Deal 1: Self Storage Facility - Learn with me & offer support

Eric Don · 2023-06-01T22:36:39-07:00

First thing's first, I was laid off from my job and thinking of creative ways to support myself and escape the matrix. I have $400k in accessible cash looking to deploy towards real estate. I made another post and connected with many others who seem pretty helpful. One of those individuals was Henry Clark who specializes in self storage. This post is going to be dedicated to my first deal in trying to acquire or develop my own self storage facility. Join me with questions, comments, and additional support.Here are the outline steps of what I plan to do.1. Analyze a few deals. Being able to determine demand in a particular area involves a few factors. From my short amount of research, self storage is a retail service now. Folks want to be close to their belongings, they want it to be easily accessible. Some places calculate based on population and square footage per person. I'm not sure what's correct, I have more questions than answers. But being able to find a land even if there is a competitor nearby and determine vacancies, pricing, unit dimension demand etc is something that I will need help on. Currently Henry mentioned a deal in Palmdale. 4 acres asking $240,000 for vacant land. Zoned for self storage, problem is it is not in front of any main roads but has a private dirt road off an exit road next to the freeway. More on this deal in an additional thread.2. Build a template: This is something I will need guidance on. There are a lot of steps in any real estate venture. Getting organized is important to understand how to orchestrate different parties to align timing wise so no time or money is wasted when locking down a loan and needing to make payments. 3. Secure financing: I currently am talking to US Bank, I've heard they have the most favorable construction loans in the market as of right now, but they are asking to see projections in order to continue talking to me. I believe for every 100k in the bank they would loan out 1mm dollars so long as you have a high paying job, up to a few million. Going to need help putting together a financial projection to prove the business model will expect to make x dollars in y time. I'm not sure what kind of loan I could even qualify for. I dont have a business with tax returns. I'm just getting started.4. Partner with a GC and construction company: Construction company will supply the block and steel. The GC is responsible for mostly everything else, leveling, drainage, electrical, security, doors, concrete/asphalt, gates, office. I need clear and accurate estimates with to ensure we don't go over budget and that I can also say with $1mm I can build x units, which would net me y dollars. Another factor which is slowing my projections to share with the bank in order to get approval for a loan. 5. Close on a property: This may be one closing which could include the land along with my loan or it could be me purchasing the land/space outright working with a commercial real estate agent. I'm located in the Southern California, Los Angeles area. If you know any commercial real estate agents that have experience in self storage I would love to connect. I am going to need representation.Join me in sharing your stories of how you started, any advice you would give to someone new starting out. And by sharing any relevant material you think you would be helpful. It could be excel, presentation, docs, connections, or wisdom. Thank you in advance.

Eric Don

OP

Member since 2021 · 24 posts · 24 votes

2y

I guess it's back to the drawing board...

So for this other opportunity, all someone would have to do in this scenario is get the city to approve zoning/special use permit, acquire the property, and give it a nice paint job and you'd purchase it for 1mm above its original list price? I'd be more than happy to take that on.

0 Reply

Henry ClarkPro Member

Developer · Member since 2020 · 4k+ posts · 4k+ votes

2y

Run the numbers on the project you’re looking at while it’s fresh. Do it in 2 hours. Then show me what you have and we will build on it. Don’t go for perfect, just do what you can.

The potential project would be worth $2mm equity or more in your market. You’re lucky to be in both a harder place to build and in a higher price market.

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Eric Don

OP

Member since 2021 · 24 posts · 24 votes

2y

Forgive me as I'm not sure what other numbers I may need unless I speak with a bank on financing options.

The project I'm looking at is as currently constructed.

751 unit 3 story facility. 44,500 sq ft of storage space. Built in late 1970's

96% occupancy

1.53mm Gross Income

750k NOI

Assuming an 8% interest rate, what is a healthy positive cash flow? What is a healthy cap rate? Let's jsut take a look at cash on cash return. Let's assume 7mm purchase price like you mentioned. At an 8% interest rate with 20% down over 25 years That is:

1.4mm Down

224K Annual principal over 25 years

448k interest owed in first year

Totaling $672k per year in principal & interest. Leaving 78k per year in profit, not counting depreciation. That's about a 5.571% return on the 1.4mm initially invested as a down payment.

Idk how great that is given CD's are giving you 5.3% on your money guarunteed, but you need to take into account depreciation and building equity over time. For me that's worth it. Now, do I have 1.4mm to put down? No... I may need to re-run the numbers at a 10% down over 25 years which has an interest rate between 10-17% so lets assume 14% Here are the new numbers.

