Category Archives: Financing

Articles on commercial funding, real estate financing or specific to self storage financing

Self Storage Investing in the News

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Here at Self Storage Investing, we’ve been helping newcomers advance and get their start in the business through our mentoring program. And after years of service, I’m happy to announce that others are taking notice. This past week, our efforts were featured in Extra Space Storage’s blog, as well as IBT PR Center’s website, highlighting the outline of our plan.

In her blog, Holly Robinson of Extra Space Storage, expresses the importance of a program to help buyers obtain finances and show them the ropes of the self storage business. She states how most businesses don’t come with a how-to manual, but that’s exactly what we’re doing: teaching investors what to expect. But we don’t stop there.

During the program, students learn the ins and outs of self storage through several mediums including software, seminars, eBooks, and one-on-one mentoring. Then we help them sign up for specialized loans or meet with private lenders to make their business a reality. In fact, last year alone we were able to help four students obtain storage facilities, across the country, worth a cumulative $6.9 million.

To find out more about our mentoring program, comment or click the academy tab above.

Storage Auctions: What Happens When They Bring in Extra Cash

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The current trend of storage auctions is growing in popularity by the day. TV shows are devoted to following professional auction buyers, and people everywhere are on the lookout to find a good deal for themselves. But as the facility owners, there is more to the auctions than the public may realize. Just because storage units may sell for more money than their back-rent racked up, it doesn’t necessarily mean it’s extra profit.

There are many rules involved with running these storage unit auctions, and many vary from state to state. For example, in the state of California, the profits – after rent bills are settled – are to be turned over to the original unit’s renter. If, after a year they cannot be contacted, the money should be given to the county in which they are located. But, according to an article found from Inside Self Storage, “the county has no mechanism in place for handling these types of funds.” So, you must go through the formality of sending them a check, but will later need to send the profits to the state. One tip for making the process easier, given by Jeff Greenberger, attorney, is to stamp the checks with a “void after 90 days label,” allowing the unit’s owner to wait the three months and mail the funds to the state. The money is then held until the owner can claim it.
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Alternate Forms of Revenue: Opening a UPS Store

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As an entrepreneur, chances are you’re looking for every medium possible that can help bring in extra money. Whether it’s adding on a coffee shop, putting in a vending machine, or becoming a certified UPS store, there are always ways to capitalize on your building’s space. Think of the first person to cram a Wendy’s or McDonalds into a gas station. It may have seemed like an unlikely combination at first, but by cutting back on overhead (using a single building) and increasing convenience (the “convenience” store), owners can significantly increase their profits.

One such venture is to turn your facility into a UPS store. This is a combination, unlike gasoline and hamburgers, that goes hand in hand. For example, UPS stores sell packing supplies, boxes, labels, etc. When customers are bringing in items to store, they have easy access to the supplies they will need. And, on the other side, those who come in to pick up or mail a package learn about your storage facility. Plus, you’ll be earning money from the store’s sales, only a fraction of which goes toward royalty and franchise fees.
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Economy 0, Self Storage Business 1

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It’s nothing shocking to hear yet another blog/article/news piece about the failing economy. Every day the media is announcing one more way the US economy is hitting the ground. From banks, to small business, to Fortune 500, it seems that everyone has taken a hard hit from the Great Recession. However, it seems that, with all of this negative financial news does come an up side, there is one industry that is thriving more than ever: the self storage business. (I knew I got into this business for a reason.) And for those still standing on the outside of those storage garage doors, it’s not too late for you either.

How is the Self Storage Business Thriving in This Economy?

If you’re wondering how the self storage market is thriving when financial companies can’t even make it, you’re not alone. People from all across the country are analyzing the self storage business and looking to duplicate its success. Their results? There are several for the current success rate. Here’s the top three contributors I’ve researched:

  1. Banks aren’t approving many loans. Rather than purchasing land, building, and then renting, owners are buying up current properties. Bankrupt furniture businesses, grocery stores that have closed – no matter the building, almost any property can be built with plans for a storage units in mind. (And many for prices much lower than their worth.)
  2. People are downsizing. With the looming thought of an increasing mortgage payment, or just the realization that a home is too large, many are packing up and moving their excess belongings into a self storage unit.
  3. Bang for your buck. Buying a property outright can be expensive. But renting for a few months is much more cost-friendly and allows renters the flexibility to use a unit for as little or as long as they need.

