Parking (As an Investment)
 

I realize that this might belong in the finance forum. However, the thrust of this forum is so wide and the quality of those that frequent it is such that I feel like this is an ideal home for this discussion.

-------------

I am considering a few ideas for more investing (paid off student loans for those who saw a previous thread) and want to know if anyone has experience with these ideas or any questions which we could, as a community flesh out and answer.

The ideas I am setting fourth are obviously ideal in cramped urban settings (specifically Boston) and could, be a fairly good money maker. The first of these is much smaller in scope, however, I am curious if anyone has experience with either:

A) Deeded Parking as an investment (we shall call this the micro approach, individual, deeded spots)

or...

B) Parking lots (we shall set this forward as the macro approach)

For B, proximity to professional stadiums and public transportation is paramount. Has anyone had experience in either of these venues?
~Justin

Re: Parking (As an Investment)
 

Awesome question. Basically real estate without maintenance. Although you do have to hire someone to take the cash.

I am interested as well.

Greg

Re: Parking (As an Investment)
 

i think theres a ton of money in this, and often a lot of missed opportunity (like lots being built dumb which dont maximize spaces etc).

Re: Parking (As an Investment)
 

If that is true than maybe it is possible to buy a looser operation off someone and streamline it turning it into winner?

I am always looking for an investment like this that by streamlining the operation, value can be added to a business where no one sees value.

However, it seems like parking lots wouldn't be for sale too often and probably hard to get involved in.

Greg

Re: Parking (As an Investment)
 

J,

I don't have any personal experience with or knowledge about this, but have some completely useless anecdotal evidence to share.

I've met two guys who own multiple parking lots, one in LA and one in SF. Both of these guys are super rich.

Re: Parking (As an Investment)
 

Part of me almost thinks you could make some money (obviously not the same amount) by simply flipping parking spots.


Try checking out parking spots on craiglist. You have to be lightening quick since the cheap ones go fast, but there are often ones priced well below avg. for location

For example, two spots were available on the same street, within 500 feet of each other, one for $100/month, one for $150/month.

The $150 is probably closer to the right price and definitely will go for that (given that its a good location with no on-street parking nearby)

So rent out the $100 spot and sublease it for $150, making a $50/month profit on this one spot, and you literally have to do nothing.



Parking lot obviously is more work for more money, since you need someone to collect the money, but the amounts that people pay for any spots within 2 miles of fenway on game nights is obscene.


Also, when you buy a lot, I expect to receive some sort of a 2+2 discount since my apartment has no deeded spot.

Re: Parking (As an Investment)
 

Ok. Another huge perk of looking for sites is that you can find contaminated sites listed by the DEP or EPA and basically cap them and use them. You can also get incentives for helping to clean up contaminated land by the government. You don't necessarily need a lot just space, in whatever form that takes. I will be interested to see where this goes. If anyone else wants to talk in a more live setting you can PM me for my aol name. Perhaps some mutual learning could take place.
~Justin

Re: Parking (As an Investment)
 

in my area (macro as you call it) parking lots are being converted into condos since land is so scarce.

Re: Parking (As an Investment)
 

I think parking is a good investment. Think about what you could do if you had a monopoly on a highly populated area. Charge $20 an hour + for places like malls.

Re: Parking (As an Investment)
 

How do you plan on getting into this area? Wouldnt good locations be pretty sought after by established companies?

Re: Parking (As an Investment)
 

[ QUOTE ]
How do you plan on getting into this area? Wouldnt good locations be pretty sought after by established companies?

[/ QUOTE ]
These questions are exactly what I would like to hash out in this thread.

Re: Parking (As an Investment)
 

i'm in if you find a good location. boston parking is a goldmine. tell me where to send the cash and how much. thanks.

Re: Parking (As an Investment)
 

I don't know what kind of bankroll you're working with, but I'd have to assume the "macro" approach would require a very large investment. If parking spots in Beacon Hill are selling for $250,000, imagine what a piece of land that could fit a parking lot must cost.

Another approach may be to find "upcoming" areas of the city where real estate is less expensive and get in early.

Re: Parking (As an Investment)
 

I read that in Tokyo it is an awesome buisness. I'm not sure how that market would compare to a major U.S city.

