Short answer: There are two main routes. Partners usually share ownership, votes and the loan, which reduces your own liability; Mark sees this as a good way to start. Investors hand over capital and step back, usually through a syndication, which takes more experience, legal structure and trust.
Partners #
- Everyone usually has the same type of ownership, with votes and cash flow tied to ownership percentage.
- All partners are usually on the loan, which reduces your personal debt exposure.
- You give up some control, so agree up front on goals: how long to hold, the exit, and each person’s role (including who handles tax filings and decisions).
- Look for people already building wealth through real estate: local investor groups, exchange groups, social media groups and your own network. Lead with your strengths, such as finding and underwriting deals or overseeing management.
- Have an attorney prepare an operating agreement, ideally in draft before you start those conversations.
Investors #
Investors give you their money and step back; you are responsible for the results. This is usually done as a syndication, with separate ownership classes for sponsors and investors, and investors typically aren’t on the loan. It requires a good securities attorney and following their guidance closely.
Mark still uses both approaches. He suggests first-time buyers, especially those with a limited track record, start with partners.
Related answers #
- What makes a good investor or partner for a self-storage deal?
- How does a self-storage syndication work?
- How much money do you need to get into self-storage today, and how does debt coverage affect it?
Source: Mark’s post How to Raise Private Money for Your First Self-Storage Deal
