Investing in your first self-storage property isn’t going to be an easy task. When Stacy bought her first storage facility, it took so much time, energy, and money that she went out of pocket every month after the deal. Buying really mismanaged properties can be challenging, but it will be so much worth it. You can earn more than $1 million right now with self-storage investing. Join in as Stacy talks about her first experience in buying a really mismanaged self-storage facility. Discover all the hoops and hurdles Stacy and her husband had to get through to get this facility up and running.
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Earn $1 Million With Self-Storage Investing
I’m here again to teach another session on how to make some money in storage investing such as $1 million. I’m going to talk about a couple of deals, go over them and give you some pointers on how I made $1 million on these deals. Hopefully, I can inspire you to get out there and start looking for some self-storage facilities to buy. It is time to get out there and start looking. 2022 was rough with real estate investing.
I started my turnkey acquisitions in May 2022 and it took off in June 2022. First of all, I was training all my virtual assistants anyways but the summer of 2022 was rough. Sellers did not want to come down on their prices. That was the time when the market started slowing down and inflation was super high but the sellers still had the mindset of, “I don’t want to sell my facilities for low prices. I want to make a lot of money on them.”
We’re about to sell four of our facilities in the Atlanta market. We’re going to sell it as a portfolio. What I told my husband is that we’re going to list those properties for 20% lower than what the market calls for. The truth is there are so many storage facilities for sale. There are 700 storage facilities for sale in Crexi. It’s crazy because I’ve never seen that many storage facilities for sale. All these sellers are asking for high prices. They still haven’t quite got in their head that the prices are dropping and things like that. That’s why I go directly to the owners.
People keep asking for high prices for their storage facilities even when prices are dropping. That’s why you go directly to the owners.
Stacy’s First Property
One of the properties that I was going to talk about is the very first property that I ever bought. When I got into self-storage investing, it was at the end of 2015 and the beginning of 2016. I was pregnant with Lillian. We wanted to get into passive income. Essentially, it’s what it was. I was doing all these rehabs and was so tired of rehabbing that I couldn’t do it anymore. We started looking for things to do. I had raised all this money to do all these rehabs.
Remember, I’m 100% privately funded. I met a lot of private investors. We worked together and did a lot of deals together. This was back in 2016 when nobody was talking about storage, honestly. Storage was one of those things that nobody was interested in. I started in the upcycle in 2010 so I have not been through a downcycle yet.
During that period, there were so many houses on the market that was a free-for-all. All these houses were super cheap, pennies on the dollar but there was no money so I had to get good at raising money, get out there and talk to investors. That’s how I got good at raising money. There was no money so I had to do that.
Up through from 2011 to 2015, I was doing lots of rehabs. In 2015, I got pregnant and that’s when I started looking for a passive income. I looked at multifamily because multifamily was just coming into the picture. About 2015 to 2016, people were starting to talk about multifamily because in the first five years, from 2011 to 2015, nobody was talking about multifamily because they took such a huge hit.
I looked at a whole bunch of buildings. All these buildings needed so much work and I didn’t want to do all those rehabs. I was so tired of it. In 2016, nobody was talking about storage. It wasn’t even on my radar. I had heard somebody talk about it maybe years ago. They had said that they buy storage facilities and I was like, “That’s interesting,” but that was it. That was the extent of storage in my life. Until my realtor brought me this deal, it was my very first deal and I had just told my realtor.
From 2010 to 2015, this is when you could go on the MLS and find a property to buy. Everything was super cheap. I had a realtor. His name is Richard. He got up every day and searched the areas I was interested in a property and sent me properties. Every day, I was looking at a property and the things that he sent me. I’d then go drive over and take a look at them and stuff.
We formed this good partnership and he made a lot of money off me. I would buy the property and sell the property under him so there are two separate transactions. I closed, in 5 years, over 200 transactions. He did pretty much all those transactions. I told him when I got pregnant that I’m not buying houses anymore. He flipped out.
He’s like, “What? What am I going to do? I bought a brand-new truck.” I was like, “I’m still going to be in real estate. I’m just not going to be in housing anymore. I just don’t want to do rehabs. Get out there and find me something else to do because I don’t want to do houses anymore.” He was bringing me portfolios of houses and rental properties, multifamily buildings and even huge big buildings. This was back when there was so much of that on MLS. It was super dirt cheap and everything.
