My Self-Storage Investment Journey - Follow Along!

[BizyDad]

I appreciate the consistency in posting. Now following with interest.

 

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[amcg88]

Today, I pulled more facility mailing addresses and thought about offer types and amounts I want to offer the one owner. I am almost done with my research there.

 

[amcg88]

Yesterday I looked up more facilities. I also talked to someone who received a mailer but does not run a storage facility (the building is used for something else). My search method is not 100% precise, so I am bound to mail a few non storage facilities which have similar use codes & look similar on google maps.

 

[amcg88]

I just researched more facilities today, will order a mailer tomorrow. I came to what I want to offer the one seller and plan on contacting him tomorrow.

 

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[amcg88]

• I pulled data for more facilities today.
• I ordered another mailer for the facilities pulled this past week.
• I sent my offer to the one potential seller.

 

[BizyDad]

Just curious, how much time a day are you devoting to these activities?

 

[WJK]

Just curious, how much time a day are you devoting to these activities?

That is a good question. He's been on his program for a while, and he's spent a lot of energy, time, and money on it. Early into his quest, I made some suggestions in this thread for other ways to locate and approach sellers. I usually use a multi-pronged campaign when I'm bird-dogging. I was concerned that he is soliciting a "no" answer. But, he has continued to put all his energy into this one program. So, I concluded he wasn't interested in trying some other approaches. I just hope he is successful. There are a lot of ways to skin this cat.

In his defense, he only has to get one yes to make it work. From his thread, I assume he is looking to make one buy rather a series of purchases. And he has been totally diligent about it.

 

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[amcg88]

Thank you all for the interest and suggestions. I am largely following the storage course and course community methods with my own twist. I spend maybe 1-2 hours every day on this. I am balancing this with my day job.

 

[amcg88]

• I pulled data for more WV facilities today
• I started the 2nd round of follow up calls to the first direct mail campaigns. I am calling any owner I was unable to directly speak with a few weeks back. I called six owners today. I spoke with one owner. He seemed annoyed with my call and abruptly told me to send an offer to his address, then hung up. To be honest, I think he was just trying to get me off the phone as soon as possible.
• I also emailed an owner who had reached out. On second glance, I think his facility is too small and I think he is an investor too (may be wrong about this). He is interested in buying more facilities. It could be a good opportunity to network.

 

[cornishpasty]

I really respect the hustle, keep going!

 

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[amcg88]

I finished pulling owner data for wv facilities and moved onto southern ny (non nyc, westchester, suffolk, etc.)

 

[amcg88]

• I am making my way through southern ny counties' facilities
• The one seller emailed me back regarding my offers. He wants the original asking price lol. I am thinking about my next move. The deal works at that price, I wanted to try and negotiate a bit though. From the feedback I have received from other investors, it's only a so-so deal which is actually fine with me.
• I did not do any follow up calls today due to being busy at my day job

 

[amcg88]

• I 2nd round follow up called 10 owners today. I spoke with one who was not interested in selling.
• I also pulled more upstate NY facility information

 

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[amcg88]

• I pulled more ny facility owner contact information, almost done with those along the pa border, may go deeper into the state or head west to ohio
• I 2nd round follow up called 10 owners. I actually spoke with 4-5 people (have not considered selling)
• I have been looking for comps on crexi and loopnet to see where the market is at for my one active deal, tough to find something same area and size.

 

[BizyDad]

I 2nd round follow up called 10 owners. I actually spoke with 4-5 people (have not considered selling)

Do you ask what their exit plan is? I find asking this way often gets more of an answer and tells you more about their overall mindset.

 

[amcg88]

Do you ask what their exit plan is? I find asking this way often gets more of an answer and tells you more about their overall mindset.

I ask "have you ever considered selling your storage facility?" I understand what you are saying, rephrasing it like that could give me more information, though I think all those people were hard no's regardless of the semantics.

 

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[amcg88]

• I finished the southern most ny counties and ordered a new mailer for ~150 facilities. again will move onto either north or into oh
• I also pulled for sale comps for the one deal. It was difficult to find something comparable in size and nearby. Based on the cap rates, it looks average compared to the most recently listed, better deals. I am concerned about potential capex with fencing, automated gate system, and gravel replacement. Some of the deals appear better in those regards. I need to think some more...

 

[amcg88]

• I decided to continue north into ny and pulled more county facility information
• I 2nd round follow up called 8 owners. I asked them what their exit plan is instead of my previous question (which I had changed at wjk's suggestion. though in hindsight I don't think I altered it enough). I talked to two owners who gave me more information than I think they would have if I used my previous questions. Still no though.

 

[cornishpasty]

• I decided to continue north into ny and pulled more county facility information
• I 2nd round follow up called 8 owners. I asked them what their exit plan is instead of my previous question (which I had changed at wjk's suggestion. though in hindsight I don't think I altered it enough). I talked to two owners who gave me more information than I think they would have if I used my previous questions. Still no though.

