What’s the best way to find a JV Partner for Self Storage

Real Estate Agent · Conroe, TX · Member since 2017 · 24 posts · 7 votes

This will be my first commercial and development deal. I have the land and plan to build Boat and RV storage and potentially some other self storage products. We're about 1 mile from the lake and the feasibility studies look great. I have a hunch that the best route for me to take is to partner with some self storage development experience....

If you've done a JV how did you find your partner?

Are there any red flags that I should be aware of?

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Jeremy Horton

Rental Property Investor · Somewhere over the Rainbow · Member since 2021 · 1k+ posts · 1k+ votes

I've considered partnering in my self storage project as well - but I decided against it. I want full ownership of the property and decision making. I would potentially be open to partnering in the future with local owners (which I think may be a possibility)

Similar position as you - have the land, did my own feasibility study, spreadsheets as far as income/expenses. I just don't quite have the cash yet or risk tolerance to pull the trigger on full climate control self storage. It is a lot more involved than what meets the eye - dynamic pricing (or at the minimum keeping up with competitors pricing), discounts, CRM, contracts, website, SEO and that doesn't even get into the building itself.

I'll likely go a cheaper route to get my systems in place - open parking with a gate and all that. Then from there go to canopy parking. Then climate control. Then expand the climate control.

@Henry Clark is the pro on self-storage. Knows about it and has done it repeatedly. I would get a Word document going then go through Henry's posts and take notes on what he says on all the main categories. Then adjust a little depending on your market/location. That's personally what I'm doing anyway - you need to be a "pro" before you start in my opinion.

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Ronald RohdePro Member
Attorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
1y
Find people who own similar assets nearby. Find people who own industrial storage, truck parking, or traditional self storage.
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Henry ClarkPro Member
Developer · Member since 2020 · 4k+ posts · 4k+ votes
1y
OP. I think I have responded to you before.
Don't do a JV if you already own the land, that is the major exposure item.
You need to get past your underlying RISK issues.
1. You have already accepted the market area by buying the land. So, forget the market.
2. Best use- is there an alternative Best use for the land that you will damage if your storage fails? Follow my suggestions below and you will not damage resale value of the land.
3. Contracts- join the Texas Self Storage group and get a copy of their contract. Rent a space at a Boat/RV place and get their contract. To use as examples. Let your Attorney amend as needed. Also post your contract on a Self Storage Web forum and ask for suggestions.
4. Operation Software- $44.95 use U-Haul "Webselfstorage" software. Only do Autopay. If you want, use their contract/call center versus handling contracts and calls yourself. Call your local U-Haul Regional Sales Manager and ask him for a demo of the software.
5. Insurance- Use UHaul "Ponderosa" insurance, plus their customer insurance. May need to look for a different product if you want to provide offering for RV and Boats.
6.  Marketing- long discussion. But can do on the fly later. Start with a website, get an SEO to do. If you need a recommendation, I can give you my guy in Omaha, he is expensive but good. There are others who do just Self Storage, but they also help your competitors.
7. Financing- you have the land as collateral, if 100% paid off. Follow my suggestions and you will Ramp up, and not put a lot of money down up front. Get a working Line of Credit, draw as needed. Find a lender who is familiar with Apartments.
8. Check on zoning even though you're in Texas, Road axis, storm retention pond, fire hydrants, bathroom requirements, internal road surface requirements if any, utility access, these are the major deal killers.
9. Operations- want you to install "10" parking spots on gravel and "10" cargo Containers (see my posts on Containers). Say $20,000 to level and install gravel, limestone, caliche, etc road and parking as needed. Use "Engineering fabric" TX180 or TX 160 if possible. See my posts. Containers say $3,500 each installed. Get the 1 trip or new. You can turn around and sale these retail for $5,000 if it doesn't work out. Low, Low, Low risk exposure to get a taste. Do not do Enclosed or Canopy Boat and RV storage or traditional Self Storage buildings until you are past your Risk level.
10. Layout- depending on the shape and size of your land. Do 9 above so it does not impede you building future Canopy or Enclosed RV/Boat storage or Traditional Self Storage.
The above are very, very, easy to do. This will get you past your risk concerns. Then you can decide on how to scale. Unless your enclosed RV or Boat storage is not $300 up to $500 per month in your area, recommend you don't go that way. But either way run the numbers.
Don't know your background. But if you can't follow through on these steps. I would just sell the land to a developer. Chances of you finding the "Right" JV partner are very slim.
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Jeremy Horton
Rental Property Investor · Somewhere over the Rainbow · Member since 2021 · 1k+ posts · 1k+ votes
1y
I've considered partnering in my self storage project as well - but I decided against it. I want full ownership of the property and decision making. I would potentially be open to partnering in the future with local owners (which I think may be a possibility)

Similar position as you - have the land, did my own feasibility study, spreadsheets as far as income/expenses. I just don't quite have the cash yet or risk tolerance to pull the trigger on full climate control self storage. It is a lot more involved than what meets the eye - dynamic pricing (or at the minimum keeping up with competitors pricing), discounts, CRM, contracts, website, SEO and that doesn't even get into the building itself.

I'll likely go a cheaper route to get my systems in place - open parking with a gate and all that. Then from there go to canopy parking. Then climate control. Then expand the climate control.

@Henry Clark is the pro on self-storage. Knows about it and has done it repeatedly. I would get a Word document going then go through Henry's posts and take notes on what he says on all the main categories. Then adjust a little depending on your market/location. That's personally what I'm doing anyway - you need to be a "pro" before you start in my opinion.
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