On a Friday afternoon, in September of 2012, I sat at the kitchen table of my operations partner presenting yet another Self-Storage deal to an investor. This was one of her & her husband’s close friend.
The whole thing made me very nervous.
This investor has turned out to be a very rich relationship and this gentleman has served (although he doesn’t necessarily know it) as a mentor to me. I have received way more than just the opportunity to put another deal together. Through him I have learned more about the mindset and thinking process a sophisticated investor goes through than from anyone else. He has also helped me with my understanding of how to run a company because his family owned a big one in our hometown.
That meeting has allowed us to acquire four more projects.
I looked at how I got to that table and here is what I see.
Relationships and networking.
I truly wish I had something more profound to say, but the truth is it took me years to get to that kitchen table. Don’t get me wrong, I owned Self-Storage and had put a lot of deals together, but to really begin to hit a stride and get investor money somewhat turned on, it took a long time.
Here is how I got to that table. On the first Self-Storage deal put together, I went through all the people I knew at the time who I thought had money. In 1999, I raised a 20% down payment of a couple of million dollar facility and had thirteen investors in the deal. When that facility sold a few years later, they made money.
On my second deal, some of them invested again with their friends. So after a couple of more acquisitions, the circle of people I knew who had investment income was gone.
On the deal I presented at the kitchen table, I had ask the owner of that table to be an investor. They said they couldn’t then, but if they could be my partner, they would have their circle of influence look at this and other deals, and they have a circle of friends with high net worth. I had also worked with them before and knew she had a lot of hat I was missing in operations (she had actually worked for the first company I put together and knew the industry very well). Smart move on my part because her and her husband run critical aspects of the company freeing me up to grow it.
On each deal, we focused on investor returns and did what we had to do to make the deals work as presented. I have had one deal since I got back in the industry in 2008 that not do better than what was presented on the ten year cash flow statement to the initial investors (case study in book Creating Wealth Through Self-Storage).
I wish raising money and where to find investors was cleaner and more structured than that, but the reality is, life is about relationships. For someone who is an introvert and not socially skilled, that is a hard reality to accept, but I have.
Begin to develop relationships.
How?
Well, I am not the best at that.
My approach has been to add value. I learned early from Think and Grow Rich by Napoleon Hill, and for some reason it stuck, to “…always do more than you are paid for”. Give more than you get. Also, if you say something, then do it, period. As soon as you realize you can’t do something you said, communicate that, and create something new in that space. Honor what you say as sacred.
I often fall far short of the ways of being stated above, but I think trying to operate from there pulls towards you what you need. I am not 100% sure that is the “truth”, but “believing is seeing” as Wayne Dyer would way.
Here is the good news of all this, you don’t have to be very good at it to win. I am having the experience of winning and I am terrible at it. Just ask my wife and partners. It is easy to see my shortcomings (just like I think it is easy to see everyone’s). I have made way more mistakes than I have get things right in life, and I still have the experience of playing at a game I created, with rules I put in place, and have the experience of winning.
What more can anyone ask for?
So just start. Start knowing you are probably going to suck at it at first. If I am any kind of example, it shows that doesn’t matter. But just start and what you create will be so much more rewarding that the money you raise.
My younger sister passed away a few weeks ago very suddenly. I am still not over it. But that guy I sat around the kitchen table with…he was there with his brother supporting me during that extremely hard time.
Those are the kind of relationships possible in this business and in life. Even for a socially awkward person.
