The strength of the self storage industry has stood tall through the windy storms of the recession. As a result, it has attracted a lot of attention from investors looking for a solid avenue to place their money. But how to negotiate and close the deal on a self storage acquisition is a step-by-step endeavor, experts say. Taking a systematic approach to negotiating is the best way to smooth the path to acquisition.
For those looking for some expert advice on investing in self storage, there is the upcoming, one-day, Self-Storage Investing Workshop to be held in Shawnee, Kan., on Feb. 26, 2011. The workshop will be run by self storage investment expert, Scott Meyers, who is widely considered the nation’s foremost authority on self storage investing. A real estate investor since 1993, Meyers is also the president and owner of Indianapolis Based Alcatraz Storage and specializes in acquiring existing self storage facilities.
A self storage facility, if well run, can provide annual returns of between five and ten percent, which is considered by experts as a good return on one’s investment. And it’s an excellent way to create sustainable wealth without the hassles of toilets, tenants, evictions and the rest. Another plus is that owning a business means that it is possible to write off expenses on one’s tax return. However, investors are cautioned to remember that self storage is not an easily liquefiable investment.
Knowing the process of negotiation is key and a “win/win” scenario should be sought. In this scenario, both buyer and seller walk away from the closing happy with the outcome. This negotiation strategy has become the industry standard rather than a “win/lose” scenario where the buyer comes at the transaction from a position of strength and forces the seller to take their offer “or else.” In the “win/win” scenario, there needs to be honesty and all players must put their cards on the table. For example, it needs to be known if the facility needs $200,000 in capital improvements or if the buyer has $250,000 cash and nothing more.
According to commercial investor Frank Rolfe, negotiating is not an art form, but a process that when stuck to can lead to a successful negotiation. Rolfe’s experience includes purchasing and operating more than 25 mobile homes, RV parks and self storage facilities as an investor. He is a featured speaker at investment seminars and real estate clubs. Rolfe suggests visiting the Niche Investment Network website for more insights on self storage acquisition.
The Kansas seminar at the end of the month will focus on how to uncover great deals and how to evaluate those deals before negotiating. It is an introductory workshop for self storage investing and will also touch on various aspects of running a successful self storage business, such as marketing and operations. The free workshop will begin at 9 a.m. on Saturday, Feb. 26 and end at 5 p.m.
Sources Used:
Rolfe, Frank. “How to Negotiate a Self-Storage Facility Acquisition.” Ezine articles. Feb. 14, 2011.
“One Day Self Storage Investing Workshop in Kansas City.” Press release central. Feb. 13, 2011.
“Self Storage Investments Beat the Stock Market.” Self Storage Industry News. Sept. 23, 2010.