All Forum Posts by: Michael Wagner

 In my experience, hard copy advertising has not been hugely successful for me.  I would say 80% of my leads come from internet marketing.  I use google adwords express to drive traffic to my website.  I budget about $250 a month for that.  Also use craigslist and customer referrals.  If a current customer brings you a new customer you should pay them!!! And they should know this is your policy.  A cheap way to hit the apartments is to print up 1000 business cards for like $20 and have them printed to look like coupons for your facility.  Then ask property managers to distribute them to new move ins. People often dont realize that all thier stuff won't fit in the new apt. until after they are in.  Perfect time to give em a coupon:)

Look at Storagefront.com, usstoragesearch.com, and other storage aggregator sites.  I use the "pay per rental" options with them.  Also, emove.com for $5 per month also gets you dealer prices on uhaul boxes and locks plus reservations through thier system.

Lastly,

Are your rates too high?  Or do other facilities around you have better ammenities?  Do you need to pretty the place up at all?

Give us an update when you can!!

I'm sure that it is possible to find such partners but I would venture to guess that it won't be easy!  What size properties are you looking at.  Given your market I am guessing you are talking some pretty big dollars here.  If that's the case (and even if its not really) I would think you are going to need a polished presentation that highlights your experience, success and a detailed plan individual to the struggling subject property.  I feel like you will have much more success selling an individual deal than you will selling a general concept.  My advice would be to go find the deal, lock it up via an option or loose purchase contract and then shop for the money.  One question, how well run were your facilities when you inherited them.  Improving a well run facility is a bit different than overhauling a 50% occupied, facility requiring a lot of physical improvements.  Even if you haven't "overhauled" a facility before, you should consider preempting a potential investors objection by putting this out there upfront and addressing the concern before they bring it up (if this even applies, perhaps you overhauled the ones you have...all the better)

If you are willing to do all the work, there may very well be people that you can sell on the idea of putting up all the money.  It will come down to them believing in you and your deal and of course on you showing them a strong return for the risk taken.  You might also consider putting in 10-20% as a show of good faith and then recouping some of that in the form of management fees before profits are distributed....I have had success doing this.  I further increased thier comfort level by offering a preferred return.  Meaning they get X% paid on thier investment before my management fees come out and then any cashflow is divided as agreed.  This way they get paid first, then you, then you split whats left over...

Just some ideas.  Hope you will share any progress you make!

@Eric Busch 

Welcome. Check out my blog (link should be in my signature below) for some introductory information on self storage.  I am a huge proponent of it as it was what set me free from the J O B!!! Happy to answer any questions you have.

@Jon Klaus - Thank you. I perused your profile and it looks like you are making moves building houses! Impressive timeline!

@Patrick H. - I somehow have two BP accounts and responded to you under an old dated one.....in case you are interested, here is a link to the SS blog that I sometime update from my other active BP account:

http://www.biggerpockets.com/blogs/3915-all-things-self-storage

@George Fitz 

Yes I have just one employee.  And yes I pick up slack as needed.  She works 16 hours per week (8 of which she actually helps me with another business that I own). When she vacations, we just close the office with a sign on the door having folks call.  THe calls are forwarded to my cell phone and I can then move them in or assist them via remote log in to my office computer.  Pretty easy stuff!

Security is a concern but not one that should be seen as a deal breaker.  We have a perimeter fence, barbed wire, 17 cameras, electronic gait access.  For the most part this is to "keep up with the joneses" and impress the customer.  We have had one break in in the three years I have owned the facility and it was a hassle and headache but from a legal standpoint, I have no legal liability for the customers' belongings.  I did compensate some with a free month and a lock to replace the cut one but that was a business decision to prevent negative word of mouth.  We are in a quiet suburb....more urban areas with higher crime rates might call for additional measures but again, don't let this deter you.

Over the last three years we have averaged 8 NET move ins per month.  If I were to guess, I would say that we probably have 8 move outs and 16 move ins per month on average....roughly one move in/out per workday....this varies considerably where I live as we are most volatile from April to June and Sept. to Nov....Winter is slower (in and out) as is mid summer (vacationers?)

