Are you thinking about investing in a storage facility? In this episode, we delve into the details of a $1.4 million storage facility deal using our advanced deal analyzer. We’ll take a closer look at all aspects of the investment, including its worth, potential risks, and the benefits that come with it. We’ll give you a full picture of the deal so you can make an informed decision. If you’re eager to immerse yourself in the realm of self-storage investing, look no further—this is the ideal space for you. Investors of all levels, whether new to the game or seasoned pros, will find this episode with great value.

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Watch the episode here

 

Listen to the podcast here

Running The Deal Analyzer On A $1.4m Storage Facility

In this episode, I want to go over the deal that we closed on. I’ll talk about how I found it, how I funded it, and how am I running it. I don’t know if any of my students are on here, but if they are on here, know that in the mastermind that we have coming up, I’ll go very deep into this deal and I’ll show you how I did everything and how I ran the numbers. For now, I wanted to give everybody on here a high level of what we did.

This facility that we bought took us nine months to close. It was a cash deal as well too. Cash is not always the easiest way to close. We got it under contract, and then I wanted to pay cash for the deal, so I had to raise the money. Raising the money is hard. You then get attorneys involved. We had the attorneys get involved and of course that messed up. That didn’t mess anything up, but it made everything super drawn out because each attorney got involved and they both wanted something different. You had to communicate back and forth to get all that done. It was a nightmare.

On top of that, this owner owned this facility in his IRA which is a little bit different type of transaction. It was a corporation that was inside of his IRA. Just because of that, we had to go about buying this property a little bit differently. We had to make sure that on his end everything was okay because he was worried about how much taxes he was going to have to pay based on closing this facility. If he had to pay anything inside of his IRA or how that was going to work. That’s why the attorneys were involved as well too. It was a little bit of a different transaction. If you’re willing to work through it, work on it, and go through the motions, then eventually it’ll close. It just takes a little bit of time.

Anyway, in 2022, we picked up six facilities. This is number 6 in 2022. That’s from August of 2022 to August of 2023. I raised enough money for six facilities, which totaled around $20 million. This is going to be my last facility for 2023 because now, we have 16 storage facilities and we need to stabilize them. Getting out there, finding, and funding deals is a lot of work, but you have to own, manage, and stabilize the facilities. It’s a lot of work to do that.

My husband, Pete, on the back end, manages all of our facilities. They need time to get everything all worked on and stuff. If I’m always constantly making them buy these facilities, they’re constantly working on onboarding those facilities. The onboarding process is the 60 days before you close, and then the 90 days after you close. It’s a lot of work to get things up and running. We’ve been buying these facilities every quarter or once every couple of months. They’re working on onboarding all the facilities. Now, we’re going to focus on stabilization. Right now, the market is down, but also occupancy is down. Prices are down. Tenants wanting to go out and rent units are down.

What we have internally is that the management portion is solely focused on how your occupancy is doing. If you are not occupied or if you don’t have 80% to 90% occupancy, then the value of your property is not going to go up. What that means is that we have over 2,000 doors. We have to focus internally on how to get new tenants. For us, marketing is the most important thing that’s going on. In our stage, owning 16 facilities, it’s all about how much marketing we’re doing. What are we doing to get tenants in the door, get them to stay, and get them to pay the prices that we need them to pay?

If you don't have 80-90% occupancy, then the value of your property will not go up. Share on X

A lot of people don’t think about this when they think about owning a storage facility. The hardest part of owning a storage facility is making the returns that you’re supposed to be making. That’s what we’re focusing on. We’ve decided that this is going to be the last facility in 2023 that we’re going to buy. Over the course of the next year, we’re going to focus on getting all of the facilities that we have stabilized. The first 10 to 12 we have are doing pretty well, but the last ones that we bought in 2022, we need to work on stabilizing those. That’s where we’re at. It’s exciting. We have a lot of facilities, but it’s also a lot of work. Now, it’s management work.

Just a quick reminder. We have a Facebook group. It’s called Super Simple Self-Storage. Please join this group if you can, and that way you can post any questions that you have in the group. I follow this group. We all answer questions. My team is there. We put all kinds of videos in there for you to watch, so you can start educating yourself. A lot of information is in this group. In that way, you can see what everybody else is doing too. Please join this group and become active in this group.

