Investor · Anchorage AK and Hampton, VA · Member since 2012 · 140 posts · 82 votes
Hello all,
Looking for some advise on approaching someone to lease/buy additional parking space for a potential acquisition. We're looking at an 8 unit multi family that seems to pencil well, in a good area and with good potential for repositioning. The main reason we haven't made a move is the parking. It has 9 spaces and NO on street parking (just no room for it) Code would require at least 12-13, but the bigger concern is as we upgrade clientelle, they are much more likely to have 2 cars and this section of the road is already over crowded which doesn't help the curb appeal of the property.
A possible solution is a vacant lot directly behind the subject property owned by a local business. I've had a friend approach them about leasing this (I'm out of town currently) and they didn't say yes, but they didn't say no either. I plan to approach them when I get back.
So my questions are these:
What would be your strategy to get them to say yes at a reasonable cost?
Would you pass on this cost in the form of parking fees to tenants? (thats kind of unusual here)
Or would you just roll that cost into expenses and look at the numbers again?
Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
13y
Scott Sewell In regard to the adjoining lot, is it large enough for the neighbor to build and have parking? If not, they might want to sell it. Maybe you can get them to do a lease with an option to purchase after a year for a predetermined price. That way you can tie down the price, and have the parking in the mean time. The question is, if you pass the fee along to tenants (which doesn't sound unreasonable if they want additional parking) will the rents still be competitive?
I don't know if you've had a chance to read the 3 blogs I've done on development? I see you're out of town, so wasn't sure if you've been on BP. Good luck with your venture.
Investor · Anchorage AK and Hampton, VA · Member since 2012 · 140 posts · 82 votes
13y
Thanks for the input guys. Here's a little more info (especially for you Karen). The adjoining business actually has 5 contiguous lots on the next street over. 3 (zoned for business) contain the existing business operations and their parking. My friend found out they have intensions to expand their recieving/back of house/logistical areas into the existing parking area, not the other 2 (zoned multi-family)vacant lots. I don't know if their development plans will require them to provide additional parking to make up the loss, but if so that could work in our favor, i.e. they might like to get some additional ROI on that expense. What doesn't help is that the lot we would like to encumber is the 4th lot and would cut off the 5th from the business. There's alot more info I could provide and another possible solution but, I guess until I can do some face to face and see how the management reacts, this is all speculation. @ Karen Margrave: I read part 1 right after the last time we talked, just finished 2&3, and can't wait for 4. Now, more than ever, I want to be a developer! Great stuff Karen.
Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
13y
Scott Sewell Sounds like you should be able to get something worked out. It's usually better dealing with people that are businessmen vs. homeowners. Business people can understand the reality of what you can afford to pay and still make a return on your investment, etc., and sounds like it could be a win/win for you both. Maybe you can work into getting the multi family lots :)
Glad you liked the blog. I try to put a little meat in it for people actually interested in development. As always, if you have any questions I can help with.. I'm here!
Investor · Anchorage AK and Hampton, VA · Member since 2012 · 140 posts · 82 votes
13y
Karen Margrave Ditto on the dealing with business people vs. homeowners. Just have to try and define an answer/costs.
So, can we expect parts 5,6,7,etc...? Would love to hear how you do your research on markets and determining the appropriate use for a property.