To succeed in real estate, you must understand the specifics of fund raising and deal analysis. In this episode, we dive deep into understanding and analyzing whether a deal is a good deal or not. Often, investors can’t recognize a good deal until it’s gone. Tune in to learn about passive investing, buying storage facilities, property taxes, and purchase prices. There is a lot to learn in this industry, and you have to ensure you know how to manage what you know and what you have.

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How To Know If Your Deal Is A Good Deal

 

I’m going to teach. We had Valerie come on. She is one of my students. She came on and talked about buying one of her storage facilities. We had Matt come on. He talked about a couple of the storage facilities that he bought. My husband came on and taught as well. He taught about managing self-storage and hiring and managing boots on the ground. I’ve been delegating this show to other people but I figured I would teach. I haven’t taught in so long.

I wanted to say thank you for coming and hanging out. I’m Stacy Rossetti. I teach people how to invest in self-storage. I also invest in self-storage together with my husband. We own eleven storage facilities for all of you that don’t know us in the Georgia and Florida areas. We have two under contract. We’re looking for money for those. That’s the goal. Once you get into commercial investing, you realize that it’s all about raising money. It’s management and raising money.

Smaller Facilities

Everybody is always asking, “How do you find these things?” The truth is you’ve got to learn how to raise money because commercial real estate investing is expensive unless you want to stay in the tiny facilities. There’s nothing wrong with that as well. A lot of our facilities are smaller. We started with some smaller facilities but we all went to the big boys. We’re moving on up. It’s not that big but we’re at $1 million to $2 million properties now. It’s not super big but they’re big for us. That’s where we are.

You could keep following us. Right after this, I pitch my fund, which is called the Self Storage Fund of America. For all of you that are reading, if you want to do passive investing and if you’re like, “I don’t want to do all the work,” a lot of people think they want to do the work, start getting into it, and realize they don’t want to do the work because it is work to get out there, talk to owners, look for facilities, learn how to run deal analysis, and figure out if it’s a good deal and stuff.

That’s a good first step. A lot of people get into it and realize, “I don’t want to do all the work.” If you don’t want to do all the work, then what you should do is invest in a fund or partner with somebody and have them do all the work. We have a fund that’s called the Self Storage Fund of America for anybody that’s interested in getting started in self-storage but doesn’t want to own or take the time to learn how to do all this passive investing. Over the next couple of years, passive investing is going to be one of the best ways to make money in real estate investing.

Passive Investing

When I say passive investing, I’m not talking about owning it and having passive income. I’m talking about true passive investing. True passive investing is when you hand your money off to somebody else and let them work your money for you. The truth is over the years that I’ve been doing this, I have made my investors millions of dollars. We are asset managers. We have become asset managers. A lot of people rely on us to make money for them, which is the role that we’re meant to be in. This is what I and my husband do best. We’re continually growing that.

Storage Nerds

I wanted to talk about a couple of deals that my students brought to me. If you don’t know, I own StorageNerds. StorageNerds is a coaching program where we teach people how to invest in self-storage. My husband helps and then I teach. We coach, hold your hand, and guide you on what you should do. We opened the doors in May 2022, which is exciting. We had a whole bunch of people come in and then closed the doors. We only opened the doors for two weeks.

All those students are out, calling, talking to owners, and looking for facilities to purchase. The good thing is that there are a lot of people in the group and students that are finding deals. Two of them went over in my coaching calls. I do one-on-one coaching calls every Monday with all my students. I get to hear what they’re doing. It’s one of my favorite times. I can hear what everybody’s doing and hold them accountable. We had two different students bring a couple of deals to the table.

One of them is a female. She does not have a lot of money at all. She’s coming up with the money for the coaching program. Her idea is that she wants to wholesale a couple of deals. After she wholesales a couple of deals, then she should have some money to go out and find her property. That’s what she’s working on. When you are a wholesaler, essentially what you’re doing is you’re calling and talking to owners. You’re the one that’s doing all the work or trying to get the owner all the information from the owner and running the deal analysis.

