nothing or pertaining to a warehouse or other facility that rents units to people by investing in storage units for storing personal possessions.
a shorthand for “self-service storage”, and also known as “mini storage”
Used in a sentence: The self-storage industry is bigger than the recording industry.
…is an industry in which storage space (such as rooms, lockers, containers, and/or outdoor space), also known as “storage units” is rented to tenants, usually on a short-term basis (often month-to-month). Self-storage tenants include businesses and individuals.
Self-storage facilities that Invest in storage units on a short-term basis rent space (often month-to-month, though options for longer-term leases are available) to individuals (usually storing household goods; nearly all jurisdictions prohibit the space from being used as a residence) or to businesses (usually storing excess inventory or archived records). Some facilities offer locks, boxes, and packaging supplies for sale to assist tenants in packing and for their goods safekeeping, and May also offer truck rentals (or may allow free use of a truck for a new tenant).
There is evidence of some concept of self-storage dating all the way back to 2,000 years ago in Ancient China. The British refined this concept by placing contents in crates inside of stables and having watchmen secure them.
In 1891, brothers Martin and John Bekins, the Self storage investors founded Bekins Company in Omaha, NE. The company operated with three horse-drawn vans and 12 employees. In 1895, Martin expanded the business to Los Angeles and started using moving vans. In 1906, the Bekins Warehouse was built–the first reinforced steel and concrete building in the city. During the first half of the century, the company set up a large number of fireproof warehouses throughout southern California. After World War II, Bekins focused on four major areas of service in the moving industry: local moving and storage within communities; long distance moving of household and other valuable goods; international moving and storage for military personnel and civilians; and other related services, such as the storage of business records, records management, film storage, and office and industrial moving. The Bekins Company pioneered the modern concept of containerized storage.
First of all, it’s worth noting that self storage is sold at a discount every single day all across the country, so this isn’t a “rare” situation where this would happen. An example of why a lender would sell a facility is when a borrower stops paying on their loan. This note then becomes classified as a “Non Performing Note” (NPN) or a “Delinquent Loan”. So rather than deal with the NPN themselves, lenders will very often sell these off at big discounts just to free up their money to make a new loan. In addition, there are many reasons a private seller would want to sell their facility at a fair price: Retirement, trading up to a larger facility, tax implications, health, divorce, bankruptcy…virtually any life changing event would cause a seller to sell their facility, or just because it’s time
The first place to start is by asking if the owner is interested in holding the note and receiving payments directly from the buyer, as in a traditional borrower/lender scenario. The tax advantages for the seller are huge, and so are his profits. If that is not a possibility, the next steps are to contact any banks in the market that you have a relationship with, and then a commercial mortgage broker that specializes in self storage.
The beauty of this business is that you don’t need a significant amount of capital or credit to start. In fact, many of our students have little to no money of their own and have still gone on to successfully own and wholesale, and invest in self storage. The fact is that there is so much money available through banks and private lenders to fund your deals that by simply deploying a few of our strategies that we teach about how to close deals will finally remove the barrier to success due to lack of money.
Can I still do this? Most of the people we train to invest are in the same position and have gone on to buy their own properties. The strategies we teach allow you to start the business in your spare time. What many people have found, or have in mind, is that as they acquire more facilities, ultimately, it would end up costing them more money to go to work due to the lost opportunity of ignoring their self storage investing business. That’s when people make the switch to becoming a full time Self storage investors.
As with any investment, of course there are risks involved. But as a responsible investor it is up to you to get the proper education and professional guidance to reduce those risks as much as possible. Without doing the proper due diligence, you could end up making a bad acquisition and end up losing money. However, it is important to note that the same risks exist even when purchasing your own house. With the right education, you can ensure you safely invest your money so there is a significantly reduced chance that your investment isn’t as profitable as anticipated.
Now, I am not an attorney so even I don’t know all the specific laws as they pertain to real estate transactions in each state. But the good news is that I don’t need to. What I do and what I teach my students to do is to work with specific attorneys in the situations where they need to, but the key is to only work with them when you need to. Knowing how to work with your team members, like attorneys, wisely and economically is an easy skill to learn and essential to your success.
Investing in self storage needn’t be complicated. It’s a matter of understanding the deal, knowing how to complete the due diligence properly, and obtaining the necessary funding to close the deal. Once you understand these 3 steps, you can successfully acquire self storage facilities anywhere in the country – not just your own backyard. And the good news is that you can do this in as little as 10 hours a week or even less. Some of my most successful students have gone on to close their first deal in a matter of weeks. Like most things in life, the more time and effort people dedicate, the more successful self storage investors they can become.