Purchasing a parking spot as an investment.

Asked by KZRoberts, Arlington Heights, IL Tue Apr 28, 2009

I was thinking about purchasing a parking spot in downtown as an investment. How does the financing work? Is a mortgage involved or do you typically pay cash for this type of small transaction?

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Mike Opyd, Agent, Chicago, IL
Fri Feb 22, 2013
Its going to be hard to turn a profit on a parking space. spots can cost anywhere from $20K-$50K or more depending on where you buy it at and usually rent around the $200-$300/mo or so. Run the numbers, it would take a long time to break even let along turn a profit.
1 vote
Christopher…, Agent, Chicago, IL
Wed Apr 29, 2009
Dear Kevin,

The financing for this type of purchase typically works the same way as a home purchase. However there are many lenders who do not lend below a certain amount (often around 32K or so). Even those who will originate loans for parking spaces (which I'd assume are priced between 10-50K downtown), will often have to charge substantial fees to you (so that the originating lender does not have to pay for the loan itself- too complicated for a non mortgage professional like me to explain). Many times the amount of fees throws these type of loans into a high cost loan category which are more heavily regulated by the state, so many local lenders avoid them.

Just this weekend I asked three of my best loan people about doing exactly this and only one was able to do it. The other two's company's had effective lending floors of 100K and 150K. So it is possible, but I'd suggest pursuing financing via local (read smaller) banks and/or local credit unions and the like. They are more likely to have lending guidelines that allow for this size and type of loan.

Good luck and let me know if you need any referrals for lenders.

Christopher Thomas
Broker Associate, Sudler Sotheby's International Realty
773-418-0640 (cell) 773-293-1200 (off) 312-577-0985 (fax)
1 vote
Santiago Ken…, Agent, Chicago, IL
Thu May 30, 2013
Run the numbers --200 to $300 per month plus dont forget that you have to paid real estate taxes every year
0 votes
Maria Clark, Agent, Chicago, IL
Tue Apr 28, 2009
It's is a challenging to get a fair rate for anything under 100,000. However, since you are looking downtown,
there are a small hand full of parking spots available. I wonder if you would consider renting a dock from the city as well. Sure your on a waiting list but it can be lucrative if you market it right. You might also want to look at a few condo buildings that rent 20% to the public. I can help you with those options if you would like.

I can be reached at mariasellsrealty.com or immariaclark@yahoo.com
0 votes
Phil Burnsti…, , Chicago, IL
Tue Apr 28, 2009
Kevin you need to evaluate what your return will be on your investment by finding out what the going rate for parking is, realistically. It is up to you to decide how much you will put down. You may get a mortgage on it since most spaces have a PIN number associated with it. Where is it located and how much is it?

Phil Burnstine
Thornton Properties
0 votes
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