All Forum Posts by: Henry Clark

Been running the Skidsteer spreading about 60 truckloads of dirt on our upcoming Contractor building location. One of the Bumps, made me think of Value Add as a topic. In between Breaks, kept jotting concepts down. Sure there are more, but this is a start.

Overview:

Operational:

A. Raise rents

B. Automate

C. Clean up, add features security, roads, etc.

D. Add services or products, Uhaul, Fedex mail drop,

E. Added land- add more units, unit mix, parking, Contractor buildings, etc.

F. Cost reductions- property tax, insurance, processing

G. Payment terms- autopay,

H. Customer upgrade- slow pay, problem, etc.

I. Occupancy%- Higher right?

J. Management

K. Marketing

Strategic:

L. Refinance terms, cash flow

M. Build more local locations

N. Buy out competition, value add

O. Control 60% pricing and distance

P. Common Systems and security

Q. Local Investor Ready

R. REIT Ready

S. Downgrade- Reverse 1031 or Syndication

T. Value Add Returns ($) and upside?

You just Died:

Not included is Controlled Climate and Multi Story business models not included.

Start small and Make Your Big Mistakes Early

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Operational:

A. Raise rents- won’t go into detail. Considerations are your occupancy, how much of the market you control, distance to next town or storage. If your Risk averse, you can do all new customers, certain sizes, across the board- In Iowa do this one in January- really cold/they will forget by spring. Someone is saying why not use a computer generated system. Not part of my business model. Some of our customers have rates from 6 years ago, value add for the next owner. Although we have increased rates on new customers. We have focused on Buying and Developing.

Impact? Lets use a country unit of $60. Break even to cover all costs and debt service we will say $30. Current cash flow is $30. You increase the rent $10, then you have a 33% increase in Cash flow and your margin just went from 50% (keep it simplified before taxes), to $40 / $70= 57%. We concentrate on Cash Flow/years of payback; if you do Cap rate, you can do the calc. Investment- none.

B. Automate- order online, Gates open/close, Security cameras, self service, autopay, actually saw a place last year that automated their snow removal when they build their driveways.

Impact? Reduces work load if you want to achieve no onsite Management. In a city lets say you have 300 units at $100 average. 12 months x $30,000= $360,000. Lets use $50,000 onsite management 7 days a week. This is $50,000/$360,000= (14%) margin impact. Another way to look at it takes 40 units at $1,200 annual gross to cover. Investment- website already would have online booking; Automated gates $25,000; Security cameras- we do 1 camera for 6 units plus about 10 at the entrance, say $40,000 for 200 units; Self service see our youtube, someone still has to clean out units and restock contracts/free locks, Autopay- part of software.

C. Clean up, add features security, roads, etc. Site dependent. Most of these are cost adders, to help with price increases and marketability.

D. Add services or products, Uhaul, Fedex mail drop. Site dependent and probably requires an onsite manager to justify.

Impact? Reduces net onsite management costs. We have 8 locations but only one with Uhaul. Population 10,000 and our revenue is about $6,000 without product sales.

E. Extra land- add more units, unit mix, parking, Contractor buildings, etc. Market dependent as to the impact.

Impact? Normally on our added units our break even is 35% occupancy. So this is very profitable. If you add more units, do an inventory of sizes in the market. One town in our area the two owners have about 400 units which are all 10x20. The market is saturated, but I would still build 30 wide units with a mix of 15/15 and 20/10 depths. They also built to the south due to easy zoning, but the population is north. There is properly zoned land in between these locations and the customers. Why haven’t we built there? Better opportunities elsewhere and this is 60 minutes away, outside of our 40 minute radius. Another town, the largest location has about 300 units. They are 4 miles out of town near no one. They have 160 acres extra. We are building in town. Understand your market, before utilizing the extra land.

F. Cost reductions- property tax, insurance, processing, electricity.

Impact?

- Property taxes is one of your highest costs with little recourse.

- If your adding more units up front, check on Zoning if Cargo Containers can be used. No property tax. You can write off in year one. This is covered by Personal and not property on your insurance coverage.

