I have a lot on my mind and a lot of questions, but I'm going to try to get to the point as quickly as possible. I am new to investing and I'm still trying to figure out exactly what I want to do. I have a pretty good idea, but I'm still not to a point where I feel I'm ready to dive in just yet. So here I go, I hope this doesn't turn out too too long.
I currently own one SFR as an investment property (newly refinanced for better interest rate and cashflow). I have roughly $40k in equity in this property and it is currently in the second year of a two year lease. This was my first primary residence which I decided to keep as a rental property after scaling up due to a growing family. However, I think I've decided that landlording may not be the best route for me.
I also have a $20k retirement account from a previous employer that, even though it's gaining 7% annually, I feel could be put to better use. Those are my main assets in play here, with the retirement account being the first primary source of capital.
Through investing, my goal is to generate enough passive income to replace the majority or all of my current pay, which would then allow me to effectively retire from the rat race and focus on my own entrepreneurial goals instead of someone else's. I realize that this is a business and is not 100% hands off, but I am willing to put in the work to make this happen.
I was (and still am) originally interested in building or purchasing an existing boat and rv storage business. In researching this, I discovered the wider world of real estate investing which ultimately led me to BP, of which I've been a member and observer for almost a year.
After spending a lot of the previous year attempting to learn as much of the real estate industry as possible, I think I've decided to shift my focus back to the commercial / business side and begin a serious attempt to make things happen. I'm just not real sure how or where to begin.
I've considered buying a few acres of land and building a new facility, however, I don't think I have enough capital of my own, and it doesn't seem that most commercial lenders are very fond of taking risks on this type of business. I've considered looking for private lenders, but I don't even know who or how to approach them.
I've also thought about buying an existing business, but again I run into the issue of securing financing. Without a track record and with my limited funds, I'm not sure that I'd be able to get into something worth getting into.
Lastly, I've considered approaching a current owner / operator of an existing business to discuss the possibility of a partnership for a new or existing facility, or to discuss other possible investment opportunities. Although I don't have a world of money, I am skilled in many construction and maintenance related fields which could be beneficial to an operator. The problem is that I have no idea how to even approach this possibility.
I am an educated blue collar guy (with some white collar experience), but I am not a businessman. I am trying to get a good grip on my finances and make them grow so I can live the life I want to live and, at the same time, be the provider my family needs me to be. I have a good job and excellent credit, so I feel like I can do more. I am trying to learn as much as I can about what I'm trying to do here, but I always end up wanting to know everything before I take the next step("Analysis Paralysis" I believe this is referred to as). I know this isn't possible, but I guess it's just my nature. I love to learn.
So, first of all thank you if you've made it this far, I knew I couldn't keep it short. What I'm looking for is advice. Where do I go next? Am I even in the ballpark of being able to realize my goals? Does anyone have any real world experience in this business that they can share? I feel like I'm ready to move, but my feet are stuck in cement. Thanks again for reading! And thanks in advance for any guidance.
Hello @Tyson Dierschke
Do they have Boat and RV storage in Texas? (I am guessing they do by your post but how do they work?)
I know up here you take your Boat/RV in October/November and it sits there until April/May and you pay by the month/foot and add fees to winterize etc. That being said I would guess the business model and costs would be different. Do people come in and pull it out all the time down there and just store it on a lot instead of at their house? I guess that would cost more because someone would be there all the time and pulling in and out of spaces.
Sorry I don't have a lot of solutions... and just more questions but always trying to learn something new.
Yes we have quite a bit of boat/rv storage down here; especially in my area (suburbs of Houston). Due to the never ending development of small lot residential subdivisions and the proximity to the coast, many people, if they own boats or rv's, have no choice but to utilize a storage facility. Most HOAs won't allow them to be kept in driveways, and the garage isn't big enough. So they would take their vehicle out of storage for their camping/fishing trip, and return it when they get back to town. I see storage facilities of all types around here from boats and rv's parked in a wide open (fenced) grass pasture, to a professionally built facility with units ranging from open, to covered, to enclosed and locked with 50amp outlets for batteries and water hookups. Most pay monthly rates and I've seen some where, if you pay a full year in advance, it would be less per month.