700k Down

248k in annual principal over 25 years

868k interest in first year

Totaling 1.12m in principal and interest. Even with depreciation, the cost of the property wouldnt make sense.

Maybe the owner would be open to seller financing 10% of the down payment in the original 20% down loan. Something we can discuss. Otherwise purchase price needs to come down, but I just don't see that being realistic based on other deals in the area. For example, a 22k storage facility with an asking price of 5.2mm.

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Henry ClarkPro Member

Developer · Member since 2020 · 4k+ posts · 4k+ votes

2y

1. You need to do at least 5 deal analysis before thinking about doing a deal. Use this as your first analysis even though it’s a no go.

2. Spend a weekend and read every post with my name Title starts with Self Storage. Start with Will they come? Then financing. Then Deal 1 thru Deal 13???? Then read the rest

3. Tons of books and podcasts

You can not learn by studying and loose $300,000 or more in the school of hard knocks. Or you can spend a week learning.

2 Reply

Henry ClarkPro Member

Developer · Member since 2020 · 4k+ posts · 4k+ votes

2y

Everything in Selfstorage can be validated

Don’t trust anything I say or any info the seller or realtor gives you.

For example. Their $1.5 gross revenue and $750 NOI are wrong. You need to validate and reconstruct it. Find my post where I have the following in more detail

Gross revenue

Discounts- should be zero if 97% occupancy

Extra revenue- Uhaul, past due, cleaning, auction, etc

Property tax- existing and based on your purchase price. Look up the tax rate in that location and use the percentage.

Insurance- get a quote from Ponderosa They just do Selfstorage and customer insurance. Read that post

Utilities- ask for the utility bills. Or look at one and the whole year usage by month and estimate. How are they advertising? Climate controlled or temperature controlled? Read that post.

Management cost- see how structured. Pay. Housing

Advertising- how? Website presence? Billboard? Read my post.

Maintenance- you will want inspections on structural, roof, elevator, hvac or dehumidifier, parking lot, etc. ADA make sure you are grandfathered, EPA- 70’s build check on abestos

Other line items. Read my posts

Depreciation- don’t worry about cost segregation for now. Take out land value and use across the board 20 years for this exercise. Add this back to your net income to get cashflow. Need it to get to your taxes. I want to see cashflow after paying taxes.

Principal and interest. You need to calculate to validate you have enough cash flow to cover this. On new builds I expect an occupancy level around 60% to cover all costs and P/I.

1 Reply

Henry ClarkPro Member

Developer · Member since 2020 · 4k+ posts · 4k+ votes

2y

Due diligence

Make a due diligence list.

On revenue.
rent roll

35 month revenue report by month

Ytd financial mgt report. See how they are collecting payments. Cash or autopay. See how many accounts and dollars are more than one week or one month past due.

Market analysis. Read and do post. Will they come?

What other revenue streams? Any billboards? Uhaul, past due fees. Etc

Do a market price comparison. Pick their top 4 sizes in terms of dollars and units. List theirs and 3 other close locations. Apples to apples. Don’t compare drive up to enclosed. Use Sparefoot to get prices or call

97% occupancy. You want to be near 90%. They are to high. That’s good for you as a buyer. Check the aging on their customers. Make sure they didn’t beef up the numbers in the last six months by undercutting market price.

2 Reply

Henry ClarkPro Member

Developer · Member since 2020 · 4k+ posts · 4k+ votes

2y

Each post of mine vote on it. If I don’t see you investing your time, then good luck. I won’t help any further. Keep everything on this post versus DM or PM so others can learn. Thanks.

2 Reply

Eric Don

OP

Member since 2021 · 24 posts · 24 votes

2y

Will do. I obtained the financials for the past 3 years by month on this property. In 2021 and 2022 NOI was around 600k 1.2 Revenue. They do Uhaul and trailer parking and merchandising.

I'm doing my best to make this property work because

1. It's close in proximity and I know the area very well.

2. The owner would prefer to sell it to a small investor vs a big corporation and would ideally love to sell it to their onsite manager who's the wife of my business partner on this venture. So no matter what we will have an opportunity to put in our best offer and be taken seriously so long as we can come up with the money and financially it makes sense for all partners. Their relationship is everything in this deal and could even warrant creative financing.

3. You can tell the property is well maintained, I drove around today and will be meeting with the owner on Friday morning to discuss the potential of how we can work something out. I'll read through your posts to identify questions to ask and things to bring up. There is actually space for expansion on the lot which is great. Another deal I was evaluating was for half the usable square footage of rental space just went into escrow for right under 5mm and the land is leased, not owned.

I'll read your posts and do a market analysis and make a post in this thread. Any last pieces of advice as I go into a conversation with the owner on Friday?

0 Reply

Henry ClarkPro Member

Developer · Member since 2020 · 4k+ posts · 4k+ votes

2y

Do the PL I noted above to validate their NOI. They should be making more than 50% NOI.

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Eric Don

OP

Member since 2021 · 24 posts · 24 votes

2y

Been working with the onsite manager and can confirm numbers are accurate.

They are still running discounts until the end of the year. Prepayment for the year they get 1 month free.

They do Uhaul, have late fees, auctions when evicting. Two units to be auctioned this month.

Property tax documents provided with assessor history, although I am curious how this may change if the property is sold for a lot more than currently assessed/first purchased.

Insurance- Big expense because need to insure the commercial building. Also a revenue stream add on for individuals who want to purchase.

Utlities- Not temperature or climate controlled Few units have electricity inside the unit. Hallway lighting is controlled via a timer. Electricity is a big expense. In the process of getting formal utility bills.

Management cost: Biggest expense is employee Salaries. Son was being paid 6 figure salary, but no longer working at the faciilty. They have contracted Salaries which are expensive. Sub-contractor (repaving the floor very recently), merchant, and accounting expenses seem higher than what it should be consistantly.

Advertising: One billboard in front, Online website, SEO, auction advertising in the local paper.

Maintenance: No asbestos, building inspectos/enforces come on some regular basis to make sure building is up to code so these issues aren't a danger to the public. I saw vents when I toured but onsite maager doesnt know of any HVAC system. Could be broken/never fixed. the CUP shows a use for HVAC on the building's roof, but google images arial view show no HVAC unit on the roof.

Met with the owner last week. Ideal buyer is a group that has a developer as they have space on the FAR to build another 3 story building on the back half of their 1.7 acre lot. Owner doesn't have a strict timeline anymore for selling, but hoping within a year. This could potentially be an opportunity that could interest you Henry! Currently the facility's numbers aren't beefed up to command the price the owner believes he should get in addition to how commercial property is priced. He is trying to sell the potential of the expansion and location. Lmk your questions. I can be boots on the ground for this operation.

0 Reply

Henry ClarkPro Member

Developer · Member since 2020 · 4k+ posts · 4k+ votes

2y

You have to put numbers to the above

Validate Don't trust. His NOI numbers are still wrong or he is paying way too much.

Property tax. What is it now? What would it be based on the purchase price?

Insurance- call Ponderosa or another self storage insurer and get estimate. Need numbers. Write a post.

Electric? Shouldn’t be that high if not climate or temperature controlled. Maybe $6,000 per year. Need numbers.

Water sewer?

Management cost now. If you owned it could you manage or live there? Is it near a college? Need numbers.

Put a capex list together Start making estimates and timing. Example Parking lot $100,000 in 2026; Roof $200,000 repair 2030, HVAC $30,000 replacement 2032 Etc fire sprinkler system, security system, office, lighting, etc

Do your market study. Follow my post Will they come? Start voting in my posts. Looks like you have only read two of them. Make your own separate post on doing this market study for this site.

You should be building your team. Show this deal to your commercial banker. Ask him for a “term sheet”. Ask him what info he’s needs from you. Make this a separate post of yours. Although I am helping you, prefer to help more people when they read your posts. You will have fresh eyes and fresh questions versus me.

Ask the busiest commercial realtor in your area where you live for a cpa firm. Look on loopnet for your town under commercial. Ask that firm cost for bookkeeping service. Plus tax service to do your personal taxes and the storage. You will drop off a box to them. Also ask about payroll service. See if you can find a live onsite college student.

Add. Title search company, attorney, hvac, plumber, electrician, painter, sign, etc. Does this have an elevator and or lifts?

You should be building your checklist, PL, cost to build worksheets. Add to them as you go through this.

If you’re reading my posts you will already know the items above and documenting them.

2 Reply

Henry ClarkPro Member

Developer · Member since 2020 · 4k+ posts · 4k+ votes

2y

Now that you have talked with your commercial banker.
1. You know how much money you can put down.

