All Forum Posts by: Steve Cheslock

@Brian G Reeves

Live Oak Bank up in North Carolina. @Terry Campbell

@jimkittridge is right on with second part. Lot dimensions will play a HUGE role in determining how many spots you can fit. 

@Chip Stroz

DM if you’d like to connect. Scott Meyers is a great resource here. I own one mom/pop facility in South Carolina and opening a second in GA soon. Will share my experience and what I’ve learned so far.

@Angela Yan

The quick answer, I can’t tell you. Take a look at the market rates around you that are being offered. If there are non that if fantastic, that means there should be demand and you can set price.

As a rule of thumb with driveway aisles and turning radius you can fit about 50 spots give or take per acre.

Focus on marketing online. The physical location is playing less of a factor these days and online marketing is the main presence now.

Hope this helped.

@Matthew Wright

These are all great questions and the answers revolve more around personal preferences, capabilities and risk tolerance instead of a good hard “rule of thumb”. Like in multifamily we like properties that are lacking, meaning the "less" a facility has the more potential value add I see. So things like no security, no online presence, bad management are all things I'm looking for.

I have found that many people entering storage haven’t truly thought out their road map yet. They have heard storage is great, but one area all lot of people haven’t thought of is how they plan on financing it. Someone can find a multimillion dollar deal but with no prior experience in storage specifically, they can’t get a loan to fund it. So before asking yourself how many units or how many square feet (minimum 12,500sf by the way), ask yourself questions like: how much time do I want to put towards this? If I find a deal how am I financing it with no prior experience in this asset class? What are my capabilities to add value and compete in the marketplace at this point?

I started with no money or experience so raise a bunch of family/friends money and took down a small mom/pop facility. I put in all the work and ran it. Everyone understood it wasn’t going to make anyone rich and it was more of a proof of concept. It allowed me to get my hands dirty, establish systems/processes that are now scaleable and gain experience. Now return to my own questions I now have the experience, capabilities and ability to obtain financing to move up to a larger facility.

Hope my rambling helps. Feel free to DM with any questions.

@Nathan G.

Good question.

12,500sf: I have found that that is the min number of square footage where you can automate a facility and still achieve close to maximum efficiency with expense ratio. If properly managed expenses should take up 35% of gross. Anything under 12.5k sqft I’ve found that the fixed costs are too much to achieve that 35%.

40,000sf: This is just a personal rule of thumb where currently I’m trying to stay away from the spaces where the institutional players are operating (if I can). I’ve found that usually 40,000 is their minimum investment. I plan on going to bigger facilities over time but right now I know I’m not currently capable of competing with them as effectively as I would like to because of experience level and capital. Like anything you start small and grow.

Hope this helps.

 I look at facilities between 12,500-40,000 sqft. 

@Rick Oaks

I specifically focus on value add mom/pop storage facilities in the Southeast. DM me with any questions.

@Nathan G.

I invest in smaller Mom/Pop storage facilities in tertiary markets throughout the Southeast. Currently own/mange a small facility in South Carolina with another under contact in GA. It’s a great business.

@Sandra Andrews

It is based on a cap rate. Cap rates can go as low as 4 for brand new class A and obviously vary based on asset class and geographic location. I’ve only looked at deals where the land and business were combined.