Day 45: Self Storage Survey and Zoning: Why Skipping These Steps Can Cost You Everything

All right, welcome back to the Storage 100, day 45. Wow. I'm Joe Downs with the Storage Moguls Mastermind, and let me tell you a story about a buyer who skipped a survey because that's what we're talking about today. They closed on a self-storage facility, then 6 months later decided to expand. City told them their property line was 15 feet further in than they thought. The existing fence was on the neighbor's property and their build— their new building would be too. This led to a boundary dispute, legal fees, and no expansion, all because they skipped, what, $1,500 to $5,000 survey? I think for them it was $2,000. Today we're going to cover surveys, zoning, and why they matter and why you can't skip them. So what exactly is a survey? It's a legal description of your property boundaries showing exactly where your property starts and ends. This document identifies encroachments, things like fences or buildings crossing your property lines. It also shows easements, which are rights for others to use part of your land, either the land underneath the land or above the land. Most lenders require a survey before closing. And by the way, you should too. Knowing what you're buying prevents expensive, time-consuming, time-consuming boundary disputes that can derail your plans, folks. It's kind of important to know this. So let's, let's, let's dive in here and look at some of the specific details of a survey. So building on our understanding of what, what it is, let's dive into what you, what the document actually says. So it's like I said before, a survey clearly outlines your property boundaries, giving you exact legal description. It details every building location relative to those boundaries. You'll see the easements, including utility, the access, the drainage rights. It highlights any encroachments, neighbor's fence on your land. And then finally, it shows setbacks and zoning compliance, indicating if the existing buildings meet local requirements. If a building's too close to the property line, for instance, you might have a zoning violation. All right, so let's explore why this is so crucial. So first, it confirms you're buying exactly what you think you are, right? Let's start with that. If you're supposed to be buying 5 acres, that's what you're being sold. We want to make sure that the survey doesn't come back at 4.2. We want to make sure we're paying for 5 and getting 5. Second, it identifies any boundary disputes before you close the deal. So you'll know if that fence is in the wrong place before you buy. Third, you'll need a survey for any future expansion or building permits. So you're going to need it anyway if you have plans for it. Fourth, it's going to protect you from any costly encroachment issues. So a survey, like I said earlier, $1,500 to, you know, $5,000. But boundary disputes, when you get into them, and legal fees cost tens of thousands of dollars. So It's insurance against all of that, and you probably usually either need it now or you might in the future, or even it's nice to have if you're going to sell the property in the future. It's nice to be able to hand that to a prospective buyer. This leads us to another critical topic now: zoning. So transitioning from surveys into zoning, let's talk about what zoning is. So it's a set of local regulations That dictate how a property can be used. So it determines if your property is first zoned residential or commercial or industrial or mixed use. And then there's some various classifications within those categories as well. So, and then for self-storage, by the way, you'll typically find that light industrial, commercial, or just industrial, not always. But it's typically where you'll find it. Zoning controls what you can build, how big you can build it, how close to the property lines, and what activities are even permitted on that property or what you build on that property. And if your property is not zoned properly for self-storage, you might be in serious trouble. So that's something that you're definitely going to want to confirm. If you're the buyer, because you might not be able to operate legally or even expand it in the future if it's not zoned properly. So let's dive into what that looks like. So ignoring these details, well, that could be bad. That could derail your entire investment. But first, we need to confirm if, if when we're looking at this, when you're looking at a property, first, first thing you have to confirm is Is self-storage even an allowed activity in that zone? So some permits, some areas permit it outright, others need a special permit, and some forbid it completely. So you're going to want to verify this. You're also going to want to look at setback requirements. These dictate how close you can build to property lines. And this is— that's critical for any future expansion plans. And then finally, you're definitely going to want to check for height of building height and any parking restrictions. Because those rules can impact how much you can build and how many units you can add, et cetera. So you really need to get an understanding of the local rulebook here. And knowing these types of details can prevent you from some very costly surprises down the road. So by the way, if some of you were paying attention and were like, what do you mean? How couldn't it be zoned for storage? Because I would've been thinking that myself. In fact, I was even thinking that as I said it. Are you saying the right thing? But of course I am, because here's the example. So what happens if the if the property isn't properly zoned for self-storage? Then this is where you absolutely have to dig deeper. How could that happen? You're wondering. The mystery is because it could be grandfathered. There might not have been zoning laws at the time it was built, but then path of progress happened around it, and now there's zoning laws. And whether they like it or not, it might that area might not be zoned for self-storage yet there's self-storage. So if it's grandfathered, that's that's that can be fine. By the way, it means you're insulated from some competition. But that also means it's a legal but non-conforming use, and it's allowed to continue because it predates the current zoning laws. But Here's the issue. Grandfathered properties typically can't be expanded. So if it's not grandfathered and zoning doesn't allow self-storage, you're looking at rezoning. Meaning if the expansion isn't grandfathered, you'd have to rezone. So this— that's an expensive, time-consuming process, and there's no guarantee you'll even get it. So if zoning is a major hurdle and rezoning is infeasible, Probably something you should walk away from. Don't buy a property you can't legally operate or expand if that's your goal. All right, so let's— and actually, let me tell you a little story about that. Um, we had a, uh, a student of ours that found, uh, a property that was marketed with room for expansion, which, right, sounds great. We look for that all the time, but Being the smart student they were, they of course first did a zoning check and discovered that there was— I don't know if it was new or not, but there's a 15-foot setback requirement for new construction. The existing buildings were only 8 feet from the property line, so that meant expansion would have been impossible without a variance from the city. So naturally, they walked away and they saved themselves a huge headache and potential financial loss. But had they skipped that zoning check, they might have bought a property They couldn't expand, right? Zoning checks are non-negotiable in your due diligence. So given these very critical insights, let's talk about how to integrate zoning and survey into your due diligence. And this is not optional, it's essential. So first, order your survey within the first week of due diligence. Takes a few weeks to get back usually, so start early. Also, Verify zoning before you even make an offer. Don't waste time on a property that isn't properly zoned. I would budget between $1,500 and $5,000 for the survey. And then most importantly, include survey and zoning contingencies in your purchase contract. This will protect your earnest money deposit if issues arise. If you follow these steps, you will be well prepared for what's next. Now, if you found the information valuable today, please hit the like, subscribe, and share buttons. Let your network know how serious you are about self-storage investing. This way, when you're raising capital next year, they'll already know you're in the game. Next up tomorrow, we will dive into day 46, the title commitment. Sounds like a sleeper, I know, but again, it's— there's critical stuff in there. It's not the whole document, but there's some important stuff in there, and what you're actually looking for is what I'm going to show you. And hey, if you ever found a property line dispute or issue that would've cost you a fortune, hey, maybe just, you know, subscribe so you know that we hear you. And also, please like this video if you agree that spending $2,000 on a survey is way cheaper than a boundary law or boundary dispute lawsuit. I think we can all agree it would be. Makes a lot of sense. And then lastly, please share this with someone who's about to close on a property without getting a survey. We're verifying, verifying zoning. They will definitely thank you later.