All Forum Posts by: Scott Meyers

J.J. 

I respectfully disagree with most of the posts above.  

NOTHING about single family rentals or apartments is passive!  Regardless of whether you have a property management or not.  Even the best PM Company will still have to pass along a slew of "problems" for you to make decisions on - Most of which are costly. 

Take it from someone who had 80 Single family rentals, and 400 apartment units, in good areas - and with GOOD Property Management Companies. 

We eventually sold them all off, successfully staving off a trip to the looney bin and an eventual bankruptcy. 

1 year prior to that, we bought our first Self-Storage Facility with 252 units.  The partners were getting a "business divorce" and we were able to acquire it, and it was throwing off approximately $9,600 per month in Passive Income. 

Passive - Because there are NO Tenants, Toilets, or Trash.  

It changed my life! 

We painstakingly sold all the houses and apartments and purchased over 3,000 units. 

This Year, we'll buy 3-4 more facilities, and develop 1 from the ground-up. 

I would strongly consider the asset class.  

Good luck, 

Eric, 

Ditto:  Loopnet, Marcus & Millichap, Argus, Sperry Van Ness, SSBA, and a handful of Small Biz Websites. 

However, that's only a fraction of the opportunities available for purchase. 

Develop a mailing campaign, and then going out into your market and begin to pull doors will produce the types of deals you're after.  

Take it from someone who has sourced hundreds of Self-Storage Opportunities, You need to find the owners and talk to them BEFORE they go on the open market. 

Create the deal.  

You may also want to consider buying many of the "dark" warehouses in your area to convert to Storage. 

You can also download our 6 part video series at www.SelfStorageInvesting.com where I spend an hour on video 3 teaching you how we find deals.  

Cheers, 

I used to take on the current manager, have them train us, and then move on. 

NOW, I don't want to take on any previous liability, or be responsible for vacation pay, etc. so without exception, I will require the owner to release the manager, and we'll slot somebody in immediately. 

Have a great weekend!

Georgetta,

If you want to learn more about Self-Storage, there's a free, 6 part video series located here:  www.SelfStorageInvesting.com. 

It speaks to the industry, plus how to find, evaluate, and manage them.  

Mobile Home Parks are a good investment, but at the end of the day, even if you're only renting the dirt, you still have the hassles of tenants, toilets, and trash.  

Keep us posted. 

 Hey Guys, 

Thought I'd weigh in - the Rule of thumb for Self-Storage Expenses is 30-35%.  That's why we love the sector - Average rent/sf for Storage is $1.12, and Average Rent for Multi-family is $1.01.   

Do the Math!   

That's why we sold all our Single Family and Apartments to invest only in Self-Storage!  Plus the added benefit of not having to deal with tenants, toilets and trash anymore.   

My Real Estate Business is very simple and Extremely Lucrative.......... Now. 

Cheers, 

Nate,

First of all, Kudos for having the cahones to buy this before analysis by paralysis stepped in.  Next time, however, I'd seek just a little more advice....  But no Worries - I'm proud of you!

Some Quick Resources: 

1.  Sitelink or Centershift Property management software (or is the mgmt company using something different?) will assist in automating the day to day. 

2.  Join the State Self Storage Association and immerse yourself in it. 

3.  If I may, we hold a 3 Day Self-Storage Academy that teaches investors about the business.  We've been doing it for 8 years, and helped countless investors launch, and grow their SS Business:  www.SelfStorageInvesting.com/academy. 

4. HEAVILY interview the management company you choose - only one that understands the Self-Storage Industry - tenant and toilet companies won't help you grow your NOI.

Lastly, Welcome to the wonderful world of Self-Storage. 

Cheers, 

Nate, 

Hold the phone here!  ABSOLUTELY Get your attorney involved before taking the advice of people on this thread, including the attorney that weighed in on this.   Landlord tenant law doesn't apply to self-Storage. 

I'm assuming you have an attorney involved in this purchase that understands storage and/or industrial? If not, Get one. 

I would have them modify the assignment and assumption agreement of all leases/rental agreements to state that "any/all contracts entered into by seller AFTER the signed purchase agreement are subject to review, and may NOT be counted toward NOI, and will be subject to exclusion from the transfer....." (obviously, this is a sticky mess to clean up post-closing, so I would have them do it prior to closing, again, with the help of your attorney)

Make sense? 

Also, if this clown is running rough shod on stuff like this, I would definitely review EVERY rental agreement prior to closing, and match them up with physical locks in the facility to flesh out any "Phantom" rental agreements that can falsely boost the NOI.

For the record, avoid signing any 6 or 12 month agreements once you own it - that's the beauty of self-storage - we can raise rents, and NOT renew an agreement if the need arises. 

Keep us posted! 

Angie, 

do you have a trailing 12 month P & L for this property that you can send me?

For the record, you can't increase NOI by trading your own time as a manager when underwriting a commercial property. The investor, appraiser, and banker won't discount the Expense side and grant you the 8.3% cap rate you have stated.

Get me the actual #'s and I will let you know in 48 hours if we are interested. 

Thanks, 

 Hey Guys, I have posted A LOT of information on the topic here on Bigger Pockets.   But one of the common misconceptions or words thrown around regarding the industry is "oversaturated".  

It's quite the contrary - Industry experts and myself conclude that the level of development we are seeing won't meet the increased demand or even approach the point of equilibrium until around 2020.   The Current, National average occupancy in Self Storage is approximately 93%, with most of the top 50 MSA's stating they are 100% full with waiting lists!

We are buying and developing as fast as we can, and my education business that teaches people about this asset class is absolutely Exploding.  For the record, our next Self Storage Academy will be held in Dallas, TX November 19-21 if you're interested to learn more about the business, or you can pull down a free, 6 part Video Series at www.SelfStorageInvesting.com. 

We're always looking for more deals to buy, and we also partner on select deals with our students, as long as they meet our acquisition Criteria should you be interested.  

Real Estate without the hassles of tenants, toilets, and trash has absolutely changed our lives - having dumped over 100 houses and over 400 apartments in favor of Self-Storage and Warehouses. 

Cheers, 

 Justin - we've seen it from both sides.  Is it a benefit for someone to live there?  Yes, IF they do the job. And if not, then you not only have to let them go, but, usually, you have an eviction. 

Personally, Give me the Rock Star Manager that will drive my $Million Asset Forward, and we'll pay them accordingly, AND with Bonuses.  We've found that the type of person we're looking for is not driven by free rent, and would rather NOT live at a Storage Facility. 

Make Sense? 

Just my $.02

Cheers,