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Updated 13 days ago, 11/11/2024
Loan product for self storage and metal building with NO INCOME?
I have an opportunity to buy a property in tennessee that has 25 self storage units AND allows for 25 more to be built. It also has a 6,000 sq ft metal building on it as well.
But here's the catch. There is zero income on the property right now because the current owners were using it for personal use and/or letting friends and relatives use the storage units and the metal building (for an auto dealership).
Now because of this, nobody else has been able to get this property because they can't get a loan for it either. I tried but the lack of income on the property is a no go.
I actually have two options for this property: 1) Rent out the existing 25 storage units AND rent out the building plus add the 25 additional units out of pocket.
OR 2) Rent out the existing 25 storage units and added the 25 additional units out of pocket to rent them out BUT keep the metal building for my GC business to where we have offices and storage for building materials. We also have our main subcontractor and our driveway guy that would like to rent some space for their vehicles and materials as well.
So we could do this loan strictly as a value add play on the self storage units and renting out the metal building. OR we could do it as an owner occupant for the GC business to where the self storage units would pay for our mortgage.
Just a matter of whether we can find anybody that will do this loan. I've tried some local lenders but they wanted to see income from the self storage units. And they wouldn't do it for us as owner occupants because our revenue comes from selling houses (hell - we're a general contractor - thats how we make our money) which was strange but its their rules. I've tried some hard money lenders too but they don't seem to have a product for self storage where there is no current income coming in.
The kicker is we've been able to negotiate the price down from 400k to 300k because we know they're trying to get their cash out and they told us they couldn't get a loan either. And no other buyers can get a loan on this thing either because there's no income to show.
Anybody have any lending sources that might do this as a value add project? The land (3 acres) and the metal building alone are worth well over 300k in this area. I know because we have a 5 acre piece that is worth 200k and if we added a 6k square foot metal building, we could sell it for 450k all day long.