All Forum Posts by: Scott Krone

It does not appear to be a good deal. First, you have not provided or explained your operating costs. That will determine your NOI prior to debt service. Considering your debt service is greater than your income, it is not a good deal as you will be negative cash flow even before expenses.

4,800 sf is quite small for storage. Your model would have to be based upon leasing up the site. Uncovered/unprotected outdoor storage is a completely different model than self storage. Different rates and terms. You would first have to determine the Income, and then the owner should be able to tell you the general expenses as as starting point. This will help you determine the NOI..

Our investment business is converting warehouses into fully conditioned interior units.  Upon completion, we have a nation wide operator run the facility.  In essence we are building them for 12% caps, and upon completion they are valued at 6% caps.  We have a boot camp webinar if you would like to know more.  Our typical conversions are 600+ units.

Our investment business is converting warehouses into fully conditioned interior units.  Upon completion, we have a nation wide operator run the facility.  In essence we are building them for 12% caps, and upon completion they are valued at 6% caps.  We have a boot camp webinar if you would like to know more.

We don't do conversions that small as the market place for them is much more limited on the sale.  The largest cost factor will be the lockers and MEP.  That will be dictated by the local demand and what locker size is required.  Larger fewer lockers will be more cost effective than smaller with more units.

Our investment business is converting empty warehouses into self storage.

If the commercial deal is set up properly, the commercial deal can offer a greater return due to the appreciation factor.  SF will not appreciate as much as commercial.  For instance, when we develop our self storage facilities, our cost basis is 65% of the value of the asset.  As the case flow increases, this spread only increases.  So we can generate more passive income as we as a greater amount of appreciation than we would by buying a SF.  We have prepared a webinar boot camp that compares the two asset classes.