Short answer: Listed facilities are often priced beyond what smaller buyers can make work, and owners are flooded with texts and letters from buyers. Mark’s “first-call offer” approach stands out: do five minutes of research, ask the owner one question (last year’s or last month’s gross income), and give a rough verbal offer on the call to find out quickly whether they are a serious seller.
Why the usual approach struggles #
As an owner, Mark gets around ten texts a week plus letters and calls asking if he’ll sell. Buyers who succeed off-market usually build relationships over months or years. Buyers also hesitate to make an offer without income, expense and occupancy figures, which many small owners can’t produce quickly. (If an owner will share a random daily close report, Mark has written offers from that one document.)
The first-call offer, step by step #
- Research first. Estimate the facility’s size from aerial maps, look up average rents in the trade area, and check whether the area appears oversupplied, undersupplied or balanced.
- Call the owner. Ask whether they would consider selling for a good price. If not, ask whether they’d like an offer on this call, based on one piece of information.
- Ask one question. “What was your gross income last year, or last month?” Then stay silent and let them answer. An educated guess is fine; everything is verified after a contract is signed.
- Run quick math. Use a template with your own assumptions for operating expenses (Mark uses different ranges for automated, managed and large climate-controlled facilities), stabilized occupancy and a market cap rate to estimate value.
- Give a rough number. Offer to send a letter of intent if it’s close. If it’s too low, explain that condition, verified numbers and terms such as seller financing could change the price.
The goal isn’t to lock down a price; it’s to find out quickly whether you have a real seller. If not, stay in touch for the long term.
Any estimate made this way is a rough screen based on unverified figures, not a valuation. Confirm everything in due diligence and with your own advisors.
Related answers #
- How is AI being used in self-storage due diligence?
- What are the most common mistakes when buying a first self-storage facility?
- What makes a good self-storage trade area?
Source: Mark’s post The First-Call Offer: A Different Approach to Finding Off-Market Self-Storage Deals
