuss.  Would be great to connect with others involved in self storage in Washington.

-Geoff

Are you referring to expense ratio?  Yes, sometimes.  It depends on how many units the property has, what if any onsite personnel, how old the building is, buying existing versus building.

Self storage is great, but is no cakewalk.  There's plenty of pitfalls, but it's a great asset class.

Brian,

There will be a lot of due diligence, and consideration in this type of project.  Plenty of ways to "leak" funds during acquisition and construction.  Let alone when the real work begins as you put together your business systems to fill and keep filled those units.  If you are investing your own funds then caveat emptor!

But if you are being trusted by an investor then ... it's even more important.  

Consider putting the time in a workshop or two on the subject.  Do the homework indicated to create a business plan.  Plan out every cost you possibly can.  Check with existing owners/investors on best practices they've found (be specific as possible please if you have questions).  Tour existing sites.  Consider a partnership/mentorship with a current investor.  Flesh out two or three back up plans if things fall through at various stages.

This is the work required in these deals.  No shortcuts or secret formula.  Gotta do the work.

Stepping into a construction project such as this could have very heavy negative consequences, and isn't taken lightly.  If this involves "other peoples money", you owe it to your investors and underwriters to take the time and develop your skills before putting funds at risk.

I know Scott Meyers workshops appear to have a lot of this type of information (though I haven't been to any myself) and if you're considering going the route of self storage I would recommend seeking these types of resources out before any extremely costly mistakes.

@Lesley Resnick I agree it seems like "stepping over dollars to get coins". But also get that some types of investments can be squeezed... optimized by folks to generate a higher ROI. For some like you (and me) it may not make sense time wise, but if we could find managers to keep these extra systems afloat, a maintenance person to install and service washers/dryers for example then it makes sense. Basically value adds for larger properties.

Seems like these system scale much easier the more units under management to cover the added cost of oversight.

Not sure this would work for folks that have a few rentals here and there.  But they likely have systems that work better in their case that are hard to impliment on a larger scale.  Systems such as splitting electricity and water meters, subcontracting housecleaning or landscaping service, or minimizing vacancy rate by building relationships with renters.  All value adds for smaller buildings.

I agree with "out of the box" concepts.  In fact I tend to boil over with them myself.  But how many are actually sustainable?  I would add that additional criteria.  Because there's plenty of ways to make money, but nearly all of them most of us would never even attempt (septic technician for example), we instead choose to hire that out to a pro.

Do you have stellar managers that work with these kinds of creative concepts, or are they maintained in some other way requiring little input from you?

Great topic!

Just quit your job?

Let the real work begin.  The work of building an amazing retirement, the work of building a legacy for your family, and nothing is quite as sweet as working on your own business. 

Congrats brother.  

Thank you Viktor!

Yes, listen to those podcasts!

I started at the most recent one and worked backwards.  Then catch the most recent as they come out, you'll be notified if you subscribe on Google play or wherever you listen.

Keep asking questions and hunting deals, it's not not esoteric the concepts do in fact work.  Eventually you'll find one that makes sense for your style of investing (commercial, residential, fix and flip, buy and hold, etc).  

But don't buy something you'll hate.  If you just have zero interest in an investment, I would be willing to bet I know how it will perform.  Find something you can be passionate about.  For example I love commercial real estate so that's what I invest in. 

If nothing does it for you... buy a mutual fund... like everyone else.

Welcome.

In town looking at properties and talking with brokers, managers, lenders. Thought it would be fun to meet some fellow investors for coffee before I leave. Anyone around for coffee later today in Spokane area? Would love to hear what you're up to, and perhaps make a great connection or two. -Geoff