All Forum Posts by: Kevin Bledsoe

@Alejandro Trevino

You might want to reach out to @Sergio Altomare to discuss deal syndication. Sergio has some good deals that he’s syndicating in self storage which could help you get started.

@Nate Smoyer

It sounds like an exciting opportunity, and congratulations on entering the self storage investment world.

I would recommend the following:

1. Call Center - Implement a call center to take all sales calls. Opentech or XPS

2. Signage - If automating the facility have clean, clear and concise signage with QR Codes telling customers that they can rent on your website.

3. Management Software - Use a web based program with revenue management options. StorEdge, Sitelink, Self Storage Manager, Hummingbird, Easy Storage Solutions

4. Implement Tenant Insurance - StorSmart or Xercorx would be my preferences

5. Website - StorEdge, G5, The Storage Group... All very good

6. Staff - Hire a PT employee to do a daily walk through, sweep units and help with renters who need onsite assistance

7. Taxes - @Henry Clark has a good handle on this and some good thoughts on depreciation and pricing allocation at sale.

8. Focus on revenue management - 6% to 8% rent increase 6 months after renting and every 10 months after that.

9. Implement automated collection calls, texting and emails - Storage Collections

10. Forms and Leases - Consult with Scott Zucker or Jeffrey Greenberger to implement state specific leases, forms and lien paperwork. See Self Storage Association website or state SSA website.

11. Add cameras and never have a dumpster onsite

12. Attend an SSA, State SSA or ISS show to continue educating yourself on the industry. Lots of good speakers and classes. Join your state SSA.

I hope that this helps and best of luck in your new venture!

@Jesse Futia Hi Jesse, I’m a broker who specializes in the self storage space. Feel free to touch base anytime.

@Jason Vandermark

If you use $3.50 per SF or 35% of the Gross Potential Income (All Units Rented at Market Rate) then it’s a good overall ballpark for expenses. Sometimes it doesn’t workout, depending on the size and location of the facility. Cap rates vary drastically, but using a 7% cap rate would be fair for most underwriting scenarios. I would use a 7% as your exit cap rate projection as well.

@Jason Vandermark

Jason, it’s very hard to answer any of those questions. It really depends on the market, size of the facility, quality of the facility and the quality of the operations. A facility in a primary market is going to have much higher taxes, typically higher operating expenses (Temperature Controlled vs Drive Up) and cap rates can range from a 5% cap rate to a 9%. What part of the country are you buying in and are you looking at primary, secondary or tertiary?

@Coy Struckhoff

Coy, I focus solely on the brokerage of self storage in the Northeast and Mid Atlantic. There are a lot of things that roll into valuing the site and cash flow. I would need to know revenue, expense breakout, age and condition of the facility and your proximity to the facility to help guide you on an operations strategy. I’ve also managed more then 100 properties in 14 states in my operations portfolios over 16 years in the self storage industry. More then happy to help if you want some assistance.

@Krystle Khoo

@Kris Bennett Were you at U-Haul in your past life? I could’ve sworn that we crossed paths at a few shows. I think that Kris probably has lots of operations tricks in his bag.

@Michael Stokes Yes, there are a number of really good 3rd Party Management companies in the industry. There’s a company in York, PA called Storage Asset Management (SAM) and they’re the largest privately held management company in the industry. However, 3rd Party Management costs 6% of revenue or typically a minima of $24k + the cost of the employee.

I would also look into Freedom Storage Management and Red Dot Storage for 3rd Party Management. Both of these groups offer a remote management style which will reduce onsite staffing expenses.

Best of luck!

@Karen Devlin I’m a broker who specializes solely in the self storage industry in the Northeast and Mid Atlantic. My team values 90 to 110 properties per year and we sell between $70mm to $100mm in self storage each year.

I would agree with many of the comments offered. The cap rate being paid is fairly aggressive. I would base the NOI somewhere closer to a 7% to 7.5% cap rate. I'm not sure what expenses you have factored into the NOI equation but that plays a major part in the equation also.

Honestly, a property of that size can be supplemented through the use of technology. I’ve managed more then 100 properties in my management portfolios prior to entering brokerage. You can set up online rentals, automated collections calls, revenue management and tenant insurance all through automation. Using this operations approach can help limit a lot of the need for an employee. If you aren’t close to the property geographically you can hire somebody to do a daily walk through, clean units and help customers who need the personal touch of an in person rental.

It sounds like you might be close to a valuation of $1.1mm with the land included in that price.

I hope this helps and best of luck! It’s a great business!

@John Kim ESS is definitely a good software package. You may also want to look into StorEdge and Sitelink as well. All three software companies are owned by a private equity firm called Storable. I would venture to guess that at some point in the future all three platforms may be redeveloped into one program.

However, for the time being, StorEdge can do all of the same things as Easy Storage Solutions. Sitelink is an older platform but easily has the most self storage users of all three. Sitelink has an open API with a number of add on complimentary programs like automated collection calls, integration with website developers and call center integration.

Each program is very good and definitely worth exploring further.