Guys, I'd like your ideas and feedback on opening a collector car facility

[Hudsy Wudsy]

Failure due to under capitalization isn't negative thinking as in "doom and gloom". It's the cold, hard reality that has sent many a good man into bankruptcy court.

[Restorer32]

Here's a joke told to me by an Amish man. "What would the Amish man do if he won a million dollars in the lottery?" Answer... "He would keep farming 'til that was gone".

[Scooter Guy]

There is a facility just south of Fort Worth, Texas called the Motorsports Ranch. 

 

It seems to be nearly exactly the sort of thing you're talking about. They have a private road course (two actually), a skid pad, clubhouse, garages (13 buildings worth), and private on-site support businesses of different sorts. There are (apparently separate, third-party?) some stand-alone track side houses available there also. Their website has a lot of information on what they have to offer and what their fee structure is. They don't have a museum, but they seem to check just about every other box that you mentioned. 

 

It took A LOT of time and money to get this facility to where it is today. A LOT. It did not happen overnight, rather it took years to develop the facility. If you are serious about pursuing a similar concept, my suggestion is to go visit this facility and try to get them to answer as many questions as you can think of. I don't intend to discourage you but think part of your market research should be to see what your competition has to offer and how they run their operations. They seem to be more "track centric" and with more of a motor sports focus, so less about the garages themselves, but that might be an important take-away for you to consider.I am not a member there but have seen their facility. 

[joe_padavano]

The commercial facility where you can store and work on your own car has been tried and mostly failed for decades.  When I was in college in the 1970s, I once used such a facility run by Click and Clack in Cambridge, MA, since I had to help a friend change a starter in the middle of a Massachusetts winter. That shop didn't last long.  More recently, one here in Sterling, VA lasted about a year.  The fundamental problem here is the cost of liability insurance.  You have no idea of the skills that each potential user has, nor any idea of that person's safety ethic.  Suffice to say that anything from a scrape on up in severity will be the facility's fault, and subject to some sort of legal settlement.  Do the users bring their own tools? Are they using a facility lift? What about a torch or other fire starter?  The general public by and large are idiots and any stupid mistake that they make will have a trail of ambulance-chasing lawyers looking for the deep pockets. Release forms are worthless - they are too easy to get around.

Edited January 9, 2019 by joe_padavano (see edit history)

[JFranklin]

Joe is right, maybe if there was a mechanic on call to do repairs the problem could be solved. I have thought a facility that could serve as collector car paid storage, and multi-club meeting room, with stored cars exhibited safely in a museum setting, might work. The club members could share the duties of docent and have limited public viewing hours to generate additional funds

[1937hd45]

Here is a related question, if you have the funds to go out and buy a $250,000.00 + super car how come you need to store it in an upscale storage facility, and can't afford to have a 20x20 addition added to your current garage? Bob 

[joe_padavano]

23 minutes ago, 1937hd45 said:

Here is a related question, if you have the funds to go out and buy a $250,000.00 + super car how come you need to store it in an upscale storage facility, and can't afford to have a 20x20 addition added to your current garage? Bob 

 

Because what good is spending $250K if you can't show it off to brag about it?

[39BuickEight]

20 minutes ago, 1937hd45 said:

Here is a related question, if you have the funds to go out and buy a $250,000.00 + super car how come you need to store it in an upscale storage facility, and can't afford to have a 20x20 addition added to your current garage? Bob 

 

Ego, geography, impulse purchases, convenience of maintenance, all sorts of reasons

 

I hear you though.  Its the same thing I wonder when I see a person file an $1100 damage claim with a $1000 deducible on a $50,000 car.  So you mean you can afford (oh wait, they actually cant) a $50,000 car, but can only afford $1000, and not $1100, to repair it , knowing your rates will go up because you backed into your own mailbox twice this year?  And you have the wherewithal to drive a $50,000 car, but cant figure out that if you shop around, you can probably get it fixed for less than $1000 anyway.

[Scooter Guy]

I think you need to decide what business you want to be in...

 

1. Real estate developer (which means building the facility then actually selling the garages/condos)

2. Landlord (you own it and collect rent for the spaces)

3. Shop owner (restoration, repair, car wash, whatever...)

4. Museum operator 

5. Race track operator

6. Restaurant operator

7. Events center operator

 

My opinion is that a lot of these concepts fail because there is no focus and the facility is trying to do all of those things at the same time with limited knowledge of most of the various lines of business. It can be done, but the phrase "Jack of all trades, master of none" comes to mind. 

 

Personally I see the model used at M1 Concourse to be the best approach - SELL the garage units to individuals thus transferring risk to them (insurance, liability, security, etc.) and then offer shared spaces like the track, skid pad, picnic area for RENT but with blackout periods for garage owner use exclusively. That seems like a much more manageable, and likely sustainable, approach to such a facility. 

