The Storage Investor Show
Learn how to turn your cash into cash flow with self-storage and small bay industrial. If it has a roll-up door, The Storage Investor Show covers it. Your host, Kris Bennett, will ask the right questions to help you find, fund, and close your next deal. New episodes every Tuesday.
The Storage Investor Show
Mastering Direct Mail for Off-Market Storage Deals
Radius Plus is the industry’s leading market intelligence platform, providing the most comprehensive data and analytical tools for deep-diving into self-storage location intelligence.
Book a demo using this link
Or visit www.radiusplus.com to find out more.
DESCRIPTION
In this episode of the Storage Investor Show, Kris Bennett explains the importance and effectiveness of using direct mail letters to find off-market deals in the self-storage and real estate sectors.
He outlines the advantages of targeting off-market deals, such as avoiding competition and dealing directly with sellers. Kris provides a step-by-step guide on crafting a compelling letter, including introducing yourself, being credible, respectful, and offering multiple closing options.
ABOUT THE GUEST
Kris, founder of Bennett Investments, acquires Class B self-storage and small bay industrial properties. Since 2021, he’s closed $130M+ in deals. He hosts The Storage Investor Show and speaks at UNC.
Follow him @thekrisbennett or storageinvestorshow.com and bennettinvestments.com
BOOK A CACTUS DEMO
Cactus will save you hours per deal with clean comps, rent data, and intuitive analysis tools—all in one sleek platform.
Book a free demo using my link and see why top investors are switching to Cactus: https://www.trycactus.com/
NEWSLETTER
Get tips to help you turn your cash into cash flow with The Storage Investor Show Newsletter
https://storageinvestorshow.com/newsletter
Hey everyone, welcome to the Storage Investor Show. I'm your host, chris Bennett. Today I wanna walk you through a simple but powerful tool in the Self Storage Investor's Toolkit, and that is sending letters to find off-market deals. I've done this for a while and, whether you're in Self Storage, small Bay, flex, industrial or Residential Real Estate, direct mail still works okay, but when it's done right. So let's break it down. First up, why do we want to go off markets? When you're competing on market, especially in today's competitive environment, you're going to come up against institutional money brokers blasting out deals to hundreds of buyers, pricing that often reflects peak assumptions. Everything has to kind of check the box and go right in order for that deal to make sense at that particular price the seller wants. If you go off market, you're getting to the seller before all of that noise starts to surround that deal. If you know what I mean, you have a chance to negotiate directly. Often you can build a relationship. You can meet for coffee. You have several phone calls to discuss things. You can often find properties that haven't been optimized, meaning that they're mismanaged or they're underutilized. Maybe there's more space to build some more and the owner just hasn't gotten around to it because they run a couple other businesses. It's also owned, free and clear. Who's somebody? That's just they're retired, they aren't pushing rates, they aren't trying to maximize the situation, the revenue there at the facility. So that's where the real value in deals is created and that's why you want to try, if you can, to go off market Quickly here. There's nothing wrong with on-market deals. I've actually done a few through LoopNet, believe it or not. I've found a couple of deals and closed those deals and they've done really well. So there's nothing wrong with going on-market or doing broker deals. But just if you can go off-market using letters, I think it's going to really maximize your potential as an investor.
Speaker 1:So why do letters work? There's a lot of ways to go direct to the seller. You can cold call, you can text, you can door knock. Obviously do texting legally. There's rules around that. We'll get into that right now, but I think you know what I'm talking about. But even when I say door knocking, I mean going and stopping by the facility. Driving for dollars, some folks call it.
Speaker 1:But I love letters and because they're tangible, right A well-written letter. It feels personal or it can feel personal. It sits on the kitchen counter. It usually gets opened every single time. If you ever get your mail, you get a lot of junk and other things. But if you see one of those little, you know invitation style letters or even just a regular letter, but it's looks like somebody's put some effort into it, wrote the address down by hand or at least put a label on there, it looks like somebody actually did something. It wasn't automated. Those always get opened, right. So that's what I'm talking about, right, it creates a different kind of engagement with the seller than a quick call or a text or whatever. That can feel kind of intrusive at times. So let's get into what the letter should say, right, what goes into the letter? Here's the formula that I use.