 

The second thing I wanted to go over was the StacyRosetti.com website. This is where you can get information on my online course, which is Super Simple Self-Storage. This is going to walk you through step by step how to get started in self-storage investing. There are 100 videos. It takes you through every single type of module, acquisitions, marketing, finance, raising money, management, and wholesaling. Everything is in there. If you want to learn, make sure you check this out, Super Simple Self Storage.

On top of that, you have access to my Deal Analyzer. I’m going to show you that so you can see. I want you to see how we ran the numbers. The Deal Analyzer that you see is what you can purchase. If you need help analyzing a deal or if you don’t know how to do that, then there’s a whole bunch of videos that go with this. Also, you get the Deal Analyzer as well.

Here is the information about the coaching program. Doors are open as of September 3rd, 2023 for either the StorageNerds coaching program or turnkey acquisitions. The coaching program is where I’m coaching, teaching, and guiding you. You get to come to the masterminds and bootcamps, all kinds of stuff. The Turnkey Acquisitions are where you can hire my team to find you a facility. We have fifteen virtual assistants that do nothing but call owners and do all the dirty work. The only way that you can join Turnkey Acquisitions is if you are a student. I don’t hire anybody. You have to be one of my students. Just so you know that.

 

There’s a whole bunch of information here. Also, there’s the show information here. Here is where you can find information about my investors or how you can invest with us. Self-Storage Fund of America, the offering is open for this fund or to invest in this fund until the end of September 2023. Once September is over, the offering is closed. If you need a place to place your money, then please make sure you check out the Self-Storage Fund of America. This is where you can access the PPM. You can get access to the subscription and you can always come to the pitch. I want to make sure I put that out there. If you’re thinking about putting money into the fund, now is the time because the offering is going to close.

We bought this facility right here. Mission Self-Storage is the brand. You can go to MissionSelf-Storage.com. This is the facility that we just bought. In order to get onto Google listings, it’s quite a feat if you don’t know what you’re doing. The good thing is that we made friends with the owner, and the owner’s a super nice guy who worked with us. He knew that we were trying to raise the money for this purchase. I wanted to pay cash. The issue with this deal was that he wanted a certain amount of money for the deal, but it was way more than what the value of the property was worth.

In that respect, what that means is that you either have two options, you can pay cash or you can get the seller to finance it because no bank is going to finance something that you’re paying way more money on. He had no P&L, no balance sheet, nothing because he wasn’t keeping track of anything. It’s funny, he sent me over his P&L and his balance sheet. What happened in this facility is that he owns three different companies. He was commingling the funds on all three companies. If he needed money over here, he’d move it over here.

When you look at the P&L for this facility, you could not tell what was going on honestly. It was like a disaster. We sent the P&L and the balance sheet that he sent to us over to a couple of lenders and said, “What do you think? Would you finance this?” They were like, “We can’t finance this at all.” We had to either pay cash or get him to seller finance on this deal because it’s a severely mismanaged facility. It doesn’t look mismanaged. You can never tell if a facility is mismanaged, but he wasn’t managing it properly. He was honest about it. He was like, “I’m not into it anymore. I don’t want to do it. I’ve had this thing. Most of the units are full. They’re full of crap and nobody’s paying.”

Anyway, that’s how it was. I tried to convince him to own finance. I tried with all my heart. I was like, “Come on. You could do it. I’ll give you X amount of money every month.” He was like, “No, I want to take my money and I’m moving to Costa Rica.” That was his thing. He wanted to move to Costa Rica, him and his wife, and retire. He was an older guy. He was like, “I want to get out of here.” I remember it was in his IRA, so it’s a weird deal.

That’s the gist of it. You can come and take a look at it. If you want to, go to Mission Self Storage, and it’s the Carrollton facility. Remember, what I said was to get onto the Google business listing. It is not easy, honestly, to do this because you either have 1 of 2 things that you have to do. One of them is you have to create a new listing, which is going to be at the same spot that the other listing is. I know you guys have seen this on Google Maps, but you’ll have two names there and we don’t like to have two names there. What we do is take over this listing. It’s not difficult to do except for when you’re not tech-savvy.

The good thing is that the owner of this facility is tech-savvy. He’s a tech guy. He gave us ownership of this listing. It only took us a day or maybe a couple of days to get ownership. That’s why we already have ownership here. Typically, this is not happening. It could take anywhere from a week to months to get to get onto Google Business listings. Luckily, the owner was working with us and he was like, “I’ll just switch it over for you. Not a big deal.” We already have the Mission Self Storage website and phone number. This phone number is already ported to us. The owner ported it over to us. He and Pete, my husband, worked together and got it done. He gave us this phone number.

