Wish me luck, I'm about to buy a mini warehouse complex!!

[YY1]

Seriously, the place I had my car stored at a couple of years ago.

I drove past it three times looking for a place to use before I noticed it was one. Poor sineage and disinterested management (could barely read the phone number).
While my car was there, I kept thinking "I bet this place goes up for sale cheap in a couple of years, and I sure would like to buy it".

Well this is the year!!

I've been running out of room, and thinking about adding on to my pole barn, when it hit me...why not invest in something where people will pay ME to have a storage space as well??

I found another property for sale near me, but while driving to look at it, saw the sign on "my" prpoerty and it hit me like a ton of bricks!

Seriously motivated seller, 70% occupancy of 24 units.

I threw out a low ball offer (75% of asking price) and it looks like they are accepting!!
It will cost a little less than my house did, and is less than the property appraser has it valued at.

If my calculations are correct, it's $50 a month in the red after income and expenses.

Who wouldn't pay $50 a month for a 7 car garage??

I've been doing all the research I can for the past week and I can't find any downside.

Not gonna make me a millionaire but will keep me from being a bag boy when I retire!

LLC, here I come!

 

[Meep-Meep]

I've had my eye out for a place the last few months and I've been going through the same thing as you. Calculations factoring in taxes and construction costs (because I will have to build a shop), mortgage percent, etc... I even made an excel spread sheet comparing my current situation to some properties I saw. Lot's of thinking for sure but it needs to be done. One place I looked at with a buddy is in a redevelopment zone. The house and shop won't be torn down but will be right next to all the action as the 700 unit development goes in. It may not be a bad idea for you to chat with the city planners to see what they have planned for that area. Because after all the city council mafia ultimately decides what you can do with the property that YOU buy and that YOU pay the taxes on. Your plan sounds good as long as no one stands in your way and I do wish you the best of luck.

 

[696pack]

I did a lot of reserach on this and can give you some figures on the industry.

My storage facility plan was foiled by the economy downturn.

I bought 6.24 acres with the intentions of a storage facility. I paid cash for the property, have a 798 credit score, $1.7 million in mortage free property to pledge as collateral, and an approved SBA package and no one would lend me the money to start up this new business.

Three years ago the national statisics on self storage were that they were 90% occupied within 3 years and remained that way. The average throughout the US was $125. per month for a 10' X 20' unit. Now prices and occupancy are both down due to the economy. Locally here in northern AZ. the occupancy is down to 70% in some facilities and a 10' X 20" rents for as low as $85. per month.

I had a GREAT plan to buy ISO containers which you can buy for way less than building perminate buildings, are much stronger, don't require a building permit as they are equipment, don't require a sprinkler system, don't raise the taxes on the property as buildings do.

Now, here is the best part. I was going to buy a hook loader truck that would pick up and move these containers so I could offer both on site storage or mobile storage. This same truck will pick up construction debris containers and dump them AND it will act as a tow vehicle with a 22' flat bed body that can be removed completely and automatically in seconds.

I was going to set it up with a tow driver and give him a big cut of the tow business and be at my disposal to move my containers when needed.

My property is now for sale as I have plans to liquidate and move out of the country for most of the year. I still have the package I developed for this project that I will share it with a buyer for the property.

 

[Ron 73]

With a 18x20 building i do wish i could do this. I do wish you luck and i agree with Meep, id suggest you do a serious appraisal of the building top to bottom inside and out. I have no way of knowing but if theres sewage and water involved, or just a park it leave it type thing, it would be good to check condition and any problems, I always think of taxes when it comes to these things and what you can do to keep then reasonable and yet make the place as attractive to people as it can be. You may be able to have a storage area above the main building if theres room enough and access (smaller items ex: car parts).. Just an idea there but theres so many other things you may be able to do depending on how its built. Again, Good luck!

 

['69Net]

Luck.......but if You can afford to do that You probably don't need need My luck wishes.....lol

 

[YY1]

Thannks, guys.

This is a pre-existing sturcture built in the late 70s-mid 80's on a 1/2 acre.
There are 10 22x24 units (all rented) three of which have long term tennants (one is an office with an existing business), 3 20x20 units, all of which are rented, and 10 10x20 units, three of which are rented. The 10x 20s are listed for $75 /mo, but I plan to drop that to $65, because 65x ANYTHING is better than 75 times ZERO.

The main issues are that there are two nearby facilities with better ammenities, and this facility's owner isn't actively participating in the management (he lives on the other side of the next city over).

I think a new sign with the posted rates, and a clearly visible phone number will help.
I think there is still a market for "simple" storage. ie, not climate controlled with wine storage capacity (LOL).

I've been to zoning, and all is good.

It's a simple operation that will hopefully give me a place to store some parts, and maybe a car or two, and also has good frontage on a medium density road, in case I want to sell a car.

Hopefully it will at least break even until it's paid off, and if I'm lucky, might make a buck or two.

I've also calculated that for each unit that gets rented beyond the current 70% level, if that rent income is applied to the mortgage, it will take one year off the term and save 1K in interest.

I'm by no means wealthy. We're talking about an under 100K deal here.
I'm just a big fan of efficiency, prudent use of funds, awareness of one's surroundings, and apparently I'm also a good amature bookkeeper.

