Inside Self-Storage

JAN 2019

Inside Self-Storage (ISS) is an information source for industry owners, managers, developers and investors covering news, trends, facility operation, finance, real estate, construction, development, marketing, technology, insurance and legality.

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Subscribe to Our FREE Weekly Newsletter. Stay on top of what's happening in the industry and get links to the in the industry and get links to the latest news, feature stories, videos, latest news, feature stories, videos, and more straight to your inbox. and more straight to your inbox. SIGN UP TODAY! insideselfstorage.com/newsletter Subscribe to Our FREE Weekly Newsletter. TILT-A-WAY TILT-A-WAY TILT-A-WAY Beautiful, Secure Commercial and Residential Entryways Security Gates Heavy Duty Barrier Design Safety Features t"EKVTUBCMFTBGFUZ PCTUSVDUJPOTZTUFNT t#BSSJFSMPDLTJOEPXOQPTJUJPO t6-MJTUFE t#BUUFSZCBDLVQ )BSOJTI#MWE#JMMJOHT.POUBOB PS XXXUJMUBXBZDPNtFNBJMJOGP!JEFBMNGHJODDPN Celebrating over 50 years in the business – Since 1957 XXXUJMUBXBZDPNtFNBJMJOGP!JEFBMNGHJODDPN Dedicated Performance Understanding available financing is critically important for a first-time buyer because you'll likely compete against all-cash buyers whose offers don't include a finance contingency. From the seller's perspective, dealing with a financed buyer means additional time for the earnest deposit to become non-refundable. More important, it adds the unnecessary risk that the deal won't close. If you understand the financing sources and options, you may be comfortable accepting the risk yourself rather than asking the seller to accept it. Due Diligence Once you make an offer on a property, you and the seller will agree on a length of time for you to conduct due diligence, which is when you get to the inspect the property and its financials. The onsite inspection may involve soil tests, an environmental study and an engineering report for necessary improvements such as roof, utilities and HVAC equipment. You may also need to review existing site surveys or complete a new one. This can take up to three weeks, so an early start is essential. Financial and other records to inspect include utility bills, tenant leases and correspondence, profit-and-loss (P&L) statements, bank statements, and cancelled checks. You want to confirm that the rental income shown on the P&Ls was deposited to the bank and there are no unreported expenses. Ask the seller to certify the accuracy and completeness of the material he provides. This is important because your lender will require the same certification from you. Competition for the best properties among would-be self-storage buyers can be fierce, and first-time investors enter the field with many strikes against them. Follow this advice to mitigate those disadvantages on your path to ownership. Bill Alter is a self-storage specialist with Rein & Grossoehme Commercial Real Estate in Arizona. He has specialized in storage since 1986, and has been involved in the sale of more than 160 storage facilities totaling more than 9 million square feet and a value of more than $400 million. He can be reached at 602.315.0771; bill@rgcre.com; visit www.rcre.com/author/billa. LEARN MORE Learn more in the video "Acquiring Self-Storage: Predicting Cash Flow and Property Potential," available in on-demand and DVD formats exclusively at iss-store.com. January 2019 I ISS 31

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