Floating a Car Related Business Idea
 

You guys always provide good feedback, so here goes. I know a lot of car guys that either have more cars than space, or the desire to purchase a car but no additional space to store it. The choices are few in Wichita - rent a bare bones storage unit for about $150/month (roll up door, no electricity, no climate control), purchase/lease a commercial building, or purchase a "luxury storage suite" at a local facility. The luxury storage suites are essentially oversized storage units ranging from about 1200 to 2500 sq ft that are wired, plumbed, and climate controlled. Depending on the size and finish they sell for between $150,000 and $300,000, and usually sell quickly. They are not rented, except for owners renting spots to their friends.

My thought is that there is a pretty big local gap between bare-bones and luxury vehicle storage for collector cars, and therefore a potential opportunity. My idea is to purchase a plot of land in or near the NE quadrant of Wichita, which is where the abundance of nice homes are located. The land would need to be readily accessible via paved roads, close or in town, and in an area perceived to be safe. On the land I would build a large steel building for vehicle storage. I picture the layout of the building as being a large central garage door and center corridor, with parking spots adjacent on either side. Each spot would be segregated by a half wall with doors for vehicle access to give some measure of privacy and security, a spigot and floor drain for indoor washing, and sized adequately at about 12x20. The building overall would be well-lit and climate controlled, with some variety of code access for the building and gate access to the property. A four post lift would be available via reservation for an extra fee for vehicle maintenance. I had also thought that a community element might add appeal, for instance a picnic area to hold monthly summer bbqs.

So, putting aside the obvious questions of property cost and construction logistics, does something sound like this sound appealing for say $500/mo? My doctor neighbor (Lotus Evora S, Shelby Super Snake shopping) told me that he had once discussed something similar and had strangers calling him via word of mouth, and I know multiple people paying hundreds per month to store their car in a shared commercial space who aren't happy, so I know there is some interest. There is nothing in Wichita that offers a similar service. Thoughts?

Protecting yourself from liability will be the biggest challenge. So, security and insurance will need to be state of the art, and you're going to need great legal advice. Otherwise, a great idea. I wish I had the business savvy and the resources to attempt a similar endeavor.

Good luck!

I'm working on something similar for New York City but it goes a lot further than what you have planned out. The math pencils out.

My plan covers 24/7 bonded security service, critical in NYC. I have a way for liability as well.

I've had this idea for awhile now, because I just put up a 104'x60' pole barn that we built 4 horse stalls in, and the remainder of it is a riding arena for my wife and daughter.

You can't believe how many horse people want to rent a monthly stall for thier horse with the ability to ride year round. All of my friends want to put thier muscle cars somewhere safe for the Winter where they won't get messed with, and most of these people have called us crazy for not wanting to have customers (whether it be storage, or riding) stomping all over my property in the exchange for a princley fee.

The only way I would do it is to have it away from my own property and fence the entire property (5 acres would be ideal) and put up a large pole barn or two for secure automotive Winter storage, and apply stone to the rest of the acreage for boat/RV storage behind an 8' fence with barbed wire around the top.

There is good money in the Winter car storage business, but I think the real bucks are made on the secure outdoor storage for boats and RVs when they are not allowed to have them in thier own driveways, they need a place to park them when not in use (Marina storage is insane).

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OP "Thoughts"

First: Why am I not already doing this!?

Second: Great idea, I believe people will definitely pay especially considering the added benefits as described. I have a buddy who was shelling out $650/mo for storage in 1-bay (for an '02 Trans-Am LOL)

Thanks guys! Shaun, just based on basic estimates for land and building cost I think it pays back within 5 years. In KS the security requirements would be less than NYC, access control to the property would probably be sufficient. I also had the idea of 24/7 wifi cameras so owners could check in on their cars at any time.

The large RV/boat storage was another related idea of mine, likely on the same property. As the owner of a 23' boat there is only one indoor facility that is large enough for it to fit. That facility is almost $300/month and has a wait list.

