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.
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?
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?
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.
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
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.
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
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...
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.
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.
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.
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.
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.
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??
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?
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.
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.
Good presentation and very informative thank you. May I ask do the expenses include a full time employee to give keys to customers and collect the money etc.. ? Thanks
@@CommercialPropertyAdvisors I was wondering the same thing. But so if a manager's salary is included in the $32k expense amount, how much do you figure a decent and dedicated manager's salary would be? If it's minimum $2,000/mo (?) or $24k/yr (is that enough? I don't know...) that's leaves $8k for property tax, insurance, maintenance, repairs, vacancies, miscellaneous. Is that enough? Thanks.
Get started investing in self-storage by applying for our Protege Program: www.commercialpropertyadvisors.com/protege-program
You are an excellent teacher and representative of real estate investing! Much respect to you Peter. Keep em coming.
As a commercial broker I can definitely attest to the importance of building relationships. Most of the good deals are not found online. Great video!
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!
This is the best video I have seen yet on getting started with self-storage. Thank you!
You sir, are simply amazing!! This was the very first time in my life that I was actually interested to learn math formulas!! Thank you!!!
I used to be a storage property manager and a truck rental manager. I've considered this as a future investment.
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
How's that going bro? I'm curious to see how you are doing after over 5 years. 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!!
These videos are very, very good.
I learn by interacting and making mistakes.
Great video. It has been my dream for the greater part of 10 years to get into the self storage business.
Sounds like you’re doing well
I see we all here on the same mindset of cash flow with storage units
This has been the most informative video I've watched regarding self-storage commercial real estate thank you so much for this information.
Love all the noise you cut out and the 40% rule of thumb for penciling out a deal. Thank you!
Thank you for walking us through the financial details and other information on Self Storage units. Your videos are extremely informative. 😊
Amazing video, informative, specific and so helpful. Thank you!
Excellent tutorial on investing, I’m a realtor and I learned a lot.
Great information. I'm in Orlando. I'm a beginner. Looking forward to starting. Thanks for sharing
Excellent video and explanation. Thank you Peter!
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.
Excellent, very informative and simple to understand!
Very nicely done. You’re a great teacher.
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.
I wonder exactly the same!
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.
Both require equal amounts of input/experience. You can start with one or the other, but don't try both at the same time.
@@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.
@@CommercialPropertyAdvisors
Are you up for a chat ☎️?
I need to invest in something like this can we talk being this video is SEVEN years old
One of the best videos I have seen yet
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
Such a great humble spirit and great content! Thank you for all of the information! 💫
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?
If you are brand new, you may not want to build from the ground up. That's a whole new universe beyond just self storage.
@@CommercialPropertyAdvisors like what?
Beautiful handwriting!
thank you, for taking the time to make this video, it was very useful.
Wait a minute, ... Brokers put their pants on one leg at a time? That's just like you and me!!
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?
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.
Class A-Stay (A)way
Class B- Do (B)usiness
Class C- (C)aution 👍🏾 Got it
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
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.
Watch this video: ruclips.net/video/JPfj6P5m5wE/видео.html
It seems like this would be a difficult way to be "self-employed". Not much of a profit margin once you factor in time for management and maintenance.
If you self manage you get a lot of the 'expenses' portion also.
Your videos are amazing and very informative, thanks!
Easy to understand and well explained. Thank you!
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
If you do the managing yourself, you get more of the $ out of the expenses. I'm sure a lot of the expenses go to the manager.
Excellent, thank you. Good all round explanation.
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)
Ask yourself if you’re getting 19% return on your life savings.
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...
How much of the calculated expense goes to paying the property manager?
A 3rd party manager of a self storage facility usually gets 5% since there is very little work to be done.
Thank you man great info and highly detailed much respect 🙏🏾
Thanks for sharing. Still RELEVANT TODAY!
What a great video!!!
Great educational lesson. Thank you.
It's hard to find your videos from the thumbnails because I'm looking for your face. FYI. Love the videos.
Excellent source of information. Subscribed.
Nice simple presentation..you made it very easy to understand, Congrats
tim tong your numbers are wrong they rent by the month not year. # of units x rent x 12
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.
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.
Im going to be successful at this!
Thank you so much for great and valuable information
Thank you for the thorough breakdown.
Excellent presentation, TY for posting
THANK YOU!
Very well explained... thank you!!
Still great!
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.
with SBA you can get 25 years.
Thanks for the Information I really want to invest
what is included in expeses? would think taxes, insurance, utilities, salaries, etc. here mortgage is not considered an expense
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.
Very informative...I'm thinking about constructing a boat storage on my lumber yard.
Be careful about vehicle storage. Lien laws in most states make vehicle storage not as secure an investment.
thank you, very understandable.
Wouldn’t you calculate your taxes and insurance in your cash flow?
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.
Thank you
great video, I learned a lot thanks!
Great video.
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.
I’d like to get in touch with you for some coaching.
great comprehensive video!
Thanks for the info! Great stuff
excellent video. Thank you
This was great thank you
Is self-storage something you invest in? And if so how do you rate that investment with your other investments? Thank you,
What is a good mix of sizes?
Very helpful video, Thank you
Solid information. Thanks!
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??
Can you explain how you got the mortgage pymnt of $1952.69 from the 5% amortized over 30yr rate? Any assistance would be appreciated.
Great explaination 👍😁
pls can u tell us 40% include what i mean the expences,thanks
I like this presentation is cool, thank you
I'm confused as to how you got the monthly payment? 363750÷30=12125
12125÷12=1010.42
I dont know where to include the 5% interest?
Great video even 6years later. I do have a question, do you worry much about a cap rate? Or do you focus on the CoC return?
Those two often go hand and hand; the higher the cap, the higher the cash on cash return.
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?
No I don't.
Will you be available if I need support?
look into cost of replacement its getting more expensive to build facilities nowadays.
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.
Dude same here! I rent two storage units and pay $150 a month!
In order to make sure you're not renting the space/storage for traffickers (drugs, human, and etc), what should be done? Any tips?
Advise your clients that your facility is used by law enforcement in the training of their narcotics/cadaver dogs.
Excellent
If "C" is 1960-80s, what is a 1900s limestone (retail lower/5 door apt) building on the town square?
Is the property management included in the expenses?
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.
Thanks a lot of great info
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.
Good presentation and very informative thank you.
May I ask do the expenses include a full time employee to give keys to customers and collect the money etc.. ?
Thanks
It includes the costs of management
@@CommercialPropertyAdvisors I was wondering the same thing. But so if a manager's salary is included in the $32k expense amount, how much do you figure a decent and dedicated manager's salary would be? If it's minimum $2,000/mo (?) or $24k/yr (is that enough? I don't know...) that's leaves $8k for property tax, insurance, maintenance, repairs, vacancies, miscellaneous. Is that enough? Thanks.
@@MichelBron_ I agree, in my opinion it's not a good deal
Richard are the state taxes included in the expense category?
Thank you!
Amazing video