All Forum Posts by: Dan Seavey

@Nicolas Gonzalez

Where is your facility located? How did you get into the storage business? What was your method of purchase?

Scott,

Thanks for the great input. The cap rate for this facility is around 6%. I understand that this is low, but I am looking for a long term investment that will cash flow while building equity. My plan is to work with the SBA 7a, are you familiar with the process?

I am thinking of offering $395,000 with the seller holding paper for 20%, with a 15-year amortization payment at 5% with a 5-year balloon. I would like to put down the least amount of cash possible. Any advice would be great.

Dan

@Brandon Hicks

@Brandon HicksThanks for the advice. I Am thinking of doing just that. Offering $410,000 (asking price) with an owner finance clause of 10% at 4% interest. I will offer the 10% at a 15 year amortization with a 5-year balloon. This way the owner will only have to hold paper for 5 years maximum. My only concern is I am asking for the 10% finance to supplement the down payment. I will be purchasing through the SBA, who requires 10% down, which I would like to avoid pulling that money from my HELOC. Any experiences or advice with this type of purchase? Thanks again.

I am new to storage facility investing and have been prospecting a few here in Maine. I am seeking a mentor or to network with individuals that have experience in the industry. Thanks,

Dan

I am currently looking into my first storage facility investment. It is a 70 unit built in 2004, it is quite modern and well built. The current owner built it and is now selling because of different business interests. The facility is in a medium sized town, BUT on a main route which leads to the bordering state and has great viability and a very high traffic count. It also has no competition. The facility is currently 100% occupied, which I know is not a great thing, because it has reached its maximum income. The property is not zoned for expansion, but possibly exterior storage (boats, RV's, etc), upon town review. It would likely hold 20-30 spaces. The current price is $410,000, I have made offers of 360K, and 380K, with a 10% owner finance clause. The owner still will not budge. Any tips, thoughts or ideas?

Dan

After reading through many of these threads, I figured that @Rich Weese would have some great insight! Thanks.

i am prospecting a 110 unit storage facility here in Maine. The owner has it listed with partial owner financing, which is good for me as I am a young investor with little cash available. I am posting here to see if there are any experienced investors in the storage business that could give some insight on the deal. It is a 110 unit facility in a busy city right off of a main route. The road signage is shared on a business park, so it is not a large sign. There are temperature controlled units as well as 5 different sizes of units. The owner owns another business about 30 minutes away and bought this through a 1031 6 years ago. I am somewhat suspicious at the occupancy rate, as there is really only one other competitor (which their facility is much smaller) in the area. The town is approx. 17,000 and the facility is also in close proximity of 3 major Lakes and one small University. The broker has said that the owner does not put much effort into the business, hence the 65% occupancy rate. The owner is asking $650K. At 65% occupancy, with 10% down ($65,000 owner financed at closing - no cash out of pocket), and 90% mortgaged through SBA and bank ($585,000), $7,800/taxes, and $5,000 in misc. expenses/annually. This will be $4,300/Mo + taxes and utilities. I am seeking suggestions to make this deal work? The occupancy obviously needs to increase to make this work. I know the area and believe that it can be filled very quickly. Maybe a owner finance clause to keep expenses low at first until it is occupied? Thanks in advance.

Dan