SSSE’s core values are Fun, Integrity, Drive, and Others-First. As part of our commitment to Others-First, we strive to educate our investors, partners, and the general public about self storage. The Roman philosopher Seneca once said, “Luck is what happens when preparation meets opportunity”. This Frequently Asked Questions page is to serve as preparation for anyone interested in learning more about self storage and SSSE. The opportunities come when you sign up for SSSE’s investors list or buyers list by clicking the links in our menu bar. We hope to be lucky enough to work together.
If there are any questions that you have that are not answered below, please contact info@ssse.com
How do I invest with SSSE?
At SSSE, we provide both accredited and non-accredited investors access to tax-advantaged self storage investments with an emphasis on downside mitigation and social stewardship. Our syndications range from acquiring existing value-add self storage facilities to expanding existing facilities, from converting vacant big box stores into self storage to building from the ground up.
At SSSE, we provide both accredited and non-accredited investors access to tax-advantaged self storage investments with an emphasis on downside mitigation and social stewardship. Our syndications range from acquiring existing value-add self storage facilities to expanding existing facilities, from converting vacant big box stores into self storage to building from the ground up. The first step to investing with SSSE is to fill out our investor onboarding webform. It is quick and easy and can be found on our website SSSE.com by clicking the “Investors” menu link in the upper left corner. Once you have submitted your investor webform, you will have the opportunity to schedule an introductory phone call with one of our investor relations team members. A scheduling program will automatically appear. After that, stay tuned for the next investment opportunity! If we have any active raises occurring that are a good fit for your investor profile, our investor relations team member will let you know on the call and will walk you through getting access to the investor portal. Otherwise, we typically will send out an email whenever there is a new investment opportunity. It will have the high level details including whether it is a 506(b) syndication (for both accredited and non-accredited investors that we have pre-existing relationships with) or a 506(c) syndication (for accredited investors only). There will also be a link to the investment opportunity’s web page! On the webpage will be more details including a short description at the top, followed by buttons to schedule a call, access the investor portal to review the documents, and a video summary. The investment process concludes with accessing the investor portal and signing the subscription documents and wiring funds through the investment portal. Our investor relations team will be there to help every step of the way.
What is an accredited investor?
Only accredited investors can invest in 506(c) syndications. We do both 506(b) and 506(c), so if you’re not yet an accredited investor, if you invest in enough of our 506(b) offerings, you’ll be headed in the right direction. The Securities and Exchange Commission sets the definition of an accredited investor.
Often we get asked, what is an accredited vs. a non-accredited investor. We get asked this because only accredited investors can invest in 506(c) syndications. We do both 506(b) and 506(c), so if you’re not yet an accredited investor, if you invest in enough of our 506(b) offerings, you’ll be headed in the right direction. The Securities and Exchange Commission sets the definition of an accredited investor. The definition is subject to change but as of the time of this writing, an accredited investor is someone who meets one of the following 3 requirements. 1. Income. You can be considered an accredited investor if you have a sustained annual income of at least $200,000 as a single investor, or $300,000 total if combined with a spouse’s income. 2. Professional. If you hold a valid Series 7, 65, or 82 license OR are a “knowledgeable employee” of certain investment entities. 3. Net Worth. Excluding the value of your primary home, if you have a net worth of $1 million or more, by yourself or combined with your spouse, you qualify to be an accredited investor. A couple reminders: part of the 506(c) syndication investment process will be verifying that you are an accredited investor, so “fake it til you make it” does not apply. Lastly, I am not an attorney or investment advisor. This information is purely for educational purposes. Please consult your legal and financial counsel for any questions, guidance, or advice.
How much money do I need to invest as a syndication participant?
How much you need to invest as a syndication participant is dependent on the investment opportunity. The syndication sponsors set the minimum investment amount and communicate that to the potential investors. This can be as little as $25,000 but can be much higher. There is often a maximum investment amount as well in order for the syndication sponsors to protect ownership interest so that a single investor does not come in and take over a deal or break a threshold which would require an investor to be a loan guarantor based on their ownership percentage. Each of our syndications at SSSE has the minimum investment and maximum investment established on a deal by deal basis with our lowest minimum investment at $25,000.
What sort of fees do self storage syndicators collect?
Self-storage syndicators typically collect the following fees:
Acquisition fee: A fee charged by the syndicator at the time of acquisition, usually a percentage of the total acquisition cost.
Property management fee: A fee for managing the day-to-day operations of the self-storage facility, typically a percentage of the monthly revenue.
Asset management fee: A fee for overseeing the overall performance of the investment, typically a percentage of the monthly revenue or net operating income.
Development fee: A fee for overseeing the construction and development of a new self-storage facility, usually a percentage of the total development cost.
Disposition fee: A fee charged by the syndicator at the time of sale of the facility, usually a percentage of the sale price.
Performance fee: A fee based on the performance of the investment, usually a percentage of the returns generated by the investment.
Capital calls: A fee charged to the investors to cover unexpected expenses or to provide additional funds for the operation of the self-storage facility.
It's important to note that the fees and their structure vary from syndicator to syndicator and from investment to investment, so it's important to carefully review and understand the terms and fees associated with any self-storage investment opportunity.
What is the difference between a limited partner (LP) and a general partner (GP) in real estate syndications?
In a real estate syndication, the limited partner (LP) and the general partner (GP) are two distinct roles that are critical to the structure and operation of the investment.
Limited Partner (LP): The limited partner is an investor in the syndication who provides capital to the investment. They have limited liability, meaning they are only responsible for the amount they invested and are not responsible for the day-to-day operations of the investment. They receive a share of the profits and distributions, but they do not have a say in the decision-making or management of the investment.
General Partner (GP): The general partner is responsible for the day-to-day management and operation of the investment. They have unlimited liability, meaning they are responsible for any debts or obligations incurred by the investment. They are also entitled to receive a portion of the profits and distributions, but their primary role is to manage the investment and make decisions on behalf of the limited partners.
In a typical real estate syndication, the GP is usually a professional real estate developer or management company that has the expertise and experience to manage the investment effectively. The LP is usually made up of individual investors who want to invest in real estate but do not have the expertise or experience to manage the investment themselves. The GP and LP work together to achieve the investment goals and maximize returns for the limited partners.
What questions should I ask a syndicator?
If you are considering investing in a real estate syndication, it is important to thoroughly vet the investment opportunity and the syndicator. Here are some key questions you should consider asking:
What is your track record and experience in the real estate industry?
What is the investment strategy for the specific property or portfolio?
How is the investment structured and what are my potential returns?
What is the timeline for the investment and expected exit strategy?
How will capital be raised and how will investor funds be used?
What is the risk profile of the investment and how is risk being managed?
Who will be responsible for managing the property and what is their experience?
What is the plan for addressing potential challenges or market downturns?
How will distributions and profits be allocated and paid to investors?
What is the fee structure for the syndicator and any other third-party providers?
What is the current market demand for the specific property type and location?
Are there any potential liabilities or concerns that the syndicator is aware of?
It is important to thoroughly research the investment opportunity and the syndicator, and to consult with a financial advisor before making any investment decisions.