Seeking Advice: Finding LP Investors for First-Time Storage Syndication

[Katie Talamantes]

Hi everyone,

My husband and I have had great success with our rental properties (we currently own two single-family rentals) and are now looking to branch into self-storage.

We plan to structure our first deal as a real estate syndication, where we will act as the sponsors/general partners—handling deal sourcing, financing, and ongoing management. Our target property is in the $500K–$1M range.

Although we’ve spent years researching and analyzing storage unit deals, we’ve never taken the next step to purchase one—until now. We will also be investing our own capital into the deal alongside our limited partners.

This will be our first time sponsoring a syndication, and we’re looking to connect with limited partners (passive investors) who are comfortable with smaller deals and new sponsors. We expect returns to come from both ongoing cash flow and a capital event (such as a refinance or sale).

For those of you who’ve raised capital for similar first-time or smaller syndications:

• What strategies have worked best to attract and build trust with LPs?

• Are there specific networking channels, events, or platforms you’ve found effective?

• Any common mistakes you’d recommend avoiding as first-time sponsors?

Thanks in advance for your insights and experiences!

— Katie

[Evan Polaski]

Am I the only one has started reading a lot of these types of posts (there was another one the other day too) as thinly veiled solicitations for LPs to reach out?

@Katie Talamantes

To directly answer your questions:
1. Attract LPs: these will be the people who already know, like and trust you.  So, your mom and dad, your best friends, and likely your coworkers.  People who already have your personal number and seen your successes with the two rentals you already own.

2. Thanksgiving, Christmas, birthdays, etc.

3. Thinking you know anything about what you are doing.  I am assuming you are not currently an asset manager for large self storage company.  So...
Who will you call to fix your gate, what management system are you using, what is your advertising budget for the property, who many employees will you have on site, what is your retail mix, how many carts will you own on the property, what is your balance of interior climate controlled and exterior units, will you allow RV and boat storage, how do you handle someone living in a unit or running a business from your self storage unit, what is the real demand for storage in that market, does your client base have enough expendable income to afford storage and/or absorb your rent increases, how long of free rent or other promotions are you providing to get your units full, are you planning on expanding the property, how much are you co-investing, what are your fees, what is your carried interest, what relationships do you have with brokers or owners, what markets are you focused on, how are you different than the hundreds of other self storage syndicators, how much time are you dedicating to this venture versus your "day job", do you have the net worth to secure a loan yourself, what terms are you finding for the loans, are you providing the personal guarantee or relying on someone else, fixed or floating rate, what auction company are you using for unit sales, what have you done professionally that would give me the confidence that you will figure this out on the fly, how frequently are you paying distributions, how can i monitor the health of my investment, how frequently will I be getting updates, do you have an investor portal, have you setup a website and professional email address, who is your management company, how many did you interview before settling on them, how many are operating in that market in case you need to replace them, will this be branded units or creating your own brand...

At the end of the day, the reason you will be raising money from your friends and family is because they typically won't even know to ask these questions.  They will already trust you and therefore invest on your relationship and wanting to help you get started more than viewing it as a prudent investment with minimal risks.