Full transcript
0:00There is no money coming out of our
0:01pocket. Now, I was here about 3 hours
0:03ago, but it looked like this. When this
0:05is [music] stabilized, we'll have 3x
0:06this property, at least. You can tell
0:08that the structure of this thing is
0:09sound. I mean, it Oh, it's not screwed
0:11together yet.
0:13>> [laughter]
0:14>> All right, ignore all that. I just did
0:15that.
0:16>> no better return on investment than
0:17converting a light industrial building
0:19>> [music]
0:19>> into a climate-controlled storage.
0:21>> What's happening, guys? We're here to
0:23show you exactly every dollar it's taken
0:25to convert this 20,000 square foot light
0:28industrial building into
0:29climate-controlled storage.
0:30>> And these are the facts because we've
0:31already done this one time before on the
0:33same property. So, this is proof.
0:35>> We have 20,000 [music] square foot out
0:37front. We converted it about 3 years
0:38ago. Now, we're taking this building
0:39that Mike used to rent for $5,500 a
0:42month, and we're going [music] to turn
0:43it into climate-controlled storage. So,
0:44here's the exact breakdown cost of
0:47exactly what it takes to convert 20,000
0:49square foot.
0:50>> Just to give you some of the highlights,
0:51the build-out, the materials, and the
0:52labor is just under 200,000 for 20,000
0:55square foot. Site plan was about
0:57$10,000. Cameras, [music] keypads, fire
0:59electrical system, all those total for
1:01another $25,000. The electrical on this
1:04building was about $76,000, and the
1:06reason why in this building it was
1:08already insulated, but we didn't have
1:09HVAC on it. So, to get all the
1:11electrical run throughout the building
1:12for the HVAC and the lighting was about
1:1476,000. [music]
1:15>> The HVAC system was around 76,000. Then,
1:18you're talking about interior doors that
1:20for entry, only a couple of those that
1:22are nice glass doors. Some of the other
1:24odds and ends, we already had a fire
1:25suppression system in here, but we just
1:27had to check through that, get it all
1:28updated, actually hang some fire
1:30extinguishers in the building. That's
1:31another 2,500. The carpentry work on the
1:34inside, the cabinetry for [music] the
1:36alarm system, and some of the camera
1:37system and stuff was about 12,500.
1:40>> of miscellaneous things here, signage
1:42about 2,500, getting our plans printed,
1:45500 bucks. But, everything totals out
1:47that you can see for the 20,000 square
1:48foot building was just under $500,000.
1:52Now, like I said, the other 20,000
1:53square foot building that we have was a
1:57less because we didn't have to do the
1:58electrical and the HVAC system in the
2:00building. So, you can tell we can give
2:02you all the details of exactly the
2:04breakdown why each one of these cost
2:06what they did, and there's no better
2:07return on investment than converting a
2:09light industrial building into [music] a
2:11climate-controlled storage.
2:12>> All right, check it out. When you're
2:13watching these videos, we know that you
2:14guys have questions that aren't
2:15answered. Might be about business, might
2:17be about real estate. Well, guess what?
2:18We can answer all those questions that
2:20aren't getting answered in this video.
2:21So, shoot us a text at 928-605-4335
2:25cuz there's questions that need to be
2:26answered, and this dude and I will
2:27answer those questions for you.
2:29928-605-4335
2:31shoot us a text.
2:32>> And the other thing about it, not only
2:34that it's a great thing to do and it
2:35cash flows, is they're easy to exit.
2:38Everybody loves storage, and everyone
2:41really loves climate-controlled storage.
2:43So, we love it, too.
2:44>> Yep.
2:44>> We're always trying to buy it, and guess
2:45what? We get phone calls every single
2:47day cuz of all the storage complexes we
2:48own, so it's an easy exit.
2:50>> So, like to convert multi-family or
2:52something like [music] that, it's much
2:53tougher to do something like that. To
2:55build it ground up, it's so hard to do.
2:57Uh the Verbos, those businesses are
2:59seasonal. This business is very turnkey.
3:01Once you do your preliminary work, all
3:03the site plans and the engineering,
3:05boom, the build-out of this thing is
3:06going to be done in probably about 2 to
3:073 [music] weeks.
