It’s another Monday session with Stacy Rossetti and in this episode we discuss a creative deal structure of buying a storage facility with no money down. So if you’re low on cash but are motivated to start building your portfolio, this is one episode you can’t miss. Stacy also shares insights into how rent, occupancy and property conditions affect seller’s price. So tune in and learn more strategies on assessing, negotiating and closing deals on storage.
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How To Buy A Storage Facility With No Money Down With Stacy Rossetti
Are you all ready to learn about storage? Tamara, how are you? Tony says, “Hi.” We got a couple of people here. Tyron, Jeff, and William, I appreciate that. Nice to meet you, Ax, Mike, and Vance. Ax is from Idaho. My family and I are from Idaho. Have you heard of Challis, Idaho? It’s a little tiny town. Ray says, “Hi.” Nice to say hi to you. Sean and Troy are here. We are going to go over another facility. This is whatever number in my series of all of the facilities that we own. We have been going through each one of my facilities. We have twelve facilities. I will be sharing with you how we found, funded, and ran them. That’s what we are doing.
These are all live sessions. The only people that can get a copy of these are my students inside CoachAccountable. If you miss a session, then you can always go in and reread this session. Everybody else that’s not a student, then you have to be here live to get the training. I teach every Monday night. It’s a completely different topic every Monday night. I have been doing this for a while.
We already have everything all planned out for 2023 as well too, so I will be here on Mondays as long as you need me. I’m here to walk you through getting your foot in the door. We had our two-day bootcamp for students that joined the coaching program. We took them through an entire deal. How did we find it? How did we purchase it and run the deal analysis for it? How did we onboard it?
All the onboarding process, which is what I call Stage 2. This is when you get a facility under contract, then what do you do? There’s a lot of stuff you got to do. After you purchase the property, you go into Stage 3, which is a transfer of ownership. There’s all the stuff that you have to do for the first 90 to 120 days. After that, you go into Stage 4, which is automating and systematizing your facility.
That’s what the coaching program is about. If you are interested in that, you can go to StorageNerds.com and get on the waitlist. The doors will open again in January of 2023. I only open the doors 3 times a year for 6 days, and that’s it. I only take twenty students every single time the doors are open because that’s all I can handle. I got to help everybody. I’m going to go over a storage facility, and this is a good one. I put no money into this deal. I don’t put any money into any of my deals but this is a good one because it’s a creative deal structure. I’m going to get into that and show you what I did for that.
Finding Deals And Financing
A lot of people ask me how I buy all twelve of my facilities. I ask people for money and to lend me the money. When they lend me the money, then I go out and buy a facility. If you don’t have any money or don’t have enough money to buy a facility, then you should be talking to everybody that you know and asking them if they have any money that you can borrow, especially now that we all know how the market is getting.
We all know interest rates are going up. Interest rates are above 6% now. The commercial side is usually a little bit lower and lags a little bit but essentially, all rates are going up. By the end of 2022, we know that interest rates will be super high. How high? I don’t know. I’m going to guess like 8%. We already know where they are going to go up but we don’t know how high they are going to go up.
When you have a property that’s too expensive and then interest rates that are too high, you can’t make a deal that way. One is got to get, either you have high residential and commercial prices and low-interest rates or you have low-interest rates and high prices, it’s one or the other. Interest rates are already as high as in 2008 and going to get higher.
You need to have that spread. In 2022, sellers have not been giving you the spread or the prices. We are seeing that because we are putting in, on average, ten offers a week for my team. For all of you that don’t know, I have fifteen virtual assistants that work for me, and they do nothing but find storage facilities and make offers on them. The rule is that you can’t go below a 7% cap to put an offer in on a storage facility. Not a lot of people accept 7% caps.
A mismanaged facility could be a lower cap rate but for an income-producing property, you can’t go lower than a 7% cap. A 7% cap is a good conservative number, especially because we don’t know where the market is going or even higher would be great for an income-producing property but nobody is doing that. It’s like few and far between. Now, it’s getting a little bit easier to find facilities but owners still think their facility is worth a lot of money.
