Closing deals doesn’t just happen by chance. Today, Stacy Rossetti dives into two key skills you need to master: understanding how to raise capital and crafting creative deal structures. By honing these abilities, you’ll be equipped to secure the best possible outcomes in your negotiations.
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Fund Your $3M Storage Facility Using Creative Deal Structures
A 3-Million-Dollar Property
What we’re going to do in this episode is we’re going to go over some Self Storage 101 stuff and get you guys out there, get you guys looking, and make sure that you are putting an offer. The funniest thing is that I’m partnering on a deal right now in Ohio with one of my students. I got an email from her. She picked up this facility for $3 million. It was 630 units. Actually, the very first facility that she bought was 125 units and she got that facility in Southern Ohio for $100,000, maybe $300,000.
She turned that facility around and it’s worth at least $8,000 or $9,000. That was a very good first facility for her. She started getting out. She started looking for other facilities to buy a year later after she bought her first facility. She found this other facility. Actually, it was like three different facilities in a portfolio. The owner wanted to sell all three of them, and it was 630 doors, and they wanted $2.9 million.
She’s like, “How am I going to buy this thing? There’s no way that I’ll be able to buy this property. I only have $150,000. That’s it. That’s all we have. I barely can come up with that.” When we ran the numbers, I valued that property at $6 million. I was like, “You have to buy this property. You cannot let $3 million be passed up.”
A lot of people, when they hear numbers like that, this wall comes up. It’s like, “I would never be able to afford that, or it’s way out of my league, and I’m going to pass that one up because it’s not in my wheelhouse. I’m not going to be able to do something like that.” That’s how she was, too when I was talking to her. She was like, “I don’t know what to do with this deal. Maybe I could wholesale this. I’m not going to be able to buy this thing.”
I was like, “You have to buy this thing. You have to buy it.” We get into that a little bit. I cannot remember what the square footage is, but it was three facilities and it totaled 630 doors. The owner wanted $3.2 million. She talked the owner down to $2.9 million after we went back and forth and other stuff. This was years ago. It’s very faint in my mind, but it was making around $300,000 a year. That’s about right. If you have $300,000, $3 million. Back in the day, you could think, “It’s making $300,000 a year, I’ll pay like $3 million for it.”
That’s how you think. Obviously, $300,000 a year for 630 doors comes out to about $0.50 a square foot. If you do not know how to run commercial deal analysis, then you’re in the right place because I teach this. I’m not going to teach it now. You can buy my Deal Analyzer, and you can go through the course and you can learn how to run deal analysis. Right now, I’m going to give you the highlights of this deal so that we can get into the aspect of what I want to teach you, which is how we raise the money for this deal. Anybody can do this.
It came to around $0.50 a square foot. Obviously, $0.50 a square foot at $300,000 means that it should be double the price. That’s how we came up with the total value after the rents were raised. If you want to get it to the full price, it was coming out to $6 million. This was like the as-is valuation or the current one, and this is like the opportunity. This is what you look at. We look at the deal in three potential scenarios. We look at as is right now. What is it valued at? What’s the opportunity? What’s the potential?
The potential is taking it from a severely mismanaged facility to an income-producing property. This was producing income. This was producing and it was full, actually. Let’s say it was 85% to 90% full, something like this. It was making what it should be making. It was at $0.50 a square foot, and I think the area called for at least $0.85 to $0.90 a square foot, something like this. Remember, this actually was pre-COVID. I think she closed on the facility at either the end of 2019 or the beginning of 2020, right before COVID. This is the scenario.
Traditional Vs Create Deal Structure
It was three facilities, and it was all in one town. We ran the numbers and we had a valuation of $6 million, and the owner wanted $3 million. Obviously, when you see these numbers, you’re like, “I have to buy this property,” but how do you buy something like this? How do you come up with this? The way it works in funding or funding for commercial bids, it’s two scenarios. You have traditional, and then you have creative. The traditional is you go to a bank and you get a loan.
