Best way to locate Self-Storage deals
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Specialist · Victor, NY · Member since 2013 · 823 posts · 844 votes
9yOriginally posted by @Jay Hinrichs:
try coastar .. along with there are probably self storage associations.
I have owned self storage.... its not really real estate its a business. \
the one I had I condo converted and sold each unit.. that turned out to be profitable.. took back notes so I did not have to manage the individual units and still enjoyed cash flow
While I agree that SS is a business....I have to disagree that Self Storage is a business rather than real estate. Its both, but so is any other real estate investment---if done right--NNN might be the closest thing to an exception to this rule. Having come from multi-family (albeit on a small scale- 31 units) I can say beyond a shadow of a doubt that my storage investments (also a proportionally small scale -460 units covering 50,000 sq. ft.) require FAR less of my personal bandwidth than my MF did/does (still have 14 units and dwindling!). And SS makes me far more money that my MF investments. Just like any other RE investment, self storage involves renting space at a rate that exceeds your cost to do so.
As for the Original Poster's question, www.selfstorages.com, loopnet, brokerage specific sites like Marcus and Milichap and Argus, www.investmentrealestatellc.com if you are looking in the mid-atlantic or northeast, and craigslist are all sites that might be useful to you.
Looking at off market property: For a first property, I would recommend using the magic of google to locate all storage facilities that meet your criteria within a 60 mile radius of where you live. Then use property tax records to locate owner and mail to them regularly. Make a habit of visiting any that you happen by. You can also call the facilities but its sometimes tough to get to the owner (unless you are calling small facilities).
Storage is a hot market and has been for some time. And it appears it will be for the foreseeable future. Most owners (myself included) are willing to sell but only at prices that are higher than what the "market" could bear. Simply put, SS facilities are "worth" more to people who already own them because they know better than anyone else how profitable they can be and how tough it can be to find a place to re-deploy any gains at a comparable rate. Because of this, you need to know that self storage is a long game when it comes to sourcing off market deals. I looked for 3 years before I closed my first one which was ultimately found on loopnet-second deal was off market...walked into the place and got owners info....chased him for 18 months....and the rest is history). I have been helping a friend do the same for almost 2 years and we are still on the wrong side of the search. Being flexible (considering warehouse conversions, facilities that are "too" small but with room to expand, etc) will increase the supply available to you.
62 Replies
- Rental Property Investor · Sacramento, CA · Member since 2016 · 267 posts · 214 votes9y
@Jon Q. Jon, I think your best bet to find self-storage deals is a broker relationship. When you start dealing with large properties, most clients choose to work with a broker, since they typically have many different relationships with people that can close on a deal of that magnitude. This allows them to create the largest pool of potential buyers and achieve the highest price possible (assuming the full competence of the broker! )
As for off-market deals, most of them are found through relationships. However, the state of the self-storage market allows owners to blast to the investor community that they would entertain offers, and in turn avoid a broker fee. That being said, I would do my best to network with the owners of the properties in which you would consider putting offers on. Try and find properties that look neglected, and do some classic driving for dollars !
Jon, I hope this helps you !
Kenny Reimer
- 9yJon Q.Investor · Berkeley, CA · Member since 2015 · 1k+ posts · 713 votesOP
Originally posted by @Kenneth Reimer:
@Jon Q. Jon, I think your best bet to find self-storage deals is a broker relationship. When you start dealing with large properties, most clients choose to work with a broker, since they typically have many different relationships with people that can close on a deal of that magnitude. This allows them to create the largest pool of potential buyers and achieve the highest price possible (assuming the full competence of the broker! )
As for off-market deals, most of them are found through relationships. However, the state of the self-storage market allows owners to blast to the investor community that they would entertain offers, and in turn avoid a broker fee. That being said, I would do my best to network with the owners of the properties in which you would consider putting offers on. Try and find properties that look neglected, and do some classic driving for dollars !
Jon, I hope this helps you !
Kenny Reimer
Thanks Kenny. Unfortunately, this doesn't really answer my question though. Brokers obviously list the properties they're selling. Where do commercial brokers list self-storage? Is Loopnet the primary listing source or is there a niche website that provides self-storage deals for sale?
Thanks again.
- 9yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
try coastar .. along with there are probably self storage associations.
