Short answer: Partners are usually people still building their wealth; investors usually have already made their money and want something that beats the stock market without losing it. Mark learned to research each person, ask what problem they are trying to solve, and only present a deal when it genuinely fits.
Partners vs investors #
- Partners are creating wealth and often bring skills, time or connections as well as money.
- Investors have made their money and want to place it somewhere that beats the market without risking loss. They aren’t usually on the loan; that’s the sponsor’s role.
Finding the right people #
Mark suggests defining your “ideal investor,” someone you can relate to. Examples from people he has worked with: doctors (through a spouse in medicine), airline pilots, and, in his own case, people who had sold family businesses.
Early on he didn’t know many high-net-worth people, so he partnered with people who could help run the business and introduce him to their networks, giving up a share of the deal in return.
Get into their world #
The skill that made the difference for Mark was focusing less on himself and the deal and more on the other person: research them, ask what they are looking for, and if the opportunity doesn’t solve their problem, say so. Many of his early investors wanted to avoid losing money and to do better than an index fund; once they understood where the real risks in storage lie (mainly during value-add and lease-up), many chose to invest.
Related answers #
- Should you raise money for a self-storage deal from partners or investors?
- How does a self-storage syndication work?
- Why should you set benchmark returns before looking at self-storage deals?
Source: Mark’s posts How to Raise Private Money for Your First Self-Storage Deal and Five Decisions I Made That Created My First Million Dollars of Wealth
