All Forum Posts by: Chris C.

OP noted they were a first time Self Storage investor.  In this climate with no expertise most banks will be hesitant to make them a loan or even in great times.  

I try to always say “Start small and Make Your Big Mistakes Early”.   Bankers like that too.   What they also like is straight line Cashflow and incremental risk management.

The good thing about cargo containers is:    
1.    You can add them incrementally.    
2.  You can sell them for very little loss.  Easy to sale.  They are very liquid.

3.  You can write them off in year one.

4.  Leadtime is days and not months to add.

5.  Not multi contractor specific.

Bad thing about cargo containers:

1.  They are Personal and not Real property.  They are movable.   Banks don’t like that.  They just need to put a lien on them.

2.  They are harder to open and close. Some people will not want to rent them.  Others will swear by them.

Banks love both incremental risk management and straight line cash flow.   Per month $1,000; $5,000; $10,000; $20,000; $30,000 per month positive Cashflow.  
Investors like that also plus the year one writeoff.  

OP can be up and running with $50,000.  Or he can try to get a loan for $2mm.

Head on over to @Michael Wagner's Storage Rebellion and watch his content. There are a few good Storage investing books on Amazon, grab those as well. 

@Henry Clark has put up a lot of information on his past experiences and deals on BP's forums. Follow him as well!

1.  Don’t buy. To high premiums.

2.  You’re in Texas, no zoning in the counties.

3.  Pick a county or area within 40 miles of you.  Something close enough for you to check in.

4.  Want you to look at county or city property tax sales.  Don’t go to auctions. Look for their off list properties.  If they want $25,000; offer them $5,000.   Send them a letter.  Do your due diligence on the property

5.  Look for 2 acres or more.  On or near road or crossroads.

 
6.    Look for property with electric high lines over a portion preferably. You can’t build under power lines.  Makes property cheaper.  You will “build” under them.

7.  You’re going to do two products.  20 foot cargo containers and surface parking.  Don’t do buildings unless you’re in a market where 10x20 are $130 or more.  Can make a profit at $90 but not good enough for risk reward.

8.  Read my post on setting up cargo containers and parking.

9.  Depending on market your will rent parking for $50 for a 30 foot space and $70 for a 40 foot space.  Put these on the other side from the containers.  As you rent the containers you will start getting rid of the parking.  

10.  You will buy Used containers around $2,300.  One trip around $2,900. Your catching and unusual moment in time.  These were twice this 2 years ago.  Buy these in quantities of 10 as you need them.

 11.  Rent them for $80 and $130 each.  They are 8x 20.  Similar to a 10 x 15.

12.  Spend $3,000 for a website.  Join sparefoot during your rent up phase.  Put a road sign up for $20,000.  Take the calls yourself.  If you need a different phone get an easy number.

13.  Lane prep, fence, security system, rock roads, etc.

14.  Texas has high property taxes.   No taxes on cargo containers

15.  Insure as Personal property. Use Ponderosa insurance.  Part of Uhaul.  All they do is self storage.

16. Use Webselfstorage management software. There are better software out there but this is the one you should start with.

17.  If you plan to keep do year one writeoff.  Containers, fences, roads, pads, security system, electrical, etc.  Don’t do if you plan to sell.  

18.  Run the numbers.  Validate all information

19.  Don’t trust anything I tell you.  Validate.

20.  If you do a 3 acre site, in 2 years you should have at least $1mm appraised equity.  
Think scaling.  Lot of opportunity in Texas.  In 5 years you want to have 10 of these locations.

Read my posts and vote for them if useful.   

Don’t contact me.

Start small and Make Your Big Mistakes Early.  

Looks like you're in Texas.  The greatest state in the United States for property tax sales.  No zoning out in the counties.

I would learn everything you can about property tax sales in Texas.  Just do Land only and not houses.  Learn how to develop, subdivide and flip land.  

Don't go to any tax sale auctions.  Buy directly from the courthouse office.

@Chris C., could be my personal experience, but I feel strip centers have been "hot" for a while. Specifically, necessity based retail.  

Retail, like all real estate and any business, has its own networks and nuances. To me the "hottest" play is the one you know.  

One thing that I didn't catch in this article: what happens to retail when you are in a recession?  A lot of the data seems to be backwards looking, with a little current day quotes.  Not to say this isn't a good sector.  I am an LP in a neighborhood center fund.  To be clear, I signed my commitment over a year ago.  To date, they have called about 30% of my commitment. 

I say this because: this isn't a 2023 hot trend.  This has been a popular asset class for several years now.  I still believe in the asset class, but there are a lot of nuanced risks.  Additionally, there has not been a lot of syndicators come up in this space, like multifamily and residential has seen with influencers peddling their master classes and consulting programs.

I am glad you shared. Again, while I work in multifamily and invest in it, I always like when posts are made like this reminding this community that there is more out there than buying a SFR, Airbnb or investing in a MF syndication.

Are they using the rental income as well and your DTI is still too high?

I'd just recommend to make sure they are calculating your DTI correctly or if there is anything you can update before you introduce another coborrower into the loan.