All Forum Posts by: Tony S.

Wow, that is amazing! I'm just getting started with my first four properties, but I've been brain storming about how long it could take me to build a much larger portfolio. I'll be following your progress, keep us posted!

Tony

The comments you made regarding taxes really hit home with me, and I hadn't considered that aspect of it before your first post on this thread. I absolutely loathe paying taxes as well. After letting what you said marinate a bit, it's enough of a deal breaker to point me away from storage right now. Maybe if I was more experienced and had plenty of other properties for the depreciation, but I'm just starting out and could really use some tax benefits.

Tony

You're right Jimmer, great people here, and this thread cleared more up for me than any of the research I'd done prior to reading what was said here.

Thanks again everyone! I think that after taking everything into account, this just isn't going to be the right fit for my first deal. Oh well, another one is out there.

Tony

Happy Thanksgiving to you as well!

This post is exactly what I needed! I knew I was just too excited by some of the big numbers that I thought looked good. I had started to wonder about the tax issues, and you really cleared those up for me and showed that they definitely would be a problem.

My plan is/was long term hold. As I mentioned, I hadn't considered many of the things you brought up, but I do think that there is a lot of room for growth for this property. The reasons for the low occupancy seem to be pretty straightforward, there are other options available that actually have gates, lighting, cameras, etc. and this one doesn't. I had thought that fixing those issues and just re-marketing the property would begin to fill it up, but that may have been overly optimistic. I am not sure how the housing market in the area is doing, so I will look into that, as it seems like a crucial element.

Your input has definitely given me a lot to consider, and was much needed. It seems like for my long term goals this may not be the best fit, but I'm going to continue to look into it and see what I can learn.

Thanks!

Tony

Aaron,

Thank you for the input. I have been "what if-ing" this property for a little while now, and honestly I don't see a major downside. Even at the current 45% occupancy, with the NOI I was shown, and using the asking price with a down payment of 10% it looks like it would be paying for itself. I had already checked and the current bank will not finance it, which is odd to me, but perhaps they just want to get away from it. I'll continue considering what you mentioned and see if I can find the scenario that would keep me from wanting it, and then it's a matter of guessing how likely that is.

Thanks for the tip on how to include someone's name. I was trying to tag the names I mentioned before but I wasn't sure how to do it.

Tony

Hey,

Thanks for the recommendation, I had read some of his other posts, but I'll specifically look for that one.

Tony

Thanks for the welcome Marco, I'm very excited to get started, I feel like I've put it off far too long as it is. I definitely will study those links you sent me!

Tony

Hi BP,

I've been reading posts for quite a while now, but I have yet to invest in a property or engage on the forum. Here's hoping that both are about to change! I have found a property that I just had to get more advice on before pulling the trigger, so I posted my questions and concerns. I figured that protocol would dictate that I should have introduced myself first, but late is better than never I suppose.

My name is Tony, I am from NC, and I am fascinated with real estate, but have given into the naysayers who are full of horror stories of land-lording. I have just recently been talking to a like-minded co-worker who owns a whole slew of properties and convinced me that "yes it can be hard, but we've both put up with a lot worse." That really stuck a chord with me, and I am now determined to find a deal that works for me and make it happen. I'm looking forward to learning from, and engaging with the community here at BP in the process.

Tony

Hi Everyone,

I've read through most of the threads I could find on self-storage and have seen a lot of good input from various sources. I am particularly interested in what Rich Weese and Michael Wagner have had to say in some of the threads I've read. Basically, as the subject line said, I have been watching real estate investing from the sidelines for a while, but have yet to pull the trigger on a property. I have found one that I think could be a winner, but I want to see if there is anything I'm completely missing and maybe gather some good questions I should take to the seller before jumping in.

The basics are that it is a 247 unit business, split between two locations. It is bank owned and currently on the market for just over $500K. With the current NOI, the cap rate is 10.6%, but that is at only 45% occupancy. The low occupancy is due to various factors, not least of which being that the bank doesn't want to spend money on it. It needs probably $30-50,000 invested in it to replace fences, gates, add cameras, etc. Competitors in the area are seeing over 85% average occupancy, which, if I could match, would give the property over a 19% cap rate.

One thing I've read that makes sense is that this is a business rather than purely a rental property, I understand that part of it and am willing to take that on, as I think there is significant upside to be had here. However, I absolutely recognize my lack of experience and my emotional response to what I see as great numbers, so I'd love to hear from anyone who knows about this sort of thing. What should I be wary of, what questions should I take to the seller, what type of financing would be best for this kind of deal? I have read that SBA loans are available, but it seems that commercial real estate ones would be too. It seems like there may be pros and cons of each. Do any of the pros have recommendations either way? Basically, I just don't want to rush into a bad decision, if there are red flags that those more experienced than me are seeing.

I appreciate everyone's time and input.

Regards,
Tony