We put an offer in on a facility, and it was in Indiana or some Midwestern state. The owner emailed back, and his message was, “Looks like we are not going to be able to do the deal. I don’t think we will be able to come to an agreement because your prices are way off. Good luck with your search.” That’s basically what it said. It’s funny. When I talk to the virtual assistants, they are on their scripts.
We have the seller call sheet for all the students. For all the students, the script is there so you all can read it. It says, “What’s the price you are looking for?” We can come up with an offer but if you don’t give us a price, it could be a lower offer than expected. We don’t want to do that because we like to create fair offers. “If you have a price in mind or have been offered something and turned it down, can you tell us what that number is so that we have something to start with?” That’s what we ask.
I love when an owner gives you the price or the number. They are like, “If you could be over around $550,000, we could talk.” This question works very well. Everybody can use that. The guy that I told you about would not give us a number, and so then we gave him an offer, and the offer was not close at all to anything that he had in his mind. If he had given us a number close to what he had in his mind, we would’ve saved a whole bunch of BS in the middle. That’s so frustrating.
If you have a number in mind, then tell them. Maybe way off. You could give him a high price. A lot of sellers give us high prices. We try to work it with owner financing. “You want $1.4 million but it’s only worth $1 million dollars. Why don’t you seller finance that for us? If you seller finance, you will make $300,000 or $400,000 over the course of the next ten years.” We do that a lot with the magic letter inside the deal analyzer. That works out very well as well too. A lot of owners are open to at least discussing that.
There are still a lot of sellers out there that don’t want a super high price and low cap rate. Anybody that is like this guy that I talked about that our prices are not close at all, I tell my virtual assistant, “Put that in as a follow-up in six months,” but the truth is, in six months, it’s going to be a completely different market. We are doing that a lot.
There are a lot of follow-ups in 3 to 6 months, especially if we put in an offer and don’t accept that offer, we follow up in six months. That’s what we do. We are going to give them this last quarter and then the first quarter of next year, which are going to be the two worst quarters coming up. By the end of the first quarter, everybody will have a better gauge of where the market is going to be, what’s happening, and then, “Should I hold onto this or was my price way too high at that time?” just to give you an idea. Internally, that’s how our acquisitions team is working.
By the end of the first quarter, everybody will have a better gauge of where the market’s going to be.
Live Oak Deals
Let’s get into Live Oak. We have 11 facilities under Ms. Lillian’s Self-Storage and then 1 under Mission Self-Storage, which is for our fund. To remind everybody, I have a fund it’s called the Self-Storage Fund of America. If you are interested in passive investing like, “I want somebody to manage and make money for me. I don’t do any of the work,” which is the best way to make money but if you want somebody to do that, then essentially check out the Self-Storage Fund of America. It’s Self-StorageFundOfAmerica.com, and then you will be able to log in and see the PPM and things like this. After this session, I always pitch it. That’s us buying storage facilities and managing them for you like the stuff that I teach you but we do it for you.
Ms. Lillian’s Self-Storage is our own personal portfolio of eleven facilities. You can check it out. We are going to go over a Florida property. We have two facilities in the same city, Live Oak North and Live Oak South. This time I’m going to do Live Oak North. We’ve got parking and the facility itself. We will go to Google Maps. How did I find this one? The funny thing is I didn’t find it. The Live Oak South is the one that we found driving for storage. It’s 100 units. We got this one at a great price. I’m going to go over this next time, so make sure you hop on to read.
This is how it works. We found the Live Oak South one driving for storage, which is how we find most of our facilities. When my acquisitions manager found it, I told him, “Call every storage facility within a 30-minute radius to see if anybody else wants to sell.” That’s what he did. He called everybody, and this one wanted to sell in the same city. We have 1 on the North side and 1 on the South side. All we did was drive for storage and pick up the 1st one, and then call around and pick up the 2nd one. Honestly, it was very easy. We are calling and talking.
