How We Turned $1.07M into $2.125M with Self-Storage

We bought two self-storage facilities for $1.07M. We Sold one for $2.125M.

Here's a full rundown of what happened.

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:

1. Self-storage demand is cooling across the market.
2. The space is now commoditized with increased competition.
3. Our investors specifically want 2–3 year exits.
4. The offer was 14x annual cash flow—too good to ignore.
5. 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:

1. Appraisal values don't always equal what the market will actually pay
2. Hot sectors cool down—and they cool down fast
3. 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?

Want the backstory on what drew us to this asset class? Read about why I got into self-storage in the first place.

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