My grandfather had storage units as part of his investment portfolio and loved them. Minimal maintenance requirements, low upfront cost, excellent cash flow.

There was a place like that here in Kansas city for a while. It made it a few years. Cool place old building they put a couple lifts in and you could rent those pretty cheep. 24 hour access, pretty clean. Couple guys brought in fridges for beer and snacks. I think it was around 150 bucks a month, they had a full time mechanic that they rented space to who would work on your car at a discount.

I've studied this idea as well. My plan was for renting units, versus selling them. I'd offer some open spaces for one price, partitioned ones for another, and then completely enclosed ones for those who who wanted to increase their level of security even further. By "open" I mean that they'd be separated from other spots by nothing more than lines - they'd still be in a climate-controlled building.

Onsite detail services would be available, and there would be lifts available on an hourly rental basis for tenants. Probably some tool rental or loan service as well. I even considered an on-site tuner and a dyno. Some sort of comfortable lounge area, while taking up precious storage space, might be attractive to people too.

Life, so far anyway, has gotten in the way of me pursuing this further for now, but when I looked into it a couple of years ago it appeared to pencil in my area. That said, that was a couple of years ago and real estate has gotten completely out of hand in my area since then. Of course there are affordable areas in different parts of the metro area, but there's a need for this sort of thing in my part of town, not across town.

C'est la via, I'll probably never jump back into it, but I do think it's a viable business.

Good luck in your pursuit!

As stated, insurance should bne investigated before anything.

Environmental contingencies also need to be looked into -- what happens if there is an oil spill and it seeps into the groud around the area? With a four-post lift, folks are going to be draining fluids, and you will need to have a plan in place to capture the oil/transmission lube/antifreeze...etc. Regarding that 4-post lift - you may want to require training and certification to be able to operate it - too many accidents have occurred with the improper positioning of a car on a lift.

For security, and fire containment, I would replace the half-walls with floor to ceiling corregated metal walls. If I am storing a high-end exotic vehicle in your facility, I prefer not to have others able to view my car.

Will you have provisions for storge of other items? I would think workshop tools are ok - but storing vast amounts of paper or volitile fluids such as paints can be a recipie for trouble.

Venting - proper ventilation should be a high priority -- don't want your customers to be overcome with CO fumes...

Interesting concept that I have discussed with my fellow PCA members as well...

-Z-man.

I already own a warehouse, and considered this. The building is one story, and has plenty of room outside for trailers, even semis, to maneuver. Perfect layout for this type of business.

-If you have lifts available, hazardous waste will be a problem. Everybody says they will keep the space clean, but at some point there will be a grimy bucket of oil/coolant/grease/slop that nobody knows about.

-Floor will need to be cleaned on a regular basis. If a place looks clean, people tend to keep it clean. Once it looks messy, the mess grows exponentially.

-High-end cars need high-end security. A half wall will not keep looky-loos away from an original Cobra. Some think that since they are "car guys" its okay to take a close look at other's cars. That has to be prevented. One thought I had was chain-link cages. That way, light is not blocked by solid walls, making maintenance easier, and everybody can oogle cars without touching.

Since my warehouse has 3-phase power and a compressed air system throughout, I was going to supply each bay with power and air.

We ended up not doing this. The space is rented out to a few good businesses that pay their rent on time each month. Much easier from a landlord's perspective than trying to squeeze rent out of two dozen or so individuals. I'd hate to have to call someone and tell them their Gullwing has been pushed outside until the rent is caught up.


Edit: looks like Z-man and I were typing at the same time. I wasn't quite fast enough....

Around here, there is a lot of competition in this space. Virtually all of the independent Porsche shops around here also have storage facilities. But, I am not sure of their price point.

There is also this ad which has been running in our local PCA monthly newsletter for over a year. Since it is still running, I guess he hasn't gotten any traction.

http://forums.pelicanparts.com/uploa...1427139808.jpg

I think a lot of owners would feel this way. For my lowly 911 I would. If I owned a Zonda or 918 than I certainly would.

