Your Self-Storage Team

Self-storage tends to attract lone wolves who want the freedom and independence this business can offer.

But here’s the deal: no one can be successful by themselves. It takes a village.

Or a team, in this case.

Let’s discuss who I think are the players on your self-storage team if you are creating a self-storage project.

I have the privilege of scaling a new company (Resolve) with a construction partner helping small storage investors get to biddable plans, then execute self-storage construction using the process and team members I have utilized over the years in my own projects.

In this process of working with people, I have never been more present to the fact speed to market and overall success is a function of a strong team.

Here are who I see as the key members of a successful self-storage team.

1. Attorney: I have covered this in other episodes, but one of your primary team members is a good attorney. You may need more than one if you syndicate deals. Our attorney handles our rather small syndications as well as our contract negotiations.

Your attorney is indispensable and having them know your overall goals and strategies, and where any particular deal falls within them. Our attorney helped us design our overall strategy.

If you are interviewing attorneys, tell them a good attorney joke, and if they don’t laugh, move on.

2. Civil Engineer: This is a must for any construction. Unlike most other asset types, apartments, retail, houses etc., I tend to rely on this team members to drive the approval process with us.

Ideally, we want a civil engineer with a relationship with the players at the regulatory level who are going to have input and approve the project.

3. Surveyor: Often, in a market outside of our hometown, we rely on the civil engineer to recommend a surveyor, but they are important.

Usually, we need a staked survey, a topographical survey, and sometimes, but not always, a minor plat as well or an “as built” survey.

4. Environmental: I typically syndicate deals, and or have partners. I want to make sure I cover my tail, and in most cases get an environmental report.

Some people have an “I don’t want to know of any problems” approach. That may be a valid approach, however, for myself, I want to know ahead of closing on land if something is going to bite me down the road. I relate to environmental reports, such as insurance policies.

One way to cover your tail may be to tell the company doing the phase I report, that if any phase II is recommended, another company will be doing that work. This may remove any concern you may have somone will make a phase II recommendation in order to generate more work.

5. Architect: Usually, in our smaller self-storage projects for ourselves and our clients, we try to minimize the amount of architectural work involved. We tend to lean a lot on fabricators to create layouts and building plans, then have our civil and architect add to them. It is not always this exact approach, but we can use it as often as we can.

We often have renderings for regulatory approvals generated by the architect. Ultimately, they are generally responsible for the final building plans, but as stated above, we try to minimize our cost and errors concerning the fabricated systems by having the building plan portion of the final plans generated by the fabricator’s engineers.

This is our usual process for smaller self-storage projects. For larger, multistory Class A large projects, one would need to lean much more heavy on the architect than we usually do.

6. Project Manager: Who is on site during the construction phase is critical. Unfortunately, due to the cost, most small investors and storage owners can’t hire a construction manager to oversee the general contractors. So, who that project manager is during construction is critical.

In our construction company, during the construction portion, we use well-vetted project managers who are accountable to us and the owners. Sometimes, it is myself or Smitty, my General Contractor partner.

However, much of the “project management” is done in what we call phase I. This is the initial formation of the scope, design, and layout of the project. Here is where we see lots of unnecessary spending. In this phase we act as “Owners Representatives” coordinating with the Owner’s team members moving to biddable documents.

I have seen people spending $100,000 or more getting to biddable documents on smaller projects. Average is north of $60,000. We have been able to bring in this cost way below this utilizing our process.

7. City Planner: It really helps to establish a good relationship as early as possible with the person, or persons, who will be approving your project.

Sometimes, very often, it’s easier said than done.

Open, good, and clear communication can speed the process up. Often, these people are salaried, over worked and have no real motive to move anywhere near as fast as we want. Our cost of capital and speed to the market is of no real interest to them. They pay attention to a different set of criteria.

It can be helpful to try to understand what this criteria is. Not always easy to find out. I have seen some people I work with hire consultants who have been through the process with a particular City Panner or regulatory group to assist in getting a development approval over the finish line.

Regardless of your thoughts and opinions on this step of the process, they are the gatekeepers and, therefore, need to be related to as part of the team that is involved in getting your project ready to execute.

8. I used to relate to getting a loan as a one-time event that happens at closing. Give me the money so I can do a deal. Like a snapshot photo. Check at closing please.

Then I got in the self-storage business and started doing expansions, conversions, and ground up construction. Rather than a snapshot, my relationship with lenders became more like a movie. An ongoing process long after closing.

I finally realized that lenders are partners who happen to be vendors. I need to have a good partner because it is a long-term relationship. Not just from deal to deal but also during the life of each deal.

Believe me, when a deal does not go as well as planned or on the timeline you predicted, being able to have a bank pivot with you can really help.

Knowing the construction draw process, loan covenants, and all the terms of the loan are more important than ever today.

I have worked with large lenders that are heavily regulated, and the draw process has been extremely difficult and burdensome.

Money is a commodity, but lenders are not. They are part of the team and need to be selected as such in my opinion.

9. Partners & Investors. Unless you are the only owner in your storage project, partners and investors play a vital role. I couldn’t have gotten into the business without them.

Keeping people informed every step of the way to putting a project in service is key. I have discovered it is impossible to over-communicate.

Conclusion

Without these key team members, many of us would not be able to get out of the starting gate. So don’t overlook or take these team members for granted as you move forward.

My goal in this episode is to expand your idea of who team members are and how important is to select good ones. I have often been ask to help fix a problem for somone who didn’t have a strong team, or the right team members, or were missing some key ones. If we could have helped from the start, it would have made a big difference.

So, as you consider your next storage project, keep these key team members in mind.

If you would like to explore having us as team members to get a project across the finish line, reach out at mark@helmproperties.com.