It’s not a bad or small town. Lake City is a little bit bigger town and a lot of people work in Lake City. It’s in between Tallahassee and Jacksonville. Lake City is right on 75, and then we are right on the 10. There’s a lot of traffic that goes through this area. If you’ve driven from the South to Florida, you are going through 75, and if you are going East to West, then you are going on the 10. It’s the perfect location.
I’m not sure how big this radius is or how many people. Live Oak, Florida’s population is 6,929. It’s not too small. It’s a good size. It’s inside the city limits. We look at the 10-mile radius is what we do. It’s probably 30,000 people. Lake City, Florida, is even more. It’s big. It’s good a little kind of town. The population is 12,000 people. Together is 20,000, and then you’ve got a whole bunch of people in this area, is how it is. It’s a good little area.
This facility that we picked up in the North called the guy and asked him if he wanted to sell. Our manager called, and the guy was like, “I am interested in selling. I have been thinking about selling for a while.” My acquisitions manager was like, “Stacy, give him a call because he wants to sell.” I did give him a call. I remember I was at an indoor play place with my daughter. She was playing and doing her thing. I was like, “I will call this guy and talk to him.” We sat on the phone and talked for maybe 30 minutes, and he told me his life story and that he wanted to retire. When somebody gets on the phone and talks to you for that long, you know they want to sell.
Try to talk to them. They are regular people. He was a super nice guy. We talked on the phone, and he told me, “I want $600,000. That’s it.” I was like, “Are you sure? Can I not go down to $500,000, $550,000 or something?” He’s like, “No, $600,000. That’s it.” I was like, “I can do that but let me make sure. Let me run the numbers and stuff.” He wants $600,000 for this facility. We got all the details. We know what it looks like. This is the one thing I also want to tell you. This one is the same size as this one. It’s 100 units, and the other one is 116 units. It’s not like exactly the same. This one is a little bit bigger but they are almost the same.
Factors Affecting Pricing
Live Oak South, we picked up for $300,000, and Live Oak North, we picked up for $600,000. What is the difference? Why is one $300,000 and the other $600,000? We are going to see Live Oak South. We will do both so you have an idea. Why is there $300,000 in these two properties when they are both exactly the same size? They are both around 100 units each. It’s the rent. It’s because Live Oak South was not making any money. They were both full but one of them was charging half of what the other one was. They were maybe six minutes apart or something like this.
The owner of Live Oak South did not live in the area and wasn’t managing it properly. The owner was a lady. It was full but she had not raised the rent in like forever and was not into it. It was a mismanaged facility. The owner of Live Oak North has a business, and it was pine straw. He had his office, little tractors, and then the facility. He was there store managing it. The Live Oak North was making $72,000. The Live Oak South was making about $38,000. It’s the same exact size of facilities. Isn’t that crazy?
Tony said, “Did you lose tenants when you raised rates?” Yes. I’m going to get into all that here so we can go through the process. When you first buy a facility, you always lose a couple of tenants. If you raise rates, you may lose more, and then if you severely raise rates, you lose even more. For instance, we raise the rates for all of our facilities, on the one that we just bought. The owner was charging $20 a month for a 10×10. He hadn’t raised the rates in ten years. We raised them to $100 a month because that’s the market price. Everybody was pissed off. We are going to lose 20% or 30% of the people, and they will leave because we raised the rents. We ripped the Band-Aid.
You rip the Band-Aid immediately or you can raise it how much of it you want but we’ve learned over the last couple of years that it takes too long if you only raise the rates by $5, $10 or $15. What happened was that over the course of the last couple of years, market rates went up like everything else. Housing and rent went up.
A lot of people in the storage are still at the same level as pre-COVID, so we take it to where it’s supposed to be. We do lose people. If you buy a facility, that’s producing what it’s supposed to produce, if you only raise the rents by a couple of dollars, nobody is going to leave on that. You are supposed to raise your rent once every 6 to 9months, depending on your location.
Housing and rents went up but storage is still at the same level as pre-COVID. And we just take it to where it’s supposed to be.
