Joe DownsCEO & Co-Founder, Belrose Storage Group. Founder, Storage Moguls.

These Pro Forma Red Flags Kill Deals

30 Jan 2026 · 1 min

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Joe Downs shows what kills self-storage deals: perfectly round expense numbers, expense ratios under 35%, assumed 100% occupancy, and aggressive rent growth. These red flags signal a pro forma built to sell, not to reflect reality.

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Well, you need to train your eye to spot the obvious financial red flags that scream walk away. This is the perfectly round numbers like expenses listed exactly as $5,000 or $10,000. Real-world expenses are never that clean. Another huge warning sign is an expense ratio below 35%. Self-storage is not a 25% expense business, and anyone claiming that is probably hiding something big. Never trust a pro forma that assumes 100% occupancy either. This is— there's always vacancy loss. Even in the best markets, and be very careful of aggressive rent growth projections.