Common Self-Storage Borrower Mistakes
The self-storage refinancing process does not have to be complicated or stressful. One way to ensure a smooth process is to learn from others mistakes. Following are some common mistakes to consider before you start the self-storage loan process.
Self-Storage Acquisition/Refinance Loans
- Not considering all available self-storage loan products
- Using an inexperienced lawyer
- Failing to negotiate deal points in the self-storage loan offer letter
- Failing to "adjust" actual results when appropriate to maximize your self-storage loan amount.
- Failing to use an experienced Self-Storage Loan Broker
- A buyer failing to negotiate that the seller deliver key items needed to obtain a self-storage acquisition loan
New Construction Project
- Not having a Feasibility Study completed
- Being too aggressive with Financial Projections
- Failing to factor in Interest Expense & Working Capital Reserves until CASH FLOW breakeven
- Under estimating "soft-cost"
- Using a lender that will not finance " interest reserves" or "soft cost"
- Not calculating your "occupancy breakeven" before you invest
- Failure to obtain financing commitment for Phase II & III (based on performance criteria)
- Not having "ground lease" reviewed for financeability
- Not building with an "exit strategy" in mind
Call or email Bill Walton to discuss how you can avoid making common borrower mistakes. 888-525-9081 or bwalton@sandwgroup.com |
