The first full calendar year is in the books for 3 self storage facilities we bought at the end of 2020. I’ll open the books and give you a breakdown on how it went.
Here’s a podcast episode with more on where we’re at, what keeps us up at night, and how we plan to attack 2022.
Deal #1 was purchased in September of 2020 for a purchase price of $1.2 million in upstate NY town of 15,000 people.
The 12 months before acquisition it achieved $264,000 in revenue, or $22,000 per month.
Projected 2021 revenue: $319,000 (+21%)
Projected 2021 Net Operating Income (NOI): $188,000
Our goal was to increase revenue by 21% the first full year (2021).
Here’s a screenshot of our model we used for underwriting:
What actually happened?
Well, things went very well. We did $398,000 in revenue in 2021 (+51%) and achieved almost as much operational profit as we had projected in revenue.
Actual 2021 NOI: $298k
A screenshot of our management report for 2021:
This deal has been amazing. We acquired it for $1.2m and its worth about $5m now. We’re about to do a cash out ReFi – I’ll update you when that happens.
–
Deal #2 was purchased in November of 2020 for a purchase price of $2.2 million in upstate NY town of 5,000 people.
The year before acquisition it achieved $275,000 in revenue, or $22,916 per month.
Projected 2021 revenue: $295,000 (+7%)
Proj 2021 NOI: $190k
Here’s our underwriting model (upgrade from when we underwrote the first one):
Our goal was to raise revenue from $22,916 to 24,583 per month, or by about 7%. We set our goals a little lower here because the rates were already fairly high and the previous owner didn’t do a very good job managing it, so we were a bit worried about our ability to raise rents and bring in new tenants in the small-town market.
What actually ended up happening in 2021?
Our achieved 2021 revenue came in at $365,000 (+32%) and our NOI was a whopping $245,000, or 28% higher than expected.
We actually missed on expenses here, they came in a bit higher than we thought, but revenue more than made up for it.
Here’s a screenshot of our management report from the end of 2021:
–
Deal #3 was acquired on the last day of 2020 (December 31st) in a western PA town of 1,000 people for $1,300,000.
The year before acquisition the property achieved $165,000 in revenue, or $13,750 per month. It was fairly well managed – with near full occupancy and a good track record of being full of customers.
We knew we could raise rents a bit because they were really low, but we didn’t know how much or what would happen when we did.
Projected 2021 revenue: $183k (+11%)
Proj 2021 NOI: $115k
Here is our underwriting model:
It has been a heck of a year in the storage business.
We bought these three deals in 2021 for a combined $5 million after closing costs and they generated $722,000 in net operating income in 2021.
At a 6 cap valuation, these properties are worth north of $12 million.
We raised about 2 million in equity in these properties and we have about $9 million today. We’ll recapitalize these assets and pull out about $4 million in tax free cash here in a few months.
I’m a genius.
I’m just kidding. We all look like geniuses in this business. Here’s one article on rate growth and here’s my recent year-end update.
It’s been a wild ride so far. If you’re an accredited investor and interested in seeing our deals or getting to know us, fill out this form.
Onward and upward,
Nick