The creative is where you’re coming up with some structure, like you’re going to do some a JV, you’re going to do owner financing, or whatever you’re going to do, like some creative deal structure. When you look at more, what you could do is syndicate it. You’re looking at the overall picture when you look at deals like this. It’s like, “How can I fund something? How am I going to be able to afford $3 million?” These are the scenarios that you’re looking at.
Can I go to a bank and get a loan? In a bank, there are two different ways for you to fund something in a bank. There is a 30% down fixed rate, which is called conventional, or there’s SBA, which is typically 10% to 15% down and in the variable rate. Now there are variations of these loans. There’s never two loans that are exactly the same. Putting yourself into a box is going to limit yourself to what you can be able to afford in any type of deal. You’re like, “I can only afford X amount of dollars. I can only come up with $50,000. That means I can only afford this much.”
Putting yourself into a box is going to limit you to what you can afford in any type of deal. Share on XEssentially, what you’re doing is putting yourself into a box. Anything that falls in that box or comes across your place is what you can buy. If you’re thinking to yourself, “How much money can I actually come up with? How much money can I find? How much money can I actually find to buy?” That’s how you look at deals like this. Most people are not going to put $1 million into a deal for a down payment and go and buy something. They’re going to come up with some scenario to buy this property, putting as little money as possible down.
All investors that understand these concepts are going to be working on this. If you do not understand these concepts, then this is what you’re thinking right here. You’re like, “I have to come up with 30% down.” If you have a $3 million property, you’re like, “I got to come up with like $1 million. I don’t have $1 million. We’ll screw that. I’m out. I’m not going to buy this property.”This is exactly how my student was thinking.
She was like, “I cannot go with $1 million.” Especially nowadays, the banks want 30% down. Now you know how much money you’re going to need in order to get a loan. You find yourself asking, “I’m going to need $1 million to buy this property. Where am I going to fund this? Where am I going to find this? Where can I find this?” That’s where these creative deal structures come in to truly understand how you can do this. How you can come up with all these creative structures is what’s going to help you buy amazing properties where you can double the value of the property within a couple of years, and we presented this.
I’ve talked to many people, then they said, “I never do partners. I never take on partners because I’ve had a bad relationship with a partner and they suck. I’m out.” That also puts you into a small buy box. You’re not going to be able to afford a lot of stuff because you’re not thinking outside the box. Some deals don’t work out, but if you only have one deal and it sucks. I have done several very bad deals, and with partners, but I’ve also done many amazing deals with partners as well, too. This is one of them.
Basically, when I talked to the students, it was like, “Where am I going to come up with $1 million?” At this time, it wasn’t $1 million; it was like $850,000, which we had to come up with in order for her to buy it. What I did is I brought in two investors. I asked two of my investors if they’d be interested in doing the deal and they each brought in $250,000 each. That’s $500,000 and then she put her $150,000 in. That’s $650,000. We came up with like $650,000. We went to a bank and told them this was what we had.
“This is how much money that we have. Would you be interested in working with us?” Remember that we’re trying to bid $1 million. We’re thinking in our minds that we have to come up with $1 million. I’m working on trying to find one more person to put some money in to get us closer to that number. What the student did is the student went to a local bank, actually all the local banks because it wasn’t a very big city. It was a city of maybe 30,000 or 40,000 people.
They went to all the local banks in that area, and they told them, “We’re going to buy this property.” Everybody knew all the properties. Everybody knew the owner and they said, “We want to buy these properties. Would you be willing to work with us?” They’re all like, “Yeah, of course.” We started sending all the information over and having these meetings with these bankers. We let them know this is how much money we could come up with. Is there a way for us to work out an agreement to be able to buy this property for this much money?
Everything And Anything Can Be Negotiated
What happened is one of the banks was open to us printing less money down. In the end, we had to put 20% down or maybe even less, but they have come out to less because we only had about $650,000. Whatever that amount is, that’s what we had to put down. In our mind, if we would have been thinking, “We have to come up with 30% down right now or 15% down or 20%,” or whatever it is, and we passed up this deal because of that, we would have never been able to negotiate with the bank in order to be able to purchase this property. The truth of the matter is everything and anything can be negotiated.