Finally, he brought me to the storage facility. He said, “I think I found you something.” This was after a couple of months of looking at portfolios and apartment buildings. I kept saying, “I can’t do it. It’s too many houses. I’m tired of it.” I was so tired of houses at that time. He said, “What about storage?” I was like, “Storage is interesting.” He’s like, “I found a storage facility. It’s been on the market for five years.” Honestly, this was back when properties used to sit on the market for five years. I don’t know if anybody’s been in real estate for that long during that time but it was crazy. That intrigued me so I said, “Give me the address and I’ll drive by.”
Back then, properties used to sit on the market for like five years.
I used to live in Peachtree City, Georgia, which is a suburb of Atlanta, South of Atlanta. This one is in Fayetteville, Georgia, which was twenty minutes away from my house. It was a perfect location. I was thinking that I hope this thing works out because it would be perfect. I’d just stay home, hang out with Lillian all day, play with her and then go take care of this storage facility.
I drove up to the storage facility. North Fayetteville is where it’s at and I lived maybe in South Peachtree City. I would drive up 85 to get to the facility. I took a look at it. We painted the gate black so it looks a little bit better. It was all rusty when we bought it. When you drive up, there’s a keypad and then right behind the keypad, there’s this huge piece of lien, which is for sale. The funniest thing is I tried to get ahold of the owner for many years. I was like, “Buy this property and I could add on.” We’re about to sell this property.
As we drove up, there was this massive pile of tires, probably 300 tires sitting there. I was like, “That’s not good. Isn’t it bad for the environment to have all those tires in one spot?” That’s what I was thinking. I was like, “This is going to be a good one.” We drove up to 314, which is a busy road. It’s a good location. It’s not quite on the main road. It’s off this road here. You come down Commerce. That’s the one long building. A rectangle is what it is. There’s a lot of parking. There are 64 10×10. There are 30 parking spots here, 30 in another and then another 10.
I drove by to check the place out and see if I’d be interested but I couldn’t get in. When I drove in, there was an RV that was parked. It was blocking. You couldn’t see inside at all. I couldn’t tell what was parked or not but I could tell that there was a whole bunch of cars piled up over here. It looked like the owner had said, “Go find a parking spot.” It looked bad the way it was all parked. I was like, “This looks good. I like this storage facility.”
This is the very first facility that we bought. This property was sitting on the market for $500,000 for 5 years and nobody bought it. What I did was I called Richard and said, “Yes, I’m interested in this property. I would like to look at it, talk to the owner and get the story behind this. Why has it been sitting on five years? Can you ask the owner if he’d be interested in meeting us and we want to get more information on it and I need to walk the property? Is that possible?” Richard said, “Sure.”
Meeting The Owner
I met the owner. He met us over here as well too. This is always something that I tell you. If I can bring my lender with me to the property where I like to meet the owner, I always bring my lender as well too. I called one of my lenders and said, “We’re about to close on this rehab that we did. Would you be interested in rolling your money into another deal?” He was like, “Yes.” Once you start lending, you never want your money back. I said, “Why don’t you meet me at this next property? I have something that we could work together on if you’re interested.” He said yes.
I gave him the address and he met me so it was me, my lender and Pete. At that time, I was pregnant. It must have been at the beginning of 2016. I was due in April 2016. There was a big group of us. We all met there. If you want to make a lot of money on a deal, you need to talk to the owner. For the smaller deals, the best ones are going to be the ones where you go directly to the owner. I have a student that bought a $3 million deal and she’s selling it for almost $7 million. You can make a lot of money on huge deals. For the little people, if you want to make a lot of money, what you have to do is go directly to the owner and get them to know, like and trust you. That is the key.
We met the owner. He opened the gate. We came in and walked the property. I told my husband, “You’ve got to figure out how much money we can make on this thing. Count the doors and parking spaces. Let’s see what we can do for this thing.” I had no idea about investing in self-storage. For most of you that have no idea what you’re doing, that was me on this deal right here. We all walked the property and I met the owner. His name was Butch but the name of the storage facility was Big John’s Storage. He was an old tiny guy.
