Case Study 1 - Ground Up Development in NY, PA

Hi! My name is Fernando Angelucci. I'm "The Storage Stud". Want to take you through a few deals today. First a little bit about myself.

I live in Chicago, but our company is a national self storage buyer. Been in real estate since 2013, moved into self storage around 2015, 2016. I currently own and operate eight facilities. We have another six facilities under contract. As of this recording. We did create a self storage income fund, and we have done a lot of education on the self storage space.

So we're going to go over a few deals here today. First one is a ground of development in York, Pennsylvania. Second one is the ground of development in Vernon, Connecticut. The third is an existing facility that is a extreme or a heavy value add in a Meridian Mississippi. The fourth is an existing facility in Marshall, Minnesota. This is also a heavy value add property. The fifth is an existing facility in Rayne, Louisiana. This one is more stabilized, but has some opportunities for value add. And then the sixth is an existing facility in Branson, Missouri also pretty stabilized, but it does have some value add potential to it.

So this first deal is the ground of development in York, Pennsylvania. It's actually slated to be a three story facility with a basement below. So total of four stories. Prices at 825,000 and earnest money on this one 60,000. This is a photo of the site map. It's on a major thoroughfare. Population in the area is 1.2 million people, that's a good sign. Medium household income is 63,000. We usually are looking for anything above 40,000 when we're underwriting properties. It's a third most populous area in PA and this property comes with a special use permit included. So it's ready to go to plants.

One of the things that we always look at is, how are the street rates reacting? So it's always a good sign. When we see street rates are increasing year over year. The site location is about 1.9 acres and the gross square footage of the building will be roughly 99,000 square feet. Now, after you take out the efficiency, the actual net rentable square footage for the units themselves will be about 74,500. And that will equate to about 736 units.

Another fact that we really like to look at is, you know, the vehicles per day, we want to make sure that it's a highly visible site location. For us we like to have anything above 12,000 to 16,000 vehicles per day. Especially if this is your first facility. If it's a second or third or fourth facility for years, then you can start getting lenient on those requirements. As long as you have a very good advertising campaign. And then the supply index is 5.1, which is very advantageous. Supply index is the net rentable square feet in the area divided by the population.

Here's some basic information on the supply. As you can see that 5.1, that 5.3 net rentable square feet per capita is what we're looking for. And then this is an aerial of the commercial area. You can see it's on a major thoroughfare, route 30, and this is a heavy commercial district. So there's going to be constantly cars going by your facility. This is always a good sign for us.

Now, when it comes to competition, we always like to look at not only what self storage facilities are in the area, but are they of the same grade as ours. So for example, you can see extra space storage sets, you store it and shoe house, self storage. Those are not really on par with our type of facility. The only one in the area that is on par is capital self storage. That is a Class A regrade facility, which will be the only competition for this ground of development.

The acquisition costs for the land and the special use permit is 825,000. Closing and financing costs are gonna be roughly 250,000. The construction costs are about 6.2 million. Interest reserves, about three quarters of a million dollars, which comes to a total cost of 8.1 million for this project. Now, as far as the financials goes, the once the property is stabilized, they'll have a gross potential rental income about 1.5 million a year. And the net rental revenue will come out to about 1.3. Total revenue after you add in additional ancillary profit centers will be about 1.36 with an operating expense of about 470,000. So that leaves us with a net income of just shy of 900,000.

Now, right now, these types of properties are trading at roughly a 6% cap rate. So if you take the net operating income and divide it by 6%, you'll get a sales price typically to a REIT, a Real Estate Investment Trust at about 14.8 million. Divide that by our total costs and your gross profits, about 6.7 million on this property.

-----------------------------------------------------------

Fernando O. Angelucci is Founder and President of Titan Wealth Group. He also leads the firm’s finance and acquisitions departments. Fernando Angelucci and Steven Wear founded Titan Wealth Group in 2015, and under his leadership, the firm’s revenue has grown over 100% year over year. Today,
Find out more at
https://www.TheStorageStud.com


http://titanwealthgroup.com/


Titan Wealth Group operates nationwide sourcing off market investment properties for Titan Wealth Group’s acquisition as well as servicing a network of thousands of active real estate investors world wide. Prior to founding Titan Wealth Group, Fernando worked for Dow Chemical, a Fortune 50 company, rolling out a flagship product estimated to gross $1B in global revenues.
With an engineering background, Fernando is able to approach real estate investing with a keen analytical mindset that allows Titan Wealth Group to identify opportunities and project accurate pictures of future performance.
Fernando graduated from the University of Illinois at Urbana-Champaign with a B.A. degree in Technical Systems Management.
Titan Wealth Group was founded in 2015 with the vision of gathering individual investors that have the means to invest but lack either the time to find high-yield investment opportunities or the access to these off-market deals. All too often, founders Fernando Angelucci & Steven Wear came across investors who had deployed their capital only to regret the lack of consistency or degree of returns their investments were producing. In response, Titan Wealth Group provides access to highly-vetted real estate secured investments and off-market acquisition opportunities primarily in the Greater Chicago MSA. Today, Titan Wealth Group not only assists individual investors but has grown to support the acquisition goals and capital deployment of investment groups, private equity firms, and real estate investment trusts (REITs).
As a facilitator of wealth growth, Titan Wealth Group believes that success is not limited to the sum of our efforts and is infinite with what can be accomplished through partnership.
#SelfStorage #RealEstateInvesting #AlternativeFunds