If the bank wants your business, they will work with you. They will come up with terms that fit the deal to make the deal work to create this win-win situation. A lot of people don’t understand where they put this wall up, and they push the deal away because they don’t think they can do it. In the end, we had to come up with whatever that amount of money is. $2.9 million purchase price minus the $650,000 is what we had come up with. They financed $2.259 million or whatever. They financed this.
There are two parts to this whole investment or this transaction. One of them is how you’re working with the bank, right, and the terms that you can get with the bank. In the end, this $2.5 million, at the time, I think interest rates were like 6.5% or something. They got 6.5% interest and had the down payment as a twenty-year loan. That’s what we ended up getting. The banks started working with us. The other part of this equation is that we had the $650,000. There were three investors, plus me.
I got to cut the deal because I helped with the deal. There are four of us. Actually, I ended up putting some money into this deal. I put the closing costs and stuff into this deal. That’s what I ended up doing. I did the closing cost to close the deal. Now you’ve got this. Out of your funding, out of the way that you fund, we’ve got this conventional loan that we’re working on, and then we have a JV. We have a partnership. With these partners, we had to create an LLC.
There are four partners, and we created an LLC. This LLC purchased the company, and we all got an equity split in the deal. It was all dependent upon how much money each person put into the deal. Money that each person invests. Also, the student got another cut in the deal for being the boots on the ground and for being the manager. The student put $150,000 in plus has managed the deal. That is worth something as well, too. They got a cut for the money they put in and they also got a cut for managing the deal. I got a small cut in the deal as well, too.
The people who put about $250,000 or whatever they put into it also got a cut in the deal. They also got the bigger cuts because they put more money in. In the end, this student bought a $2.9 million facility and only put $150,000 in, and ended up getting a 25% split in the deal, something like this. They basically got a $6 million deal for $150,000 and some sweat equity. The student did an amazing job. You took this property from $300,000 annually to $585,000 annually, and now this property is listed for sale. This portfolio is listed for $6.5 million, and it was all done in less than three years.
This person, the student, only put $150,000 into the sale. That’s it. This $150,000, when they sell the property, is going to be $1 million. They’re going to make $1 million in three years on this property. They were going to pass this property up because, in their mind, they thought that they only had $150,000 and they would not be able to afford this deal. They could only afford $700,000. How many of you have looked at deals, looked at the price, and thought to yourself, “I cannot afford that property because of the purchase price?”
Raising Capital And Doing Creative Deal Structures
I’m sure if you’ve looked at storage facilities or any property, this is exactly what you thought. What you have to do is learn how to find money. You have to learn how to talk to people and ask people for money. If you want to be able to do a deal like this, let me know. If you want to do a deal like this, there are two things that you need to know. One is how to find money. Where do you find the money?
Where do you find all this money? Two is you have to understand creative bill structures. If you can understand all these different types of structures that I talked about, JV, lease option, RAP, syndicate, owner finance, if you can understand these structures, the sky is the limit for you to be able to do any type of deal, any deal that comes across your plate.
If it’s a good deal, you do not have to pass it up if you understand these structures. I hate passing up good deals. I hate it. It’s like the worst thing ever is to see a deal, know that you can make $3 billion on the deal and not be able to purchase it, and then find the money. Finding money is all about raising capital. If you know how to raise capital, then buy anything that you want. In fact, somebody reached out to me and they set up a meeting with me and said, “I’d like to invest with you,” and everybody knows we’re not buying storage facilities right now.
What I’m doing is partnering with my students and making sure that they are successful. We’re not buying storage facilities. We have sixteen and it’s enough for us. Basically, my goal is to partner with my students right now. This guy reached out and he said, “Stacy, I want to partner with you. I have around $300,000. We came into this money and I’d like to lend it to you, give it to you.” I was like, ” I’m not taking any money right now. I don’t need it, I don’t want it, but if you’re interested, you can partner with one of my students.
He was like, “Yeah, I’ll be open to that.” I was like, “I’ll be in the deal. I’ll be there and I’ll be part of the deal. I’ll get an equity split. I’ll be the mentor. I’ll be the coach and then we’ll bring your money in as well too and then we can all do the deal together.” He’s like, “Yeah, I’m totally open for that.”