He built this thing in 1980. He said that the first 20 years were great and then the last 10 years have been horrible. He’s not into it anymore. I asked him, “How much money are you making on this thing?” He said, “$2,000 to $2,300 maybe a month.” I already knew by looking at this thing that I should be making way more money than that. I asked him, “Why are you not making that much money on this? It seems to me that you should be making way more money than $2,000. Are you not full? What’s the story?” He said, “No, I’m full. I’m full of crap and nobody’s paying.”
Auctioning Cars
He said that every single one of these units was full and probably only a quarter of them were paying. The parking when we bought this thing, we had 40 cars that we had to auction off. It took us two years to get those things auctioned. They’ve been sitting for ten years in some of these cars. It was nuts. He let them sit and not pay. It took us years. We made so much money selling those cars. He made a lot of money too. You can auction off cars but it takes a lot of work. The tow truck tows vehicles, put them on their property and then it sits there. If nobody ever picks it up, they go through the vehicle auction process.
You can totally auction off cars, but it will take a lot of work.
There’s a state law for this process. In towing companies, there’s also a towing association. The towing association is the one that works with the state to figure out what the rules are going to be. If anybody doesn’t know who Pete is, Pete’s my husband. Pete started digging into vehicle auctioning. This property has so many spaces and it was run to the ground. He wanted to make sure that he was doing everything correctly. What he did was went to the towing association. What happened is we formed a partnership with the towing company and put signs on the storage facility that said, “Towing enforced for nonpayment.”
The reason we did that was that our attorney told us to do that. We’re working with an attorney to give us the process of what to do. He was like, “You need to put a lot of signs up everywhere.” I can’t remember all the signs. We had a lot of different signs put up. One of them was “Towing enforced for nonpayment.” Pete started looking into the towing agencies, talked to the tow company and asked them, “What do you do with these cars? What’s the process? If we take these, what do we do?” What’s so funny is we had a couple of tenants and we still do who own tow trucks. That’s a business. You buy a tow truck, drive it around and tow things.
We had a couple of people that were doing that so he started talking to them. He was like, “What’s the process with auctioning vehicles?” They said, “If it sits there for X amount of days and you can prove that, then you can go through the vehicle auction process.” Pete started looking at the vehicle auction process and then get to know the towing association.
Towing & Recovery Association of Georgia holds workshops, just like the Self Storage Association. One of the workshops that they had was how to auction cars off and what’s the legal procedure for auctioning cars off. He took him and Bonnie because Bonnie is our Operations Manager and she runs everything underneath Pete. They did this whole one-day workshop where they learned how to properly auction off vehicles and what the state laws were for that. He learned how to do all that and what the right way to do was. Eventually, it took 1.5 years to 2 years to get to the process where he could auction those off.
We’ve been doing it a lot more so essentially, it’s getting faster but the first time you do anything takes forever. He ended up going through the whole process of figuring out if there were any liens on the property and the vehicles, getting ahold of the owners, getting the vends and searching the vends. He got access to IDI. If anybody does not know IDI, IDI is a higher-level skip-tracing company. Not all skip-tracing companies are created equal. You would have to get a security clearance to get access to it. Once you get the security clearance, then they give you vehicle information
He has a security clearance that allows him to put the VIN in and then it pulls up the owner of the vehicle. Especially if you’re going to get to boat and RV parking or any type of parking, you want to have this. I would highly recommend IDI. It was expensive but not really but it is going to cost you a little bit of money to do this, the cost of doing business. He got access so they started gathering. We had 40 vehicles. Essentially, there were so many vehicles that had not paid in years and they were sitting there and rusting because this owner had run this thing to the ground.
If you think about it, there are 60 parking spaces and 60 10×10 spaces. There are 6,000 square feet of storage and 60 parking spaces. 2 acres of that whole lot is parking and 1/2 an acre is taking up the 60 spaces. It took him the whole time to get it through and then finally he got through the whole process and put it on StorageAuctions.com. We had so many vehicles. People don’t care if they’re nice cars or not. They’ll just buy whatever. I don’t know what they’re doing with these cars but even the junkiest cars.
