If you want amazing storage facility deals, you have to drive for them. Driving for storage and talking directly to the owner are the best ways to get deals. Cold-calling is okay but if you want great deals, drive for storage. Just go to Google Maps and search for storage near you. Drive to them and talk to the owner. It’s that simple. Join Stacy Rossetti as she shares more on her latest storage deal and how she found it by driving. Learn how the deal went down and how much it was. Also, get a look at a new deal analyzer tool that can help you in your deals. Stop waiting around and start driving for deals.
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Why Driving For Storage Is So Critical For Finding Facilities
As I go through the process in this episode, I’m going to talk about the next storage facility that I purchased. I got this one owner-financed to me. We’ll talk about how we got the owner to owner-finance it. I’ll show you how I got the money for it. We’ll go through how I found it, how I funded it, and how we are running it now, and then we’ll go through the deal analyzer. In the last couple of Monday nights all the way through until the end of September 2022, I’m going through all twelve of the facilities that we own, how we find them, fund them, and run them. I’ll be showing you what we did.
Also, on top of that, I’m taking the numbers and putting them into our new deal analyzer. The deal analyzer that I’m going to present to you is for my students only. If you become a StorageNerd and you join StorageNerd over the course of the next couple of days, you will get access to this deal analyzer. A couple of people go and say, “How do I get access to the deal analyzer?” You have to be a student in StorageNerds. Make sure you get on my calendar because the doors are open from now until the next couple of weeks. There are a lot of people I got on my calendar. I do Tuesday, Wednesday, and Thursday calls.
There is a couple of more availability for Thursday. On Saturday or Sunday, I will open my calendar up again for Tuesday, Wednesday, and Thursday, and then that’s it. I’ll close my doors. Whoever wants to join can meet up and talk to me. We can go over whether or not it’s a good fit. Typically I take around twenty people because they require a lot of time. You have to remember that I have so many other students. I have my team as well. I try to only take so many people because I only have so much time. I’m the one that coaches and does this. In my coaching program, I’m the one that coaches.
This is not a coaching program where you get in, and then you can meet all my other coaches and stuff. I don’t do that because I want you guys to succeed and I want to work with you. That’s what I love because I’m a teacher. That’s what I want to do. I’m just letting you know that the doors are open. We’re now going to get into my next storage facility. For everybody new, we’re going to talk about the next facility that I have. I want to show you this facility. You can go to MsLillians.com. You can check out all my facilities. I say this quite often, but I want to let you all know that you can check them out.
The most stressful part about investing in real estate is going to the closing table.
For everybody that does not know me, up until this last facility that we just bought, I buy facilities that are worth $1 million or less. I focus on smaller facilities between 50 and 150 units that were severely mismanaged. When I say severely mismanaged, essentially, they weren’t getting the income they should have been getting, and they probably weren’t taken care of. They didn’t look nice. Mismanaged typically means that they weren’t getting the income that they were supposed to or they were not full. Mismanaged also means they’re not full. The vacancy rate is very important when you’re looking at a facility.
Ms. Lillian Self Storage
This particular facility that I bought was full when I bought it. I’m going to tell you about this one and how I found this. Ms. Lillian’s Self-Storage is the name of our storage facility. You could go there and look at all the facilities that we have. Essentially, this one is Franklin. It looks like a storage facility. Here’s our storage facility here so I can show you what it looks like. This building right here is one huge room. That’s 10 x 40. We rent this out to somebody. Over here are some smaller ones. It’s 3 or 4 different units, but they’re bigger units. When I talked to the owner, he was like, “I built this building so I can put all my stuff in it. That’s what I built it for, so I could have a storage facility. After a while, I moved it over to my barn and started renting this out.”
This is what it looks like. Here’s the funniest thing about this owner. The way that I found this storage facility, this is what it looks like. It looks like a storage facility. It’s got gravel. That’s a unit. That’s a 10 x 10. These over here looks like 5 x 10s. These are probably 10 x 10s or maybe 10 x 20s. Sometimes you can take the middle out or put the middle in. This is the big building that I was telling you about. Over here is a massive space that we’re renting out. There are two or three 10 x 30s.