- Insurance is so small, as long as your with a Storage specific insurance carrier, your not going to find appreciable cost reductions. Example: On a $1mm location, your premium might be $2,500. Not worth shopping.

- Electricity- as you build or change out, go with LED. Will save you on both Electricity and Bulbs.

G. Payment terms- autopay debit/credit card or Bank ACH. Our last two locations we do autopay only.

Impact? Reduces workload (manually recording checks and money orders, life is tuff). This does a Credit filter on bad customers. Also reduces work load and “Check is in the Mail” phone calling. We do no phone calls, we just lock them out. Reduces work load on collections and the Auction process.

H. Customer upgrade- slow pay, problem, etc. When we had 100 units total, we would have 25 past due accounts at the beginning of the auction process, whittled down to about 8 auction units. We have an escalation process now, if you are a repeat offender. No late fees. Another value add for any future owner. We move your from Cash to auto pay. If you keep having issue, we increase your rent significantly, say from $60 to $80. If you don’t pay, we auction you and also evict you at the same time, even if you pay up.

Impact? Now we have around 1,300 units and have about 25 past dues and about 4 auction units. We could not have grown, nor would we have liked it. Why no late fees? Since we do a lot of autopay, we don’t want phone calls on billing questions. This offsets our management needs. My buddy gets about $1,500 per month in late fees and loves it. He also has his storage clerk sending out invoices, late notices, doing special billing and cash application.

I. Occupancy% Higher Right?- This is really about; do a market analysis (6/100), develop a marketing plan, competition, geography, road sign, website, Sparefoot, rate comparison, Office hours, gate hours, etc. Always remember its “One” contract at a time.

Impact? Before you buy, understand their Occupancy and Paying Occupancy. All of the above can be fixed except for Market. Even Market can be fixed if there are sufficient customers, then rate changes can be made.

Actually, I would reduce Occupancy right off the bat. See “H” above. Get the problem accounts out of the way up front, so your not looking over your shoulder.

J. Management- We are self service rental. Unless its timing, we never meet our customers coming or going during the rental process. A lot of operators like to “meet” their customers at these times, we don’t. As I’m walking the property, mowing, landscaping; I stop by and say hello.

Impact? When you pull up to a hamburger shop, you want your burger. You don’t want to meet the cook. This allows us to do self service, so you can rent a unit at that moment or when you want to. No meetings to set and miss. Plus with 8 locations spread over a 40 minute radius, we couldn’t meet. Not our business model.

K. Marketing- Road signs are the cheapest and best advertisement. However, people like to use their phones and computer to do comparison shopping. We will get an order from Sparefoot who we pay 1 ½ months rent per customer, when I know the person drives by our road sign every day. I love Sparefoot and Google. On Sparefoot you can see who is and isn’t using it. On google you can see who doesn’t use a website. Sparefoot you can do price comparisons. You can see if the competition is out of a size if they have it turned off. Also, like Bus Benches in our two city locations. See our next Post.

Impact? Although a high road count location is great, internet marketing is the king. We pay our SEO $1,500 per month. He at first wanted to get us to the top search location and I told him, that was not my objective. Wanted to be on the Google Map and be in the top three recommended on the map, which show up below the map. We can’t out SEO Sparefoot and the REITS. Even if we did, we would only show up once out of about 8 pages. Sparefoot has 4 search criteria and other than “distance” you can be number one in the other three, you just have to understand their measurements. Also when a customer does a self storage search, You tubes show up easily out of 8 pages. We did two you tubes and have worked them up on the google search.

Strategic:

L. Refinance terms, cash flow- 1. Refi and extend terms. Improve cash flow for more deals.; 2. All banks have Federally mandated Loan Cap rates. Identify what bank fits your long-term needs and can meet your loan requirements.; 3. If your in SBA, determine if you have enough equity and switch back to conventional and consolidate all of your loans. You will be giving up lower interest rates and longer fixed terms. This is more of a positioning move so you can do a quick sale.; 4. Or go into an SBA loan from a conventional for the lower rates and longer fixed terms. There is a time limit from original ownership to do this.

