What is a self storage or ministorage loan?
Financing for a self storage facility is a special-purpose type of commercial property loan pertaining to a facility that allows people to keep their personal belongings away from their primary residence. Self storage mortgage lenders are comprised of banks, non-banks and private lenders. It is common for borrowers to seek self storage financing for purchase, refinancing or construction. Owners of self storage properties usually refinance their loans to get a better rate and term, or to pursue a cash-out mortgage in first or second lien position in order to fund improvements, rehab, expansion or other enhancements. Self storage construction financing is also available to aid borrowers in building facilities.
What is a self storage loan?
Financing for self storage facilities is classified as a special-purpose commercial property loan pertaining to a facility that allows people to keep their personal belongings away from their primary residence. Self storage mortgage lenders are comprised of banks, non-banks and private lenders. It is common for borrowers to seek self storage financing for purchase, refinancing or construction. Owners of self storage properties usually refinance their loans to get a better rate and term, or to pursue a cash-out mortgage in first or second lien position in order to fund improvements, rehab, expansion or other enhancements. Self storage construction financing is also available to aid borrowers in building facilities. If you are interested in building a new facility you will need to find a self storage construction lenders.
Self storage financing can be used to:
- Purchase an existing self storage or ministorage building
- Refinance the expiring term mortgage with a new rate and term
- Refinance to get cash out of the property
- Acquire a lot and develop it into a ministorage or self storage facility
- Reposition the property in the market
What are some common types of self storage loans?
- Small business bank loans guaranteed by government agencies, like SBA 7(a), SBA 504 and USDA B & I
- Bridge loans to carry the property to permanent financing
- 65% LTV, recourse or non-recourse purchase and refinance loans from $250K to $3M
- 2nd lien cash-out self storage financing up to 75% CLTV
- 3-year term mortgages up to $20M that close within three weeks
- 75% LTV on a 5-year hybrid mortgage
- No credit or bad credit equity driven hard money loans that close in 7 days
- Portfolio lender, all credit considered with flexible terms and underwriting and loans starting at $100K
- No minimum credit score, small markets OK, up to 75% LTV, bridge loans
- Cash-out refinance up to 75% LTV and up to 90% LTC for construction or value-add
- Self storage construction financing
- Construction take-out permanent loan
How do I get financing for a self storage facility?
Borrowers should approach banks and credit unions for ready-made financing on conventional self storage loans. These lenders require full documentation, as well as an appraisal in order to obtain the lowest interest rate. There are non-bank lenders who fund loans and then sell them to servicers and some keep their loans in portfolio. Borrowers who need their self-storage financing to close quickly should consider low-documentation loans based on the equity they have in the property, such as hard money loans.
Enter your loan details in the lender search above for a list of self storage lenders that can finance a loan that matches your specific scenario. Click the “Contact” button in a lender listing to provide that lender with the particulars you searched, as well as your contact information. The lender will contact you shortly to discuss your needs.
If you’re an owner of a self storage facility, you might want to find a commercial mortgage broker to assist you. All of the self storage direct lenders you find here will work with mortgage brokers to get their clients’ loans funded.
What is a self storage hard money mortgage?
Private and non-bank lenders often offer hard money loans based on the unencumbered value of the property. Hard money loans offer some benefits to borrowers, including the ability to fund quickly (often in less than two weeks) and more lenient documentation requirements than banks and credit unions. Other features of hard money loans for self storage financing include: Borrowers putting 25% or more down, CLTV’s of 65% or less of the value of the property, short term repayment of three years or less and self storage financing rates starting at 8.99%. These loans can be very attractive to borrowers with an immediate need, like repairing storm damage. Hard money loans are often used to stabilize a property that needs upgrading to attract more customers and enhance cash flow. Once stabilized, the borrower exits the hard money loan by obtaining permanent financing.
Which lenders offer financing for self storage properties?
There are plenty of self storage lenders in the marketplace but the one a borrower selects will depend upon their unique loan scenario. Because this class of real estate has reliable cash flow, it is attractive to lenders of all kinds. Use LenderSearch.com to see how many of the 130 +/- direct lenders in our database can finance your ministorage or self storage property.