All Forum Posts by: Greg W.

Yes, 3-5% vacancy should be the norm. Check with Liberty SBF and Bank 5 Nine for loans and MiniCo and other local commercial insurance companies for options. Call other facilities and ask who they use for loans and insurance.

If you go onto Marcus and Millichap, they have 5 listings in Houston and 2 in Beaumont. Crexi shows about 50 between those two cities. Look for something that's a 7 cap or above or figure out what price would make sense. Look at rents compared to competitors, and can you raise them? Does the current income cover the mortgage (get a lender involved) and other expenses (taxes, insurance, capex, software and vacancy (3-5% in a lot of places). If the current income covers the mortgage and the other expenses or is close and you can raise rents, you probably have a good prospect. 

I searched "Self Storage Income by AJ Osborne" and about the third link that appeared was a Reddit thread that was interesting. It doesn't appear to be a scam but I'm not sure you need it either. Find a bank (there a some that specialize in storage loans), figure out what you can get for a loan amount (check SBA loans) and then find a property that's in that range and close to you. If the place is mostly full, you just maintain it and figure it out from there. Where are you located?

First, I love that you are exploring options to keep/invest your principal and earn interest/income. 

Some other other options to consider that may be easier, would be these: 

1) Take your $840k and have a money manager at Vanguard, Fidelity or Schwab invest it in individual bonds at a 4-5% return. They will charge you about 1% and it will throw off $25-30k per year. Definitely not as much but it’s an easy way to maintain your principal and get some income from it, forever. 

2) Invest with an experienced real estate operator. Your returns will be higher, say 15-25% but your risks will be higher, of course. I can DM 3 good, conservative operators if you are interested.

3) Some combination of these two. I imagine other people might have good alternative suggestions too. 

Try both Old Glory Property Construction and Oakwood Builders. 

If you don't really need the cash flow now and you are going more for appreciation, stay local. Being a realtor, you already know the area, you know contractors and you know what's happening in the city. You don't have to fly halfway across the country to try and figure all of that out. You have the flexibility to show your own units and manage turnovers, etc.

I see a couple of nice multi-family properties in your area for sale. If you are renting to professionals, you shouldn't have to worry about the landlord/tenant laws. If the laws are still concerning to you, then buy a commercial property, like an office or industrial property, in your area. 

I see a couple of interesting options on Loopnet. An industrial condo for $450k built out as a brew pub (know anyone that wants to run one?). A downtown commercial building for $525k that could be your new office. 

At the end of 25 years, what do you want to own and where do you want to own it?

Where do you want to live? Invest there. It's easier to invest where you live. Your assumption about appreciation is right on even though it may not cash flow now. Buy something that will be in demand for years to come and rent to tenants you want to rent to (college, young professionals, families, grandparents). Doing a quick search, I see a bunch of duplexes in and around Austin available in the price range you are talking about, if that's where you are from and want to live in the future.

Buy in an area you want to live and renting to the people you want to rent to. Do you want to rent to college students when you are 30? That's some people's niche and it works for them. Is that you? You could rent to young professionals or to families. I would buy in the best area you can afford, to hopefully get appreciation over time. Buy where people want to be. If you can buy a fixer in a great area, that's even better. Also look at the rental laws in the areas you are considering, just so you understand what you are getting into and whether you are OK with them or not.

I would second checking your pricing. Look at other comparable rentals on Zillow and see how your unit stacks up. 

It depends on if you want to continue to be a landlord or not. If you enjoy it well enough, then keep it, since it seems like an easy property to manage. In less than 30 years you'll have a property worth close to $1M. If you don't want to long-distance landlord and find it to be a pain, then sell it, 1031 exchange it or owner finance, like you mentioned. I imagine your ability to find a buyer to assume your mortgage will be there for a long time, so there's no need to make a decision right now. You can revisit this every year if you so choose. The longer you hold it, the more principal you will have paid down.