2. What downpayment % they will allow. SBA 10%, commercial 25%, etc

Deal size- if you have $100,000 at 25% down payment you can do a $400,000 deal.
From now on only look at deals in your size.

Keep working this first deal. Now start a separate post for your second deal analysis. Again you need to do at least 5 deal analysis before even thinking about doing a deal.

Again, right now it is better to build than to buy. If you build you will have at a minimum $1mm appraised equity at the end of two years. If you buy your loan will be that much higher with only your downpayment as equity.

Start small and Make Your Big Mistakes Early.

0 Reply

Henry ClarkPro Member

Developer · Member since 2020 · 4k+ posts · 4k+ votes

2y

Start your second set of spreadsheets. Deal 2 pl, deal 2 cost to build, deal 2 checklist. Each deal you do you should have these three worksheets.

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Eric Don

OP

Member since 2021 · 24 posts · 24 votes

2y

Because this property has an expansion opportunity, I still look at it as a build opportunity in a rather favorable location. Second loan will be favorable terms from the same bank after 12 months with 0 down and interest-only payments during construction period. Along with a lease-up period for smaller payments. Property is already designated for this use so development will be a lot simpler.

Commercial banker gave me these numbers for purchasing this local deal.

Purchase price: 8.2mm

SBA loan 15% down: 1.248mm

Projected interest Rate: currently 7.02%

Total Monthly Debt Service estimated: $53,465k ($641,580 per year)

This does not leave much meat on the bone for cash flow and would be a max purchase price, but rates are variable and are expected to come down.

Unfortunately, I dont think 400k will get you much in Southern California. Any future deal analysis at that level would require me to look in the midwest.

Have you seen my update on quartz hill?

0 Reply

Henry ClarkPro Member

Developer · Member since 2020 · 4k+ posts · 4k+ votes

2y

The $400k is an example on how to size your deal potential. You have to adjust to your situation.

So $100,000 cash at your 15% SBA financing = $666,000 deal. As an example. Read my SBA loan post. Vote on it so I can see your growing.

Show your Pl for this deal.

0 Reply

Henry ClarkPro Member

Developer · Member since 2020 · 4k+ posts · 4k+ votes

2y

On this first deal we are trying to build your deal analysis tools and checklists.

Also identifying positions and team.

By now you should have 4 worksheets.

Pl, cost to build, checklist, team. How are you progressing? If you don’t start from the beginning of this post. Keep reading my other posts.

The deal 1 you’re looking at has plenty of meat on the bone. You just don’t have it laid out so you can see it. Still too big of a deal for you. Finish it so your set up to look deal 2.

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Eric Don

OP

Member since 2021 · 24 posts · 24 votes

2y

Profit and Loss Statement for 2023 (Projected)

Income

Rental Related Income: $1,227,954
Merchandise Sale: $1,840
U-Haul Income: $2,136
Total Income: $1,231,930

Expenses

Salary-Wages: $138,900
Payroll Processing Fees: $1,282
Contractor (Sub) Fees-GP: $127,116
Contract Labor: $419
Payroll Taxes Expense: $10,699
Interest Expense (Included in Debt Service): $12,151
Other Operating Expenses: $285,059
Total Operating Expenses (Excluding Debt Service): $575,626
Annual Debt Service (Principal + Interest): $641,580

Total Expenses

Total Expenses (Operating Expenses + Debt Service): $1,217,206

Net Income Calculation

Net Ordinary Income (Total Income - Total Expenses): $14,724

Loan Details - Based on $8,200,000 Purchase price & 15% Down

Total Loan Amount: $6,952,400
First Mortgage: $4,139,125 @ 8% Interest
Second Mortgage: $2,813,275 @ 7.02% Interest
Estimated Monthly Debt Service: $53,465

Can provide a more detailed list of expenses but lumped most under operating expenses. There's a ton, but for simplicity left it out. E.g. utilities, software, pest control, accounting, legal, Advertising, Alarm service, taxes, merchant fees etc.

0 Reply

Henry ClarkPro Member

Developer · Member since 2020 · 4k+ posts · 4k+ votes

2y

Getting closer.
Need expense break down by line item.

Get rid of supplies and Uhaul sales. Not making any money since this is part of the reason for the payroll.

Don't charge late charges. This costs more labor. Increase rent if they keep doing. Then move them out. Move to 100% autopay only. This will reduce labor costs and speed up lock out process. Read my post on payment methods.