We just bought the facility. We’re up and running in terms of the Google Business listings. I’m excited about this. Now, we have to work on pictures and stuff. These are the pictures that he or somebody else maybe put. I’m not sure what these pictures are. We’ll have to work on those. It’s hard to get rid of old pictures and stuff. That’s the one bad thing about taking over somebody’s listing. Anything that was put there previously is going to be there. I don’t know what you could do. Somewhere inside Google Business listings, you tell them, “This picture doesn’t belong here or something.” Google looks at it and they’ll take it off. It takes a minute to do that. We’ll clean up these pictures and we’ll get good fresh pictures in here. Some marketing pictures and stuff like that.

Google Business listing is looking pretty good here. The reviews are not too bad. We’re working on trying to get more reviews and we’ll work on trying to clean this up because this is a very big important part of owning your facility. The number one way that people look for storage is to go on their phone, go onto Google Maps, and click on storage near me, so you want to make sure this looks good.

The number one way people look for storage is by going on their phone to Google Maps and clicking “storage near me.” Share on X

Another thing is that our storage software is already up and running. We use storage internally. The process of getting it up and running takes quite a long time. The onboarding process is not an instant flip-switch thing. Remember I said, the onboarding process is those couple of months right before you close on the facility. We have been working together with the owner who was previously using SiteLink to get storage up and running. Storable own SiteLink, storEDGE, and ESS. They can internally do whatever they do to switch everything over. That’s the process that we went through to work with them.

They tell us what they need to do and you’d go through the process, but we worked on this over the course of a couple of months and got everything up and running. On day one when we owned this facility, which was Monday, we could have storEDGE flip the switch or whatever they do internally, to have us have storEDGE up and running. That means all these units that you see here are all internally added. All the 5x10s, 10x10s, and 10x20s, whatever sizes we have are all internally added into storEDGE, and then they mark it either as late, available, or rented so paid up. The blues are all paid, the greens are available, and the reds are past due. storEDGE is up and running.

In the dashboard for Carrollton, the numbers are correct in the occupancy. You could see that we are 53% occupied. You’ll know when you buy this facility that it’s a mismanaged facility. It’s not 80% to 90% occupied, which is what you shoot for. 27% are past due, we have 74 tenants, and then we already have 1 lead. See, we already have one lead coming in. This is how storEDGE works with the interface. This is how it looks. You can always see how many people have seen it. You’ve got 44 people that have been there for two-plus years, and then you have 13 people that have been there 1 to 2 years. You can get a good overview of what your tenants look like.

I wanted to show you, those two things are done now. When we transferred everything over on Monday, this got done and this got done. Those are two big things. This is not for a lot of facilities. It takes a long time. For instance, we closed on our facility in Tennessee and the owner would not cooperate with us after closing. It took forever to get anything and everything that we needed. It took months. A lot of times, it doesn’t work out this way, but this one I’m excited because we’re ready to go. Now, we need to manage this thing.

Also, you could go to MissionSelf-Storage.com, and then you can see these are the four facilities that we own under this brand. You can come and check us out if you want to check us out and see what our website looks like. It’s all here. You can see that our website guy already has the website done. Everything is done for this page. We’re just adding a page to the website. We don’t go through storEDGE or we don’t use them. I have my internal marketing team that does all of our websites and stuff. This is already done. On day one, we are ready to manage this facility.

A lot of times, I see people, like they buy the facility, they don’t get a lot of stuff done, and then they’re scrambling for the first couple of months. We’ve learned over the last couple of years that that’s way too stressful. You don’t want to do that. As much as you could get beforehand done, before closing, you want to have that done. This was all created beforehand.

Once the closing happened, we could add the page and flip the switch. You could see the sizes. You could see all the different sizes. You could see the testimonials, etc. The Rent Now page goes directly to the storEDGE page, and then they can rent directly from there. That’s how it works. You can own your own website or create your own website, and then link the storEDGE back office software to your page. That’s what we do. There’s that. You can come check it out here.

