In the ever-growing self-storage market, knowing how to acquire the right facility is key to maximizing your profits. This podcast episode dives deep into the world of self-storage buying, giving you the tools and knowledge to make smart investment decisions. We’ll explore essential steps like market analysis, property evaluation, and deal negotiation. You’ll hear from Stacy Rossetti, who share her insights on uncovering hidden opportunities and avoiding costly mistakes. Whether you’re a seasoned investor or just starting out, this podcast will equip you with the strategies you need to find the perfect self-storage facility and build a thriving portfolio.
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Find The Right Facility: Your Guide To Self-Storage Strategic Acquisitions
Right before this meeting, there is always a phone support meeting. We always meet with the manager of our phone, the people that answer our phones. We always go until 1:00, and then I hop on here. We have an amazing phone support team and they do so good at answering the phones. The phone support team is the most important part of the company because they answer the phones and convert your leads. It’s not just lead conversion. It’s also bad debt.
We split our debt up into days 1 through 29 and then 30-plus. We have these processes internally. What’s the process if they’re over 30 days late? Also, we look at things how many inbound calls we have and how many outbound calls we have. From the inbound or the outbound calls, how many of those are sales calls? How many of those are customer support calls? How many of those are payment calls? We either separate into past due payments or bad debt payments. It’s a whole process. Obviously, when you’re starting out and you’re learning how to invest in self-storage, you are the person answering the phones.
You have call centers answering the phones or the person that you hire is answering the phones. What I’m telling you is the processes we do internally, 1 person that does all the phone sales, 2 people that do customer support and 1 person that does bad debt. We used to have one person that did that. In the beginning, it was me. When we first started out, I was the person who did everything and then we added Bonnie. She’s been working with us for many years. After we sold one of our businesses and my husband came over and started managing the storage stuff, he was also answering the phones and then after about maybe 800 doors, Bonnie was like, “I can’t answer the phones anymore. It’s too much. I need help.”
That’s when we started hiring other phone support people, which was Steph. Steph has been with us for quite a while now. Now Steph manages all of the four people who answer the phones. We meet with Steph on a regular basis, and she coaches and teaches. We talk to her and then she talks to the phone support people. Internally, we’re trying to be good on the phones. Also, we look at how many phone calls we are getting inbound calls versus how many people are going directly to the website and then converting through going to the website.
We want more people to go to the website because that means less phone calls. That whole process of people going to the website and reserving online, that’s a very new process. It only started in 2020 when COVID happened and then people were like, “I need to be able to do this online.” Now we obviously been completely passive and completely virtual and automated since day one of owning our first storage facility but did not push people to go online to reserve. That wasn’t something that was pushed up until 2020. From 2020 to now, we’ve been trying hard to get people to do more automated reservations because otherwise, you have to have so many phone people.
We have I think 2,000 to 2,500 tenants. We have a lot of tenants. In the grand scheme of things, 2,500 tenants is not a lot compared to all the bigger players. For us, a little mom-and-pop facility owners that started from scratch, 2,500 tenants, it’s a lot of tenants. It’s a lot. Internally, we have to work on phone people and be good on the phones, at auction processes, and on top of the auction processes. Also, how does the flow of our online reservations work? That’s a lot of management stuff. The truth is that when you think of owning a storage facility, these are the things that you do not think of.
I can tell you because I talk to students. I have students. I talk to people all the time and everybody’s always worried about how I find facilities to buy. How do I know if it’s a good deal and how do I fund this facility? I can guarantee you, everybody that’s reading right now. These are the three things that come up when you want to get into this industry. The truth of the matter is if you are not thinking about how you’re going to be managing your facility, it’s a business and it’s not just a property. If you are not the type of person that’s good at running a business, then you are not going to succeed. It’s one of those things. Right now, there’s only a very small window of getting into this industry. Years ago, it was a huge window and I was like, “The world was my oyster and I got a lot of good deals.”