Let’s say that we are in a tertiary market, and every nine months, we are increasing our rates by 5%. Nobody is going to leave on that. When you transfer ownership, and they were like, “I have to go sign a contract and pay online. I’m totally not going to do that,” or they leave when you raise the rents or severely raise the rents. That’s the two times that they are leaving. Outside of that, they don’t need the unit anymore. Now, you have an idea.
Live Oak South
We also have another facility in Valdosta that’s a 45-minute drive and another one in Blackshear. We have a little good size portfolio that we are trying to build up. Let’s do Live Oaks. Let me do satellite imagery. We are outside of the city. This is what it looks like here. It’s got three buildings. You will notice also when you look at storage, you could tell how old it is by how far apart it is. It looks close together but it’s about 15 feet. Typically, you are at 20 to 25, maybe even sometimes 30 feet away. Now, you have some wiggle room. You can drive a car but it’s tight. You can drive a truck but it’s tight.
The older facilities are that way. There’s this big open space, which dips down, which is the retaining area. We’ve tried to ask if we can build here like, “Can we add another building?” They were like, “We are going to have to come out, take a look, and do a test.” It’s partially fenced in but then there’s this big open area that’s not fenced in. It’s flat but it dips down a little bit. Maybe it’s supposed to be a retaining thing or something. I’m not sure. I feel like you could put another building if you leveled it up. They should be okay with that but we will have to see.
For Live Oak North, we are going to add another building there. We went to talk to the county, and the guy at the county was like, “Go for it.” Even in the City of Live Oak. They were like, “You can do whatever you want, just sign this form.” I like working in little tiny towns like this. This is the facility itself. It’s dipping down a little bit but not a lot. There’s water sitting there but that’s how it is.
It’s 2 separate buildings and 2 different colors. To me, that’s probably Phase 1 and Phase 2. This might have been like Phase 1, and then they added new ones, or maybe this was Phase 1, and I tried adding two more buildings but couldn’t get approval for this. They could only add one. That’s how it looks. It’s 100-unit. This was found driving for storage, and then I funded it 100% by a private lender. I purchased this property for $300,000. We made an offer of $300,000, and they accepted it.
This is also what I told my acquisitions manager, “Whenever you are out driving for storage and then you are in front of the facility, call the facility and ask them if they are interested in selling.” You are right in front of the facility and I say, “My name is Stacy. I’m right in front of your facility. I’m very interested in this property. I own a couple of other ones, and I’m trying to pick out another one. Would you be interested in selling?”
A lot of times they will say, “We are interested.” “Awesome. I’m right here. Do you have time to meet now so that I can introduce myself?” This is what happened with Chris because that’s what I taught him like I taught my students. He was out driving for storage. He called the owner, and they were like, “Yes, we will meet you.” They came over to the facility, and they all met.” Right then and there, Chris filled out the contract and handed them the contract.
When we are driving for storage, we always have some contracts with us in case. They said, “We would take it for $300,000.” Chris said, “Can we put this under contract, and you can give me some due diligence time, so I can take it back to Stacy and look at it and see if it’s a good deal or not?” They said, “We can do that.” He filled out the contract and put it under contract. He emailed me the contract and put the folder and everything together so I could take a look at it. That’s how it worked. They were ready to sell. We were right there at the perfect time. They also said, “We appreciate you being there.”
Let’s do Live Oak South. I will show you the folder, so you would know what’s in the folder. It’s called My Storage Place. Anyways, I try to keep our folders as organized as possible. I can’t be going to the Google Drive folder, and there’s a whole bunch of stuff everywhere that’s labeled weird, and you don’t know what it is. Everybody who works for me knows they must label everything properly for us. That’s how we do everything. Closing docs, corporate, walkthroughs, and whatever we need are all labeled properly.
Let’s go over the deal analyzer as well too. Inside the storEDGE, there’s a dashboard we have 67 tenants and 75% occupied. I have been over this since we did this. The reason why we are low occupancy on all of our facilities was that in July is when we raised the rates again. We brought them to current market value. It’s not a 5% raise or anything like that. The market was going up high and fast. We were raising rates by 5%, and it wasn’t keeping up with what the market called for. I talked to Pete and was like, “We need to raise the rents.” We ended up raising the rent considerably. We went from $60 to $100 on a 10×10 or $60 to $85. It’s a $25, $30, or $40 increase in rates.