I’ll show you in storage. You can come to Ms. Lillian’s, and then you can click on Georgia and then go to Franklin if you want to look at the pictures or whatever. This is our website. You can take a look at it. This website I told you about was created by our guy. He’s our Marketing Coach for StorageNerds. You’ll be able to meet him. He does everybody’s website for all the students. He comes in and teaches as well. When you come to our website and see Get Pricing, this typically means it’s full. What I wanted to show you is what it looks like inside storage.
Here’s the map. There’s Franklin. That’s the one that we have. This is where Atlanta is. This is how far it is. This is considered your tertiary market. Let’s search Ms. Lillian’s on Google Maps and see if it pops up. I’m not sure. This is Fayetteville, Fairburn. This one is Newnan, and this is Franklin. That’s how it looks. I told you all before that most likely we’re going to end up selling these four facilities as a portfolio. Our goal for the end of 2022 is to get these all ready so we can sell them. I bought Fayetteville first and then I started driving for storage.
Every single facility except for the one that I bought right up here where we’re at, I’ve found through driving for storage, except for one. One of them, one of my students found. I started driving this whole area. I talked to every single storage facility owner in the South Atlanta area. These are the ones that I picked up by doing that. How did I find this facility? I found this facility driving for storage and talking to the owners directly. That’s how I found them. Everybody always asks me how I find it. I just drive around. I use Google Maps and search Storage Near Me. I then call and talk to the owners. I either call or drive over.
Finding Deals By Driving For Storage
Let’s do Storage In This Area. I’ll get into Google Maps. Some of them come up. Here’s Greison Storage, Newnan Self Storage. If we get into Franklin, let’s see what it looks like. Franklin has a small population. It’s not very big, honestly. What’s the population of Franklin? It’s 1,000 people. It’s been steady going along. If you do a 25-mile radius of Franklin, there are about 25,000 people. I know this because we looked up the research. If you want to know how to do that, we just use Radius Plus. If you want to look up the demographics of a radius for storage, use Radius Plus. That’s what we use. We’ve already done this, and it costs money to do that. FYI, it’s not free. We know all the owners.
There are three storage facilities in town, and we all know each other. We’re all investors. One of the storage facility owners in town is one of the partners in StorSmart. It’s called the insurance company. I know him in the industry. He’s a nice guy. I went driving for storage. I was driving around, looking for storage, and talking to G&G and all these people. I happened to come across this one right here. I was driving down this road right here. I was coming into town, and I saw this storage facility. It’s up on a hill. I was like, “There’s a storage facility.” I couldn’t park in front of the stores because this goes up into a hill.
Vacancy rate is very important when you’re looking at a storage facility.
I didn’t come in and park. There’s a gate and stuff. I drove past it, and there was a sign. This is a sign that has a phone number on it. I saw it. It said, “Franklin Self Storage.” As I was driving down, I called it as I was passing. The owner answered the phone and said, “This is Franklin Self Storage.” I was like, “This a Stacy. I called about your storage facility.” He’s like, “Are you looking for a unit?” I was like, “No, I’m interested in buying your storage facility. Would you be interested in selling? I have a couple of others in the area. I’m just calling all the owners. I’m in front of your storage. I’m driving past your storage facility now. I wanted to call and see if you are interested in selling.”
He was like, “Where are you?” I said, “I just passed it. I’m coming into town now.” He’s like, “Why don’t you turn around? Come on back over here.” I was like, “Sure.” I made it down into town somewhere in this area. I turned around and drove back. The owner’s name was Tom Munch. I love his name. It was the best name ever. I drove in. He came in and let me in the gate and put the code in. I drove over and parked. I was like, “Hi.” He’s like, “Who are you?” I said, “I’m Stacy.” He was like, “I’m Tom Munch.” I was like, “Nice to meet you. I own one in Newnan. I own one over here and Fairburn and own another one in Fayetteville. I’m trying to pick up a couple more.”