Speaker 1:So a quick intro, briefly. You know authentic. Hi, my name is Jim, whatever. In my case, my name is Chris. I'm a local investor looking to buy self-sort, looking to buy flex space. You know, whatever it is in your area, I live locally. I may say something like that or I may not, it just depends on the person. But I explain why I'm interested in the property and in my letter I just say it's because it fits our criteria for size and price. I forgot exactly what the words are, but basically it fits our criteria. You can say something like I came across your property at such and such address.
Speaker 1:And then the next part is you kind of want to be credible, right? I let them know that I'm not a broker. Oftentimes off-market sellers they don't want to go through a broker for a various number of reasons, but they just don't want to. So I let them know I'm not trying to broker the deal and I say I've closed on similar properties in North Carolina or wherever it might be. Or I've closed deals like yours. That's a little bit more generic. I'm looking to buy directly. You could say I've closed on similar properties in your state, whatever state you're looking at in North Carolina and Georgia, and I'm looking to buy directly without a broker involved. So that would be a very easy way to say that you're not a broker, all right.
Speaker 1:And then be respectful, low pressure. If you ever thought about selling or would just like to have a conversation, feel free to call or text me. And then obviously, you leave your phone number, email, your name, of course, a website, if you have one. Keep it to one page, right? So let me go back through that real quick. Introduce yourself briefly. Explain your interest in the property. It fits our criteria. Be specific and credible. I'm looking for deals in this market and I don't want to work with a broker. I want to do without a broker involved, or I'm not a broker, whatever. Be respectful. If you ever thought about selling, give me a call, et cetera.
Speaker 1:You might want to include some ways you can close. I can close cash. I can close with typical financing. I can close with a combination of seller financing, traditional financing, whatever. Give them some options if you'd like to. And then obviously include your contact info phone number, email address at a bare minimum. And then, if you have a website, do include that as well. And then keep it to one page.
Speaker 1:Keep it very simple. I wouldn't worry about corporate branding. I mean, if you have that on there, a logo and all that, I'm not saying it's not a big big deal. I've gotten letters like that personally from other folks and sometimes it really just depends on the person. There's no right formula. Some people don't like that, some people do like that. So really you got to go with what you feel comfortable with, but try and keep it as simple as possible.
Speaker 1:I would not go into a long paragraph about why you're the best and the greatest and all this stuff. People want to know what's in it for me. So letting them know hey, we have experience, which means we're going to treat you fairly. Hey, we've closed before, which means we can close. So, in other words, here's the benefit, here's what we've done, but bring it back to the seller and how it benefits them. Or, excuse me, here's the feature, like what we've done, and then bring it back to the benefit to the seller of doing business with you. Keep it short, brief and straight to the point, all right. And then a little pro tip here for you. If you have a little bit of time, I would recommend printing them out. So I send out roughly 200 letters per week and if you want to get specific on a couple of them, you can include a handwritten little note, in other words, at the bottom of that letter.
Speaker 1:Let's say you really liked this one deal. Like you're sending out, let's say, a hundred letters and there's like 10 of them that you've really looked closely on online or whatever. You really like those because they're nearby, whatever the reason might be. You might single out those 10 letters and individually write on there. Ps, I'd love to do business with you. Please give me a call. Like a quick little handwritten note on top of like the printed letter? I've done that numerous times as well. You could use a service that simulates handwriting. I've seen those in the past as well.
Speaker 1:Really, it depends on what you want to do, what kind of speeds up the process for you. There's always a trade-off right. If you hand wrote a hundred letters, guaranteed they'll be open, guaranteed it's very personal. Also, guaranteed that will take a very long time. If you print all the letters and don't handwrite anything, that's going to be the fastest way to do it. The easiest way to do it is to hire somebody else to do it for you in like a mail house, right, and print all that and send it out for you. So you don't have to think about it. And this may be a combo where you print some and then you handwrite a little note in some of those that you really, really like to try and have that personal touch. It's really up to you. Just pick something, do it and as you do it, you will then kind of create your own version of what you want and you'll understand how to do it better, quicker, faster, all right, okay, I think that's the main gist about the letter itself.
