Floating a Car Related Business Idea

[onewhippedpuppy]

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?

[herr_oberst]

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!

[Shaun @ Tru6]

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.

[Shaun @ Tru6]

Originally Posted by herr_oberst

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

Good luck!

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

[ckelly78z]

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).

[1990C4S]

Subscribed...

[911SauCy]

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)

[onewhippedpuppy]

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.

[t-tom]

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.

[Norm K]

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!

[Z-man]

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.

[Dantilla]

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....

[Paul_Heery]

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.

[KNS]

Originally Posted by Z-man

If I am storing a high-end exotic vehicle in your facility, I prefer not to have others able to view my car.
.

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.

[Deschodt]

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)

[Nickshu]

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

[Deschodt]

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

[rusnak]

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

[wdfifteen]

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.

[Rot 911]

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?