Hi - I'm about to sell one investment property to purchase others. I'm intrigued by the concept of self-storage facility investments. Ideally, I'd like to get my feet with by buying out a smaller mom and pop facility in the southern New England area.
Two challenges:
1. I'm looking in price range of $600-750k. All of the facilities I've seen listed are significantly more expensive.
2. I see very few listings on loopnet for self-storage facilities. I'm unsure if inventory is this low, or whether I'm not looking in the right place(s).
Looking for feedback on how on how to more effectively look for a foothold in this market. Thanks in advance!
Real Estate Investor · Grass Valley, CA · Member since 2014 · 124 posts · 85 votes
7y
Hi Tyler,
I've gotten most my best leads by sending out letters to property owners. Identify your area and search for properties that fit your criteria. Then send letters to the owners. My response rate is probably about 5%, if I had to guess. I once found a property through my banker, since he knows I invest in this space. I found another owner interested in selling as I was stopping in and renting a unit for my mother. Call your CPA, your insurance agent, your banker, and ask them if they know anyone who owns a SS and might be interested in selling. Loopnet, brokers, RE websites are great too. But you definitely need to cast a wide net, especially to find the better deals. Good luck!
Real Estate Investor · Grass Valley, CA · Member since 2014 · 124 posts · 85 votes
7y
Hi Tyler,
I've gotten most my best leads by sending out letters to property owners. Identify your area and search for properties that fit your criteria. Then send letters to the owners. My response rate is probably about 5%, if I had to guess. I once found a property through my banker, since he knows I invest in this space. I found another owner interested in selling as I was stopping in and renting a unit for my mother. Call your CPA, your insurance agent, your banker, and ask them if they know anyone who owns a SS and might be interested in selling. Loopnet, brokers, RE websites are great too. But you definitely need to cast a wide net, especially to find the better deals. Good luck!
Rental Property Investor · IN · Member since 2019 · 34 posts · 39 votes
7y
I invest in Self Storage. I agree with George Fitz. Send letters to the places you would like to purchase. Everything has a price. And self storage across the country is stupidly expensive right now. Good luck.
Specialist · Victor, NY · Member since 2013 · 823 posts · 844 votes
7y
You might find some value in two blog articles I wrote. They are published right here on BP. Here's a link to the first one. It will give you a bit more Insight into finding listed properties:
Investor · Fishers, IN · Member since 2012 · 520 posts · 499 votes
7y
I agree completely! Another thing to consider when it comes to price is to remember that many of the asking prices you'll see are filled with optimism and often based on bad numbers or advice. All too often, we see incorrect rent rolls, shoddy bookkeeping, and a variety of other factors impacting CAP rates and the reported NOI. When you get under those numbers, you have a clear understanding of the facility and can make a fiscally responsible offer, even if the asking price is lofty. More than a few times, this has still allowed us to close a deal favorable to us based on solid due diligence.
Specialist · Corry, PA · Member since 2015 · 75 posts · 67 votes
7y
Finding self storage deals to purchase is very difficult. I've been in the self storage business since 2011, but when I say self storage I mean the portable self storage business. I have gone from 4 portable units to now 84 units and I have been looking for facilities to purchase over all of those years but still haven't found the right fit. I will likely develop before I successfully purchase another facility. They are great businesses, so they just don't come up for sale very often and when they do they go for prices that don't make sense to me.
Investor · Bentonville, AR · Member since 2014 · 759 posts · 379 votes
7y
@Nick Heil Do you just have a lot with portable units? I have seen those become a lot more common. Have looked into getting one or two to fill some holes, but haven't pulled the trigger yet.
Specialist · Corry, PA · Member since 2015 · 75 posts · 67 votes
7y
Yes, I have two lots at this point actually. Most of my inventory stays out at customer locations, but I do have two lots to rent them onsite as traditional units and to park empties in between rents.
Yes, I have two lots at this point actually. Most of my inventory stays out at customer locations, but I do have two lots to rent them onsite as traditional units and to park empties in between rents.
What are they costing you to purchase and place on your lot? I'm assuming you have someone onsite/staff to haul and place them as well.