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Pitching Investors

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  • Pitching Investors

    I have a few friends, business associates, and acquaintances, that I would like to partner with to buy a self storage facility. I've spoken to the friends about this casually, but the others are very wealthy and I don't want to approach the subject until I'm better prepared. This leads me to this post.

    Before looking for financing I need to have a since of how much capital I'm starting with. I'm wondering what is the best way to show the value of self storage to someone unfamiliar with it. Showing a specific site pro forma doesn't seem ideal to me. First, it may not be the site that would be ideal, and if it was it wold be sold before the stars align. Second, I feel that's wadding through the weeds too much. I don't believe in the value of pitches that give broad general stats either.

    In my mind, a spreadsheet that uses local market realities (unit sizes, rents, etc) to show a general return would be good. (Does anyone disagree?) I'm wondering if anyone has one started. I'm also wondering if there is a way to find local statistics (through ISS?). I read Mark Helm's book, and I've considered buying his Storage World Analyzer, but I'm not sure if that's worth it.

    As always, any help is greatly appreciated.

  • #2
    There are a lot of good stats that your can pull from similar reports. Things like, density, age demographic, housing market trends. Location near residential area, population. All these come in a good feasibility study. Perhaps you can get your hands on one of the bigger stats reports, and us their variables. This way you can judge what is a good number and see what works in your area. Government stats are normally the source of info for these type reports. Perhaps see what you can pull for your local area.


    • #3
      There is all sorts of things out there but 2 we have always shown outside investors are the ROI of storage in general compared to other real estate investments and then the Y-O-Y returns from storage compared to others. These both show that over the last 20 years storage has significantly outpaced the rest of the real estate market. Then you can show them the failure rate of storage compared to to the real estate industry as a whole. It had the least failures in the down turn.

      You need to gauge their desire to invest in real estate not just storage. That's the grounds we always start with. Once we establish the conservative investment strategy of real estate and agree it is something that is of interest we bring out the above and show how storage compares to other segments.

      I think all of the above is the easy part. Getting solid, firm commitments to capital, how much are they will to put up, and financing, what they are liable for on the note, are the hardest parts.

      Good Luck.

      Chasing Perfection to catch Excellence


      • #4
        I know I'm a bit late in replying but I have the most current self storage almanac. Not the perfect resource but is a great starting point and I've found it extremely helpful. PM me your area. Not sure if you're allowed to give me your email address but I could send you the applicable pages too.


        • #5

          You are asking questions that others in your position have spent thousands of dollars to be answered. If you are serious about getting in to this industry, I would highly recommend you hire a good Feasibilty Expert. Several visit these forums regularly. You will get what you pay for.



          • #6
            I agree with getting a professional to help you look up the feasibility of your business in your particular area. Just pulling up reports for the accounts and data for other companies might not be effective for you at all. You could always work on a small basis looking at the size and potential rental income. But if you're hunting for more in-depth analysis, best that you find someone who is more familiar with collating that sort of info.
            Christopher James


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