Is this self-storage property a deal...?!
Help!
We may have found our first deal but unfortunately, it doesn't fall withing the scope of our real-state training to date. Yesterday, we found a self-storage lot for sale by owner! We made a preliminary call to the owner to ask a few questions and to relay my interest.
Here is what we know so far:
- The storage lot sits on 10 acres but currently all buildings sit on just 2 acres.
- All buildings were built in 2001.
- There are 7 buildings consisting of 17,000 square feet.
- There are 110 enclosed units of varying sizes (5x10, 6x10, 5x12, 6x12, 10x20, etc).
- There's at least 1 "open ended" storage shed for boats, campers, etc.
- There's at least 1 large totally enclosed building for storing large vehicles, campers, boats, etc.
- Current owner states that until this past fall, he has operated at 100% capacity for at least two years. At this time, he has just 7 small units un-rented.
- Current owner states that he has ALWAYS run at 90+% capacity since opening the business.
- Current owner claims income from the lot at $38-40,000 per year, but I failed to ask if that was gross or net. I assume gross.
- The county assessor has assessed the property and buildings at $140,900. Taxes should then be less than $1500 per year.
- Asking Price: $375,000
Furthermore, the current owner wants to sell his home which is located next door to the storage facility:
- Brick home built in 2001.
- 3 bedrooms, 3 baths, kitchen, living room on the main floor.
- Full basement with half being finished.
- The county assessor has assessed the home at $270,200. Taxes should then be less than $3000 per year.
- Asking Price: $225,000
Current owner would like to sell both house and storage together to one buyer.
At this time, the current owner will NOT consider a lease with option to buy.
Current owner wants to retire and build a new home at a different location.
I feel he will be a little flexible on the price but not overly so.
OKAY, so what do I need to know to make an informed decision?
- Storage facility
1. Cost of all utilities (electricity, water?) per month/year?
2. Taxes? And are they paid current?
3. As for income, Best month? Worst month?
4. Number of lock-outs in the past?
5. ??????
- House
1. Cost of all utilities (electricity, water, gas?) per month/year?
2. Taxes? And are they paid current?
3. Square footage
4. Comparables
5. ??????
Of course, I don't have the money to buy either one of these, so I will have to attempt a Commercial loan. Any suggestions, recommendations?
This feels like a good opportunity, but I want to be able to see on paper that it is a good opportunity. No more emotional decisions!
Any help will be deeply appreciated.
Thank you,
Will and Karen