Many factor come in to play:
For starters, I doubt you can just build whatever you want on a piece of land you have purchased. You will need the city's permission.

Secondly, land in a desired location will probably be very expensive, and it will probably be developed (like a building, or something is on it). Finding undeveloped land in a nice are will be difficult;

The owner probably gets countless offers on a monthly basis.

Optimizing the land; you will prolly want to have a multi level lot, this will cost a lot of money to build. Also various safety regulation must be acknowledged.

After all of this has been done, I would imagine you get a nice cash flow. IDK what kind of model is used for pricing, however I know in cities, parking can easily cost around $9
an hour here in Cali.

Re: Parking (As an Investment)
 

I used to work with a propery management company in SF (mostly they bought malls and spruced them up). One of the principals told me off the cuff one time that you can never go wrong with parking garages.

Re: Parking (As an Investment)
 

[ QUOTE ]
One of the principals told me off the cuff one time that you can never go wrong with parking garages.

[/ QUOTE ]

If this were true it would be everyone's virtue to save up and own a parking garage as soon as possible. Of course I know your boss was exaggerating a bit, but parking garages are no different from any other investment; not eveyone wins.

Re: Parking (As an Investment)
 

What? You mean there's no investment that's always guaranteed to make everyone money? I think his point, if I'd asked him to elaborate would have been something like - "Parking garages aren't sexy, so they're rarely massively overvalued. And in a place like SF which has way more people than parking spaces, there will always be demand and therefore a nice guaranteed revenue stream."

Re: Parking (As an Investment)
 

is that you, Mr. Lundergaard?

Re: Parking (As an Investment)
 

[ QUOTE ]
What? You mean there's no investment that's always guaranteed to make everyone money? I think his point, if I'd asked him to elaborate would have been something like - " Parking garages aren't sexy , so they're rarely massively overvalued. And in a place like SF which has way more people than parking spaces, there will always be demand and therefore a nice guaranteed revenue stream."

[/ QUOTE ]

If it was so consistently profitable, why wouldn't it be "sexy"?

Re: Parking (As an Investment)
 

[ QUOTE ]
[ QUOTE ]
What? You mean there's no investment that's always guaranteed to make everyone money? I think his point, if I'd asked him to elaborate would have been something like - " Parking garages aren't sexy , so they're rarely massively overvalued. And in a place like SF which has way more people than parking spaces, there will always be demand and therefore a nice guaranteed revenue stream."

[/ QUOTE ]

If it was so consistently profitable, why wouldn't it be "sexy"?

[/ QUOTE ]

there are many examples of unsexy or out of favor industries that ended up being large profit oppty's. Loews Corp made a habit out of it, investing in insurance in the 60s's, Oil Tankers in the 70's, cigarettes in the 80's...basically industries and companies that nobody else wanted any part of, but they saw oppt and profit in all of them. at least that's what Forbes told me.

Re: Parking (As an Investment)
 

Stros fan,

Just curious, how old are you and what's your profession?

Re: Parking (As an Investment)
 

[ QUOTE ]
I don't know what kind of bankroll you're working with, but I'd have to assume the "macro" approach would require a very large investment. If parking spots in Beacon Hill are selling for $250,000, imagine what a piece of land that could fit a parking lot must cost.

Another approach may be to find "upcoming" areas of the city where real estate is less expensive and get in early.

[/ QUOTE ]


This is the single spot on Comm Ave. that sold for $250,000 and was all over the news. You had to drive over a 4 inch curb and it didn't include snow removal, etc.

http://cache.boston.com/bonzai-fba/G...20406_8723.jpg

Re: Parking (As an Investment)
 

That $250k spot doesnt really reflect the true prices in town. But point taken, that being said, even if you organized an LLC (proper term) and bought a lot for $1m or so, you could turn profit rather quickly.
~J

Re: Parking (As an Investment)
 

[ QUOTE ]
bought a lot for $1m or so, you could turn profit rather quickly.

[/ QUOTE ]

What is the likelihood you can purchase a lot for this price point though?

