Storage Authority provides you with detailed information and guidance to both understand and implement these tips to find superior properties faster. As you look for land it is critical to understand the land mines so you can avoid them.
Here are 10 traps: https://www.storageauthorityfranchise.com/post/10-real-estate-traps-for-self-storage-developers
1.Start looking for land today! Don’t wait until you are a land expert. This day may never come. 2 hours a day = 14 hours a week = 728 hours a year. This is the number one key to finding land. Storage Authority Franchise owners have the advantage of being connected with a finding land pro with guidance and answers on day one so they can get off to a fast start
2. Learn, Learn self-storage. There are great books, magazines, state and national conferences, seminars, and mentors to learn from. Storage Authority has three platforms and experts in each one to let you rapidly learn the business. The platforms are: 1) Finding Land & Development; 2) Operations; 3) Sales & Marketing
3. Visit one storage a week. This is critical so you learn about the competition and their pricing. This will give you the confidence and understanding of why you can charge more than the competition with a great sales & marketing plan and team. Keep a list of physical things you like and dislike to discuss with your architect & engineer. Always record the price of a 10 x 10, non-cc, and how long the rate is good to guide for your future proforma. Don’t forget to see if you can determine how full they are. Storage Authority provides a long list of site plan items and building items to include in your project design to make your project stand out. And how to do a proforma
4. Determine how much loan deposit cash you have and the total loan this cash will allow you to borrow. Many lenders want 30% – 50% down +_ and SBA loans typically allow for 10% down if you are borrowing less than $5MM and 15% down for loans over $5MM. It’s good to call 2 -3 lenders at this point
5. Deposit Examples to help you understand bank loans with your cash:
-
- An SBA $5MM loan at 10% down will require you to have a minimum of $500,000 cash to invest
- A good-sized single-story project say 80,000 + gross sf may cost around $9,000,000 to build, including the land and carrying cost to break even. This would require you to have a minimum of $1.4 MM cash to invest. Often the project can be built in 2 phases to reduce phase 1 cash requirements. Storage Authority provides many ways to reduce construction and increase income, which both can reduce the required deposit
- This same $10,000,000 project at a traditional bank would require you to have a minimum of $3.5MM cash to invest
6. Understand the time commitment to find land. Research 100 properties – make 3 offers– buy 1 parcel. Using a 4-hour average for each of the 100 properties is 400 hours. At 10 hours a week, it would take 40 weeks. This assumes you understand how to search for land, find land, and evaluate land. In this scenario, you would know you are on track if you are researching 2.5 properties a week
7. Determine how much land you need based on your budget and goals. You can build 10,000 to 15,000 sf of gross building sf per acre of usable land as long as there are no restrictive regulations. Building regulations, the shape of the land, and topography all have a significant impact on how much self-storage. We suggest you look for 6 acres to build a minimum of 80,000 gross SF = 64,000+_ Net Rentable SF
8. Prepare an outline of your sales and marketing plan. This is also critical to give you the confidence you can be the price leader in your area for more profits. The more you charge the more you can pay for land, increasing the number of suitable locations. Storage Authority provides all our franchise owners with a Sales and Marketing plan day one. Four months before opening we personalize it with them for their facility
9. Build your team! Your engineer, architect, contractor, and self-storage expert need to be on board before you write up your first offer otherwise you are at huge risk. This will take mega hours to find, meet, interview, check references, check projects etc. Storage Authority provides an approved vendor list to save you time, and money, and avoid huge disasters
10. Determine areas where you can build and make a profit. At today’s (Spring 2024) construction prices and interest rates you need to charge around $1.60/sf or more for a viable project, assuming you are getting a loan. Now is the time to determine why you can charge more and how much more you can charge above the competition. If you have a written super high-end operations, sales, and marketing plan and manager training program you can charge 30 percent plus than your competition
11. Don’t waste your time looking for land where self-storage is not permitted. Call the city staff and ask what zones permit self-storage; get a copy of the zoning map and zoning regulations. Typically, available online. Do this for the city you live in and the several cities nearby in your search area. Make a list of streets in each town that permit self-storage
12. Now that you know where self-storage is permitted drive these roads looking for land
13. When you drive the roads have an app like Regrid that provides the land data as you drive by: Area, topo, owner & more. If a property meets your criteria send them a letter or call them to see if they are interested in selling. If you don’t hear back from them in 3 weeks send them a second letter
14. Use word of mouth to find land. Tell everyone you are looking for land. Shout it out day in and day out. Post your land needs on social marketing sites like Facebook, Instagram, LinkedIn, etc. Hand out a minimum of 2 business cards a day. Do your family and friends know you are looking for Land?
Offline land Search:
15. Typically, the best land locations and best prices are found offline land purchases. In fact, at Storage Authority we find over 80% of the time we find land offline. You need to have a written step-by-step plan one page plan to find land offline. Well, document your contacts and results so you know when to contact them next
16. Step 1 for offline property search is to review each land parcel zoned for self-storage and make a detailed list that includes each property that meets your land qualifications (zone for self-storage, on a main road, 6 usable acres, not overdeveloped with self-storage, population greater than 15,000 people etc.)
17. For offline land search owner contact use Text before email to double the responses. The same goes for real estate agents
18. Use Postcards vs letters to double the responses
19. One offline prospect contact is not nearly enough. If no response try another contact option a week or two later. Four contact attempts should be the minimum. It is ok to send multiple postcards and or letters
20. One key when you reach out to prospects is to let them know you can have a purchase price for them in less than a week. This will entice them to reach back out to you.
Do you want to know if you qualify for a Storage Authority Franchise?
If you fill out the application (apply icon on our website) you will have your answer in 2-3 days. Or we can have a 10-minute call today and not only will you know if you qualify, you will learn the basics of what is involved in developing and operating a self-storage business. Give Garrett Byrd on our team a call or let him know a couple of good times to call you. (Let him know the time zone – He is in Eastern Standard Time.
Garrett Byrd at: 941-928-1354 or Garrett@StorageAuthority.com to learn more about the Storage Authority Franchise opportunity
Marc Goodin is the President of Storage Authority Franchising. The only self-storage franchise. He owns 3 self-storages he designed, built, and manages. He has been helping others in the self-storage industry for over 30 years. He can be reached at marc@StorageAuthority.com or directly at 860-830-6764 to answer your franchising, development, marketing, sales, and operations questions. His best-selling self-storage books are available on Amazon.