On the really plus side, if the economy improves, I'll have bought "LOW", and it could be a cash cow, with some modest improvements.

 

[HEMI-ITIS]

Here on Long Island the storage biz exploded with NEW 4 story buildings built real nice,heated with rental trucks available to move your property in.They get some crazy rents,but people are paying the highrt rates for the local convience.
Hope it works for you!!Good luck:hello2:

 

[YY1]

Yep, there's a few of those around here as well.

As I said before, wine storage (??!!??), document storage, and moving services seem to be big trends.

Providing services and a reasonable guarantee of climate (especially in FL), opens you up to a whole new realm of liability, which I'm not even remotely interested in.

Thanks again for the good wishes.

I'll post some pics when the deal goes through- probably early to mid Feb.

 

[Budnicks]

Congrats, I wish you the best of luck, in your new venture... A little paint & GOOD signage will do wonders...

 

['69Net]

Thannks, guys.

This is a pre-existing sturcture built in the late 70s-mid 80's on a 1/2 acre.
There are 10 22x24 units (all rented) three of which have long term tennants (one is an office with an existing business), 3 20x20 units, all of which are rented, and 10 10x20 units, three of which are rented. The 10x 20s are listed for $75 /mo, but I plan to drop that to $65, because 65x ANYTHING is better than 75 times ZERO.

The main issues are that there are two nearby facilities with better ammenities, and this facility's owner isn't actively participating in the management (he lives on the other side of the next city over).

I think a new sign with the posted rates, and a clearly visible phone number will help.
I think there is still a market for "simple" storage. ie, not climate controlled with wine storage capacity (LOL).

I've been to zoning, and all is good.

It's a simple operation that will hopefully give me a place to store some parts, and maybe a car or two, and also has good frontage on a medium density road, in case I want to sell a car.

Hopefully it will at least break even until it's paid off, and if I'm lucky, might make a buck or two.

I've also calculated that for each unit that gets rented beyond the current 70% level, if that rent income is applied to the mortgage, it will take one year off the term and save 1K in interest.

I'm by no means wealthy. We're talking about an under 100K deal here.
I'm just a big fan of efficiency, prudent use of funds, awareness of one's surroundings, and apparently I'm also a good amature bookkeeper.

On the really plus side, if the economy improves, I'll have bought "LOW", and it could be a cash cow, with some modest improvements.

and "Under New Managment"...someplace on the sign or front fence..is good.

 

[68sportsatelliteragtop]

Good luck with your venture. Hope things work out for you. Wouldn't it be great if you could establish it as a place for car guys to store their projects and parts with maybe a few swap meet type events each year. You know like minded people having each others back!

 

[alleyoopmgv]

Good luck to you YY1! Hope it all works out good for you!

 

[YY1]

Good luck with your venture. Hope things work out for you. Wouldn't it be great if you could establish it as a place for car guys to store their projects and parts with maybe a few swap meet type events each year. You know like minded people having each others back!

I LIKE that!

I was just commenting to my wife that we could store "garage sale" items there, then just open the door to have the sale. ...and get the frontage exposure as a bonus.

 

[BIGSHCLUNK]

Good lick on your new venture. Being in business isnt always easy and isnt always fun. But once its paid its YOURS!

 

[Meep-Meep]

Since you will plan to store your cars and parts there my biggest concern is your tenants and their friends. All you need is one person with the wrong intentions to take interest in your stuff and then the fun begins. Be careful and good luck.

 

[YY1]

Yep, two biggest fears-

Liability (including theft/vandalism) and environmental.

I appreciate evryone's input.

It's certianly a been a learning experience so far.

 

[Cranky]

I always wanted to get a storage facility. My X didn't like the idea (but she didn't like anything I did) and after a divorce and getting remarried, it was out of the question until now. Now, I'm not sure I want the hassle but a storage facility seems like it's not much of a hassle. Also, I used them for years to store stuff that I didn't want to get rid of but didn't want in my way at home. I used to build a lot of different things so I had plenty of steel stored there for example. NOTHING of great value was ever kept there. A few project cars was also kept there and they were projects enough that no one wanted to steal them!

 

[68sportsatelliteragtop]

Yep, two biggest fears-

Liability (including theft/vandalism) and environmental.

I appreciate evryone's input.

It's certianly a been a learning experience so far.

Look into setting up an LLC to keep your assets separate from the corperations. For insurance check into an "Umberella" covers you in everything you do and cheaper then just increased liability coverage.

 

[cdr]

a freind of mine has some storage units in houston there are some problems,such as people breaking into & stealing,renters not paying on time,renters not opening the roll up doors all the way & backing anything taller than door is open that gets expensive to repair ,replace doors,it helps if you can hang garage doors yourself dont forget insurance people seem to be sue happy this day & age,not wanting to be negative just stating what by buddy is allways bitching about but if i could have bought them before he did knowing what i now know i would do it ck

 

[MarPar]

Nothing easy is ever worth it...the first year will be the toughest. lots of great suggestions from everybody here. UNDER NEW MANAGEMENT sign and some paint would do wonders!

Good Luck and Godspeed!!