Unless you have deep pockets on those pants you’re wearing, there’s a good chance you’ll need to get self storage financing from a bank or other lender. Are you fired up about investing? You should be. Even though this particular specialization in the real estate industry still flies somewhat under the radar of investors, it would be wise not to overlook the potential windfall of profits that could be heading for a pocket near you.
And though you may not realize it, lenders are not quite as leery about loaning money to purchase a self storage facility, especially when compared to other types of real estate. Self storage properties go into foreclosure less often than other types of real estate and the budding investor in search of self storage financing will reap the benefits.
Your first stop should be your local bank because they know you and why not give them the business if you can and their rates are competitive. Failing that, you might approach mortgage brokers, or even explore seller financing if you discover a property that the owner is itching to get rid of fast. If the thing is profitable, he already knows whether or not your cash flow will be able to pay the mortgage, assuming you don’t run it into the ground.
Lastly, you can Google “self storage financing” if you’re a brave sort of person. Up pops a list of independent loan agencies with websites that makes one feel slightly sleazy just looking at them. Makes you think of the check cashing industry. If you end up considering one of these companies for self storage financing, tread with care. The interest rate might be off the chart, the physical location might be the back room of a laundromat in Saigon, or the owner might have just made bail on embezzlement charges.
In a word or two, “Be careful!”
The MHP Listings Team
Flickr / vagawi