All Forum Posts by: Mark Byrge

It is certainly not a passive investment however with the right systems in place it IS quite lucrative. I currently own three facilities ranging from 60 units to 124 units and spend maybe 4-6 hours per week dealing with oversight total. I have a call center take care of the renting (along with online portal) and then have a local person who we’ve trained to handle clean outs and simple maintenance. It’s far better income and less hassle than the SFH’s we have. I’d definitely shop around for your insurance as it seems quite high (however I’m in Michigan and we don’t see hurricanes very often here!) Good luck! I wish I had 10 more!

I recently spoke to my insurance agent about this very subject and he stated the figure $18-$20/linear foot installed.

I could not agree with you more Terry! I absolutely love self storage investing and recommend it to most everyone. I would venture to say that the same people who have issues with collecting rent on storage is going to have an even worse time in rental homes or apartments.

Another great source of FREE information is Mark Helm on youtube. There is no big sales pitches or hardsells  like you get with some of the others in this space, rather a pretty large selection of short videos on a wide selection of topics. 

I can say that I got into self storage 2 years ago by purchasing a small 60 unit that I happened to find listed incorrectly on the MLS. I was instantly hooked on it and have now purchased an 84 unit mid-year last year, and just closed on another 124 unit property at the end of January.

The first property I bought with a traditional commercial loan which I utilized some of my SFH rentals as collateral and was able to buy with 100% financing. While I do not recommend that for everyone, it allowed me to get into a space that I had long wanted to try.

The two most recent I have been able to work with the sellers and have purchased both with seller financing terms. I have found that all three of these have been the exact same scenario, in that the owners were all three in their late 60's-early 70's and ready to cash out and retire. None of them NEEDED the money and were more than happy to spread out the gains as well as still have a steady income coming in through the monthly payments. Don't be afraid to ask or you are guaranteed a "NO" for an answer! In fact, both of these properties I was able to get better interest rates that what I would have through the commercial banking loans. (4.5% and 4%) 

There are companies out there that you can setup your management software through as well as even managing all of your calls and rentals too. This has been a life changer for me! It has freed me of the chains of carrying 3 phones, as well as having the anxiety of worrying about "what if I miss a phone call". This is MUCH cheaper than having an onsite manager and seems to probably be more efficient as I have a "team" of people answering phones and they are trained to do this as their only job. This transition has allowed me to finally work ON the business instead of IN the business as so many of the books and "gurus" tell you to do.

To me, it's the best business to be in period. It's not completely passive, but it can be pretty low maintenance with the right automation investments.

Sorry for the book, there's just so much to love about this space.

Is there a reason that you have chosen those two cities specifically? Eastpointe and Warren can be excellent areas to invest as well for cash flow. Obviously you are not focusing on appreciation as much as you are cash flow, all of these areas are great areas for this. Pay close attention to basements in these areas as quite a few have foundation cracking issues. I would also suggest paying the extra money for a scope inspection of the main sewer lines. $120-$150 can save you thousands of dollars if there are drain issues. You can sometimes use this as a negotiation tool as well to get the price down if issues are found. Good luck!

Interested! I have two self storage facilities in Michigan. One has several acres of untouched land close to the interstate (I-94)

Originally posted by @Jeremiah T.:

Originally posted by @Mark Byrge:

I just purchased a storage facility that was managed by a residential property manager and I can tell you they ran it into the ground. The property is currently at 25% occupancy, the security gate was taken offline, and renters were basically squatters since rents weren’t being paid.

I guess my point is to stick to professionals that understand the niche. When I asked them why it was in the current state, they replied “well we only make $5/unit so it’s just not worth our time”.

 Was your upside strategy in this acquisition replacing the unprofessional management company with a self storage management company, a residential or a commercial management company?

 My plan is to put some improvements in place and run it remotely for the most part. I have upgraded the gating system to include keypad entry rather than RFID cards, have started integrating an online web portal for renting units as well as being able to do it over the phone. I have added video cameras onsite for security and being able to monitor the property from a distance, and then I have found a local handyman that is interested in learning the business to do the weekly maintenance, cleanouts, etc. 

Once the property is stabilized, I will reevaluate it at that time to see what my long term plan is. I have enough room on the property for expansion if and when the need arises which will further allow the potential for adding part-time and maybe full time onsite manager. It really depends on how the above experiment goes. The property is in a college town and I think I can market it in a way that the online capabilities will work. 85% of the people who call my other facilities seem to already know what they want without seeing the units, so even being able to rent them over the phone with electronic signing or even getting it scheduled and having the local guy meetup with the client should work for the majority.

The downsides are not having the ability to upsell or having a storefront in place for complimentary products and offerings, UHaul rentals, EBay sales, etc. is something that having an onsite presence in place can offer.

Just my $.02

I just purchased a storage facility that was managed by a residential property manager and I can tell you they ran it into the ground. The property is currently at 25% occupancy, the security gate was taken offline, and renters were basically squatters since rents weren’t being paid. I guess my point is to stick to professionals that understand the niche. When I asked them why it was in the current state, they replied “well we only make $5/unit so it’s just not worth our time”.

Scott Meyers has another academy coming up in January in Orlando. I just bought my second facility in Michigan. Looking forward to getting insights from a professional. Price is not outrageous and flights and rooms are reasonable too.

Why not do a hard money or private money loan? Or possibly setup a line of credit on the home instead of a refi?