All Forum Posts by: Jonathan Towell

I'm no attorney, but that seems like the contractor's problem, not your investor's.

Ah, you're looking for a way to build a prospecting list for potential storage to acquire?

Why does he want out of the mortgage? If it is because he is paying too much, he should see if he has enough equity to refinance. If the same mortgage is kept on the house, I agree with Ryan... if he passes the mortgage off, the payment will only go up, not down.

We own a 200 unit self storage facility in Lubbock, Texas. I think you are right to evaluate self storage differently.

With self storage, you are buying a business, not just a property. Businesses are more sensitive to price competition, branding, marketing, staffing, etc. The turnover is much higher. You often need someone on site during business hours (if the facility is big enough).

On the positive side, when someone leaves, you sweep out their unit and get someone else in (unlike residential which requires thorough inspection and make ready between tenants). It is a little simpler to "evict" by way of auction.

When evaluating a self storage deal, I'd look at the income statement to determine if there is opportunity for value add. Can rents be raised? Can expenses be reduced? Can occupancy be increased? If there is no opportunity for value add, then it comes down to cap rate and whether or not you believe you can maintain the business.

Feel free to message me with more specific questions if you like. This is a big topic, but I hope my reply has been at least a little help.

I don't think a loan will be turned down because of a missing stove or fridge. 

If you are getting a loan from a bank, the bank will usually just do a drive by appraisal and not require an inspection (at least that is how banks in our area operate). The inspection, in this case, would be purely for your benefit.

If the loan is coming from the secondary market (FHA, Conventional, etc.) a more thorough appraisal and inspection are usually required.

10 days is plenty of time for an inspection. If you are getting a secondary market mortgage, ask your lender if they have a list of approved inspectors. Otherwise, ask a local realtor for a good inspector and get him to inspect the property.

Usually, you want pre-approval on a loan amount from your lender before going into a deal. Regardless of whether or not you have pre-approval, get the deal details to your lender immediately. Those banks and mortgage originators can often be very slow.

At first glance, it seems like a good one to sell. Cash flow is usually pretty important.

There are reasons why people hang on to properties with negative cash flow, not limited to...

• If it is a buyer's market, the time may not be right to sell. Especially if it will sell less than it is worth.
• If it needs more capital invested in order to prepare it for sale. For example, maybe it needs major repairs.
• The area is a high appreciation area and the owner does not need cash flow.

Very cool. Congrats!

I like the idea of buying and leasing back. Maybe they can prepay 6 months rent from proceeds of the sale. If the mom is dying, she may not have it in mind to pay rent so you'd want to avoid being in the awkward position of asking them for late rent during such a difficult time.

We own a self storage facility that we purchased in Lubbock, Texas back in April. I don't know the answer to your question, but I'm eager to hear what others say.

I noticed a few questions on the forums in recent days related to collecting data from public websites. I thought I'd write my first blog article to speak to the topic. I hope others find it helpful.

http://www.biggerpockets.com/blogs/7000/blog_posts...