A piggy back/related business to the lot is the contracts and trading of contracts for the booting/towing rights on the lots. I knew a guy with some boot van crews that worked downtown Atlanta lots, he didn't own any of the property just the vans and boots, he bid and swapped lot contracts for these rights and did real well for a fraction of the investment.

Re: Parking (As an Investment)
 

[ QUOTE ]
[ QUOTE ]
bought a lot for $1m or so, you could turn profit rather quickly.

[/ QUOTE ]

What is the likelihood you can purchase a lot for this price point though?

A piggy back/related business to the lot is the contracts and trading of contracts for the booting/towing rights on the lots. I knew a guy with some boot van crews that worked downtown Atlanta lots, he didn't own any of the property just the vans and boots, he bid and swapped lot contracts for these rights and did real well for a fraction of the investment.

[/ QUOTE ]

$1m was just an example. Going to inquire this week about a few parcels I have my eye on.
~J

Re: Parking (As an Investment)
 

Aren't there huge conglomerates that are involved in parking garages? Being around Boston and New York- lots of garages are Central Parking Systems or Kinney or what not. Are these franchises? Or are these chains that buy up good land and put parking garages on them? I would think once you get the momentum and cash flow going, it's to your benefit to have a chain of parking garages- what's the point of franchisees? Barriers to entry in this business are very high anywhere land is scarce.

Re: Parking (As an Investment)
 

[ QUOTE ]
Aren't there huge conglomerates that are involved in parking garages? Being around Boston and New York- lots of garages are Central Parking Systems or Kinney or what not. Are these franchises? Or are these chains that buy up good land and put parking garages on them? I would think once you get the momentum and cash flow going, it's to your benefit to have a chain of parking garages- what's the point of franchisees? Barriers to entry in this business are very high anywhere land is scarce.

[/ QUOTE ]

To clarify, I am not talking about a large garage, simply a parking lot.

Re: Parking (As an Investment)
 

[ QUOTE ]
[ QUOTE ]
Aren't there huge conglomerates that are involved in parking garages? Being around Boston and New York- lots of garages are Central Parking Systems or Kinney or what not. Are these franchises? Or are these chains that buy up good land and put parking garages on them? I would think once you get the momentum and cash flow going, it's to your benefit to have a chain of parking garages- what's the point of franchisees? Barriers to entry in this business are very high anywhere land is scarce.

[/ QUOTE ]

To clarify, I am not talking about a large garage, simply a parking lot.

[/ QUOTE ]

Of course there's a huge demand and bigger profits available in the parking lot business in big cities - your idea isn't anything new. However, I would almost be certain that Osprey is right about barriers to entry. The fact that parking lots are generally an oligopoly in most cities should clue you into this. I wouldn't be surprised that there's some permit that you must get from the city in order to operate legally, and these things don't grow on trees. Even if you could afford the land (which is going to be tremendously expensive), you'd have to get the permit, which is very difficult and expensive (at best). Look into it, but I think you'll be disappointed.

I'm pretty sure that Diablo's buddies who own parking lots are not the primary generation of investors, though I'm sure they do make a mint.

I'm thinking that in many cities, the only way to get into the lot business is to buy an existing lot/permit, which will be really expensive. After all, if they have 100 spots and can get 40 bucks a day for them, how much do you think they would sell the business for? This doesn't even take into account the fact that parking lots are often the last undeveloped land in downtown areas - holding out in spots like this can make even a small parcel extremely valuable.

Also, this isn't a passive income activity. You need to have people handling the money and watching the cars. Security and insurance will be expensive. You'll have to do a lot of work, at least in the beginning.

Good luck, though.

Re: Parking (As an Investment)
 

[ QUOTE ]
$1m was just an example. Going to inquire this week about a few parcels I have my eye on.
~J

[/ QUOTE ]

Approx. what size lots? (how many spaces). Also, just curious as to what general area you are looking at and maybe why you think those particular spots would be good investments.

(Don't worry, I won't be buying it out from under you)

Re: Parking (As an Investment)
 

A family friend owns a parking lot in LA that his father bought 30+ years ago. He makes decent money from it and it's not a super prime location near Staples Center or anything. One problem he has is that the employees will pocket some of the cash themselves since there are no real records of how many cars parked there during a given day or how many hours they were there.