Interest is not part of Net operating income. Move below line.

Payroll and management is about $250,000. How much would you normally make in a year? Do you have any parents or relatives? Is there a college nearby? Move to self serve rentals. Watch my YouTube on self service rental.

Check the security system out. Add there security contractor to your team. On your phone or tablet. Want you to see the entire building. Have water, fire, moisture, temperature, motion sensors, voice interaction with customers, throughout the systems. Want your NVR sized to at least a 2 week memory on your NVR. Read my post on security systems.

Why do you have a 1st and 2nd loan?
What are your deal numbers? Use them for your second deal analysis.

What are your financial targets?

Read my post on financing and the good and bad on using SBA loans.

1 Reply

Henry ClarkPro Member

Developer · Member since 2020 · 4k+ posts · 4k+ votes

2y

Electric bill

Please get a copy of the monthly kWh. See if it is flat or seasonal. Add up the annual kWh.
Since this is an enclosed building (insulation), an old building (electrical hot spots), ask your hvac person or insurance company to do a spectrometer or heat sensor review. Do early morning when cool.

I don’t think it matters but you’re in California. Don’t know how green you want to be or the storage market cares.
Once you have the electrical history ask a solar company to check the building out and make a proposal. This will immediately increase the value of your property. Electricity is above line for Net Operating Income. Solar system would be depreciation below line. Example if your electric is say $20,000 per year. Use a cap rate of 7%. Then your market value increased by $285,000. See what a solar system would cost with rebates. California should have a ton of rebates. Read my post on improving or changing Cap rate.

This is just one line item in the combined operating expense number you showed. Have to challenge each line item.

0 Reply

Henry ClarkPro Member

Developer · Member since 2020 · 4k+ posts · 4k+ votes

2y

The extra land you mentioned. You will have to see if it can be built on. It might not be usable.

1. Parking spaces. Will you still have enough parking spaces per code?

2. Will you need a storm pond or drain installed?
3. What are the setbacks?

4. Is there a permeable land coverage % required per code.
5. If you build there will you be required to make the existing building ADA compliant?

6. Will you have to retrofit or update your fire suppression system if you build the new addition?

All of my posts and questions you should be adding to your checklist and cost to build worksheet.

Start small and Make Your Big Mistakes Early. Any of the above issues could cost you $100,000.

1 Reply

Eric Don

OP

Member since 2021 · 24 posts · 24 votes

2y

U-haul is a typo, there is a digit missing it should be $21k. The current onsite manager's husband is the regional manager for U-Haul and would likely be a coinvestor due to operational knowledge. So it makes some money, and is an attractive/convenient option for customers although everybody in california drives a car.

I have parents, relatives, and family nearby as well as a Community College very close by that woud allow for cheaper part time work at this facility. This facility would likely need someone onsite for security reasons.

Their security right now is decent, cameras that pick up audio and video, only risk is people following each other in/out of the entrance/exit gate. Voice interaction + sensors im unsure but would be a good idea.

The second and first loan is the way the SBA loan is structured. It only loans up to 35% of the cost then 50% comes from a conventional loan. Idk why this is, but they told me to assume an 8% loan vs the 7.01% SBA loan. Financial targets would be to acquire and have enough cash reserves for an emergency fund within the first year. Second year is expansion where real money and evaluation of property will be made.

Solar will be nice as the roof is all very flat. Assuming no roofwork needs to be done for anoter 20-30 years, something I dont know how to check as the realtor is now being stingy with all my questions. Need to communicate through the onsite manager who communicates directly with the owner.

Extra land can be built on. There should be enough parking spaces the code is 1 space per 1,000sq of building area. Doesn't make sense why there would need a storm pond or drain installed but it the new building would need to be built in a way that addressed califonira rain and runoff. Setbacks could include verifying buildable space, and confirming city approval as the city currently does not have a public record since it is so old but recognizes it as legitamite and any future development must adhere to the city's "general plan" meaning the "Floor Area Ratio" and in my calculations there is about 57k sq. ft left to build a building on in the land, still leaving enough room for ample parking. The existing building is already ADA compliant.

I believe the new building will be completely seperate to the exisiting one so it would have its own fire suppression system.

0 Reply

Henry ClarkPro Member

Developer · Member since 2020 · 4k+ posts · 4k+ votes

2y

Make sure to add all of these points to your checklist for reviewing properties and building PL's.

Quick exercise lets evaluate your market.

