Posted by joe–ga on March 06, 2010 at 18:23:59:
got another friend who is an auctioneer.He contracts with large storage facilities to advertise and such to sell them.The owner STILL has to run them in the local paper to advertise the auction for non payment customers…
He takes a percentage of the sale price…Not sure what that price is, but he travels 3 states selling storage units…must be pretty good money
Your thoughts??? - Posted by Darrel F. Smith
Posted by Darrel F. Smith on February 25, 2010 at 19:28:12:
I have an appointment Monday to view a self storage facility that is for sale. This is what I know-----what do you think?
-Slightly over 200 units with 11 being Climate Controlled
-Possible gross income (all units full) $115,230
-Actual gross income (47% occupied) $54,159
-Expenses (nothing shown for management) $13,144
-Net Operating Income $41,015
Cap rate 9% Asking price $455,722
It appears that even with 53% vacancy the required debt could be serviced. That would mean most of the addition sales would be cash flow. Presently there is no advertising or promotion. The building are all in good condition and were built by Trachte. The facility is located in a small town with about 5000 people in the city proper and another 2000 nearby. The town has an unusual number of larger businesses for its size. There is a large construction project that will happen within the next few years.
First blush, what is your impression?
Darrel
Re: Your thoughts??? - Posted by Darrel F. Smith
Posted by Darrel F. Smith on February 28, 2010 at 20:47:16:
Thanks for your input! I had to cancel the meeting and will reschedule. I will post a report as to what I learn.
Thanks again
Darrel
I don’t think so! - Posted by Lin (NC)
Posted by Lin (NC) on February 26, 2010 at 08:14:49:
You’d be paying a premium for upside the current owner has not been able to realize.
It’s a whole lot harder to rent up than you’re imagining, particularly in this economy.
IMHO you can do much better than this.
You can give me a call if you want to discuss it. I have self storage, and one of the facilities is this size.
Lin
828-337-7730
Re: Your thoughts??? - Posted by shawn sisco
Posted by shawn sisco on February 25, 2010 at 21:07:44:
I think it is too small to support a manager, pay the
bills, pay for itself and pay you. Unless you see other
exit strategies that I’m not thinking of.
Re: Your thoughts??? - Posted by Bill - Tx
Posted by Bill - Tx on February 25, 2010 at 20:04:58:
What does the competition look like in the area? What is their vacancy rate?
With this facility alone means there is one storage unit for every 25 residents. That seems ridiculously low. I imagine there is a recommended range.
Re: I don’t think so! - Posted by joe–ga
Posted by joe–ga on March 06, 2010 at 18:19:46:
I have a friend who has about 200 storage units. YOu would think in the world of foreclosures people would be standing in line to get a warehouse, but he usually rents about 2 a month.in western atlanta
Re: Your thoughts??? - Posted by joe–ga
Posted by joe–ga on March 06, 2010 at 18:20:42:
I dont see it either…
Re: Your thoughts??? - Posted by Brenda (OH)
Posted by Brenda (OH) on February 25, 2010 at 20:27:39:
I was chatting with the manager of the storage business by the mobile home park office, and one cost you may need to look into is what is the process for legally getting rid of abandoned property.
For our county, She has to advertise in certain newspapers, have an auction for the stuff etc and in the area by the park, the stuff left behind is not nice enough to get hardly anyone to buy it at the auction and cover the costs…
and it is a variable cost… high in one quarter, low in another business quarter.
the other storage sites in their family business tend to have nicer stuff in them, and they get decent prices at auction.
just thought it might be a watch out, since the abandoned property regulations are going to be local and state specific.
Brenda (OH)