Financing of storage condominiums has always been a hit or miss sort of thing, mainly due to the newness of this concept. Some banks simply don't get it, even though the sales and entitlement process is exactly the same as any other "bankable" real estate. Escrow, title insurance, ownership vesting is exactly the same. We have always been the square peg in a round hole.

However, we do have an expanding collection of banks willing to lend on storage condominiums. Yes, there are some "progressive" lenders out there listed below. Please visit this page often, as other banks may be joining us in providing reasonable finance solutions.

Special Note to Private Investors

We are actively enrolling investors interested in providing 1st trust deeds on our storage condominiums. Loan amounts range from $75,000 up to $400,000. Interest rates range from 6 to 8% based on the strength of your borrower. Generally, borrowers are well qualified, and will provide down payments to your terms. 25% up to 50%. Loan servicing can be provided by FCI Lender Services. at a cost of about $15 per month.

We have placed many private first trust deeds and we can guide you through the process. Contact Ted at 1-714-928-0527 or by Email

Hidden Tax Beneifts of Storage Condominiums (Cost Segregation)

Before diving into Storage Condominium ownership, there are some little known tax benefits lurking out there that are fairly new and worth exploring. Cost-segregation is notable.

Essentially, a cost-segregation analysis allows an owner to depreciate certain types of building components and improvements over a shorter depreciation recovery period than the typical 39 years generally used for self-storage facilities. For instance, most site work (paving, curbing, fencing, lighting, retaining walls, storm drainage and other utilities) can now be depreciated over 15 years. Many systems, such as closed-circuit television, controlled access gates, computerized locking or alarm, can be depreciated over five to seven years.

You're probably wondering, "Why hasn't my accountant told me about this?" First, the concept of cost-segregation is a relatively new one. Second, it requires an engineering skill set and expertise most accounting firms don't have have in-house, such as being able to read construction drawings, and knowing construction systems, cost estimating and how various types of IRS asset classifications relate to existing construction and use. A cost-segregation study does not replace the accountant's role in determining taxes or preparing tax documents and forms. It provides information to the accountant so the proper IRS forms may be prepared and the correct, allowable depreciation calculated.

The following chart is courtesy of my friends at


First Republic Bank

First Republic Bank, located in Palm Springs is providing financing for our storage condominiums. Here are the expected terms. (The below terms are preliminary, as we are still not close enough to completion for exact quotes just yet.)

  • Loan Term: (length of loan), 10 years
  • Rate: Prime + 1.25% to 2.50% (variable)
  • Fees: 1% origination, plus closing costs
  • Loan to Value: 50% (up to 60% may be available to stronger borrowers
  • Collateral: 1st trust deed

Pricing terms are subject to change – and reflect a deposit relationship with FRB, including having the monthly payments deducted from a FRB checking account. Fixed rates available to stronger borrowers combined with having/establishing a good deposit relationship with FRB.

Home Equity Line of Credit (HELOC)

If you desire 100% financing and some tax deductability at the same time, a HELOC may be what you are looking for. Using the equity in your home, you can borrow the necessary funds to purchase your storage condominium. Often you can borrow enough to fund the entire pourchase.

A home equity line of credit (often called HELOC, pronounced Hee-lock) is a loan in which the lender agrees to lend a maximum amount within an agreed period (called a term), where the collateral is the borrower's equity in his/her house (akin to a second mortgage).

Further, (subject to some restrictions), you can deduct the interest portion of your loan from your taxes, where with traditional loans, you cannot (personal use, not business use.)

Here is a link to get you started, but almost all major banks provide this service. Shop around as the rates vary quite a bit. --

SBA 504 Commercial Loans

SBA 504 commercial loans are the darlings of comercial loans. The down payment can be as low as 10%, with long amortizations of up to 25 years, making the monthly payments very low. However, the process for this type of loan tends to be lengthy. Set aside at least 60 days for funding.

How 504 Loan Funds May Be Used The use of proceeds from 504 Loans must be used for fixed assets (and certain soft costs), including:
  • The purchase of existing buildings;
  • The purchase of land and land improvements, including grading, street improvements, utilities, parking lots and landscaping;
  • The construction of new facilities or modernizing, renovating or converting existing facilities;
  • The purchase of long-term machinery* ; or
  • The refinancing of debt in connection with an expansion of the business through new or renovated facilities or equipment*.
*Note: The 504 Program cannot be used for working capital or inventory, consolidating or repaying debt, or refinancing (except for projects with an expansion component or that meet the temporary refinancing provisions of the Small Business Jobs Act of 2010).

The 504 Loan program offers small businesses both immediate and long-term benefits, so business owners can focus on growing their business. Some of the top-level benefits include:
  • 90% financing;
  • Longer loan amortizations, no balloon payments;
  • Fixed-rate interest rates; and
  • Savings that result in improved cash flow for small businesses.
504 Loan Eligibility

To be eligible for a 504 Loan, your business must be operated for profit and fall within the size standards set by the SBA. Under the 504 Program, a business qualifies if it has a tangible net worth not more than $15 million, and an average net income of $5 million or less after federal income taxes for the preceding two years prior to application.

Loans cannot be made to businesses engaged in nonprofit, passive or speculative activities. For additional information on eligibility criteria and loan application requirements, small business and lenders are encouraged to contact a Certified Development Company in their area.

Here are a few SBA 504 sources to help get you started.