Self Storage University Podcast: Episode 76

All About On-line Listings

One of the first places that buyers typically look for self-storage facilities are on-line listing services, such as But this is actually one of the least productive sources, coming in last against brokers, cold-calling and direct mail. Nevertheless, there are deals to be found using this high-tech option – if you know how the process works. In this Self-Storage University podcast we’re going to explore on-line listings from a buyer’s perspective.

Episode 76: All About On-line Listings Transcript

The advent of the internet was a wonderful thing. It impacted so many parts of our life, and that includes how you look for a self-storage facility. This is Frank Rolfe, the Self Storage University Podcast. We're gonna be talking about online listings, how they work, things to watch out for, where the opportunities lie. So what is an online listing, anyway? Well, we all know how to go to Etsy, we know how to go to eBay, we know how to go to Amazon, but when you're looking at commercial property, many people then go to a website particularly known as Now, what is so great about Well, they, pretty much, when it comes to self-storage facilities for sale, they kind of dominate that space as they dominate many other sectors of commercial real estate. So, what it is, it's just like Amazon or eBay or Etsy, only it's for self-storage facilities for sale. They can be placed on the website either as a mom-and-pop seller or as a broker who represents the mom-and-pop seller. They come in all shapes, all sizes, all dollar amounts, all over the nation.

If you go to, you'll see the site is not that difficult to navigate. All you enter in is you're looking for a self-storage facility, and up will pop a map, which shows all of the self-storages. Right now, there's about 350 available on the website and they are strewn pretty much across America, if you look at the interactive map they have with all the little dots. And you're freely allowed to click on any of the dots to look at any of the properties that are in the geographic area that you seek. Now, the first thing you'll notice when you look at the property is a little more micro-level than just the dots on the map, that some provide you lots and lots of information, and some provide you very little.

So you'll find some that are attached to complete packages. They'll have the entire rent roll, profit and loss, photographs, the whole thing. Others just have, maybe, just a photo or even a stock photo and it just tells you roughly where it's at. The first thing to know between these two cuts is the ones that give you all the information are probably the safer ones. The ones who don't give you full information, typically, there's things they're trying to hide from you. They're trying to get you interested in it a little bit without telling you the whole story. Their theory often is, if they can just kind of suck you into the deal where you are curious, that might motivate you on to accept and go after and pursue a deal that you normally would not. So the ones that have all the information, typically, are your better choices. Now, that being said, the ones that you see that have all the information on them, and the ones that don't have all the information, the first thing they typically suffer from is they're horribly overpriced. Now, why is that? Why are so many things on LoopNet or any online listing, why are they often priced so high? And the simple answer is, when you are selling things anonymously to people who you don't know, they don't know at any given moment who's looking at any of the listings, you tend to price them high because you're hoping there's a fool out there.

We call it shopping for idiots, hoping there's somebody out there that's just dumb enough to click the "Buy Now" button. Now, of course, where they're wasting their time is there is no "Buy Now" button on a commercial property. Sure, on eBay, I can maybe put something out there, some widget, and price it too high, higher than anyone else, and you still might be stupid enough to click it and buy it. But a commercial property, they'll have to get an appraisal, they'll have to be, typically, a bank. So it's very hard for those things to pass like that. But nevertheless, when you look at the cap rates on many of those things, you'll see they're insanely low. They make no sense at all. 2.5% cap, 3%, 3.5% cap, and no one is going to buy a self-storage facility at that kind of price anymore. That ship has sailed. In fact, that ship was never even in the port, at least not for smart investors. With interest rates where they are currently, there's no way you're gonna look at buying anything that's lower than the interest rate on the debt. So, you're not looking at things at 3% caps, you're looking for stuff that's more like 7% and 8% caps.

So what does it mean? It means many of those deals are only going to work if you get the price knocked down a lot. Some of the deals we've bought over the years, that we've bought online, we've had to offer and have [0:05:01.7] ____ up at 50% less than the asking price. We bought a deal in Springfield, Missouri, for 50% less than what the online listing said, and the online listing was marked "Firm." We went to them and said, "Hey, I know it says 'Firm,' but hey, it's not selling because this is all it's worth. But if you're interested, let me know." And about two weeks later, they called up and said, "Is that offer still on the table?" Now, why would someone price it so low and leave it on there so long? Well, because every day, they dream of some moron coming in and paying too much for it. But those dreams rarely ever happen. If you look at the bottom of the listing, it tells you when the listing was placed on LoopNet. And pretty much all online services show that. If you see a listing that's been on there for a year or two years, it's a pretty good bet it's priced too high, but it's also a pretty good bet that's a seller that might be finally willing to drop the price.

That's how the deal in Springfield was. I noticed it'd been on there for a long, long time, and I was exactly correct. My hunch was correct. He was willing to take, in this case, half of what he had it listed as "Firm." So, really, when you're buying things online, your success or failure will boil down normally to how good you are at convincing the seller that you can't pay anywhere near their price, that they'll have to accept a lower price. And your best bet from those listings is to attack the ones that have been on there for a while and are gathering dust. Now, how do you explain to somebody that the deal is priced too high and you can't offer anywhere near that amount? Just tell them the truth. Tell them, "Hey, I've run the numbers on this. This is where I come out on it. Tell me what I'm doing wrong." See what they say. Often, that gives you an inclusive door for them to say, "You know what? I think maybe you're right. I think maybe I've had it priced too high now. So, here's my new pricing." Because, typically, when the seller finally gets tired of it sitting and gathering dust, they make a drastic move. They don't start just dropping the price slowly, they drop it significantly and suddenly.

So when you see deals that have been sitting around online, it's a good idea to hit those up on a continual basis. Even if they don't agree right now to the reduced price, they probably will, unless they find anyone crazy enough to pay them what they're asking. Now, there's many other ways to find self-storage facilities, and to be honest with you, online is probably your weakest idea, much better odds with brokers, cold calling, and direct mail. But nevertheless, it doesn't hurt to look at the deals, to make offers. You can learn a lot from looking at those offering packages, so it's a great reference tool for you to become a better buyer. But when it comes to just clicking a "Buy Now" button, no, there's a lot more to do before you're gonna wanna buy. This is Frank Rolfe for the Self Storage University Podcast. Hope you enjoyed this, and talk to you again soon.