All Forum Posts by: Charles Kao

@Sawyer Scott

The fees are high enough to kill the deal at times. If you want 100 percent financing I would also consider taking and equity partner. Consider this is your first I can see you paying 5-6 points and double digit interest and the HML will want to see your are buying with alot of equity right off bat.

@Chandler Butler

If you can be patient not making any money for 2 years then commercial may be worth a try but your best bet getting into commercial is as an analyst. Its hard for go commercial because its so much technical knowledge and experience is needed. Unless you want to do leaseups and chase alot of people who want to startup a business and are poor leads the barrier is extremely high.

@Emily Fackler We have propstream and another software. like propstream because of use but you be better off using library resources with insurance classification to pull mhps.

@Vera B.

The best cities are those that get strong year round traffic normally up north close to a ski resort and or/lake. If its within 30 miles of a ski resort and on a lake thats the best combination but also not cheap in my opinion.

@Thomas Don I agree with alot of what Joel does but have heard Starbucks requires significant tenant improvements paid by owner so thats also why they pay more on lease. I have a colleague who opened a shopping center and got Starbucks placed as a tenant and just the act of getting Starbucks placed as a tenant increase the value of the strip center so much that his partners decided to sell. Starbucks also has easy outs on lease if they don’t hit sales numbers although rare.

@Adah None

Overpaying is relative as the market is appreciating rapidly as people

have access to cheap money and cost of everything has skyrocketed to go with increasing wages. If you think prices are high now imagine what inflation will do to real estate prices in the coming years.

@Barrett Boone

Download the compass report from an app called radiusplus. That area gas obstacles around building because your storage cannot be visible or cannot look like storage so you have higher costs but I like that area. If you have that land already you have a competitive advantage because of a lower cost to build. Message me if you’d like to discuss further.

@Henry Clark

By building that size of unit we essentially are eliminating many deals that essentially are “too small” for our investment group so we also make a significant income from selling to clients deals that just don’t meet our return on time requirements but still high cash on cash and high cap rates. I would also disagree self storage is recession proof when 100 percent occupied. Storage as a class was recession proof because of the significant undersupply during last recession. If faced with another recession the economics of each market will determine what is recession proof where I would argue nationally there is an over supply of storage but locally where I look at economic and fundamental data I evaluate the entire picture. My portfolio consists of multiple

asset classes and multiple

markets so unlike others we are prepared for a poor economic cycle as much as growth.

@Henry Clark

We actually have another new build now but I am not as bullish on storage or real estate in general as many investors are so when you saying we are building aggressively I think thats relative as I feel we have been conservative on our growth and I always sit on large cash deposits. If I add 20 units multifamily when I own 1000 that might be alot to some but modest by overall growth. We are overcoming cost issues through building larger and finding operational efficiencies. For example we used to do 30 foot wide building but have started doing 40 foot wide as fewer pads are cheaper as they require fewer bump posts, video cameras, aprons, site prep and so forth. I am a licensed builder and building a 100,000 sq ft facility vs 40,000 is roughly the same amount of work and my gc fee is based on hours not job size unlike other operators. Also by building tthat size of unit

@Bharath Mun

The metrics for evaluating self storage is no different although each market is specific. For example in Michigan property reasssess for taxes every year and common they uncap to purchase price whereas in North Carolina and it it every 10 years and purchase price does not affect assessment. Thats a big deal. I tend to freelance on some of my criteria in markets I know really well but out of state I am very disciplined in that criteria and of course I want to make sure I can find staff locally which means I only target bigger deals out of state.