Case Study 4 - Existing Facility in Marshall, MN

This is an existing self storage facility in Marshall, Minnesota. This is also a heavy value add deal. Price is about 700,000. Which comes out to 9.3% cap rate. Once the value add is completed proforma.

Earnest Money is about $30,000. Population in the area is pretty low. It's 25,000. Median Household Income is a little bit better though. At 47,000. This is a heavy value add property. Needs about 160,000 in rehab. Recently they have had a kiosk installed. Now how these kiosks usually work is it looks like an ATM. It allows current and potential tenants to come up and rent units, pay for those units with cash credit card or check. They even require you to input some type of identification. And then they also have little buttons that you can click to have someone to walk you through it. If more technology is challenged.

The Net Rentable square feet on this property is about 31,000 square feet. Which equates to 157 units. Occupancy currently is at 40%. So that's pretty low. That's where the heavy value add component comes in. Vehicles per day is low on this one. It's about 11,000 square feet, but because there's that heavy value add component, there's a lot of opportunity to force value. Supply index is 6.7. So this area is starting to get close, to being close to equilibrium if you will. And once the rehab is included in the price you're at about 27 and a half 28 bucks a square foot, which is lower than replacement cost, to build one of these facilities.

Here are the competitors. Once a deal is completed on the value add side, Total Revenue is going to look like 151,000. Operating Expenses at roughly 71,000, which I think is very conservative. Usually with facilities this size, you have an Expense Ratio of 30% to 35%. So what that means is whatever the total revenue is, you take 30% of that or 35%. And that's what your typical Operating Expenses should be. Then leaves an NOI about 80,000 that will equate to a proforma cap rate of 9.3%.

So to recap, price on this property is 700,000. Earnest Money's $30,000.

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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,

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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.
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