But, as many have found, why the self storage business is thriving isn’t so much as important as the why-haven’t-I-been-doing-this-for-years. Newcomers from all over the employment map are beginning to purchase storage units and renting them out. Former businessmen/women, former salespersons, and even those just looking for some extra side money have bought units and started turning a profit almost immediately. And just because you haven’t gotten in the game yet doesn’t mean it’s too late. To find out more on how to get into the self storage business, contact us or check back here for weekly tips.

How to Maximize Your Storage Facility’s Exposure with an Online Directory

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When was the last time you used an internet search? Yesterday? Three hours ago? Ten minutes ago? If you’re anything like me, the internet is a part of your everyday life. And because of the speed in which users can find information, more and more people are relying on the internet – the self storage industry is no different. While yellow pages were once a customer’s best bet, now all it takes is a simple Google search to bring up virtually any type of information, presenting thousands of links that are just an internet jump and a mouse click away. It is because of this ease that, in the self storage business, it’s more important than ever to stay on top of the advertising game.

One of the easiest ways to do this is also a great way to draw in traffic: internet directories. There are tons of online directories available to us, and listing your facility is one of the best ways to ensure that new customers are aware you exist. (Trust me, a few extra dollars spent is more than worth the added exposure.)

So, why internet directories?

Think about it, where do you go when you need information? Do you scour the phonebook? Listen to radio ads? Or do you punch your question into your favorite web browser? While all of these methods may be effective, the latter is much more time efficient. And, more than likely, your customers will be out to save some time as well.

Aggregation sites such as online directories take large amounts of information and condense them into one easy to use page. By simplifying the process for consumers, they are able to find more information through less research or comparison work. Rather than finding individual prices and matching them up one-by-one, there are now entire websites dedicated to finding storage renters the best deal. Through the use of these aggregation sites, customers can find their new storage facility, sign up, and pay their first month’s rent without leaving their computer. Online directories are all about making consumers’ lives easier, and the people are responding strong.

All for a simple month fee, your business can be listed in an online directory along with some of your biggest competitors. The only thing left to do will be to welcome your new customers.

For more tips on breaking into the self storage business, be sure to check back in for weekly insider information.

 

 

How to get into the Self Storage Business Step 1: Securing a Loan

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From the outside looking in, the self storage business can often look intimidating. Especially in an economy where it’s difficult for anyone to get a loan, particularly first time property owners. However, there are steps that you can take to make getting into the self storage business easier and less stressful.

First of all, it’s important to understand why banks are so selective when it comes to self storage borrowing. Not only is it a property loan, but the self storage industry is unique from most other property ownerships. In fact, it’s more of a retail business – meaning you not only have to known how to be a successful landlord, you have to know how to run a sustainable retail business. And if you have little or no experience in either field, banks and credit unions are often hesitant to cough up the loan.

How to Gain Credit

Before heading into the loan office, it’s a good idea to build up your credit. Whether it be business or personal, having a good track record will only help your chances at getting approved. If you’re working under a company name, be sure to register with the three credit bureaus. It will put you on the map with creditors and allow banks to check your Small Business Credit Risk Score. Another way to earn a high credit score is to open up a checking account or credit card in your business name. And if you’re operating under your personal accounts, make sure your debts are paid up and any previous property loans are in order.

Next, get to work on your paperwork. Your loan application is one of the most important steps when purchasing your very own self storage facility. Make is shine by highlighting all of your assets. Have you owned property before? Worked in retail? Show the bank your skills and why you’ll be great in the self storage business. On the other hand, though, make sure the skills you’re listing are worth bragging about. Selling retail in college for a few months isn’t exactly going to impress a possible investor.

Finally, utilize your resources. Do you currently own properties? What collateral do you have to offer?Having a sufficient amount of insurance is sure to help any lender feel at ease when handing you a check. Another helpful resources is hiring an experienced manager. Bringing in an employee who is well-versed in the business will prove to the bank or credit union you’ve done your research and are serious about the loan and the self storage industry.

How to Get Reviews for your Self Storage Business

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In the self storage business, there’s not always a lot of opportunities to have one-on-one contact with your customers. And chances are, if you do, it’s to talk about maintenance or contracts. So how do you get reviews or testimonials that will help your business from existing customers?

Why should you have reviews?

Customer reviews are an excellent way to give first-hand experience on your company. Potential renters will appreciate opinions from those who have already dealt with your business and will be more likely to trust you after hearing others’ reviews. Having existing customers review your business will also show that they are not only satisfied with the services, but confident enough in their experiences to share them with others.

