All Forum Posts by: Michael Wagner

@Mark Updegraff

Certainly an interesting proposal. Would certainly look closer at the opportunity to determine its feasibility. When can we do lunch?

@Dan Seavey ,

How's this coming along? We love follow up posts.

@Richard Mann ,

Any success to report? We love follow up posts

HI all,

I am experienced self storage owner looking to buy my next deal. Im in Western NY. Criteria's pretty simple...I will look at anything between Buffalo and Syracuse and Nationwide but must be larger to justify travel. anything in the $500K to 1M range. Im a value-add guy so distressed is fine. Turn key is also fine if theres room to expand or otherwise force appreciation. Keep me in mind if you run across anything. THanks!

@stephen turner,

I have some experience in the Storage World and I can recommend without hesitation that you give it a long serious look. It is a wonderful industry. I think the signature of this message should contain a link to a couple blog posts I put on here a few months back. Check those out for some preliminary information and feel free to reach out to me with any specific questions you might have. I love taking business!

Mike

@Dan Seavey ,

I wish I had a better answer for you but I recall you saying that friends and family were not an option for you. That is unfortunate as they can be a great source of funding. I'm afraid I would'nt have any other options to offer you other than to tell you to find the money. Can you do some wholesaling for a year to come up with the money? Even if this property still isn't around, you'll still have a bunch of cash to go to work with. Or perhaps you need to look at other deals...ones with owners who are more motivated and therefore willing to hold paper. Wish I could be more help.

Mike

@Derek Carroll - I'd love to get together for coffee or something. Always up to talk RE....

As for the 6 Cap, I wouldn't consider something in that range and after further investigation, neither would Dan. He had accidentally pulled debt service out of his Gross so he was working with an inaccurate NOI. UPon making this correction I think it came in at an 11 Cap or so.

Anyways,

My schedule is open most days except Monday. LEt me know when your schedule allows some coffee.

@Dan Seavey

My experience with SBA's loans has been overall pretty good but it is cumbersome...more so than typical bank loans. That being said, I believe 10% is the minimum down that you could realistically expect......

With the 10%, you will also need a POLISHED Business Plan to submit to the bank. I'm sure I have some that you could use to template from if you would like.

As for my comments about refinancing an SBA with another SBA, I was referring to a situation where you already own a facility with an SBA loan on it and are looking to refinance (to pull equity or fund expansion etc.). Most banks don't think that SBA loans are eligible to be refinanced with another SBA loan but as previously posted, this is not the case.

And please excuse the unsolicited interjection of advice but I have read your other storage related posts about this facility and I have to agree with Scott Meyers that 6% is not something to get too excited about. I understand that you are not in search of a windfall here but if you are borrowing close to 100% of the money at current SBA rates (5-6%) and are buying a facility that is valued at a 6 cap....won't you be lucky to break even each month? Given a 410K purchase price and a 6 Cap, that means the NOI on the facility is roughly 25K. A 369K loan at 5% over 25 years would require annual debt payments of $26K. This means your on the wrong side of zero.

For a leveraged facility to produce appreciable positive cash flow, you need the cap rate to exceed the interest rate on your debt. I say this not to be argumentative but just to bring your attention to the concerns that come with hefty leverage and low cap rates. As a buyer, if you and your subject property can survive the unbiased, third party assault of us on BP, you know you'll have a deal:)

Happy to answer any other questions you might have. Perhaps even connecting on the phone might be useful?

Mike

@Sandy P. ,

The 19th ward is technically the 14619 area code...that's where it gets its name. It borders 14611 and so some folks consider parts of 14611 as the 19th ward. It is in the southwest quadrant of Rochester across from the airport on the other side of interstate 390. It is also adjacent to U of R. THere is a well known new development at Brooks Landing which is the pride of that neighborhood. It used to be very ROUGH....but during the 1990s and 2000's there was a grass roots effort to "take the neighborhood" back from the gangs that had overrun it. IT was very successful and the area is now one of the most stable neighborhoods in Rochester. It houses about 10% of the cities population but only accounts for like 2% of the crime. I own 11 houses in or near the 19th ward. Hope some of that helps.

@Nate Miersma , Thanks for the kind words! Happy to share.