Tommy Dobczyk explains Land Shark's framework for RV storage deals: start with a 40% minimum ROI target, and use leverage to push returns into the 40-60% range. Industrial storage and covered premium parking command higher rent per square foot. He warns that switching valuation methods mid-deal can tank a property's value.
Chapters
Did you see the deals today in the Deal Room? Ideal, because this is legitimately the only way we do deals in Land Shark is to start at 40%. What we're doing to be smart about it is we're making sure that we don't touch anything that's got less than 40% to it. So one of the things that it said was to go with an industrial storage yard because we can charge a larger amount per square foot for that. Now, Blake, based on that, it shows your ROI fits at the 23 to 40% area and then adding the leverage to it gets you up above that 40 to 60%. Cents, right? Anyway, not, not an industrial storage, but covered premium storage parking gave you a pretty decent bump as well, give you a value of $34 to $36 million. If we changed the way we valued it to a market or to an asset, the value of this property plummets extreme. The last thing you want to do is start off a deal by pissing somebody off.