Hey everyone! My wife and I are going to look at our first self storage deal. I’m not to familiar with self storage but we really what to try it out! What things should I ask the realtor and facility owner? So far all I know about the facility is that they are asking $200000 for a 71 unit facility, and from what I can find the taxes are $3100 a year. We have a list of questions but I would like some other inputs on thinks to ask. Also, what are some baseline numbers to shoot for? Thanks in advance!
Coy, I focus solely on the brokerage of self storage in the Northeast and Mid Atlantic. There are a lot of things that roll into valuing the site and cash flow. I would need to know revenue, expense breakout, age and condition of the facility and your proximity to the facility to help guide you on an operations strategy. I’ve also managed more then 100 properties in 14 states in my operations portfolios over 16 years in the self storage industry. More then happy to help if you want some assistance.
Hey Coy, a lot depends on location and the 3 and 5 mile market. Check with the realtor, but do the work and secret shop facilities around the facility you’re looking to buy and see what the demand is. Where is this located and how much sq ft is the facility?
Coy, I focus solely on the brokerage of self storage in the Northeast and Mid Atlantic. There are a lot of things that roll into valuing the site and cash flow. I would need to know revenue, expense breakout, age and condition of the facility and your proximity to the facility to help guide you on an operations strategy. I’ve also managed more then 100 properties in 14 states in my operations portfolios over 16 years in the self storage industry. More then happy to help if you want some assistance.
You need to know the Value of the Facility (what's it worth?) and the Financial Assumptions (how are you going to pay for it?) And then have these three questions answered: 1) What is the value-add? (aka Pro Forma, 2) How are you going to manage the Facility?, and 3) How are you going to make money?
You answer all that by looking at the Physical Aspects (size, age, # of units, etc.) and the Financials (P&L, Books & Records) so that you can see the Income Stream. And then you have to put it into context by conducting a market study (1-3-5 mile) for population, income, car counts, etc., as well as a Competition Analysis (what are the other facilities like in that 1-3-5 mile radius, e.g. management, curb appeal, occupancy, street rates, etc.)
If you can determine all of this, you will have a very good indication as to whether it makes sense to move forward or not.