Self Storage lenders

6 Replies

Hello everyone,

Are there specific lenders out there for existing self storage facilities nationwide?  Or have any of you had success with smaller local banks that have an appetite for self storage?

Thanks!

Drew

We used First National on our current storage facility that is being built for around 1mil..... which is a local bank to us but, it’s not a small credit union or anything. In my opinion it doesn’t matter what bank you use, if you present the right proposal, banks will throw money at you. Should be able to negotiate the interest rate between multi banks but sometimes with the larger projects it’s a lot of leg work to get multi banks involved. 

And @Michael Wagner for whatever reason the SBA denied our loan for storage.... if I remember it was because they didn’t offer loans for that type of business.....

Originally posted by @Thomas Jackson :

We used First National on our current storage facility that is being built for around 1mil..... which is a local bank to us but, it’s not a small credit union or anything. In my opinion it doesn’t matter what bank you use, if you present the right proposal, banks will throw money at you. Should be able to negotiate the interest rate between multi banks but sometimes with the larger projects it’s a lot of leg work to get multi banks involved. 

And @Michael Wagner for whatever reason the SBA denied our loan for storage.... if I remember it was because they didn’t offer loans for that type of business.....

 SBA just started doing storage loans about 10 years ago.  If it was before then, that might have been the reason.  If it was more recently, it wasn't the SBA that didn't deny the loan...the bank did.

Thanks guys!  Working with a seller now, tossing around how I’m going to put another piece of the pie together.

I have a third of the down payment available, asking him to take a second mortgage back for the other third.  Just have to come up with that in between piece.  I have other properties and could sell some of them off over then next year or two to generate the money to pay back a private lender? 

I have used some private lenders in the past but on a somewhat smaller scale and paid back after a refinance. 

I’m planning on improving and keeping this facility.  My thought is a private lender for that part of down payment and pay back with the sale of my other properties.  

Think the bank would be open to something like that? Or any other thoughts and suggestions?

Drew

Drew, do you own any of the other properties free and clear or have a significant amount of equity available? The reason I ask is that the first property I purchased, I was able to use some SFH rentals I had with equity as collateral. I purchased the facility for $195k, but my loan was for $276k. It was to cover the purchase of the ss property, along with paying off the LC's I had on two other properties, AND I walked away from the table with over $50k in my pocket! They held a lien against the rentals, but the income from the storage property more than covered the note for all. I later sold the sfh's one at a time and paid a small portion of my proceeds towards the principle of the storage property, and just this past week refi'ed the storage property on a new 5 year note. The storage property appraised for $388k and my payment also dropped $350/mo. There's ALWAYS a way to make it work if it's truly a deal.

Hey Mark, that’s awesome!  I agree that there is always a way to make it work if the deal is good enough.  We have equity in our other properties but none are free and clear.  I have considered asking a seller or two that owner financed their properties when we bought them to take a second position and obtain a line of credit with a bank on those.  Not sure I want to ask them for that though.  I am leaning more towards getting a SBA loan with the longer amortization and less money down. I am going to reach out to some of those lenders this week and obtain some more info regarding SBA vs conventional.

Drew