I have owned self storage.... its not really real estate its a business. \
the one I had I condo converted and sold each unit.. that turned out to be profitable.. took back notes so I did not have to manage the individual units and still enjoyed cash flow
- 9yJon Q.Investor · Berkeley, CA · Member since 2015 · 1k+ posts · 713 votesOP
Originally posted by @Jay Hinrichs:
try coastar .. along with there are probably self storage associations.
I have owned self storage.... its not really real estate its a business. \
the one I had I condo converted and sold each unit.. that turned out to be profitable.. took back notes so I did not have to manage the individual units and still enjoyed cash flow
Thanks Jay! I'll check with Co-Star. There's also Inside Self-Storage (ISS) and List Self-Storage, but I haven't found many deals posted here at all.
- 9yJon Q.Investor · Berkeley, CA · Member since 2015 · 1k+ posts · 713 votesOP
Originally posted by @Jay Hinrichs:
try coastar .. along with there are probably self storage associations.
I have owned self storage.... its not really real estate its a business. \
the one I had I condo converted and sold each unit.. that turned out to be profitable.. took back notes so I did not have to manage the individual units and still enjoyed cash flow
Jay,
Another topic...I'm hosting/moderating a panel discussion on real estate development. Any interest in calling in and being part of the panel? If so, please email me a brief bio and I'll list you on the site and get back to you with call in info. Currently we've got 30 people RSVP'd for the event.
- 9yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Jon Q. I am in vegas let me check with the boss and see if I can make that call.. we might have dinner plans.
- 9yJon Q.Investor · Berkeley, CA · Member since 2015 · 1k+ posts · 713 votesOP
Originally posted by @Jay Hinrichs:
@Jon Q. I am in vegas let me check with the boss and see if I can make that call.. we might have dinner plans.
Sounds good. Hopefully you can participate...
I think we've already exchanged emails a few times, but I just sent you my contact info in case you need to reach me.
- 9yJon Q.Investor · Berkeley, CA · Member since 2015 · 1k+ posts · 713 votesOP
Originally posted by @Jay Hinrichs:
try coastar .. along with there are probably self storage associations.
I have owned self storage.... its not really real estate its a business. \
the one I had I condo converted and sold each unit.. that turned out to be profitable.. took back notes so I did not have to manage the individual units and still enjoyed cash flow
One more topic. Any interest in being involved in a multifamily work force housing development opportunity in Reno? Large Amazon facility, many other big employers etc...
A close contact of mine just got a project entitled and ready to build. He also will likely be looking for financing..
If interested let me know.
- Rental Property Investor · Sacramento, CA · Member since 2016 · 267 posts · 214 votes9y
@Jon Q. Hi Jon, a close friend of mine who brokers self-storage doesn't necessary "list" the portfolio of properties in any one site. As @Jay Hinrichs mentioned, CoStar has many listings, but it still doesn't guarantee they're on there. You could also try the websites of the brokerage houses. My colleague's team uses email marketing, cold calls, and snail mail to alert their clients of the listing. The use of LoopNet depends on the person with the listing, and the wishes of the owner. I know that some brokers don't like to use it as some see it as diminishing their reputation (not sure why since all exposure is good exposure! ). Also, I would argue that the state of the self-storage market allows brokers to move product very, very quickly to clients they have relationships with. The brokers don't need to market it any further than alerting their existing clients that are waiting with their mouths watering to take down a self-storage deal !
- 9yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Jon that is out of my league... need big player for that... MF construction lenders requrie 25% cash equity to get the vertical loan if your talking a 20 to 30 million dollar build out.. 5 to 7million in cash would be required.. that would use up 1/3 of our capital on one deal.. too risky
- 9yJon Q.Investor · Berkeley, CA · Member since 2015 · 1k+ posts · 713 votesOP
Originally posted by @Kenneth Reimer:
@Jon Q. Hi Jon, a close friend of mine who brokers self-storage doesn't necessary "list" the portfolio of properties in any one site. As @Jay Hinrichs mentioned, CoStar has many listings, but it still doesn't guarantee they're on there. You could also try the websites of the brokerage houses. My colleague's team uses email marketing, cold calls, and snail mail to alert their clients of the listing. The use of LoopNet depends on the person with the listing, and the wishes of the owner. I know that some brokers don't like to use it as some see it as diminishing their reputation (not sure why since all exposure is good exposure! ). Also, I would argue that the state of the self-storage market allows brokers to move product very, very quickly to clients they have relationships with. The brokers don't need to market it any further than alerting their existing clients that are waiting with their mouths watering to take down a self-storage deal !