She lives in the Texas area. She started calling owners and found a good handful of them that wanted to sell. People don’t realize that if you call and talk to owners, you will find some that want to sell. It’s a numbers game. If you’re calling in primary markets and maybe even secondary markets, it might be a little bit different than tertiary markets. She called and started talking to these owners. She does have a deal that she brought me. We ran a deal analysis on it. She’s going to show you that one.

 

There’s nothing wrong with starting with smaller self-storage facilities.

 

Good Deal

Also, we have another student that brought a deal. He got it from a wholesaler. He brought me the deal and he was like, “Is this a good deal?” We ran the numbers and went through the whole process of how we figured out if it was a good deal. I thought what we would do is we would ask the question, “How do I know if it’s a good deal?” I’ll help you to answer that and go through with that. Let’s get started. I’m going to go over what one of the students brought to me.

The first one is a smaller facility. We don’t have the location. I’m not going to go over where it was. What I want to show you is this is what the whole seller gave him. Do I like this? Not really, but it’s okay. It’s a good start. As a wholesaler, all my students know how to put together the most awesome wholesaling package in the world. Essentially, this home wholesaler gave him this. There are sixteen 5×10s that they get $45 for. They make $720 a month off of that.

There are 23 units that are 10×10 at $60. They make $1,480 a month. Nine units are 10×20s that are $90 each. They make $810 a month. The total revenue is about $2,910. The annual is $34,920. This is the list of the expenses that the owner has. The list of expenses that the owner has is probably not going to be the expenses that you have. Everybody always says, “Knowing what their expenses are is important.” The truth of the matter is what you need to know is your expenses, not their expenses.

We will get into that. They’re spending $1,008 on the web, which I’m guessing is probably the software that they’re using. I’m not sure if they have a website or not. I’m guessing that there’s no website included in this price. This is the back-office software that they’re using. The utilities are $1,320. If you divide that by two, it’s essentially $100 a month. That’s the typical price for utilities. If there’s electricity at a small facility, it’s going to be about $150 to $100 a month.

The insurance is $924. The marketing and insurance include a storm or something that comes in and ruins it, a fire, or something like that. Liability and hazard insurance are what it is. This is not tenant insurance. This does not cover any of the tenant’s belongings. It covers the building like a commercial insurance policy and liability insurance policy for your facilities. Marketing is about $1,000. We’re not sure what they do with marketing but we know that they’re doing some marketing.

The merchant is $873. That’s all their credit card processing and things like that. This is the domain. They do have a website. It’s $360. They probably have the back office software here and then the domain. The property management side is here. Taxes are $1,233. The onsite boots on the ground, repairs, and things are $2,000. When they say onsite, I would consider that to be boots on the ground. Their annual expenses come out to about $8,718. We will get that here.

This is what they’re saying that the competition could do. Sixteen 5×10s is $65. They have $45. Twenty-three 10×10s are $85. They’re doing $60. Nine 10×20s are $125. They’re only doing $90. They should be making over $4,000 or $4,120 a month. They’re only making $2,910. They should be making $49,440. It’s almost $50,000 minus their 7% vacancy. It’s very important to know what the vacancy is. They have minus out the vacancy here and then also the expenses. The NOI is $37,261.

Commercial Deal Analysis

This is what the wholesaler gave the student. His question is, “We’ve got this. Looking at all these numbers, how do we know if it’s a good deal?” Is anybody else thinking this? How do you know if it’s a good deal? To know if it’s a good deal, you would have to be able to run a commercial deal analysis. How you run commercial deal analysis is up to you. What you need is a deal analyzer. You need something that you can use to run commercial deal analysis.

I’m going to use my spreadsheet because this is what I use internally. You can go into the web and search all different kinds of commercial deal analyzers. You can buy them and get them from somewhere else if you want to as well. All my students have access to our deal analyzer. If you become a student, you would have access to the one that I’m going to go over but you can also find stuff online. I have a good friend. His name is Jo James. He created a deal analyzer called ROI-Muse.

