Kevin Bell

Lesson #3 - How To Buy Self Storage

The secret is out. People know about self storage. It'd be an understatement to say that it's trending right now. And rightfully so, it's arguably the best asset in real estate.

While that hype is beginning to level out after, from an investor standpoint, it is still phenomenal.

The three Ts (Tenants, toilets and termites) don’t exist.

Storage has been and continues to be where my team and I spend a lot of time. We have facilities is Kansas and South Carolina and continue to add to our portfolio.

But the question remains HOW do you get in on the action?

In this email, I'll give you the 30,000ft overview of How to find a storage facilityHow to value the facility you findHow to lock down your deal

This is only ONE email. I know you want more. And I don't blame you, it's juicy stuff. I promise to provide you with all the details overtime through this newsletter, course, videos, podcasts and other outlets. Today we'll start with the basics.

Lesson # 3 - How To Buy Self Storage

1️⃣ How to find a storage facility

I have always said and will continue to say that if you can find a good deal, the money will come. It's hard to fully conceptualize that until it happens, but I'm living proof that it 100% happens.

Sure, there's a handful of things that led to that point with talking to the right people and having a good team, but ultimately, NONE of those things matter unless you have a good deal.

So HOW do you find a good deal? Let's break this down👇

STEP 1: Find a good market to look in. The market is KEY 🔑

Boxes you want to check:

If you can find a good market, you're laying the foundation for success. I talk a bit about markets and finding self storage in these tweets here 🐥

Twitter Link

Twitter Link

STEP 2: Once you've found your market and for the sake of cost effective strategies, do this.

  1. Go to google and type in your chosen city
  2. Click on maps to see the Google map of the city
  3. Select "nearby" then type in Self Storage
  4. All the pins of self storage facilities in that city should pop up
  5. Start filtering the facilities and looking for these few things

Theres a handful of more things, but these are important because they are "value add" opportunities.

NEXT, call the facility and talk with the owner about your interest in purchasing the facility.

Here is the EXACT call script that we used to train our VAs on

2️⃣ How To Value The Facility You Find

So now you've found a facility that looks good and is In the market you like AND the owner is thinking about selling it... now what?

You need to figure out what you believe it's worth so that you can make an appropriate offer on the facility.

Storage Valuation in 30 seconds - aka "Back Of Napkin Valuation" When you're talking to the owner on the phone, work to get these 4 questions answered:

  1. How many units does it have?
  2. What is the square footage?
  3. What is the occupancy?
  4. What is the annual gross revenue?

Cool, now you pretty much have all the basic items you need. Let's make this SUPER simple:

[Annual Gross Revenue]

X Occupancy % (example x.85 = 85% occupancy)

X .62 - estimated expenses (unless you know the exact number)

/ Cap rate

= Suggested Purchase Price

Ok, but whats a cap rate?? Ya I thought you'd ask that. You can find it by dividing the Net Operating Income by the current market value...

We'll go Into that another day, but for now lets just stick with the fact that you don't want anything less than a 7 cap. Plug in anything at 7 or above. It'll look like this .07 or .08 or .09, etc.

Now for some numbers to see how this works out:

$200,000 Annual gross

x .85

x .62

/ .07

= $1,505,714

For an 8 cap - $1,317,500

For a 9 cap - $1,171,111

Your range on suggested purchase price is between 1.17M and 1.5M Theres a TON more that goes into this, but this is a good start. Heres one more SUPER quick method for you. If you already know the asking price, take that and do this:

ASKING PRICE / Monthly revenue

Based on that, 115 or LOWER is GOOD to look into.

Example: $1,00,000 (asking price) / 10,000 (monthly revenue) = 100 (GOOD deal)

So you've found a facility and you've valued it AND you think this is a good deal... NOW WHAT??


3️⃣ How To Lock Down Your Deal

Letters of intent (LOI) are non-binding.

I know that it might feel that it's a big step especially if you're still trying to find money to make it happen, but just by submitting an LOI does not mean that you need to put any money down. This is simply you sending an offer to the owner (or broker) and seeing where you stand.

The more LOIs you submit, the more comfortable you'll get with the process. We often send several LOIs a week when we're really grinding on leads.

Here is an ​LOI Template​ that you can use until you get one figured out yourself.

Note: I am not a lawyer, this is not legal advice. We have legal counsel as we get closer to closing on deals that make sure things are all buttoned up.

Truthfully, with just this email, i'd be confident sending you out RIGHT NOW to find and lock down deals. And once you have a deal locked down, it's just a matter of finding people that want their money working for them but didn't do all the work you did to find that deal.

If you belong to networking groups or you have high income earning friends, or maybe YOU are high income earning... awesome, you're set. But if you have the deal and need some help with capital, operations, closing, hiring boots on the ground, building a team, whatever it might be, this is our bread and butter and would love to help. Shoot me an email with what you need and I'll do whatever I can to help you land that deal!

We're also about to launch a community of entrepreneurs like yourself that are all looking to grow their portfolio and do some big things. I'm sure someone in there will want to see the deal you have. 😉

More resources for you:

ONE video on how to find storage:

​How to find self storage Youtube​

TWO articles on storage:

Pace Morby Article​​

How To Get In The Game