New rentals are decent and move-outs have slowed. Strange considering it's one of my more podunk locations.
If rev flatlines @ $21k/mo, expenses kept to 30% (expect lower), it'll gen:
- $252k rev
- $176k net income
- $83k cash flow
- 35% cash on cash return
Yahtzee!
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Bought my 6th crappy storage property 6 months ago.
"Overpaid" at a face-melting 3.6% cap rate, watched 80 yr old seller laugh all the way to the bank, then went to work.
After shedding some blood, sweat, and a few tears, I'm now chuckling a bit too.
The story of
#6
:
⬇️
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Feb 2021: Get a State of Market email from a storage broker on my turf.
Resist delete reflex, instead respond: "Excellent report! If you ever have a super crappy one to sell, here's my crap-teria: ..."
Broker quickly responds: "Have I got a perfectly crappy one for you!"
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I'm kinda a connoisseur of crappy storage and this was one to behold:
- No books just tax returns
- $60k back rent, no lockouts/auctions
- cash/check only
- begrudgingly managed by extended fam
- burglarized weekly
- wrong name & address on Google
- units tracked by whiteboard
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Owner is an absentee 80 yo, 1600 miles away, husband built 30 yrs ago (RIP), local neph manages.
Books don't exist but I've got all I need with a unit mix.
Lick finger, raise to air, plug guesses into magic spreadsheet, make offer, negotiate, agree to $1.55m for 40k sq ft.
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100% occupied & rent roll of $15k/mo but lax collections means only ~$10k/mo was coming in.
Guessed I could get rev to $20k/mo if I:
- Raise rent
- Kick out deadbeats
- Backfill @ higher prices
- Require rent be paid
Results of my guesses below:
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I have some side cheese but don't have $1.55m laying around so I had to go find someone to lend it to me.
At this point, I'd financed 2 buys with Local Bank 1, 2 w/ Local Bank 2, and one with a seller.
Decided to introduce banks 1 & 2 to each other and let them duke it out.
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Bank 2 came out swinging:
SBA 7a loan: 10% down, 4.55%, 25 yr am, 10 yr adjust.
The catch: I had to refi the other 2 and move them from Bank 1.
They won. Refi'd the two, rate unchanged, pulled out a buncha cash, extended adjust to 10 yrs on both.
We're besties now.
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Ended up putting $234k of my own bags into the deal:
$155k down
$37k closing costs
$40k new gate/fence
$2k for signs
Closing statement in case you want to see the deets.
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Closed June, sent broker extra $2k thank you, cleaned house, now runs smooth as buttah and beating most of my guesses:
- Collected $21k in Dec
- Rent roll now $19k @ 90% occupancy
- Rolled out insurance, now generating $1800/mo
- Collecting $500-800/mo in fees from late payers
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If you like stories like this, hook me up with follow, RT the tweet below, or send a DM if that's your thing.
Bought my 6th crappy storage property 6 months ago.
"Overpaid" at a face-melting 3.6% cap rate, watched 80 yr old seller laugh all the way to the bank, then went to work.
After shedding some blood, sweat, and a few tears, I'm now chuckling a bit too.
The story of
#6
:
⬇️
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68
2K
15
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Refi'd $500k out of my house in Nov 21.
2 options to spend $:
A) Buy Addams Fam mansion for $2.2m, put another $500k into remodel, spend $100k+/yr to live in a baller pad
B) Buy my 5th crappy storage prop for $1.85m and add ~$100k/yr to cash flow
Which option did I choose?⬇️
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@mhprvpmvp
Bro, I checked your profile yesterday and it was so professional and even had your real name. Today, not so much.
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@SultanofStorage
My $0.02.
- Use a top tier management software with street rate management.
- Try hard to get tenants on CC autopay.
- Website with online move-ins.
- Implement auto-rent increases.
- Fair but strict auction timing.
- Every unit is cleaned and ready for re-rent within 2 days.
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