Redwood Storage owns two properties within 0.25 miles of each other, totaling 50,000 sqft of drive up self storage, in Toccoa, GA.
Redwood Storage acquired these assets from two separate sellers, off market, for a combined $2,325,000. The portfolio currently yields over $21,000 in net income per month, effectively a 10.5% yield on all in cost. With a 4% interest rate loan, we are achieving gross cash-on-cash returns in excess of 18% and cash-on-cash + principal returns of over 27%.
We purchased these properties with a simple strategy: replace on-site managers with off-site, conduct basic cosmetic and security improvements, establish a tenant protection program, and increase tenant rents to market levels. Over the first 6 months of ownership, we increased gross revenue from $20,000 to over $30,000 per month.
At a 6% cap rate, this property is worth approximately $4.2m. However, we are currently expanding one of the properties and leasing up a few vacant units, and do not believe that we have yet achieved the maximum value of our investment.