Makes sense, but to find the big brokers specializing in self-storage, I need to locate a listing source first. Most do list them, with exception of the best deals that they often acquire themselves or offer their private list of investors. So I'll have to work my way up the ladder. I'm looking for the best listing source to get started.
- 9yJon Q.Investor · Berkeley, CA · Member since 2015 · 1k+ posts · 713 votesOP
Originally posted by @Jay Hinrichs:
Jon that is out of my league... need big player for that... MF construction lenders requrie 25% cash equity to get the vertical loan if your talking a 20 to 30 million dollar build out.. 5 to 7million in cash would be required.. that would use up 1/3 of our capital on one deal.. too risky
Okay, we're also offering it for sale. entitled project...if you know anyone that may have interest, let me know and I'll send it over.
- Specialist · Victor, NY · Member since 2013 · 823 posts · 844 votes9y
Originally posted by @Jay Hinrichs:
try coastar .. along with there are probably self storage associations.
I have owned self storage.... its not really real estate its a business. \
the one I had I condo converted and sold each unit.. that turned out to be profitable.. took back notes so I did not have to manage the individual units and still enjoyed cash flow
While I agree that SS is a business....I have to disagree that Self Storage is a business rather than real estate. Its both, but so is any other real estate investment---if done right--NNN might be the closest thing to an exception to this rule. Having come from multi-family (albeit on a small scale- 31 units) I can say beyond a shadow of a doubt that my storage investments (also a proportionally small scale -460 units covering 50,000 sq. ft.) require FAR less of my personal bandwidth than my MF did/does (still have 14 units and dwindling!). And SS makes me far more money that my MF investments. Just like any other RE investment, self storage involves renting space at a rate that exceeds your cost to do so.
As for the Original Poster's question, www.selfstorages.com, loopnet, brokerage specific sites like Marcus and Milichap and Argus, www.investmentrealestatellc.com if you are looking in the mid-atlantic or northeast, and craigslist are all sites that might be useful to you.
Looking at off market property: For a first property, I would recommend using the magic of google to locate all storage facilities that meet your criteria within a 60 mile radius of where you live. Then use property tax records to locate owner and mail to them regularly. Make a habit of visiting any that you happen by. You can also call the facilities but its sometimes tough to get to the owner (unless you are calling small facilities).
Storage is a hot market and has been for some time. And it appears it will be for the foreseeable future. Most owners (myself included) are willing to sell but only at prices that are higher than what the "market" could bear. Simply put, SS facilities are "worth" more to people who already own them because they know better than anyone else how profitable they can be and how tough it can be to find a place to re-deploy any gains at a comparable rate. Because of this, you need to know that self storage is a long game when it comes to sourcing off market deals. I looked for 3 years before I closed my first one which was ultimately found on loopnet-second deal was off market...walked into the place and got owners info....chased him for 18 months....and the rest is history). I have been helping a friend do the same for almost 2 years and we are still on the wrong side of the search. Being flexible (considering warehouse conversions, facilities that are "too" small but with room to expand, etc) will increase the supply available to you.
- Real Estate Investor/Broker · Irving, TX · Member since 2015 · 520 posts · 263 votes9yJon S. Google "self storage broker (your city)" and I'm sure you'll come across several... Bancap seems to be the big dog in your area. Also, check loopnet for past solds and call those brokers.
- 9yJon Q.Investor · Berkeley, CA · Member since 2015 · 1k+ posts · 713 votesOP
thanks @Michael Wagner
Thanks @Mark Allen
- 9yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Michael Wagner I also recommend if one is to get into the business you need to have facilities that you can afford to have on site management.
- Specialist · Victor, NY · Member since 2013 · 823 posts · 844 votes9y
Originally posted by @Jay Hinrichs:
@Michael Wagner I also recommend if one is to get into the business you need to have facilities that you can afford to have on site management.
That is certainly true for someone who is not able to or does not want to handle the day to day operation. But making such a recommendation does require that we first know of one's motivation. As a hypothetical example, If someone is trying to replace a $100,000 per year income that they currently earn working 60 hours a week....they might do very well with a smaller facility (say 20-30K sq. ft)....They could Net darn close to the $100K in income working just 15-20 office hours per week. It always circles back to one's goals for investing.
