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  • #16
    Were in St. Charles, MO. And thanks for all this info, its alot to take in.

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    • #17
      Recommend you check out Loopnet Missouri Storage. Look at the RV/Boat facility for sale $945,000 in St Charles where your at.
      There is the 5 acre lot and then first right of refusal on another two acres. If you have already looked at it, lets look at it again with a different view.

      If you have already analyzed this property what were your figures and what did you come up with? If you haven't analyzed lets do a cost build up.


      Excel sheets not allowed to be attached. Just contact me.

      Cost approach: Take my project cost estimation and update the data based on your local info: Example;
      $250,000 5 acres level ground $50,000/acre
      $ 60,000 5 acres rock fill $12,000 per acre, levelled
      $ 40,000 5 acres fence
      $ 25,000 Automated gate
      $ 10,000 Saw something about electric fence
      $ 30,000 55 LED lights and lighting; w/ poles
      $ 30,000 Security system
      $ 25,000 Office/bathroom/storage
      $ 10,000 Misc equipment
      $480,000 Rough dirty estimate

      Revenue side:
      30 ft space is $50 with prepaid 6 month lease required. Use this as the average with 235 spaces at 90% occupancy:
      235 x $50 x 12 x .9= $126,900; validate against last 3 years, also current contracts. Challenge the rent rates with other places in the area.

      Expenses:
      Electric- LED, $1,500 per month est.
      Property Tax- should be low since no structures $4,000/yr
      Insurance- should be low since no structures $4,000/yr
      Mowing/spraying/maint- you, zero.
      Rock- $2,000 replacement per year

      Expense estimate: $28,000

      Revenue before income tax= Call it $100,000

      Finance example:
      SBA 20 year term
      10% down= $95,000
      Interest rate 3%; 20 years; $850,000
      Do loan amort calc

      Actually partner bank will do half of the above loan, with loan amort on 20 year with 10 year adjustment, then 5 year intervals.


      Lets say $55,000 P/I per year for 20 years. Interest on the participating bank will probably go up at year 10.


      Again all of these are quick numbers you need to validate:
      A. You have $100,000 cash flow before taxes; with $55,000 P/I per year.
      B. Your asset is basically non-depreciable, thus it keeps its physical value.
      C. Revenue is 6 month leases paid up front.

      Deal Points:
      1. Do a Stupid Money test. Look at zoning in the general area and see how likely someone else could build this same property and take your business.
      2. Talk with your Accountant. See if you can do an Asset purchase versus a business purchase. Break out all of the depreciable assets so you can do an early write off to get the tax advantage. Have the deal weigh higher towards the depreciable assets and away from the land.
      3. Ask the owner that part of the price is a 5 year "Non Compete" agreement. Again talk with your accountant on how this can be written off and to quantify.
      4. Check on flooding; ask the county emergency mgt and neighbors.
      5. Go through all of the items on my 101 Checklist.
      6. Again this is quick and dirty. There is a big gap between Cost and revenue. Validate this. If true, again do the Stupid money test, potentially you could build for cheaper.
      7. Even if you can build, rent up phase for RV/Boat/vehicles is slower than Storage units, especially with existing competition. It might be worth $100,000 cash per year to pay for an existing revenue stream.
      8. Don't get too greedy. If the Cash flow works, even if the cost build is a lot lower take it. Explain it to the person the price is high relative to the cost to build, and ask for $300,000 no interest payment in 5 years on the balance. See if this is allowed with the bank or SBA before you ask for.
      9. See what the two acre sales lot is going for. Possibly put Storage on it. Because of your existing Boat and RV storage; see if the city/county will allow you to do Cargo Containers. These are cheaper, no property tax, and can be written off quickly for tax advantage. Recommend you stay away from traditional storage, there is a lot of competition in the area, unless your physical area has little.
      10. See if zoned for storage units, both properties.
      11. The two acres says something about sales. Don't buy that business if you want to be hands off; just the asset.
      12. Negotiate for the name and web. This should help on google.
      13. Don't see them on Sparefoot. The extra % occupancy will be pure profit. I would actually go with higher rates on Sparefoot than your street rate.


      This is probably a faster deal than you would like to do. Deals die on the vine. See how long this has been listed on Loopnet. Probably the sales price is a little high compared to building it. Make them happy and yourselves, with the no interest loan facet. They aren't going to earn that much out in the market with the money now anyways.

      Good luck.