ROI-Muse is an online commercial deal analyzer. It’s Jo’s deal analyzer that he lets everybody use. He does apartment buildings but the truth is commercial deal analysis is a commercial deal analysis. Maybe it’s a little bit different here and there. They say doors and we say square footage but it’s typically the same stuff. What we’re going to do is use my deal analyzer and run the numbers. Let’s take a look at it and see how this deal is. Here’s our deal analyzer. This is what it looks like.

 

I’m going to take the information that we’ve got on this proforma and put it into this deal analyzer. The way that our deal analyzer works is that any place that’s in yellow is an input. We have called that the info sheet. This is where you will input all the information so that it will spit out an analysis for you. Every single one of these tabs across the bottom of the deal analyzer is super-duper important. You can’t fill out this one, look at it, and call it a deal. We will go through these and I’ll show you what is there, how I know if it’s a good deal or not, and what we use.

Let’s go in here and do this. We have 48 units. This is a small facility. Honestly, the truth is most likely if you’re reading this, you’re okay with buying a small facility because this is what I do. I buy small facilities. Let’s do 48. We need to figure out the total square footage and the annual income. The annual income is $34,920. We will figure out the square footage in a minute. They said the vacancy was 7%. They gave us their expenses here. The expenses were property taxes, utilities, and insurance.

Utilities were $1,320 and insurance was $924. With property taxes, the way it works for me is I pretty much double what they tell me because the truth is that they’re probably paying property taxes at a lower price. For property taxes, you don’t want to put what they’re paying for property taxes when you fill out your sheet. You want to be putting what you’re going to be paying based on the price that you’re going to be paying.

We haven’t gotten into the purchase price but typically what I do is double. There’s a whole calculation that you can go in and fill out. You could figure out what the property taxes are going to be. This is in smaller and secondary-sized facilities. When you get into the primary market, it could be a whole different ballgame. Essentially, in secondary and tertiary markets, you could do this.

Taxes are $1,233. That’s $2,400. I’m going to put $2,400. CapEx is if you need to do any repairs, fix it up, or anything on the front end. That’s where you would put CapEx if you have some initial clean-outs and if you’re going to paint it or put a fence up right in the beginning. How much money do you need? We’re going to assume that this does not have any CapEx for this facility. It’s a small facility ready to be bought and ready to go.

The one thing that we don’t have here is the total square footage. We need to figure out what the total square footage is. We do that on the unit mix sheet. If you go to ROI-Muse, get an online deal analyzer, or use a different deal analyzer, you’re always going to have to fill out the unit mix. Get into the habit of filling this out. Essentially, if you want to buy storage facilities, you have to start getting your brain to think in terms of square footage. Let’s look at the square footage and see what it is.

That’s another thing too. The reason why we fill out our unit mix here is that we want to make sure that the square footage that they tell us matches up to what they say because a lot of times, storage owners will say, “I’ve got 5,000 square feet of storage.” The truth is once you add up all of the storage units, it comes out to 4,900, 5,200, or something like this. You want to have the true number. The way we do it on our deal analyzer is we fill this out.

We have sixteen 5×10s that are $45. We do 5×10. That is 50 square feet. We do sixteen of those. It spits out 800 square feet. We put $45 right into there. We have 23 10×10s. A 10×10 is 100 square feet. It was $60. This row is your as-is price. This is exactly what they’re charging. Finally, we have nine 20×10s that are $90. We have a 10×20. That’s 200 square feet. We’ve got nine of those. They’re $90. On this unit mix sheet, this is how much we should be making. If we were 100% full, we would be making $2,910.

On the sheet, he said that he took the vacancy away. If we knew, this is where we come in and say, “What does he have full? He’s 7% vacant. Which one of these is not full?” You could put the actual current number here. This is if he was full. This is at $2,910. This is where we put potential competition. Competition is super important in the storage world. You have to know what the competitors are charging so that you know whether or not you can bring that price up too.

