Superior, WI - 28-Unit Self-Storage Acquisition: Down Payment Strategies

[Matt Wignall]

Hello Bigger Pockets community,

I am currently analyzing a prospective acquisition of a 28-unit self-storage facility situated on 3.1 acres. The asking price is $295,000, which is above a recent appraisal(previous buyer could not obtain Financing) of $270,000.

The property exhibits strong operational fundamentals:

• Current Occupancy Rate: 100%
• Gross Monthly Income: $2,720
• Construction Year: 2023

The facility is located in a rural area, approximately 10 minutes from the nearest town. It features a gravel lot and currently lacks perimeter fencing or security cameras. Despite these aspects, it has consistently maintained full occupancy since its construction.

My primary lender is quoting a required down payment of $75,000-$85,000 for a 25-year amortization. The projected cash flow, given the minimal operating expenses, appears favorable. My objective is to explore alternative financing structures that would minimize the initial capital outlay.

I have already determined that seller financing is not an option for this transaction. While I have the liquidity to make an all-cash purchase via a Home Equity Line of Credit (HELOC), I would prefer not to fully leverage that resource. I am considering utilizing a HELOC for the down payment, which would also enable me to implement immediate rent increases to bring rates in line with market values. Current analysis suggests a potential monthly income increase to $3,120 if rents are adjusted to market rates.

I welcome any creative financing suggestions or strategic recommendations from those with experience in self-storage acquisitions or alternative investment structures. Your expertise is greatly appreciated.