I’m a member of a few real estate forums out here on the interwebs, and I get notified when the topic of self storage becomes active. So, when I spy a post where someone is about to make a major mistake because of their laziness or outright ignorance (and I say that with peace and love), I’ll spend a few minutes “intervening” to prevent them from learning a costly lesson. Through the years, I have witnessed many real estate investors fail, because they only relied on the free information that others “threw their way” when they posted a question on a forum or blog post thread, rather than investing their time and resources into getting proper training or hiring a professional to assist them in the more difficult decisions.
3 Most Important Tips for Self Storage Newbies
So to save us all a lot of time, I decided to create a mini-compilation of my 3 most used but all encompassing responses to the uninformed investors in my quest to help them avoid certain annihilation. After 24 years of investing in real estate, and 10 years in Self-Storage, here are 3 overarching tips I can provide:
- Hire a consultant to perform feasibility before you develop. Just because you have the dirt, doesn’t mean that the highest and best use is self storage, or that there is demand for it at that particular site.
- Continue to educate yourself OUTSIDE of the advice you’ll likely get from the chuckleheads on the forums who love to give advice, because they own a couple of rental houses, or did a few flips over the years. Most of them mean well, but you’ll see what I mean after you read a few posts.
- Grab as much info from Inside Self Storage and The Self Storage Association that you can. You may also want to attend one of the Free Developer events held by Janus and/or Trachte if they happen to be coming to your area.
I consider myself the industry’s “Guardian Angel” for people who think that they don’t have to do their homework when it comes to buying/developing self storage. That said, I strongly suggest you build yourself a team of self storage professionals to help along the way.
Because I’ve seen the flip side: People who fail to take a business-like approach to commercial real estate since they made a couple hundred thousand in the single family rental/wholesaling business and think they can do it in self storage. And there’s nothing wrong with that, because either way, I win when I give the advice above:
- People actually follow it, and my experience is being put to good use, which is why I’m here. OR…..
- I win because they fail to follow it, buy, or build it WITHOUT doing their homework, or using professionals, and then when it fails – I swoop in and buy it for pennies on the dollar from them, or the bank that may have financed it. I’m buying 2 right now due to that exact scenario.
Ladies and gentlemen, DON’T BE GUY #2! I’ve bought a number of deals this way, and it’s great for MY business, but also very sad, because I know there’s someone on the other side who just got punched in the gut, and they may not recover.