Cash Out Refinance on an RV or Boat Storage Lot: How It Works

The typical RV and boat storage owner we talk to has the same problem. They bought or built a lot, filled it, and now have a property worth far more than they owe on it, with no way to get at the equity. The bank that would not finance the purchase will not refinance it either. The money is real, and it is stuck in the gravel. A cash out refinance with a private lender is how it comes out.

What a Cash Out Refinance Is

A new loan on the property that pays off whatever is currently owed, if anything, and puts the rest in your account. If the lot is owned free and clear, the entire loan is cash out. The loan is secured by the storage property and the proceeds are yours to use for the next lot, another investment, or the business. We require a business purpose for the funds, which is the case for nearly everyone doing this.

What the Loan Is Based On

Two things. First, what you paid for the property in an arm's length purchase, if that was recent. Second, the income you can document with bank deposits. RV and boat storage is a good fit for deposit based underwriting because the tenants are many and small, they pay monthly, and most operators already collect through a card processor or a software platform that produces clean payout reports. Twelve months of those deposits, plus your purchase settlement statement, is the core of the file.

The loan sizes from the price paid, and moves toward the top of our range, 65% of value, when the deposits show the income comfortably covering the interest. A lot you bought two years ago for $600,000 that now deposits $9,000 a month is a straightforward cash out. A lot you bought fifteen years ago is valued differently, usually on the land plus a conservative read of the income, because the old price no longer tells us much.

What It Takes

• Settlement statement and deed from when you bought the property.
• Twelve months of bank statements or platform payout reports showing the storage income.
• Confirmation from the county that RV and boat storage is permitted by right on the parcel, or a clean path to that letter as a closing condition.
• Entity documents and a personal guaranty.
• A clean site history. RV and boat lots on former farmland rarely need an environmental report. A lot that used to be a repair shop or fuel stop needs a Phase I.

What It Does Not Take

An appraisal, in most cases. Tax returns showing years of profit. A building. A committee meeting. Our outdoor storage financing program underwrites in house, one person makes the decision, and a complete file closes in 7 to 14 days.

A Common Structure

An operator owns a 200 space RV and boat lot free and clear, bought three years ago for $900,000, with platform payouts averaging $14,000 a month. The loan at 65% of the price is $585,000, interest only, with all of it landing as cash at closing. Annual interest at 13% is about $76,000 against $168,000 in documented income, so the coverage is comfortable. The operator uses the proceeds as the down payment on a second lot. Illustration only, but it is the shape most of these deals take.

Read the full guide to RV and boat storage facility loans, or send us the address and your purchase price for a written number.