Self Storage Deal Breakdown

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.

Not sure what a cap rate is? Take this free course to find out.

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.

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About Me

I started the Sweaty Startup in December of 2018 because I believe the Shark Tank and Tech Crunch culture is ruining the real spirit of low-risk entrepreneurship.