He had that on the sheet as well. He had $65, $85, and $125. This is what he said. Do I trust this number? I don’t trust this number at all. This is what he’s saying that we could be at. We should be at $0.84 a square foot and we’re at $0.59 a square foot. You see how it brought that to here. It’s $0.59 a square foot and we should be at $0.84. We’re making $2,910. The wholesaler is saying that we should be making $4,120.

 

Commercial investing is really all about raising money.

 

Remember, the reason we put all this in is that we needed to know what the square footage is. The square footage is 4,900 square feet. This is a very important sheet to be looking at when you’re looking at your deal. I’m running a deal analysis. Let’s go back to the info sheet and change this number to 4,900. These numbers are looking good. The only thing we haven’t changed is the market cap rate. We haven’t put the price in here yet.

What could the cap rate be? Honestly, the truth is that cap rates are all over the place. You see in tertiary markets things sell for 4%, 5%, and 6% caps. You see secondary markets things going for a 7% or 8% cap. It’s a whole bunch of BS. The truth is cap rate is what you as the person buying is willing to buy it at. What are you willing to buy it at? It depends on the location and a lot of factors. One of them is where the location or the market is.

If it’s a tertiary market, typically you’re buying at an 8% or 9% cap. If you’re in a secondary market, it’s a 6% or 7% cap. If you’re in a primary market, you’re in a 4% or 5% cap. We were going to play around with the numbers so I can show you what it is but it is you coming up with the number based on whatever you think the cap rate is or what you feel that you will pay for the deal. That’s what I wanted to get at. People get so hung up on the cap rate but the cap rate is all over the place.

What you should do honestly, instead of worrying about the cap rate, is you should put an offer and see what they say. The owner could be like, “This is the worst price ever. I would never take this off.” You know that you need to lower the cap rate. The question is, “Do I want to pay that much money?” That’s it. Don’t get so hung up on the cap rate. A lot of people think that the cap rate is so important but the truth of the matter is it’s what you’re willing to pay and what your gut is saying about the deal.

It’s hard to explain but I’ll show you in the deal analyzer. I can’t even remember where this property is, honestly. I’m thinking that this property was in Texas but I’m not 100% sure where it was. It doesn’t matter where it was. It’s 48 units. It’s in a tertiary market. It’s in a smaller market. Remember that it could be a 7% or 8% cap. You could try different numbers. The wholesaler was trying to sell this property for $399,000. At this point for this type of deal, we know what the purchase price is.

A lot of times, you don’t know so you have to play around with the purchase price. We know that this is what the wholesaler wanted. We know that this property was in a tertiary market. Tertiary markets typically go in for 7% or 8% caps but maybe a 6% cap depending on what we want to pay. She wants $399,000. That’s what the wholesaler wants. What he has under contract, we don’t know but we know that he wants $399,000.

The question is this little section right here. It’s the average rent per square foot after the updates. What I mean by that is what is the competition charging so that we know what we could be getting. On the unit mix tab, this is what the wholesaler gave us. This is what the competition is charging. It’s $0.84 a square foot. Let’s go in here and put $0.84 a square foot. Now that we have pretty much everything you filled out, I’m going to get into competition more.

We have everything on this tab. This is the input area filled out. These yellow little sections here are the expenses sections. You don’t want to go off of what the owner has as their expenses. You want to go off what your expenses are. For our expenses, we have property maintenance, which is the boots on the ground. Remember that on the proforma, he had onsite. Onsite, he had $2,000. We’re guesstimating that this property probably takes about $6,000 to maintain with the boots-on-the-ground person, all the repairs, and everything.

That’s based on our formula that we use internally, which is 0.015 times C6. C6 is the purchase price. Let’s say that the owner’s price was $150,000, $180,000, or whatever it is. With this number right here, this formula would be different. For him to manage a $180,000 facility is a completely different number than us managing a $400,000 facility. You have to keep that in mind when you’re running numbers. Your expenses are more important than the owner’s expenses.

