All Forum Posts by: Henry Clark

@Bill Snyder

We use the same manufacturer.  Its a matter of timing on the order.  Prices have escalated with metal and production very quickly. Talking with our rep, the buildings we are getting in two weeks cost $528k, would be $763k today if ordered.  We ordered them earlier this spring.

Taking a pass on building in our lower rental price areas (10 x 20 for $65 per month), since economics and payback aren't there.  Have to really sharpen the pencil for our City locations where 10 x 20 is $130 per month.

Thanks for sharing.

SBA released the front 4 acres.  Won't get any building done this year, but starting to do planning.  Below is an engineering plat of the buildings we plan to do. 

The two long left to right building foot prints at the top are our 2nd phase of our self storage buildings.  Have decided to make the bottom one into Flex buildings.  45 deep x 25 wide.  12 x 14 tall doors.  Metal walk through door with window above.  Will have some electricity and individually metered.  No set parking out front.

The six square/rectangle buildings at the bottom will be the larger Flex buildings.  70x70 or 70x100.  Will divide.  At this time plan to use a building from Sukup.  My Electrician is also a rep for them.  Did some early quotes on different sizes and he was far less expensive than another company.  Buildings are comparable quality and this contractor has done significant work for me.  Will have water, sewer, electric. Stub out commode, bathroom sink, shop sink, coffee area sink and water.

Subject to cost estimates will probably build the long building above.  Then the first three buildings below, since this is a new market and product for me.  This will reduce the risk and anxiety as we rent up.

Have erected building quote, door quote ($10k per door, chain, insulated, installed.  Have 48 drive thru doors.  wow).  Getting concrete pad and roads, electrical, sewer, water.  The plan above has a lot of concrete driveway and parking.  Have to see if the numbers will allow.  Plan to give so many parking spots to the units, and then the rest have to be rented.  We have Location/Location.  The extra concrete driveways and parking should help set us apart.

As noted above, this 4 acres was appraised at $580,000.  Banker says this collateral is good for project up to $2mm.  So won't need to put any cash down.

Plan to go for a $1 per sqft/month.  They pay insurance (us additional insured), water, electric, maintenance.  Have to figure out if/what we do for deposit or early out charge.  3 to 5 year leases.  We will cover Property taxes, sewer, grounds keeping (very little other than snow removal).  Will split improvement costs with them (hvac, bathroom, offices, etc).  They must leave in place.

Have to get actual building prints to submit, along with engineering for Electric, water, sewer.  Want to get a Fire Marshall determination if Sprinklers are needed. 

We added more buildings from original layout.  Engineer said I need to dig out Storm pond 2 more feet.  Will do that in October.  Use for fill.

Google is building a really large distribution center 1 mile down the road.  See if that has any impact.

Don't make your CPA the trustee.  We have listed three individuals in order who will be our trustees.  If 1 can't do it, then 2,  then 3.  These are people who I trust.  Plus a Trust should be fairly explicit on how things get handled.  Our trustees have very little 
"decision making" to do.

Pick an attorney that specifically does trust and estate planning.  Not your local attorney.  Just ask your CPA's in the area, who they recommend.  This took about 6 meetings before we finalized everything.

You have to go based on your estate.  If simple, then just do a normal Will.  If complex then do a Trust.

Your $6k to $10k shouldn't be that much if the person has a large or complex estate. 

You know how your parents or old people always say I don't want to bother you?  Well dying without a Trust is a huge bother and will lead to a lot of family anger in most instances.

When we get to the end, don't think about buying and selling.  Think about offering them a Solution.  You need to develop a Solution packet.  We will get to that.

@Eric Douros

I don't do SFH or MFH. Do Self storage. But I see a lot of people who need storage.

Going to make you work for this, versus just telling you.

Give me three bullets why people don't want to sell?

Give me three bullets why people do want to sell?

Look up post "Self Storage- Setting up LLC"; Also "Self Storage- LLC operating agreement.

use the Search magnifying glass above.

@Jeff S.  Post I did on BP.  "Self Storage: So you just died, did you send everyone to hxxx?"

There was no reason, but the day I hit 30, I realized it was “ME”. Everyone around my family was doing fine, work was great, it was a nice day. Just for some reason, I realized I was the person in charge of my life. Its not like I all of a sudden matured. Paid my way thru college, top of the class, top 1% job, only got drunk twice in my life, etc, etc.

My realization was, I was it. Now I didn’t do anything with that thought. From that point on, until I was 50, I knew literally I could go through Mountains, jump over them, dig under them, go around them and stop Run away trains by hand. There was no obstacle in my life that I could not overcome.

And then it hit me. I ran into an obstacle, that I had no clue how to deal with, it could not exist (in my world), and the experts had no clue (from my point of view). No more Invincibility.

We are all at different points of our lives, perceptions of living into eternity, Invincibility, or just lack of thought on the subject. If your “there” and are aware of your lack of invincibility, please keep reading.

So you just Died. The following are actions not to put your Family through Hxxx. (Also Vendors, Customers, Bankers, employees)

A. “Will” or “Trust”?- Do you want things to go through Probate for several months or seamlessly go through a Trust with no stoppage in operations or control? Without a business, you might not care if your below a certain Dollar level or asset types that don’t deteriorate. Various discussion points- Bucket Trust, rename all of your assets to include the Trust, etc, talk with your attorney.

