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

This $1.5M self-storage deal almost turned into a $600K disaster 🚨

23 Jan 2026 · 1 min

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0:55

Joe Downs walks through a $1.5M self-storage deal that nearly fell apart when flood insurance came in at $70,000 instead of the expected $11,000 annual cost. That single line item would have crushed the 7.5% cap rate and dropped the property's effective value by $600K.

It was $11,000 was our normal, normal annual insurance. Add another $70,000 for flood insurance.
So for folks watching, listening, watching the replay, whatever, that additional $70,000, had we closed on this thing, had we not caught it and closed, we would have been required to get that insurance. That additional $70,000 would have been— what were we buying this thing at? At 7 cap?
We're buying it like 7.5 cap. And it's sliced in half in that, in that hour.
So 7.5 cap, I'm gonna do quick math for us live here, Tim. I can do it live.
Better you than me.
Is $933,000. So our facility, this facility we had under contract for $1.5 million. $1.5 million, yep. Yep, would have been worth about $600,000