Also, we have the staffing. This is our phone people or the phone person that answers the phone, does all the auctions, and stuff like that. If you were only going to buy a 48 unit and that was all that you had, then you might be handling this yourself. This number may not be what your expenses are. Maybe it’s cheaper if you’re handling it yourself. If you’re the boots-on-the-ground person and you’re handling it all yourself, then this is going to be cheaper. You should have some number in here.

 

A lot of my students will come in and take the whole thing out. The truth is that you’ve got to have money for property maintenance. The staff isn’t paying themselves, so you want to make sure you have these. For us, we multiply 400 times 12 and then 50 times 52. Essentially, it’s $400 a week for the phone person that we pay and then also the office person that manages everything for us. On top of that, there’s $50 for our evening calls or overnight calls because we always have somebody answering the phones 7 days a week and 24 hours a day. We don’t want to miss any phone calls at all.

The software is $3,600, which is $300 times 12. It was $300 a month. That’s for storEDGE. If you buy the website and the software, they’re typically around $300 a month. Finally, marketing is $633. This is the formula that we use, which is the number of units or C13 times 1.1 times 12. That’s how we came up with our marketing formula. This number right here is the mortgage payment. We don’t have this in yellow because it’s calculated automatically.

We have this at 10%. This is an income-producing property. We can go and get a loan from a bank. What is the loan from the bank going to be if interest rates are going up? Let’s say the interest rates are at 6% and it’s for 240 months. You can see the mortgage payment went from $40,000 to $24,000. Your mortgage payment is going to cost you around $24,000. Including your expenses, it’s over $40,000. For us, that’s how much it’s going to cost. For you, the expenses might be a little bit different here if you’re going to be managing it yourself. Personally, we don’t manage our facilities. We delegate all that out.

You have an overview of everything all filled out here of what you need to run deal analysis and look at the deal. You’ve got all this in the current. We’ve got some after updates and expenses here. We’ve got your mortgage set up. The question is this. What would you pay for this? It’s only making $34,920 a month but once you increase the rates, and this is one of those facilities where you would buy the facility and then increase the rates within the first quarter, then notify everybody.

You buy this facility and notify everybody of the owner transfer or owner change. You are now the new property manager of this facility, “We’re going to be increasing rates as well. You’ve gone on too far and too long with cheap rates. We’re going to increase the rates and bring it up to market value.” That’s what happens. Within the first quarter, you increase the rates. In a facility like this, you never want to take longer than the first quarter to increase rates. You want to get in there and rip the Band-Aid.

When you start looking at the $0.84 a square foot for the competition, the good thing is that you need to be keeping track of the competition. We have a whole internal system where we are keeping track of the competition. For you to know whether or not it’s a good deal, you have to look at every single competitor in the area. That’s why on the sheet, we have a tab for competition. This is where you go around, find all the competition in the area, and mark them down.

You’re going to have the name of the property, phone number, website, email, and address of the property. Did they claim their Google Business listing? That’s a good thing to know. How many miles away are they from your facility. Are they gated? Is there an office? Is there a square foot? Do they take credit, ACH checks, or cash? This is where you’re putting all of the different sizes. You would have the 5×10, ten 10×10s, ten 10×20s, and ten 10×15s.

You put the number here. Let’s say that they charge $50 for a 5×10, this one here charges $45, and this one here charges $65. You have somebody that charges $70. They charge $75 and then $80. You can go to 10×20s and say they charge $100, $110, and $120. What you’re doing is trying to find the average unit price and also the average per square foot. If we take this number and divide it by three when you put the right numbers in, then you will take this average per square foot and you stick it right here. Whatever it comes into, this is that number.

You will be looking at the unit mix under the potential to see what comes here. If I take the average per unit or $53.33, $75, and $110 and then put them in here, this one comes out to $0.72 a square foot. You will put the competition in your sheet, average it out, and look at the as-is versus the potential or the competition. This competition sheet is very vital to determine whether or not it’s a good deal. You have your input here. You also have your unit mix put in and your competition for them.

