Learn Me: Renting Shop Space w/Friends?

There's a couple of us who have been close friends since High School. At one time or another, they've also been employees of my father at the Auto Parts Store. I will be picking up another project car in the Spring. My father will be picking up something as well. One of our friends races roundy-round stuff. Another is restoring a Scirocco that I've posted about on here. The last one, he and his father (my boss, ironically) has a small boat, some sleds, and 2 project cars as well.

Needless to say, we've all outgrown our respective garages. I currently rent a "space" from a buddy of mine that rents some space with his brothers & father. Unfortunately, he doesn't have enough room for me to expand my "collection" and I don't really keep any of my tools over there.

We've been looking at renting a small warehouse in one of the numerous vacant light-industrial parks in the area. Rent varies, but let's just say I need room for 10 cars or so. We all have various tools. Compressor(s), air tools, MIG, etc.

Just need a collaborative workspace for race car stuff, maybe a front office for the requisite Kegerator/place to crash, TV, whatever. Kind of a man cave away from home.

Anywho, knowing what we need and where we need it to be aren't the problem. We just have no idea on how it would be set up. My main goal is obviously security. I believe some web-enabled cameras should take care of that.

I'm also concerned about losing friends over rent payments, etc. My first thought was to form an LLC and set things up that way. However, I am concerned that if there happened to be a falling out of sorts that it would make all members of the LLC "owners" of a portion of things they had no hand in purchasing.

My next thought would be to incorporate something with my father and have friends as "tennants". In the future I was considering possibly branching out into a sports/vintage car storage and prep service so this would be an avenue that I would ultimately be exploring. Having a small corporation and a Tax ID would allow me to open a COD account with a parts distributor as well.

Not sure if anyone on here does similar and how it worked out. I'm meeting with a lawyer in a few weeks on the matter, but I'd like to protect assets for all of those involved. Unfortunately, the rent on such a place needed it a bit too steep for me to cover the bulk of it for a prolonged period of time. I have no evidence to believe that any of my friends would be deadbeats on payments, but I certainly don't want to create a problem where there wasn't one previously. More importantly, I don't want any of us to lose friends over playing with cars..

I've shared a shop with a couple buddies for a few years. It's about 0.09% of the complexity and ass-covering you're proposing. If you have good guys that you trust and are reliable, none of the other stuff is necessary. We share tools and bill payment responsibilities shift depending on who is in town at the beginning of the month.

If a friend proposed to me what you're proposing, I wouldn't touch it with a ten foot pole.

Bryce

Sounds like you don't really trust them.

I had a shop with some guys I knew from college. There were police by the end of it. I'll only ever have my own garage.

Nashco wrote: I've shared a shop with a couple buddies for a few years. It's about 0.09% of the complexity and ass-covering you're proposing. If you have good guys that you trust and are reliable, none of the other stuff is necessary. We share tools and bill payment responsibilities shift depending on who is in town at the beginning of the month. If a friend proposed to me what you're proposing, I wouldn't touch it with a ten foot pole. Bryce

Well that's great to hear. I do tend to over-think things at times. I trust my friends fully, I just know things can get complicated when larger amounts of money are involved. The whole reason I made a post was to get the ideas from others, as I even felt that what had been discussed previously by our group was starting to become a lot larger of a headache than it should be.

How do you handle the billing aspect? Is everyone on your lease? By "whoever is in town" does one guy just pay up front and collect form others?

Lotta stuff can happen even amongst friends. Their SO just decides NO someday, money issues, job loss or transfer, family issues, loss of interest etc, etc. What's to keep one guy from bringing over all his buddies cars? Need strong language written in the agreement in to prevent that kinda stuff.

A place like that can soon become the local 'hangout' where you can't get anything done, BTDT.

OTOH, excess space can be rented out for storage... cars, RV's, boats, trailers etc. Helps pay the rent and utilities.

Don't be the guy holding the bag (rent and utilities) if said friends decide to bail.

Make sure you are well insured.
A small shop/warehouse near me just went up in flames due to a small initial accident that got out of hand.

I've looked at buying a few smaller (but still large) commercial buildings for personal use and then renting out to my car club friends. Even with reliable people, it just didn't seem worth the hassle of trying to organize.
Whatever you do, just be careful among good friends that are broke. That is also a pending disaster.

If you're concerned about personal liability if something heads south, form the LLC and put it's name on the lease/agreement/whatever for your portion.

Not a a garage but I subletted a warehouse space with a friend for a photography studio. Nothing formal, just gave me a key & asked for small $ each month because I wanted it much less often than he would be using.

One weekend I got an email saying he had to leave the space, was moving back to northern Ohio, and oh yeah you need to be out by Thursday. Womp womp. So yes, you might want to decide if you can afford the whole deal yourself if every flakes on you.

