Most people I work with getting in the self storage business are individuals who think they are solo entrepreneurs getting in storage.
It often takes a while to realize they are not.
There is no way.
Yes, you may not have employees or partners…but I guarantee you, you are not going to do it all by yourself.
You need a team. Period.
No Man Is An Island
The business today is very complicated. Perhaps in the old days, one could function alone whenever they were. However, if those days ever existed, they are long gone.
In the Self Storage Bootcamp, day one morning one, we discuss building your team and talk about it all the way through.
Every person has different skills and knowledge and has different gaps to fill in executing a business plan.
But in general, there are some standard key team members you should have in place or close to being in place before you write your first LOI (or very soon after).
Attorney
I harp on this in the Bootcamp. One of our most important team members is our attorney.
I recommend having an attorney local to you (or close), who knows your business plan, perhaps even had input in it, and knows your long-term and short-term goals. It also helps to have one who is a good negotiator. In self storage, usually, the last stages of a contract negotiation are my attorney talking directly to the Seller’s or Buyer’s attorney negotiating items such as reps and warranties, indemnifications, etc.
Our attorney can also do the private placement documents we need for our investor partnerships, but for many I know, this is a different attorney.
If we need legal services in and out of state area, my attorney arranges it. He is involved in most aspects of our business.
We will generate the LOIs and then hand them off to our attorney to create contracts, or we will give the contracts we receive to him for review. Even though I am a commercial real estate agent who generates contracts all the time, I don’t do it in our self storage business. Our attorney does.
Everything our investors see in the fund-raising period, our attorney has approved.
Remember, your attorney is critical. Don’t leave home without one.
CPA
Critical for us because we have partners and investors usually. I am accountable for the funds, the taxes, the financial reporting, etc.
We often generate cost segregations reports as well for maximum tax benefits for ourselves and our investors, so I want a firm that can also handle all of that.
Our CPAs will tell us before closing how much to allot to the business, how much to allocate to goodwill, and how much to allot to land, which is a non-depreciable item.
I need this in place before we take our first investment dollar.
Civil Engineer
You could also include an architect as well here. But given how much small investors’ value-add-plays involve construction, having access to a good civil engineer familiar with getting self storage projects approved in a given market is critical.
We are usually in a very short due diligence period, and we have the engineer lined up before the execution of a contract.
Some people have architects as the lead role is design and approval. We usually use engineers and have them recommend an architect if we need one, and mostly we do.
Don’t wait until after you have a project under control to find one. We get a lot of valuable information from our engineers, which is important to know and sometimes use as we write the contract.
System Fabricator
I would also recommend developing relationships with some companies that manufacture self storage systems. We utilize the relationships to get current pricing information, intel on delivery times and new trends, and preliminary layouts that save time and money. We give engineers and architects how we may want the project, not to mention getting the systems to build.
These relationships are essential to us and save us time and money.
Contractors, GC, and/or Construction Managers
I would begin early on to have some go-to relationships with people who build self storage, or can oversee the construction if you feel you have some construction knowledge.
Often, their input will make or break a deal. Also, having a strong relationship today with a GC or builder is more critical than ever. It takes something to mobilize a team on-site to build or erect self storage, and being set back six months or a year (both of which I have experienced) can mean a lot in terms of additional construction and holding cost.
Construction today is harder than ever, and it is important to have a strong construction partner.
These are just some of the main team members to have in place early.
Other spaces we cover in the bootcamp you are either going to have to do yourself or have team members are:
- Finding deals
- Analyzing deals
- Conducting Due diligence
- Management of the facility once you close
Remember, no person is an island. It takes a team to succeed, but it is well worth the effort.
Good luck as you create your self storage business.