Impact? Looking for greater cash flow for future deals. You will pay for updated appraisals and any loan processing fees.

M. Build more local locations- Add them in a radius, so they can be sold as group. You will generally have three types of potential buyers. 1. Small single location buyer, 2. Large regional, 3. REIT. Although Building/Developing on our new locations is running a premium around 40% Appraisal over cost to build, this is separate than Value Add, so not delving into it here.

Impact?

Future Sale- If you buy stand alone locations of less than 300 units, you will primarily be only marketing to single local buyers. A large regional buyer won’t want to buy a 50 unit location, if that is their entire portfolio.

Current Operations- try to buy within the same town/location to gain price control. Shoot for 60% or more of market. Evaluate competitor extra ground to build and other land that could be developed into Storage. The less probable storage can be built, then the greater you can increase the price. Same thing with distance to the next town or facility. If you own the storage at the next town, say 5 miles away, then there is less chance of them leaving you. Reference back to the $10 rate hike in “A” above. You might say you already increased the rates in “A” from $60 to $70. Now that you control the market, move from $70 to $80.

Lets understand what the above dynamics mean. Lets say there is a competitor you want to buy and with this you achieve market dominance, or your already dominant. Competitor says they will sale 100 units for $500,000 and their market rate is $60 also. Say annual rental $63,000 at 90% occupancy. Operating income of $50,000 with no onsite management. You buy it and raise rates to the $70 or $80 level. At $70 you added $10k at 90% occupancy. At $80k its $18k. No additional investment, and cash flow increased an average of $20 per unit.

Generalization- We use a financial target of 8 to 12 year payback when doing evaluations. We do a break even analysis around 65% occupancy to cover all costs and debt/interest. Usually Debt service is about 35% points of the 65% points. If we are at 90% occupancy or 25% points more than break even. If we add another $20 rent on top of the original purchase level of $60 per unit, this is $20/$60= 33% added cash, but our added cash flow after break even 65% at an occupancy of 90%, actually $20 per unit on top of 35% x $60= approx $20. Or an added cash flow of 100%; current $20, plus additional $20 per unit before taxes. 100% cash flow increase above cost/debt Service at 90% occupancy.

N. Buy out competition, value add- See above. Don’t haggle. Make the deal. Your about to add an additional 100% profit potential to that location. See “M”.

O. Common Systems and security- This reduces management, which reduces your cost and increases cash flow and profit.

Impact? See “B” above.

P. Local Investor Ready- This is more about having systems in place, whereas a REIT will probably change the systems. Finance is also an issue, being flexible with close, payment terms, SBA loan, seller financing and possible 1031 by them.

Impact? Now that you have done all of the Value Adds, its time for the last one. When you go to sell, you want a premium on top of all the value add. You raised rents $10; you controlled local prices and raised $10, now when you sell get another $10 or more. Actually “more”. I might be greedy, but its a lot of work and risk. When we go to sale, we want “Cost” plus “Revenue Stream”. Why sell someone an asset the “Cost” will stay the same in the 10 years, forgetting inflation; with a “Revenue Stream” that will pay it off. Especially since “locations” will be harder to find.

Q. REIT Ready- Add onsite management facilities. Shoot for more than a 300 unit location in a city, versus small town.

R. Downgrade- Reverse 1031 or Syndication.- Say you have bought all of the locations you can handle. Have added all of the Value Add you can do. Everything is perfect. Now you have two value streams captured. 1. Increase cash flow from operations., 2. Increased embedded location “Added” value. To “realize” the embedded “Value Add” you would need to sale.

Impact? Your Bored. "BRRR" You have finally learned, executed and become efficient at all Value Add techniques and now that is worthless, because you can't do anymore deals. Although you have "2" above captured, your not generating anymore of this "Value Add" profit potential on your existing units. How do you "Cash Out" and start this all over again? You do the last "R". Talk with your RE Tax accountant and understand all of the angles, documentation, impact, etc.