He was like, “I am interested in selling.” I was like, “It’s perfect timing. Do you have time to talk?” He was like, “Yes., come into my office.” This little thing right here is his office. It’s one of those little tiny sheds that you can pick at Home Depot. I was like, “I’ll be putting my tools and stuff in.” This was his office. He had a desk and an AC that he had put in. He also had a little heater in case it got cold in the winter. This is where he worked. He was like, “Come on into my office.”
I sat down at his desk and was like, “Tell me the story about this place. Tell me a little about it.” He said, “I built this facility in the ’90s. I built this row right here first.” He’s like, “When I got enough money, I started adding more rows and stuff.” I was like, “It’s cool. Where do you live?” He was like, “I live right here.” This is his house right here. “I picked up this property, so I own all this little area.” I was like, “Are you interested in selling?” He’s like, “Yes. I’m interested.” It’s this little barn right here. I said, “Tell me a little about this. Let’s go for a walk, and you can tell me about it and show me what you know, how you did it, and everything.”
We walked around and looked at all the units. He told me all the different sizes and everything. This is the funniest thing. When he first started, he decided he wanted his numbers not to be numbers. He wanted his numbers to be Roman numerals. On the door of every single one of his doors was a Roman numeral. That’s how he did it. There was a Roman numeral one, and then he had X, III, XXIII. That’s how he did it. I was like, “Are those Roman numerals?” He’s like, “Yes. I decided to do Roman numerals for my numbers.” I was like, “This is crazy.” I was like, “Do tenants get confused about that?”
He said, “They do. I shouldn’t have done Roman numerals.” I said, “That is so funny.” He’s like, “Yeah.” He showed me this little big building. He showed me the ones that are over here. There’s another one on the edge. He showed me around. I was like, “I’m very interested in buying this. I’ve got the cash. I can close now. Let’s do it. Let’s sit down and figure this out.” We get back into his office. We sat down and I said, “Can you show me the numbers? What are you making on this?” He opened up his drawer and pulled out a yellow notepad. He then started writing down. He got 5 x 10s for $25, 10 x 10 for $25, or whatever it was. I can’t remember.
This is a total of 60 units, so it wasn’t a lot. He wrote down all the units and the price that he charged. He said, “This is the list of my units, sizes, and prices I give.” I already knew that 60 units are $600,000, give or take, maybe a little bit or less, depending on the market and stuff. That’s how I run the numbers. Now, it could be way more, depending on where you’re at and stuff. I always think 60 units is $600,000. I was like, “Do you have a number in mind? What are you thinking about this facility?”
I still needed to go back and run numbers, but I was like, “What do you think about this facility? What price do you have? Do you have a price in mind? Do you want me to run numbers and give you an offer?” He was like, “I have a price in mind.” I said, “What is it? I’m ready. Tell me.” He said, “It’s $189,000.” He’s 100% full on this thing. I said, “Have you ever done any auctions?” He’s like, “I’ve done a couple of auctions. This one guy I had to auction off.” He says, “I typically don’t do a lot of auctions. It’s a small town. Everybody knows each other.” At $189,000, I started choking. I was trying not to choke.
Always shoot for a 10% cash on cash return or more.
I already knew that it was a good deal. Even if it was $400,000 or $500,000 worth, it would be a good deal. I was like, “I think that could possibly be doable, but I’m not 100% sure. I need to talk to my husband and my money guy to make sure that I can get that. Is that okay?” He said, “Yes. Think about it and let me know.” I said, “Okay.” I got his information so I left, and went back so we could run the numbers on it and stuff too. I already knew it was a good deal anyways. I went back home and told my husband. I was like, “We’re going to buy this storage facility.” He was like, “Great. Another one,” which is a typical answer from Pete anyways.
I told my lender too. I was in the process of finishing up a rehab, and it happened to be around $200,000 or $300,000. I can’t remember. I was like, “I’m picking up a storage facility. Can we roll the money over?” He’s like, “That’s fine.” It was super easy. I already had the lender roll the money over from a rehab that we were doing. Essentially, I picked this up with private money. I’ll show you the numbers on it. We’ll run the numbers on the new deal analyzer and see what it looks like. My private lenders typically give me anywhere from 8% to 10%. I could go out and get a loan on the deal. I like to close as fast as I possibly can.