I wanted to get into some pictures. Let’s get into some pictures of Carrollton. I could show you what it looks like. It’s got a lot of units. This commercial space right here has 5 2,000-square-foot units. That big building that you saw in storage, this is it right here. The owner rents these spaces out for $500 a month, and they’ve been there for years. This building does not have any AC. It does have electricity but it doesn’t have overhead lighting. When you walk into the room, it’s like a concrete block, walls, and a concrete floor. That’s it. There’s no AC, no heat, and no lighting.

It’s like this empty shell of a space. There are five of these. There’s a bathroom in each one of those spaces. Some of them just put lamps and stuff up or whatever they do. Some of them put lighting up ahead and maybe update it a little bit. There are industrial types of companies that are renting these out and they’re paying $500 to $600 a month, and that’s it. This is a 10,000-square-foot building that’s making maybe $2,500 a month.

That’s it. It’s crazy what he’s getting for this. He said, “They’ve been there for years and I’m just not going to raise the rent. I don’t feel like putting air conditioning in. I’ll put lighting in. I don’t want to do anything. I’ll leave it at $500 to $600 a month, and that’s it. Put your thoughts about that. I’d love to hear your thoughts on that. Essentially right now, we’re going to talk to the people.

Another thing is he treats them as a unit. They’re on month-to-month contracts. They’re paying on a monthly basis. My idea is to make this into climate control. This is my idea. This building would be the perfect climate-controlled structure. There are walls in between and stuff, but why can’t we make this into climate control? This is one thing that we’re going to be looking at. The thing is, this money right here or this building, I didn’t even put it into the numbers because I honestly didn’t know what we were going to do with this.

I ran the numbers on what the units were going to be making. I looked at the units, “What are we going to be making?” That’s it. That’s how I looked at this. This is a work in progress. We’re going to have to see what we’re going to do with this. I’ve talked to my husband and we’re trying to figure it out right now. That’d be fun. It’d be a good project.

The facility itself or the building itself is not bad. It’s just an old building that needs to be painted. This is one of the spaces up here. There’s a big parking space right here too that’s not being utilized for anything. It’ll be interesting to see what we come up with. We might do a feasibility study and talk to a couple of people and see what we should do with this. The storage itself is over here. It is not bad at all. There’s a couple of doors. My husband said there are maybe three doors that need to be fixed, and that’s it. It could be power-washed. That’s something that we’re going to do. Other than that, the facility itself is not bad at all. It’s got its own gate. It’s all asphalt. It’s fine. You can see this is what the building looks like with these doors here.

Let me get into the deal analysis. This is the executive summary. This is what we put together to show investors. These are the pictures. It’s located in Carrollton, Georgia. We have six facilities in Atlanta. We have several facilities in this area. For us to add another facility here is not a big deal. Anyways, our boots on the ground can take care of it one day a week over there, do walkthroughs, check on it, clean it up, and stuff.

There are 45,000 people within a 5-mile radius. This is a sub-primary location. If anybody knows Carrollton, Georgia, it’s like a booming area in Georgia. It’s a suburb of Atlanta. The way that we found this facility is one of my virtual assistants from Turnkey Acquisitions called him and asked if he’d like an offer. He said, “Yeah, I’ll take an offer.” That is how we found the facility.

How did I fund this facility? I funded it by raising the money to purchase it. I purchased it for $1.4 million. I’ll get into that. I raised the money to buy this facility. Let me get into the deal analysis so you guys have an idea of what that looks like. “Do you need to be an accredited investor to invest in my fund?” Yes. It’s a 506(c), so it’s for accredited investors only.

Kayla says, “I would make it into climate control.” That looks like a climate control building to me. Kayla says, “When you say raise the money, can you elaborate on this?” I am asking people if they will give me any money to use to buy the facility. That’s what I’m doing. You have to be able to ask people within your circle. You can’t go out and ask strangers unless you have a 506(c) fund. This is one of my facilities inside the fund.

The Mission Self-Storage brand that I have is my fund, the Self-Storage Fund of America. This one is going into the fund. I raise the money from investors asking people if they want money. This is why you see me pitching every single week. It’s because I’m asking people to raise money for properties like this, but you don’t have to have a fund. You can find somebody to partner with. Inside your circle, you should be talking to people and asking them if they’d be interested in going in with you on a deal.

When you do that and if you find 2 or 3 people that say, “I’d be interested in putting some money in,” then you could form a partnership, go out, and buy the property that way as well. I happen to have a fund, so I raise the money through my fund. I’ve raised money for every single one of my facilities so that I don’t have to put any money in. That is what I’m doing. Raising money equals asking people for money. Starting within your circle.

I don’t know if you saw it, but make sure you all follow me. That’s why I said get into the Facebook group. I’m speaking at the Capital Raising Summit. If you go to CapitalRaisingSummit.com, I’m speaking there on September 14, 2023. That is a conference for people who want to learn how to raise money. I highly recommend checking that out. If you put SROSETTI into the code, you can get a discount too. It’s coming up, so you better go there if you want. If you’re interested, go there. It’s in Houston.

Anyway, commercial real estate is super expensive, and your money is not buying you what it used to be able to buy you a couple of years ago. That means that you have to learn how to raise money. Raising money equals asking other people for money to buy property. That’s what it is. There are rules and regulations behind doing that. You have to learn those rules and regulations, and that is what the Capital Raising Summit is about, so go do that. Also, you could join the StorageNerds Coaching Program, and I can help you do that as well.

The Capital Raising Summit is about educating you about the rules and regulations of raising money. Share on X

Find The Facilities

Now, let’s get into the deal analysis. I want to show you the numbers and my Deal Analyzer so you can see how amazing this deal analyzer is. You could get out there and start making some offers. This is the deal analyzer. The first thing that we do when we get the facility and you get find the facility is we have to get the numbers so we can run the analysis. On our deal analyzer, this is one that you can go to the website and purchase, everything in yellow is what you’re filling in. The annual income for this facility was $150,000. In 2022, he made $150,000. The only way I saw this was not from his P&L and his balance sheet, but remember that he used SiteLink. Sitelink is the software for you to manage your facilities.

I asked him for the management summary. On the management summary, you can see how much he’s making, the rent roll, and the management summary. There’s a lot of economic occupancy. There’s what’s called physical and economic occupancy. Physical occupancy is how many people are on the property. Economic occupancy is how much money you’re making. If everybody was paying for the 175 doors, if everybody was paying what they should be paying, he should be making upwards of $270,000 for this property. In this Carrollton area, units are going for almost $1 a square foot.

Competitive Analysis Number

This number right here is your competitive analysis number. What is the price per square foot in the area that your facility should be making? Are they where they’re supposed to be? Are they below? Are they above? What is it? This number is the most important number of all the numbers because this is the number that’s going to show you how much money your property’s going to be making. Now, you could see, it’s 25,000 square feet. He was making $150,000. It’s 175 doors, and it’s 32% vacant. These are the numbers. In 2022, he did a lot of auctions and you can see how he’s 50% vacant. Also, the numbers are never correct. You’re always thinking, “He’s 35% vacant.” The truth is, it’s probably more than that honestly.

Also, when you switch owners, a lot of people are going to leave. That’s how it is. People are like, “This is the reason why I should get out of this place.” People don’t stay a lot of times. Anyway, these are the numbers that he gave us. This is what we gave for 2022. We ran the numbers. You can see here, we run our numbers on our deal analyzer in three different ways. There are eight different ways, I’ll show you those. Three different ways is your current, “What is the property worth right now?”

The value of this property is $1.4 million. We ran it at a 7% cap. The 7% cap is a market cap rate. It’s like, “What are properties in the area going for? What cap rate?” It could be anywhere. If you’ve watched any of my videos, primary markets are typically 5% to 6%. Secondary markets are 6% to 7%. Tertiary markets are 7% to 8% or something like this. That’s what it’s going for right now. We have a 7% cap because this is a sub-primary market. It’s a suburb of Atlanta.

Primary markets typically have five to six cap rates, secondary markets have six to seven cap rates, and tertiary markets have seven to eight cap rates. Share on X

You can see here that he’s made $150,000. It’s 175 doors. It’s 25,000 square feet. He’s 32% vacant. The value of this property comes out to $1.4 million. We then do the competitive analysis. That goes on this tab right here. That is where we put all the facilities in the area. We did a 2-mile radius. Every facility that we could find, we called them up and asked them for some pertinent information. We try to get the prices of what their units are.

This is what we came up with. 5×10, 10×10, 10×15, 10×20, and 10×25 are the unit mix that we have at this facility. What is the competition charging? You can come up with the average per unit or the average per square foot by doing your competitive analysis. This average per square foot right here for the facilities populates onto our unit mix spreadsheet. You’ve got all the unit sizes and the square feet, the number of units you can see, there are 72 5x10s, 10×10 is 83. He’s got a lot of smaller units, and then some bigger units as well too.