Reverse 1031- you Buy, then Sell. Versus 1031 you Sell, then Buy. 1031’s have time limits on them. You don’t want to sell, then be forced to Buy in a short time frame. You would rather be forced to “Sell” in a short time frame since Self Storage is a hot commodity and can easily be sold in 90 to 180 days within 1031 guidelines (talk with your accountant). A problem with doing 1031 exchanges is finding the proper size deals. Example if you Sell a $5mm dollar operation, you might have to find 5 $1mm operations. That’s hard under a time constraint, and do they fit your above “Value Add” strategies? Its easier to buy 5 $1mm operations (buy options), and then be forced to sell your $5mm operation.

Syndication- No background in this. High level you might move your investment into a syndication and take cash off the deal up front, since you already have a packaged deal. This would be good for Financial Investors, who don't realize or care about the "Value Add" or BRRRR profit potentials. Basically take your "Value Add" profit out of the deal. Keep the revenue stream income embedded in the Syndication. Again talk with an experienced Syndicator and your RE Tax Accountant. This won't be your area of expertise.

S. Value Add Returns ($) and upside? If you have been aggressive be aware of any Depreciation recapture and tax impacts.

There are several types of revenue streams: 1. Developer- higher risk/higher reward/Strategic Site selection.; 2. Buy location.; 3. Marketing control market in the town and nearby.; 4. Value Add.; 5. Packaged locations.; 6. REIT ready in A/B market.

I would rank E- extra land first, then M/N (add more locations or buy locally) and then Developing as having the greatest impacts financially the quickest versus effort. All the rest should be worked on because they are easier and faster. They also reduce management needs, allowing you to scale faster and spend more time on Deals.

Side note:

You just Died: While you are doing all of this Fun work and adding value and wealth; this is the greatest time you, your family, vendors, financiers and customers are at risk. Read my post, “So you just Died”. Can you imagine having $150,000 in your company bank account with no access and your family and Contractors are having to take out loans to cover your debt? Realize your supposed to end on a Fun note, but the above was truly one of the most enjoyable exercises my Wife and I did. When you take care of this its full bore forward and your not looking over your shoulder.

Not included is Controlled Climate and Multi Story business models not included. I like to stay in my “lane”, plus you can beat that model with Drive up, non climate. If you truly deep dive above, you will realize there is far more profit potential, room for growth and less risk in the B/C/D property range.

Start small and Make Your Big Mistakes Early

Helping a person look at getting into the Storage business.

@???????    I'm going to back up the discussion a little versus just "getting" you a storage location. I'm going to take this post below and make it, its own post so more people can see.

1. I'm about to sell you something. You don't know me. We will never do business together. You will never pay me a dime. Thus I am about to sell you something which cost you nothing. The proverb, you get what you pay for. All things Self storage can be validated. Don't trust me. Go to seminars. Watch/read YouTube and books. Find a similar investor in another market with similar goals to converse with. Also I have never been 100% correct and when I am 100% correct, I'm still not correct. For example: I don't know your Risk tolerance, Financing, family or professional life, appetite for self storage long-term, appetite for change, "Control" appetite. Thus my approach is not your approach. What's in it for me? I enjoying sharing my experiences. Also it sharpens my thought process. Take what I give you, change it to your situations and make it your own.

2. Storage industry "generalization". Generally divided between Mom/Pop and REITS/Large regionals. About 70% of all locations are owned by Mom/Pop. About 60% of Value is owned by REITS/Large regionals.

- Mom/Pop tend to be drive up, not climate controlled, no onsite professional management and site is based on pre-existing land and convenience to the Mom/Pop and not the customer. Tend to only own one location, are unwilling to keep expanding, their objective was to just use up the extra land next to an existing business or house, and their kids will not come back to take over the business.