When I was talking to Tom Munch, I said, “I’m pretty sure I could have that money here in the next week or two. When do you want to close?” He said, “We can close in 30 days if you want.” He’s like, “If you want to buy it, I’m ready to sell.” I’m like, “That’s doable because I’m closing on another property and I need to roll that money over to a new one. Let me make sure that it all works out good. That should be fine.” I went back and talked to my lender. I talked to my husband. They both said fine. We’ll run the numbers on it now and see what the numbers look like. I came back either the next day or the day after. I’m not sure. I called him up.
Coming Out Of Pocket
He had no computer, no email, nothing. He had no way to show me any income or anything. I got no numbers, nothing from this person. In fact, for every facility I’ve ever bought, except for the last one, I’ve never gotten any numbers, rent roll, or anything from any of them. I go off of essentially what I could possibly be making. That’s what I go off of. I just want to make sure that I don’t come out of pocket too much on the front end. Personally, I’m okay with coming out of pocket. I say this a lot quite often that I’m okay with coming out of pocket. Ask my husband. My husband doesn’t want to come out of pocket because he’s the Operations Manager of the business.
He wants to get money upfront. He wants to have CapEx upfront. He wants to have money to do things. What I’ll do essentially is take these four facilities that you saw. One or two of them, I’ll buy it and it’s not producing income. Within six months, it’s starting to produce income. I’m now making an extra $1,000, $2,000, $3,000, $4,000, and $5,000 a month that will offset the next facility I’m going to buy. At Fayetteville, we were making probably $5,000 a month on that. I had Fairburn, and we were netting probably $2,000 a month. I had Newnan, and we were netting $2,000 a month. I was like, “We have at least a little bit of money left over. We can afford to buy another facility if we need to ever come out of pocket.”
We offset one facility with the other facility. In the beginning, maybe it’s a little tight, but after 3 or 6 months, you cashflow very well. I always shoot for a 10% cash-on-cash return or more. I don’t put any money into my deals. I’m 100% privately funded, pretty much. I put a little bit of tiny money into all the deals I’ve done. When you don’t put any money into any deal, your cash-on-cash return is ridiculous. You’re making money off of not putting any money into the deal. If you’re somebody that you’re not going to go out and find a private lender to lend you money, then you want to stick to a 10% cash-on-cash return or more.
The truth is that you should be learning how to raise money because raising money is what’s going to be able to get you to have 2 to 12 deals like us. If you don’t learn how to raise money, a bank is only going to take and leverage you so far. It’s okay not to raise money for the first 1 or 2 deals. You should be partnering using other people’s money and raising money, especially in the commercial real estate world. Commercial real estate is expensive, so you have to learn how to raise money. I’ve been raising money since 2010, taking something from rehab and rolling it into a storage facility, which is not a big deal for me.
Meeting The Wife
I went back, took the contract, and we signed the contract. At that time, when I met him, I also got to meet his wife. I think it was Beatrice or something like that. I can’t remember what her name is, but I remember Tom Munch. When we signed the contract in his office in the next couple of days, she was like, “I am so glad that he is finally selling this place.” I was like, “Why?” She’s like, “He works every day, seven days a week. He comes into his office and works all day long. He never stays at home. Now, he can do all the housework and I can be like, ‘Honey, do this and that.'”
Commercial real estate is expensive so you have to learn how to raise money.
I was like, “He comes into the office and works with the storage facility all the time?” She’s like, “He’s always at the storage facility. It’s hard for me to get him to do anything because he’s working so much.” I was thinking to myself, “What the heck is he doing every day all day at the storage facility?” It’s 60 units, and the facility should take an hour or two hours a week. That’s it. I’m thinking that maybe he will come over to his office and hide from his wife, and pretend he was working and stuff all day. She said he would get up every morning, come to the office, and come home at dinner time.
