Joe Downs breaks down where self-storage deals actually come from: over 50% through direct outreach to sellers, 30% via brokers with pocket listings, and only 10% from LoopNet and CREXi, which he calls a retail graveyard. Cold calling and direct mail beat online listing sites because they face zero competition and offer the highest equity.
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All right, well, welcome to day 35 of the Storage 100. Uh, we're done with the academic stuff, folks. I hope you enjoyed, uh, last night. I know we had a lot of fun, uh, but now we're gonna be talking about the only thing that matters— finding the actual deal. I am Joe Downs with the Storage Mastermind. All right, so you can know everything about demographics and cap rates, but if you still can't find a deal, you got nothing. I spent 6 months once refreshing LoopNet every morning and found zero deals. It was a complete waste of time. I was looking in the wrong place. So today's going to be your wake-up call on where the real money is made in self-storage acquisitions. And we're going to move from theoretical to the actionable. And I'm going to break down the 3 main sources for deals and tell you which one is the absolute goldmine. So let's start by looking at the reality of where deals actually come from. First, you have to stop looking where everybody else is looking. This pie chart is the reality of the self-storage acquisition world pretty closely. If you're spending 90% of your time on LoopNet or CREXi or some of the other online listing services, you're looking for deals in the 10% slice of the pie. That's a loser's game. The vast majority of the deals, probably definitely over 50%, probably 60%, maybe more, are found off-market through direct to seller efforts. It's cold calling, that's walking on the lot. This is where you find zero competition and the highest equity. The next 30% comes from building a strong broker network. It's a relationship game that gets you pocket listings and a first look. Only about 10% of the deals are found on the real retail sites like LoopNet or MLS or, um, you know, any, any of the other— and there's, there's many of them. We call that the, the Or they call it, I don't call it, they call it the retail graveyard because deals go there to die. So let's talk about why that 10% slice is a trap you need to avoid. And it's a sticky trap because it's easy. You can just sit there at your desk and click, click, click and look away and get excited. I know the feeling. I used to do it all the time. But if a deal's on those sites, it could mean that every professional investor has already passed on it months ago, and there likely wasn't even a pocket buyer for it. So, and you're also looking at retail pricing sometimes. So sellers are still asking— we found on there the 2021 and 2022 pricing. It's 2026, folks. And they're just— I guess they're hoping to find a sucker, and maybe they were one themselves at that time. Who knows? Um, this creates bidding wars with dumb money, and we That can't just underwrite properly. And you don't want to be the greater fool who pays too much. The only exception is a truly mismanaged property with massive hidden value. Even then, you're fighting a crowd. So you need to get out of the retail market and into the insider game. And that means building your broker network. Broker network is where you're going to find 30% of the deals, and they're the gatekeepers to the best inventory. Brokers control 90% of deals over $2 million. You simply can't scale your business without them. If you see a deal on a broker's website, you're already too late. 10 other investors have already passed on it. Your goal is to get the first look and you want to see what's on their desk, not, not what's on their website. It's a relationship game, not a transactional one. Tomorrow, day 36, I'm going to be giving you the exact script to get on their VIP list. But even better than the broker network is the direct-to-seller goldmine. The direct-to-seller channel is the goldmine because it offers zero competition with and high equity. It's just you and the seller, usually no bidding wars and no highest and best deadlines. You're not just offering a price. Sometimes you're solving a problem for the seller, whether it's burnout or retirement or distress. This relationship-first approach is the only way to get creative control, and it's the best way to get seller financing. The catch is that this requires high effort. Folks, this is hunting or sowing, watering, and growing. It's not a shopping spree of broker OMs. But it is where you find your Black Friday and your Cyber Monday deals. Public service announcement, by the way: tomorrow I'm going to break down the exact tactics for this gold mine. So, but first, allow me to introduce you to a potential hunting partner. That's the wholesaler. The wholesaler is a bit of a wild card in this whole thing. Can be a massive shortcut because you are leveraging someone else's hustle. Wholesalers are out there doing the hard work of finding off-market deals. Deals for you. Never take a wholesale deal that's listed. That's a disaster. We'll cover that at another time. They're— but they're finding off-market deals for you. Then if you like the deal they found and the terms that come with it, you end up paying them an assignment fee to take over their contract, which is just other acquisition costs for you and would actually already be baked into your decision to make the purchase anyway. So, but here's a massive warning with this. Unfortunately, most wholesalers out there do not know how to underwrite self-storage very well anyway, not like our students. So you've got to throw out their pro forma and run your own numbers every single time. The only thing you need to tell every wholesaler you meet is 3 words: I buy storage. That's your new mantra. Now let's talk about where the suckers are looking for these deals. The wholesaler wildcard is great, but you need more lines in the water to catch a fish. So the online marketplaces are great for data, but not as great for deals. LoopNet is the Zillow of commercial real estate, and as they say, it's where deals go to die. I'd only use it to find active brokers and pull rent comps. CREXi is the auction house. Don't get caught bidding in wars with institutional money there. Instead, try tracking failed auctions to spot market trends. BizBuySell and about 100 other business franchise selling websites is where you find the tired mom-and-pop owners who don't really know how to value their business or their commercial real estate or together their facility or their property. It's a low percentage chance you're gonna find a deal there, and it's, in my experience, either gonna be wildly underpriced or wildly overpriced. Sad. But hey, someone has to look there and you just never know. If you start listening to Successful Idiots podcast, Successful Idiots, excuse me, I can't say my own podcast about how to use AI tools for your entrepreneurial and personal life. You could probably figure out how to use AI to do it for you, which is mean to create agents to go search those and script those sites. And no, I have no shame in promoting my other podcasts. It helps if it helps all of you become better storage owners and find deals faster and better. Anyway, always check that the real estate is included and avoid any business only deals from those biz sale websites. Sites. The pro move for all these sites is to call the listing brokers and ask them for their off-market inventory that has not yet hit the web. All right, so we've covered the goldmine of direct-to-seller and the shortcut of the wholesaler. Let's look at this sourcing matrix here and choose your hand. This matrix shows the kind of the reality of the deal flow. You either pay with money or you pay with time. LoopNet and the MLS are low effort, but the deal quality is Low. You're paying a high price for convenience, really. Cold calling is high effort and low cost, but it delivers the highest quality typically. But here you're paying with your time and your sweat equity. Direct mail, working with brokers, kind of the middle ground. They require medium effort, medium costs, but they do deliver, you know, high-quality leads. So you need to pick one or two of these high-quality sources and start building your pipeline today. Stop looking for the easy deals. Folks, the deals are out there, but you'll be hard-pressed to find them on the, on the, you know, the LoopNets and the CRECs and the MLSs. So you know the playbook now. So please hit like so the algos know you appreciate my efforts here. It's just like button. It's free. I'm not asking for financial pledges yet. I kid, I kid. I never will. Subscribe, of course, you don't miss the daily video drops like tomorrow's where I'll be covering working with commercial real estate brokers. And of course, Share this with that friend who's still refreshing the online listing service looking for the thrown away lottery ticket. They will thank you later.