We have cars that were sitting there and it looked like they had just been piecemealed, scraps are taken off, tires and a big chunk of metal sitting there. We also had pieces of cars sitting around with engines and stuff like this. He put those on there too. He auctioned anything off in Storage Auctions. We had one guy on the property. There was a mobile home trailer. There was also a semi-truck. He had parked their trailer there, never came back and left the semi. We auctioned that off and somebody bought it.
The semi-truck was probably put there many years ago. It’d been sitting there forever. I can’t imagine how the semi-truck even came in here. Did it come around here and then go straight and back in or what? I guess the person got the semi-truck and paid a couple of thousand dollars for this thing. We didn’t even open it or anything. We just put it on, did the whole process and put it on Storage Auctions. We had people bidding on this thing. In the end, we got $3,000 or something for it.
We put it on and they came back. The person that had won the bid hired a company to come and pull this thing out. It had been sitting so long in the dirt and stuff like that that it was sunk into the dirt. They tore the whole place up. We didn’t care because it was taking up ten parking spaces or something and that’s a lot of parking. Somehow, they pulled it out, swung that thing around and got it out. I don’t know how they did it without even wrecking anything. These trucking companies are amazing.
We went through that whole process of getting rid of all these cars. There’s a school right over there. We talked to the school. There’s the property I told you is for sale. They’re trying to sell it. Whoever wants to buy that property could buy this property as well too because we are going to sell this facility early in 2023. They can buy this and build on it right here.
We wanted to repave the school because this was bad, honestly. There are potholes everywhere. On one side is where that little pothole is. At one point, this was a nicely paved driveway. This might be newer, I can’t tell. It looks nice and paved but we got this all paved. It didn’t cost that much money. It costs $60,000 to pave this.
It looks nice and pretty. Parking is all organized. There are nice lanes and everybody’s parking perfectly. It looks good. We’re about to get the facility painted and then sell it. We’re trying to fix it up. We had a lot of parking here so we asked the school whoever could move the cars. This was a huge fiasco that took us months to plan because we had so much parking and stuff there.
They parked all their stuff here for a week. We paid the school to let them park here in the holidays. Nobody was going to be there. We planned it that way. We hired a security guy that had a van and they stayed there the whole time, 24/7 and monitored. That’s how we did it. We got everybody to move all their cars. We had to tow a couple of them but we got it all done. It took a week to pave this and make it look nice. It looks amazing now, honestly. I don’t even know if I have any pictures of it. Pete probably has some pictures but it looks good. Pete’s going to go up there and take some good pictures, especially for selling it. That cost us about $60,000, plus another $10,000 to do all this stuff but we did repave it.
Getting Out Of Pocket
We bought a dumpy store. Our very first storage facility was a dump. I have no wrongs at all with buying mismanaged facilities. The only thing with the mismanaged facility is that you have to come out of pocket for X amount of time to fix all this up or you could borrow the CapEx if you want to and then use that money as the CapEx. We typically don’t do that because I pay 8% to 10% on my property and I don’t want to pay 8% to 10% on a lot of money. I want to pay 8% to 10% on exactly how much I need. We typically borrow enough money to purchase the facility. It was $250,000 to buy this.
Remember, he wanted $500,000 but I told him that I couldn’t afford that because, honestly, I had no idea what I was doing when I bought that property. All I knew is that I was selling a property and we were selling it for $250,000 to $300,000. That’s all the money I had from the other lender. In my mind, I was thinking, “I’m going to sell this rehab. We’re going to close it.” He’s going to give me his $200,000 or $250,000 that he has and I may be able to come up with some money as well too. Whatever money I have, I want to roll it over to this.
Essentially, I only have $250,000. That’s all the money that I have to spend. At 10% interest, it’s going to cost me $2,500 a month. He said that he was only making $2,000 a month. I was like, “I’m going to have to come out of pocket for a couple of hundred dollars every month. Plus anything it takes for us to get this thing up and running, we’re going to have to come out of pocket.” That’s how I talked to my private lenders as well too. I am 100% privately funded on all of the purchases.
