Thread by @sweatystartup

I've analyzed 5+ self storage deals per week for years.

At this point I need two metrics and 3 mins on Google Maps:

Asking $
Revenue per month

If its >20k square feet and AP is less than 90x R/M its time to dig in and take it all the way through underwriting / market analysis

Another way:

Asking Price per rentable square foot of property
Rental rate for 10x10

You can use the rental rate per year and compare that to the asking price and get a VERY good idea of what your returns are going to be.

This is simply my smell test.

If it passes, I dig in and figure out:

-How much I can raise rents
-What my unlevered yield (CAP rate) will be first year
-What my expenses would be
-What the value will be at 18 mo when I get it stabilized

And I use that to figure out what my returns on my cash and for my LPs would be in the following scenarios:

Interest rates go up and we hold for a long time

Environment stays the same and we can ReFi at 18 mo when I get it stabilized with a great trailing 12 mo history.

I've made great money buying smaller facilities (under 20k SF) because larger investors wouldn't mess with them.

Here is an example:

Unfortunately we're now large enough that a 10k SF facility isn't worth the brain damage to close and set up operations.

But if you have a few hundred K sitting around and are interested in self storage...

The smaller facilities in small towns are THE place to find great returns without risking the farm.

Let me know if I can help you analyze a deal!

There are more deals than there are buyers out there.

Thousands of mom and pop facilities for sale drawing no interest from the big REITS.

We closed on two facilities in the last 3 mo and we have 8 more ($17MM) under contract right now just in NY and PA.

My plate is FULL.

Three months ago I had the capital and was limited by deals.

Now we have the deals and are on the hunt for LP capital.

The pendulum swings and its a tough balancing act at any given time.

Gotta eat when the food is on the table!