Self storage financing is used to pay for the purchase, remodeling, building or growth of self-storage units by small business owners. The storage units include organized rooms of different sizes, containers, lockers, and outdoor places.
Self-storage financing is used for:
- Purchasing an existing self-storage building
- Renovation of the storage units
- Reposition the property in the market
- Refinancing for building storage units
Types of Storage Units to Consider
What kind of storage units do you already own or wish to own in the future? You can get self-storage construction loans for:
- Drive Up Storage
- Business Storage
- 24 Hour Storage
- Vehicle Storage
- Student Storage
- Military Storage
- Climate Controlled Storage
How Much Does Building a Storage Unit Cost?
Land prices and parcel sizes play a major role in the price of storage unit construction. A land parcel of two to three acres is needed for a building that is 40,000 square feet in size. For 60,000 square feet, you need 3 to 4 acres, for 80,000 square feet, 5 to 6 acres, and so on.
A typical storage facility’s customers of 40% or so request climate-controlled rooms. Although it only costs 10 cents per square foot, this feature raises rental prices by 25% to 60%! In other words, the ROI on climate control is extraordinarily high (ROI).
The area of land that the storage facility covers at a given site is known as the coverage ratio. Your coverage ratio is 75%, for instance, if you have 6,000 square feet of coverage on an 8,000 square foot property. Naturally, you can extract more money from the storage facility if the ratio is larger. Therefore, keep it in mind before you begin constructing storage containers.
What Are Some Common Types of Self-Storage Loans?
- Government-backed loans to small businesses from banks, such as SBA 7(a), SBA 504, and USDA B & I
- Second lien cash-out self-storage financing (75% CLTV)
- 65% LTV purchase and refinance loans from $250K to $3M
- Bridge loans to move the property to permanent funding
- 3-year term mortgages up to $20 million that closed in three weeks
- Equity-driven hard money loans with quick closings for borrowers with bad credit or no credit.
- Loans beginning at $100K, flexible terms, and underwriting are available from portfolio lenders.
- Self-storage Construction loans
- Permanent loans for construction
Advantages of Hard Money for Storage Unit Construction or Remodeling
Practically speaking, obtaining a hard money company loan as a financing option doesn’t have many significant benefits. However, the following are some advantages of these loans:
- Like other small company loans, hard money loans do not take your credit score into account. This indicates that they are considerably easier to qualify for, and you have ample collateral to offer the lender.
- Most business loans, specifically bank loans and long to medium-term loans, have stringent application requirements. The application process will be relatively straightforward because hard money lenders will simply consider your collateral.
- This is related to how simple it is to apply. However, hard money loans are typically short-term company loans, making them possible to consider if you require funding right now.
Las Vegas Private Money Lenders
NV Capital Corporation of Las Vegas is your choice for commercial money loans in Las Vegas. It offers the lowest overall rates, and funding as soon as five to 15 days. In addition, we can lend you up to $3 million for 12 months. Contact us today to fund building storage unit construction or remodeling.