That window is getting smaller and smaller and I can see it getting smaller and smaller. The reason is because there’s not a lot of storage facilities out there compared to housing, residential, multifamily or even land. There’s not a lot of opportunity out there. There are only 55,000 or 60,000 storage facilities in the country, and right now, maybe 30% to 40% of them are owned by bigger players in the primary market. There are also these secondary players. This market is getting big and very competitive right now. I know because I’m in that market and it is not easy to be in a secondary market right now. It is not easy to own a storage facility and to compete with all of the competition out there. You have to be on top of it. Otherwise, you are going to shoot yourself in the foot.
If you’re the type of person that’s owned a facility that’s more than $1 million, let’s say more than $2 million, a $2 million, $3 million, $4 million, $5 million facility, then you need to be on top of it. You need to either understand how to run a business or have somebody as a partner that can do this for you because there’s a lot of competition out there. What I’m saying is that that window of opportunity of you getting into this industry is only growing smaller because there can only be so much storage in the world. You can’t have a plethora of storage because people only need so much. It’s not everybody’s going to be storing everything that they own. That’s one thing. The buy boxes are getting smaller.
How Big Is Your Box?
That’s what I wanted to talk about. I keep saying this over and over. How big is your buy box? We had a couple people join StorageNerds. A good amount of people joined. The one thing that I tell them when I’m talking to them, when we decide whether or not they should actually get into StorageNerds or not it’s how big is your buy box. If your buy box is super small right now and you’re like, “I only want to buy some a storage facility within my area,” that means that your buy box is small and you are most likely not going to find anything. Your buy box has to be big right now because there’s so much competition.
There are so many players. We have many instances where we have students putting offers in on deals and somebody comes in. They’re about to get it under contract and then somebody swoops in and takes the deal right from underneath them and will pay more money for it. You have to know that there’s a lot of people right now out there looking for storage to buy. Whether or not they understand how to run it as a business, there are a lot of people out there that want to buy storage facilities, and there are not a lot of storage facilities out there to buy. Think about it. Go on to Crexi and then pull up how many storage facilities are for sale.
I don’t know if anybody’s at their computer if they can do that right now, but there’s not a lot of storage facilities for sale out there. Maybe 700. In the entire country, there are only 700 storage facilities for sale and tens of thousands of people are trying to get into this industry and buy a facility. You’re playing against somebody me and I’m not even a bigger player. Sixteen facilities is small. That’s a small amount of facilities in this world. Also, we have a whole team called Turnkey Acquisitions. Turnkey Acquisitions is part of StorageNerds. We have ten virtual assistants, which we call acquisition specialists. If you do this with the United States, these ten virtual assistants are not too bad.
There are 10 of them, 10 sections. Every single virtual assistant has its own region. Within that region, they typically have maybe 4 to 5 different states, around maybe 4,000 to 5,000 storage facilities. That’s how we do it. Each of these virtual assistants’ job is to call every single one of the storage facilities out that are primary and not so not primary, secondary and tertiary markets. We do not call primary market storage facilities. We only call secondary and tertiary. The secondary is going to be a town of 150,000 people or less. A tertiary market is going to be a town of 25,000 people or less.
I teach about this quite often. You know what those are, and they are all in the course if you want to buy the course. They are essentially assigned to these areas and regions. Their job is to find and build a list of every tertiary and secondary market facility in the country. Now we’ve already pretty much done that. We have this massive list. In 2023, we called almost 52,000 people. It’s over 51,000 storage facilities. Remember, there’s only 60,000 storage facilities in the country and we called 50,000 of them. We did call some primary market ones, but we never call U-Haul or something like that. We do call maybe bigger players. We call these sub-primary markets.
