All Forum Posts by: Michael Wagner

Add a new standard...you are free to update your policies as time progresses.  Is his car green? If so, ban tenants with green cars....car color is not a protected class....of course Im being ridiculous but the point is that you can deny someone for ANY reason that is not protected under law.  Perhaps your new policy prohibits you from renting to people who are known to be friends with any tenant who has caused you grief in the past?....

Could a bank ATM be an option.  We see small pads here advertised for such.  Its essentially a driveway with a curb and the bank puts up a stand alone ATM with a roof....

 Too small for storage.

That depends on a lot of things....

First, Is the mortgage assumable or would your name still be on it? I personally would not sell a house via allowing someone to take over the mortgage unless my name was removed from the note/mortgage.  

Second, Why are you selling? Does the transaction above accomplish that for you? 

Third, What's the house worth? Is it worth $178,000? More or less?

Fourth, Is there an indication that the house will be worth more or less 1, 3, 5 years from now?

Hope this gives you some things to think about as you make your decision.

Mike

That is certainly a complicated one!  Very interesting for sure.  From a self storage standpoint, the income to expense ratio is not inline with industry standards.  I would expect to see a 30-35% income to expense ratio rather than the 59% the owner shows.  Could be that other property expenses are lumped in with the storage? If these numbers are accurate, there could be quite a bit of room for improvement/value add.  Conversion of empty space is also a very cost effective way to expand.  Can be 30% of the cost to build from ground up.

Storage, not cell towers, is my area so take what the rest with a grain of salt.  My understanding is that the value of the cell tower lease has much more to do with the other terms of the lease.  Many providers are trying to renegotiate leases, or shopping any leases that expire soon.  How long is left on current lease? Also, sharing the rent with the current owner is an odd arrangement....is he doing the work to get it signed.  If so, then it might not be unreasonable, especially given his fair financing terms.  The only term I dont like is the pre-payment penalty.  Any chance of getting rid of that? Or at least making is a de-escalating penalty (5% in first two years, 4% in year 3-4, 3% in year 5-6, etc)?

 Wanted to throw my two cents in here....For me, it is storage all the way.  I started in Residential rentals (topped out at 31) and then transitioned to storage.  Currently own two facilities totaling roughly 50,000 square feet.  Have sold off many apartments (14 left).  Why?  Less headaches, more favorable legal treatment (liens and auctions vs. evictions), far better income to expense ratios, etc.  Check out my little blog here on BP for a mini primer on Storage if it is something you are interested in.  

Welcome @Anthony Griffin!

I think you will find the underlying financials in the Storage world to be VERY attractive.  It might be a bit elementary for someone with your experience but check out my blog here on BP.  Its called "All Things Self Storage" and might be a good primer as you delve further into the industry.  Storage has been great to me and I hope it will be as good or better to you.

All the Best,

Mike

We got slammed too...not quite a bad as you guys but sure kept our plow guy running for days! 

Good Luck and don't hesitate to reach out if I can be of any assistance.

For indoor warehouse car/camper storage, it is customary to charge per foot for the season.  So 20$ per foot for a 20 foot long car would be $400 for the season.  For outdoor car and camper storage, its usually a flat fee.  Say $35 per month for anything under 20 feet and $50 per month for anything over 20 feet.

Is there a particular reason you have decided to move forward with a pole barn?  Without knowing your market, I can't say for sure if it is the right move but there would have to be a VERY compelling reason for me to put up a pole barn for seasonal winter storage rather than another traditional storage building that I could rent year around.  Another challencge with pole barn style storage is that the customers are packed in and the first one in has to tbe the last one out so move in and move outs are a logistical hassle.  

Owning a facility in Syracuse, with similar weather to yours, I can tell you that you are likely better off (if the market will support it) putting up your traditional storage building, doing outdoor storage for cars and campers on the empty gravel lot (instead of in a polebarn) and then putting up another traditional storage building sometime in the future if demand allows.  Why pay year round for an asset that only produces income in the winter months?

Hope that helps some,

Mike

Those are manufactured by Trachte Building Systems.  They are great but a bit more costly per square foot than traditional Trachte (build on site) buildings and they cannot be used to store cars etc because they are made with a sub floor rather than a concrete floor.  They do offer advantages though in that they are not fixed buildings so cannot be taxes as real estate by the municipality.  Also, they can often be placed on setbacks and easements because they are not permanent structures.

www.trachte.com for more info.  I work with Mike Larson but your representative will be based on your location.