Self Storage Finance
Lower rates make it easier to qualify for a loan, correct? Lower rates mean the money costs the banks less, so they have more profit.
A commercial loan needs to be negotiated to finance approximately 70% of the total project costs. A 15-year mortgage will be applied for with an 8.5% interest rate. First drawdown upon agreement of the seller and buyer concerning the terms of sale of the building. Last drawdown around the end of the year when all conversion to self-storage units should be completed. First repayment of principle is planned in April of 1999 with monthly installments of interest and principle to continue until the loan is fully repaid in 2013
Self Storage Financing Tips
Traditional, fixed-rate, commercial bank loans have been the mainstay for self-storage acquisition and refinancing. Additionally, in some situations, owners elect to seek nonrecourse financing offered through mortgage brokers and insurance companies. These are typically called conduit loans. Other alternative financing solutions are available that offer flexibility as well as the opportunity to take advantage of variable interest rates, with or without a maximum ceiling rate.
Fundamental Self Storage Financing Tips for making Commercial Investments
- Great location An area with appreciating values, near other properties with higher rental rates, near transportation, and on the line of current development.
- Diverse tenant profile An average office size of 1,000 square feet, so that losing one tenant won’t be catastrophic. Self Storage Financing.
- Upside Undermarket rents with leases that will turn over within the next two years, so you can increase rents, and options for renovations that can increase rents and value.
- Efficient design Good location of core elements (elevators and bathrooms), so rental space isn’t lost, and no more than 15 percent common area.
- Positive leverage An interest rate that’s less than your cap rate, and the biggest mortgage for the longest period of time. Self Storage Financing.
Commercial Self Storage Units For Sale – Here you will find subject matter regarding Commercial Self Storage Units For Sale. Details on what you can store in your new units and some researched links on the subject.