There have always been crooked people who tarnish the reputation for those who raise money for investment purposes.  A recent example is Bernie Madoff.  Many people also have a "stigma" for sales people.
    
This hit home to me recently when someone close to me said that they did not trust realtors and that I could not be successful in the investment business without being deceitful.  I found this very disturbing.  Why do some people think this way?
    
I think it is bad personal experiences they have had and the fact that the only successful and wealthy investment specialists that get media attention are those that have done wrong.  This is sad.  There are many examples of successful businessmen who were known for their high level of integrity and honesty.  One example is Conrad Hilton, who I highlight in this issue.

 
Yes, maybe it is true that the people who get rich the quickest tend to be dishonest, but their wealth or business doesn’t last.  They either get caught or their business slowly dies since referrals and repeat customers are vital for success.  Plus, even all the money in the world can’t help them ignore their conscience.  Deep down they are not content with what they have done.
    
A successful investment business is built on trust.  For people to give you money they have to believe you are being honest with them and are capable of finding good investments.  It may take you longer to find deals worthy of your promotion, but these deals will create wealth for your investors, not just yourself.

What do I do to analyze a potential storage deal?  First, I analyze the numbers similar to how you would with multi-family.  Find the Net Operating Income and the Cap Rate.  I want deals with cap rates of at least 10%, based on realistic numbers, not necessarily those that the seller provides.



Second, I will research the location.  I want areas that are growing or in the path of development.  I check population growth, population within 3 and 6 miles of the facility, and if there are new jobs coming to the region in the near future.  The specific location of the facility is also very important. Most customers come through drive-by, so the facility should be on a busy road, easy to access, and highly visible.

Third, I research the supply of facilities in the market.  Are there building permits for new facilities?  Is the current supply of storage space too much for the population?

These are some of the steps I use to find deals.  I am currently preparing to submit offers on a few facilities, so if the idea of investing in a carefully-picked distressed asset that will provide future cashflow for years to come appeals to you, please contact me with your interest.