I started in landlording and trust me when I say if you can succeed there, you can EASILY succeed in storage. Income/Expense ratio is Way more favorable.....Does take a bit of more specialized knowledge of the local market but thats all easily learned.  Hope you find as much success in storage as I have.  It truly has been life changing.  Where on the east coast are you potentially moving?

Mike

@Bill Pederson ,

My first question for you is why can't you refinance your SBA loan? Is it an SBA 7A? IF your bank tells you you have a pre-payment penalty of 3% because you are in year two and that number is prohibitive for you, then that's one thing but if they are saying refinancing an SBA7A with another SBA 7A is "not allowed", well that is baloney. Its a common misconception out there though. I know because I was in your EXACT position last October and had 13 banks say no before number 14 said yes! We also scheduled it so the closing was 2 years and 1 day after my initial purchase thereby bringing the pre-payment penalty down to 1% instead of 3%. If your bank is "unwilling" to refi a SBA loan with another SBA loan, then simply apply for it with them and request a denial in writing. Then put the denial in your back pocket and shop your deal to other banks. Once you find a taker, they will need that denial letter on file to allow them to proceed. It can be done though. I realize that none of this addresses the fact that your current LTV might not provide enough room to pull capital but SBA can by regulation go 90% or beyond (though rare). HOpe some of this helps....Keep us posted!

@Jedd Braunwarth

You are right that there is some degree of hands on required to succeed in self storage but that is true of any investment. For the first two years after buying my facility, I ran it myself by commuting 60 miles each way 4-5 days per week. This was somewhat do to my OCD/type A personality but the facility was quite neglected when I took it over so it really needed some attention. I also added 10,000 sq. feet during that time so that required my attendance as well. That being said, for the last year, I have had a manger who works just 16 hours per week in the office plus 1-2 hours for appts. Total cost is less than $1000 per month including WC and disability etc....Small price to pay given that total revenue is $15,000 per month and I now visit the property 1-2 per month spending less than 20 hours per month "managing" this investment. I do move people in remotely when my manager is not available. I use Logmein.com and email paperwork to them, take payment over the phone and have locks hidden onsite so they can buy those too! Super easy. CHeck out my blog at the link below for a summary of my experience (if you havent already). Im happy to answer any other questions that havent been addressed yet.

@Andrew S. ,

Sorry for the delayed response...not sure how I missed this. My Storage facility is actually in Syracuse, I am only there a couple times per month but Id be happy to show you around if your schedule allows when I am there.

Mike

Hi,

I do some of this and simply use google to search out local storage facilities, weed out the REIT owned properties and then mail away. Also use state self storage association membership which can often be found on websites. Hope that's helpful. Please add me to your buyer's list for any that you intend to wholesale!

Mike

@Brandon Cooper , You can use the search feature to locate some good threads on this awesome niche market. Storage has been very good to me. You can also check out my blog for an account of my experiences if you think that would be enlightening.

@Anthony Martin ,

I am active in the Self- Storage niche and just wanted to clarify something I noticed in your post. You mention wanting to be passive and NNN in self storage. Storage is not typically a NNN set up (it could be if you master leased an entire facility to an operator and they handled the day to day but that is not cusomary in this space). Instead, the typical self storage arrangement involves an owner renting to hundreds of tenants at a rate that allows the owner to pay all expenses themselves....This is not to say that it can't be done relatively passively. I currently visit my facility 1-2 times per month and answer calls (after hours by choice:). SPend the rest of my time seeking the next deal. Self Storage is Great, I just wanted you to know that it does not inherently shield the owner from increases in tasex, insurance utility costs the way a NNN lease does.

As for getting started. My advice would be for you to call and have coffee with as many mom and pop owners as possible. You want to position yourself as the person they think of when they decide to sell sometime down the road. Also, find the time to connect with Storage Specific Brokers and make sure they know what you are looking for so that they can forward you any leads that meet your criteria.