The next week, I happened to be talking to one of my students and it’s a deal that we found for them in Turnkey Acquisitions and they’re looking for a little bit of money to be able to put in for the deal payment, like this deal. It’s like a $1.8 million deal, and the owner is going to seller finance that deal, but the owner wants like $300,000 down or something. They can come up with some of that money but they cannot come up with all of it.
I was like, “I know this guy that has the money and he’s looking at the partner. Let’s meet him and talk to him.” We met this guy, the partner, and the student on Zoom and went over the deal, and the partner said, “Yeah, let’s do it. I’m interested. I’ll put the money in.” It was that simple. I make it sound simple, but it is. You know what it is? It’s that I ask people for money. That’s it. I ask people for money.
If you cannot get into the habit of asking people for money, then you’re never going to be able to do this because syndicating or asking a seller to seller finance is basically asking them for money but asking them to be able to do a partnership or syndicating or owner financing is asking somebody for money. The two things that you have to learn right now are how to raise money and how to structure a credit bill. You have to learn how to do credit deal structures.
The two things that you have to learn are how to raise money and how to do a creative deal structure. Share on XRight now, it’s very difficult to fund deals. It’s a bad year and maybe like this next year as well too, we don’t know. The more money that you have available to you, the more chances that you have of being able to do more deals. What I want to reiterate is that I help my students. I helped that student come up with the money for the investors because I’ve been raising money for many years now. I have a lot of people that I can lean to and ask money for. The truth is that I had to start somewhere, like you’re starting somewhere. The very first person that gave me money to do a deal was my neighbor.
I happened to be walking my dog, and my neighbor came down and was like, “I haven’t seen you in a while.” I was like, “Yeah. I was at this training that teaches people how to raise money for real estate investing.” He’s like, “Is that what you’re getting into?” I was like, “I’m thinking about getting into real estate investing. I’ve been trying to educate myself on how to do the investing part, but also how to raise the money.” The neighbor was like, “That’s interesting. I lent some money out to my condo. I made a good return on that money. I’d be interested in doing something like that again.”
He told me that he wanted to give me money. I was like, “Really?” He’s like, “Yeah. I’d be interested in lending some money out if you’re going to make some real estate investments.” I was like, “Yeah, we could totally talk about it.” He’s like, “Cool, let’s sit and talk about it. You can show me what you’re doing.” We set the time and like, “Hello, meeting. Hello, presentations,” back when it’s presentations. I was with the sweetest guy who sat there and listened to my presentation, and he was like, “Yeah, let’s do it. I’m open to it. Let’s try to figure out what we can do.” That is how I started out in funding lenders.
I found some random guy who was willing to give me money to do real estate investing. All I had to do was ask. I had never done a deal before. I’d never done any real estate investing before. There are people out there who are willing to partner with you or take a chance on you, but the only way you’re ever going to be able to find those people is if you ask. I had an email sent to me. It was either an email or it was like a YouTube comment or something. It was like, “Just wondering how you find all the private lenders. Is there a place I can go to find private lenders so that I can do more deals?”
I wrote back to this person and I said, “A private lender is either going to be friends, family, or colleagues that you know.” That’s what private lenders are. That’s the truth. Right now, I’m telling you that you have to learn how to raise capital in order to do a whole bunch of amazing deals, especially right now because everything is so expensive. Commercial real estate do nothing but get more expensive. It’s very hard for you to find a deal under $500,000. It’s very hard.
If you don’t know how to raise money, you’re not going to be able to play this game. This is something that you have to learn, such as how to raise money, how to talk to people about money, and how to ask people for money. I want you to make this a goal for yourself and say, “By the end of the year, I’m going to raise like $200,000. Who can I talk to that can give me money for a deal?” Either a storage deal or residential or multi-family or whatever. This is it. You have to ask and then come up with a number.