We don’t get into primary, but we will get into sub-primary markets sometimes. It depends on the student, what the student is looking for, and how much the student wants to pay. My point of this whole training session is talking about our page. I’m talking about your buy box. I keep pushing this over and over again that your buy box needs to be big right now because there is a ridiculous amount of competition out there. That’s number one. Number two is you have to think about who your competition is. I’m your competition. Not only me. I’m a little tiny player in this whole thing. I have ten virtual assistants that do nothing but call owners of storage facilities every day.
They’re calling 25 to 50 storage facilities. You have to compete against that. All these owners are super tired of getting calls. It’s a timing thing. You have to keep that in mind. I’ve already pulled out two main options on how you can find storage facilities. I said you could go to Crexi or call all the owners. You can talk to the owners. I talk about this quite often. These are two different types of buys. When you’re calling an owner directly and talking to an owner, you’re handling it differently than if you’re going online to Crexi and putting an offer in. This is where realtors, brokers and agents list their properties for sale.
Calling Owners
It’s a commercial real estate website for commercial property and any type of commercial property. You’re talking with the realtor, and you’re working with this person who’s in between, this middle person. We don’t do that. We go directly to the owner and talk to the owner to eliminate that middle person. Talk directly to the owner so that we can negotiate that price, negotiate a better price with the owner. Now you have call owners. Remember that my Turnkey Acquisitions team has called all of these people and we keep track of every phone call and how what we do is we have all these kpis. We’re keeping track of how many phone calls everybody’s doing. The goal of the ten virtual assistants is 500 calls a month. That’s 100 calls a week.
It’s not even that much. They typically do more than that, maybe 600 to 700 calls a month. The goal is 500 calls a month. Think about that. From the 500 calls, it takes 200 calls to find an owner who would be interested in getting an offer. That’s a lot of calls. Out of the 500, it takes, on average, 200. That means in a month, out of the 500 calls, they’re getting two owners that are willing to talk to them. They’ve been doing this for years. Out of the 200 calls, they find one owner. Remember, when you talk to an owner, this is cold calling. That’s why a lot of people honestly don’t do this.
It is a lot of work. I’m laying it out there and letting you know how much work it is. Going onto Crexi or Loopnet or going through a broker, you are going to find and pay for facilities at a higher price. If you go directly to an owner, I can tell you, hands down, this is 100% true. Rarely ever do we find a property cheaper on Crexi than we would if we went directly to the owner. I don’t think I’ve ever had this experience and if I have, I can’t remember it. I’ve had 250 transactions in 10 years. Going through a broker or going onto Crexi is more expensive. This is why we choose to go directly to the owner.
You can go onto Crexi and put in an offer. It doesn’t matter what your offer price is. Put an offer in that meets your parameters. Whether or not the owner accepts that offer is a different thing but it’s the same concept. Your job is to put in offers. The only way you are ever going to find a facility to buy is if you put an offer in. Another thing I was going to bring up too, because I had another coaching call at the studio and she’s in StorageNerds and then she’s also in Turnkey Acquisitions. On top of that, she also goes out and she puts offers in on properties through wholesalers. One of the things she talked about with me was that you see all these properties being posted on the Facebook groups and stuff like this, you’ll see properties and a whole Facebook group for facilities for sale.
The only way you are ever going to find a facility to buy is if you put an offer in. Share on XThe truth is that those wholesalers trying to find a buyer for this facility rarely ever real offers. Rarely ever do they get an offer. I can tell you that this is true because I pitched my deal, my facility, and 200 people signed up for a pitch, and a good number of people listened in. I think it was maybe 50, 60 or 70 people that showed up to listen to my pitch. Out of that pitch, ten people were interested in putting an offer. That’s it. Out of those 10 up until now, I’ve gotten 2 offers. Think about the odds of that. You see all of the Crexi properties and you see all of the wholesaling properties that all these wholesalers are trying to do, yet they are struggling to sell facilities because people do not give them offers and it’s a huge missed opportunity.
