All Forum Posts by: Ronak Shah

Hello,

Self storage investing is something I am seriously considering currently.  Looks like there are few training options for self storage that I have come across.  There is Scott Meyer's self storage academy, there is Mark Helm's Creating Wealth Through Self Storage, there is Investorsinaction.com by Terri Garner and Alia Ott and I guess few others.

I am looking for feedback from anyone who has taken training from above or someone else and let me know the good, the bad and the ugly for driven and resourceful person.  I would like to know if the initial training actually is good enough to get great start in self storage investing or like many other gurus in other fields, you need to go to the mastermind or higher level training to succeed?

Any other helpful hints to make full use of time if attending academies will be appreciated.

Originally posted by @Luka Milicevic:

@Ronak Shah

So you've lost all your CF on your one paid off rental bc it is out of service/vacant.

One of your 10 rentals goes vacant, your other 9 are occupied. Your other 9 are now paying for the note on the one vacant one. You still net to zero. What if 2 are vacant?

 That is why you don’t stop at small number of doors so 1 or 2 or 5% vacancy doesn’t drown you!  There is no perfect solution and to each his own!

This was actually on the podcast that  @Brandon Turner and @David Greene did with newcomers recently.  Guest did get financing on $25k property from local bank.  Talk to local banks!

@Luka Milicevic Where is the diversification? If that one door with $1000 cash flow is vacant or gets out of service (vandalization, natural calamity, eminent domain, etc.) then you are losing all of the cash flow.

@Joshua A Fuhriman My friend has his own team in India that works as his virtual assistants and they do as they are instructed to (as part of his system), to do backend work but my friend is still face and sound of his platform in Baltimore. So I have seen some form of outsourcing (not just with flipping but rehabbing too) and it mIght work! However, if someone is offering all the pieces then one would wonder why won’t they do it by themselves as money is hardly ever a problem.

Another way would be to say the rent for entire duration is $11,400.  First Payment due on first full month is $1900 and rest to be paid on each subsequent 1st for next 10 months in the amount of $950.  I believe this is legal but if tenants in your area can’t afford this upfront 3.5 months rent (including security deposit) then look into that surety bond.

While I don't have rentals in NJ.  I heard about maximum security deposit of 1.5 months rent in NJ at a meetup last week from @Darren Sager.  However, also heard from @Jason Yarusi that he asks clients to buy surety bond when he can't charge security deposit so you can be creative in asking direct security deposit and then cover the rest with surety bond.  Disclaimer: I am not a lawyer and this advice is just my opinion and not legal advise.

Originally posted by @Rich Weese:

The last time I posted in this thread was in April of this year. In prior posts, I mentioned the lack of off setting depreciation for some of the cash flow was a negative for me. When my storage facility was purchased in 09, the occupancy was 55%. Location was fantastic, owners were at each other's throats, they weren't maintaining the appearance, etc. I realized it needed a facelift and some updating but 78,000 cars passed by every day. Once the overdue maintenance was completed, occupancy would rise but ongoing expenses would remain the same (same staff, utilities, yard care, security system, etc) and a much larger cash flow would occur.

We are now 87-88% range and more can be done by  someone more motivated. I have been an absentee owner that just looks at monthly reports!

The listing agent from my acquisition approached me with a buyer, but his price was unacceptable. He brought another interested party a week ago and we finalized a contract yesterday at approximately a 30% increase in price. 

After studying the return from ownership, I determined I can 1031 into approximately 10 million in apts, generate the same cash flow and return a great amount of offsetting depreciation. Using cost segregation up front, I should be able to generate enogh write off to cover all the net income PLUS cover some additional cash flow from other properties I own.

For me, it was a no brainer. More cash left in my pocket after paying taxes, as well as 3 times the asset value that hopefully would increase in value by the same appreciation %. The current property is free and clear and the new one would have  a loan. That is what makes the #'s so attractive.

This was my first entrance into Storage facilities and it has turned out well.

This is NOT a completed sale but looks strong and walk through is tomorrow.

Rich

 I see that you decided to go from SS into MF.  What is your take now after 4 years on SS vs MF?

Originally posted by @Scott Krone:

@Ilona Kovacs and @Mark L.  We are currently active in the self storage conversion market.  We convert under performing assets into self storage.  Would enjoy the opportunity to answer any questions you have.  www.codamg.com

 Is it conversion from warehouses or even apartments?

Hi Ruel,

Congrats on your first find! I hope you have done your ARV and rehab costs correct. I did a flip in Baltimore where we raised roof to make a large open space. Added lot of sq.ft. to the house. House was in nice area and was finished really nice and it was done with all my $. Had a hard time to sell it due to my partner listing it really high and then quickly dropping the prices which I guess made people think, let's just wait until it drops no more and needless to say there was hardly any return to talk about even though there was no debt service involved.

May be your experience will be different but be careful!