The Deal Analyzer
Whatever number. “I think I can raise $200,000 by the end of this year. Who can I ask that may be able to do this?” I want you to learn how to structure deals so that you can buy more deals. If you cannot structure deals, then you’re not going to be able to do this. This right here, this owner financing, this is all part of my Deal Analyzer. This is everything that I teach. This is part of the deal analysis. On my Deal Analyzer, you’re giving a cash offer, owner financing offers, and then a bank financing offer. You’re running deals like that.
If you don’t know how to do it, I highly recommend that you at least start with the deal so that you can learn how to put these offers in. If you’re not putting offers in that have creative deal structures, if you’re only putting one offer in, it’s just an offer, then you’re screwing yourself over. You want to make sure you’re giving one offer that has 3 or 4 different types of scenarios. That’s what the Deal Analyzer does. Also, what I wanted to tell you guys was that all my students can come to this bootcamp for free. The bootcamp is called Funding Them.
It’s two full days. The virtual bootcamp, and it’s basically teaching this right here what I’m teaching. How to raise money and how to do creative deal structures. I own sixteen facilities. Of the 16 that I have, the first 10 that I bought, I had private lenders. A private lender is friends, family, or colleagues. I ask people for money and this is debt lending. The first ten. Number eleven is my first JV deal, plus owner financing. Some of these are owner financing. That’s not true, yeah, so ten, that’s not true, yeah.
Some of them are owner financing, and some of them are private lenders out of the first ten. Number eleven, I had a partner, and I received the deal owner’s financing. Numbers 12 through 16, I syndicated the one I did. That means I crowdfunded the deals. I also got the owner financed. I did JV agreements, and I had GPs and LPs. That’s how it worked for me. The first ten, I did regular like creative deal structure, owner financing, and debt lending. The 11th one, I was like, “Having a partner on a deal, let’s try that,” and then by the 12th one, I was like, “I’m ready to do some bigger deals. I want to get out there and do big deals, and I need a lot of money. I need to understand how to syndicate, how to crowdfund, how to set up partnership agreements, this stuff.”
Slow And Steady Wins The Race
That’s me, and I’m also slow and steady winning the race. My husband and I look like we do a lot of things, but the truth is we are super slow. Everything we do takes forever. This is like eight years in the making. I told you, the first deal on this one that I went over, the first deal that this student bought that was maybe $300,000, and then the second deal was $3 million. The other one that I told you about, the other student now owns five facilities.
The first one was a little tiny one, maybe $250,000. The second one was like $600,000. The third one was like $1 million. The fourth one was maybe like $1.5 million. The fifth one was like $2 million. This one right here, they syndicated. The sixth one is the one where I’m going to bring the money in, and we’re going to do a JV and we’re going to get an owner financed. If you figured this out, they’re way faster than that. It looks like we’re fast, like we know what we’re doing. The truth is my husband and I were super slow.
If you have somebody that’s showing you and teaching you how to do this, how to find money, how to structure deals, and how to visually understand how all this works, and how to do deal analysis, then it goes a lot faster. For instance, the only thing holding this person back is finding good deals because it’s hard to find good deals. The money is there. They’re ready now. They’re ready to do more deals.
The Sky Is The Limit
You get to the point now where the only two things you’re focusing on are finding deals or finding money. If you can do these two things, then the sky is the limit. That is what it is. I wanted to point out that the bootcamp is coming up. I hope people come to it because it’s not going to get any easier to find deals and find money. If you don’t educate yourself on these creative deal structures and raising money, then you’re not gonna make it. There are too many players out there that know how to do it, and you’re also competing with people like me.
The only thing you should focus on is finding deals or finding money. If you can do this, the sky is the limit. Share on XFunding Them Bootcamp
There’s a lot of these out there. Your buy box, the chance for you to get into this industry and actually do well and be successful, is shrinking, and it’s only going to get more and more difficult. I hope that you come to the bootcamp. It’s a virtual bootcamp. You don’t have to travel or do anything. You hop on Zoom and listen for two days, and I will take you through all sixteen of my deals and show you how I structured or how I found the money and how I structured those deals. That is the purpose of the Funding Them bootcamp. You should have gotten the first email on that.