We had a lot of people leave. We have around 1,000 tenants or a little bit more, and a lot of those leave. We probably had 100 to 200 or 20% leave because we raised the rates on all the facilities. We are building back up. They are coming in at the rate they are supposed to be coming in. That takes time to do that. We raised the rates in July. It has been August and September. It’s going to take us until the end of 2022 to get back to where we were. That’s why you see the occupancy like that but we will get back. It just takes a little while to do it.
We have sixteen that are delinquent on the 26th of the month. They are probably going to be doing auctions and stuff like that. You can see how long people stay in this area too. This is very important to know because this is what we call your customer lifetime value. Once you start knowing how long people are staying with you, then you can know how much you can spend on marketing. That’s why this is very important.
On average, most people are staying 1 year to 2 years. They are either a couple of months in and out or 1 year to 2 years. Once you look at all these numbers, you can come up with your customer lifetime value. We started doing Google Ads. SpareFoot is a website where you can list your property, so we are slowly getting on SpareFoot or Freedom Storage but Pete hasn’t put us on SpareFoot yet. The reason probably why he’s not on SpareFoot is that it is expensive. You will have to pay it 2 to 3 times what your rent is to get a tenant in the door.
We do a lot of Google Ads, and in a Google Ad, it will be $10, $15 or maybe $20 to get a tenant in once you get it going and started. We do that more often but every once in a while, if we need to lease stuff up, we use SpareFoot. It is very good at marketing for you, and they do all that, but then you have to pay for that. We could do it ourselves or get them to do it.
Questions so far are before I start to get into the deal analysis. It looks like Ariel Lund is posting all the information about my course. “Is that $72,000 a year?” Yes. Live Oak North made $72,000 a year when we bought it, and Live Oak South made $30,000 or $40,000 yearly. Let me look up what Live Oak South is doing now. We raised the rates so let’s see what we are making on the generator report. We are at $5,700.
For Live Oak South, we started at $22,000, and then we went down $6,000, and we went down $4,000 or $5,000. We raised the rates in January, and then they went down. We then raised the rates again, and it’s coming back up. April and May went down to $4,700, and now we are coming back up to $5,700. Remember, we have delinquency and all kinds of stuff. Let’s say we are at $5,800 now. It’s probably going to get back up to $6,000. As of now, $46,000 add another, let’s say, $20,000 for the rest of the year, so we are at $65,000.
It was only making $30,000. It wasn’t making that much money for 100 units. You should be making a good amount of money. This probably will only get better. Let me put my price in. We bought this for $300,000 but I ended up doing zero down, 10% interest, and then interest-only payments, and we did it for five years. Let’s leave it at a 7% cap.
The market cap rate essentially depends on what you want to pay or where the market is. A seven percent cap is a good conservative number now. Typically, for most secondary and tertiary markets 7% cap is a good number. An annual income of $65,000 is what we are going to be making. There are 100 units, and it’s 10,000 square feet. We are 25% vacant. That’s good. We will make $65,000, and then if we get full, we would make more money than that. That’s how that is.
I’m going off of $6,000 a month, which is where most likely we will be at, and then we will slowly increase. We should be at $100,000. We are taking it from $65,000 for the year to $100,000 is what we are going to be doing. In 2023, we will be at $100,000 once we get filled up. Actually, we are the competition. Let’s go to Live Oak North and look and see what they are charging versus what we are charging. Live Oak North has a gate and is fenced in. It’s a little bit more, honestly, than ours because ours is not fenced in and stuff. That’s something that we have on the list but haven’t done it yet, so move in and get pricing. At Live Oak North, 10x10s are $85.
Let’s go Live Oak South. What are we charging? It’s interesting to see the difference. Ten by ten are $85, so we are charging the same. We are charging $85 for both. We are at $0.85 a square foot. Let’s go back into the deal analyzer and put $0.85 a square foot. Vicky said, “How would you get the numbers from the competitors?” We ask them and look at their websites, and call them up. That’s what we do.