Speaker 1:Now we need to get into real quick the properties. Who do I send it to? Right, this is obviously important. Who do we send it to? How do we get that information? There's a couple ways to do it, from very cheap to very expensive, all right, so it comes down to your list, right? Do you want to have a good list? You want it to be curated, you want it to be targeted to folks that can sell the most expensive way. But the most accurate way to do it is to use Yardi Matrix. It costs money, of course, a couple thousand dollars per market. The more markets you buy, the lower the cost per market, marginally.
Speaker 1:But whatever, you can use that data to then sort and find out who's owned the property for at least 10 years, for example. Who owns it free and clear, with no mortgage, who are the real mom and pop operators not the institutional folks and maybe some of them own a couple of them, a couple locations. One owner might own a couple locations, so those are the ones you typically want to target. You could target folks who've owned it for a few less than 10 years. It's not a problem. Some people are willing to sell within that timeframe. But it's most likely if somebody bought it in the last call it two, three, four, five years, they've already added value to it. They've done what needed to be done. Maybe recently they haven't pushed rents. There may be some upside there. You never know really. But generally speaking, you want to target folks who've owned the property for a little while and they own it free and clear. It's going to be the easiest target to get that deal done.
Speaker 1:You can pull that data, that information, like I mentioned you already matrix but you can also hire somebody like a VA or do it yourself. You go through the public property records In the state of North Carolina. You can see all that information, obviously tax information, et cetera and you can see the LLC information. So who owns the deal, how long have they owned it, et cetera. You can get an address from the LLC filing information that's kept at the North Carolina Secretary of State. Some other states don't have that information readily available. You have to do a little bit more digging. So at that point you might need to contact somebody to help you with that. Right. Somebody can get that done for you. There's folks online Fiverr, I think of Fiverr, I think of other places where you can hire a VA and show them how to do that or have them do that for you.
Speaker 1:I've pulled large lists from different databases online for like 50 bucks, less than a hundred bucks. You have to go through that list one by one and find the deals that make sense because it will have just, you can say storage um based upon. Let me back up for a quick second. So every business or in the us has to file, obviously, taxes and all that, but they have to have a. It's like an s I c code uh, sick, or there's also another one I forgot the, the name of it now and that's how the US basically classifies businesses. And so there's warehousing and storage and I forgot what that SIC code is. But in other words, if you own a business, that's storage, it's classified or coded that way and that's how these mail places can find who the storage owners are.
Speaker 1:The problem is you also get a lot of warehouses. You'll get a lot of warehouses. You'll get a lot of random other things that aren't self-storage or other types of storage. So you have to go through and clean that list up. It takes a little while. I've done that in the past. It can be a little cumbersome and that doesn't tell you how long they've owned the deal, other loan information or whatever. You have to do a bit more digging and find that out. You can call your state secretary of state and can help you walk through and sort of sift through that information. Obviously, property tax records will tell you that as well, but it's going to take a little bit more time. But that's the free quote, unquote or the cheapest way to do it. And there's always going to be some middle ground there between hiring somebody else, hiring a VA, showing them how to do it, et cetera. All right.
Speaker 1:So the last part of this whole thing is the frequency. How often should you mail? I recommend at least what's called like a five touch, maybe even a seven touch campaign, and touch meaning how many times have you contacted or reached out to them? The more frequently you reach out to them, the more trust is built over time, All right. So in other words, don't send just one letter and forget about it. This is a game of consistency. So I recommend that five touch campaign. You send your first letter, that's one touch. You follow up in three to four weeks. That's another touch. It might be a phone call, might be another letter. Then you send another one, a postcard or maybe a little different style letter, right, you might have a different version of that same letter. Ask ChatGPT to write you a different version of that same letter and then you send another letter within another two months or so. So you have your first letter goes out in about three to four weeks. Another letter or a phone call In another two weeks or so. You send in another letter and then another letter in two months. So you've hit them already four times within that first two months, right. And then another letter three months later. And I would keep going one per month.