1. Pick the top 4 sizes in terms of numbers for this location. Example: 10x10; 10x15; 5x10; etc.

Then look on Sparefoot in your area and pick 4 competitors put their prices next to this location's prices. Disregard discounts. Just Street prices. Make sure to select apples to apples on Sparefoot. Example: climate controlled versus drive up. Make sure the sizes are the same. Sometimes spare foot will show a different size versus the one you're looking for.

2. Then follow the instructions in my post "Will they Come?". Use both the Sparefoot map with all types of storage showing. And the Google map. Look at your location. Look at both population and number of locations near you. When you have the time go do an inventory of all storage within 2 miles of you. Normally it's up to 3 miles. But depending on the neighborhood you're looking at and the drive time in LA, let's use 2 miles. Then find some population tool for that area.

Complete doing your own PL for this location. Do the market study above. Then we will be ready to evaluate the deal. We won't have a Cost basis approach, since I don't do enclosed storage, but for this exercise it won't matter. I'm expecting your rental rates to be really large relative to our market and Cost of the building doesn't matter that much.

Find out if the Uhaul $21k is the rental or the net income. For example, you might rent out a Uhaul for $50, but you only get $5 income. I would still plan to get rid of the Uhaul. It costs personnel cost and in your area on a square foot basis, it doesn't make you enough money. Can show you how to make more than that with zero effort depending on your location and parking lot setup.

Although you still need to get more info for the PL, you should be starting to see there is more Meat on the Bone for this deal. Even though it is larger than your deal size.

1 Reply

Eric Don

OP

Member since 2021 · 24 posts · 24 votes

2y

I'll work on it.

Uhaul revenue is revenue, not net income.

There is meat on the bone because of the price point of 8.2mm. Especially because of future development and expense cutting. But the owner knows this and I think has a selling price that they're willing to accept that is higher because of this. Even at 8.2mm though, current net income is under 20k due to the loan. Thats enough to stay afloat, and the development is where the meat really shines.

Deal size may be biting off more than what I can chew on my own but my hope is to convice a bigger fish to join this opportunity because of the upside potential, and im flexible to structuring that agreement in a way that makes it work for everyone. I'm happy to act as an operator along with the current onsite manager, there's certainly value there. I dont want to discount the relationship the owner/onsite manager has either. I dont think its a good idea for the current building to operate without staff working during business hours because of security reasons. But I will need to partner with someone with some development experience to make this work.

0 Reply

Scott KronePro Member

Investor · Northbrook, IL · Member since 2017 · 352 posts · 295 votes

2y

@Eric Don You have been doing great research and working through the numbers. Buying and existing facility is a good place to start for your first ones. Keep in mind, it will be a learning experience, so it is always better to try to buy one below market value than at a peak value. $8.2mm is a large facility. A few answers to your questions:

SBA loan at 35% and a second is due to the debenture. The local CDC takes on the smaller loan for the SBA. This allows the originating bank to lower their risk on the development when the carry the "second" loan.

With regard to development, there are a number of issues to take into consideration when dealing with new construction or expansion, water retention, impermeable site coverage, water supply and pressure (is there enough pressure in the water main to service fire suppression), electrical capacity (I know you mentioned solar, yet fire alarm panels and systems require 24/7 power, sewer connections, and zoning are some that come top of mind.

We just worked with a client that purchased a property to expand. They wanted to add 16,000 sf of lockers. They discovered after buying the property (and before we were involved), they could only add 4,000 sf of lockers, and were going to be required to add $400,000 of underground retention work for storm water. We resolved the challenge by building 4,000 sf of lockers and adding concrete pier foundations for 12,000 sf of portable lockers. The site was a long and narrow site with the existing lockers in the rear. We had to coordinate not only the construction but also maintain access through the duration of construction.

Another point regarding a site manager being there a long time. The payroll seems quite high. Having proper systems in place to insure the books and records are accurate are critical. When our colleagues take over a facility, they usually bring in new staff to insure the records are accurate.

0 Reply

Ronald RohdePro Member

Attorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes

2y

Just a note, you don't care abotu their existing debt service. It just clutters the analysis. NOI is just cash flow.

if people are prepaying for a year, you need to amortize that revenue, it will look misleading for the seller to receive rents but for you to provide services. Is there a seller credit for that?

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Deal 1: Self Storage Facility - Learn with me & offer support

Deal 1: Self Storage Facility - Learn with me & offer support

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Profit and Loss Statement for 2023 (Projected)