3 Things to Consider When Selling Your Self-Storage Facility
Whether your decision to part with your self-storage facility comes from mounting repair bills, difficulty in the day-to-day operation and maintenance of the facility, or other unrelated factors, the last thing you want to do is have to spruce it up before you sell it.
But that’s exactly what commercial Realtors, REITs, or banks will want you to do.
Not us. Don’t clean it, don’t fix it—just sell it.
Below are some of the common drawbacks to not using I Buy Storage Facilities
Commercial Real Estate Agent or Broker
While selling a house through a Realtor is fairly straightforward, using a commercial real estate agent or broker to sell your self-storage property involves additional steps that can delay the process and cut into your profit potential.
- Lengthy Process: It might take weeks or months to obtain a valuation, get all your paperwork in order and for the Realtor to match your facility with qualified buyers.
- Pre-Sale Repairs & Cleaning: Before selling a property through a commercial real estate agent, you’ll need to give the property a thorough cleaning and fix all the issues that have been plaguing your facility.
- Realtors Earn Commissions: The average commission is 6%, which comes out of the final sale price.
Selling to an REIT
Similar to listing with commercial Realtor, selling your property to a real estate investment trust (REIT) entails a number of steps that could end up costing valuable time or money.
- Finding the right REIT: Can be a challenge to find one that’s both familiar with your market and the self-storage industry.
- Pre-sale repairs & cleaning: Before selling a property to a REIT, you’ll need to give the property a thorough cleaning and fix all the issues that have been plaguing your facility.
- Lengthy Process: choosing a REIT, getting your paperwork in order and closing the deal can take time.
- Lowball offers: REITs are in business to make a profit and won’t be concerned with your bottom line.
Abandoning Your Storage Facility
Sometimes, when the bills mount, the profit hasn’t materialized and the workload is too great, the temptation is there to walk away from your facility and let the bank deal with the property.
- Legal action: If the sale price of the foreclosed property is less than the amount of the promissory note, the bank can seek a deficit judgement against the borrower.
- Affects your other assets: If a deficit judgment is levied, the borrower becomes responsible for paying the difference between the sale price and the promissory note.
- Bankruptcy: As a last resort, a borrower might be forced to declare bankruptcy, which can affect your credit, your future income potential and much more.