I do not own any storage facilities but I am a customer. To me once you get the land assuming it is zoned for such, it seems like a pretty easy thing to get started on because you can grow it as your business grows.
If I were to do it, assuming you had the land which is a hurdle, I'd start off just renting spots in a field. Once I got some cash coming in, I'd put down some gravel and sell those spots for slightly more. Once I got that established or all the people in the field moved over, I'd look at putting in another strip that has a gravel base and is covered.
Depending on your location and what your customers want depends on the next step. If you are mainly a ski lake, you typically do not need power. If you have fishing boats that use trolling motors you need power. Once you make that decision, you could convert your covered parking into completely enclosed, or enclosed on 3 sides. the biggest thing you want is security. so that means camera etc. The place I go, its just a locked fence and I have the combo. It is fairly insecure but I don't pay much at all. You also have to think about your lay out upfront so you can make sure people can bring trailers in and out easily and that driving area isn't taking up too much space but isn't too small they are going to hit stuff as they back up.
Storing RVs seems like a little more of a hassle. the problem I see is that they are hooked to power all the time, people show up to work on their RV and turn on the AC etc means higher electricity. its almost better to not offer power. I haven't thought much about storing RVs as I'm more of a boat guy.
In response to Shawn's concern about power being an issue, the RV facility that I am currently looking at purchasing has a single 15 amp outlet in each unit with the power set up on a timer so the most it can be running continuously is 30 mins before it shuts off. This prevents tenants from accidentally leaving things running 24 hrs a day while still allowing for some minor electrical needs.
I thought that battery tenders in RV's needed to be powered for awhile to keep the batteries topped off.
Maybe they make solar powered ones now which would be really nice for someone that only uses their RV 4 weeks out of the year.
That is another service you could offer..making sure their batteries have a full charge, water tanks filled up, etc...
I would prefer to have a Storage Unit facility but where I am it takes quit of bit of down payment to get a decent sized facility, which would be over 125 units. Most of the better ran facilities in my area have over 200 units, but also have Managers that live onsite.
Many smaller storage facilities have some outdoor storage for Trucks, RV's, and other items on wheels.
This post has been removed.
My family is heavily invested into apartments and I suggested we get into storage units to diversify and it seemed like it would have less maintenance. Also I liked the idea of renting land to just have someones boat or RV sitting outside with a fence around them.
The numbers worked out BUT we ran into zoning issues. Anywhere we looked at wanting to build one the county would not change the zoning or allow a storage unit facility to be built there.
Make sure you can build what you want when you buy a piece of land. The one place that we did find we liked would not allow us to have vehicles or boats just sitting outside.
They gave up on the idea since another apartment complex a block down from one of theirs came on the market and all of their assets went into that. I quit since I had very little capital at the time and I was going to provide mostly sweat equity.
Hello Tyson. I ran across this thread from a Google search. Did you end up starting an RV storage business? If so, how is it going? I'm very interested in doing that as well in the St. Louis area. There are several open lots around here that are mostly full. I have in mind to do something a little nicer (such as offer covered and/or enclosed storage along with open and possibly on-site services such as wash bay, dump station, water, electric, etc).
I'm also curious if this ended up working out? Or Eric Waters did you get one started? We are looking at buying something but would possibly be looking out of state since we couldn't afford to do it here.
also interested in this, just moved to a new area and feel like it would do very well here.
I own one, we 1031’d into it after selling off most of my multi family.
Looking for more existing facilities as we speak , not really interested in ground up development.
However, I would do a ton of due diligence on the potential competition and make sure you have really wide aisles as well(aka plenty of land or a really good layout)
Curious how this ended up for everyone. I'm interested in starting one in Central Texas as well.
I am in Arizona and am doing due diligence here... I have portfolio of SF rentals that net about 12.5% annually..I am thinking about dumping them and building an Rv/boat storage facility on a 7 acre piece of land. Does anyone have any number to share about COC returns for this facility's that have been recently built n the past 5 years or so?
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing