How Stacy Made $500k Profit On An Abandoned Facility In < 1 Year

Abandoned facilities do exist. They are tougher to find, but it will be so worth it. These facilities are easily millions of dollars just being left to rot. Go out there and start finding these storage facilities. This is what Stacy Rossetti did and she made a $500k profit in less than a year! Join her as she explains how she did it. She explains how she drove around just to find this abandoned facility. Learn how she found the owner and negotiated a deal with them. Find out all the ins and outs of the deal, including how she managed the price and revenue. Also, discover some new tools for finding or marketing your facilities.

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How Stacy Made $500k Profit On An Abandoned Facility In < 1 Year

I hope everybody is having a great day. I had a very good day. I talked to students and got to do coaching calls all day long. It was nice. We have a lot of students that are doing some good deals and running numbers. We took in a good handful of students. Welcome, everybody. I got to meet some of them. I had team meetings. What we are going to talk about is one of the deals. Remember, I have been doing all of my deals. I have twelve storage facilities. I’ve got two storage facilities under contract. Congratulations to us. We are working on numbers 13 and 14.

These are great deals. I’m going to go over those deals and the pitch. If you want to hear about the fund, these two deals are going into the fund. If you want to hear about those deals and are interested in putting money into the fund, then go to StacyRossetti.com/fund. You can register and hop on that pitch. It’s a 506(c) Reg D fund. I’m trying to raise money for this fund. I need $2 million. Let me know if you are interested in giving me some money. These are great deals. The IRR is 24% on these deals. I only put awesome deals into the fund. I’m looking forward to presenting those if anybody is interested.

What we are going to do and what I have been doing is going over all twelve of the deals that we own. This is the perfect deal to go over. I spoke to 100 people. I take 20 new students 2 times a year. I open the doors only three times a year. We opened the doors. I talked to about 80 to 100 people or something like this. We take twenty students. I helped those twenty students to get their first facility under contract and purchase in the next six months.

On top of that, I drove all the way to Arkansas and spent the whole Saturday with a whole bunch of students and got to hang out. I drove all the way back on Sunday. It was 12 hours there and 12 hours back but it was an amazing weekend for any of the new students there. It was awesome. It was a fun time. I love doing the infield training days because not only do I get to meet and know everybody but we get to drive around and look at storage facilities.

Mai, who’s on my team, was scouring all of the Arkansas areas and finding the ten perfect storage facilities for us to go to and find. She did an amazing job. We went to a lot of good storage facilities. In one of our storage facilities, we got to do a tour, walkthrough, and check. It was a conversion. The owner had taken it and then converted it. He let us walk around, check it out, and stuff. It was cool.

We have a surprise, which is the theme now and what we are going to be talking about. One of our students, Rob, is gung-ho about getting into storage. He’s already out driving for storage and talking to owners. He already joined. He’s got two offers he wants to put in. He found an abandoned storage facility. The theme is how you can find abandoned storage facilities and what you have to do once you find an abandoned storage facility.

The facility that I’m going to go over, which is our Ball Ground facility, was an abandoned storage facility. The truth is that there are such things as abandoned storage facilities out there. The only thing that you have to do is get out there, look, and find one. I had a call with Rob. He also drove from Florida to Arkansas. He drove for storage while he drove back.

There is such thing as abandoned storage facilities, you just have to get out there and find one.

He said that on the way home, he found an abandoned storage facility. It was 50 units. He happened to get gas. He was pumping his gas and looked over. There’s some random metal building that was behind all these bushes and stuff. He drove over to take a look at it, and it was a storage facility. It was completely abandoned. It was all overgrown. You wouldn’t be able to tell at all if it was there unless you looked.

When you are out driving for storage, I always say that driving for storage is the best way to find deals because you get to do what’s called market research. Driving for storage equals market research. I say this over and over again. You get to go out and see what’s out there and stuff. The truth is that there are residential properties that have been abandoned or vacated. Commercial properties are vacated and abandoned. There are also storage facilities but you have to get out there and look.

He found two abandoned storage facilities on the weekend by driving around and looking for storage. The theme is abandoned storage facilities, how we took this abandoned storage facility that we found, and how we got it after running. We are going to do that. Here’s a quick reminder that every Monday night, the topic is completely different. I teach something new every single week. You want to make sure you come to every single session so that you can know.

The StorageNerds coaching program is closed until 2023. Nobody can get in but you can get on the waitlist. If you want to get on the waitlist for when it opens up in 2023, make sure that you go to StorageNerds.com. Once you click that button, then it will take you right to the waitlist so you can join. Now that it’s in between when the door is open, if you want to get started, then you should be checking out my course, which is called Super Simple Self-Storage.

I wanted to announce to everybody before we get started that we uploaded the new deal analyzer to the course. We have versions 1, 2, 3, and 4, one for each year that we have been doing this. When we first started, we had this very basic deal analyzer. We could run numbers quickly. We added more stuff in the 2nd and 3rd years. We released the fourth version.

The fourth version is only for my students. My virtual assistants and my students are the only ones that get that. Version four is available on CoachAccountable for all my students if you are a student there. There’s also a video going over that deal analyzer. I will show everybody that deal analyzer here but only my students get access to it. In the course, you have version three, which is the one that everybody used until I released this new one. It’s doable. It works. People buy storage facilities from it all the time.

We have a student that took the deal analyzer to a bank and said, “This is the deal. These are the numbers.” The bank lent him the money based on the deal analyzer. The deal analyzer works. I wanted to show you where you can get it. You want to go right here to log into Stacy Rossetti. It will give you access to this course. The Simple Self-Storage link is here to buy it.

I wanted to point out that if you go to this page, it comes up as $1,997. Anybody that shows up live gets access to $1,000 off. You could pay $2,000 if you want to or you can come to the live webinar and get $1,000 off. Once you sign up for this course, then you will be able to log in and go to the login page. Inside here is where you will log in and get access to the course. Inside there is a whole bunch of different modules and 100 videos that take you through start to finish learning how to invest.

There’s a module in there, and that’s the deal analyzer. It goes over the new deal analyzer. You can click on that. The deal analyzer is there so that you can download it. I wanted to let you know that the deal analyzer for the course has been updated. You can get it. Students that already have the course should be able to download that and use that new deal analyzer.

Abandoned Storage We Found

I wanted to show you this picture as well. I thought this was cool. This is on the infield training day. This is the abandoned storage facility that we found. This is abandoned. You could see how high it is. It has been abandoned for years. This is us walking and checking it out. See how old it is and the old doors. Here are the trees growing up on the side and stuff like this. This is what it looks like. These doors are rusted. The doors are dirty and rusted. You could tell it’s older because the doors are like this. Typically, new facilities don’t have this in them. It’s typically roll-up doors.

This is the neighbor right next door. That’s Rob. What happened was we drove up to this thing and I was like, “What the heck?” This is huge. There are 200 doors. Could you imagine abandoning a 200-door storage facility? That thing is worth probably $2 million if you had it cleaned up, fixed up, leased up, and producing income. That’s worth a lot of money. He’s letting it sit there. We walked over to the neighbor that was right next door. He has this nice house. The lawn is all kept up. Rob was like, “I’m going to walk over and knock on the door.” I took a picture of him knocking on the door. The owner came out.

Abandoning a 200-door storage facility is like abandoning 2 million dollars if it had been cleaned up.

He was like, “I’m Rob. We are out looking for storage facilities to buy. We came across this one. We are wondering what the story is. Do you know the owner? We want to try to buy it.” He was like, “Please buy it. I know the owner. Come on inside.” We all went into his house. He invited us in, looked up the phone number for us, told us the story of the owner, and gave us the phone number of the owner. Rob already found it. Rob was like, “I already have that phone number.” He’s like, “You must keep calling and trying because he never answers his phone.”

We found this 200-door storage facility that’s completely abandoned. The owner is letting it go to poop. He was leaving a lot of money on the table. The guy that lived right next door said that over the years, it had been bush-hogged three times. He was like, “Please, I want somebody to clean this up.” It’s right next to his house. This is making his house look bad. We will post a video on YouTube once and on Facebook. I like a good video as well.

STN 40 | Abandoned Facility — Abandoned Facility: We found this 200-door storage facility completely abandoned. The owner just left it there. The next-door neighbor just wants it cleaned up because it’s making his house look really bad.

The point is that now we have to work on trying to get ahold of the owner, getting him to answer the phone and provide the information because he said that over the years, he had three people knock on the door and ask him about the storage facility. He has given the phone number to all three of the people because he wants that place to get cleaned up. He said the owner never answered his phone. He gave us the back story of it.

The truth is that there are abandoned storage facilities out there. Finding them is the hard part because even when you look online, it’s all overgrown. It’s hard to find those. The one that I picked up in Ball Ground is a storage facility. It looks like every other storage facility. I didn’t know it was abandoned when I saw it and drove up to Ball Ground.

We fixed it up and cleaned it pretty good. We painted it, cleaned it up, and made it look nice. These bollards are telephone poles. We had our boots-on-the-ground person. I will tell you the story about him. Our boots-on-the-ground person was like, “I know where to get the perfect bollard. I will get you a telephone pole.” He got a telephone pole, chopped these up for us, and put these bollards in.

We were having a huge problem because it’s a little bit tight in here. This one was getting all banged up. You look at how big these things are. They are massive. Nobody ever hits the edges of our things. The way we got this idea is that I almost bought another storage facility where he was using railroad ties. He was like, “I dug holes, put those things in, and poured the concrete. Nobody hits the edges of things.” I was like, “That’s the smartest thing ever.”

When they sell bollards, they sell these little tiny ones. People hit them. They always get bent. Your thing gets bent. It’s this whole big thing, especially when you have these tight spaces. It’s 20 feet apart when you build them but back in the day, it used to be 15 feet at the most. This is a tight space. It’s enough for one truck to go in and out. When you get on this end way down here and swing around, it’s a little tight in there. On the other corners, you get banged up. Now that we got these in here, it’s doing pretty well.

Let’s find Ms. Lilian’s Self-Storage. Here are the old pictures. This is how it is. We don’t even have the new pictures in yet. It looks pretty beat up here. What happened with this storage facility is that it’s right off not a major highway but a major county road. You could see this storage facility from the highway. Here’s 575 but we are right off the 372, which is a very busy county road or whatever these are called. Here’s our facility. Here’s the road.

I was driving down this road. We happened to live in this area. We moved to this area. I was driving down this area. I was like, “What is the storage facility?” I came up and drove up. I see this open fence right here. The gate is over here. I came in here and drove up to the facility. There was no sign at all. When you drive up to a facility, and there’s no sign, your heart should start pitter-pattering.

When you drive up to an abandoned facility and there’s no sign, your heart should start pitter-pattering.

I was like, “This could be a good one.” All I knew was the address. That’s it. I went on to LandGlide and searched LandGlide to see who the owner was. The owner came up but he just gave his name. He had a PO box. I was like, “I need to skip-trace this guy.” I skip-traced him. You could google skip-trace. A gazillion different services come up. I skip-traced his name and said, “Where is this guy?” His number did not come up when I skip-traced. His cousin’s number came up.

I called that phone number, and it wasn’t some company name, so I couldn’t tell you who it was. I said, “I’m looking for the owner of the storage facility in Ball Ground. I was wondering. Are you the owner?” He’s like, “I’m not the owner. That’s my cousin, Greg.” I was like, “I would love to get his information because I want to buy that storage facility.” He’s like, “He lives right around the corner. Here’s his phone number.” He gave me his phone number.

All I did was drive up. I looked on LandGlide, got his information, skip-traced it, and then called the number I got. I got his phone number. I called up the owner. He answered the phone. He was like, “Hello?” I was like, “You are hard to find.” He was like, “Who is this?” I said, “This is Stacy. I have been trying to find you. I want to buy your storage facility.” He was quiet for a second and said, “When can you meet?” I said, “I can meet whenever you want to meet.” He said, “How about Saturday?” I said, “I will be here on Saturday. What time?” That was honestly how easy it was.

Guesstimating The Size

I drove in and drove around. I was like, “This is a good site.” We learned about this on infield training day. I counted how many doors and looked at the side. I was telling all my students, “Look at a storage.” Most people just look. You can tell how big the storage facility or the unit is. I looked at this and then guesstimated what sizes he had by looking at this. How do you do that?

There’s a door on this side and a door on this side. You are not quite 100% sure but you can step it off. This is what we are doing in infield training. You are stepping it off. This is 20 feet across. You drive around. There are doors on either side. I guesstimated and said, “This is probably a 10×10.” You can have 10×10s that have doors on either side. We do what Pete does on some of his facilities. Pete is my husband, for anybody doesn’t know. He will do either 10×10s or 1 10×20 that has 2 doors. He will charge extra to have access to both doors for the 10×20.

You can have one door. If you want to have access to both doors, then it’s going to be an extra $5 or something like this. It works. That’s a tip for everybody. I drove around, counted 76 doors, and then guesstimated that they were all 10×10s. If you have 76 10×10s, and it’s 7,600 square feet, another thing that you could do is go right onto Google Maps and try to calculate it yourself. You could right-click on this and then measure distance. You make a square here and then calculate it that way.

This is 4,250 square feet. It’s giving you an estimate. 4,200 and 4,200 is 8,400. I guesstimated 7,600. This is guesstimating. It was 8,400. It depends on where you put your markers and stuff. I may be a little bit too big. It’s something like this. It’s to give you an idea of how big it is. What I did was I counted 76 doors and said, “They are probably all 10×10s. They could be other sizes but I’m going to guess 10×10s.” It’s 7,600 square feet with 76 10×10s.

Meeting The Owner

We have to meet the owner. This is what I do when I meet the owners. If I’m the person that’s meeting the owner, I’m bringing my husband and Lillian with me because I want us to look like a family business. If I can, I will bring the lender as well if that’s going to be a private lender. I was going to have a private lender. I did not know whether or not this thing was full or not. He wanted to meet me and give me his story. I didn’t even ask him any questions on the phone.

I was like, “Let’s meet. Let’s do it. If you want to meet, I’m in.” I didn’t ask him any questions on the phone or anything. I knew I was going to meet him and get all the information I needed. On Saturday, I take Pete, Lillian, and my lender. I called my lender up and I was like, “We’ve got a good deal. You have to come out here.” He was like, “I will come out.” He lived in Peachtree City, which is an hour and a half drive. He was like, “I will be there.” He is all into it. He came up.

When we pulled into the storage facility, I thought there was the owner but there was 1 man and then 2 women there. I pulled in. We parked and got out. We were like, “How are you doing?” They all introduced themselves to us. It was the brother and the two sisters. When you pull up to a storage facility and all three of them are there, something is about to go down. They are one in the sale.

I had given them a little bit of information. I can’t remember how many we owned at that time but I was like, “We own X amount of storage facilities. We want to pick up some more. We moved to this area. This is the perfect facility for us.” He was like, “Let’s meet. Let’s do it.” We talked to these people for two hours. He gave us the whole history of their lives. They have been in Ball Ground forever since they were kids. It’s where they grew up. They were born right around the corner.

He also had land he wanted to sell, “If you want some land, I’ve got some land too.” He told me, “There are 76 units. It’s 7,600 square feet. They are all 10×10 units. They are all full, and nobody is paying.” That’s what he said. He is like, “We gave up on this property years ago. We have maybe 1 or 2 people that pay randomly and stuff. We never do auctions. We don’t want to deal with it. It is honestly a waste of time and energy for us. We’ve got other things that we are doing.”

I was like, “I’m the perfect person to buy this. You have to give this to us. I get that it costs money for you to build this and stuff but this is my proposal to you.” I didn’t even run the numbers or anything. Mentally, I was thinking of 76 doors. Before I came, I looked at the market. At that time, which was years ago, 10×10s were going for $60 each. What I did was I multiplied 76 times 60. I knew that I was going to make $4,500 a month.

My lender charges me 8% interest. I knew that whatever amount of money that I got or whatever I got the property for, I would pay in 8% interest. That is the mortgage. The way that I typically do it when I borrow money is I will borrow whatever amount of money that I need 100% and then be the one that comes out of pocket for anything else. We know that when you buy an abandoned facility every month, you are going to have to come out of pocket.

You have to think about this because, first of all, there’s no bank that’s going to lend you money on this deal. You have to have either your own cash or a private money lender. You are going to know that it’s going to cost you money to get this thing up and running. How much money are you willing to come out of pocket? What is your risk level? How much money can you afford? You have to mentally think about that.

If I know, it’s going to be a good deal on the back end. I will come out of pocket. I wanted to make sure that we at least could afford to pay the mortgage. I was like, “How much can I pay for the mortgage, $1,000, $1,500 or $2,000? What do I want? I could probably come out at $1,000. Maybe $1,500 a month would be fine out of pocket. I will pay the mortgage. I will pay too whatever it takes for us to get this facility stabilized.” I always want to make sure that I have enough money to pay the lender. However long it takes us to come up with the money to get it stabilized, then we know we have to come out of pocket for that.

In the end, what I offered them was $150,000. It was right before Thanksgiving. The last quarter of the year is the best quarter to get facilities under contract because owners want to sell by the end of the year, especially right before Thanksgiving. This time is the best time to be talking to owners. Every year, I put several facilities under contract. I put two under contract. We will most likely put more under contract as well. We will close those before the end of the year. Be aware of that.

Putting The Offer

We offered $150,000 for this facility. I told the owner, “I want to pay $150,000. That’s $50,000 for each of you. This is your Christmas present from me. Think of it as your Christmas present from me.” They all looked at each other and then looked at me. They said, “That’s fine. Let’s do $150,000.” They were probably open to whatever amount of money. It’s a win-win situation for all of us. I’m not going to be greedy. I could have gotten it cheaper but the truth is I’m going to make a lot of money on this deal. Giving them some money is okay with me. Making the lender happy is okay with me too.

Don’t be greedy when you negotiate your deals with a lender. If you know, you’re going to make money, giving them some money is okay.

We got this facility for $150,000. My lender gave us $160,000. I asked my lender for $160,000, “Can you give me $160,000 so I can have $10,000 to get this thing up and running and stuff?” He’s like, “That’s fine.” I borrowed $160,000. I got the facility for $150,000. When we got it up and running, we were guesstimating $4,500. The price is almost $80 to $100, depending on where we are at and how full we are. We only sell 10×10 units. We don’t make them into 20×10s or anything like that. That’s it. You’ve got 10×10 if you want to take it.

The minimum is $80 up to $100, depending on how many units we have left. Let’s say that at 80% full, the price is $80, and at 90% full, the price is $90. At 98% full or 96% full, when you only have 1 or 2 units and you charge a lot, that’s called dynamic pricing. That’s how our pricing is. Sometimes if we don’t have it in full, we raise the rent. We went from $60 to $80. Some of them are even higher than that now. We raised the rent. We did have some people leave. We have a little bit of vacancy but it’s not too bad.

Using StorEdge

We have been making $4,500 a month. “How long does it take to stabilize a property like that?” That’s the question. This is storEDGE. Inside storEDGE, they have the reports section. It’s right here on the left. They have occupancy reports and a ridiculous amount of reports. They have financials, merchandise, insurance, management, and all kinds of stuff. I’m getting the financial annual revenue. Occupancy is what I clicked. You generate the report.

This is the report that came up for Ball Ground. This is up through September. We closed on this in January 2020. We made no money. We started contacting people and saying, “You owe us some money.” Over the course, we started getting this thing filled up and leased up and making more money. In the first year, we made $26,000.

That’s from $0 to $26,000 working to get this thing filled up. In 2021, it gets more from $35,000 to $38,000. To get to $4,000 to $4,500, it took us a little bit over a year and a half to get this thing leased up. We were at $60 a square foot, slowly raising the rents. June is when we raised the rent to $80. A lot of people stayed, and then all of a sudden, it dropped off. People are like, “I’m getting charged. I’m out of here.” It’s $80 to $90.

You could go to MsLillians.com and then click on Georgia and Ball Ground. He did change a couple into 10×20s. It says front and back. Right here is regular. You don’t have front and back doors. He charges more for that. This is where we are at. A 10×10 is $100. I didn’t know we were this high. A 10×20 is $220. Look at how crazy our prices went up. We were only calculating $60 when we bought the thing. We have ridiculous prices here. We are trying to get leased up.

We started charging, and then people left. We have to get a lease back because people don’t want to play. The 10×10s are all full. You have some 10×20s. I’m not 100% sure. We could look at the occupancy report. September is $3,800. September is $912. It’s very important when you think about dates in a month because, in the first week, 80% pay and 20% don’t pay.

Maybe 20% haven’t paid. We are working on trying to get that paid. We are also trying to get leased up from all the people that left because we raised the rates from $60 to $100. It’s twofold. It’s like a dance when you are thinking about revenue. We are at $37,000. Let’s say it’s $5,000 for each month. We will add another $15,000 here. We will be at $50,000 to $55,000 by the end of 2022 for this facility.

Managing revenue is like a dance.

Cleaning Up The Facility

In this facility as well, you saw that we took it from this to the pictures, cleaned it up, and made it look nice. Our boots-on-the-ground person did this. Our boots-on-the-ground person for this facility is Eddie. He was one of the ones in the beginning. We bought this thing and contacted everybody. Within 90 days, we did 36 auctions. We had to go through that. It takes a while to do those auction processes. It was full of crap. We did the auction process. It takes a long time to do the auction process.

What we had to do too was auction them and then clean them out if nobody took the stuff, which typically, nobody does. The auction processes are horrible. You end up having to clean the stuff out. It took us probably five dumpsters. It took a lot of dumpsters. These dumpsters are $500. It probably cost $2,500. You have to clean all that stuff out. Once we would clean one unit out, it would immediately get rented.

That was the process that Pete did. What he did is he brought Eddie on. Eddie was one of the guys that had a unit. He did not want to lose his stuff. Pete worked out a deal with him and said, “Why don’t you be the person that takes care of this as the boots on the ground? You can have your unit for free.” That’s what he did. He would mow and trim things out. He was the one that cleaned out all the units and put everything into the dumpsters so that the dumpster could take it away.

Another thing that Eddie did was that if he found anything in any of the units, he said, “It’s yours. You can have it.” He would sell that stuff on eBay and out in Facebook Marketplace or whatever he did. He would get money for all that. He was a guy that didn’t have a lot of money and stuff. He couldn’t afford the unit. We worked this deal out, “If you clean it up, you can keep, take, and do whatever you want with it. We need to get each unit out one at a time.”

On the weekends and stuff, Eddie would work and do that for us. This is how we do a lot of our management. When I borrow my money, typically, we are only borrowing so much money. I don’t like to borrow a lot of money, especially when we are paying high-interest rates and stuff. You don’t want to borrow a lot of money because you have to pay interest on that. We are that type of manager when you start making money, that’s when you can fix stuff. Slow and steady wins the race.

As he cleaned out a unit, it immediately got leased up. After he cleaned out all the units, we paid Eddie to paint the storage facility for us. That is something that he did. He did the balusters. All he does is check on the place and mow the lawn and stuff. He cleans out the units of their business. That’s how we got Eddie to do that. He worked with us closely for the eighteen months that it took us to get this thing cleaned up and running. He did a lot of stuff for us. We would pay and help him. Whenever he needs money, we give it to him. That is the boots-on-the-ground person.

I have a couple of questions, “How much did it cost for the renovations?” It didn’t cost that much money. We borrowed $10,000. It probably cost a couple of grand to clean the place out. It didn’t cost us that much money to even get the thing painted. It probably cost us a couple of grand to get it painted because Eddie did that for us. It wasn’t a lot of money. It was time to get out there and work.

The good thing is that we moved around the corner. Pete was fifteen minutes away. He would always be hanging out at this thing and doing whatever. I told Pete after that, “You can’t be hanging out at that place every day.” In the beginning, it was good for us to be there. We closed on a facility. We are right around the corner from that facility as well. Pete is going up there, doing his thing, and taking care of whatever he needs to do at the facility to get it up and running. That’s how we do it. We are more hands-on.

Storage Facility Interest Rates

“I’m new to this. What do you usually end up making from auction processes?” Nothing at all. You don’t make any money from auctions. It costs you money, time, and energy. It’s a lot of work to even put the auction process through. They open the door and don’t want to pay anything or maybe $20. We will take whatever they want to give us because all we want is for them to get out and put the stuff out. If they will take everything out and clean it out, they can have it for free for all we care.

You don’t make any money from auctions, it will actually cost you money.

“How are interest rates now for storage facilities?” Commercial real estate has not been affected as much as residential. Who knows what’s going to happen over the next couple of months? We already know that it’s supposed to go up 2 or 3 times in 2022. Commercial rates are not as affected as residential rates, so everybody knows. Typically, rates are anywhere from 5% to 7%.

When it comes to interest rates, commercial real estate has not been affected as much as residential.

5.5% and 6% are where we run our numbers at. That’s a very fair number for now. We will keep an eye on it. Who knows what’s going to happen? There’s going to be a lot of pain. That’s what Jerome is saying. Commercial rates don’t get as affected as residential. The truth is I pay anywhere from 6% to 10% on all my storage facilities because I go to private lenders, and you pay more money for it.

As long as there’s a big enough spread, there is nothing wrong with paying high-interest rates. As long as you know in the front end that you are getting a good price for that property, it should not matter what the interest rate is. Like what everybody has done in 2021, if you are overpaying and paying high-interest rates, that’s where you screw yourself but if you are paying low and you have a high-interest rate, it’s okay because it evens itself out.

SpareFoot

I wanted to show you SpareFoot because the way that we got this thing rented up quickly is through SpareFoot. I’m not going to get into the deal analysis. We have been doing deal analysis on facilities for the last X amount of time. You can always go back and watch those, especially students. Those are inside CoachAccountable. On this one, I wanted to show you SpareFoot.

I don’t know if anybody knows about this but it’s owned by Storable. Storable is a huge company in the industry. They are very vertically integrated. They’ve got their hand in any aspect that you think of in the storage industry. They have all these different companies. For instance, SpareFoot is a company where you market your facility for tenants. That’s what SpareFoot does. You pay them to market your facility. It isn’t cheap like everything else in the world.

Especially when you buy a facility that is not leased up, SpareFoot is probably the quickest way to get it leased up. If you buy a facility that’s an income-producing property, there is no reason for you to be on SpareFoot if you need 5 or 10 doors filled or something like that but if you are like me or if you are buying a new facility that hasn’t been leased up. We have one facility under contract. It’s not full. We are going to have to use SpareFoot for that.

What they do is they syndicate your facility out to the world through Google Ads and stuff. Google SelfStorage.com or, “Storage near me.” Both of those domains are owned by SpareFoot. You go into SpareFoot, and then you can get to know your market this way as well. I typed in Ball Ground in the search, “Storage units near me.” Most people do not come to SpareFoot to look up facilities.

If I were going to go to Google and type, “Storage near me,” then it would come up like SelfStorage.com. Storage near Jasper is $19 a month. This is a trick that they do. This is probably a 5×5. Who knows what this is? It’s probably some trick. Jasper is right next to them. They have so many storage facilities, I can imagine. Ball Ground is a good area. There are not a lot of storage facilities.

I don’t know what Conexwest is. Those are containers, maybe. Canton-Waleska Self Storage comes up as an ad. They are doing their ads. You have a couple of other ones that are doing their ads. Here’s SpareFoot right here. It is on the first page. Their job is to be on the first page. SelfStorage.com and SpareFoot are their two domains. If you click on SelfStorage.com and then type in Ball Ground, this is what SpareFoot does.

What SpareFoot does is bring it up at the top of the page. Whoever is at the highest of this is the one that has opted to pay the most money for each tenant they find. Flex Storage is at the top. You can see Public Storage. It’s always going to be all the REITs at the top. Flex Storage is up here. REITs are up here. There’s Prime Storage. All the little tiny people like me and you are never going to be on the front page. You bid on the space and say, “I will pay 1, 2, 3 or 4 times the amount of money that the rent is.”

I’m going to do $85. This is a good one right here. If you clicked on this and went in, typically, they will call you. You could book it online or they will call you but if it goes through SpareFoot, whatever they bid on, if they bid 3 or 4 months’ worth, they would have to pay that for this price. That’s why the more that you allow SpareFoot to take as a price to be paid, then they get higher up on the list. Like Midgard, they are all opting in to pay 3, 4, 5 or 6 months. You could go up to twelve months.

It’s ridiculous but what this shows you is that these companies know what their customer lifetime value is. The customer’s lifetime value is key in this industry. My homework for you is to search SpareFoot, look at the market researcher area, see what everybody is charging and who comes at the top, go all the way to the last couple of pages that are there, and see who comes up that is not paying because it does show those as well. It will say, “Must call to get pricing.”

You have to call SpareFoot to get the prices. This means that they are not paying SpareFoot but all that stuff is listed. If you want SpareFoot to handle it, they will call this facility and say, “We’ve got a tenant that’s interested in your facility. Would you be interested in getting this lead?” These are all good facilities for you to look at to see if they are small mom-and-pop facilities. SpareFoot is a very good way to find mom-and-pop facilities in your area that you can contact and see if they want to sell.

For Ball Ground, we use SpareFoot to get them leased up. We put $40 to get it leased up. You have to pay minimum doubles. We had to pay $80. We were like, “Let’s get everybody leased in.” This is our strategy because everybody leased in. Once they get leased in, we can slowly and incrementally start increasing the rate. As soon as they get in a couple of months later, it’s like, “Sorry. The rates increased.” We will see if they stay or not. Pretty much everybody stays. Nobody leaves unless you do a huge price increase. We took it from $60 to $100. They leave.

I have to hop off, go to my fund, and do the fund pitch but I wanted to show you SpareFoot so that you use this as a tool not only to find properties and owners but also to get tenants into your units. Know that it’s expensive to do that. I’m going to show all of my coaching students a special secret way to get even cheaper tenants but for everybody else, SpareFoot is a great way.

Use SpareFoot as a tool to not only find property and owners but also to get tenants into your units.

We increased the rates. We almost doubled the rates on almost every single facility to get it to the current price. With $30 or $40 rates, everybody is like, “I’m getting out of here.” They will leave. Twenty percent will leave. We use SpareFoot to get it leased up and then try to fill it up again. We will raise the rates again. That’s my tip. That’s Ball Ground. There are abandoned facilities out there.

Get out there and start looking. Get ahold of those owners and talk to them. I know because Rob found two. I know they are out there. For everybody else, all of the questions that you are asking and that I did not get time to go over, post them into the private Facebook group. We will get to them through there. Make sure you search Super Simple Self-Storage and then post them there. I will get to them in the Facebook group. I appreciate you hopping on. I will see you all. Take care.

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