You can see here that his rate is $0.79 a square foot. If he was at 100% full, he would be getting $0.79 a square foot. He should be making $20,000 a month. The competition is right here. The competition’s at $0.94 a square foot. If you’re 100% full, you should be making almost $25,000. Remember, he’s 35% vacant. He’s not making this much money per month. If he was, he should be making $20,000 a month. That’s how we do a competitive analysis based on the unit mix that is in the area.

That is where we get the $0.95 right here. It’s $0.95 a square foot, and then you have to add in your expenses. Now, on our sheet, anything in yellow, you could see there are formulas. We base these off of our expenses. When there’s no formula, that means that you need to plug those numbers in. Most of our expenses are formulas, but you can always override them. That’s why it’s in yellow because you could override your expenses.

If you say, “Stacy’s way too expensive on her stuff,” it’s because we typically run our numbers at 38% for expenses. It comes out to 38% for us. We have our students using that number, but if you think you could do a better one, change whatever numbers you want. That’s why it’s all in yellow. Anything in yellow, you can change. Anything that’s not, you can’t click on any of these other spaces.

The Info Tab is where you’re inputting all the inputs. It comes up with a quick evaluation. Remember that we run our numbers current, and then we run our numbers potential, which is taking it from 32% to 8% without raising any rates. We know that he should be making almost $20,000 a month if he was at 8% vacancy. If you raise the rent to $0.95, then he would be at $270,000. This is how we run our numbers.

Creative Deal Structure

Remember, on my Deal Analyzer, you can run your numbers in five different types of structures. You can see a little top left button. There’s cash, and then you can do owner financing, which is creative deal structure 2, creative deal structure 3. You can do bank financing or a private money lender. If we were going to do bank financing, this is what the terms would look like. There’s a little debt service ratio here that gives you the debt service ratio.

You can run your numbers in five different types of structures on the Deal Analyzer. Share on X

At $1.425 million, the debt service ratio is 0.99. Remember, a bank wants $1.3 right now. We had a lender come onto our master line the other day and he was adamant that he wanted $1.3. To get to a $1.3, we would have to significantly lower the purchase price. You have to keep that in mind if you want to go to a bank. If you could pay cash, then who cares what your debt service ratio is? It doesn’t matter. That’s why it says N/A. If you want to do some owner financing, it doesn’t matter what your desk service ratio is, but it still shows you that because it’s financing. The way that you run creative deal structures is the same way that you run bank financing or private lenders.

 

We have the Financing Inputs Tab. This is where you add your financing inputs and you get to run your numbers in five different scenarios. We always do a cash offer. We do some seller financing or creative deal structures right here. We do a bank or private lending here. These four terms have the same structure. It’s the same thing, just copy four times. You can run your numbers in four different financing structure ways is what I’m saying.

For this facility, we ran our numbers to where we have a $1.425 million cash offer. If we paid cash for this facility, you could see that we’re at a 15% cash-on-cash return. You can also see right here in yellow what you want your cash-on-cash return to be. If you want your cash-on-cash return to be 20%, then put 20%. If you want it to be whatever amount of money that you want your cash-on-cash return, I typically run my number that 10%, but you could put whatever you want.

You can also change your net after the mortgage. If you want to make your net 10%, 30%, or 40% after you pay the mortgage, you could put whatever number that you wanted. You can see when you’re doing financing terms for your offers. The things that you want to know is, “What is your purchase price? What’s your down payment? What’s your interest rate? What’s your interest rate on the loan? Interest-only loan, yes or no.” You can also switch these and you could do interest-only terms. If you wanted to do an interest-only offer, you could switch it and do it that way as well too.

Length of the balloon period, length of the amortized interest, and then you have your startup costs, which come from this little area right here, your CapEx. Your loan amount, the total interest, the total paid, and then the payoff time, ten years. You have your payment, down payment, balloon payment, and monthly payment.

You can see it here. If I took owner financing one, I did $285,000 down. I’d have a balloon at $1.14 million. My monthly payment with $3,800. This is with interest-only payments, 20% down, 40% interest. If I did financing, this is a typical bank term right now. $1.425 million, 30% down, 8% interest, fixed interest for 10 years over 20. I’d have to come up with a down payment of $427,000 and have a mortgage payment of $8,300 a month. My cash-on-cash return would be 27%. Net after mortgage is 44%.