On the deal analyzer, you could do your own competitive analysis but on our deal analyzer, we have a section that says Ms. Lillian’s is our competition, and then we could fill all these sections out if you wanted to. Let’s say 10×10 is $85. You would want to do every single one apples to apples but I’m going to go on average to be quick. On the national average, it is $0.88 per square foot for a 10×10 so that everybody knows. We are right at the national average. You need to put all your unit mix in. We could do 100 10x10s, so 10,000 square feet. We are doing those at $85. It’s coming out around $0.80.
We did not use a realtor to close. Closing costs include your realtor, attorney or title company. I’m going to take that out. Insurance is maybe a little bit more expensive in Florida, let’s say $2,000 property taxes. Property taxes are probably $3,000. There are no utilities. We are right on par. It’s 1.33 for the debt-to-service ratio. You want to be above 1.3 to get bank financing.
We bought it for $300,000. We will make a minimum of $65,000. By the time we get it up to where we are supposed to be, we will be at $0.80 a square foot and keep raising the rates. Honestly, this thing should be worth almost $1 million dollars. It should be worth $700,000 to $900,000. We bought it for $35,000. It was full when we bought it. We paid more money than it was worth. It came out to a value of $150,000, and we bought it for $300,000. I knew that this property would be worth a minimum of $800,000 or $900,000 when it was full. That’s why I was okay with coming out of pocket on the backend.
Eventually, we will be making $96,000 minus vacancy is $88,000, and minus expenses come out to $63,000, and that’s our NOI. We have a mortgage on it, so we are making about $33,000 a year. If we put our mortgage, that’s $2,500 a month. When we bought it, we were at negative 399% because we borrowed 100% of the loan, but now, we are on a cash-on-cash return at 666%.
For 100 units, we should be at $7,000 to $8,000 a month in good markets but if you are in the middle of nowhere like Alabama or Missouri, which has very low market rates, that’s a little bit different. For the most part, you should be right around there. We are netting around $2,000 to $2,500 a month is what we are doing. That’s the Live Oak South. We are going to do Live Oak North next time and get into the numbers of that. That one we are doing very well on, even better than the Live Oak South one. It’s gated and a nicer property, and we are going to add more units to that.
Q&A
Sarah says, “Does this analysis help you figure out what you should be paying based on the information they give you?” Yes. The way that I teach my students is that you want to get all the information that they need from the seller, and then you take that information and put it into the deal analyzer. This deal analyzer is only available to my students. After you input everything, the deal analyzer will spit out your offer letter, which basically gives them a cash offer and the owner-financing offers.
We did not get this one owner financed. They only wanted the $300,000 cash. That’s it. We always offer owner financing and cash offers. Everything in yellow is the information that you are going to need to input into whatever deal analyzer that you use. After you input all the information, input your competition, do your competitive analysis, and put your unit mix in, then you are going to be able to come up with your offer.
I could change it and put $0.76, and it comes down a little bit to $843,000. Whatever your unit mixes here, it comes up and gives you the average if you want to know what your average price per square foot is. That’s one of the most important numbers of the entire deal analyzer. These four numbers are the most important. You input all this, and then you need to do an analysis. We do it in red and green. Red means, “You are going to have to figure something out. This is not working.” Green is, “This is awesome. Do it.”
For your competition, in secondary markets, we do a 3 to 5-mile radius. In tertiary markets, we will go up to 10 miles in radius. Sometimes if it’s extra tertiary and extra country, we can’t even find deals within 20 or 30 miles. There’s no other storage facility. In a primary market, it’s a 1-mile radius. If you start seeing there’s a lot of competition, then only go 3 miles or something. If it’s too much competition, then do the ones right next to you and look at them.
“What does it cost per foot to build 100 units near the Oak location?” Now, it’s going to cost you about $40 a square foot to build. We have one in Tennessee that one of my students sent me. He’s going to wholesale it, and it’s in Tennessee. It’s a big facility. It’s 350 doors or something. It’s got parking and doors. He wants a little bit under $3 million. It’s $35,000 per square foot. You can build but it’s cheaper to buy.