I tell them, “If you give me the money to purchase the deal, I’ll be the one that comes out of pocket to get the things up and running.” That takes a lot of time, effort and cost to do. For this facility that you see here, we came out of pocket $60,000 to get the whole thing paved. We came out of pocket every month. It took us eighteen months to get a profit and break even on this thing because it was such a dump.
We ended up having to call EPA because, throughout the entire facility, there were tires everywhere. That took me two years. I called the EPA. I was like, “I feel like our area is a dumping ground for tires. I want to get this fixed and I hope you guys can come to do this for free because I cannot afford to fix that.” I talked to a nice guy that worked for the EPA. I don’t remember how I did this. I probably just googled EPA or something. I talked to the guy in the district area and was like, “Can you come by and meet me? I’ll show you where all these tires are. You take a look and see if you guys can help me.” He said yes. I was honest about it.
The guy came over and when he drove up, he saw this big huge pile of tires. I was like, “That’s not it.” We started walking the property and there were tires everywhere. Also, there’s a fence. This section goes down. It’s a hill. People started throwing their tires over the fence. They were down on the other side of the fence and there were hundreds of them. Overall, he told me that they took probably 3,000 tires from this area. Could you imagine 3,000 tires all from this whole area? He said that they went through this whole area and picked up every tire.
The owner had let them do whatever. These people were working on their cars, throwing tires and it was a big mess. Nobody wanted to buy this thing because it’s a huge operation trying to get this thing up and running. You’ll come out of pocket and it takes a lot of time and energy. These properties for Pete and myself are perfect. These are the ones that we love. I bought this for $250,000. We pay 8% interest to our lender. It’s an interest-only payment. We put in $60,000, plus money over the course of the last couple of years to get this thing up and running. Let’s say $100,000 total to get this thing beautiful up and running, time, effort, fixing and painting. The fence is coming down so it got all redone.
We spent $100,000. We’re all in a $250,000. We have 125 spaces that are making about $100 each a month. We’re making between $10,000 and $12,000 a month on this. Remember, he couldn’t even get $2,000 out of this thing. We’re making $12,000 a month on average and let’s say $125,000 a year. This thing is valued at around $1.2 million. We bought the $1.25 million. We’ve made $1 million on this property over the course of the last couple of years.
This property also is a higher value because it’s at a lower cap rate. The reason why is that it’s a primary market. This area is South of Atlanta. This would be considered the primary market. When we bought this facility, there was only one storage facility. There’s LiveStorage and Secure Storage. There are a couple more. There are so many major players in this area. It’s a busy road.
We’re surrounded by larger facilities. It’s crazy. Those were not there when we bought the place several years ago. I would consider this a primary market. I would consider this a primary market. This is going to be worth a lot of money when we sell it. That’s how we made it. We’re going to be making $1 million on this property and working hard to get it up and running.
There’s Space Shop Self Storage, our competitor. All these people are way more expensive than us. We charge $100 a month on average. If you look at their website, look at how much they’re charging. Let’s check and see. 5×5 is $62. This is climate control. Let’s see the available units. Small, medium and large size guide. They’re way busy on this website. It’s too busy for me.
Everything’s climate control. Here’s a drive-up. I see a 10×20 for $289. We’re charging $125 for a 10×20. There’s 50% off the first to rent here. They’re going, “You can choose your promotion 50% off the remainder of the month or 50% off the first full month.” With 10x20s, we charge $125. Ours is older. We don’t want to be as good as them. That’s why we’re always full as well. We’re making $10,000 to $12,000 a month on this thing. We should be able to sell this for $1 million plus.
We can get into online deals but going directly to the owner, asking the owner to sell to you and getting the owner to know they can trust you is the best way to get deals. Keep that in mind as you get out there, especially over in 2023. It’s going to be amazing. I hope you are working on coming up with the money and raising money. l talk about this every week. Your focus is to find the money, either your own money or somebody else’s money. I like somebody else’s money better than my own money. I’m okay with paying higher rates if it’s somebody else’s money. I’ll do all the work. That’s how my husband and I are.
Going directly to the owner and getting them to know, like, and trust you is the best way to get deals.
