Be very careful with this because you don’t want to over rehab or overbuild your facility in an area that does not support it or won’t bring you value.
Once we have done all the non-capital expenditure capital style improvements then we proceed to physical improvement.
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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So, in addition to non-capital expenditure increases in revenue and decreases in expenses. Also look at actually building, additional land, additional facilities on that land, remodel on what you currently have and actually putting some capital expenditure into your facility. You have to be very careful with this because you don't want to over rehab or over build your facility in an area that doesn't support it. So, it won't bring you value. So for example, say that all of your competitors are gravel roads or grass that none of them have fences. None of them have security cameras, and none of them have technology to use. It wouldn't make sense for you to go and build a 30,000 square foot edition. That's all climate control with all this technology, that's gated and has security cameras and has all this crazy, no touch technology, because you're not going to be able to get much of a premium if any, for those units versus just building a drive up unit on gravel with no fencing.
So, one of the things that we always look at once we've done all the non-capital expenditure style improvements is we start looking at physical improvements and we try to stair-step our way. So number one, the biggest thing for us is the safety of our tenants of our renters. So, what can we do to make the property safer? Give them a feeling of, you know, security when they come to the facility, but not only when they come to the facility and when they also leave them and they can have the peace of mind knowing that their goods are going to be stored securely and safely. So, one of the things we always look at is, do we build a perimeter fence around the entire property? If there's not one already there, do we install a gated entry that uses a key pad to not only enter, but then also exit so that we can track everyone that's in and out of the facility?
Do we install security cameras? Do we install security lights? Is, does the property dark at night? You know, do we want to install these large high lumen lights that will light up the entire facility? That obviously comes at an expense when it comes to utilities. But, if someone is willing to pay $5 a month more to come to my facility versus the one down the street, that's completely dark at night that would be worth it. Another thing we look at is, putting portable units on the facility. Maybe, we don't know if the market will absorb additional units or maybe right on the cusp of the market being at equilibrium. One of the things that we can do is, put these portable or modular units on the site in odd places, see if they get filled up and if they start getting filled up quickly, we put another one and another one and another one.
And if all those get filled up, then Hey, maybe it makes sense to put down a permanent structure, let's lay the concrete, let's build up a permanent structure. And you know, let's go ahead and shift tenants to the new structure and then start all over again with the portables and kind of just stair-step our way up. So, that increase in income will offset the increased debt and hopefully exceed the increased debt that we have to take on to build these additional units. Another thing that we always look at is, buying adjacent land. That's always going to be, it's always going to be a value add for us, especially in a market that is severely underserved. And then, one of the things that we really like to do is if we can control or monopolize the market. So say, you know, we're on the West side of town, the majority of our competitors on the East side of town, but maybe we have two competitors on the West side of town that are within, you know, half a mile of our facility.
You know, one of the things we can do easily is just go and offer to buy their facilities and even pay a premium for those facilities because we have a vested interest. Now, by doing so we're able to monopolize pricing, we're able to get economies of scale. And then, when we go to resell, when you have a larger portfolio, you can actually get a premium for having more square footage in an area that's easy for one manager to go in between. So, these are things that we always look at when it comes to capital expenditures, you know, upgrades and remodeling. Another thing too is, you know, again, keeping the possessions safe. Does the roof need to go? Does it need to be repaired? Does it need to be resealed? Does it need to be redone? How about the doors? Are the doors all dented and sticking on the tracks?
Or maybe the Springs are starting to go, do we need to replace these things? These are all things that are necessary and we have to do them. They may not drive additional revenue, but they'll make the property look nice. It'll make the property easy to use. And then in the end, when you go to sell or refinance, you'll push the value up, by dropping the cap rater or allowing the property to be valued on a multiple that's higher than it was when you first bought it. So, these are the things that I usually look at, when looking at upgrading or remodeling a facility.
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