Boy, I hear this ALL the time! “Scott, I can’t find any off-market facilities around me!”
The truth is, you might not for one simple fact – people who want to sell their self storage facilities put them up for sale. On the other hand, though, there are a lot of operators in any market who are just barely holding on, are tired of running their facility because they’ve never taken the time to build out a system that works FOR them instead of ON them, and then, too, there are those who have been thinking about selling but never really gotten serious about it.
Let’s talk about how you can get in front of those types of owners…
The first one – the owner/operator who is just barely holding on – is very common in the Class B and C world. Maybe they inherited the facility or bought it at the wrong time OR they bought it with the intention of “buying themselves a job” and now, years later, they simply don’t like it. These folks may not have gotten fed up enough to sell the facility yet, but if a well-informed investor came along and asked the right questions the right way, they’d likely be happy to continue the conversation. Chances are, they aren’t going to open an email or even a piece of direct mail, but if you simply stopped in and talked to them in an easy, conversational way, they might become very open to an offer.
You oughta try it!
This is almost the exact same tactic I recommend for those operators who are sick and tired of the day-to-day nonsense they allow in their facility because they never built a system to run it. If you want to catch them on a bad day, it’s probably anytime after the sixth of the month, when they’re having to chase money from late payments and they are “stuck” in the business. Again, face-to-face is so powerful! Remember, it’s altogether likely you might be the only friendly face they see or talk to all day, and the fact you’re asking intelligent questions about their business could – and often does – lead to bigger things.
Lastly, there’s those owners who have “been thinking” about selling for awhile and never got serious. These men and women often have trouble committing to a broker or agent because, honestly, they A.) are unsure of how to value the business (and may not trust anyone about that) or B.) they’re scared because they don’t know what they’d do without the facility.
This can actually work out perfectly, because once you’ve built a relationship with them, they might be VERY open to seller financing. They love the “job” aspect of the facility but might be tired of the stress of ownership. Seller financing could allow them to slowly step out of the operation, guarantee them income for a number of years, and allow you to move into a fantastic asset for no money down.
There are literally thousands of facilities with these three categories of owners in them and only a fraction are actually “for sale” right this minute. When you simply go out and meet people face to face, you’ll be surprised how positively they react.
By the way, there’s still a few tickets left for the Self Storage Academy next week in Orlando and if you’re ready for some warm weather and some hot new ideas for self storage, you can still grab a ticket here.