StylishOne

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

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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!

 

 

ROMEO1.jpg

ROMEO2.jpg

ROMEO3.jpg

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Posted (edited)

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. 

 

ROMEO1.jpg

Edited by Hudsy Wudsy (see edit history)
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Why do I look at that picture and remember the catechism class about purgatory? Something triggered it.

 

Bernie

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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. 

 

ROMEO1.jpg

 

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?

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Posted (edited)

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 by Hudsy Wudsy (see edit history)
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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.

 

2019-01-09.jpg

Edited by Matt Harwood (see edit history)
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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.

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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.

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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..

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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 by John_S_in_Penna (see edit history)

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