This is one thing in StorageNerds, I tell my students, “Make the offer.” Who gives a crap what the offer is? Just make the offer. Understand and know how to run deal analysis so that you know it’s a deal that’s within your risk level, your parameters and then make an offer. How many people here in 2024 have actually made an offer on a property? If you haven’t, shame on you because you have the tools to do this. You have the tools. You have Crexi. You have wholesalers. My course, you have my deal analyzer. Why not make offers? I don’t understand this concept. I think my point is that we’ll get you to the point where you understand that you have the opportunity to buy a storage facility and have all the tools you need. You just have to get out there and do it.
Right now, the way that I do it is 500 calls a month, 200 calls of talking to owners and then getting 1 owner to actually give me all the details so I can run the deal analysis. Just so everybody knows, this is the internal process. This is the process to get a source facility under contract. The goal is to find a facility under contract. You have to make an offer. It takes us 30 to 50 offers to get one facility under contract. In the grand scheme of things, we have 500 calls in a month. You have 200 calls to find 1 owner that will actually entertain your offer. We take 20 to 30 offers to get a facility under contract.
Back pre-COVID, it was way easier. This is how it’s looking in the last couple of years. These numbers are only going to get more challenging. Your window of opportunity right now to find a facility and get it under contract is getting smaller and smaller. I encourage you to understand and know that Crexi is there. Those are owners who want offers. That’s what they are. Crexi and Loopnet are owners who want offers. Why not make them offers? Don’t worry about the price of whatever they’re saying. Just make an offer. By law, the broker has to submit the offer to the person. It’s practice.
If there are 700 facilities on Crexi right now, you have a huge chance of getting one facility under contract if you can do 30 to 50 of those. You have to become a machine. You have to become a lean, mean offer-making machine. The only way that you can do that is if you learn how to do commercial deal analysis and you have a deal analyzer that you could plug numbers in and then it says yes or no. Just put the offer. My deal analyzer, I’m telling you, creates the offer letter for you. You put the numbers in when you get the information from the owner, and then the offer letter is created. We have become very good at making offers.
I see in my students this hesitation. It’s a fear of what if these numbers are correct. It’s an offer. Who gives a crap if it’s not correct? There’s no legally bound thing. This is when you’re calling owners or with a wholesaler. It’s the same thing. I see all these wholesalers with these facilities under contract and they have done all this work. They’ve called the 500 people. They’ve called and talked to the owner. They ran the deal analysis for you and they made all these offers to get a facility under contract. They’ve done all the work for you. Now you get to run the deal analysis, make an offer, and then chalk it up to, “I’m just learning how to do this.” My suggestion is to make offers to every single wholesaler. Who cares if it’s not even where you want it to be?
It’s just practice. You don’t have to buy it. Now, when you put an offer in on Crexi, you obviously have to use their contract. You have a due diligence time. You make sure that you get due diligence. Due diligence gives you the time to decide whether you want to buy the property or not. It could be 10, 20, 30, 40, or 50 days, however long you need. The more complicated that you make making offers or getting a facility under contract, the less likely you’ll be able to find something to buy.
For instance, right now, one student is putting a facility under contract for about $2.5 million or something like that. It’s a good deal. It’s making $350,000 a year and he’s getting under contract for $2.5 million. The process of them going back and forth and getting this thing under contract has been dragging on and on. They’re getting lawyers involved. I cross my fingers and hope nobody else swoops in and gives a better offer because this is what happened.
Getting a facility under contract takes so long that somebody else comes in and makes another offer and then decides to go with that one instead because it’s more money. You have to worry about that when you’re doing something this with Crexi because that’s what realtors do. They drag it on and on waiting to see if they get a better offer, which has happened many times.
Finding Wholesalers
That’s why I like this process or going to wholesalers. Turnkey Acquisitions is a wholesaling company. Our job is lead generation. We are doing all this dirty work and presenting the deal to our students. Only our students can buy the deals. We are presenting the deals to the students. A wholesaler is doing all this work so that you don’t have to do it and then you can make an offer. I challenge you, if you don’t want to do this, find some wholesalers that you can practice making offers on or going on to Crexi and making offers. You’ve got almost 1,000 storage facilities out there right now that you can make offers o with having to do this.