I've been using such services in FL prior to my move and since then in Cali post move (lack space in my new garage). The market seems to be capped at $300/mo from my research as a customer. It was cheaper in FL (not much, $250 or so) , but so is R.E. there. And it wasn't full - by a long shot. The one in Cali is about 90% full I'd say.

Currently my 912 is atop a lift, pissing oil on a new Aston Martin (metaphorically speaking - there's a drip pan). That place has a 50s 300SL, countless old maseratis, Ferraris, porsches, $$$ cars... my car is by far one of the crappiest or lower value ones. But it's also not full, and I think it's too expensive for regular guys - $300 a month for my 1Million 300SL I'm ok with, for my 912 not so much... I'm about to call it quits based on cost...

I briefly thought about doing this for myself, smaller warehouse, share costs with 4/5 other people, but once I priced the warehouse and insurance, it wasn't worth my time. Might be different in your area - but if warehouses are cheap and plentiful, the need tends to be less.

On features, the place I'm currently in has magnetic card access, IP camera access, small office/facilities. It's odd in that I could access all the car keys and drive away (I'd get caught but I could). I think there could be more security given the cars on location. Lifts everywhere for stacking and doubling space. If you are on top you must call someone and they will come move the car below. Same if you wanna get to your top spot and there's car there...
I even asked the guy if he wanted to partner up when they were full, but business has since dropped. And the math didn't work for me (in that location, I'm better off buying a house and renting it via airbnb, while using its garage for myself - which is exactly what I plan to do)

Here's a setup in CO called Vehicle Vault. Very interesting...a larger operation than you are talking about but interesting nonetheless.

Gallery at Vehicle Vault Car Museum

The one I used in FL was also called "the vault", how original ;-)

The Vault - Fine Automotive Preservation and Storage Solutions - Tampa Bay Car Storage, Alfa Romeo, Aston Martin, Audi, Bentley, BMW, Bugatti, Ferrari, Jaguar, Koenigsegg, Lamborghini, Lotus, Maserati, Mayback, McLaren, Mercedes-Benz, Pagani, Porsche

Figure around 20% loss of floor space, and a 40,000 sf building gets you around 32,000 sf. So 133 units.

At $120/ sf, plus $20/sf interiors, you're around $5,600,000. 25 year amo, 5.5% and your mortgage not including points would be $34,000. Your costs not including insurance, property taxes, maintenance, reserves, etc would be around 52%. You can project taxes based on your local tax rate, and get insurance estimates. Use a 10% vacancy factor, and at least 4% reserves. This is for things like structural repairs, roof, asphalt resealing and parking lot repaint, etc. Don't forget to factor in labor, payroll taxes, insurance for employees which is different from property insurance, etc

Sounds like a great idea. A big plus would be a mechanic to check on the tires and batteries once a month. $500 a month is steep around here, but people might pay if it had a concrete floor, the mechanic, and escorted access only.

Matt, I know it is a bit different, but have you checked out the guy that is part of the Carriage Houses on the KCWS board?

One I used to belong to outside of Atlanta.

- Car Storage Club In Alpharetta GA - Race Cars, Street Cars and Show Cars

No Kurt, I'm not familiar with that. Any more info?

Thanks for all the input so far guys. I think the biggest question in my mind is price sensitivity, which is very localized. I need to talk with some local guys that I know have the means to see what their input is.

Just to be clear, what I'm thinking isn't a huge operation. No stacking cars vertically, no huge fancy finished suites, just a clean, secure, climate controlled place to keep your car, do moderate wrenching, and socialize with other car guys. Something like what willtell posted but with half walls. Wichita is a pretty laid back place, hell I don't think we even have a restaurant with valet parking, so some of the more high dollar operations probably wouldn't work here. I know guys parking six figure cars inside of shared garage spaces and paying a few hundred per month to their buddy who owns the space. The spaces are so shared that they have to leave their key, as their car might be blocking in someone else. THAT is the situation that I could improve on. Real estate is cheap here, guys that want a fancy full on man cave will just buy some property.