You can look at each of the valuations and the current as-is. The debt-service ratio is 0.53. A debt-service ratio is a number that the banks look at to determine if it’s a good deal. They want to make sure that you’re not overleveraged. They have this formula. You can click on the formula, see what it is here as well, and follow it through. Essentially, what that means is if it’s an income-producing facility, you want to make sure that it’s above 1.30. It’s what the banks are looking at.

 

True passive investing is when you hand your money off to somebody else and you let them work your money for you.

 

Most of the time, you will find different things with different numbers. Find out what your bank wants. If you have a bank that you’re going to be using, ask them, “What’s your debt-service ratio?” They will tell you it’s 1.28, 1.20, or 1.34. When you get all the information in, then you can play around with the numbers. If this was the actual number, you could play around with it. If you have determined that the market cap rate is a 7% or 6% cap, it’s a tertiary market but it’s going for a 6% cap.

You could say, “I would need to get a loan on this property. What is the number that is going to allow me to get a loan to purchase this property? I would not be able to get a bank loan on this deal.” If I came down to $200,000, it’s almost there but not quite. We set the scale at 1.30. $195,000 is where you would need to be to get a bank loan on this property. Once you rip the Band-Aid, you will be in the green. The property is going to be worth $437,000.

Once you rip the Band-Aid, increase the rates to what the competition is, and then be more competitive, then you’re going to have this property valued at $437,000 but you have to buy it at $195,000. If we go back to the $399,000 purchase price, it’s only worth that if you increase the rate. I see this all the time. People are basing their numbers on what the market could be. You don’t want to do this. It’s okay to pay a little bit more for a facility if you know that you’re going to double the value on the back end, but on this facility, this is not a good deal.

Forty-eight units that are only making $34,000 are only worth a little over $200,000. I wouldn’t pay $400,000 for a property that’s worth $200,000. I may pay $250,000, come in, and say, “I’ll do $250,000 on this deal.” That’s a 6% cap. It’s $250,000. I wouldn’t pay $399,000. You should not pay $399,000. Nobody should be paying $399,000 for that deal but the wholesaler essentially was running the numbers off of this deal or this number, which is why it is very important to be looking at the competition and what you think you could be charging versus what you are charging.

We only know this much. Essentially, we don’t know if we can add on. We don’t know anything else except for what was on that proforma that I showed at the beginning. This is it. My final offer is $250,000. I’ll come out of pocket for the first six months or so to get it up and running. I’ll borrow money from a private lender. After a year of owning this thing when I have one year of tax return, I’ll refinance out, get a better loan, and get a loan from a bank.

You could buy it for $195,000. That will be able to give you a green light to go to a bank and get a loan. At this price, that bank would loan on this. That is the deal analysis there. I wanted to make sure that you knew how to look at the numbers. These are the current numbers. This is based on $195,000. The current valuation comes out to $261,000 with equity at $64,000 or $65,000.

You have your gross potential runs at $37,548 minus your insurance expenses and all this stuff here, which makes your NOI $15,717. If you don’t pay cash for it and take a mortgage, then you’re going to be netting $3,400. Essentially, all that works at $3,400, which is a no-go. We don’t want to do that. What we want to do is make sure on the after updates that you can increase the prices. That’s the key.

I’ve looked at properties where the owner increased the rates. He’s like, “I increased the rates.” There’s no room to grow at all. Some people might want to buy them but I don’t want to buy a property just for cashflow. I want to buy a property for cashflow and appreciation. You want to make sure that you keep that in mind. Let’s look at the after updates here. It says the valuation is $437,000. You’re going to have $240,000 in equity. Your NOI after your income and expenses is going to be $26,000. After your mortgage, it’s $14,000. You make a little bit over $1,000 a month on this deal.

That is the gist of how to look at a deal. I’m going to answer a few questions and then do another deal next time. We will practice looking at deals. Let’s see a couple of questions. I’m going to head over to the pitch. If you do want to hang out with me at the pitch, go to StacyRossetti.com/fund if you’re interested in learning about the Self Storage Fund of America. I’ll be pitching that. I always pitch that right after this session to all my investors.

