Storage Units

11 Replies

My passion is to become a full-time real estate investor but will not start investing until after I earn my Bachelors degree. Because I am attending school, I am spending my free time researching investment ideas, strategies, etc. and have come across the idea of developing storage units. What are the pros and cons of investing in these? I do not have experience fabricating or constructing buildings so I would have to consider hiring a contractor, but I have been told storage units are a very fast way of building a cash flow (not sure how steady of a cash flow). Is there anyone that can give me their input? Please & thank you! 

@Tyler Sample - Why are you waiting on a piece of paper? 

Poke around, look who owns some nearby storage units and buy him or her lunch. Have a list of questions prepared.

If you dont like the answers they give you, move on. 

Since you're still in school (and likely in a college town, but I dont know for sure) You should consider house hacking. Pull a 3.5% down FHA loan for a multi-unit, and rent the other units to friends while you live for free.

@Jeff Fruhwirth Thank you for responding so quickly! And good question... perhaps I am waiting on my degree because of income security i.e. getting a real job? Plus, I do not believe I would qualify to buy a home... Although I have great credit (731), and I'm sure there are other factors that would come into play, I am only 22. I have actually looked into an FHA "Kiddie Condo Loan" which requires a co-signer but simply do not have anyone to sign (can't get parents on board).

It would be a dream to own a home by next year and rent out the other rooms to friends, however, yes I am in San Marcos, Tx. There is a city ordinance stating no more than 2 non-related individuals may live in a home together. It basically helps to keep neighborhoods quiet and away from parties. Although this is the city law I am positive there are many students who get around it. I wonder how else I could do something similar in a college town?

@Tyler Sample

The 2 non-related wont count if you own a duplex. You could get a duplex with 2/1 in each, and that'd be 4 unrelated people in the structure, but there's 2 homes in the structure.

If your credit is good and you have a plan and a job, you'd be a good candidate for FHA. Go find out if you qualify. You've got lots of excuses, but no firm answers.

Just call up a local bank (likely have better odds if you stay local) or a mortgage broker.  

Hey @Tyler Sample ,

I'd love to hear how things are going for you. Have you called any local banks yet? Do you know if you qualify for a FHA loan?

Just would like an update on how you're doing. Hope things are going well. 

-Dakoda

Storage Units are low overhead, good cash flow businesses.  The down side is to manage the cases were the tenant walks away from a balance due, forfeiting the contents. 

Each state has it's own process, but in Calif, you must hold a Public Auction after following the Abandoned Property procedure.  Not fun and the 'day manager' you hire (ie: you become and employer and go thru that ringer) has to clean out the units.  This is the larges portion of the overhead expenses other than employees.

Another aspect to consider with storage units is quantity.  There are several within a mile of my house so I would recommend researching locations.

@Jeff B. In your experience have you found the owners for storage units ever sell these? This seems like something an owner would hold on to an pass down from generation to generation.

If they do get sold are they usually found on an MLS or some other public site?

Originally posted by @Rich Hupper :

@Jeff B. In your experience have you found the owners for storage units ever sell these? This seems like something an owner would hold on to an pass down from generation to generation.

If they do get sold are they usually found on an MLS or some other public site?

 hmm - - I have no idea, not being in that market, I've never looked :sigh:

Originally posted by @Rich Hupper :

@Jeff B. In your experience have you found the owners for storage units ever sell these? This seems like something an owner would hold on to an pass down from generation to generation.

If they do get sold are they usually found on an MLS or some other public site?

 here's one..

https://www.listselfstorage.com

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