We’re starting to email out about it, and that’s why I want to talk about it. All my students that are StorageNerd students all get to come to that for free, but everybody else will have to pay for it. I typically don’t open up my bootcamps to the public. I’ve never done it outside of now. This is the first time, and this bootcamp only happens once a year. That’s it. If you do want to get into commercial deal analysis at commercial real estate, I highly recommend coming and sitting and listening so you can visually understand how to structure commercial deals. That’s it.
James is asking about wholesaling. Wholesaling was in the Finding bootcamp, James. I do wholesaling in the Finding bootcamp. That is not going to happen again until January of next year because I only do my bootcamps once a year. I do have a wholesaling course that’s going to come out, but the wholesaling course is still being worked on. It’s going to take a little longer. I need to do a couple more videos and stuff on it.
Eventually, it will come out. Any other questions about what I went over anything with funding, raising capital, or the bootcamp that’s coming out? We have Michelle saying, “If you don’t mind, how do you get around the syndication rules since technically if someone is providing money for passive lending and not actively involved, it’s considered a syndication?”
The syndication, you have to set up a PPM. You can structure your deal any way that you want. You can have a syndication where you have GPs and LPs and you raise the money for the down payment and then you have the deal seller-financed. The structure of the deal doesn’t matter in syndication. We’ll go over that actually in the bootcamp. My attorney, David, is going to come into the bootcamp. He’s going to talk about SEC rules and stuff. This as well, too. You can ask him. He’s an SEC attorney. That’s all he does. He’s going to come on and like ramble about SEC stuff for like an hour probably as well, too.
Why wasn’t this deal considered for SBA? We could have done an SBA loan, but we wanted to have a fixed rate, and remember, most of the time, SBA is a variable rate, not only in some circumstances, and some lenders can do fixed rates. Right now, you’re seeing more SBA loans with fixed rates. Back in the day, there were no fixed rates for SBA loans because the rates were so low. They want that to be variable. Think about it. If we would have gotten an SBA loan, we would have gotten that 6% or 6.5%. Whatever this interest rate was, it would now be at 13% interest.
You don’t want to get into a deal at 13% interest unless the numbers work. I have a deal right now that’s an SBA loan, and we are paying 11% interest, and it works. The numbers work because we’re doubling the value of that property. I’m not doubling, tripling the value of that property, but if you don’t have that spread, you can’t afford that interest rate. A $6.5 million facility, you would have to put an offer in for $4 million to make the deal work. Why would you sell a $6.5 million property for $4 million when you did all the work?
I would never sell. I literally took it from $300,000 to $600,000 a year. Why would I sell this property to you? This is how owners think. The question about finding deals, “What information should I ask the seller for analysis?” That is on the Deal Analyzer. Of course, everything that you need in order to run an analysis is in the Deal Analyzer. That’s what you can do is purchase that and watch that. Private money lenders need to know, like, and trust you. That’s exactly why I said your private money lenders are going to be like friends, family, and colleagues in the beginning. Your private money lenders look like this. You have a couple of different circles.
That’s why I teach in the book camp. A little taste of it. This is your circle of private lenders right now. This is your friends, family, colleagues. That’s how big your circle is. It’s not a big circle. Yeah, we all know that, but you do have friends, family, and colleagues that you can ask for, and they may give you $20,000, $30,000, $50,000. The truth is later, it was like, “No, this person doesn’t have money.” I’m going to tell you, a lot of people have money. Put this whole mindset thing away.
You have the second portion. Here’s this first tier. The second tier, this is going to be like acquaintances. Acquaintances are people from like that know these people. Once you start getting one private lender or two, they’re like, “I have a friend that can do this. I have another friend.” I don’t have 100 investors. It’s like all these people are referring to each other and it’s building all of each other.
You have to get your first little tiny handful and build that out, and then that’s it going from there. These right here are strangers. You cannot ask strangers for money. You cannot, by law, ask people for money that you do not know. You’re going against the SEC rules. We’re going to go deeply into this in the bootcamp. The only way that you can ask strangers for money is when you syndicate, and only with the 506(c). I’ll show you how to do that in the bootcamp as well. Thank you, James, Heather, and Ceasar. They are the only three people that abused me by saying they want to do a deal like this.
