How will banks value my Storage Shed business so i can borrow against it?

[Logic]

Hi All,

I'm not a regular poster because i dont feel like i am experienced enough to contribute just yet! But i do have a quick question i hope someone can offer their opinions on......i have a block of land with shipping containers used as storage sheds and would like to refinance on it to access some funds. I have mostly 1yr leases on all of them and a waiting list of people waiting to get in.

I've heard one broker tell me that the commercial lenders will almost value it as 'land only' because the shipping containers are not a fixed/permanent structure? Does anyone know if this is true?
What sort of LVR would i be looking at?
Would any of the lenders look at my yield and allow me to borrow more than just the land value?

hoping someone who's been through this or knows this stuff can offer some suggestions?

 

[Qlds007]

I think your broker is about right.

The lenders security could in theory disappear overnight if the containers were picked up and not returned. (Iassume they are freestanding and not fixed to the ground) and as such i think you wil be looking at a land value security.

I have financed a couple of similar ventures owned by clients and have never got much more.

 

[grossreal]

hi Logic
can you get some on a 3 x 3 lease.
if so you can lend against the lease.
not easy but possible some of the second teir lender will lend on it but the rates will be over the 10% mark so not cheap money.
also a valuer will value the business not the container
and on the lease value.
I have never done this type of finance as not got any of my people looking for this type of funding but a few of the funders out there will look at it.
the other thing is
is there any concrete under the containers and can you fix then.
I would be very interested on how you get on.
on this one and to find who will lend on it.

 

[Logic]

thanks for your replies Qlds007 and Grossreal

makes sense that the lender wouldn't risk what could easily be removed from the site.

i'm going to see a commercial broker today so i'll see if he has any other suggestions and will let the forum know.

thanks!

 

[landlubber]

Logic ...Welcome to the forum !! I am interested in hearing about your business if you don't mind sharing . May I email you ?

LL

PS Don't be fooled ...we're all learning here ...I'm sure your contribution would be just as valid the rest of us "experts" !

 

[Pablo]

I'm not a regular poster because i don't feel like i am experienced enough to contribute just yet!

Hi and welcome. If you're the guy that had a quick presentation at the Adelaide meeting a couple months ago (and I think you are) your more than experienced enough to contribute to this forum. I learnt more from your 10 minute presentation than from the main presenter who was a developer. Hope to hear more from you in the future.

Cheers,
Pablo.

 

[sailor]

Hi Logic, welcome to SS. I'd love to hear about your storage business.