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      • #18
        I actually went out to that property and talked to the guy for a long time. Its a little more than we wanted to start with, but again, we dont know much about this whole world yet. Everything he did there was "old school". Payments had to be mailed or in-person. It definitely was under water in the flood of 93. Its flooded 2 times in 18 years according to him. There is a gate, which sometimes doesnt work properly. There is lighting, but the electric comes from the 2 acre property (which I believe is another $450K). theres also a couple cameras, but again, comes from the 2 acre property. The 2 acre property has a gravel lot, and a building with 3 garage stalls and an apartment above it. He lets people rent that lot for selling RVs and boats monthly. Noone occupies the apartment. There also an electric fence. He runs at about 75% capacity, which I think isnt great. He actually mentioned how theres a smaller self storage down the street, and the guy runs all of it all online, and is at %100, but lacks the "personal service" like it was a bad thing. Dont get me wrong, the guy was a good guy, but for the asking price and how its run now, could be ran WAY better. Ill look at all this info you all have graciously given, and try to make sense of it with my 2 favorite peeps, and see if its worth looking at again. This is so much great info, thank you all for helping us get started.

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        • #19
          The way he does six month paid up front contracts is great. Even after a flood he would get his customers back. Also due to the timing of the six months most of his customers will re up.

          Read my my post on Broader discussion on finance. Determine your initial investment number based on the type of financing you want

          If you decide not to proceed let me know. I have some other people looking for an investment like this.

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          • #20
            Just IMHO, never purchase a property that's flooded...especially in a small town. They will never forget which facility all of their belongings were ruined in and most likely will never trust the property again. Being from the coast of Texas and having been hit by several hurricanes, it's common for customers to ask if we've ever flooded. We can proudly say "No"...some will go on to tell us about the last facility they were at that flooded in Harvey, Ike, etc.

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            • #21
              I haven't read all that you've posted but I have worked with facilities that have had or added parking for RV's etc. I'm located in Central Florida where all of the retirees like to keep their comfortable toys comfortable. At one facility he was going to make the parking spaces on grass. NOT recommended. Grass grows over the tires and can rot the rubber if the vehicle isn't moved often. Grass invites ants and other bugs too which can get into the RV's. Not that bugs won't go in if they are on cement. Just have seen less of them on cement or macadam.

              Put as many spaces at an angle that you can. He also didn't want to have long spaces. There are Hundreds of people with RV's who pull another vehicle behind, a work trailer, a trailer for a boat, a boat, etc. So when you make up the RV spaces, make them so they have options.

              These will sound like a no-brainer, but they didn't think this all the way out until near the end.

              Back in - 40' with enough room ahead to get around other parked vehicles.
              Pull Through - now is this going to be a 40' space that pulls through or a 40' space with a 30' space for the other vehicle they are pulling behind?
              Are they going to have to back the RV to move that trailer into another space (not recommended as most are NOT professional drivers)?
              Make the pull through two-spaces two INDIVIDUAL rentals in case the customer gets rid of the pulled vehicle, or they don't have one.


              | | | | | | | |
              | | | | | | | |
              | | | | | | | |
              | | | | | | | | Regular RV space approximately 40' long
              | | | | | | | |
              | | | | | | | | Regular parking space approximately 20' long. Two individual rentals, two spaces but still able to pull an
              RV and it's pull behind into a space.

              When we made the spaces at a slight angle, we also made the driveway one direction to in and out so they had an oblong piece of land that had a directional sign leading them in and out so the angles weren't a difficulty for anyone. We made 130 spaces out of approximately 3 acres of land.

              Another recommendation is to have specific RV spaces that have some "luxury" items. Covered RV Spaces with A small locker with a small lock that has to be drilled out to remove where they can store things they need when they go on trips. (Like store keys to the house that they aren't using or store extra TP etc.) A post with electricity for the trickle charger for the RV, on the same post with a lock and key that is given to the renter of the space. So when they go on a trip, they can lock up the electricity and no one can use it while they are gone.

              A dump station, an RV cleaning area or vehicle wash, maybe have the information for an RV specialist who can be on call to make repairs on the property. Perhaps a small area for vending machines - such as a "break room" with vending machines selling RV items instead of them having to stop at Walmart or a Camping store, they can get it from your vending machines. Things such as tubes that get lost or split, Seals that are used, toilet paper, paper towels, and vending machines with sodas and snacks.

              Hope this helps!
              Last edited by Tall Terri; 20 August 2020, 02:22 PM.
              Throw kindness around like Confetti - But don't get glitter in your eyes!

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              • #22
                When you begin getting to the point of financing, find a bank that is familiar with storage, not just apartment financing. If you got the SBA route, get a bank that is very familiar with self-storage and the SBA so you can get accurate info on the SBA programs, terms, rates, etc.
                Terry Campbell
                General Manager - Self-Storage lending division
                Live Oak Bank
                704-437-4322
                [email protected]
                www.liveoakbank.com

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                • #23
                  Thank you for all the great info from your posts.

                  Clarkstoragellc - I would like to get the excel sheets you mentioned in your post if possible. My email address is [email protected]

                  thanks!
                  Joel/Kyra

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                  • #24
                    joellg will do

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                    • #25
                      joellg PM on the way

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