You could change your terms to anything that you want on anything at all. You just have to know what is your down payment, what’s your interest payment, what’s the balloon, and what’s the amortization going to be. Once you fill all these numbers in, the sky is the limit. You can come up with 1 million different ways to run your numbers. If an owner comes back and says, “I want to make sure that I’m making $6,000 a month,” you look at the monthly payment and say, “What do I need to do to make sure that I’m getting him $6,000 a month?” If the owner’s adamant that he wants $400,000 down, then you run the numbers based on getting him the number for the down payment that he wants.

This is how we run our numbers. I put the offers in. In the end, we create 5 or 4 different offers. These numbers right here flow through onto our magic letter. This is the magic offer letter. This is where the numbers come right over from the input page, and then we have our offer letter and say, “We’ll pay this or we’ll do this or this.”

You could make another $400,000 if your owner finances this deal for us. We show what the total interest to the owner is and what the net amount to the owner is. This is the little table that we show. Our little letter says, “Everything’s negotiable. Give us your idea of what you want.” We sent something like this over to the owner for Carrollton. He was like, “I only want cash. If you want to buy this thing, that’s it, cash only.” We started with $1.2 million. He said, “I’ll only sell it if we do this much money.” He wanted more. He wanted $1.6 million. We met in the middle at $1.4 million, and that’s how it worked.

This isn’t the final offer, but this is the offer letter to get the wheels turning in the owner’s brain of what could be or let’s get started on the negotiations. We could try to create a win-win situation. That’s how that works. You can see here that I paid the $1.425 million in cash. We paid what it was worth as of then. Now, the goal is to not increase rates but to increase occupancy, because we have a lot of available. There’s no reason to increase the rent. Our goal is to get it occupied first, and then slowly increase the rent.

 

We’ll take this from a $1.4 million facility to over $3 million facility by getting it from $0.71 a square foot to $0.95 a square foot. This is probably going to take 24 months in order to do this. This is not something that happens overnight. To get it filled up, stabilized, and at 85% to 90% full. That’s just the storage. You have an idea of how the deal analyzer works, but I wanted to give you an idea so you could see how easy it is to run the numbers and look at everything. It gives you all of the valuations. This is where it gives you the NOIs. Once we get it to $0.95 a square foot, then we’ll make $295,000 minus the vacancy, minus the expenses of 50,000. We have no mortgage, so our NOI is $219.

I have to share this number with all my investors based on what we set up for the investment. That’s how it works. You can look at the NOI based on the current. You can look at the NOI based on getting it leased up and raising the rents. You can run your numbers based on five different scenarios. Any type of five numbers that you want, you can run them at the same time.

That is the deal analyzer. I hope that you guys utilize that and use the magic letter and send out some offers. That is what we did exactly for the Carrollton facility. We called the owner and asked if he wanted an offer. He sent us his information over. We put all the numbers into the deal analyzer and sent the offer over. That’s what started the whole thing. Any questions on that? Just a quick reminder. You can go to StacyRosetti.com to pick up the course or the deal analyzer and start practicing with it. Put offers in. It’s just an offer. It’s nothing but an offer. That’s it. We put a ridiculous amount of offers in. That’s what your goal should be.

“What is the formula for the square feet pricing?” I’m not sure what that is. I don’t know what you mean by that. “Do you restrict your acquisitions to the Southeast? Are you expanding?” We only buy in the Southeast, but my students are buying all over the country. We have virtual assistants calling in almost every state. We find facilities for all the students, so I know tertiary and secondary markets. I don’t know the primary market very well because we don’t focus on that area.

I appreciate you guys spending time with me. Hopefully, you will check out the course and the deal analyzer. Alberto’s final question is, “If we become a student, do you help with raising funds?” Yes. You’ll have bootcamps. I just spent two days on a bootcamp on how to raise funds. Also, I partner with my students and help my students raise money as well. Thank you. Take care. I’ll talk to you soon.

 

Important Links

• StacyRosetti.com
• Super Simple Self-Storage – Facebook group
• Super Simple Self-Storage – Online course
• Deal Analyzer
• StorageNerds
• StorageNerds’ Bootcamp
• StorageNerds’ Turnkey Acquisitions
• Self-Storage Fund of America
• MissionSelf-Storage.com
• Storable
• SiteLink
• storEDGE
• Easy Storage Solutions
• CapitalRaisingSummit.com