This right here, this 500 calls a month, it takes 200 calls to find 1 owner. The way I teach my students in StorageNerds is that your first step is to build the list of facilities. You cannot make any calls to owners until you have a list of between 200 and 300 owners. You build this list. You manually build the list yourself. You’re looking for storage facilities yourself. You’re putting it on a list. My team calls around 25 to 50 owners a day. I say 25 to maybe 30 owners a day is average, and that takes a couple of hours. It could take as few as 30 minutes up to a couple of hours if you talk to people on the phone. You build the list and then you call the owners.
What we do internally is we track how much phone time each VA has on a monthly basis. If they’re calling 30 owners a day, typically, this is taking 30 minutes. You’re dialing and then you’re calling and you’re dialing a voicemail, dialing, leaving a voicemail or whatever. If they do answer the phone, they’re typically on the phone with an owner from anywhere to, let’s say 5 to 20 minutes. On average, out of the 30 calls, I would say maybe 1 or 2 people actually talk to the owner. Let’s say you have a half hour more talk time in a day. You’re at 30 minutes, plus you talk to owners and that’s another 30 minutes.
When you call owners, you have one hour to call 30 people and talk to them. You actually talk to owners. We’ve learned that the longer you can talk to owners on the phone and have a real conversation with them, the more likely they’ll be open to allowing you to get their information from them that you can give them an offer. You want to think about talk time. I know it sounds super technical what I’m talking about, but the truth is that you got to break this down so that you understand this process. I could say, “Build a list and call some owners,” which is what everybody says. You have to understand that it takes work and effort to find a facility to buy, own, manage and make money.
Just in the very beginning, I want you to plan one hour of talk time for 30 calls. Remember, it takes 200 calls to find 1 owner who wants to give you the information. I had one student, the first person he calls, she was like, “Yeah, I’ll take an offer,” but that is not normal but you could be lucky. You’re calling 30 people but you have to call 200. This is one hour. You’re going to have give or take six hours to call 200 people. In the beginning, when I first started, I would sit for four hours and call and call. Every time I sat there for four hours, I always had somebody who wanted to get an offer, every single time.
It sucked. That’s why I have ten people doing it now because I don’t want to do it anymore. I would always find somebody. I would take half a day and I would sit there and I would call. I drove for storage. If you follow me, you know I drive for storage because I’m a big driver. I used to live in an RV for years and then I would make a list of every storage facility I found and then I would either call them when I’m in front of the storage facility or if I couldn’t get ahold of them, I would come back. I would sit for half a day and I would call. Every time I called for half a day, I always found somebody.
I remember one time, I was talking on the phone with one guy and it was the list and it was 2 or 3 hours into calling and it was maybe 4:00 in the afternoon. I was calling and I talked to the owner and he was a super nice guy. We had a good conversation on the phone. He was like, “Yeah, I’d be interested in meeting you. When can you come up?” I was like, “I’m in Jasper. I can come up to Blairsville. I can be there in an hour. Would you be interested in meeting an hour?” He was like, “Yeah, come on up.”
I drove up, met the guy and he ended up putting the facility under contract and he actually had three facilities that he wanted to sell. I put them under contract. I know for a fact sitting and calling owners works because I’ve done it. I want you to know how much time it’s going to take. It’s going to take a lot of time and effort, but it’s worth it.
Leveraging The Triad
Now we’ve got 200 calls, we’ve got an hour per 30 calls, we’ve got 6 hours of work. After that, now I have to get all the information. I find an owner, and then I have to get all the information needed to run the deal analysis. When to get the information that you need to run deal analysis? It’s not like the owner’s like, “Here’s all the information.” It takes a lot of time and effort to even get that. It could take anywhere from a day to a week or a couple of weeks.
