How can I make this work?

[Craig Garrow]

Looking at a small 24 unit self storage business on 2.5 acres in our local industrial park. It’s 16 10x10 units and 8 5x10 units. They’re below market on their rents ($32.50 for a 5x10 - should be between $35 and $40) and $45 for a 10x10 which should be between $50 and $55. 22 of 24 units are full, so I doubt anyone would move even with a $10/month increase. Owner and I negotiated two years ago and was left off at a $55,000 purchase price, $15,000 down, 6.5% interest, and a balloon payment in 8 years. Just for kicks, assuming the facility was full with no vacancy, after the rent increase, you’re looking at $1,080 per month, which after mortgage, taxes, and insurance leaves about $480 per month, before any maintenance, lawn care, snow removal, and vacancy. I think there is upside here if I can add more units. The plan would be to build 12 10x20 units that I could rent for about $90 per month and double the total income of the facility, but that will obviously come at an expense. So, my question is, how do I sell the owner on either dropping the price, or try to do a no (or very low) money down deal? The owners are an older couple who aren’t necessarily real estate investors, I think they just owned this for a tax write off. Any help is greatly appreciated!