I am currently putting together a deal on a 4-plex in my area that I found about a month ago. Its a solid deal that involves finding a capital partner for the ~$150-200k down payment and someone with good credit to purchase the rest of the investment through the bank. I found parties necessary and am now proceeding down the purchasing path.
Owning a moving company, its no secret that I want to enter into the Self Storage industry. While networking a couple months back, I made a great contact and asked him to call me if they ever needed anything. I recently got a call from him giving me what looks like some pretty good terms on a deal worth about $6-6.8M. The terms are; raise $2M for the down payment on the property and in exchange that investor will own 75% of the property. I will receive a couple of ownership percentage points in exchange for putting this deal together. I have a couple of interested parties but know that they do not have Millions in savings. People I do know with Millions laying around either don't take my calls regularly or take a couple of weeks to set up a meeting. I'm wondering how people would go about increasing the network of wealth around you quickly? I can and will certainly increase the network of wealth around me over time but am trying to do it quickly to set this self Storage deal up quickly.
I love where you are looking and going. I too am trying to get into self storage. Wouldn't this be a good try for syndication? Get many investors instead of a few?
@Tyler Morrison if you’re on a tight timeline you should reach out to some other self storage investors In your area to partner with.
Kudos for thinking big. I love it! And please don't hear this as discouragement but raising money for a $6 Million purchase is a big elephant...especially if it is your first foray into an industry. That doesn't mean it can't be done but if I were you I would also have my eyes on some more "approachable" deals. There is tons of opportunity in the $300-800K range and doing a couple smaller deals will allow you to establish a track record which ill attract the bigger money down the road. I started out with a $330K property (since sold for $1.8 Million after some expansion) that I raised $60K in private funds for. After a couple deals like that, I not only have the cash to buy into bigger properties, but I've also found that BIG money starts seeking you out. I put in $5K on a $500K purchase last year and raised the remaining $495K privately via my network. Since then, I've been approached by a couple Fund Managers asking how I would respond if they told me they wanted me to spend $5-20 Million. Granted asking how I would respond and asking if I'd actually do it are two different things but it does, I think demonstrate what I am getting at here. I have a friend who experienced something very similar in the SS space as well. AGAIN, I'm not saying you can't raise $2 Million for your first rodeo...I just think the path above might be a more "probably" path to success.
Hi @Michael Wagner solid advise as always! Quick question: what kind of properties do you see in the $300k-800k range? What sort of places do you stay away from?
We tend to focus on Value add properties. Typically they are on the 12,000 to 25,000 square foot range. B and C grade properties in secondary and tertiary markets. Generally low occupancy or otherwise mismanaged. Ideally we want to double or triple the value in 24-48 months.
I agree with the feedback @ @Greg Dickerson gave you to find an experienced self-storage operator interested to take this deal on and let you be a part of this undertaking for a small cut.
You can do your search here on BP. Just look through the old threads and you'll be surprised to what and who you'll find.
@Tyler Morrison the quickest way to raise money fast would be to bring on a professional has experience raising that kind of money. Raising money is not easy and we are arguably in one of the "easiest" times in history to raise private equity. I suggest getting with some self-storage pros that can guide you.
@Tyler Morrison there’s no quick fixes, especially when it comes to building relationships with wealthy people, be in service to them, support their activities and grab a “Best Ever Apartment Syndication Book” to learn specific process on how to build those relationships and more.
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