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What is it you REALLY want to do? Genuinely.
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You’re reading this for a reason, and I’d bet you’re consuming other business newsletters, books, podcasts, videos, etc
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So there must be SOMETHING that you are working towards. Right? 🤷‍♂️

Maybe a business you’re trying to start? Or maybe you’re interested in buying a business and growing that way? Is real estate your thing? 🤔

If that’s you, would you mind sharing your story? I’m writing a book and doing research right now. I’ll dive more into the topic in a later email, but I’d love to hear what you’re doing or what you’ve tried along your entrepreneur journey so far.

Shoot me a reply! Your insight is valuable and deserves to be shared.

Now for the topic of today:

Find and analyze a storage facility without any prior experience:

Seriously, this is the step by step here.

1. Locate property via Loopnet, Crexi, Cityfeet or Google. Loopnet, Crexi snd CityFeet are going to show on market deals (which aren’t bad, it’s just you’re going to have to deal with brokers now… again, not bad, just a variable). Google will be off market and manual. If you can find these, you really have something to work with.
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2. If it’s an on market, look for the Offering Memorandum (OM) or ask for it from the broker. You might have to sign an NDA. Don’t worry, just sign it. It’s not a big deal.
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3. If it’s Off market, there’s so much to dive into here that I’ll leave for another email, but the main thing is GET ON THE PHONE with them. Make the call. Chat it up. Definitely go into it ready to take some hits. They get calls ALL day. They might not be stoked to talk to you. BUT if you’re cool and down to earth, that will go a long way.
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4. Whether you get the OM from an on market deal OR the financials from the off market deal take those and use this “Back of napkin” underwriting -
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   a. Take the current gross income and subtract out the current expenses (it’d be safe to estimate 40%). At this point you have a rough NOI. And I mean ROUGH
   b. If you multiply that by 10, that’d be a very loose valuation. (NOI x 10)
   c. Using these numbers —> Grossing 100k, spending 40k on expenses a year = NOI
   d. 60k x10 = 600k
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5. Then run the same exact formula based on the potential revenue
   Maybe there are some vacancies.
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   a. It could bring in 150k per year at “full” capacity
   b. Expenses of 50k (lowering ratio to 33% of income)
   c. NOI now = 100k
   d. 100K x10 = 1M
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6. Now that you have a basic underwriting done (which should take 5min when you have the numbers) start looking more at population of the area.
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7. What you’ll want to know at first
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   a. The population
   b. The growth rate
   c. The median household income
   d. The square foot per capita
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8. There’s a handful more things that would be helpful, but these are your starting points.
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9. You want a population over 10,000 at the minimum
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10. A growth rate going up (more people moving in)
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11. A household income that can afford your business
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12. A low (under 8) sf per capita. This just means that there’s not to many other facilities near you.
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13. All of this can be found though googling/ ChatGPT or a tool like StorTrack.

At that point, you’ve now found the facility (either on market or off) you’ve analyzed it with a rough valuation from the back of napkin analysis and you’ve examined the market. From here you should have a pretty clear picture on the quality of your find.
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Here’s the next part that’s VERY important to remember. If you can get this facility under contract, DO IT.
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Send out an LOI with your rough numbers even if it’s a Hail Mary low ball throw and see if they bite. Use this template. Even if you don’t want it, someone else might and you can make something on the wholesale.

There you have it, super high level overview of finding a facility and underwriting it.

If some of this doesn’t make sense

(which is entirely possible. I’m writing this as I roll around in my police car… I’m not the driver don’t worry)Id be happy to dig into any bit of it you want.

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.

What are you working on? What is it that you really want to build? I'd love to help.

Until next time...

Stay in the fight,
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My best tweet this week:

Kevin Bell 🍩 @kevinasrx From pushing a mower around at 15 to selling his lawn care company 39 years later, here’s a story of how consistency in a “boring” business can make you a lot of money. I can’t tell you the specifics yet, but at one point I will. This will be the 10,000 ft view today. I’m in… https://x.com/i/web/status/1877481387193937970 2:23 PM • Jan 9, 2025 0 Retweets 9 Likes Read 4 replies

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My favorite tweet this week:

Nik Shevchenko @kodjima33 introducing omi. thought to action. order now at http://omi.me 7:40 AM • Jan 8, 2025 284 Retweets 3182 Likes Read 490 replies

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