"Toy" Storage

[Chas]

Gentlemen (and Ladies).........very much need your valued advice. I have a three car garage attached to my home. About 15 years ago, I had a 2000 square foot shop built behind the house on the "lower forty". Problem is, they are both now filled with cars and parts (mostly cars). So I need to branch out. Been looking at commercial and industrial buildings. Not looking to run a business out of them, just to store cars and turn wrenches as a hobby. Also looking at these newfangled industrial "condo" spaces. Question is, outside of buying/selling my own home(s) I have no experience with commercial/industrial properties. Knowing what I want to use it for, what should I look out for, ie, pitfalls? I hate being a "babe in the woods" and I just know there are a number of you out there who are well versed in this field. Many thanks in advance!

[Scot Minesinger]

Chas,

Right now I don't think you can go too wrong buying real estate, gold or money markets - ha I know you are an investor.  Seriously if you are buying real estate for you that will be held for a while you should be OK.  I have purchased and sold 14 real estate investments over a 20 year span and never lost money on them ever.

That location thing is critical as you have heard.  Your location ideals are likely close by (not far drive) and safe neighborhood.  Other things such as curb appeal, retail potential and etc. that make real estate expensive you don't have to worry about.

Make sure the building has water and power plus it is insulated. 

You did not ask this, but I would try and find a way to be happy with what you have.  Maybe you could downsize and not force this expansion.  I'm similar to you with a three car attached and three car added detached garage for the hobby.  All the time I think about expanding, but that can be a lot of extra work and complication to your life.  Right now I have 8 cars with 5 people driving and between the oil changes, tire rotations and etc., that is my limit.  I just cleaned out my garage, sold some stuff and threw some stuff out.  It feels great!

[Chas]

Scot......hear what you're saying, and much appreciated! Maybe I should give a little more in depth info on the property I'm considering. It's an old Goodyear tire  outlet two towns over from me. Been closed about four years. Metal building of 6000 square feet. Six bays, of which 5 have in ground hydraulic lifts, all of which work. Front of building is all glass, looks like a car dealership and I can put three cars there alone. It's in a  commercial area which is an ok, not great neighborhood. Needs a bit of work, but nothing friends and I can't handle over a couple of weekends. In my dreams, I was thinking of dressing it up to look like an old Caddy dealership. Price is a very optimistic  $249k.

As an engineer myself, I can figure out if the bones of the property are ok or not. What I'm concerned about are insurance, zoning issues, etc.....that I'm not familiar with. Another idea would be should I incorporate and place the building there, or just keep it in my name? Would it be easier to just forget about this commercial property and look at something zoned industrial?

[Scot Minesinger]

Chas,

Presuming that you are not doing this as a business venture (not renting or making money on the property) and so it may be best to have in your name.

Call your insurance agent for home/auto and ask about insuring a storage building

Since this is a former car repair place and your use will be that or storage, you should be OK zoning wise, but before you buy check with County/jurisdiction - living in DC suburb I can understand your concern here.

Since this at one time probably served retail, the price may reflect that.  5 lifts seems excessive and they you may be paying for that.  I would keep looking.  However 6k sq ft and 5 lifts for under a quarter seems OK to me, but I don't know the market in your area. 

Also

1. Be sure and check property taxes.
2. Fixing up place often involves permits and what may seem simple can be very expensive.  Be sure and investigate this thoroughly. 

For example in Fairfax County, VA where I live a small conference room was to be changed into two offices.  I was the low bid to provide permit plans at 5k.  That is just plans, nothing else.  Because of the jurisdictional scrutiny I feel like the fee was about right.

[Glen]

Also keep in mind that if you apply for a permit to fix up your building the city/county may require more work such as upgrading the entire electrical system.  It happened to an organization I volunteer for. 
It pays to investigate that possibility

I’ve considered moving into an industrial building like you describe, but I am probably just dreaming. 

[jwjohnson86]

You may want to order a Phase I environmental assessment to check for issues from prior owners and uses, and find a good commercial real estate attorney to advise.

[Chas]

Perfect example of why I originally posed the question: I never would of thought of a "Phase 1 Enviromental Assessment"..........or that such a thing even existed"! Thanks for pointing it out.

[Scot Minesinger]

Chas,

This forum is great, but as suggested you probably should consult with the pros that do this for a living, such as but not limited to a high quality commercial real estate agent and your jurisdiction (County office).  Tell the County that you want to buy a place on commercial property and use it for car storage and lite repairs exclusively for yourself and not deal or sell with public.  Change of building use can be difficult.  As suggested often any minimal change requires an update to modern codes.  I produce mechanical, electrical, and plumbing plans as my day job and it can be horrifically difficult and expensive to change an older building to meet modern codes, such as accessibility for example - can the bathroom accommodate a wheel chair (5 foot diameter circle clear)?

