No Money Down
Working with a young gentleman in Zagreb, Croatia who was seeking advice to get into the Storage business. I was mowing the next day and thinking about a business I have in Belize (higher interest rates) and also the fact this person probably didn’t have much capital. The amount of capital you have determines the paths you can take. Croatia has a very low-interest rate now around prime 3%, but it has been up to 3000% before, probably due to the war. If interest rates ever got above 9 or 10% I would never build. Might buy but never build. If his interest rate jumps high, he would go bust. Below is a Non-Traditional Storage approach for a no (little) money down scenario.
No Money Down
While you are doing your research for Traditional storage, check out this Non-traditional storage approach to get into the game, but use as little cash upfront.
- 20 Foot Cargo Containers used- Over here you can get them for about $2,000 USD delivered. You have many ports near you, so you may get them cheaper. Check the Roof, Floor, and make sure the doors open easily. Sand the rust spots and prime them. Paint all side exterior surfaces the same color. They will look great. Croatia gets hot. Paint the roofs with Aluminum trailer roof paint. This will drop the temperature by 20 F degrees inside.
- Lease or finance these for a 1-year lease or 3-year loan.
- My understanding Zagreb is an old beautiful town and has some industrial areas. Look around town for the cheapest, ugliest, least used property in town. But it has to have a “lot” of Concrete pavement or rock parking space. Don’t put on dirt. Lease it with a 2-year lease (it takes about 2 years from 0, to get rent up) with an automatic 5-year lease renewal option, with an option to buy at the end of the 7 years for a set price (establish upfront, once you get your business going they got you). Push hard, see if you can rent 1/2 or 1/4 of the space available and can add on, as needed. Add in the first right of refusal on the remainder.
- Find a guy with a “boom” truck who can set the containers in place once they are delivered.
- Figure out your gate access and security system upfront.
- Layout your roadways.
- Run your financial numbers. Try to do 5 containers at a time. It helps on the buying price upfront and on the Boom truck price.
- Run your numbers. Save the money. Whenever you hit xx units, you pay off 1. Whatever your numbers are, say the magic number is 10. When you hit 10, pay off one. Keep doing this. This is to Control “You”. Everyone thinks Storage is a Cash machine and they take the cash and use it outside the business. Your cash can only go to two places: a. pay your leases, b. buy a container.
- There will not be enough money to pay “you” until you have about 300 storage containers or more storage units. Keep your day job. The only way you work with storage is if you develop a Moving and Storage business. Lease a truck as needed at startup, then buy when you hit “your” number. As you get a feel for this model in Zagreb, then build the same model in other Croatian towns. You want every Real Estate broker, contractor, apartment manager in the area to know your name.
- Once you have this model going, then get into Traditional Storage. It might take 5 years for you to build up equity. You can always sell this business and take your equity to traditional, but it will be your “baby” and pride. Hard to do. Get a friend or relative to step in and manage, then turn your attention to Traditional storage.
- Storage is a piggy bank for building equity. The only way you get cash out is by selling, paying off, and using generated cash, or taking a loan against the equity. Try not to use any of this money for personal use. If you have to, live on-site to save apartment money and to watch your investment.
- If you have water, electric and sewer available, build mini hostels (Croatia is a tourist destination), on the other side away from your storage.
- On the extra ground store vehicles. This does not make very much money, but it helps with the rent. As you fill up with containers, get rid of the parking, or find another spot.
- Fireworks. Import direct from China. Get your explosive permit if needed. Stage these around the country for holidays, get groups to sell your fireworks out of them for a percentage.
Check your zoning and permits
Remember, start small and get your big mistakes out of the way. The above is as small as you can start. Try to own nothing upfront.
If you go bust, you lost your sweat equity (sell the units you bought), took a swing for the Fence (home run), and will have little “debt”. If you succeed, picture 5 years from now (wow), and every “no” that gets in your path, find a way around it or make it an “advantage”. There are three things that are needed to make “New” wealth.
- Finance (maybe not above)
- An idea (storage, is working its way across Europe)
- Entrepreneur- someone who is willing to risk it.
These very rarely come together. Yes, you can become a Doctor, Lawyer, Engineer, etc. But you know what each of them wishes for? An investment where they did not have to work. If any of them stop working, they’re not wealthy. Given a choice in 5 years would you prefer to have failed to swing for the fence and be with little debt, or not have tried and been on the same “path” as your friends. Don’t go down this path unless you can take a mental beating and keep coming back.
The units below are part of 40 we own
My son and I cleaned them up and painted them. Not good for ladies (hard to open the doors). Most guys love them since they are more secure and bug proof. How good are these? Picture floodwater 2 feet above the roof for a month. I took a lot of cleanouts. Power washed inside, good as new.
Clark Storage – Best and Most Secured Storage Units in the Area
Our family business objective is to provide you the best service and facilities in a secured location. As you get to know our facilities, you will note they were selected for your ease of access, location, and security. Please let us know how we can continue to improve your storage needs and fulfill your high expectations. We have units in Council Bluffs, Glenwood, Shenandoah, & Pacific Junction. Contact us today. We are also offering a Move-In Referral Program, click here for more information.