You may not be that type of person. I have a lot of people in my coaching program that is like, “No, somebody needs to manage that. I want a bigger facility. I want 300 units because I need somebody to manage that.” They’re adamant. “I have to make sure that the numbers work with my management fee because I’m not going to do that.” There’s nothing wrong with that either. Everybody has their way that they want to invest in self-storage. The best part is that there’s something for everyone. You can be like us who like to get our hands dirty with nasty storage facilities.
Remember that we closed 171 units for $375,000. On 6 acres, that one is going to be worth over $2 million when we’re done. It’s the same thing. It is a dump. It’s going to take a lot of work for us to get that done. Those are the type of facilities that we like. You can do income-producing properties, mismanaged, new construction or whatever you want.
If you want to hop onto my pitch, I always do it right after every session. I’m looking for some money for the next deal that we have under contract. If you’re interested in doing that, then you could hop on that at StacyRossetti.com/Fund. That’s how you get on. “When you roll the money over from one property to the next, is that situation written into your private lender contract? How do you go about structuring that? I assume you roll that money over so you aren’t having to pay out the lump sum.” That’s not true. What you do is close on the deal that you have.
Before this one, we had rehab and sold it. The lender got his $250,000 back. Once he gets the $250,000, the attorney or the title company is going to wire that money and that transaction is going to be 100% closed out. He’s going to have to rewire the money back over and there is going to be a new lien on the property. As a private lender, you get the first lien on the property and a note. The note is the terms of your and the private lender’s agreement.
With that lender, we do 5-year loans at 8% interest. I’ve been working with that lender for almost ten years. He does not want any money back at all. He knows that he gets between 8%, 9% and maybe 10%. At one point, he gave me 3%. He was like, “Stacy, I’m so happy I’m working with you. Interest rates are down. I’ll give you 3% on this deal.”
I love working with lenders that are open to working and understand the concept that a lender is like a partner. We’re trying to create win-win situations. I’ve made my lenders so much money. Thank you for being nice to me as well too. We close that transaction out and then that money is rewired back to the attorney to close on this transaction here at the storage facility. They get the note, the lien on the property, title insurance and also hazard insurance. Just in case this burns down or something, they’re covered.
Work with lenders who understand the concept that a lender is like a partner. You and your lender need to be in a win-win situation.
That’s what they get for lending me the money. That’s how it works. There are always separate transactions. On private lending, I don’t get a line of credit. On my fund, the fund is like a line of credit. I raise as much money as I can and then go and buy storage facilities. The fund would be like a line of credit. That would be more advanced. Start it out with some private lenders, figure out how it works and then move on up to funds and syndications.
“How long do you take to get your CapEx back?” For my facilities, it takes 1 year to 1.5 years for CapEx. The one that we closed on was a $200,000 CapEx. That’s going to need to be painted. Also doors and walls. In between the units, the owner took walls out on some of them for some reason. I don’t know if he was trying to make different sizes and stuff. Also, the latches. $200,000 is what it’s going to cost. To spend $200,000 on a storage facility takes a lot of time and effort. Think about ordering those doors and managing that whole process. That’s a lot of work. Give yourself eighteen months. I tell all my lenders, “Eighteen months is when I’m going to start turning a profit. If not, longer, maybe 24 months.” It takes time and you want to get yourself time.
Let’s say you buy an income-producing property. I have students who are like, “I need cashflow. I want to quit my job. I don’t want to be doing this anymore. I need to make $5,000 a month because that’s what I make in my job. I need to buy me a storage facility that makes $5,000 a month.” Income-producing property is what that is with a little bit of appreciation on the back end. For mismanaged facilities, you’re coming out of pocket with a lot of appreciation on the back end.
“Is there anything you can make the parking space tenants sign when they start so in case you default, you can speed up the auction process?” You cannot speed up any auction process. The auction process is up to the city or the county, whatever one you’re working with. I’m telling you, it takes forever. With the government, nothing ever goes fast. If it’s a nice vehicle, they’ve only been there for six months and then they stop paying, what we do is get the vehicle towed. “Towing enforced for nonpayment.” We’ll let them know like, “Since you have not paid this, we’re going to tow your vehicle.”
