I posted this in another forum without any response so I'm reposting here hoping for a few responses.
I have a lead on a property that I'm really not sure how to work with. I ended the conversation with the seller once I realised that I didn't know what questions I needed to ask and am looking to fill in the blanks. Below is all the information that I have currently but I get the feeling that I'm missing some pretty crucial pieces.
30 bed 15 bath
10,000 sq. Ft.
Built 1961 as senior housing
45 bedroom septic
80,000 passing car count in front daily
12k rental income
Asking 1 mil.
Owner purchased in 1965 with initial plan to build 40 houses but zoning laws?
In 1978 city requested that he build a second floor to accommodate additional units (I don't know if this was ever completed)
Could convert to mini storage?
The seller told me about a mini storage property a few towns over that is on 2.7 acres, has a lower car count and is listed with an asking price of 2.5 mil.
The property is currently vacant aside from the seller and his immediate family. The sellers kids moved away so he wants to sell the property and move to Israel.
What else do I need to ask the seller? How do I comp/determine the value of this property? Is wholesaling a viable option with this? If not, should I consider structuring the deal differently or walk away?
I have a been in Self-Storage for 10 years and have bought/developed a fair share in my day. The first step for a project like this is to hire a Self Storage consultant to perform a feasibility study to determine if the site can be rezoned and redeveloped for Self Storage. He or she will also answer the questions regarding conversion costs, market supply indexes, time to lease up, 5 year projections....etc.
This is information you need to have before making a decision on whether to do it yourself, or to wholesale it to a Self - Storage Developer.
Just because the owner said a facility nearby sold for $2.5 Million means that you can simply "wing it" and make some $.
I had the opportunity to buy a 120,000 sf vacant wal-mart on 13 acres for $600,000 to convert to storage, and I passed because the market was bad.
This 10,000 sf building on 9 acres would seem over priced if we were comparing apples to apples. but some markets command $1,000,000 per acre, and many Self storage Developers will snatch them up and do quite well.
You don't know until you get some industry experts involved to get you the correct Data.
Thanks for your reponse Scott! We'll see how it works out!
Kelsey, are you asking about converting or what questions to ask about an assisted living? I was a real estate analyst and appraiser for senior housing properties so I know quite a bit about them.
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