Self-Storage Buy Box Gone Wrong
Yes, it is good to have a detailed buy box that is specific to your goals, your available cash, and your profit minimums. It could include 10 to 30-plus items.
Your buy box helps you stay on track and not waste time on researching facilities that do not meet your goals. A good buy box and 7 months of solid effort is the key to finding a facility to buy.
Often, half a dozen items are key and will eliminate most facilities; until, of course you find “your facility”
7 Major Buy Box items
· Location
· Price range
· # of units in a facility in your price range (needed for offline with no initial price guidance)
· Net rentable sq ft in a facility in your price range. (needed for offline with no initial price guidance)
· Cap Rate in your price range
· Meets banking Debt Service Coverage Ratio ( DSCR)
· Value add
Mismanagement - limited sales & marketing
Needs repairs/clean up
Low occupancy that can be raised.
Low rent rates that can be raised
Owner Financing.
The problem is you are sending your long buy box list to agents who have over 100 unread emails and wondering why they are not providing leads.
Keep your buy box that you share with agents to 1- 3 items Max
1) Location – often a state
2) Value add
The third item may be a price range if you're getting to many out of your price range, using the first 2 items.
Ready to find your self storage facility to purchase in the next 7 months? Let's talk.
Cheers,
Marc
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