It could take quite a lot of time to get the information from the owner because when you are cold calling an owner, it’s not like he’s sitting around ready to sell. He’s like, “I’ll take an offer.” It’s like, “We need some numbers from you. Can you gimme these numbers?” “I got to figure all that out.” It’s the same thing that happens to me. It took us a while to get all that together in order for me to pitch the deal that I pitched. In fact, we’ve known we want to sell that property for a while. We’ve been working on it for six months just to get all the numbers and everything ready to pitch that deal. People don’t have their P&L and balance sheet and all their stuff ready to go.
The more stuff you ask from the owner, the less the chance they actually want to work with you. You have to get it down to a science. “These are the six things that I need from you. These are only numbers. If you can give me these numbers, then if I can come up with an offer that’s close to both of us being happy. I will need to get proof from you on these numbers. You can tell me the numbers right now. The truth is that if you don’t give me the correct numbers right now, then my offer’s going to change. Give me what you think these numbers are,” and then run deal analysis and get an offer out. If they can give us all the information we need to fill out the deal analyzer, we can get that information out within 48 hours.
We tell the owner, “As soon as we get all six of these things in within the next 48 to 72 hours, we will get you an offer.” That’s how we work. To get all this information could take one day to one month. We’ve had some instances where it takes forever because the owner doesn’t have all the information. He’s trying to figure it out. There have been many storage facilities where I bought the facility and learned that the number of units they said they had was totally wrong because they had no idea. We bought one facility where he said that he had 110 units, and then once we closed on it and did the real walkthrough or we could open everything up and stuff, we learned that it had 121 units.
It’s ten units that you didn’t have any idea about. That’s totally normal. That’s very normal, especially in smaller facilities under $1 million. That’s how the process is looking for facilities and making offers, which is key and how long it will take you to find a facility and get it under contract. Your goal in stage one is to get it under contract. Now, going through this whole process you’ve got to call at least 200 people to get 1 owner to give you the information. You need to make 30 to 50 offers in order to get one under contract.
You have to have your talk time at least an hour. Six hours per 200 calls is basically what it takes. That’s one offer and it takes 30 to 50 offers to actually get a contract. The process is quite extensive. A lot of people ask me, too, like, “Can I do this part-time?” You can do anything part-time. You can do anything at any time. Are you going to make it a priority or not? Whatever you make a priority is what you manifest in your life. Now you know how much time and effort it’s going to take to find a facility and get it into contract. If it’s part-time, you know that it’s going to take a lot more time in order to do that. Typically, it could take upwards of a year to 18 months sometimes for a person to find a facility and get it under contract if you’re doing it yourself.
Whatever you make a priority of is what you manifest in your life. Share on XOne of the main reasons why I started Turnkey Acquisitions is because I saw all my students struggling with doing all this. I started a company where they did all that for you. You have to know that it takes a lot of time and effort. There’s a lot of grit. Also, I wanted to add here, because we’ve been talking about it, is the buy box. This comes down to your buy box. If you’re here and you live right here and you only want to buy a storage facility in this area, you have a tiny buy box. There’s 20, 30, 40 facilities in this area.
Now I had one student, she was adamant. She’s like, “I only want to have a storage facility within 30 minutes in my house. That’s it.” She made a list of 20 facilities within 30 minutes of her house. She called them every single week until she finally found one that would sell to her. It took her about six months or so and she finally got a facility 30 minutes from her house and she got it under contract and she got the owner to seller financing. You can do that, but the key is you’re following up. It took her six months to finally get ahold of those people and actually finally find one that would actually talk to her. That’s why I’m talking about your buy box.
Obviously, if your buy box is the entire United States, it is not unreasonable because it’s not difficult to manage a property anywhere in the United States nowadays. Remember, I told you, everything is automated and online. If your buy box is as big as in the United States, you’ve got way more opportunities than if you have something right next to you. The goal is to get something under contract. That is our goal right now. You have to build a list, make calls, make offers and follow up and be on top of that. When I say buy box, I’m talking about two things. I’m talking about location and I’m talking about price, which could be size. Location and price.