I’m assuming that everybody else that read this does not want to do a deal because they want to take a $3 million deal to a $6 million. Okay, that’s fine. You can go buy a small deal, whatever you can afford. Keep your buy box small. “Can the seller finance part of the purchase?” Yes, the seller can do anything. You have to sell equity. The seller can do anything that you ask them to do. I can’t wait to tell you how I bought a facility by bringing a partner in.
The funny thing is like, okay, yeah, these sixteen facilities, all these facilities, I have never put any money into purchasing a facility in any of the facilities. No money into purchasing. This is a lot of real estate, or here’s a lot of real estate, outside of maybe $25,000 to $50,000 total, maybe in all sixteen facilities. Now, I have included operating expenses because we buy severely mismanaged facilities. That’s how I get the lenders to work with me and say, “Look, you give me the money to purchase, and you purchase this thing, and I will manage the operations. If we have to come out of pocket for anything, I will come up with that money.”
That’s how I get 100% of the purchase price. We’ll get into a lot of different tactics on what you can say and stuff, but I haven’t put my own money into any of these things. I’m always thinking, “How can I buy this deal without coming up with any money to buy this deal?” That is how I think. The reason why I think that like that is because that’s this era right now. You should be thinking, “How can I buy this property without putting any money into this property?”
Think Outside Of The Box
When I got started in real estate in 2010, there were no banks available for money. There was no traditional financing, and I could not go to banking again, so because of that, I started thinking outside the box. I started asking people for money, and they started giving me all this money. There was a lot of money out there and there were a lot of properties out there to buy, but there were no banks that were going to finance. I ended up becoming good at asking people for money, and that is how I got sixteen facilities.
I’ve done like 250 transactions since 2010. I’ve done a lot of transactions. I haven’t put a dime of my own money into any of them, and how did I do that? All right, it’s because I thought outside the box in order to fund my deals. Okay, question. Let’s see. “If you don’t put your own money, how does the equity split decide?” That’s all negotiations. As I said, Heather put only $150,000 into a $3 million deal, and then they came up with a fair equity split because she was going to manage the property and do all the work and get it up from $300,000 to $600,000, so that’s worth something.
The people who partnered with her were okay with giving a split to her because of that. There’s all how you sit and negotiate and your negotiation tactics and actually like what you think you’re worth. What do you think you’re worth? I’ve done deals where I don’t make a lot of percentages in the beginning. I was like, “Let’s give it all away.” Now I’m like, “Now you want to deal with me. This is how it is.” It’s the value. On my phone, I have a pop-up. At maybe around 9:00 PM every night, I have a pop-up as a reminder.
It says like, “I’m worth the money that I make,” because this is a mindset thing. People don’t value themselves as highly as they should, and because of that, they don’t negotiate, and they don’t learn how to negotiate properly. Sometimes, it takes a couple of times for you to figure it out, but you should start telling yourself, “I’m worth the money that I make. I value myself at a high level,” and then you start negotiating. The truth is that people will work with you. You know how to talk to them. They’ll work with you. Anyway, that’s my two cents. I’m sticking to it.
People don't value themselves as highly as they should, and because of that, they don't know how to negotiate properly. Share on XCaesar is asking when my coaching student doors are going to open. I don’t know when I’m going to open the doors to StorageNerds again. Make sure that you’re on the waitlist. You can go to StorageNerds.com. I honestly have the doors closed because I’m trying to help the students who are in there to get the deals. StorageNerds.com is where you can get on the waitlist, but for now, you can buy the course. It’s Super Simple Self-Storage.
You can get the Deal Analyzer, you can come to the Wednesday trainings, and you can join the Facebook group. These help you get you started for when I do open the doors. I highly recommend, if you can, come to the bootcamp on May 18th and 19th, and spend a couple of days with me, and let’s learn how to fund some of the deals. I appreciate you guys hanging on until the end and I will see you guys at the next session. Take care.
