Question #
What strategies can be implemented to leverage partnerships and raise capital in the self-storage market?
Answer #
Some people focus on equity that can be created and how fast they can sell or refinance to get that equity.
There is no right or wrong benchmark to focus on.
Just create them before you start looking at deals.
A formula for failure is to be looking for a “good deal.” Why?
Because that is a moving target that generates emotionally based analysis and creates more opportunity for failure, or at the least, a hodgepodge of different types of deals.
This decision helped us be and appear disciplined in our acquisition approach.
I quickly saw early in my career that if I only did deals myself with my own money, it was going to be a long, slow journey.
I immediately saw the need to learn how to raise money from others.
Yes, I had less ownership and had partners and investors, but that was “leverage” in my mind and allowed me to (1) grow faster and (2) spread risk over more locations and facilities.
So the decision I made was twofold: (1) to learn how to present storage opportunities in a way that solved a problem a potential partner or investor had and (2) find partners who could expose me to people with money to invest.
You may already know high-net-worth individuals, but I really didn’t.
So I approached potential partners who could help me run the storage business, be sponsors with me (again, I had to give up a piece of the pie), and introduce me to their sphere of influence.
Source: Five Decisions I Made That Created My First Million Dollars of Wealth
