The 4th Rule of Thumb & the 5th Key to Talking to Self-Storage Lenders

While your reputation may not seem that important, in the world of self-storage financing, it can make or break you. Your reputation is very important to a lender. If you have a stellar reputation, a lender is much more willing to stand behind you and vouch for you to get an SBA loan. If your reputation doesn’t inspire confidence, they are going to be really nervous pushing your loan through loan committee.

When you are making offers and talking to sellers, you want to make sure that you don’t over promise and under deliver. If you are constantly making offers and then unable to close on the deal you will start to get a reputation that you don’t actually follow through. Now there are very good reasons to back out of a contract. However, if you back out of 99 out of 100 your Realtor will get discouraged and so will your lender.

If you have a reputation for cheating people or cutting corners, that will factor in when it is time for the lender to vouch for you. The people on the loan committee may know you. They may have heard of you and your reputation. That makes it less likely for them to approve the loan.

If you have filed bankruptcy, there is no way to get an SBA loan. There are other lenders who may consider working with you, but bankruptcy is frowned upon in commercial real estate.

Make sure that when you are in commercial real estate you do things that will make other people want to work with you. Go out of your way to follow through. Go out of your way to make sure that even if you have to back out of a contract, it is for a good reason and everyone understands that reason. Make sure that you don’t cut corners or take advantage of people. It will serve you in the end. As always, happy investing.