Can you BRRRR a Self Storage Facility?

Question

Are there any big similarities or differences compared residential BRRRRing?

Has anybody used this BRRRR cash out strategy to buy more self storage properties as it can be done with residential?

I know the rehab "R" would be more like getting more storage units rented or increasing the rents rather then fixing up the property, even though you could do that too.

Specifically hows the financing, how do they appraise after the '"rehab," and do banks lend about 70% of the ARV as they do on residential properties?

Wendy Carpenter · Answer

I am doing a self storage BRRR right now! Increased rents and decreased costs! Going well so far!

Michael Wagner · Answer

Yes, the concepts definitely transfer. Of course there are industry specific differences but this is exactly what I have been doing for the last 7 or 8 years. We buy them at 50% full, fill them up and then refi to expand if demand allows it. One risk is that you could end up investing yourself into a JOB if you don't stuctire the day to day operations properly!

Mike

Milton Rivera · Answer

@Nicholas Lohr

I highly recommend you listen to BP Podcast episode 286 from a couple of weeks ago.

The bottom line, storage facilities are valued like commercial properties and not single family residences.  If you improve the property, say you go from a regular property to a temperature control unit, this will allow you to increase the monthly rents and hence drive up your revenue.

Jameson Sullivan · Answer

It's probably more simple to BRRRR an asset that is valued based on income than it is to do it with a single family home honestly.

Can you BRRRR a Self Storage Facility?

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