-REITS are typically climate controlled, multistory, onsite professional managed and site is Marketing selected. REITS tend to stay in large towns for economy of scale. REITS tend to be multistory because land cost is so high, you have to go up to make the numbers work. REITS are climate controlled because of their building structure. REITS tend to be 300 units or large to justify onsite Professional management. Due to there size they have strength in corporate management, financing, SEO, and investment diversification (if they own 50 to 1,000 locations, no one location knocks them out).

These are two totally different business models and products. Again, this is a "Generalization".

3. Start small and Make Your Big Mistakes Early. STEP 1. It is best for you to buy a pre-existing location of 25 up to 100 units. This way you only have to learn the operational side of storage. Later if you want to build then you can learn the development side. Not as overwhelming. A. Based on this I would go to all of your local locations near you of that size and make an offer. Keep "talking" with them every 6 months. B. I would also check your zoning and see where "Cargo Containers" are allowed. Then go look for the ugliest, cheapest location, preferably with a lot of concrete base or roads. Do one of these approaches. Even though option "B" is developing, its low risk and low input. You can always sell the ground and the containers; with minimal loss. You don't need to buy a lot of containers up front and you can always add. See my container post. Somewhere in Sydney is a nasty, old location.

4. Developing versus buying. STEP 2, start while doing STEP 1. Currently no one wants to sell storage because it cash flows and is a great investment and business model. We have three recent projects we are developing. Cost $1.5mm/$1.8mm/$2.5mm. Appraisal when full $2.4mm/$2.8mm/$3.7mm. You have a choice to "Buy" at the appraised value. Or develop at the "Cost" basis. At first it seems obvious you develop. But do you have the stomach, can you control the risk, developing will take about 3 years from seeking land to full occupancy thus lost cash flow, financing is tougher and fluid, Interest rates will be different in 3 years, etc. But by developing, you get to seek out under served markets. Out position Mom/Pop and REITS who built based on convenience and their business model. You have more location options and determine all things being equal, which location is the better investment. You have far more investment options than seeking out existing locations.

5. Baby Boomers. The majority of Mom/Pop locations are aging out over the next 10 years. Their kids won't be moving back to take over the business. Even if they don't know it, they need a "way out". You don't have to sell them on the idea, they and their families will come to a conclusion. You just want to be a solution. This is Australia where you are at. Be the next Sir Kidman (Nicole Kidman's relative). Instead of a cattle/sheep empire, build a Self Storage empire. Look at the strategies he used, they will apply to you. Yes, success breeds contempt.

6. Systems. Develop and document systems for buying, developing, financing, operations, and security.

7. Financing. Lay out ahead of time your path and deals. At some point you will run out of collateral or cash; and need to change your model. At some point you will reach enough is enough. At some point you will have to adapt your "Model" to align with new self storage, professional, family, etc goals. This is just like Software developing, your profession. Map out the path.

8. Failure. Understand what failure means in Self storage. "Generally" when we do a new location we build enough units for a "Break even" at 65% occupancy. This covers all costs, plus debt servicing. The next buildings only need 35% occupancy for breakeven since all of the fixed costs for fence, land, most of security/electrical, storm ponds, are already covered. On Phase 1, even if we "Fail" and only ever get to 65% occupancy we are building an asset base. On Phase 1 if we used the wrong market pricing and have to lower the pricing and our break even moves from 65% to 90%, again we are still building an asset base. On Phase 2 you either switch products to Contractor bays or sizes for a "different" market, even though its still a metal building. Or you add parking rental. Lets say none of the above work, you still win because you learn. As long as there is a large enough Market, you can always rent out 100%, thus you are never at risk of a total $0 loss. Remember the Mom/Pop and REIT models above. Mom/Pop usually only have one location, you want more. REITS have multiple locations, so one location is "averaged" out is it does poorly. Failure potential is the reason most people never get into RE or any business. Do the spreadsheet. Change the occupancy rates and pricing. Add and reduce costs. Get to know your Failure ranges on the deal your looking at. This will get you over the hump.

9. Value Add. I will do a separate post on Value Add options. This will also be part of your Site selection strategy. You really don't want to do one off locations, have a plan.


Now lets get back to you.