I don’t know what he was doing all the time, but that’s a lot of hours at this place for something that should only take two hours a week. Maybe he was doing the yard work, but that’s still only one day a week or something. There’s not a lot of yard stuff there. I don’t know what he was doing. She was like, “I’m so excited that he’s finally selling this so he can come over and help me because he never helps me at the house.” That’s what she said. At the closing table, I was like, “Congratulations. You made enough money to go and do some retirement stuff. What are you going to do? Are you going to celebrate tonight?”
Tom Munch was like, “We’re going out. We’re celebrating.” I was like, “Awesome. What are you going to do?” He said, “We’re going to LongHorn. We’re going to have a steak.” I was like, “That sounds awesome.” Their celebration is to go to LongHorn and have a big steak. She is like, “We’re going on a date. We haven’t been on a date in so long. He’s finally taking me on a date. We’re going to go to Longhorn and have a steak.” LongHorn was in Newnan. That was 30 minutes away. They ventured out of Franklin to have a steak and celebrate. They were the cutest couple.
storEDGE
First, I’m going to show you the storage. You’ve got to see this. I don’t get into storage often because this is not what I do. I’m finding them and funding them. I’m not running them. My husband runs them with his team. I want to show you the interface so you can see what it looks like, and then we can get in and see the numbers. You can see that we have 49 tenants. It’s 95% occupied. There are three that are unrentable. Maybe there’s a latch that’s broken in the door or something. You see 11% are past due. We have this many tenants.
Another thing that you could see that I like about storage is you could see how long people have been there. The one thing I love about the tertiary market is that people stay. Even when you raise the rent, they still stay. You can see here that we’ve got some newbies that have come in. You always have a certain percentage in and out for a couple of months or so. We have some that have been there 6 to 12, and then we have some that are 1 to 2 years, and then 2-plus years. We have had this facility for a couple of years. We have nineteen of them that have been stuck with us since the beginning, which is cool to see.
In all storage facilities that are tertiary markets, you have tenants that stay quite a long time with you, which I love. In the secondary market, it gets less and less. In the primary market, it’s like turning and burning. People don’t want to be paying $200 to $300 a month, especially going into the next couple of years. I just wanted to show you what it looks like. I was hoping to see where I could see the prices of what they charged off, but I’m not 100% sure where I could see that. I forgot how to use storage. My husband comes on and teaches here on the Monday night sessions like storage stuff and a lot in coaching.
In the coaching program, he comes in and teaches quite often. Another thing that I was going to say is when you join StorageNerds, the bootcamp is on September 24th and 25th. This time around, my husband is teaching. He is running and managing the facility. I teach, find and fund them. I did that in May 2022 and then my husband, who’s teaching in September, ran them. He’s going to get in and show you how to utilize this because it’s super powerful software. Let’s see if we can figure this out. Here’s the facility map so you can see this is what you have to draw when you get into it so you can see the units.
The red ones are the ones that are late. The blue ones are all paid up. These are the 5 x 10s right here and these are the bigger ones here. Here’s that big one I was telling you about. Let me see if I can click on what’s the size. It doesn’t say the prices on these. You can see that there are notes and stuff in here, whenever one of our people on the phone talks to them and stuff. 5 x 10s are $65, 10 x 10s are $85, and 10 x 15s are $125. We’ll put this into the deal analysis. What I was trying to look at is what they are charging.
The one thing great about tertiary markets is that people stay. Even when you raise the rent, they still stay.
Using Deal Analyzer
The 800-square-foot one is the big one. He’s charging $400. We’ll work on filling out the deal analyzer. Here’s the deal analyzer. We’re going to get into the unit mix and do 5 x 10s. The 5 x 10s are $65, and there are twelve 5 x 10s. There are 32 here. 10 x 15s, we have nine that are $125. Let’s change the price here. It’s $65, $85 and $125, then 10 x 20s are $165. That’s so expensive. I can’t believe we’re full. Isn’t that crazy? We raised the rates on all of our stuff, and the prices are nuts. 10 x 20s, we have two of those.