When you’re buying a property that’s a piece of crap and there’s stuff that’s been sitting there, which happens quite often, that is where you should go through the auction process and learn how to do vehicle property auctions and stuff like that. That’s what it is. Typically, if they haven’t paid in a couple of months, we send them a towing notice and tow it off.
“May I ask how much did you make out of those?” We made $20,000 or something like that. We made a good amount of money. “How do I know if I’m getting a good deal?” I go over deal analysis quite often on Monday nights. Remember, every Monday night is a new session. You can go onto my YouTube channel, search Stacy Rossetti Teaches and then look up all of the different videos that I do deal analysis on.
You can also get access to my deal analyzer by buying the course Super Simple Self Storage. If you want to learn how to do this, then buy the course. If you go to my website, it’s $2,000. Inside that course, there is a deal analyzer and there’s me on several videos explaining about deal analyzer. Taking you step by step process of the course is what I’m doing. You can go to StacyRossetti.com and click on the online course so you can find that.
Q&A
Another question. “When finding a lawyer, does anyone work or should you be searching for one that has some knowledge in the industry?” Are you getting a lawyer to close on a property? Not really but if you need a lawyer for tenant questions and stuff, yes. If you join your Self Storage Association, there are always some lawyers there that you can always hire. Typically, they’re a little bit more expensive but find a good lawyer to help you answer questions on self-storage management or questions on your contracts and stuff like that so that you can have somebody to lean on these processes that I told you. It’s good to have somebody that understands the storage industry.
I’m going to be speaking at ISS, that’s International Self Storage. I’ll be there in April or May, whenever it is in 2023. There are a ton of lawyers there. If you want to learn, get to know the network and find people, then you should consider going to the ISS. I’ll be there speaking as well. “How many square feet on the property you’re buying currently?” The one that we closed on was 25,000 square feet. That long building was 6,000 square feet because it was 60 10×10 units. It has enough spots for 60 more parking spaces. It was a 3-acre lot, which is a big piece of property.
“If we want to invest with you, what’s the rate of return?” I’m going to go into the pitch. If you want to be a passive investor, you should hop onto the pitch at StacyRossetti.com/Fund. The preferred rate is 10%, which is very good. I was talking to my lawyer and he was like, “Nobody doing 10%, Stacy.” I was like, “I’m doing 10%.” It’s a 75/25 split. It’s 25% to me and 75% to everybody else. That means that I’m giving up 75% of my deals for you. Believe me, I have never done that before. Keep that in mind. I’m finding the deal, managing it, giving you 75% and then you give me the money. We’ll all make money together.
“I’m a passive investor. What’s the highest interest per annum for monthly payments prefers that you see out there?” 8% to 10% is typical. Let’s see what happens over the course of 2023. You want to make a win-win situation. Sellers are still 50%. We want you to drop your prices. All of us investors are waiting. The prices are so high that lenders have to lower their interest rates.
Back in 2010, 2011, 2012 and 2013 when I was doing rehabs, I would see the lenders doing 15 and 5 points. That was crazy. I never did that. I always stuck with private lenders. If you have such a huge gap, then you can get more money. The truth is there is no huge and good spread yet. That’s why I say 8% to 10% is a good, fair number. Honestly, 8% to 10% is going to be way more than what you’re getting in the stock market or crypto.
You could do my course and then start getting out there. I’m telling you, there are so many good deals out there. The truth is that it’s all a numbers game. Keep that in mind. The more offers that you put in, the more chances you’re going to have in finding a good deal that fits your risk level. “Aren’t you still in the rehab game?” No way. I will never go back to rehabbing. Once you get into storage, you do not want to do rehabs anymore, that’s for sure.
Rehabbing is with contractors. Rehabbing houses is way too stressful. Storage is different. With storage, slow and steady wins the race. Storage is not so stressful. Rehabbing is too stressful, honestly. I’m so glad I got out of rehabbing. I got 25,000 square feet for $375,000. Talking to the owner is the best way to go. I think I got everything. I’m going to jump off. I appreciate you hanging out. Come back in the next episode. See you next time.
