G’day all,
First time doing this; so here goes.
My partner and I in the last year have begun building our property portfolio and enjoying the journey immensely. Yesterday we stumbled across a deal involving 64 self storage units which looks to have huge potential, however it is way out of our comfort zone. We don’t yet have to confidence (finance) to enter into this type of deal, and have two other deals on the table that are smaller and better suited for us to pursue.
But we want to know the potential to bird dog the deal, and know nothing about how to do this.
Snap shot of the deal is:Snapshot
Purchas price = $525-540K (desperate vendor)
Valuation of land and units $700-800K
Current weekly rent 45% occup = $875
Pot weekly rent @ 90 % occup = $1350Rents are also about $50 to $100 p/m per unit cheaper than others
Land size is 4000 m2 and has room for further dev (about 1000m2)The building are only 20 years old and in very good condition. The grounds are a problem; very overgrown/neglected, lights broken, no signage; poor presentation.
If the problem of low tenancy can be solved, there is huge potential, but again we don’t have the confidence/finance to take it on.
Any suggestions re how to bird dog this deal?
Much appreciated,
Roh and ThanWhere are they located, Often the reason they are cheap is that they are in a “dying” town rather than a thriving town.
TThey are in a large centre of over 100,000 pop that is booming along.
If the agent is to be believed, it is because the grounds have been let go (very overgrown) and the whole site
The buildings are in good nick, it is all the branches and crap, lack of signage, broken lights that makes it look unappealing. Looks very neglected. Can post you some pics if you want ?
RohPlease be careful with land agent’s legislation in your state, know the laws.
It is not legal to ask for or accept a commission for any real estate transaction if you do not have a land agent’s license.
I know people do it and it is OK until you get caught (just like anything else that is illegal). The implications are paying back any money’s you recieved for the transaction and in SA at least there is a $20,000 fine on top just for attempting it!
Investment Property Management
http://www.adprop.com.auAh, thank you. Was not aware of this.
I’m thinking that it might be time to step out of the comfort zone and go for this deal myself. The number all look very good, but it’s a little scary given the number are all twice the size of any other deal I have done. Plan B is to seek a money partner (have 2 couples interested), and this brings the deal back to the size I am use to.
Any advice on how to set things up re money partners?In the US, there are numerous ways this is done to avoid causing problems and overstepping boundaries into illegal territory, but requires that you check the laws of the land. I can’t speak for laws in your area, but know that some here charge a marketing fee to the seller. Some also charge a consulting fee to the seller or the buyer. I’m not advocating these, but know they are done in legal ways in many stated within the USA.
I’d be interested to hear what you find out about this. Please let us know.
Derek Guyer
http://www.landchasers.com
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