“Do you only buy or do you build?” I have never built anything before. We are in the process. We have two facilities that we are going to be doing phase one and adding more units on. I’ve never built from the ground up but I do have a lot of students that build from the ground up. It’s a lot of pre-development stuff on the front end, is what it is. You have to have a strong stomach because it takes a long time. It takes two years to build a facility. You can’t build something in six months. It doesn’t work. It’s taking a long time even to get anything done nowadays. COVID screwed everything up.
“You’ve got hard money to initially purchase and then went to a bank with valuation and got a loan paid off?” For this facility, I used a private lender. I asked everybody I knew if anybody had $300,000 I could borrow. That’s what I did. Eventually, found somebody that had $300,000 and lent me $300,000. I paid them 8% interest. They get a check every single month.
We typically borrow enough for the purchase price, and then we come out of pocket for the rest, so to close, and then all the operational expenses if we have to come out of pocket to get it fixed up. That’s what I tell my lenders, “You give me the money to purchase this thing, and I will find the money to run this thing.” That’s how we do it.
“Does this analysis help you figure out what you should be paying based on the information they gave you?” I’m not sure what you mean by, “What you should be paying.” Do you mean paying the lenders? Yes, the financing input is what’s going to show you that. I did $300,000 with a 10% interest and a five-year loan. I’m going to be paying $150,000 in interest. I’m all in at $450,000, and it’s going to be a $2,500 a month payment. It shows you your cash-on-cash return. It shows you what your monthly payments are going to be if that’s what you are asking. You need to know what’s your income minus your expenses minus your mortgage. That’s your net.
You need to know what’s your income minus your expenses, minus your mortgage. That’s your net.
“What are your thoughts on a lease option to buy a storage facility?” Sure. We do owner-financing. We have one deal in Texas where the owner has a mortgage on that facility. The person that buys it is going to do a wraparound mortgage, and then they get what’s called a contract for deed. That’s about as creative as you can get on a deal. I’m all about creative deal structuring. I love it. It’s one of my favorite things to do is figure out how to buy something, especially how to buy it with no money in the deal. There’s nothing wrong with a lease to buy or rent to own. That’s owner-financing.
“Are owners being contacted all the time by buyers?” In some areas, yes.In tertiary areas? No. Owners are not getting contacted. We have twelve facilities, and nobody contacts us about any of the facilities. I tell my office manager when she answers the phone, “If somebody wants to buy our facility, please let me know. Give them my information because I want to know what offer they are going to make.” They could be making some crazy ridiculous offer. I don’t want to pass up on that. I will talk to anybody that wants to give me an offer but nobody ever calls us. You would think people are calling all the time but nobody is calling.
Only a handful of people are doing this consistently. A lot of people call one time and then never call that facility again. The one that we closed on at least 3 or 4 times a year for a couple of years that I called the guy, and then finally, the owner wanted to sell. We are calling consistently once a quarter all of the facilities that we have in Georgia. We are calling and calling. Honestly, it’s about timing. You have to be consistent. You don’t want to give up, especially in 2021, as the market is crazy. If you are going to give up, especially this 2022, you gave up on the wrong year because next year it’s going to be good. You want to get that going now so that you are in the flow. You got the moment and the energy.
I appreciate you reading until the end. My website is StacyRossetti.com, and then if you want to go to the fund, you can go to the Self-Storage Fund of America. You had come here to register for this event to hear the pitch for the fund. It’s the same concept. This is a webinar. Also, the Super Simple Self-Storage Online Course is on there. You can purchase the online course. The price is going to be $2,000 or $1,997.
Ariel Lund should have posted a $1,000 off link in the chat. It only works for those that are here live. If you got that link in the chat, then you can get $1,000 off of my course. The course will take you through all the steps that I shared with you. It’s like DIY, Do-It-Yourself learning. There are 100 videos that you can go through and educate yourself on. I appreciate you reading until the end, and I will see you next time. Take care.