You have capital, in Sydney, RE prices are extremely high, software developer and have an online business.

-Since you have capital, its just a "sizing" exercise. If you had minimal capital, then I would do a Lease approach.
-Software developer, doesn't really matter your profession, just bring your experience whether it is a business person, contractor, accountant, SFH/MFH, sales person, etc. The only downside profession, I see is if your a pure "Financial" investor. But even that helps you out on the deal and financing end.
-Online business, you have had to structure and run a business.
- High RE prices, that is wonderful. Go back up to Sir Kidman and adapt strategies.

Again, I don't recommend you invest 1,000 miles away on your first go, or even later (read value add post).

Just in the Sydney area ( including 1 hour out), you have a lifetime of investments. You should be able to do 10/20/30 mm dollars of investments just in that area. If you develop a model, then take to other large cities. Your objective is to develop a system that is scalable, unless you just want one location. Read my site selection and "will they come" posts.

You said Sydney is really expensive, and I said that is wonderful. You have three options:

A. Do a perimeter approach. Take on all of the small towns or burbs surrounding Sydney. Normally your market area is 1 to 3 miles. Here you will be up to 10 miles. Be on the side facing Sydney. If RE is that high priced in Sydney, then it is hard to build, meaning a shortage of storage and more REIT models. Rents are extremely high, thus a good portion of the customers will drive farther for less rent and easy access. You will compete on 1/2 to 2/3 the price. Also you will be Drive up versus buggy/elevator. Buy or develop strategy.

B. Go Head to Head with REITS in the city limits. Don't recommend this. Even at $1mm per acre, you can make the numbers work. You won't have enough locations to average poor performance out, SEO strength or financing power.

C. Go UGLY. Check on zoning first. Look for the ugliest/nastiest piece of concrete in the city. Put Cargo containers on it. New developers hate old concrete because it costs to take it out, less buyers, lower price. With Cargo containers you love old concrete. Gives you a pad and roads, even if cracked and old. If you do asphalt, put plates under each corner.


Be flexible. Buy/develop/perimeter/Ugly etc. Start seeking all of them. Go with the deals that occur and if more than one deal, prioritize.

Actually, you do owe me something. Send a picture of something Australian on this post. Anything.


Start small and Make Your Big Mistakes Early.

This is my favorite of our 8 locations. Its our first one. 35 units and 40 cargo containers added later. Got flooded, but cleaned up and the Storage units are 100% full again. Just started to rent containers. Was going to sell them, if the market didn't come back. Flexibility.

@Jeff Ashachik

Not to dash a dream, but I would stay away from Belize, unless you have straight up cash in hand.

No US bank is going to loan in Belize.  You will need to collateralize with a US located asset, if you work with a US bank.

Covid.  This is the perfect time to buy in Belize since the Airbnb business is being hammered.  About 2/3 of the homes in Placencia on the coast are for sale.  A lot of UK and Canadian owners can't go there.  Plus low level of tourist.  Do you have the Cash to ride this out and take any future Covid hits?

Where are you wanting to invest?  If San Pedro on Ambergris Caye, I would really study the infrastructure (water/sewer).

Groundskeeper or Gated Condo.  The first consideration of any property, anywhere in Belize is security for the property.  You either must have a live on site groundskeeper, or be in a Patrolled Gated Community.

Real Estate Market.  

a.  There is no market in Belize for Real Estate. Do not plan on making money buying and selling.  Realize you are talking rental/vacation.  Belizeans don't have this kind of money.  A normal person makes maybe $40 Belize a day, which is USD $20.  So your market is another foreign investor.  Not that many people out there like that.  

b.  Vacation- lets say you have $250,000 for the condo.  At say 5% interest on $250,000 whether you are paying interest on a loan, or could have invested elsewhere, that is $12,500 per year.  For $5,000 per week, I can rent the "best" bnb house on the ocean side.  If I don't like that house or Belize, I can take my $12,500 somewhere else.  Change the figures as you see fit.  Point is, I wouldn't buy a Condo for a vacation spot in Belize.  Even if BNB.

