All Forum Posts by: Michael Wagner

I appreciate you asking.  Storage is still treating us VERY well.  We've sold some of our properties, kept some and keep buying more;) We've done well enough to now live on the road in our Camper 6 months per year;) I've don't know of any other asset class that matches the efficiency of self storage. 

I made the shift from small multi-families to self storage just about a decade ago and have never looked back.  Best decision I ever made.  For that reason, I'd encourage you to check it out!

You won't regret moving into the self storage space. I've focused on that solely since 2011 and it just keeps getting better (regardless of the greater "market" conditions!  Because success in storage is so dependent on "micro" market conditions, the national headlines mean very little to our success in this industry (assuming we do it right).

 Yes, the returns I have received in self storage have been 5-100 times better (that's not a typo) than when I was in residential rentals!

Self Storage Almanac is published by ministoragemessenger

I don't get hung up on the Cap Rate Spread...I can't spend CAP rate;)

What I am looking to do is make enough money to justify my time and energy invested.  Ideally I am looking to double the value of the property in 24-48 months.  

For me, the cap rate is not something I "look for" but is instead something I base my valuation on. I try to buy at or around a 10 CAP on existing 12 month trailing NOI but that rarely holds up on the properties we look at. They are so poorly performing that CAP rate falls apart....I then use what I know of the market and industry and make a best guess on a projected liquidation cap rate once I stabilize the property. Right now, we are selling properties in the 7.5 to 8 range in small tertiary markets which is clearly very good! Generally speaking 8-9 is more in line with how these properties would be valued historically. With all that we are improving the income/cash flow by turning the property around and also creating compounding equity by compressing the cap rate between purchase and sale!

I'm not a fan of CoC as it can "allow debt to make the deal". I prefer to look at Gross Rent Multiplier (of 4-5) as a way to "sniff" the deal and then use a cap rate based before and after valuation of the property to assess its merits. I'm probably the odd one out as I factor in Return on TIME Invested as highly (if not more than) Return on Money invested. Of course this is because I spearhead the acquisition and turnaround/deployment of remote management systems that ultimate handle the day to day operations.

As for specific values for each of the metrics you mention, that is going to be entirely dependent on the investor, their risk tolerances and security offered.  VERY generally speaking, we've had easy success raising debt from private investors in the 8-12% range depending on repayment terms and security/collateral position. Similarly, we target 16-22% projected returns for equity investors and often exceed those conservative estimates.

First of month because tracking anniversary dates is a nightmare! With first of month...all people are locked out  and officially late on the same day...with anniversary billing, you essentially have people that need to be locked out or notified of being late every day of the month. Super inefficient!