Simple Partnership Structures for Self-Storage Investments

When you first dive into self-storage investing, one of the biggest questions you’ll probably ask is: How do I structure a deal? It’s a valid concern and one that every investor, new or seasoned, wrestles with. But here’s the truth most people don’t talk about enough: you don’t need to have every detail figured out up front.

At StorageLife, a self-storage investing mentorship program, we guide our students to focus first on finding solid deals. Deal flow is king. Whether you're exploring self-storage as an investment for the first time or working through an advanced self-storage investing course, deal flow will always be the engine that powers your progress.

Let’s break down the different components of a partnership structure in the world of self-storage investing, and how to keep things simple, fair, and profitable.

The Deal Comes First

Many new investors get stuck on the money side. “How will I fund the deal?” is a natural worry. But here's the thing: every deal is different, and most seasoned investors don’t know how they’ll fund a deal when they first find it.

Until you have a deal locked up, you can’t know what the capital stack will look like. Will it be a self-storage syndication? A joint venture? A creative finance strategy? Focus on finding quality deals, and the capital and structure can come together afterward.

Once you master how to analyze a self-storage deal, you’ll realize how fluid the structuring can be.

Three Core Partnership Roles

Every partnership generally breaks down into three key contributions:

1. Capital – Who’s bringing the money?

2. Sweat Equity – Who’s doing the work?

3. Deal Finder – Who sourced and negotiated the deal?

   
   

You can use these roles to start thinking about fair equity splits.

1. The Deal Finder (Finder’s Fee or Equity)

Finding a quality off-market deal is no small task. It takes time, hustle, and relationships. A common finder’s fee is between 3%–5% of the deal, but it could be more depending on the quality and condition of the deal.

For example, if you bring a deal that’s already under contract, earnest money is down, and the seller is warmed up—your share should be higher. A deal found on a self-storage broker list or through public MLS channels doesn’t hold as much weight as one secured through a solid self-storage marketing letter campaign.

2. The Capital Partner

Capital partners may contribute cash, net worth for loan guarantees, or both. This is often the more passive side of a partnership.

Many first-time investors secure deals by offering partners a 50/50 split if they bring all the money. It’s a simple and effective structure that allows new investors to get their foot in the door. The key is transparency and clear expectations from the start.

A partner who helps secure financing by acting as a loan guarantor or offering financial strength (especially important if you're wondering how to buy a self-storage facility with commercial loans) can also justify a larger equity share.

3. The Operator (Sweat Equity)

Operating a self-storage business is a lot of work. Someone has to handle the property management, bookkeeping, marketing, reporting, and ongoing decision-making. That’s the sweat equity side.

In a joint venture where everyone is equally involved, it may make sense to split equity based purely on capital contributions. For example:

• You contribute $100K (33%)

• Partner A contributes $150K (50%)

• Partner B contributes $50K (17%)

If everyone is contributing equally in effort, then equity can match the capital inputs. But if one person is doing all the work, they may deserve an additional slice of equity.

The Simple 50/50 Split

For many deals, a clean 50/50 split works well. One partner brings the money, the other brings the hustle.

Let’s say you find a deal, secure the contract, and take charge of operations. Your capital partner brings the full down payment. You split the equity 50/50. That might seem generous to the operator, but remember: the investor is getting a free ride on your labor, and you're managing the asset for years to come.

This structure often makes sense if you’re newer and want to learn how to start a self-storage business through hands-on experience. Gaining experience now pays off tenfold in future deals.

Syndication Structures

In self-storage syndication, things get a little more formal. The structure typically looks like this:

• 70% of the equity goes to passive investors

• 30% goes to the general partners (GPs)

GPs are responsible for everything—finding the deal, doing due diligence, closing, managing, and eventually exiting the investment.

However, most syndications also include fees:

• Acquisition fee (1%–3% of the purchase price)

• Asset management fee (often 6% of gross revenue)

• Refinance or disposition fee (1%–2%)

This is how active partners get compensated even before the asset sells or refinances. And, if the deal performs well and capital is returned to investors, the GP's share of ownership may increase significantly.

Sweat vs. Capital: What’s Fair?

Equity should reflect contribution. If you’re running the facility, managing expenses, handling self-storage cap rate by state analysis, preparing financials, and driving NOI growth—that’s worth a lot.

Let’s say you’re putting together a three-person deal:

• Partner A brings $100K

• Partner B brings $200K

• You bring $100K and are the full-time operator

You could split equity based on capital (25%, 50%, 25%) and add an extra 10%–20% to yourself as the operator. Again, it’s all negotiable, and a good self-storage mentor will tell you: the cleaner and simpler the deal, the better.

A Word on Experience

If you’re new, be realistic. You can bring value through hustle, marketing, and sourcing, but don’t expect a huge chunk of equity if you don’t have a track record.

Instead, use early deals to build your name, build relationships, and build skills. Work with partners who have experience and learn from them. If you invest in self-storage mentorship or join a self-storage mastermind, you’ll find that doors start opening quickly.

Remember, even a small slice of a great deal is worth more than a big slice of nothing.

Make the Workload Clear

Operating a facility is time-consuming. Even if you hire a third-party manager, someone still needs to:

• Manage accounting

• Oversee marketing

• Monitor KPIs

• Handle taxes and refinances

• Coordinate with investors

Make sure all parties know who is doing what and compensate accordingly.

Final Thoughts

Whether you're going into your first deal or tenth, simplicity in structure keeps things moving. Don’t overthink how to invest in self-storage. Focus on deal flow, partner with people you trust, and structure your deals in a way that’s fair based on contribution.

If you’re bringing hustle, knowledge, or a great deal to the table—there’s always a way to make it work. Equity is flexible, and so are partnerships.

Want help structuring your next deal or understanding the risks of self-storage investing? Apply to join the StorageLife program. Our self-storage investing course and private mentorship group walk you through everything from finding deals to funding and exit strategies.

Because the only way to truly learn is to do. Let’s get to work.

Ready to make your first move? Learn how to buy a self-storage facility, schedule a call today to learn more about our StorageLife community.