c.  BNB- very little property tax in Belize.  Example on $1,000,000 property you might pay $200 per year.  Very little other cost other than the unit itself.  What is your breakeven in rental days?  Can you sustain no rent for a year depending on Covid.  To me at this time unless you have the cash to float, this is gambling.

d.  You still want to buy.  Then.  Remember CASH is KING in Belize.  You have to be more ruthless than ever in your life.  If they say $250k, you say $150k.  If they say Seller finance, you say interest only for 2 years while riding out Covid.  If they say 25% down, you say 15% down.  If they say 5 year balloon payment, you say 10 year.  Remember their money is tied up and Covid has nailed them.  Your helping them out.  They don't bite, go to the next Condo developer.  I would be looking for a Condo that has already been sold and the owner is selling.  Normally all the furniture, golf cart, bicycles, boats, etc go with the property.  Its not worth hauling back to the US/Canada/UK.  If you buy new imported furniture expect to pay 75% or more import tax.

e.  Buy what you can adjust, not what you want.  With the above approach, your not going to buy your perfect situation, your looking for a deal.  Buy what you can adjust later.  You hate the bathroom you can adjust.  You have to have a top floor, you cant adjust later, buy it.

f.  Realtors.  Working with a realtor tell them what your looking for.  Then tell them you want to look at their oldest listings first and in that order.  For "d" above to work, the owner has to have had there property on the market for 2 years or more.  They have to come to the realization, there is no market in Belize, and they will have to reduce their price.  Don't work with a NEW seller.  They haven't come to the realization, they have to take a shave.  You need to realize that already on the backend.

Remember the first consideration is a "Groundskeeper", otherwise your house will get stolen.  The first thing we did was to build a Groundskeeper's house, not in the picture.  This property which is 50 acres was on the market for 15 years.  They reduced the price by about half, then a year later, we offered about half of that.  The last thing we want is a 3 story house, but we adapted.  Entire third floor will be a Veranda.  Front of 1st and 2nd floors will be porches.

Belize is great.  Lobster season.  Lobster ceviche, cakes, quesadilla and tacos.

Go to the city Zoning department.  Or go on line.

You can also use a GIS tax map, and look up the ownership and zoning for the property.

Still talk with the Zoning department.  Tell them the property number and what you would like to do with the property.

Lets say it is not allowed.

Ask for their "future" zoning map and see if it is allowed.  Easier to get an approved zoning change or special use variance.

Also look at the existing zoning map, and see if any of the next door properties are zoned the way you need.  Then it is easier to either request a zoning change or special use variance.

Might not be your cup of tea, but rent a skidsteer with grapple hooks and a tooth bucket.  If bigger trees you can use a smaller front end excavator to dig around and push down.  Watch out for powerlines, next door neighbor houses and do an 811 underground locate.  This is actually a lot of fun.  These machines are all of the power you need.

Line up ahead of time either a dumpster of trucking company to haul away waste.

Just back from Belize. Some times you have to remember why your pushing and what Storage can do for you. Maracas in Orange Walk on the river. Its lobster season. These dishes are lobster. Ceviche, rolls, tacos and quesadillas. Actually didn't sell whole lobster.

​

Teak seedlings from last year are doing great. About 5 feet tall. Same as the replacement ones in the pickup, the original planting was I believe around October of last year. By December the old trees should be about 15 feet tall, from their current 5 feet. Had a historic flood last year due to two back to back hurricanes and killed about 2/3 of the seedlings, thus replacing.

Been moving ahead. Last two pad sites need to be poured. One is framed and will be ready next Wednesday. Then they will start the last pad. Road crew will come back and start paving around the pads.

For the city we broke this site into 3 Inspection or occupancy phases. Phase 1 is at 45% occupancy on 45 units. These are the small buildings at entrance. Phase 2 will have about 88 units, which are the two long buildings in the middle. Just need to finish electric next week and get inspection. Phase 3 which are the pad sites will have around 200 units. These pads should get finished in about 1 1/2 weeks. Then roads and run conduit under ground. Buildings are supposed to come in late August and start erecting Phase 3. Fence folks came out after they pulled off for 3 weeks and I told Sales person to set a meeting at their office so I could come yell in their faces in 2 hours. Original install was for December. Got a call 15 minutes later, saying team was coming out the next morning.

