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Self storage owners have a problem and you have the opportunity and skills to fix it. That is how you need to approach every conversation you have with an owner. They have a problem, and you have to come up with a solution. Maybe it's collectively, maybe it's you and the owner.
If everybody out there is calling these owners and saying, "Oh, you know, would you like to sell your facility?" and it's a random unsolicited phone call, most of the time the owner doesn't want to talk to you.
My business partner receives most of the cold calls, asking if he wants to sell our facilities. When he gets these calls, it's usually from a virtual assistant, and most of the time he’s extremely busy so he doesn't have a conversation with them. The only time he'll have a conversation is if the caller is a broker or somebody who knows what they're talking about, and is a little more serious.
Now, we're not the perfect target; we're not a mom-and-pop operator, and that's your target. But think about the idea that you and/or your virtual assistants are calling these owners, unsolicited. What is your goal? Yes, it's to build your portfolio. But let's go deeper – Your goal is to have a long enough conversation with that owner to understand what they need, or to identify their problem.
Do they need to sell now? Do they have a specific problem? If you’re able to chat with them, and start building a little rapport, they may start telling the story about their facility, and it's usually tied into their life story and a related problem.
I cold called property owners myself for years before I started hiring VA’s to take over. Here are some tips that I’ve learned, which I have found very effective when you start discussing numbers and purchase price with an owner:
Help them understand why you need gross revenue. You need to analyze the numbers like a lender or a banker would. Most buyers can’t close the deal without using a lender.
You need their gross revenue because you're ultimately buying a business from them. In order to buy the business and offer them a fair market value for their property, you have to know what they're making.
As you continue with conversations and start negotiating price, help them understand why you can pay what you can pay. If it's not enough for them, help them understand that other interested buyers are also unlikely to pay what they’re asking, because of the loan and what rates are today.
Maybe seller financing is a great opportunity for them. If they don't understand that, be ready to educate them and highlight the benefits to them (e.g., monthly revenue from P&I, lower capital gains tax since it’s spread across multiple years, etc.).
Remember, they have a problem, and you have to come up with the solution. Most deals are made; they're not handed to you.
Here’s an example of a storage facility we acquired in San Antonio, in mid-2023:
One of my virtual assistants called the owner, and I made the follow-up call.
At first, the owner would barely talk to us. She said she got bombarded with cold callers. Getting her to talk to us was so challenging - she wanted to hear an offer, but refused to provide ANY info or financials.
We finally got through to her by making an offer without knowing her revenue. We miraculously convinced her to send us one thing - the facility’s unit mix. Sounds crazy, but that was the only thing she would provide. Instead of walking away, we gave her an offer range based on the unix mix, our market research, and our proforma…It worked. We got her attention.
After this, she started opening up and we started to learn her story, and what she needed. It led to her telling me about a divorce that she had been going through…It was a four-year-long divorce, and she wanted to get rid of the facility as a result.
I had to have multiple conversations with her over the course of many months, and each time I talked with her, I could tell that we began forming a relationship and I started slowly gaining her trust that I was the right buyer.
Lessons: You have to be consistent with follow up calls, building rapport, and be willing to understand their story. And use the offer range to start the conversation on price!
What I have found from my experience is, when an owner is elderly, and they have run their facility for a long time, they can decide at any given moment that it's time to sell because what's going on in their life will often impact if and when they’re ready to sell their facility.
Here’s another example where we came up a solution for a storage facility we acquired in El Paso in Spring of 2024:
During due diligence we discovered that 30 units had doors that were unusable, and part of the building needed roof repairs. We went back to the seller and presented contractor bids to replace all 30 doors and fix the roof.
The owner said, "I'm not going to negotiate price, but let me see what I can do because I have a guy that can definitely beat your bids."
The owner came back and said, "I have a guy that's building a facility across town. He's going to install the 30 new doors, and I'll also get a roofer to fix the roof. I won’t reduce the price, but I'll fix everything."
This was great news for us, because we no longer needed to add the doors and roof repair as CapEx into our loan. Great for the owner as well, because he was not willing to give a price reduction. We collectively came up with a win-win solution in order to make this deal happen.
As a recap:
Your job is to get to know an owner and show them that you're serious, you understand their situation, and that you have a win-win solution.
On average, you need to have a conversation with someone seven to thirteen times until they actually remember you.
Really think about your goal: talk to an owner enough times so that when you say, "Would you mind saving my name and number in your cell phone?", they do it right there on the spot.
You want them to call you first when they’re ready to sell. Build rapport, and make sure they understand that you’re able to solve their problem.
Hope you found this helpful! Here’s to your next win-win!