Capital raising · StorageAce

Capital raising

and everyone . I’m getting some conflicting advice and would really appreciate insight from those of you who have actually closed on a self-storage facility.

I’m hearing two different approaches:

One side says to identify a deal, complete enough initial underwriting to determine that it fits your criteria, submit the LOI, get it accepted, and then begin raising or securing the capital.

The other side says to establish your capital structure and investor base first, whether through a fund or another vehicle, and then aggressively pursue deals. The reasoning is that once an LOI is accepted, the clock starts. Due diligence, financing, legal, inspections, and everything else begin moving quickly, and that may not be the ideal time to also start figuring out where the equity is coming from.

As a longtime business owner, the idea of committing to a transaction before having a clear path to the capital feels somewhat backwards to me. At the same time, I understand that investors generally want to see an actual opportunity before committing capital.

For those of you who have successfully closed self-storage acquisitions, how did you approach this on your first few deals? Did you build the investor relationships and capital pipeline first, find the deal first, or develop both simultaneously?

I’m especially interested in what worked in the real world, not just what works on paper.

Thank you. I appreciate the insight.

0 comments

Capital raising