My Most Profitable Self Storage Investing Strategy (with numbers)
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- Опубліковано 1 гру 2022
- Investing in real estate has been often described with the phrase "high risk = high return."
You can buy a safe asset, but it might take forever for you to make up the cost in returns, or you can take a risk and do a development, renovation, or expansion and attempt to quickly multiply the property value.
But that always made me nervous.
In this video, we talk about one of my favorite strategies for achieving that high return while lowering the risk associated. It softens the blow of buying an investment that isn't generating income, and you can use it to target a specific market, maximizing returns.
We are currently performing this strategy on 8 self storage properties across the US, and we just keep coming back to it due to the built-in safety nets that don't compromise the prospect of high returns.
You can navigate each segment of this video with the chapter markers below. Save this video for your future reference if you found it helpful!
CHAPTERS
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0:01 The Idea
2:09 The Strategy
3:51 The Risk
5:01 The Numbers
7:27 The Expansion
8:40 The Why
9:52 The Market
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_______
📉 Want to take advantage of todays market conditions with us? Invest in our opportunistic Fund 2 Here: cedar.cc/invest
⭕️ Join my Inner Circle! An exclusive mastermind for real estate investors seeking the most advanced strategies and resources in the world for generating wealth and passive income through self storage investing. www.selfstorageincome.com/inn...
📘 Get a FREE copy of my best selling book "The Investors Guide to Growing Wealth in Self Storage"
www.selfstorageincome.com/
Thank you for sharing your knowledge and experience in the self-storage business!
Making money is an action. Keeping money is behavior. Growing money is knowledge.😊
Great quote
Rolls eyes
Well stated
Thanks for sharing AJ and Co.!
Great presentation and guidance is strong. I will share this
Great production on this video! I enjoy maximizing each property we acquire. I feel like that’s where I can become creative.
Thanks! It definitely is, especially when you can research during the acquisition phase and really identify weak/strong points
Awesome content as always, thank you.
Great video!!!!!!!!!
Awesome video team! Was the loan you obtained for the construction a construction specific loan or a refinance?
I actually work in the industry and visit multiple properties.
I may branch out on my own though.
Working in the field definitely gives you insight into the financials, legalities, etc.
It's NOT just a property that generates cash. You need to have the legal jargon down in order to operate successfully. Operating systems, insurance, utilities, property taxes.
It's a lot but it's fun to do if you're commited.
On point!
Very generic info that isn't dissimilar from any other business opp.
i love the chart system you tell us about numbers
@beyondAnydoubt1 - Glad you found it helpful! What other topics would you like us to discuss?
Thank you for the content!
Can you please make a video regarding the recent slow down. Whether that be the industry moving back to seasonal changes or something bigger.
We did! Here it is: ua-cam.com/video/Xd-eCkvSXPE/v-deo.htmlsi=QImn2NeXwaH97k7O
I can’t get my head around the valuations. If ultimate value is based on NOI, we’ll isnt any given value loosely goosey given there is no term (I presume) with month to month rentals? I mean I get it if your buying RE with weighted term. How would you value a property with zero income (theoretically)? Thanks!
AJ what is your take on purchasing a facility that has vacancy and room for expansion but is charging same current market rates as comparable facilities around it? Is this a red flag? Smaller facility in smaller town. Appreciate any feedback. Look forward to the Arizona deal. Merry Christmas to you and yours!
I'm curious, in the background there was a storage facility with red doors, is that yours too & if not how does being next door play into the financial competition part of things
Yup! I’ve got a land .off I-95 , work in progress
You made a cool video
I’m looking and trying to break into the storage game!
Hey @darnell1238 - thanks for the comment and congrats on starting your storage journey! Head over to my site www.selfstorageincome.com/ to get my free self-storage starter pack and join our free newsletters to keep your education journey going! 💪
Helful info! Jw why did you have to "kick out some"?
(Resulted in revenue drop) Ty!
Great question! It's that we are kicking out tenants that aren't making payments and raising prices can result in having to kick out more people. We may also need to ask people to relocate if we are doing extensive work on a facility. But it's worth it in the long run!
This is fantastic
@tomforstik4899 - glad it was helpful! What other topics would you like us to discuss?
Such an awesome video thank you. Also, is there anyway you could tell me what that software and screen is that you’re using? That is amazing.
Glad you enjoyed! Yes, that screen is a dell interactive display (about 60") and we just pulled up our internal spreadsheet via Excel. :D
@@SelfStorageIncome awesome thank you!!!
Amazing video
@wuziye7832 - thanks! What other topics would you like us to discuss?
@@SelfStorageIncome how about cost of building a self storage.
How did you raise revenue 28k a month without expansion after the initial purchase?
It makes sense that building more buildings on a property you already have is a good idea generally, but saying that this would not increase expenses seems wrong. Depreciation, property taxes, and insurance would all likely or certainly go up the more assets of this kind that you build on your property.
During Covid was this still a good business to do
We actually saw historical highs in occupancy during that time! So much so that it exacerbated the bubble forming as we came off the previous development cycle
so basically find a facility that is not meeting all the market demand and expand or even better find one that is not charging market rates on rents and increase the rates and expand.
Yes, in this example, they found a seriously mismanaged property, probably 40-50% under market rates, they expanded a lot, got it filled, and then double benefited with the run up in rates during/post COVID. It's a dream scenario. But the core concept here is correct, and very doable, just with smaller returns than the example that he gave. The method is legit, is less risky than a ground up development, and still has a lot of potential.
Why over complicate things?
Breaking bad Reference 2:15
I am the one who knocks
So you increased the rent by 3x at the very minimum. That's aggressive. And you used a reasonable Cap Rate of 5.5% for all your calculations
Its not unreasonable because its of how under the market the rents are currently. 5.5 is what we got for the financing and is above all sales comps in area. The numbers are not made up they are actual numbers. Other sites rent increases are less or more and cap rate calculations are less or higher.
@@SelfStorageIncome Thank you. I only found you yesterday and starting watching your videos from few years back. Good information!
that is no sense, if the owner is gifting you the vacant land, why he doesnt just subdivide and sell you just the income generating property at the exact same price. Are all sellers just that stupid?
Why do all you youtubers lie? Adding buildings does not all drop to the bottom line. Increased operating expenses for taxes, insurance, electric, and maintenance. It’s not huge, but why lie?