I am fully aware that insurance and environmental considerations would need to be investigated first and foremost. I need to talk with a friend that does commercial real estate development, from my construction experience I don't think a metal building in Wichita is anywhere near $120/sq ft, and I would likely do much of the interior work finish myself. I envision the walls as being 5' or so like a backyard fence, free-standing walls are easy to build and would allow me to use common lighting and HVAC for the entire place. It would be tall enough to be generally secure, but also foster a neighborhood social feel. CO issues had crossed my mind, but putting the small round exhaust valves on the exterior (connect to tailpipe) in each spot might be a solution. This is just an idea right now, and if I ever pulled the trigger it would be on a small scale, say 20 spots tops. I'm thinking cool side gig, not full-time million dollar investment.

Yeah I think your first order of business would be to investigate the $$ amount to buy the land, pull the permits (guessing lots of them), and hire the grading/concrete/building/elec contractors to build it.

Just poking around FS industrial space this looks like it would be a great start at $80 sq/ft ready to go. EDIT - $500/month sounds pretty pricey to me. I would want alot more than a clean place to store my car and access a lift. YMMV.

6650 N. Broadway, Park City, KS 67219 - Industrial For Sale on Cityfeet.com

This is sorta related to my thread a couple years back about building my own home. Turns out it was far far cheaper to start with an existing home and renovate. Cool thread Matt!

I had the same thought regarding build vs buy. My only concern is that a purchased commercial building might have far more content than I would need. This would really just be a glorified garage or barn.

Great idea. You could also include "secure" space for motorbikes and a persons own junk by buying some shipping containers and having them as a lockup inside your building.

I live in Chicago, if you look outside of major metro areas there are alot of places that offer storage for around $50 a month. Limited access (or no unsupervised access) basically you put the car in the facility, you put a cover on it, pull the battery off, it is climate controlled and kept clean. It isn't private, the cars are kept under covers, and they might have wireless cameras, etc. You don't need a 12x20 spot for a sports car, etc.
SUMMER CAR STORAGE/$ 40 MONTHLY/INDOOR/DRY/CLEAN
RATES

As an owner, If, I want to put my car away for an extended period of time. If I had to pay $300 to store it, I could finance the building of a second garage on my own property for less (providing I was allowed from a code standpoint. Additionally, if I had the garage space, I could put a lift in for significantly less.

If you had a warehouse might I suggest looking at fork lifted store space where you can stack the cars vertically. This would dramatically increase the usable space and make your costs go way down. An owner would need to pay extra for in/out service. But you could "pallet" the cars so the owner could lock the car, etc. and then he could watch the fork lift driver place the car on it's storage spot, and the owner takes the keys with him. People do this for boat storage all the time.

http://www.millcreekmarine.com/images/forklift.jpg

So if it were me, I would look to see if there was a way we could build a steel pallet that you could park and strap a car to, then use a fork-lift to "park" and retrieve the cars for the customers.

The ideas of lifts and club house's and such like that are all great ideas, and I know it is done today at country club race tracks. Places like Autobahn country club provides its members with the opportunity to build a building on the property that they can configure however they want providing they don't live there full time. I would imagine that it would be possible for several members to split the cost on one of these pieces of property and build a building that could be used for storage, repair, etc.

Your first step is not investigating the costs, the insurance, the location, etc.

Your first step should be to talk to your customers. Since you don't actually have the product, you will have to spend more time talking to them and finding out what they would pay and amenities that they will pay money for.

You are trying to find out if there is a consensus. That would form a market.

I would not lend money for someone's hobby either. I would lend money as an investment for a sound business. If you don't know your customers, it'll be obvious. What amenities do they want, and how much will they pay? That is where the difference between an idea and an opportunity exists.

