278. Self Storage Loans 101: SBA, Conventional, Seller Financing, and More w/Live Oak Bank
Self Storage Income
AJ Osborne
4.9 • 591 Ratings
🗓️ 7 January 2025
⏱️ 51 minutes
🧾️ Download transcript
Summary
Want to buy a storage facility? Then you’ll need self storage financing—and you’ll want to know where to go BEFORE you find your first (or next) self storage investment. So, today, I brought on one of my favorite lenders, Live Oak Bank, to teach you how to finance a storage facility, no matter how much experience you have or how many facilities you’ve bought. They’ll reveal exactly what they need to see from you to lend, the biggest beginner mistakes that stop you from closing, and their outlook for 2025.
Anna Taylor and Bishesh Shrestha have worked with self storage investors for over a decade. At Live Oak, they lend to self storage investors just like you and even own some self storage investments themselves. But Live Oak isn’t like any other bank—they focus on self storage, SBA loans, and making your life WAY easier when buying a storage facility.
I went to their Wilmington, North Carolina headquarters to record the most value-packed episode on self storage financing around. Today, we’re talking about SBA loans, why they often wrongly get a bad rap, how to use them to buy your first or next facility, and why you should NOT get them from any regular lender. We talk about why Live Oak actually loves seller financing in a deal, how long they take to close, what down payment you’ll most likely need, and what to know in 2025 as interest rates and lending requirements have changed.
What you’ll learn in today’s show:
- Why the SBA 7(a) loan is such a powerful financing option for self storage investors
- How much of a down payment you’ll need to bring for an SBA loan
- Creating a win-win for sellers (and you) by offering a seller financing component to your deal (lower interest rate!)
- The #1 reason you MUST get underwritten by a lender BEFORE you start making offers
- Biggest beginner mistakes that stop new investors from closing on their first facility
🌳 Work with someone experienced in self storage loans at Live Oak Bank! https://www.liveoakbank.com/business-loans/self-storage/
Transcript
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| 0:00.0 | I've had situations where someone's called me panicking because last night they clicked on an auction and they put $50,000 as a bid and it went hard as soon as they won the auction. And now they have 30 days to close. |
| 0:14.5 | You guys are looking at today's environment. Rates are starting to go down. What do you see? So I think we're at a really exciting point in the industry |
| 0:21.1 | where rates are starting to come down, but we don't have these sellers who have these |
| 0:25.2 | 2021, 2022 expectations when it comes to cap rate. |
| 0:34.4 | Welcome everybody to self-storage income. |
| 0:40.9 | And the market feels like it's been thawing. |
| 0:43.5 | And I want to talk about today what's happening, |
| 0:45.3 | especially on the financing side, |
| 0:50.7 | and how you guys can get money to buy a facility. |
| 0:58.9 | But before we get into that, I have to say I'm here in North Carolina with Live Oak Bank. |
| 1:05.2 | And the main reason I came here was so that we could talk to the king about his pet elephant. |
| 1:13.6 | So with that, I think that's how we should start if you guys would introduce yourself and we could talk about the elephant in the room. |
| 1:28.6 | All right. Well, my name is Bishesh. I'm definitely not the king. But, you know, the elephant story is a pretty cool one. So my family is in Nepal and they did have a resort at one time. And in that resort, they had a jungle walk with the elephant, you know, riding the elephant. |
| 1:36.1 | So into the jungles trying to chase some tigers and rhinos and, yeah, that was the fun stuff. |
| 1:40.8 | But we didn't own them as pets. |
| 1:43.2 | They were working elephants. |
| 1:45.7 | So, yeah, all good there. |
| 1:50.9 | You grew up, though, and you had elephants. Well, one of the businesses that my family owned had elephants, yes. That's awesome. Now, you've been on the podcast before. I'm sure that |
| 1:56.9 | you probably, like me, didn't have elephants growing up. Just golden retrievers. There you go. Now, how long have you guys both been with Live Oak Bank? We actually started around the same time almost 12 years ago. 2013, I think it was, yeah, 2013. So we've been here for a while. And we both jumped into self-storage about the same time as well. |
| 2:17.7 | So that was about nine years ago, almost a decade. |
| 2:20.3 | Yeah. |
| 2:21.3 | Yeah. |
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