How do I make myself more attractive...
So, I'm having some "difficulties" getting a cash out refi on a commercial self storage facility that I have owned for ~15 years. I've developed it from greenfield and, for all intents and purposes, it's been run as a side project/hobby business for most of that. It sat at about 8000rsf and was good enough to pay its expenses and put a little bit into pocket with little to no effort involved.
In the last two-ish years, I've decided to pump it up and make it a "real" business; I've done an equity injection into it and more than doubled it's RSF in that time. First phase was an additonal 5100rsf which rented up and stabilized in 6 months; second phase was another 5100rsf and I just got occupancy in August on that. I am currently sitting at ~73% occupancy (normally I stabilize out at about 90+% with zero advertising/specials). Based on current comps, I have about a $1.1M valuation and I have a $65k promissory note from a partner buyout a couple years ago. No other debt.
YTD, I'm averaging $5500/month income on it with $3350/month expenses (of which $1250 is debt service). It's a long term asset play; I've got an approved site plan for an additional 8400rsf to fully build the site out and even if I fully finance that piece, my LTV is still really really low.
So; a couple of lenders I've been in discussions with balk at the cash flow. Historically it's been low as I've used it to generate losses to offset much greater cash flow operations I was involved in. I am now focused on this and it has a ton of upside via occupancy and rent increases, as well as future expansion.
What's the best narrative to pitch this to lenders? I am looking at a basic cash out refi of ~$320k with considerations on a $250k construction loan in the next 1-2 years. The refi is just to refill my market investment coffers, so it will still be available for use if need be, and the construction loan will only be tapped if the business is stabilized, market conditions support it, and I can't swing it out-of-pocket.
I'm of the opinion that it's a pretty safe bet all around and it seems that it's a pretty straight-forward no brainer to me. The lenders I've talked with are both local commercial CU operations, and they both have been pretty soft on the viability of this. Should I continue to try to talk and "convince" them; or should I just seek out a sluttier lender?? Does it seem really off base and I just can't see the forest through the trees??