Location, the smaller the area that you want to buy in, the smaller your buy box and then the price. If you can only afford $500,000 and live in Nashville, and you only want to buy something in Nashville, your buy box is small because there are no $500,000 properties in Nashville. If your buy box is $10 million and you only want to be in Nashville, then your buy box is humongous. These two characteristics are what’s going to determine your buy box. The bigger the buy box, the better. That’s my two cents. I want to remind you guys about my tree ad. Super Simple Self-storage is the online course. You’ve got the deal analyzer, the Wednesday training where I ramble on about some topic and then you’ve got Super Simple Self-Storage, the Facebook group. This is the way that you’re going to succeed right now.
Addressing Questions
The StorageNerds doors are closed. You can get on the waitlist if you want to join the coaching program. I’m not sure why I’m going to open it again. I closed them. For now, you have this available. You have a course that will take you step by step. You’ve got the deal to analyzer where you can plug everything right in. You can hop on here and read my ramblings about whatever. You have the Facebook group where you can post all your questions and I will be there to answer any questions that you have. That’s how it works. You can go to StacyRossetti.com. That is where you find everything.
I’m working on a wholesaling course. It’s take it forever. Things don’t happen quickly. We’re working on it, I promise. If you know my mind, it should be done next month, but that’s not the mind of the people who are actually managing the project. I don’t know what to tell you about that. Kevin said he made an offer last month. Good. Congratulations. All right, so what happened to it? Now you got 29 more offers to go. You could do it. I know you can.
“Stacy, are you wholesaling your list of properties that you identified over the last two years?” We are in the process of selling the first five properties that we bought and they’re all smaller facilities. The one we pitched was the Warm Suite Springs one, which is the smallest facility we have, which is 46 or 50 units or something.
That one we pitched. Email me at Questions@StacyRossetti.com if you want access to that. I did get two offers that are right where I want to be. I’ll probably end up accepting one of those offers. Definitely, I’ll be accepting an offer here pretty soon because I want to start offloading. I will pitch another facility. It is a bigger facility and it will be more expensive. It’ll be over $500,000. It’d be between $500,000 and $1 million. The Warm Springs one was under $500,000. All the ones that I pitch on a weekly basis will get more and more expensive. That’s how it is. We’ll get up to properties that are at the end, maybe $1.5 million or something.
Also, the properties that I’m wholesaling are income-producing properties. I bought them, and I’ve stabilized them. Now, if you’re looking for a little tiny bit of cashflow and maybe a little tiny bit of upside on the back end, that’s what I got. I’m not selling severely mismanaged facilities. We’ve done all the dirty work. “I’m interested in submitting an offer from the pitch.” Email me at Questions@StacyRossetti.com.
“When cold calling, how do you quickly qualify if the person on the other end is the owner or not?” That’s it. Just ask like, “Are you the owner of My Storage Place? You’re not? Okay, what’s the best way to get ahold of them? Is there a message that I can relate to them?” We’ve got some questions here. “What’s the success rate of students who joined the program?” We have 100 students in the program right now, and between 40 and 50 of them own storage facilities. That’s the success rate. I have a lot of students that own storage facilities are outside of the program as well too. We have a good amount of people that own storage.
Let’s see what else. We have people who have been in the coaching program for three years and they own 4, 5, 6 facilities. There’s a good handful of 1, 2, 3, up to 6. “How many people actually make profits? How much time does it take to make profits?” Okay, yeah. The way it works right now in the storage world, is that $1 million dollars or less, if you have to get a bank loan, it’s very hard to have this cashflow because the bank loans that 30% down and 8% interest. That mortgage takes up a lot of money.
