Self storage w/house and other building.
I am running different numbers and scenarios on a deal, trying to make something work. It's a 128 unit self storage complex with room to build more later. It has a 3/2 house on it and a small commercial store front and warehouse that is a little run down but could be used for something. Maybe converted into conditioned units.
My problem is that the only income currently is about 60% of the storage units. Which comes to about 2.8k. It's defiantly a reposition but what about the income for the first couple months until I get it repositioned. It won't gross enough to even cover the mortgage at first. It cash flows pretty good at 15% vacancy, but it's at about 50% right now if you factor in the house and the other building. The owner said they would finance half the down payment and I have a partner that will finance the other half for a 50% stake. It might make a good deal if someone can help me figure out what to do next.
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Would the seller be willing to master lease the deal to you for what they're getting now? The $2800/month I mean. If so you could get to work and turn it around without much risk to yourself.
Or maybe do 100% seller financing with interest only payments until you stabilize it?
If it's not performing well you may have a hard time getting the deal financed unless you have additional collateral and or solid relationship with the lender. If that's the case the seller may not have any other option than to work with a buyer in this capacity to get it ready for permanent financing. I've had success in convincing a seller that this was what was needed to be done in the past.