How do you know if a person is a professional in the field? Easy. He/she explains complicated things very easily without any unnecessary information. This video is a great example of it. Thanks a lot for this video! Nicely done!
Finally someone that will share the math behind it. I thank you "my friend" for sharing that with us, as a laymen who is very interested in learning everything I can about this side of the industry, this has definitely been the catalyst that I believe will push me forward into my next step, well done cheers
Thank you for the video! Although 7 years old.. Still picked up on the easy way to find Cash Flow then divide by down payment to see RoI or COC as you call it! Awesome quick way to evaluate a deal!!
Awesome video and very inspiring. Great content and breaking it down on what you need to know. Pretty soon I’ll be looking into investing in self storage.
This video was so very informative and well presented for a newbie like me. I'm looking to invest and gathering information at this point. My only question is on the final calculations being done. Do the operation expenses include salary for an on-site manager? Thank you.
It would be great getting more people to make their monthly payments instead of making it their last priority, and even then making partial payments.... very very annoying.many won’t pay unless they need to get into their unit because we have them locked out due to non-payment, or we sent them Aution papers that we are auctioning their things. It’s not a piece of cake folks be prepared to put your LIFE into it.
The facility I rent from gave me the option of automatic payments.The payments are pulled from the card my choosing and all I ever hear from them is an emailed receipt every month.
Mr. Harris,Thank you so much for the deeply informative videos and the care and passion you put into teaching beginners. I am a new subscriber and I am hungry for knowledge and am ready to jump into the commercial RE game.Here's a question for you: As a brand new investor, is it better to start out investing in commercial-sized multifamily properties or self-storage? I am interested in investing in both eventually, and know that they both have their own pros and cons. I guess my main concern is that one may require more input or experience than the other and would love your opinion.Thank you.
@@CommercialPropertyAdvisors would you say the same about mobile home parks? I'm interested in those, apartments, and nnn commercial space. Also Mr. Harris can you make two videos on these two subjects they will help not just me but others #1. When syndication what's the difference between irr, coc, and roi and which is most important to investors? Also can you structure a syndication so that when you refinance you cash out your investors and you now have 100% ownership? Would you dissolve the LLC or create a new 1? Video#2 the closing process. It's cloudy at best. What is the exact step by step process? No one I've followed has ever described it. Thanks Mr. Harris.
Another very insightful video Mr. Harris! You mentioned the SBA as possible funding sources for these types of properties with two different types. I've not looked into it but do happen to know what, if any, strings could be attached given as you mentioned 10% down as opposed to 25% down as could be the industry norm with commercial lenders? A sharing of gains perhaps when you sell the property for profit? Or any other encumbrance you may know of? Thank you again for these great presentations! Bill Turner
Any comments on if you already have the land in a great location? We might want to build self storage units on the land but not sure where to start and what the costs will be to build it out? Where are the best places to buy the storage units etc?
K, maybe I'm just an idiot with business but I personally look at this and think....... 270 units at 80% occupancy = about 216 units that are regularly paying. Then... $79,000 income last yr ÷ 216 units = $365.74 per year for each unit. Meaning the monthly cost of the units being rented is $30.48 per month!! WTF! No way! At that rate I'm thinking this must be a class C.
I agree. In business the word “income” isn’t clear. I like when a person uses the words, “revenue, profit, and loss.” For me they provide a clearer picture.
Thku for an informative demo how ever when you did the adding & subtraction it leaves basically a little under 500.00 per week take home & that's not to apealing , but its it's not a total turn off
Hey Peter, Great video I had a question about when you analyzed the deal. What is a bad C.O.C (Cash on Cash) number? What is considered bad C.F (Cash Flow) numbers? Also, would I analyze a multi-units numbers the same way? Thanks so much. I'm really learning a lot.
Thanks for the great videos. Off topic but the turnover-rate in the apartment business is 6-7 months ? (4m40s). My expectations were quite a bit more to the upside. Thanks very much
I have a serious question. Why would anyone want to buy a business with there life savings as a down payment, go all in and take on all that extra work for a yearly salary of 23grand, am I missing something?
Because it’s adding 23 grand into your pocket in addition to the money you put down. The life savings you put down do not go anywhere, they are in the value of the building you purchased and you are able to sell the property to get it back. However by doing this you are simply allowing your savings to produce income for you, while the value of the property begins to appreciate until it reaches a point where you can sell it for more than what you paid for it, and while you’re waiting for that to happen, you are getting paid 19% on your investment annually (in this case it’s 23,0000 per year)
That's because the rich buys "assets" that produces income per year. This $23k is also tax free income so imagine you get paid $100,000 as a W-2 worker, your take home will be around $60k after taxes. If I get three of these self storages, I would make more than an employee making $100,000.
Informative, however I'm curious how it would look if the property management, utility bills, Monthly Insurance, & property taxes were figured in & how to figure them, would this property still cash flow as well...
Another awesome video. Thank you. I just wanted you to know you don't have a #4 even though you referred to it in the video. In the Why Invest in Self Storage Facilities?
With all those figures, it seems that the manager expense wasn’t included. I’d prefer more information on that missing criteria. It makes a big difference.
Good video, I however do not think this facility was a good deal at $485K. Very rarely banks will do more than a 15 year amortization. That brings this deal to a 11% CAP RATE. This property based on these preliminary numbers has a net of $12,481.88 when financed with the prevalent commercial loan standard of 15 years.
I was thinking the same thing. $79K in annual income for 270 units seems waaaay too low. That's about $24 a month in rent per unit! No way!!! Good info otherwise.
He didn't show what items made up the operating expenses $. He used an industry standard of 40% of gross profit. I assume they are included as 40% ($32,000) seems high for a self-storage unit. I am curious what line items are in this 40% as well.
At full occupancy, the example is charging a rate of $22.22 per month. The average unit price per month should be quadrupled if not more. Also, 40% on expenses???? I hope all these numbers aren’t even close to realistic or I’m stepping away from the idea of owning a storage facility.
Sir. I have 2 commercials in my area: Public storage for example. How would I compete with them if I invest in a distressed self storage units local mom/pop??
Thank you for the wisdom sir! I’m looking into building one on a vacant piece of land I own. Any recommendation on what company to contract? I’m in Nashville, TN.
Storage facilities around 30,000 - 40,000 sq ft in my area are priced well over 1.5 million. Would it be better to build a storage facility from the ground up? Do you have information on this?
Hello I have a ??. I’m building storage units for sleeping rooms of 20 rooms of 12x12 and 2 small rooms.8x12 on the end. 130x 30 how many can I put on 1 acer 12x12 +8= 128 round of 130// 12+12+4 = 28 round of to 30 there 4 foot down the middle of these units with doors on both ends.
I love your content MF and now Storage. Please work on the clarity of your content. The content comes across distorted or with an echo. Peter please spend a few dollars on upgrading the quality of voice output of your content. Thanks for all you do.
