January 2012

I have studied and visited both properties as well as all competing facilities in the area and have a solid plan to increase occupancy.  The properties are currently about 55% occupied and vacancy has decreased since the bank took control.  My office is located within two hours of these facilities and I will manage them with one employee working on-site.  I’m excited to take ownership of these properties and start increasing occupancy by marketing to a specialized segment of the local population.

The key to this deal (which makes it a secure investment) is that even if I do nothing and they operate as they have the last eight months (with little money spent on marketing by the bank), the properties will pay me back a good return.  I am considering potential joint venture partners for this deal.

Commercial properties such as these do indeed fluctuate in value according to the market cycle.  In cities that have been hit hard by the 2008-2010 recession, commercial property values have decreased sharply and are likely at their lowest point, as seen in the following graphs.  In some cities, a slight recovery in prices is evident.




As the average price decreases, sales will typically increase and the number of facilities available for sale will decrease.  That is the current situation in most U.S. cities.  I expect a brief window of opportunity remaining to buy quality properties at these incredible prices!  My investment strategy is to buy select distressed income properties at low prices over the next two years, improve the financials of the property through professional property management, and enjoy tax-advantaged cash flow for years to come.  With these particular storage facilities, I should be able to refinance at some point in the future, pull out my initial investment, and still enjoy $185 000/year net cash flow.  

Thank you to those who have expressed interest in this particular deal.  To learn more and discuss any available investment positions in my distressed storage and multi-family acquisitions, please enter your information below and someone will contact you to answer any questions you may have:

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Johnson Frais
PassionRight Properties