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Zombie units?

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  • #16
    We had the same issue of off the books units. Over lock everything without a rental agreement and wait for someone to come in and claim it. You can always ask a person coming in to claim the unit to describe the contents and have them prove they have the key to open it before having them sign a rental agreement. After about 6 months, any units that no one came in to claim, we auctioned on Storage Treasures.

    The former manager here was offering people cash under the table deals on units and pocketing the rent each month. As far as collecting rent, we gave customers the benefit of the doubt on any rent owed before we took over. Anyone that claimed they prepaid more than a month or so ahead needed to show proof that they paid.

    If you find keys in the office, you can always try them on the unknown units to see if there is actually something in there, or if the old company was just using it for work stuff. I found a couple here like that.
    A lack of planning on your part does not constitute an emergency on mine.

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    • #17
      Originally posted by Merman View Post
      We had the same issue of off the books units. Over lock everything without a rental agreement and wait for someone to come in and claim it. You can always ask a person coming in to claim the unit to describe the contents and have them prove they have the key to open it before having them sign a rental agreement. After about 6 months, any units that no one came in to claim, we auctioned on Storage Treasures.

      The former manager here was offering people cash under the table deals on units and pocketing the rent each month. As far as collecting rent, we gave customers the benefit of the doubt on any rent owed before we took over. Anyone that claimed they prepaid more than a month or so ahead needed to show proof that they paid.

      If you find keys in the office, you can always try them on the unknown units to see if there is actually something in there, or if the old company was just using it for work stuff. I found a couple here like that.
      That sounds like a good way to handle it.

      A different storage facility that I put on offer on a few years back wanted what seemed like way too much for the facility given the rental income. I was told the "official" income was low because they wanted to "save on taxes" by renting under the table.

      I'm glad I walked away from that one.






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      • #18
        Originally posted by Moonwatcher View Post

        That sounds like a good way to handle it.

        A different storage facility that I put on offer on a few years back wanted what seemed like way too much for the facility given the rental income. I was told the "official" income was low because they wanted to "save on taxes" by renting under the table.

        I'm glad I walked away from that one.





        Sounds like you dodged a bullet on that one. Telling perspective buyers that the property actually makes way more money and they've been committing tax fraud is a terrible way to earn trust and entice buyers. It could have been that they created a bunch of ghost units to inflate their occupancy and sell the property for more than it was worth.
        A lack of planning on your part does not constitute an emergency on mine.

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        • #19
          Sounds like the previous owner slapped locks on units to make it look more occupied than it actually was in order to increase the value. As the buyer you should have insisted on confirming contracts and vacant units prior to purchase.

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          • #20
            I wonder if the buyer can go back to the seller and rework some $$$ figures???
            Don't put off until tomorrow, what you can do today.

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            • #21
              Well, my red locks arrived today so I spent the afternoon slapping them on the zombie units, along with a note saying to call the facility immediately if this is your unit, otherwise in 30 days the lock will be cut and the contents disposed of.

              Now we wait, I suppose.

              I also bought some green locks to put on the unlocked, vacant units, so now (almost) every unit has a green lock, a red overlock, or a paying tenant.

              Originally posted by Grizz View Post
              Sounds like the previous owner slapped locks on units to make it look more occupied than it actually was in order to increase the value. As the buyer you should have insisted on confirming contracts and vacant units prior to purchase.
              That's a fair point. I would have bought it anyway despite the discrepancy (the asking price was well under its appraised value) but I suppose I could have had them do the lock-cutting instead of me.

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              • #22
                Just to offer an additional perspective.... It shouldn't have mattered how many units showed locks or how many were zombie or how much cash was collected under the table or who was pocketing something on the side. You should have set your purchase price purely on the cash flow proved by their books and verified by their monthly bank deposits. You shouldn't have cared less what their excuses were or what their claimed occupancy and income were. Only what they actually collected.

                I understand how the elderly get their property paid off and then stop accounting and things can get very sloppy and undervalued because that's the easy path. That's how things go for people in their eighties. I don't blame them for letting their property slide downhill because they couldn't keep up with it. They probably had a comfortable income and that was enough for them.

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                • #23
                  Originally posted by DairyGirl View Post
                  I find it odd (unlikely is more like it) the previous owners don't know anything about those units. Start by overlocking them. If those units have tenants, they'll contact you. Then you can have them sign leases and go from there. I'd wait at least 30 days, or however long your statutes say regarding sending lien notices for non-payment. Then, with a second person, start cutting locks. Some may be empty, others may have contents you could search for a potential tenant name. Are you a fenced/gated facility? If not, you may want to lock unrented units to keep "squatters" out.
                  This was going to be my suggestion as well, almost verbatim LOL.
                  Kristy Olney
                  Self Storage Ninja/Resident Manager
                  Stor-All Gardnerville
                  Gardnerville, NV
                  https://www.storall.biz/self-storage...le/industrial


                  “Should you find a wise critic to point out your faults, follow him as you would a guide to hidden treasure.” The Buddha

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                  • #24
                    Originally posted by Moonwatcher View Post
                    Well, my red locks arrived today so I spent the afternoon slapping them on the zombie units, along with a note saying to call the facility immediately if this is your unit, otherwise in 30 days the lock will be cut and the contents disposed of.

                    Now we wait, I suppose.

                    I also bought some green locks to put on the unlocked, vacant units, so now (almost) every unit has a green lock, a red overlock, or a paying tenant.



                    That's a fair point. I would have bought it anyway despite the discrepancy (the asking price was well under its appraised value) but I suppose I could have had them do the lock-cutting instead of me.
                    Good luck and please keep us posted!
                    Don't put off until tomorrow, what you can do today.

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