The expenses are going to be the same. Once you learn about your expenses, they will be the same. The mortgage is what’s kills the deal right now. It depends on how your financing is and how much money you’re going to be making right now. If you’re $1 million or less, your expenses are the same. You have a little bit more expenses from $1 million to $2 million, but they’re going to be the same. $2 million to $3 million, it’s the same amount. It’s a formula, if you think about it.
It is a formula how this works. Once you get into the deal analyzer and start understanding that, I will look at a facility and tell me one thing. How much money is it making? Actually, two things. Is it full or not full? That doesn’t matter either. How much money is it making right now and how much money could it be making? I could tell you what the valuations of those properties are. It’s not rocket science. It’s training your brain to understand these formulas and these concepts.
“What profit does each storage unit actually earn? How much storage needs to be made?” We run our numbers at 10% cash on cash return. It’s a seven cap. We typically run at a 7 cap with 10% cash on cash return. That’s how we run our numbers. Everybody has their own parameters and stuff. Remember, I teach people how to get into $3 million or less properties. When you get into $3 million or more, it’s a different way of doing stuff. Your cap rates change. You have to dig deeper into stuff. If you overanalyze a $300,000 deal, you are never going to get a deal, that’s for sure. You want to overanalyze a $3 million.
“What are my liabilities and responsibilities with respect to owning a storage facility?” You are a business owner, so your job is how much money can I make on this property? What are all the different ways I can create income streams for this property? That’s the thing. You’re saying, “What are the expenses? How much money is it actually going to take me to manage this thing? What are my expenses going to be?” Obviously, when you have a business, you increase your income and you decrease your expenses. That creates the net operating income. That’s your NOI.
“What’s your NOI?” Everybody’s always asking what your NOI is. My NOI is my NOI. Figure out your NOI. What are your expenses going to be? How are you going to manage this thing? I have one student, and he says, “I got 27% expenses.” He answers the phone, does all the work, does the boots on the ground stuff, goes out and cleans the units. He got a low expense ratio and then us, I haven’t seen my facilities in years, so that means my operating income is higher than his. You have to figure out what your parameters are.
You have like income minus expenses. Your NOI minus your mortgage is your net. How much money can you make on this property? What are all the ways you can come up with making money on this property? How do I decrease my expenses? How much is it going to cost me to actually manage this property? How am I going to finance this property? Where am I going to get the money to pay for this property and how much is it going to cost me? Every person, every bank, every lender and every situation is completely different. I can’t tell you how much money you are going to make. You need to learn how to run deal analysis so that you can figure out how much money you’re going to make.
I can give you the tools. You can buy the deal analyzer, but I can’t tell you your numbers. I can give you a thumbs up in the coaching program. That’s what I do. They all run their numbers, they come visit me, I look at everything and I say, “Yeah, this looks good. Do it. Make the offer.” Let me make sure I didn’t miss anything.
“When does the deal analyzer cost?” You can buy the deal analyzer it anytime. Go to my website and buy it right now. The course comes with the deal analyzer. It shows you how to fill it. This stuff that I drew right here, you can go to my website and buy the online course, the deal analyzer. You can buy those right now. This is the perfect match for you to get started.
“What does it cost to build a storage facility using twenty containers and cut in half?” I don’t have any idea about that. What you need to do is figure out how much a storage container is going to cost. How much is it going to cost to cut the thing in half and put the framing of the doors on it? How much is your laying going to cost? How much is the mortgage going to cost? How much will it cost to clear the land you can put the storage facility? How much does it cost to rezone the land if it’s not zoned the proper way or whatever? It’s a process. I don’t see any magic future ball here in my room. I wish I had it so I could be like, “It is going to cost you $5 million,” but I can’t do that. You have to actually learn how to run deal analysis. That’s what you have to do.
One storage facility, twenty containers. I’m not sure, because if you go to Janice, you could actually get prebuilt units or you could go buy containers. There’s a whole thing out there. There’s a world where you can get out there and figure out what you want to do. I appreciate you guys hanging into the end, and I hope to see you guys at the next session. Take care.
