Hot to structure and fund your deals in today's economy. It's not as hard as you think!

1. Self Storage Training Series
“How to Structure
and Fund your
Deals in today’s
Economy - It’s not
as hard as you
think”
Where to Find The Money

2. Community Banks
▪Decision made by a local board
▪Know the area and Facility
▪Relationship with borrower
▪Common Sense Underwriting
▪Savings & Loans, Credit Unions

3. SBA 7A
▪New Program – (not 504)
▪80% LTV for Acquisition and Refi
▪Will allow Cash out Refinance
▪Will Allow Seller 2nd Mortgage with a 2
Year Pay off
▪Prime + 2.75, 25 year Amortization
▪Debt Coverage Ratio of 1.30
▪No Underwriting Fee

4. SBA 7A
▪ $5,000 Earnest – Refundable
▪ 2 week Approval, 60 day Close
▪ Pre-pay Penalty in 1st 5 years,
tiered
▪ 650 Credit Score and Higher
▪ $500,000 to $5 Million

5. Insurance Companies
▪$2 million in value and above
▪Lower rates than even Community
banks or Savings & Loans
▪Low fees
▪Accessed through Mortgage
Brokers

6. Assumable Loans
▪“More than half of the commercial
transactions in 2010 involved
assumable or seller financing.”
Marcus & Millichap
▪Allows a new buyer to undertake the
obligation of the existing loan,
sometimes with no change in loan
terms. May or may not have to go
through underwriting
▪Combine with seller carry back.

7. Transactional Funding
▪Quick Cash for Commercial
“Flips”
▪Need some money to use for
earnest $, fees, etc, and then to
flip to another Investor

8. HEDGE FUNDS
▪Groups that are comprised of
individual investors that
collectively buy Real Estate
▪More aggressive Underwriting
▪80% Appraised Value
▪Sometimes allow 100% Financing
▪Google Real Estate Hedge Funds
or contact a Mortgage Broker

9. Ways to Find the Cash!
▪ Savings Accounts
▪ Sell CD’s – Higher
Profits in Self
Storage

10. Credit Lines
▪Secured or Unsecured for
$25,000 - $100,000
▪Low interest rates and payments
▪The deal must be able to cover
both payments
▪Establish BEFORE you need
them

11. Equity in other properties
▪ Line backed by
equity in other
properties
▪ Akin to a home
equity line of credit
▪ The deal must cash
flow

12. Refinance Existing Properties
▪Shift down payment from existing
to new projects
▪Utilize value created to buy more

13. Other People’s IRA’s
▪Many unhappy with stock market
▪Teach how to invest with you
▪Safer – see it and touch it
▪Pre-Negotiated returns – PPM

14. Friends and Family
▪ Real Estate 401k’s
▪ Deferred interest and payments
▪ Avoid using on “Risky” deals

15. Seller Carryback
Sales Price $1,000,000
Cash $ 100,000
1st mortgage $ 700,000
Seller Carry $ 200,000
Seller and buyer execute a note and 2nd
mortgage with buyer making monthly
payments to seller for usually 3-5
years.

16. Sell Existing Properties
▪ Trade-in/trade-up to other value
add facilities
▪ Quickest way to wealth
▪ Time is our friend and our enemy
▪ Review your portfolio at least
once/year

17. Sell Personal Property
▪Got a Boat, Motorcycle, RV, extra
car……..?
▪Jewelry, Collections, Othe
Valuables………..
▪Do they make you money?
▪“Begin thinking more like an
investor, not the average
consumer”

18. Borrow Against Insurance
▪Can borrow up to a certain % of
your policy
▪Low Rates, and Flexible, Tax
incentives
▪Talk to your tax and financial
Advisors
▪Only use if the deal supports both
payments

19. Mezzanine Lenders
▪ “Bridge the gap”
▪ Loan 5-10% above 1st mortgage
▪ Rates are typically 2-4% higher
than 1st mortgage
▪ High Fees and Closing Costs
▪ Only if deal Still Cash Flows

20. Bring in a Partner
▪Caution when looking to friends &
Family
▪Multiple ways to structure
▪Thorough Operations Document
Approved by each partners’ attorney
▪Recommendation: Elephant & Mouse
▪Private Equity Partner – negotiate for a
% of profits or return

21. Forming a Syndicate
▪The Pooling of several investors
Capital for the purpose of purchasing
Commercial Real Estate
▪$20,000 - $30,000 to form
▪“Pools” made of investors usually
contributing a minimum of $25,000 to
$500,000 for purposes of collectively
buying real estate

22. Self Storage Training Series
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