3:08>> It's crazy how fast it goes.
3:10>> Yep. Then we'll get our certificate of
3:11occupancy. Fill-up time is only going to
3:12be probably 8 months to 10 months,
3:15maybe. We already know what the
3:16projected volume's going to be because
3:18of our other 20,000 sq ft up the road.
3:20>> Some of the key things that you want to
3:21look at if you do have a building or you
3:23find a building and you want to convert
3:24it, what are some of the things, Mike?
3:25>> What do you got to analyze the market?
3:26We always say there's nothing that works
3:29if there's not a demand, and you can't
3:30create demand. So, the first thing is
3:32have an analysis done to make sure you
3:33have a demand for climate-controlled
3:35[music] storage. That's number one.
3:36>> Yeah, so once you have that demand, I
3:38would say some key things to look at in
3:40the building. Is it insulated? This
3:41building was already insulated. Does it
3:43have HVAC? This building didn't have
3:44HVAC on it. What is the total square
3:46footage of the building? Cuz sometimes
3:48when it's a smaller footprint, it
3:49doesn't necessarily work because you
3:51only actually get about 70% so this
3:53one's 20,000 square foot the rentable
3:56space because of the hallways in this
3:57building is only going to be about
3:5914,000. So you lose about 30% so you're
4:01going to leave lose probably about 6,000
4:03square feet to just hallways and stuff
4:05in the building. But when you run the
4:06numbers and you know that you can get
4:07about a dollar a square foot to a dollar
4:09fifty a square foot for climate
4:10controlled then you know it's going to
4:12be 14,000 square foot so at the very
4:14bottom of the market for climate control
4:16[music] you're going to bring in 14,000
4:18at the top you're going to probably
4:20bring in around $20,000 or more. The
4:22other thing to be careful with is making
4:24sure with your county fire department
4:26city state whatever you got [music] fire
4:27suppression. We got fortunate because
4:29this fire suppression system like Bo
4:30said was already here and we just had
4:32very small upgrades. [music] If we had
4:34to add this I'm not sure if we would do
4:36this project with this size. If it was
4:3840,000 square feet and the demand
4:39[music] was there yes but 100,000 I'm
4:41not sure we didn't talk about it cuz it
4:42was already here. But that's something
4:43you'd have definitely have to put in
4:44your math problem.
4:45>> Yeah.
4:46>> We currently own this building so we
4:47ended up just going to get into
4:49construction loan and we can show you
4:51the breakdown of exactly what it took
4:52[music] to put that budget together to
4:54go get that bank loan. So like with this
4:56there is no money coming out of our
4:58pocket. We've already got a bank loan on
4:59this property currently because of the
5:01value increase of this property once we
5:03change it to climate control the bank
5:04has given us the full $500,000 to build
5:07it out. So what's going to happen is
5:08with this loan you're going to have a
5:09draw schedule you go and get $50,000
5:11towards the metal you get $50,000
5:13towards the electrical and $50,000
5:15towards the climate control. And then
5:16you pay those contractors so there's no
5:18money out of your pocket during the time
5:19of the construction loan either. They
5:21are going to fund this whole thing all
5:22the way through. They'll do small
5:23inspections as it's being done to make
5:25sure it's being done properly but other
5:26than that there's no money out of our
5:27pocket just a little bit of time to put
5:29this thing together.
5:30>> [music]
5:30>> And when this is stabilized we'll have
5:31three x this property at least.
5:33>> Yeah.
5:34>> The difference of climate controlled
5:36storage versus [music] storage that you
5:37see on the side of the road that has the
5:39garage doors just like these are going
5:40to have there's no structure to this.
5:42This doesn't have to hold wind there's
5:43no load bearing weight roof on here
5:45there's just chicken wire. So look at
5:47the steel here. It's just nothing
5:50compared to the steel that it takes
5:52>> [music]
5:52>> to build storage outside. This is the
5:55type of steel you would use, this type
5:56of steel, but it's already done. So, all
5:58the structure is here. This is just
6:01snapped together really thin metal,
6:04right, Bo? There's How many screws are
6:05holding this up?