 

 

[Grizz]

7 hours ago, StylishOne said:

 

If we can keep the negative gloom and doom aside (fully understanding it's there ever lurking in the dark corners) and focus more..as some did, on more creative fun things to consider having (doing?) at such an establishment, I'd enjoy hearing those.

Like someone else said, I think he’s looking for ideas and input about what you, the car people, like and are interested in. I didn’t see anywhere in the question about all the different ways a certain business venture can fail miserably. Anybody can come up with a never ending speil of all the possible downfalls. Heck it might even be welcomed as long as it were followed by some solid brainstorming of possible ideas. I know it’s hard for the older fellas but let’s try not to be so crotchety 😉😂

[Matt Harwood]

I have a few thoughts, having actually tried this myself once before.

 

About 20 years ago, my father and I put together what I called "the Car Guy Consortium" to do just what you propose--to purchase a warehouse/garage expressly for the storage of collector vehicles. We got about eight guys together and we formed a corporation (CGC, Inc.). That corporation (i.e. the shareholders) purchased a 15,000 square foot warehouse in a near west-side suburb of Cleveland. The corporation was billed for heat and electricity, and paid the taxes and mortgage. The guys in the Consortium had an agreement to pay their share of the bills on a per-vehicle basis (i.e. the guy with two cars paid twice as much as the guy with one car). Because the membership changed, the monthly would change too. If someone else bought a new car, their payment went up, your payment went down. If someone else joined, everyone's payment went down. But if you bought a new car, your payment went up (though it didn't necessarily double because the "pie" was still the same size). Dig?

 

It worked fine for about 18 months. Then people started using this storage facility as a workshop. Guys would turn the heat up when they were there (we usually kept it at about 55 degrees in the winter). They'd bring tools and run the electricity bills up. Some guys wanted out for a variety of reasons, and the others would have to shoulder the costs until someone could be found to take that person's place. When two guys left in one month, everyone else's payment went up by almost $600--that's a big nut to ask the others to carry all at once. Sometimes guys would forget or come up short that month, and this was always the first place they looked to "skip" a payment. It was hard to "force" anyone to pay, and if they had a bad month, sometimes the others had to pick up the slack. That made people bitter and led to some friendships ending. And as Joe points out, insurance became an issue once we switched from simple storage to doing work on-premises, even if it was guys working on their own cars. It's significant jump from store keeper's insurance (storage) to garage keeper's insurance (fixing and driving) to dealership insurance (storing, fixing, driving, and strangers driving).

 

Of course, you can see where this is going. One guy turned off the heat on his way out the door and the place froze, breaking pipes and damaging some cars. After that, it didn't take long to fall apart because it became 1) too expensive and 2) unbalanced when some owners felt that others were taking advantage by working on their cars in the shop and risking everyone else's cars in the process. We sold the warehouse (at a pretty significant loss, I might add) and disbanded the Car Guy Consortium after about four years. Nobody could agree on the right way to do it, only that whatever we proposed wouldn't work for a variety of reasons. Friendships ended.

 

This is what leads me to believe that there's a reason why these "garage condo" facilities cater exclusively to the wealthy and all the others are just U-Stor-It type businesses that will store anything, not just cars.

 

We use our dealership for car club meetings, seminars, open houses, tour stops, and other hobby-related functions all the time. But we are first and foremost a dealership and we sell the cars that are on display. Our showroom is open to the public, and we do host groups and visitors. We have storage, but that's up the road at our old facility and not part of the main showroom. I don't know how it would work without the dealership footing the bills--the storage facility doesn't pay for itself, we're only using it because we're stuck in a lease and need to put the space to work to cover some of the cost. And if you're thinking of just taking in some cars on consignment because it's easy or it legitimizes the business or you think it'll be a money maker, guess again. If you can't devote full time and then some to selling cars, don't bother. This is a job, not a hobby for me, and I work 12-15 hours a day at it, 6-7 days a week. We spend $10,000/month just in advertising to give you an idea of how much it requires to be competitive. Parking a few cars inside a building and hoping that someone wanders in off the street and buys them is not a viable business model.

 

You might also have concerns from the people renting space from you that the place is open to the public. Most people understand that as a dealership, we have to let people in to see the cars, but the guys who rent storage from us do not have the same expectation. They don't want their cars messed with and most of them are under cover and parked nose-in to be close to the outlets for battery tenders. It isn't really conducive to display. Remember that you're going to need to secure the building to keep other people's property safe and you're going to have to be on call for them whenever they want to get in to see their cars or get them out, unless you give everyone a key and a pass-code for the security system--at that point, it stops being secure storage.