Well... they are your friends. You probably trust they won't steal your E36 M3 or stiff you with the bill or you wouldn't be considering it... but my "potential" issue list would read like:

Do you trust them to:
- Clean up and sweep the floor when they are leaving for the day
- Put all your tools back where they found them even if they aren't finished when they leave
- Make sure the lift/jackstands/area is available for the next guy if they didn't finish before they had to leave
- Not accidentally tell family/associates/friends who tweak that there is tens of thousands of E36 M3 in an unsecured storage building they can steal when no one is there
- Replenish the beer fridge contents if they use it

I have one or two buddies I'd consider doing this with as well as a few who I'd lose as friends by the second week based on how they keep their own garages.

This is an idea that interests me, although I don't really have any local friends who work on thier cars.

In a way, I would treat it like I was working at a garage.I would make sure all of my tools were put away and locked before going home.

Allocate some money in the rent to have common areas (office, bathroom, etc) professionally cleaned once a week or so. Nothing will create strife faster than people with differing cleanliness standards bickering over a dirty bathroom.

I've been wanting to do something like this in Gainesville for a while now. I have more cars than garage, and would love to find a space large enough for4-6 cars where my friends and I could store some nice vintage euro iron. And then there would be a bar, pool table,.....I'm getting ahead of myself.

Get to know the area and then DONT advertise what you are doing if you get a place there. Better to be in an area that has people around but not on top of you for security. Find out if you can start an open header car with out causing problems with the Nabors.

I think it will be similar to the dynamics of renting an apartment with roommates - make sure everyone covers their share of the rent and utilities, make sure everyone shares in cleaning up, make sure one renter is not a slob when everyone else is neat, and so on.

edited to add: Will you share tools, and if so what happens when someone else loses or breaks your stuff? What about consumables (oil, brake cleaner, spray paint, beer) and if one person is using them up and not replacing them.

Every buddy, landlord, value, space, etc. is different. The point I was trying to make is that if you make this more like a business than a friendship, I could see it becoming less enjoyable and more likely to get dramatic. I am the type of guy where I don't have any problem saying, "Hey dude, you were late and I covered for you, so you owe me rent plus a six pack." Also, "We're out of rags and chemical X, can you pick some up next time you're at the store?" goes a lot better with my friends than, "The contract states..." Also, treat shopmates as you want them to treat you goes a long way as a shop mantra. I really like my shop buddies and I've been pretty selective because it's like a roommate...you don't want just anybody around.

Bryce

Giant Purple Snorklewacker wrote: Well... they are your friends. You probably trust they won't steal your E36 M3 or stiff you with the bill or you wouldn't be considering it... but my "potential" issue list would read like: Do you trust them to: - Clean up and sweep the floor when they are leaving for the day - Put all your tools back where they found them even if they aren't finished when they leave - Make sure the lift/jackstands/area is available for the next guy if they didn't finish before they had to leave - Not accidentally tell family/associates/friends who tweak that there is tens of thousands of E36 M3 in an unsecured storage building they can steal when no one is there - Replenish the beer fridge contents if they use it I have one or two buddies I'd consider doing this with as well as a few who I'd lose as friends by the second week based on how they keep their own garages.

Interesting list, I think you're close to the mark here.

In the space I currently use, the only rules are don't make a mess, put back all tools, supply your own gloves/chemicals, and don't bring anyone over. It's worked out pretty well so far. Everyone I know are pretty respectful with these sort of things. Hell, were pretty much each other's only friends.

The areas we're looking at are either an already established industrial space or a shuttered business situated more in a neighborhood-y part of town. I agree with the sentiment of having good security but also keeping people from poking around.

My main concern is still the lease portion of it. You guys have thrown out some great ideas, though.

I just decided to buy my own shop.

and my own "Dog house" within the buildings

This is the kind of stuff that goes on here

I currently participate in a shared shop type of setup and there are some cool things about it: folks to bounce ideas off of, tools to borrow if needed, and the fun of seeing what others are doing and having someone to tease me about how little I accomplish.

To make it successful, you need to do it with people who are responsible enough to hold up their end of the deal but laid back enough to share.

I would also think that 3-4 is about the optimal number for keeping it from getting hard to keep track of the money and the tools. If you have ten different car guys all trying to use the same space, all needing to pitch in for rent, and all as suspects if something goes missing it could get to be a hassle.

Nashco wrote: Every buddy, landlord, value, space, etc. is different. The point I was trying to make is that if you make this more like a business than a friendship, I could see it becoming less enjoyable and more likely to get dramatic. I am the type of guy where I don't have any problem saying, "Hey dude, you were late and I covered for you, so you owe me rent plus a six pack." Also, "We're out of rags and chemical X, can you pick some up next time you're at the store?" goes a lot better with my friends than, "The contract states..." Also, treat shopmates as you want them to treat you goes a long way as a shop mantra. I really like my shop buddies and I've been pretty selective because it's like a roommate...you don't want just anybody around. Bryce

This, while I do like the concept of having some ground rules on legal paper, forming a LLC, insurance, etc. It cant be too in depth or you get into breaking one of those rules nobody bothers to learn you the easy way. Friends and family DO NOT mix well with business. It needs to be "we all have a share in this bigass garage, contribute accordingly" not a schedule of who's turn it is to clean the E36 M3ter.