self storage advice

[Patrick H.]

Hello,  looking for advice on this deal.

 I'm under contract on a 250 unit self storage business that is 60% occupied.   Its in great shape, with all concrete drives in a non drive by location but with a in city limits location.   The town is over built on storage units.  I've found a second self storage business that isn't listed but for sale that is 15 older units in a great location with good drive by visibility.   Its 100% occupied and slightly under market on rents.   It should sell for around 60 to 70k. Asking price is 95k.   if I buy it  I'd like to think I could put up a sign and name it the same as the larger facilty and draw business to fill the vacant units.   It cash flows barely at 95k but it is older with gravel and would need new doors at some point.

What should I give for the second location of 15 units?

[Account Closed]

Originally posted by @Patrick H.:

Gave 346k for the business in Nov last year.  I'm not sure what the normal is for the industry.  My payment is 1800 a month.  The occupancy has climbed since last November because of my new management.  Prior years were at 55 to 60% occupancy.  Cash flow is fa-nominal!

If the occupancy rate is sustainable that might be great but being new to the self storage industry as you mentioned, it may be beneficial to get as much information about both the national and local self storage industry in regards to what is 'normal'. Many of the publicly traded self storage companies such as Public Storage, usually have a yearly 'annual report' to investors which usually may have quite a bit of insightful information especially regarding the industry and financial performance which you may use for comparative purposes.

https://investors.publicstorage.com/files/doc_fina...

http://www.google.com/finance?q=NYSE%3APSA&fstype=...