We bought two self-storage facilities for $1.07M. We Sold one for $2.125M.
Here’s a full rundown of what happened.
Table of Contents
The Acquisition
In July 2021, we picked up two mismanaged storage sites in Tennessee.
One had no systems whatsoever. The other had a manager pocketing cash.
This was a classic value-add opportunity that we couldn’t pass up.
Savannah Property
The Savannah location required quick cleanup and basic upgrades.
We sold it in 6 months for $380K.
While it wasn’t exactly a home run, it was still a win for our portfolio.
Clarksville Property
For the Clarksville location, we stabilized operations to 92% occupancy and hit $194K NOI.
The property was appraised at $3.13M, allowing us to refinance at $1.4M—effectively pulling out all our equity.
Why We Decided to Sell
So why sell when things were going so well?
There were several factors that influenced our decision:
- Self-storage demand is cooling across the market.
- The space is now commoditized with increased competition.
- Our investors specifically want 2–3 year exits.
- The offer was 14x annual cash flow—too good to ignore.
- We found a buyer willing to assume our loan, helping us avoid a $130K prepay penalty.
We closed at a 9% cap for $2.125M in August 2024.
The Real Lessons
Through this experience, we learned some valuable lessons:
- Appraisal values don’t always equal what the market will actually pay
- Hot sectors cool down—and they cool down fast
- Timing matters more than spreadsheets when it comes to real returns
Conclusion
We’re moving into small bay industrial next as our strategic pivot.
The self-storage chapter has been profitable, but it’s time to adapt to changing market conditions.
Where are you headed with your investment strategy?