How to Find Your First Self Storage Deal - Part 2: UNLISTED PROPERTIES
Last week we discussed the ins and outs of farming the listings for your first storage deal. While there are deals to be had hidden amongst the numerous NON-deals that populated the listings, it may be necessary to dig deeper than that. One very effective technique is to send direct mail to the owner's of facilities within the market that you are farming. This is pretty straight forward regardless of if you decide to do it yourself or if you outsource the entire process. Though I know some of you will not have huge marketing budgets as you get started in storage, the truth is that doing it yourself won't save you much more than minimum wage. The one exception is that if you are mailing less than 250 or so pieces at a time. When I first got started, I picked the 4 nearest counties to me and used Google to manually generate a list of all the storage facilities in each county. I then printed, stuffed and stamped the envelopes myself. I did so because I didn't know any better. I encourage you to skip that mistake entirely and buy a list of storage owners from someplace like www.infousa.com or www.listsource.com and then find a company like www.yellowletters.com to print, stuff, stamp and send your letters for you. They charge as little as $0.77 per piece INCLUDING the stamp that would cost you $0.50 at the post office. No kick backs for me from any of these companies. I just thought it would be good to share some of the vendors I've used in the past.
Here's a couple keys to success relative to what you say in your direct mail pieces. First, Insert your own personality into your content. Be yourself. Authenticity pays dividends. Even more importantly, you have to be consistent and follow up often by both phone and in person (if local to you). We know from solid marketing research that you should expect to 'touch” the seller between 7 and 12 times before you get to the yes that you are looking for.
As a quick aside, I want to tell you about how I found my second facility, Bloomfield Mini Storage. This facility is located about 7 miles from where I lived when I bought it. As such, it was on my mailing list and I mailed to it every 3 months like clockwork. It, along with a few other mailers, got returned to me as undeliverable. Like an idiot, I expressed frustration and then tossed the envelope aside with the intention of re-checking the address before the next round of mailers went out. Of course, I neglected to do so and wasted another stamp 3 months later. Fast forward three more months and...you guessed it, same story. Then one day almost a year after sending the first letter I was out on a run and decided to pop my head in the door and talk to whoever was in the office. The nice lady behind the desk told me that she didn't own the place but gave me the cell phone number of the guy who did. I called him and to my surprise he told me that he managed the property but didn't own it...yet. I learned that he was in the process of buying it from the current owner and had been for about 6 months. For those following along at home, this means that when I sent my first 2 letters the owner was a willing seller. Had I been more diligent in my pursuit, I quite likely could have bought directly from her. Instead though, I got beat to the punch by a very nice, but entirely inexperienced (relative to storage) gentleman. Not ready to give up, I was upfront with the guy and congratulated him for beating me to it. Understanding that doing good is good business, I also offered to help him in any way that I could. Because I knew that he didn't have any experience in storage, I offered to advise him on some best practices, auction procedures, connecting him with suppliers etc. I also called him monthly to see how things were going for him and mentioned at least a time or two that although I didn't know what he paid for it and I didn't yet know what I could offer for it, I would be interested in buying the facility from him if he ever decided to sell. “Even if,” I said, “that happens to be the day after you buy it.” 18 months later, he called me to say that he had finally closed (long story) and that he remembered me saying I might be able to offer him a quick profit if he wanted to sell. We had coffee the next day and within a couple short weeks were under contract. Because of the way his purchase was structured, I still don't know exactly how much he made off of the deal but I suspect it was $50-70K in less than 6 months of ownership. And though its still been a phenomenal deal for me, my early mailer mistake cost me a good bit of money. I tell you this for two reasons. One, so you don't make the same mistake I did and two, to illustrate that you don't have to get everything perfect the first time in order to succeed in this business. By buying this manual and working through this program as prescribed, it tells me that you are smart enough to learn from those who have walked this path before you. Even so, no one is smart enough to get it perfect every time. Accept this and you'll enjoy journey much more than you otherwise would.
Cold Calling: This is another great way to find deals. I don't operate from a script but instead just strive to build rapport with the seller. An exhaustive discussion of the do's and dont's of cold calling is beyond the scope of this resource but I thought you might like to watch a real live call I made recently: http://bit.ly/Self_Storage_Cold_Calling
Just excuse my high pitched voice in the first 30 seconds or so;)....Its a great way to “disarm” folks who are often on the defensive when you cold call them!
Opening Doors: Same as above but in person. Just go get to know all the managers and owners of the properties in your area. Ask if they'd ever thought of selling and let them know you'd be interested in making an offer if/when the time comes. Remember, it takes 7-12 “touches” to be an effective marketer. Generally speaking, my campaigns involve 4 mailers per year, 2-3 calls per year and 1-2 pop in visits per year. The mailers won't take much time at all (almost none if you outsource them). The calls, though initially overwhelming are also very manageable if you break them up. Sitting down twice per week and making 10 calls will only take you an hour or so and within 6 months you will have called 260 facilities twice. The visits will take more time but these should be reserved for the best facilities on your list. The ones that best meet your criteria or the ones that have responded to your other touches in an encouraging way.
I hope you are finding some value in my storage musings and would love it if you'd post comments or questions below. And please be sure to subscribe below so you don't miss out when the next post goes live!