What could be flipside of buying a land and renting it out to a business like food truck?
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[{"id": "g6undd4", "text": "Research ground leases.  Typically they\u2019re long term though. Like 99 years.  And the lessee builds a building on it and pays owner rent.   Not sure if this is really what you\u2019re looking for vs like a license agmt with a food truck to use the land and pay a fee.", "replies": [{"id": "g6unuz8", "text": "I didn't know that is referred as License agreement... something on those lines", "replies": [], "depth": 2}, {"id": "g6uy5oa", "text": "Dude ground / building leases haven\u2019t been 99 years in forever. Those days are gone. \n\nJCPenney, Sears/ Kmart anchor types signed those leases. \n\nMost leases are 5-20 years w options.", "replies": [], "depth": 2}], "depth": 1}, {"id": "g6uoshk", "text": "A food truck or a semi-permanent food truck cluster might work. I've seen quite a few of these in on empty parcels here in LA. \n\nAirstream and trailer restaurants are doing well too:  \n[https://www.pinterest.com/airstreambrands/airstream-restaurantsbarsfood-trucks/](https://www.pinterest.com/airstreambrands/airstream-restaurantsbarsfood-trucks/)\n\nI'd be exploring what the water and power situation might be with the lessees. Will they rely on potable water in their vehicles and generators or will you supply it. If you supply you'd need a certain level of entitlement to get water/sewage and power to the site, but you may charge more in rent I suppose.\n\nWe had a potential partner working on renovating a 3500 sf brick building with a 10,000 sf lot adjacent to it. His plans were to create a micro-brewery inside the building and do popup trailers for chefs on the parcel, created trailer food parks. The trailers in his food park would be supplied and maintained by him and chefs would do pop ups, rotating in and out of trailers after a period of time. He also split part of the parcel to have Tesla install a bank of Tesla superchargers, where people could stop and have a bite with chef curated pop up food while waiting for their Tesla to charge. \n\nI would be looking at the city plans and zoning as start to see where the path of progess is as well as what types of business or even weekend type activities your tenants may draw customers from.\n\nFood trucks can be great, but if you can find some way to get local chefs to do pop ups that could be really good. Outdoor dining is becoming more common place because of the pandemic, so looking toward the type of food parks in the pictures or even beer garden style dining may give you some ideas and could be a viable path forward.", "replies": [{"id": "g6vudt5", "text": "&gt; I would be looking at \n\n... the ingress &amp; egress requirements, potential DOT / city requirements for adding a lane to offset traffic congestion and potential conflicts with nearby property owners who may object if the traffic causes their own ingress/egress issues.", "replies": [], "depth": 2}], "depth": 1}, {"id": "g6v2it2", "text": "Ground leases are 5 years at a time, tenants might get options to renew at market rates for 1, 2, or 3 options, etc. If they don't want to continue, you then find another tenant.\n\nI like the other commenters idea about licencing. It basically allows you to have multiple food trucks on the site, but you could do leases, even month to month lease if you want. Month to month tends to be cheaper because the tenant doesn't have any tenure (business isn't stable because they can be forced to leave at any time).\n\nInsurance is a big deal, you need to make sure that your lease or license deals with that. Also what about utilities for the trucks (electric, gas, water?) Your agreement should or could deal with those. What insurance do the food trucks need. A lawyer might help you with that, and a commercial realtor might help negotiate it.\n\nMaybe trucks would be ok renting from you, maybe not. Maybe a serviced lot (with utilities and bathrooms) will garner more interest. Also, what is to stop these tenants from leaving and finding another lot? Will they even want to lease from you. Is this a good location? Maybe you need to do something, marketing or something that keeps the food trucks with you.\n\nAlso, how much can you make renting the lot out compared to other uses, it might not be feasible to cover your mortgage with the income from the food truck, ie lenders may not offer a good rate for this use if it isn't/won't be secured by leases. You may have better luck with owner occupier loan, or without financing at all (if you can afford that). This type of investment might be better suited as a temporary holding use rather than a long term income earner if the land is expected to appreciate quickly (area in transition), ie, you hold with a low intensity use like a parking lot or food truck or farm until there is a business case go develop a building or sell to a developer.\n\nThen there is the legal question, does the local govt allow this. Can you get or do you need a permit.", "replies": [], "depth": 1}, {"id": "g6v356y", "text": "If the use is allowed (this can be the tricky part) go for it.  But land is usually priced based on its highest and best use.  So if you're in a location that's good for food trucks, it's usually even better for something else, and priced accordingly.  So the downside is that you're getting a low return on your money.\n\nHaving food trucks on top of whatever else makes sense (or while you're holding it and getting ready for the thing that makes sense) can work well.", "replies": [{"id": "g6vo9pc", "text": "Just seconding this point regarding allowed uses. Municipalities (cities/counties) have zoning ordinances which say what uses and types of structures are allowed in any given area. This is why you don't typically see restaurants in suburban neighborhoods. \n\nAs an early part of your due diligence, you should [investigate the city's zoning atlas](https://wordpress.com/view/development-club.com) to determine the type of zoning category the property lies in, and what uses are allowed in that category.", "replies": [], "depth": 2}], "depth": 1}]