Bear with me. It takes a little while to do this, but at least you can see how it’s done. You will all be able to analyze deals. After the next ten weeks, everybody will be able to analyze deals. You just have to have a deal analyzer. The course has a deal analyzer on it, but it’s not the one you see. It’s a different one, but you could still use it. Let me see. One 12 x 15 is $148. We’re going to 12 x 15. That way, we can get square footage. That is what I’m trying to show you all. 12 x 15 is 180 square feet. It was $148 and I got one of those. We’ve got one more 15 x 21 is 315 square feet. We’ve got one of those and it’s $215. We’ve got one more. It’s 800 square feet. It’s a 20 x 40. That’s the big one.
That one is one of them, and it was $400. We’ve got the square footage here now. We’ve got 58 units and it’s 6845. Here are the units you see. You can put outside access. We don’t need to do that. We need to know the total square footage and the total number of units. We now know that we have 58 units and it’s 6845. He should be making $5,700 a month based on his current income. It’s 58 units and 6845. We’re 95% full. It’s 4% or 5% vacant. I don’t know what cap rate we should give this. Let’s say it’s a 7% cap. We’re 95% full.
Message me if you have questions. I’m trying to stay on the deal analyzer. Let’s do $6,800 because we have that vacancy and stuff. The reason I changed this one right here to 1% is because I did not use a realtor to close. Closing costs include realtor fees on our deal analyzer. If you don’t have realtor fees, then you take those out. We’re now at $0.87 a square foot. Can we raise rates? We’re cheaper than our neighbors. Our neighbors are $0.90 a square foot. He’s pushing those numbers. We won’t get into the competition, but we’re almost right at the same price. We’re a little bit cheaper than our competition. His name is Trey. That’s how I know it.
In order to find competition, you list out your competitors. Let’s see if we can figure out Franklin’s storage facility here. That’s us. Let’s see where we are else. Let’s go to this terrain here. How we find our competition is we just click Storage and search. I’m pretty sure it’s Franklin’s Best Storage. They’ve got two locations. There are three of us in town. They got the two, and they’re using the same storable. Let’s see what the price is. 10 x 10s are $99. That’s what they’re charging. All I did was google Storage Near Us. I looked up the guy. I know there are two other ones. I’m looking at his price.
Let me pull up the deal analyzer again. He’s doing $99 for a 10 x 10, and we’re doing $85. Tell my husband he needs to raise the rent. Let’s see what he is doing. In 5 x 10s, he’s doing $79. Isn’t this so much fun looking at this, trying to figure it all out? It’s $79 for 5 x 10s, non-climate controlled. They have two both of theirs on here. We can go with the cheapest, $74. For 10 x 20, $179 is what they have. I’m going to get into the deal analyzer. We’re doing $65, and he’s doing $74. For 10 x 20s, he’s doing $179. We’re not even at the same price as him, and he’s probably full. We need to be increasing our rent.
I didn’t change the other prices for us because I kept it at what we have. We’re at $0.83 a square foot. Now, we should be at $0.92. I put $0.90. We should be at $0.92. I bought this for $189. Let’s see if we can figure this out. I bought it at interest only. We put 0% down, and I got it at 8% interest. I got a five-year, so I’m paying about $1,260 a month. These are our numbers here. The purchase price is $189. As you can see, $189 is a 25% cash-on-cash return. If we owner financed it, we would be at 20% down. At 5% interest, we’d be at 90% cash-on-cash return, but we borrowed private money.
$189 at 8% interest for five years is what we did. We’re at 893% cash-on-cash return and 50% actual net after the mortgage. That’s what that looks like. We’ll get into the deal analyzer and look. I saw a couple of different things. David is saying, “I can tell that your prices are a little low at 95% capacity.” Should we raise the rent? If we’re at 95% capacity and you saw our neighbors, we should be raising the rents. Pete is like, “We just raised the rents.” We did just raise the rent. In May, we raised the rent. Should we raise them more now? How often do you raise the rent? You can piss everybody off. You don’t want to do that either.