Totally agree. While not local, you guys are representative of my target market. If you said that I was a moron then it would have given me serious pause. I have plenty of local folks that I can speak with, guys who have the interest and the means. It's not a near term thing either, I wouldn't be in the position to act on it for a while. Just an idea that's been bouncing around my head for a while.

Just from the seat of my pants, I think you should look for median HH incomes of over $80K, and at least 60% White, and the most important thing is education. You want over half in your 1 mile radius to have at least some college education. Education determines income and HOW YOU SPEND YOUR MONEY more than race or income level. How much to charge? I think honestly $500 membership fee is total Taj Mahal, Cable TV, clubhouse, sofas, and a way to do something power related, like a drag strip or dyno, or something. But then, you'd be needing a few hundred members too. Maybe you can charge a sign up fee, like a grand or something. And make it a yearly contract..

There's some good advice here.

I like your idea but I'm more concerned about safety than anything else. If a careless halfwit did something stupid and the whole deal could go up in flames.

FYI: I kept Tangerine in her own storage unit for a couple years. No climate control but secure, out of the weather, plus an outlet nearby to plug in my battery tender. I think the cost was just under $100/mo.

http://forums.pelicanparts.com/uploa...1427155629.jpg

I also rented at the same location a 12' x 30' unit with bay doors on each end, electrical outlet, and lighting for $200/mo. and kept my 914 on one side of it and my irrigation trailer on the other. Plus other stuff piled up around the sides.

No climate control nor 4 post lift nor grill but suited my needs at the time being.

I've since brought everything to my home. And Tangerine was sold a couple years back, unfortunately.

Good luck with your venture - I know there's a market for what you have envisioned!

The 914 in her end of the 12' x 30' storage unit....

http://forums.pelicanparts.com/uploa...1427156106.jpg

One thought would be add lots of very visible cameras to your plans.

Another, re: socializing, add a byob/big screen common area that could also be reserved at a price to watch big sporting events.

Also, I know a lot of guys who have golf course membership fees of $1,000 to $1,200 per month, and that includes no golf and no meals. I can't afford that kinda monthly spend, but it sure makes $300/mo. seem reasonable.

No way would I have a common area / social aspect unless you are up for a horse boarding type drama.

I would have 24h access, secure storage, fully enclosed in an upscale building. Meaning nice floors, good lighting. No work allowed. Offer a jump start and air pressure cart. This will keep cost and overall liability low. You should look at $300 / mo and do the math.

Generally I'd run this as a storage facility. Use the same techniques for move in specials, rent contracts etc. I would also want to see a family member run the place - not a manager you hire.

G

Jeez, I had no idea there was that kind of money in Kansas. $500 is pretty rich. I rent a single car, indoor heated space in Montana and store 6 motorcycles there for $50 a month. Rich car guys are going to be kinda cheap, right? I mean, isn't that the persona? I think you need to keep it at $200 a month max. I doubt I would spring that kind of coin, and I have a bunch of rental spaces for various stuff. My outdoor storage space for an F150 is $50 a month. Used to be $35.

I am with Motion. Maybe even $300 is too much. I haven't rented something in a while but even in CA a few years ago a garage in a storage center was $120/mo. Granted, no outlet for a battery tender and not air conditioned.

In a place with plenty of space like KS, wouldn't guys just add a garage stall or two? $500/mo will easily build a $50k addition.

G

That's the key. Kansas isn't NYC or San Francisco.

Yeah, I'm surprised you could get that kind of money, esp. in the midwest.

I'd never pay even $150/month to store a car. That's $1,800 a year. And $200-$250, yikes! $3,000/yr just to store a car? Seems rich to me.

But $500 month / $6,000 year just to store a car, that seems really, really high.

Hell, you can rent a 3/2 house with a 2 car garage in SW Albuquerque for not much more than $500 a month. Now that's a party!

That's why I'm planning this out in NYC...Brooklyn, with a car service to get you from the City, and back again after you've had your day of fun.