New Member here getting into Self Storage

Albany, New York
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New Member here getting into Self Storage

Jake Berger
Investor · Member since 2024 · 1 post · 2 votes

Hi everyone, my name is Jake, I just joined Bigger Pockets as I’m beginning my journey investing in self storage.

I currently work full time in NYC at a large institutional real estate investment manager ($33B AUM, primarily multifamily and industrial funds).

I’m 27 years old and want to start investing in some smaller deals of my own for additional income.

A buddy of mine from college who lives in Chicago bought a piece of land in rural IL, developed storage units, and now is close to saving them fully occupied. I kept up with him through every step of his process and am confident this is something I can and want to do myself.

Right now I’m underwriting markets within a 4-hour drive of NYC (most recently the Albany / up to Saratoga Springs area) and weighing whether to develop or to buy an existing, under-managed facility. Next step is to use a skip tracer in my chosen market and start calling property owners.

I joined BP to connect with people who have done this successfully. I’d love to hear from anyone who owns self storage in upstate NY or New England in general.

For those who are doing it, would you recommend a first-timer start with ground-up development or a value-add acquisition? I’m also open to any other tips or advice on how to proceed at the stage I’m currently at - I joined this forum to help keep my momentum going.

Thanks, look forward to hearing from anyone!

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  • Divin KanyamaBusiness Member
    Accountant · Seattle, WA · Member since 2025 · 371 posts · 138 votes
    1d

    Welcome, @Jake Berger . Your institutional underwriting background should translate well, but smaller self-storage deals often come down to very local demand, operations, and execution rather than the market-level story alone.

    For a first deal, I would generally lean toward a smaller value-add acquisition rather than ground-up development. An existing facility gives you real occupancy, rental, and expense history to underwrite, while still offering upside through better management, pricing, marketing, security, or unit mix. Development can produce strong returns, but it adds entitlement, construction, lease-up, and financing risk all at once—especially in markets where taxes, permitting, and contractor costs can materially change the numbers.

    Your outreach plan makes sense, but before calling owners, build a clear acquisition profile: target size, price range, occupancy level, acceptable competition, expansion potential, and the operational problems you can realistically solve. When evaluating a market, look beyond population growth and map existing supply, planned projects, street rates versus achieved rates, property taxes, visibility, access, and nearby demand drivers. Calling local managers, brokers, contractors, and zoning departments can reveal things that do not show up in a spreadsheet.

    I would also be careful not to let the four-hour radius become the only filter. A well-run facility farther away can be easier to own than a nearby property with weak systems or constant maintenance issues. If possible, analyze several acquisitions and development sites side by side, then pursue the deal structure where your capital, available time, and local operating support give you the widest margin for error. You are approaching it thoughtfully, and speaking directly with owners and operators should sharpen your buy box quickly.

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  • Kasing Ng
    Accountant · San Francisco, CA · Member since 2026 · 94 posts · 50 votes
    1d

    Hi Jake, welcome, and smart to be underwriting markets before you start calling owners.

    Whichever path you pick, the underwriting lines I would pressure-test hardest:

    Economic vs physical occupancy. Storage leans on "$1 first month" promos, so a facility at 90%+ physical can run a lot lower economic. Underwrite in-place economic rent, not the sign out front.

    Supply. This one is hard to say. Net rentable SF per capita in the 3-mile trade area is the number that makes or breaks rate growth (people benchmark it loosely around 7, and above that tends to be oversupplied). Check what's permitted or under construction nearby too, since storage overbuilds fast locally. 

    The value-add vs dev split itself. Value-add usually runs on ECRI (existing customer rate increases), occupancy, and ancillary income like tenant insurance, so pull apart how much of the seller's pro-forma is real versus already captured. Ground-up, you're underwriting a 3 to 4 year lease-up with concessions along the way, so you want a solid spread of yield on cost over the market cap rate to pay for that risk and timeline.

    On the tax side, two things first-timers often get backwards:

    Timing. On an acquisition you can run cost segregation right away and front-load a big depreciation deduction. Ground-up is the opposite. Costs capitalize during construction and depreciation doesn't start until the property is placed in service, so the benefit lands later.

    The bigger one: with a full-time W-2, those depreciation losses are very likely passive under Section 469 and can't offset your salary. Storage is generally treated as a rental activity, so it's passive unless you're a real estate professional, and you can't be one with a full-time job. The losses aren't lost, they suspend and release when you sell, but they probably won't shelter your income the way people assume going in.

    None of that is a reason not to do the deal. Just underwrite the economic occupancy and supply numbers hard, and model the after-tax picture both ways.

    (CPA and former CRE fund auditor. I am not an investor. General info, not advice on your specific situation.)

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  • Brad SeidBusiness Member
    Lender · Licensed in 28 States · Member since 2026 · 161 posts · 46 votes
    22h

    @Jake Berger Hey Jake, exciting to hear about your plans! Before jumping into development or an acquisition, it may be worth exploring your financing options to see what makes the most sense for your first deal. Feel free to reach out if you need help exploring lending options. Happy to connect!

    [email protected]248-408-3855
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  • Henry ClarkPro Member
    Developer · Member since 2020 · 4k+ posts · 4k+ votes
    20h

    OP do ground up.

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