Using testimonials are also a form of marketing with minimal costs as sites such as yelp, yahoo local, etc. do not charge for users to post or check reviews.

How to obtain self storage reviews

If you don’t already have customer reviews for your self storage business (a quick google search can find this out for you), a good tactic is to be direct with your customers. Ask them to post for you … their honest opinions though, as the reviews should be genuine. Let them know you are trying to expand your market and a review from existing customers will let others know what to expect. You may offer those who agree a coupon of sorts, or a discount on services in exchange for their review. Just make sure whatever you offer them does not come off as bribery or payment. However, a simple this-is-for-your-trouble coupon can be a sincere form of thanks.

Another great way to get exposure is to offer deals to new customers. The sale will get the buzz out about your company, and renters have a reason to contact you because of the new-timers discount. And, those who are satisfied are sure to pass along the news, either through word of mouth or through their own personally-written testimonial.

Keep these tips in mind the next time you’re marketing your self storage business to help bring in new customers and keep your current ones involved and happy.

Press Release: Self Storage Profits, Inc. Assists First-Time Investor in $1.1 Million Acquisition

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Press Release

Self Storage Profits, Inc. Assists First-Time Investor in $1.1 Million Acquisition

Self Storage Profits, Inc., a self storage education and mentoring firm based in Indianapolis, recently assisted another student in the acquisition of a self storage facility in Danville, Illinois using the SBA 7(a) loan program. The property is an older facility in a secondary market that has recently undergone a significant facelift, modernizing it with above-average technology upgrades including a sales kiosk. The property, previously branded as Always Open Storage, was immediately rebranded as Steady Storage under the new ownership.
“It’s so exciting to see another one of our students, David Manka, become a first time self storage owner” said Scott Meyers, founder of Self Storage Profits, Inc. “The deal had it’s fair share of challenges, but in the end, our staff of mentors and lenders were able to close the deal for David, which provides more proof that the market is nowhere near as bad as people perceive. We are looking forward to closing several more deals like this in our pipeline throughout 2011.”

Self-Storage Cash Gone, Business Manager Charged

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A self-storage company in Pensacola, Fla., is missing $65,000. Sheriff’s deputies arrested the company’s former business manager, Tracie Barrett, on charges of embezzling the money during the period from January 2009 through December 2010.

Wetzel Bias, owner of University Self Storage, discovered the money had disappeared when he performed an audit of the business. He uncovered what had to have been very obvious discrepancies between bank statements and internal financial reports. Mr. Bias notified the Sheriff’s Office about the possible fraud, which led to the arrest of Ms. Barrett.

Check out the Pensacola News Journal – at www.pnj.com (specifically at: http://www.pnj.com/article/20110621/NEWS01/110621007/Woman-held-on-charge-of-stealing-65-000?odyssey=tab|mostpopular|text|FRONTPAGE) – to learn more about this incident.

One puzzling factor of this case is why did it take almost two years to find the books didn’t balance? Mr. Bias obviously had complete faith in Ms. Barrett’s business running abilities. He might have been wiser to conduct more frequent audits, and generally pay more attention to the situation at University Self Storage. That might have forced Ms. Barrett to realize the futility of trying to make off with company funds, or at least keep the money she allegedly stole to a bare minimum before being discovered.

This case does make the point that successful self-storage facilities can and do make money. Trust your employees to operate in the best interests of your company, but never take for granted that their loyalty is a 24/7 issue. As President Reagan put it, “Trust, but verify.” Running a self-storage business isn’t on the same level as dealing with the then USSR, but it does involve keeping tabs on what’s at stake. We’re all fallible, to some extent.

Keep temptation under control, and your hard-earned cash is less likely to stray.

Warmly,

Scott

Credit Score and Financing

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Ugly topic of course, and no one wants to think about the declining economy and how that is affect credit.  With the job losses and the inability to pay timely — credit ratings for those wanting to start there own business is crucial to obtaining the best loan.

Few things for you to consider:

Has my credit score significantly improved?

Your credit score greatly affects the rate you qualify for when you apply for a loan.  If your credit score was in less than stellar condition when you got your mortgage or auto loan, you may consider refinancing.  It’s likely your interest rate will improve if your credit score has.

Can I consolidate debt?

If you’re paying high interest rates on credit cards or other personal loans, consider cashing equity out of your home and consolidating your debt into a low rate home equity loan (HEL) or line of credit (HELOC).  Doing so will help you save money each month by eliminating those higher interest rate loans.

Cleaning up some extra credit issues can help you achieve your goals of becoming a Self Storage Owner!