Speaker 1:I know in Gary Keller's book from Keller Williams Real Estate, sometimes real estate agents, residential agents, do this very, very well. Commercial agents don't do it quite as well. But if the residential agent is targeting your neighborhood and they're doing it right, you'll probably get like a postcard or a door knock or whatever. You've probably gotten those and maybe somewhat annoying, but they'll do it roughly once a week for like seven to eight weeks, so that they start to take up that space in your brain when you start to think about a real estate agent and when you're ready to sell or transact or do business or list your home for sale, you will hopefully think of them. You might have a friend, you might have a relative or whatever who's also an agent, but you will definitely think about them and maybe hopefully give them a call. And it's because they've taken up that space in your mind. They've taken that mind share.
Speaker 1:A quick exercise here you can do is just think of three. You know maybe three toothpaste brands or maybe three soda brands or three car brands. You know soda brands Coke, pepsi, sprite. I know they're probably made by the same company, but whatever, like that's just the three that came to my head. Coke is obviously there because they're always advertising to take up that mind share so that when you think of soda you definitely think of them. You may not always pick them right away or first or whatever, but you will definitely think of them.
Speaker 1:Right now as I'm speaking, I know there's a real estate agent. I know where his office is. He sends postcards to this neighborhood. I can still see it in my mind's eye. He's never called us, never knocked on the door, just sent us postcards. I just look at them and throw them in the garbage. But as I'm speaking I can still see the layout and I can still see his picture. I can't fully remember his name, but I know the company and if I needed to contact him I could do that by going to their website, because I'm sure it has his picture on their website. So he's done a good job of taking up mindshare in my mind so that when I think of selling my home I definitely will think of him. Whether I use him or not, I don't know, but I would definitely think of him.
Speaker 1:That's the goal that you want. So the seller will probably think of one, two, three brokers that have called them consistently and talked to them over the last several months or year or whatever, and hopefully, if you've done your letter campaign correctly, they will also think of you. They will have a conversation with the broker. Probably. The broker will tell them how they can market the property, etc. Etc. And possibly what price they can get. The seller has a price in mind. The broker will tell them what the commission will be, what that looks like, and the seller will have to calculate those numbers and see if that final sale price netting out the commission, those, ultimately those dollars that they get after paying all the transfer tax and all that kind of stuff. You know whether that makes them happy or not. And then hopefully they'll call you and say, hey, if I sold you the deal, what could you pay? So on and so forth. And they do that mental math to see what makes the most sense for them. All right, so, closing the episode here, wrapping everything up, most people won't respond right away, right, but the ones who do those are often where the best deals are.
Speaker 1:You're not trying to hit a home run with every letter, right, some of them, most of them, will end up in the trash. You're just trying to get that mind space right. You're planting seeds and if you send 500, let's say, targeted letters over a few months, I can guarantee you some opportunity will come as a result of that. I've made hundreds I mean thousands of phone calls. I sent out lots of letters. I actually sent out letters in the last call. It four weeks or so it depends on when you're listening to this episode, but roughly four weeks ago they recorded this episode and got two calls back. One we actually went to, loi competed against someone else. We lost that one didn't get that deal. If it falls out, they'll call us back. But the point is is from sending one letter campaign cost me like a hundred bucks in postage or something like that Not even a hundred bucks in postage and so obviously some time I actually got to the point of sending an LOI, so that's very encouraging.
Speaker 1:You want to keep going with that. Some things I've made mistakes on in the past is inconsistency. You definitely want to stay consistent. Start your campaign, don't stop. Keep going for at least six months. Send out four letters within the first two months and then one per month after that for the next. Call it three, four months, whatever. Get to six months and see what comes of it. I guarantee you some opportunity will pop up, or at least several conversations with sellers to help you get in that space and hopefully get a shot at that deal. One of those letters will grow into an opportunity. All right, that's it for today's episode. Guys, if you want a sample letter of the one that I use, shoot me an email, send it over. It's chris K-R-I-S at storageinvestorshowcom. I'll add you to my newsletter list as well. I'll send you that sample letter that I use. You'll see, it's very simple, has no logos whatsoever. It just talks about what we can do for them and that's really it. So I'll send that to you, not a problem, all right, until next time, guys, keep hunting for those deals and