My first facility could not support on site management (except for my free labor) when I bought it. It was only 10K sq. ft. and was losing $2,000 per month when I took it over. It now does much better and is at 30K sq. ft. with 15K more in the future and is large enough to justify onsite management but in the form of a part time manager who puts in 16 hours per week plus appointments. My second facility is under 20K sq. ft. and doesnt really justify on site management. I manage it from my cell phone as it is close to home and that works well for us as the first facility made me unemployable:) The 20,000 sq. ft. facility takes about 5 hours per week of my time and it hums along pretty good.
- Creede, CO · Member since 2016 · 3 posts · 4 votes9y
argus self storage specializes in storage.
- 9yJon Q.Investor · Berkeley, CA · Member since 2015 · 1k+ posts · 713 votesOP
Originally posted by @Jay Hinrichs:
@Michael Wagner I also recommend if one is to get into the business you need to have facilities that you can afford to have on site management.
Yes, of course Jay. Good advice. I was thinking of focusing on 100+ units deals, though 60+ might even work.
- 9yJon Q.Investor · Berkeley, CA · Member since 2015 · 1k+ posts · 713 votesOP
Originally posted by @Michael Wagner:
Originally posted by @Jay Hinrichs:
@Michael Wagner I also recommend if one is to get into the business you need to have facilities that you can afford to have on site management.
That is certainly true for someone who is not able to or does not want to handle the day to day operation. But making such a recommendation does require that we first know of one's motivation. As a hypothetical example, If someone is trying to replace a $100,000 per year income that they currently earn working 60 hours a week....they might do very well with a smaller facility (say 20-30K sq. ft)....They could Net darn close to the $100K in income working just 15-20 office hours per week. It always circles back to one's goals for investing.
My first facility could not support on site management (except for my free labor) when I bought it. It was only 10K sq. ft. and was losing $2,000 per month when I took it over. It now does much better and is at 30K sq. ft. with 15K more in the future and is large enough to justify onsite management but in the form of a part time manager who puts in 16 hours per week plus appointments. My second facility is under 20K sq. ft. and doesnt really justify on site management. I manage it from my cell phone as it is close to home and that works well for us as the first facility made me unemployable:) The 20,000 sq. ft. facility takes about 5 hours per week of my time and it hums along pretty good.
Micheal,
How many units was each of these deals you referenced? Would you recommend a minimum size to get started?
In general, what per unit minimum would you need to support an onsite manager?
In regard to debt financing, does SS differ from MF at all? If so, how do?
Thanks!
- 9yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Michael Wagner agreed if its your only gig that makes sense.
mine was part of many different real estate deal I had going on including a fairly large HML company at the time with 14 employees lending in 12 states.. so mine was 7k sq ft of commreical with 44 units below.. nice stuff all sheet rocked and power with electric garage openers 10X 20's and 3 triples.
and it was across town for us.. so it was hard to manage.. no one wanted to drive an hour for an appointment to show a unit. and I certianly had no time to do it.
that is when I came up with the idea to condo plat it... as all our tenants owned floating homes across the street.. so my thought was if they also owned preminate storage their floating home would be worth more money.. I paid 10k a unit when I bought it.. the 7k sq ft of office was basically free.
I sold each unit for 30 to 35k and the triples for 75k each.. so it was a nice play cash on cash it only took about 6 months and 50k to condo ize it. this is in portland Oregon.. right off of the columbia river
- Specialist · Victor, NY · Member since 2013 · 823 posts · 844 votes9y
Originally posted by @Jay Hinrichs:
@Michael Wagner agreed if its your only gig that makes sense.
mine was part of many different real estate deal I had going on including a fairly large HML company at the time with 14 employees lending in 12 states.. so mine was 7k sq ft of commreical with 44 units below.. nice stuff all sheet rocked and power with electric garage openers 10X 20's and 3 triples.
and it was across town for us.. so it was hard to manage.. no one wanted to drive an hour for an appointment to show a unit. and I certianly had no time to do it.
that is when I came up with the idea to condo plat it... as all our tenants owned floating homes across the street.. so my thought was if they also owned preminate storage their floating home would be worth more money.. I paid 10k a unit when I bought it.. the 7k sq ft of office was basically free.