B. Power of Attorney- you can have this made specific to different aspects of your life. You may have a business partner who you want to be able to make decisions on your behalf for the Storage business, but have no say over your Personal life.

C. Bank Accounts “POD”- Payable on death, So you just died and who is going to pay the bills? This will automatically allow a person to access the funds and support the ongoing business. You probably have you and your spouse on the account already, so put somebody that is likely not traveling or living with you, in case both spouses pass at the same time.

D. Life insurance- not tax deductible, tax free proceeds. This is more about risk, comfort zone, lack of knowledge and stage of investment. With our fast growth we have taken loans out. All of the locations cash flow very well, so there really is no risk from losing a “wage earner”. It is more about taking pressure off the family members who will end up with the property. Also to cover any estate taxes or debt restructuring if they arise.

Where the major danger comes in, is if your in the middle of a development and your the main developer. The other family members only know how to run an existing facility. This is where you can lose a lot of money, if you have to sell the property and not complete the build out.

We identified three areas of risk and they are all on three different time tables. 1. Ongoing debt payments for existing units., 2. One location in Rent Up Phase., 3. One location in development phase and then Rent Up phase.

Per our advisor we took out three separate Term life policies. That way as the risk diminishes you can drop one policy at a time. If you had just one large policy covering all three risks, you would have to cancel a policy and renew. You have gotten older, any new health issues that arise, and the need to go through the review process again, may change your access and cost of an insurance renewal. Don’t get to exact figuring out your coverage needs, it is really cheap, go for the higher number.

E. Living Will; End of Life- This is more for applying medical treatment or not under certain circumstances to continue your life support, while you are incapacitated. Just added this so you have a complete package of estate issues. By this point you should not be in control of any business, unless you were incapacitated due to an accident or sudden medical issue.

F. Medical Power of Attorney- this allows someone to be in charge of your medical treatment if your incapacitated. Not so much a business impact, but wanted to keep the list complete.

G. Facilities Management- worst case, no one knows how to run or has the time to. Develop an “Info List” with all contacts and passwords. Identify ahead of time a Management company or local Realty company who you have vetted to manage the business. Have them identified on the list.

H. What does a storage facility look like 6 months after you have died? You go down to 70% occupancy from 95%. 40% of your customers are behind. Some customers haven’t paid in 6 months. No one can find the contracts. 5 of the units were yours. All of your systems are on paper and no one has kept up. Trash has been thrown over the back fence and the neighbors want it fixed. Weeds are everywhere. I come in and offer to pay 50% of the value. Ended up not buying your property. It takes about 3 to 4 months to get a location like this transitioned over to a management system and cleaned up, through auctions. Your investment value has greatly deteriorated since there was no transition plan.

So are you taking action; or are you sending everyone associated with you under the bus?

“Start small and Make Your Big Mistakes Early”

Got the gate operational. Had to plug some things in to get going.
I prefer to have all of our equipment the same, but for our two large locations we got two different sales people and two different Gate operators. Also one is your normal Black security fence and the other was required to be a Black Ornamental fence to match the neighboring apartment. This is our gate system with the ornamental fence. Gate motor/operator on the inside to the left.

Will compare this one to our older location. New/Old references.
New at the top is plastic. Take bolts off, then keylock at bottom, the silver circle.
Old second below is a substantial metal box, with hefty locking system.

The one on the left is the more Advanced model and the one on the right is the more durable exterior. Can't have both together.
Both have exterior "Reset" buttons on the outside. New- black slide at the bottom, inside switch. Old- exterior black button at the top, left of the L in Liftmaster. Hit these to turn off the machines to manually roll gate.

My finger at the bottom is pointing to sawn lines in the concrete. Had them put metal sensors to detect if vehicles are approaching the gate. This sensor can be used to stop the gate and make it reverse and/or open the gate without a keypad. We are just using it for the safety purpose. We require all renters to push a button to get out. The purpose is to get a Facial picture of them with the cameras behind the push button, and to also align the front of there car in a position for a License plate camera. The Second picture below, the dial I am pointing to, sets this feature.

The blue dial below sets how fast the gate opens and closes (cycles). We turned ours to 8 seconds. On the old model we have to have our Security person set it.

The Red dial below sets the speed of the gate as it either starts up or stops. Ours is set to have a Gentle Start and slow down. This makes for less jarring of the entire gate system.

Now some of you are thinking you don't need to know the above.  But if you are managing remotely or have an employee (who can leave); then you need to be able to operate.

Get good pictures.  Maybe do a youtube.

Our security person has to come and set the Open/Close times. We use 8 am to 9:15 pm.  Our close time is 9 but we added 15 minutes just because.  If we wanted to get techy, remember the metal sensors in the concrete.  We could have our security guy program the gate to open after 9PM if someone drives up on the "inside" of the fence and let them out.  But we want their picture and license plate.

Talk with your tax accountant. It is probably better for you to sell the original house so you don’t pay taxes on the increased equity if you sell in the future.  Ask them about 2 out of 5 years disposition. Your on a timeline. You will lose this opportunity if you wait to long.