Entering the Self-Storage Space ----- Looking to Learn, Help, Partner and Invest

[Matthew Garay]

Hi everyone,

I’m brand new to self-storage investing but currently learning and spending a lot of time studying the asset class, underwriting, and operations. My main goal is to connect with experienced investors and operators to learn from those already in the space.

I’m also very open to helping on any self-storage related projects (market research, underwriting, deal analysis, etc.) to gain hands-on experience and add value. Additionally, I’d like to connect with like-minded people who are also interested in self-storage so we can learn together.

If you’re active in self-storage or just getting started, feel free to comment or message me. Looking forward to connecting.

[Henry Clark]

Quote from @Ken M.:

Quote from @Henry Clark:

Quote from @Gabriel Graumann:

OP.  Use the lookup and read my post.  Self-Storage Will They Come?  Then do the exercise.

I have actually analyzed this area before.  You're in a great market.  

1.  Self Storage is about Strategy and WAR.

2. The competition is upper end REI, Climate controlled mainly, traditional. You do their model, you lose.

3.  Most commercial loans require 25% down.  Determine the size of your deal first.  This will help cut down wasted time.  If you have $100,000 then you can do a $400,000 all in deal.  $250,000 then $1mm deal all in.

4.  Model I recommend.  Conexes or Cargo Containers- new 1 trip, RV/Boat parking, Storage units go with 12 foot wide and 10 tall versus the traditional 8 wide and 8 tall.  Make them 30 foot deep. Versus 10/15/20.  The first two options are low risk, since you can add as you need.  Don't do Climate Controlled.

5.  Your lifestyle?  Can you build a Facility Managers office to live in?  And sell your house?  My brother for $60,000 built a great 1,200 SF house, tile floors, marble kitchen, etc.  Get your house or rental cost to work for you.

6.  Cargo Containers- Your near Ports.  We are in the middle of the country in Iowa.  I can get new 1 trip containers for $2,300.  Cheapest they have  been in years.  Another $300 to deliver, prep ground and set in place.  8 x 20 size.  No property tax since they are not attached to the ground.  Zoning is an issue.  $2,600 in place each.  You rent for $80 which blows the competition out of the water.  About 1/2 of clients greatly prefer containers to traditional storage.  Plus, you have Drive up access.   $2,600/$80= 33 months.  Does not include interest, and other costs.  Less Risky, since you can resale these Retail for $4,500.  Also you can buy 2 at a time.  Although I would buy at least 10 at a time.  Read my post on Containers.

7.  Parking- RV/Boat.  Rock or someplace with old hard surface even better.  30 and 40 foot spots.  rent for $60 per month.  Should be able to do about 90 spots on 2 acres.  or $5,400 per month.  Less Risky, since you just need to hard surface the park, can be rock.  See my post on doing parking.  Use Engineer Fabric TX 160 or 180 for rock.  Read my post on Parking.

8.  Storage units 12 x 10 x30- This size is not marketed to by your competitors.  Rent for the same per sqft as a drive-up access 20 footer.  This is more risky since you have to build the whole building.

9.  Location and Market strategy- use the large REITS and large city configurations.  I try to use two strategies.  Wagon Wheel approach.  Or Spider Web.  Use the lookup and read my post.  You should use the Wagon Wheel approach since you're near a large city.

You're in a target rich environment.  Decide how large you want to scale, then put a 5-year plan in place.

Spend a week reading all of my Self Storage posts.  Vote on them so I see you invested your personal time and not mine.  I will get the notice you voted and read them.  Then I will be more than happy to answer more questions if you want on this post.

Start small and Make Your Big Mistakes Early.

So that we plebes may understand,
1. "what is the optimal minimum number of units" of an existing and functioning self-storage, needed to make the effort worth doing?
2. How much should someone expect to spend on buying those units?
3. How many hours a week should someone expect to spend managing an unattended self storage facility?

Would only do if you are thinking about scaling.  Also only talking Drive up storage.  I would stay away from climate
conteolled.

The first location is about getting your system down and “Learning/Failing” on a small scale.  I would say 40 to 100 unit location.  This could be on one acre.  


New storage units run about $4,100 per unit whether 10/15/20 length.  That is fully erected.  Just the building and concrete pad. 

“All costs in”, I would want to be in a market where 10x20 drive up units rent for $130 and up.  Below that I would only do cargo containers or do other investments at this point.  Al in cost, includes everything.  Land, expenses, P/I, fence, signs, dirt prep, permits, etc.  


Hours per week?  Please watch my YouTube on page one of our ClarkstorageLLC website on how to rent.  This can be optimized with a call center service but we choose to operate in person.  The phone I am in at one time we had 8 locations and about 1,800 units.  About 8 hours a week.  On the back side another 8 hours with contract management and any autopays that didn’t go thru.  If you only had 100 units, it might be 10 hours a week including mowing or weeding if needed.  You can outsource most or all work.  

I have looked at many areas in the US for different people.  There is still a lot of market for new storage out there.