Continuing to work on sign. These blocks need to be cut down since they are supposed to be "staggered", but come in a perfect square. Thus the guys are measuring and cutting down. Told them $1,000 they can split versus per hour, to build sign base. Amazing how things get knocked out. Saves me cost and waiting on contractors.

To get Phase 2 inspected, we need to put up fire extinguishers. Had Fire marshal come out and pick locations for access and distance. Have about 15 of these to install. Just had our annual inspection at our other location for those extinguishers. Our security systems person also does extinguishers.

We do U-Haul at one of our 8 locations. Since we do self service Self Storage, it does not work to do U-Haul at all of our locations. There is a Self Service U-Haul option, but we don’t use.

The one location is about 2 miles away from our house. We started U-Haul at this location since the location was brand new and we wanted to “Stir the pot up”.

A. U-Haul, by itself is not worth it, unless you are there already.

B. Don't sell packaging unless you are onsite all of the time; not worth it. Although you can/will make 100% profit on these items, its not worth my time to meet someone.

C. There is no direct correlation between renting U-Hauls and renting Storage units. In 5 years, I know of about 4 of our Storage units rented due to our U-Haul rentals.

D. With the above said, I think U-Haul is great for Stirring the pot in public. If your by yourself with no other U-Haul location, then you are the "U-Haul" location that people mention and refer to. This sends people towards you, even if you don't know it was U-Haul related. At 90 to 95% capacity I would question doing U-Haul. I let my neighbor, “stay at home mom” take care of our U-Haul and she gets 100% of the income.

E. Financial- We are a small market of about 10,000 people. We average about $6,000 profit per year.

F. Headaches- people parking at the entrance, parking in the driveways, hitting bollards, bad reviews don’t flow over to Storage, etc. Out of vehicles, to many vehicles, etc.

G. Internet- U-Haul has great pull. As soon as you sign up with them, your at the tops in your local searches under U-Haul.

Summary:

U-Haul has a lot of negatives.

If I had a managed Self Storage location, I would definitely do U-Haul to offset the cost and to add value to the position.

For a new location, I would definitely do U-Haul. Gives you free advertising and “presence” immediately.

@Eddie L.  Please read my post;  Self Storage- new investors.  Good luck.

Remember in Texas counties there is no zoning.  All of your neighbors can do self storage and RV parking.  If in cities, check zoning.

@Stephen Cucc

I would develop around San Diego. Or any of those larger cities.

Get outside the city limits along major roads.

Find county or small town municipalities within 1 to 10 miles of the San Diego City limits.

Learn their zoning and zoning map.

Look for the biggest/nastiest piece of ground that you can bulldoze and flatten.  2 acres or greater.

Do two business models.  A.  They bring their stuff and store., B.  You have a depot in the larger town where they take their items to portable storage units and then you haul to your storage location.

Why would they go to small town USA 20 miles away?   Traditional Self Storage logic says your market is 1 to 3 miles.  Think about it.  Check your potential rental rates.  Storage availability.

Another option for land purchase is to find Railroad ground available for sale.  Look along the rail lines for suitable ground.  Ask them to sale.  Almost all RE people drive by this every day, not knowing it is for sale.  Don't worry it is zoned Residential.  If you find it, contact me and I will tell you how to get it re-zoned.

Remember the harder it is to find a location, the better investment it is.  Harder for competition to build next to you.

@Stephen Cucc

Most of that market is $5mm and up; controlled climate and your playing with the REITS.  As long as you have a strong RE and financial background; you might jump in the ring.  Usually I tell people to Start Small and Make Their Big Mistakes Early.

You might look back at some of the responses I have given around San Diego to get started.  There are several opportunities I would look at around there.