All Forum Posts by: Michael Wagner

 Happy to chat storage anytime. I'm actually hosting a workshop locally in March. Shoot me a message if you are interested in that.

 I hope to be able to record the session and get it up online but I am still trying to put those pieces together.  Will keep you posted for sure!

Thanks for the interest,

Mike

What is the size of the vacant parcel?  Anything under 2 acres is pretty tight to set up a stand alone storage facility.  To give you an idea, you can probably build storage from ground up (assuming nothing crazy with the land...environmental, massive earth work, jungle, etc) for somewhere around $30 per square foot. Zoning is always a key factor too.

If "storage" is allowed as a primary use on that third parcel, it may be as an accessory use to the MF. You could combine the parcels and build garages that would be available only to the tenants of the MF?

 I will be there.  Also one night at SPAC...not sure which one yet.

 Look forward to seeing you there @Mark Updegraff. 

FYI- FFREIA members get in for $119!

As an aside....I saw the D and C article on you.  How's it feel to be famous? Also, don't work so damn hard! Perhaps you should take July 10th off and go to Syracuse!

 http://mcdc2.missouri.edu/websas/caps.html

Can work in 1, 2, 3, 4 or 5 mile radius from property. Only catch is you need longitude and latitude of the property.

Storage is AWESOME...I don't know anything about your market but I can tell you that as a general rule, Storage Facilities operate with a 30-35% operating expense. That means, if the Gross income of a facility is 1.2 Million, you are going to spend about $400,000 on day to day expenses. That will leave $800,000 to cover debt service and whatever is left after that would be your profit. Please keep in mind that these are hypothetical numbers based on industry standards. Anyways, if we assume a market cap rate of 10%...that NOI of $800,000 means the facility should be valued at $8 Million. Lets further assume that you bought such as facility with 25% down. A mortgage on $600,000 at 5.25% over 20 years would cost roughly $485,000 annually. SO, your $2,000,000 down payment yields you $315,000 in cash flow. Taking that alone, you have a very healthy cash on cash return. Factor in your principle pay down and the returns are even better. Conceptually you have discovered that Storage has STRONG underlying financials! Feel free to check out my blog here on BP for a few posts that might offer a bit more insight.

All the best,

Mike

 Have you looked at self storage as an assett class.  With the $1M you could invest, you'd easily be able to get into a facility large enough to achieve all that you stipulated as your goals.  You could probably get into something that would be lucrative enough to leave your job and still only require 10-20 hours of your work per week....(once you learn the industry of course but that doesn't take long.)

You've got what we call GREAT PROBLEMS TO HAVE RIGHT NOW.  Enjoy it and keep us posted on your progress.

Mike

 Hi Austin, Welcome to BP.  In order to be sure that other folks are made aware of your messages, use the @ symbol to tag folks like @Scott Speer. This way they will be notified of your mentioning them. 

As far as I know FFREIA meetings are not recorded.  Truth is, much of the value is the networking that occurs so a video would, while beneficial, leave you short changed. 

What areas of REI are you interested in?

Mike

Personally, I am inclined to use that money to purchase a self storage facility....it goes without saying that I would not just buy any facility.  I would need to find one that fit my buying criteria but from an investment standpoint, there is no better vehicle grow your money.  Self storage rents at the same price as apartments 9per square foot) but the expenses run only 30-35% whereas MF expense ratios are 50% or more.  Additionally, the legal system is set up to favor owners of storage facilities as opposed to being "tenant friendly" like it is in the world of habitational real estate.  These, among other reasons, are why storage is my go to.  As you said though, this is a very general question and depends on your goals!