 

And honestly, 3200 square feet isn't that big--you're not going to get many cars in there unless you pack them really tight, and when you do that, nobody's going to want to squeeze through to look around. Add in the facilities you will want for club meetings and other functions, and, well, I bet you run out of "comfortable" space at about the 15 or 20 car mark. I plan 140 square feet per car (7x20) in the showroom, which gives them enough spacing for people to move between them (which they will, whether you want them to or not, and if they're too close together, they're going to break stuff and hide it). Our first shop was 7000 square feet of warehouse/showroom plus 1000 square feet of office. We had 35-40 cars in there, packed as tightly as we could while still being able to move them around and use our photo studio. We now have 25,000 square feet and it works a lot better, although moving cars around is still a bit of a challenge. You'll make a guess as to how many you can fit, you'll draw a layout, and you'll still be short. They take up more space than you think. And if you're adding meeting areas or places that people can hang out, then take that off your car storage. Hell, we park cars in the lobby because we're packed tight!

 

If you can find a way to make it profitable, great. But merely owning a building and putting cars in it won't be enough to make it someplace that people will pay you to be, either as customers for storage, car sellers, or guests looking for something to do. You should also bear in mind that the people looking for storage aren't typically people who own interesting cars. You will likely end up with a display area full of late-model SUVs and V6 Mustangs, which is basically what is in our storage facility right now.

 

You're not the first to have this idea, but perhaps you'll be the first to figure out how to do it profitably. If so, you will make a fortune franchising it. If not, you'll join the rest of us who've tried and only have a hole in our wallets to show for it. Good luck!

 

 

[Hudsy Wudsy]

Geez, Matt, it looks like crochety old guys abound! If only you could figure out how to make "Meals on Wheels"  part of your business model. 

 

Edited January 9, 2019 by Hudsy Wudsy (see edit history)

[60FlatTop]

Why do I look at that picture and remember the catechism class about purgatory? Something triggered it.

 

Bernie

[Matt Harwood]

37 minutes ago, Hudsy Wudsy said:

Geez, Matt, it looks like crochety old guys abound! If only you could figure out how to make "Meals on Wheels"  part of your business model. 

 

 

LOL. Actually, that was a group that calls themselves ROMEO: Retired Old Men Eating Out.

 

They came to see us before lunch. We get all kinds of groups like that. Retirement homes, clubs, civic organizations. Everyone likes looking at cars. Maybe we should charge for admission?

[Hudsy Wudsy]

I could go on and on making old guy jokes, but the truth of the matter is I've always found it heartwarming to listen seniors reminisce. You're doing a very nice service to your fellow man by being so welcoming.

Edited January 10, 2019 by Hudsy Wudsy (see edit history)

[Matt Harwood]

The showroom is a little more crowded today. Remember that even if you can fit them in, you need to get them out. Right now, we have to take cars outside to get some of them. That's a problem I always wanted to avoid and we did for a while. But this is what 110 cars in 20,000 square feet looks like as I was walking out the door this evening.

 

Edited January 10, 2019 by Matt Harwood (see edit history)

[Hudsy Wudsy]

Matt, as I look at that I honestly don't know if that's the stuff of dreams, or sleepless nights. Clearly an awesome responsibility, at any rate.

[Guest]

I once worked in a brand new GM Dealership.  There was always discussions at the fiscal year end that they made money but nothing like the business plan.  Finally someone looked over the business plan and discovered that 7x20 was the calculated space for shop stalls in the mechanical and body shops.  Obviously it takes at least a third more space to work on a car than to park it. As the GPS person says re-calculate.  Once this was done all was well. Needles to say the next few new dealerships had a different architect.

[nick8086]

shopko bankruptcy - cheap buildings to buy...

 

A guy in the wpc club.. He bought a safeway building and turn into car storage..

 

It paid for the building and taxes..

[John_S_in_Penna]

3 hours ago, Tinindian said:

 ...7x20 was the calculated space for shop stalls in the mechanical and body shops....  

 

A full-sized car from the 1960's or 1970's is 80 inches wide.

A 7-foot-wide space (84 inches wide) means that the

car doors couldn't be opened if a car was parked beside!

 

A parking space, from a civil engineering standpoint,

is almost always 9' x 20' or 10' x 20'.  The narrower space

may be okay for places where cars are parked for longer

periods of time (such as an office building), but 10' x 20'

is recommended where cars go in and out frequently

(such as a grocery store).

 

One car-storage facility I laid out has 9-foot-wide spaces.

It's fine for storage, but one has to be careful when opening

the large doors of 2-door cars.

Edited January 10, 2019 by John_S_in_Penna (see edit history)