Seller Finance Mini Storage/Commercial Property

4 Replies

Investment Info:

Other commercial investment investment in Talent.

Purchase price: $1,500,000
Cash invested: $15,000

Recently purchased a self storage facility with 106 units, 46 RV spaces, a 4200 sqft commercial shop with office space and warehouse and a duplex on the property.

What made you interested in investing in this type of deal?

It was my grandfathers business and I have always loved real estate and have seen the benefits self storage provided for him and my grandmother over the years.

How did you find this deal and how did you negotiate it?

I asked if I could buy it from my grandfather on the negotiation of a seller financing deal where he would save money on taxes with monthly installment payments that would be his retirement essentially.

How did you finance this deal?

Seller financing on a 25 year loan.

How did you add value to the deal?

I did research on where our competitions prices were and noticed we were below market value. Day one I raised the rents and rented out the back shop to another business to increase revenues dramatically.

What was the outcome?

I have negotiated with the business that rents the main commercial shop on the property to manage the facility in exchange for lower rent as if it was a management fee but also increased rents elsewhere. Overall, I have been able to make the investment more passive and less work for me where I can focus on other ventures and have increased my NOI by over 25%.

@Jordan Brown Great work on this property purchase. A lot of new people will look at this and say "well I can't do that because I don't have a grandpa that has a property he wants to sell, blah blah blah...." Good on you for taking advantage of your situation, because in the end we all have distinct advantages we just have to take advantage of them.

@Josh Anderson Thank you. Im the first one to say that Im super blessed to be able to get a deal like this by having my grandfather around that owned it. However, I was able to be creative and show him the benefits of selling through me for tax savings on capital gains versus if he would have sold the property to someone else. I think that can be very enticing to a lot of individuals. It can be hard to find, but if someone will find business owners that are nearing retirement, work a deal with installment payments so they continue to have money coming in each month. 

@Zach Quick yes I have! My grandfather was very old school. No online presence, pay with cash or check. So that was actually the first thing I did was add software that allows tenants to pay online and have autopay and have my website where prospective customers and come and rent a unit there. It has helped automate the business a little more and as more customers get on board it will Continue to do so. Thanks for the comment! 

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