“How do you determine which markets are secondary and tertiary markets? Is there a rule of thumb? Is there a good guide yet?” Secondary and tertiary markets are based on population. In my opinion, it’s population. 25,000 or less is a tertiary market. 25,000 to 100,000 would be a secondary market. For instance, I was talking to somebody. They were in some town in Tennessee that had 87,000 people. That was the perfect secondary market.

 

We own a facility in Valdosta. Valdosta has 76,000 people in it. You know those towns in your city that are standalone towns that are anywhere from 25,000 to 100,000 people. Those are good secondary markets, not suburbs. You don’t want to be in the suburbs of metro areas. The price there would be too high and people are too much competition. Find tiny towns with 25,000 or less or secondary markets with 25,000 to 100,000.

“How do you figure out what potential is if none of the competition has a particular unit size?” Essentially, when you’re doing a competition, you want to compare apples to apples. You don’t want to compare brand name to brand name or anything like this because the truth is a competitor could be a bigger facility or a smaller facility. You don’t want to look at facilities that are charging way low rents because it’s going to bring your number down.

What you want to do is you want to be looking at a facility that would be considered apples to apples. If this one had 5×10s, 10×10s, and 10×20s, these are all drive-up open storage unit facilities. You want to find ones that are like that, not just rinky-dink small ones that are the same size. The same size is not important. What’s important is that it’s the same type of unit. You don’t want to use double-level or tri-level facilities if your facility is an all-metal facility or something like this.

You have to think in terms of what is the true competition. True competition is apples to apples. It’s the same type of facility and units that they have. That’s what you want to be comparing. Their last ones get hung up on that. I didn’t get into potential versus current. Potential is essentially taking it from 25% or 50% vacant to full but sometimes it’s already full. Sometimes it’s at 7% or 6% vacancy. I typically like to run my numbers at 8% vacancy.

Another thing is that the wholesaler had a 7% vacancy. Typically, you should be running your numbers at 90% to 92% full. He had 7%. We run our numbers at 8%. That’s why it was a little bit less than the current. We’re looking at a facility that has a 10×35 and a 10×40 in addition to the common sizes but none of the competition has those. I don’t even use those numbers as competition. We try to figure out the price per square foot based on what all the other units are doing.

Let’s say we have 5×10s, 10×10s, and 10×20s. We came up with those three numbers and then had also a 10×35 or 10×40. I would take the average price per square foot of that, multiply it by the one that we have, come up with that number, and then try it. The thing is that you can always change the number. Smaller units are higher priced per square foot than the bigger units. You have to gauge it a little bit and see what you can do.

Don’t go to ROI-Muse.com and get it. Use my affiliate link because you get 50% off the price, so everybody knows. We will post it to the Facebook group. Super Simple Self-Storage is the Facebook group. If you’re not in the Facebook group, make sure that you join that. I’ll have someone post it out so you can use that. You could get 50% off.

Jo is awesome. He’s a great guy. He doesn’t do a lot of stuff on storage. I’m usually the one that comes in and teaches on storage but he does a lot of apartment teaching and stuff as well. I’m going to hop off now. Go to StacyRossetti.com/fund. If you’re interested in hearing the pitch for the fund, you could check out StorageNerds, get on the waitlist, which is StorageNerds.com, and then hit Apply that you want to get in. That will take you directly to the waitlist. When the doors open again in the fall, you will get notified. I only opened the doors for six days.

I take calls for six days straight and then after that, close the doors. That’s it. Also, don’t forget that I have the StorageNerds Podcast as well. These sessions all become podcasts. If you do ever miss anything, you can always go back and watch those as well on the YouTube channel, which is Stacy Rossetti Teaches. My course is Super Simple Self-Storage. If you need to learn, it’s the course. If you want to DIY and learn on your own, that’s the way to go. I will see you at the next session. Take care.

 

Important Links

• StorageNerds.com
• ROI-Muse
• storEDGE
• StacyRossetti.com/fund
• Super Simple Self-Storage – Facebook group
• Stacy Rossetti Teaches – YouTube
• Super Simple Self-Storage