6:06>> two.
6:07>> One screw there and one screw there.
6:09It's looks like a joke, but when it's
6:11all tied together, it's strong as hell.
6:13>> tied together, then it's much stronger.
6:14A lot of people have that question
6:15whenever they're renting one of these
6:16units. But, once you build this out like
6:18some of these units that are over here
6:19to our left, you can tell that the
6:21structure of this thing is sound. I
6:22mean, it
6:24it Well, it's not screwed together yet.
6:25>> [laughter]
6:27>> All right, ignore that. I just did that.
6:28But, honestly, like the corner pieces
6:30are all diamond plate, so there is not a
6:32lot to these things. I mean, all of this
6:34is just sheet metal, you know,
6:36corrugated sheet metal. The heaviest
6:37thing here is the doors, and even with
6:39those, they go with like a lightweight
6:40door. But, the thing about it is you've
6:42got security cameras everywhere. I don't
6:44know how many times we've got called
6:45about theft in our [music] storage
6:47facilities. I don't believe we've ever
6:48got called about theft in one of our
6:49climate control storage.
6:50>> Or someone living in. Or someone doing
6:52something they shouldn't be doing.
6:53>> And they're a little bit more expensive,
6:54so you get a little bit better clientele
6:56in these than what you would in like a
6:57regular self-storage unit.
6:59>> These units right here, they were not
7:01built out this morning. I was here about
7:023 hours ago, and this is double-sided
7:05here, but it looked like this on this
7:07side this morning whenever I walked into
7:09it. And there was [music] probably four
7:10guys working on it for probably 3 or 4
7:12hours, and boom, that's built out. So,
7:14you figure [music] this whole area right
7:16here is probably 20% of the build-out
7:18right here, just this whole one side,
7:20and they did it in about 4 hours.
7:21>> Today it's Monday, it's uh 12:30 in the
7:23afternoon, and they started Thursday on
7:25a half day, and this is how far they
7:27got, so.
7:28>> Obviously, one of the biggest expenses
7:29is going to be HVAC and then your
7:31electrical and insulation. So, this
7:33building was already insulated. The
7:35electrical was run to the building, but
7:36there was no HVAC system, so it cost
7:38about 75,000 to run all the electrical
7:40to all the HVAC and all the lighting,
7:42and cameras, and stuff around the 20,000
7:44sq ft building. But, then the HVAC cost
7:4675,000. So, if you didn't have that,
7:48like on last building that we did, it's
7:4920,000 sq ft, and it cost us about 350
7:52grand to do that one. And so, we saved
7:54with the electrical, and we saved with
7:55the HVAC.
7:56>> And one thing, when you go to do your
7:57calculations, always remember that it
7:59takes [music] about 30% of the building,
8:01sometimes 25, just depends, for the
8:03hallways and all the exits and
8:05entrances. [music] So, in 20,000 sq ft,
8:07you don't use your math and start
8:08figuring out 20,000 sq ft of of income.
8:11That's not how it works. You're going to
8:12lose 30% [music] to just walkways, and
8:14obviously you don't make any money off
8:15that.
8:16>> at 70% of whatever the total square
8:17footage is. So, on this one, we'll have
8:19rentable 14,000 sq ft. We're going to
8:21rent for over a dollar a square foot. We
8:23might rent it for a dollar a square foot
8:24whenever they're first coming in to fill
8:25this thing up. But, this building should
8:27probably actually bring in about 18 to
8:2919,000 dollars a month on an average.
8:31>> So, if you have any questions on how to
8:32take a light industrial building and
8:34turn it into climate-controlled storage,
8:35all you got to do is reach out to us.
8:36Shoot us a text at 928-605-4335.
8:40[music] Ask us any question of what it
8:42takes to do it, right, Mike?
8:43>> Absolutely. We love doing this, too, cuz
8:45there's a lot of buildings out there
8:45that this can be done in. We just,
8:47[music] you need to make sure you check
8:48the demand for it.
8:49>> Yep. So, reach out to us again. Text us
8:50at 928-605-4335.
8:53Ask us any question [music]