I often think of doing this myself, but the time and trouble for me would almost make it a full time job, and not sure I want to go there just yet.  Probably be easier for me to build another detached garage on the property, but that will be a tough sell with my wife.  Keep us posted on how this works out.

[55 cadi]

I agree with all input and especially Glenn.

When you get a permit for one thing they look at a lot more, small amount of inspectors look at specific but generally they look at all to cover there butt also. If it isn't up to standards you will have to fix all before entering, the cost of permits and fixing can take months and thousands of dollars.

One other thing, you said it is an all glass front, and it is a couple cities over and not in a good area, all your "toys" will be seen by all and will see when your there and not  there, higher risk for theft.

I would look at another closer and in better area, you can also check with local law enforcement about events at addresses or areas, tell them what you plan on and see what they saw, they want to  prevent things from happening as well.

[gary griffin]

In Federal Way Washington where I live we have a condominium garage called "Garage Town". There are 66 garages from 16'by 50' to 24' by 62' .  Included is a meeting hall for clubs and can be scheduled for events, seats about 50.  Some have plumbing available and all have electricity. High ceilings allow you to build a mezzanine if you want and also many have lifts to increase numbers of cars that can be stored. A neighbor and member of another club I belong to had one and we had meetings there and Tech sessions. There are 8 available at this time and I am tempted to buy one. He regrettably passed away last month. I can not help but wonder what will happen to his garage and his great collection of cars and motorcycles? I think there are other areas getting into developing these also. I googled "condominium garage" and found a lot of them in different areas. It makes sense to develop them since residential lots seem to be getting smaller and higher local density. They seem to be near residential areas but in business areas.

[Jeff Rosansky CLC #28373]

First of all, can I come over to either one of your houses and play???
What I am thinking may be covered in the phase 1 assessment (not sure what that is) but being an old service building I would have it checked from head to to for haz waste type stuff. You may be ok with it but to get occupancy permits and/or when you sell it there may be a fortune in cleanup costs.
Jeff

[59-in-pieces]

Chas,
In Calif. where we live - environmental concerns from a petroleum based prior occupant would cause enormous expense in clean up.
The seller should have that burden, before the deal closes.
I would advise against simply lowering the price to cover the clean up, because a misstep is on your dollar - and an unclean site will negatively effect your ability to sell down the road..
And don't forget asbestos - all will be revealed in a phase 1 or if needed a phase 2 environmental study and report, along with recommendation for abatement.
All the other comments about bring the building to current codes are spot on, and again that should be for the seller - lowering the price has the same added cost burdens pushed upon you.
As to the matter of making the building look like a dealership - I would suggest not.
My advice would be to keep a low profile and not draw attention to your treasures - including moving them in at night.
I would suggest a masonry building is better for insurance and for protection from adjacent buildings catching fire - a barrier to that, greater than sheet metal.
I would also draw your attention to a building with fire sprinklers - for safety and lower insurance, or provide a budget post closing to install them - making sure you have the water pressure to pull it off.
Also consider a state of the art alarm system - as it would be to me the same as if the building were down the block or a couple cities away.
Consider from your own discipline the structural integrity of the building as well as the insulation existing or needed going forward - as well as HVAC, Heating, Ventilation, Air Conditioning.
Well enough from what might seem like the bogyman corner, but these are considerations I have used and learned buying, selling, managing a National REIT - Real Estate Investment Trust owning millions of square feet and thousands of commercial and industrial properties (not to be a brag, but an attempt at quantifying experience).
Seek out experts as was suggested by others - money and time well spent.
My comments and those of others are valuable, but at the end of the day - don't be scared away but assess risk and move forward = there is NO perfect property.
Have fun
Steve B.

[Joe Konarowski]

The City of Oshawa traded land with GM and then the city spent over a million on cleaning up the contaminated GM ground. Another fellow bought a lot in my town and after the footings were in for his new restaurant the Environment Dep. came in. Made him clean the ground when they found it was contaminated. He almost went bankrupt and it is now a vacant lot again with the foundation filled back in. Found it was a Studebaker dealership and a scrap yard years ago. Be very carful.

[55 cadi]

I didn't even get into what Steve mentioned, abatement......I was a certified asbestos/lead removal.

I did homes and it is easily $10,000 min and reach $20,000 

For a place like that it is more when being a business, you are at $20,000 min and well, the cap??

Jason