What is the main objection you’re getting at the minute?

 

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[Guest-5ty5s4]

Do you really want to buy a facility? What is your criteria? Are you stuck in analysis paralysis? Maybe you just need to find something decent and pull the trigger.

 

[amcg88]

What is the main objection you’re getting at the minute?

I think most people just like their business and don't want to sell it. I have had a couple people say they are going to pass it to their children and a couple say that maybe they would be interested in selling in the future but not now.

 

[amcg88]

Do you really want to buy a facility? What is your criteria? Are you stuck in analysis paralysis? Maybe you just need to find something decent and pull the trigger.

Yes, I do. I am looking for a relatively small facility, because I don't have a ton of money, within driving distance from me. I think I am a stuck a bit in analysis paralysis with the one potential deal I have.

 

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[Guest-5ty5s4]

Yes, I do. I am looking for a relatively small facility, because I don't have a ton of money, within driving distance from me. I think I am a stuck a bit in analysis paralysis with the one potential deal I have.

Have you spoken with an SBA advisor? They can help you structure the loan with just 10% down.

 

[amcg88]

Have you spoken with an SBA advisor? They can help you structure the loan with just 10% down.

I have not yet.

 

[amcg88]

• I pulled additional ny county facility data today.
• I did not make any calls because I was busy with my day job.
• I decided to kill my existing deal due to average price relative to the market but with high capex needed to make it hands off. Seller dug in on their initial price (probably talked to a broker and got that figure from him/her lol), so I don't think they are going to budge enough on price.

 

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[Two Dog]

One owner received my letter and called me because he had some interest in selling. His facility was too small to be of interest though. Positive sign still.

That's not a good way to think about RE opportunities. Be creative.

You've contacted 75+ owners and finally found one with some interest. At least run through a seller interview and financial analysis. You'll almost certainly get some useful information about why he/she might sell, leverage points for future offers and a bit of market pricing. That will all help you craft a better offer to other owners.

OFFER #1: Hey, I'm interested in buying your property. Please call me back.
OFFER #2: Our market analysis indicates your storage facility might be worth as much as $1.4M based on ________. If you're interested in a cash offer, please call me back to discuss in more detail.

Of course you're not actually offering any specific amount since you don't know enough about the property. The point is to initiate a dialog that helps you find additional leverage points for closing a deal. And then you stay in touch. And stay in touch. And stay in touch some more. Hopefully using some type of personalized FU system which could simply mean hiring someone to stay in touch or DIY if you're able to stay on top of things. It's a fantasy to make one cold call, find a killer deal and close on it. The reality is owner situations change constantly and consistent follow up keeps your name foremost when there's a potential buying opportunity.

As far as the one deal, look at ways of increasing cashflow and otherwise adding value for possibly flipping it.

• Maybe you can expand the facility.
• Maybe you can increase rents with facility upgrades.
• Maybe you increase revenue e.g. renters insurance, 24/7 video monitoring, climate control, special locks, automatic billing, moving services, packing materials, inexpensive retail space, vending machines.
• Maybe you can reduce the vacancy rate.
• Maybe you can flip the property (since it sounds like LOTS of investors might be interested).
• Maybe you can buy ABOVE market value w/seller financing coupled w/shared appreciation premium.
• Maybe you can open a nearby facility, move existing renters and CLOSE the first facility.

I'm assuming you know that tying up the property to work a deal requires very little cash, right? Good luck!

 

[amcg88]

• I pulled more NY county facility information today for my next mailer, to be ordered on the weekend
• I 2nd round follow up called 10 owners. I spoke with one owner who plans to keep it for income.

 

[amcg88]

• I pulled more NY county facility information today
• I 2nd round follow up called 10 owners. One is interested in selling her facility. It is small. At first glance though, there's potential for improvements. At the current rental rates, price asked is too high. I have to do more research on this one. She said she'd be interested in selling in a month as she is cleaning out the units that she is using herself. If I am interested, I would try to make a deal before then.

 

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[amcg88]

• I pulled more NY county facility information
• I 2nd round follow up called 10 owners today. One person hung up on me after I gave my opening spiel lol.
• I created a basic financial model for the deal from yesterday which looked okay. I also looked into fencing and gravel costs a bit. I will look at supply and demand and nearby facility rental rates tomorrow.

 

[amcg88]

• I ordered another mailer for ny counties, almost done and ready to move onto the next state. I skipped a bunch of southern ny counties bc i am not blackstone or whoever and can't afford to buy nyc facilities.
• I did more research on the one deal from this week, there seems to be more storage supply than demand in the area and I don't think I would be able to raise rates based on looking at one competitor. The owner has been storing a bunch of her own stuff in the units and is working on cleaning them out. Given my research, I am guessing she was unable to rent them. Combined with the small deal size, I am going to pass on this.