BiggerPockets

I am going to research a mini storage/ mobile home deal and had a question before I go to bed. Is there a rule of thumb to use when looking at mini storage units? How do I decide what is a fair price?

Travis

A starting point would be the cap rate. That is basically the NOI (net operating income) divided by the sales price.

Cap rates apply to all rentals, whether it's an apartment complex or a self-storage facility.

Like Will said, everyone has their own criteria on what's worthwhile to them. I personally look for cap rates greater than 10% and cash-on-cash returns of 25% or greater.

[b][ you should study self storage before you buy.i]

Any suggestions on where to study...People like you are the only way I know how to study on this matter..

I am going to see the property on Saturday, The cost is $253000. +- The property is new. It consists of 26 units built this year an older double wide mobile, a garage and almost three acres that butt up against the national forest.. I would live in the house so that would have to be taken into effect.
Any suggestions? I am going to run figures after I see it this weekend.

Travis

Rich,

Phone message left for you today. If you can, call me tomorrow.

Will B

I spoke to a mortgage lender and he tells me that it takes 30% down to buy a mini storage. I only have ten to fifteen thousand to my name. Not sure what my best plan of attack is. Any ideas or thoughts

I am just watching a webinar that talking about mini storage. It shows a MLS for a property that has 123 units for 49500 in Missouri. That sounds way too good to be true and it must not include the land. I am looking at a property with 17 units for 150,000.00 ..

You also have a lots of positive points with storage unit.
1) Almost no repairs, tenants won't call you for a toilet plug or a leaky faucet.
2) No eviction process. If tenant doesn't pay you lock his stuff and after 30 days you can sell all his stuff in auction.
3) Less Utitlities bill.
4) No fight with the neighboors.

However I still think it's 3 to 4 times cheaper to have your own storage built.

Rodolphe-I have to strongly disagree with you . Where do you get your 3-4 times better? Out of thin air? I bought 537 units , existing last month. I also just attended the Self storage Expo in your fair town of Vegas last week abd spoke to actual developers, owners, suppliers etc for 3 days.
You may get land and materials cheaper currently, but your lease up time frame will be scary. Storage units need real estate activity to fill up. When buyers aren't buying and sellers aren't selling, occupancy drops big time.
There are a lot of projects out there in trouble currently. I assure you that you absolutely can't build for the same price that you can purchase currently,,,period. There are tremendous existing properties out there for sale at a fraction of what it will cost an investor to have 1 built. There were over 800 facility owners sharing info last week and I learned a lot.
I do agree with the good points on buying a facility, except the auction part. I attended a high powered legal session at the Expo and the rules and laws have changes regarding that. Be careful on your assumption or advice that the auction process is slam dunk. It is not.
I'm looking at a second existing facility with over 500 units that I may buy for under 2 mil. Unless you can build that for $200 per unit, you won't be 3-4 times less. Rich in Fl.

Rich, do you think you might be interested in writing an article or blog about self-storage units? It can add a lot of value to many of us and to the BP site in general.

I understand that writing an article takes a lot of time, so if you are too busy to do it, please PM me and perhaps we can work together on an article.

Regards,

Vikram