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Welcome to the Self-Storage University Podcast, where you will learn the correct way to identify, evaluate, negotiate, perform due diligence on, renegotiate, finance, turn-around and operate self-storage facilities. And your host is a partner in one of the largest real estate portfolios in the U.S. with nearly $1 billion of holdings, Frank Rolfe.
When you're out looking for a self-storage facility to buy, you've got the regular options. You've got brokers. Brokers are really, really good. You've got online listings. That's good stuff like on LoopNet. And then you have cold calling where you call up owners and say, "Hey, would you want to sell?" And then you have direct mail where you send postcards or letters to owners to say, "Hey, would you like to sell?" But what if there were two of those you could combine together to get even more power in finding the storage facility? This is Frank Rolfe, the Self Storage University podcast. We're going to talk about the one-two punch of using direct mail and cold calling together. Now, you probably have mixed up epoxy at some point in your life to fix something. You have these two different chemicals. And sitting there, not mixed, they're just nothing, they're just mush. But when you put the two together, you get something much stronger. You get a bond that can literally get an engine block attached to a roof. Now, epoxy is basically made up of these two parts that chemically when conjoined react in a manner that gives an incredible amount of brute force.
And that's what happens also when you combine direct mail and cold calling. So let's go over how you do that one-two punch. How you bring those two together and then why it's so effective. Let's start off with part one, the direct mail piece. Now, when you send out a direct mail piece to a self-storage owner, it's going to be a postcard or letter that says, "Hi, I buy self-storage facilities. Would you have any interest in selling? And if so, please call me." It's pretty passive. And the normal rate of response on those direct mail pieces is running about 1%. So 99% of the time it's a complete fail. But if I send out 500 of those postcards or letters, the odds are I will have five people call me. And five is just fine because out of those five people, more than likely I'll get at least one that I can try and strike a deal with. So we take that 99% fail rate and we consider that a success, which is really odd. There's very few things in life where you can fail 99% of the time and feel good about it.
And then you have cold calling. And cold calling is basically more active. It's more in your face. It's more proactive. Now you're calling people in a non-passive way saying, "Hey, what would you think about selling?" And of course, many take offense to that. Many older Americans do not like people calling them, period. And they sure don't like them calling them up to ask them weird and awkward questions like, "Would you want to sell your storage facility?" But here's the deal. When you send out the direct mail piece, and then you wait a bit and then you call the owner and you say, "I'm just calling to follow up on something I sent you in the mail," it doesn't sound as offensive, right? Now you're kind of in more of a passive role again. You're just saying, "Hi, I sent you something in the mail. Did you have a chance to look at it? What were your thoughts?" You get an entirely different reaction. People who were very put off by you calling, "How dare you call me and ask me a question like that?" they're now feeling okay about it because they know you put in the effort.
You did your homework assignment, you sent them something, and you're just following up. And that's what good businesses do. That's what you would have whether it was Fisher Investments or T. Rowe Price or whoever. You're just following up on something. Well, that's professional enough. So you're much more likely to elicit a response when you do a cold call that comes after a direct mail piece. That's the one-two punch. Now, why is that so much more powerful than doing those individually? It's because when you combine them together, they just seem to be more legitimate. They seem to be more professional. They don't seem to shock older owners who just don't like people calling them. And now suddenly you're doing in more of the vein of a consultant or some kind of professional. And so they just don't resent it quite so much. You get to the same ending. You can't force them to want to sell, but you definitely can find out if they would sell and at what price. Because when you're buying that storage facility, you're trying to get the best price you can on the best property you can find.
And that means a good buyer is out there canvassing to try and find every potential option so they can make the best choice of all those options. And when you use that one-two punch of direct mail followed by cold call, that normally has your best chance of a good ending. Now, I will point out a few things if you want to use the one-two punch method. Number one, when you do your direct mail piece, make sure that you address one of those to you. Because mail delivery today in America is very funky. It's very slow. It's very awkward. And what used to take only a matter of a couple days can sometimes take over a week now. If you send one to you, what will happen is when it hits your mailbox, that's the trigger to know that it probably hit the mailbox of all those storage folks. And then wait just a little bit. Don't start calling the next day. Give it a few more days after that so you know they received it and then you can start calling. So that's an important item.
Also, when you call them, just go directly into, "Hey, I sent you something, I'm following up." Most people feel very awkward on those initial kind of flowery openings that some people use on the phone. Just get rid of those. That doesn't help the situation at all. When you're trying to do that big glowing, "Hey, how did the Las Vegas Raiders do last week in your hometown team," whatever. That makes people worry like, "Why is this person calling me?" You're going to get a lot of people who feel much more at ease when you tell them directly what the purpose of the call is. And when you say, "Hey, I'm following up on something I sent you," then they know what it's all about. They don't have to worry if you're trying to sell them Amway or contributing to the policeman's fund, something like that.
Now, brokers are still a great way to find deals. We found most of our deals from brokers. That's our number one source. But I think if you use the one-two punch of direct mail and cold calling, you will start getting some fairly significant improvements in your prospecting. Now, as you go with all things in life, keep measuring the results and adapt to what the performance is. See what kind of postcards or letters you send out that get the most response. See what preambles when you call people do the best. Mark these in your brain, because as you refine that, you can take the power of that one-two punch and take it to a next level.
This is Frank Rolfe with the Self Storage University podcast. Hope you enjoyed this. Talk to you again soon.