Every six months, especially nowadays with the market, you should be raising rents every six months to what the market is. Back in the day, you would hear, “Raise the rents 5% or 6% every 6 to 9 months.” Nowadays, it’s like, “What is fair market value?” If the fair market value is way higher than 5% or 6%, you should be raising your rates to that. That’s how we look at it. Thomas is saying, “Economic rent versus physical rent.” We’re 95% full, so we should be raising the rent. We can’t raise the rent now, can we? What will you all do, raise now? It’s because we just raised the rent. That’s the thing that we look at.
Looking At Cap Rates
Mark is asking about the cap rate. Let me go back to my deal analyzer. I put a 7% cap for this deal analyzer. That’s what I put the market cap rate for. I don’t know if Franklin would be tertiary. When we sell our facility, we’re going to sell all four of them together. As you see, I showed you Ms. Lillian’s Self-Storage on Google Maps. We have those four facilities together, and it’s going to be a portfolio. I’m guessing this portfolio is probably going to be even less than a 7% cap. It’s probably going to be a 6.5% or 6% cap maybe because it’s a portfolio, and portfolios go for higher prices. The reason I know that is because I see it in the market.
I have students that are doing this. These four right here, I’m going to sell as a portfolio. I’m guessing I could probably get at least a 6% cap r all four of these. That’s one thing that you have to keep in mind. If I sold Franklin by itself, I would probably get a 7% cap or something like that. This one is considered a secondary market, and these would be considered primary markets. These probably are even worth even a 5% cap. Maybe 5.5%, 6% or 5.75%,. They’re right in the suburb of the point of Atlanta. They’re going to have to figure it all out together. It’s going to be interesting to see what they say.
I ran this at a 7% cap. As you can see, it’s $68,000. It’s valued at about $700,000, and we picked this up for $189,000. You even see a debt service ratio is super high. It’s very good and lucrative. We’re going to make some money on it. I’m excited about it. You could see that the cashflow, if we went to a bank, would probably be anywhere from 60% to 90% cash-on-cash return. That’s just me driving around and talking to owners. People are like, “Do I need to talk to owners?” If you want good deals like this, you should be out talking to owners. If you want to have okay deals, then cold call. That’s what we do. We cold call.
When we’re cold calling, we find good deals, but by driving and talking to owners, you get amazing deals. That’s find, fund and run them. You now know we use storage to run them. My husband is going to be teaching in the bootcamp in September. He’ll get into that. Hopefully, everybody joins and is able to come to that. That’s it. David says, “In rural areas, people have more space to store their stuff. If you take them off by raising rates, it’s too fast. You can be much more aggressive in more densely populated areas. Probably raise in six months.” That’s exactly what we think.
Over the course of the last couple of years, ours is every six months, we’re raising rents. How much do we rent? Raise rents to fair market value. What is the market calling for? That’s how we’re doing it. Troy, I know him. He’s aggressive. He’s like, “Let me try and see.” He is a push the numbers kind of person. He bought those facilities not so long ago. He did pay cash for it. He’s like, “Let me push the rates so I get all this cash back I put into it.” That’s it. There’s a question, “When you bought the facility, was it around a 10% cap?” Let me look at the deal analyzer and see what it says. When I bought the facility, it was running on a 25% cap rate. That’s crazy. It wasn’t making that much.
Let’s put the numbers. It was probably making half of that. It was probably full, but only making half, maybe not half. Let’s say it was making $40,000. That’s coming out to an 11% cap. Even when I bought it at $189,000, it was still $100,000 for the value. It was probably making around $40,000, and now it’s making $68,000. That’s a good-looking deal analyzer right there. What I’m going to do is hop on my pitch for the fund.
If you don’t know, I have a 506(c) Reg D fund. If you want to invest passively, come hang out with me. It’s StacyRossetti.com/fund. I always pitched that right after the session. For everybody else, hopefully, I’ll see you again. The last day that the door is open is September 8, 2022. It’s Tuesday, Wednesday, and Thursday, and that’s it. We’re not opening the doors again until 2023. Take care. I will see you guys soon.
Important Links
- StorageNerds
- MsLillians.com
- Radius Plus
- StorSmart
- Bootcamp – StorageNerds Virtual Bootcamp
- StacyRossetti.com/fund