I sold each unit for 30 to 35k and the triples for 75k each.. so it was a nice play cash on cash it only took about 6 months and 50k to condo ize it. this is in portland Oregon.. right off of the columbia river
That condo play is AWESOME! Very clever idea and it sounds like it was a real money maker! I've also heard of it working well for RV storage with high end amenities...seems like movable houses (be it on wheels or waves) and condo storage are a good pair!
- Specialist · Victor, NY · Member since 2013 · 823 posts · 844 votes9y
Originally posted by @Jon Q.:
Originally posted by @Michael Wagner:
Originally posted by @Jay Hinrichs:
@Michael Wagner I also recommend if one is to get into the business you need to have facilities that you can afford to have on site management.
That is certainly true for someone who is not able to or does not want to handle the day to day operation. But making such a recommendation does require that we first know of one's motivation. As a hypothetical example, If someone is trying to replace a $100,000 per year income that they currently earn working 60 hours a week....they might do very well with a smaller facility (say 20-30K sq. ft)....They could Net darn close to the $100K in income working just 15-20 office hours per week. It always circles back to one's goals for investing.
My first facility could not support on site management (except for my free labor) when I bought it. It was only 10K sq. ft. and was losing $2,000 per month when I took it over. It now does much better and is at 30K sq. ft. with 15K more in the future and is large enough to justify onsite management but in the form of a part time manager who puts in 16 hours per week plus appointments. My second facility is under 20K sq. ft. and doesnt really justify on site management. I manage it from my cell phone as it is close to home and that works well for us as the first facility made me unemployable:) The 20,000 sq. ft. facility takes about 5 hours per week of my time and it hums along pretty good.
Micheal,
How many units was each of these deals you referenced? Would you recommend a minimum size to get started?
In general, what per unit minimum would you need to support an onsite manager?
In regard to debt financing, does SS differ from MF at all? If so, how do?
Thanks!
My first deal was roughly 80 storage units plus 70 outdoor parking spots. Only generated$50K in gross revenue when we started but it was only half full and had potential for $100K as it sat. We've since increased to 170 typical units, 10 covered RV spots with electric and 70 outdoor spots. Out next 15,000 sq. ft. will add another 100 units or so but will cannibalize the outdoor storage as we are out of space.
Our second facility was 117 units when we bought in 2014. It is now 200 plus 18 outdoor spots. We will replace the outdoor spots with 25 traditional spots this summer if all goes to plan.
The ability to sustain an onsite manager comes down to finances. Every market is different so a per unit minimum isnt all that meaningful. A really expensive (per unit facility) with only 20 garages @ $400 per month might not support a manager in a large market. But a run of the mill tertiary market facility with 250 units going for $80 on average will easily support a part time manager plus an after hours call center if needed. With that, its better to look at the facility as a whole as opposed to "per unit" calculations. Unit mix can also have dramatic effects on per unit calculations as well as type of management required. 5' x 5' units will get more per square foot but will turnover much more frequently than a 10' x 40' unit will and will therefore require more "management.
As for financing, I think you will find it similar to MF except that up until recently (say 5-10 years ago) it was harde to find lenders with experience in the sector. Now that the SBA is willing to loan on SS, you will find many more options. Typically, 20% down is pretty easy to come by. Once a relationship with a bank is developed, 10% down is also doable. Rates in my area have been around 5% or so in the $250K to $1M range.
- 9yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Michael Wagner I looked hard at developing a High End RV type facility like your talking about.
that play defiantly follows how the economy is going.. but at the end of the day someone who popped 1 million or a lot more on a high end coach will pop 100 to 200k on the ulra man cave.
It works in aviation... Where we have our Hanger ( its a condo and we own it) paid just under 300k for it.
and other than 2 airplanes we also have campers and all sorts of other stuff that you collect over the years
My neighboring hangers have offices and apartments in them.. along with some that have doubles ( ours is 60X50 and those are big boys with big toys.. a Jet another fun plane the million dollar motor home and one of our neighbors just has custom car collection....
I think this model done in the right spot could be very cool and your tenant base one that would be well worth rubbing elbows with !!!
- Investor · Austin, TX · Member since 2014 · 83 posts · 39 votes9y
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