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Show Summary
In this conversation, Ross Smith, a realtor specializing in motorsport enthusiasts, discusses his unique niche in real estate. He shares insights on the importance of understanding client needs, particularly for those with automotive collections. The discussion covers the rise of garage condos, the intersection of real estate and automotive investments, and opportunities in airport and hangar real estate. Ross emphasizes the value of specialized knowledge in catering to this unique market.
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Investor Fuel Show Transcript:
Ross Smith (00:00)
Well, I mean, so a lot of you hear the old adage, the riches are in the niches, right? it’s been going around for a long time. And I saw some of my fellow realtors getting into, you know, specific spaces. Like I have one guy that does horse properties and that’s, he specifically goes with, you know, ranches, you know, there’s one guy that he’s a big golfer. So he wanted, he does just golf course communities. He knows the best courses. All the, know, he knows where the houses are on the best courses.And that was his niche. So I said, how could I work this into my sphere and the people that I know and coming from a motorsports background and obviously been in racing for quite a long time. you know, it was the natural thing. And, you know, it’s funny in my line, the, you know, so kitchens and bathrooms normally sell houses, right? It’s the garage for me.
Dylan Silver (02:30)
Hey folks, welcome back to the show. Today’s guest, Ross Smith is a realtor for 10 plus years who caters to motorsport enthusiasts all over Texas. He’s a racer and FIA official working all US events for international motorsports, including F1, WEC, MotoGP, and Formula E. As is such, his clients turn to him for their unique needs. You can check out his page on Instagram atmotor sport real estate. Ross, welcome to the show.
Ross Smith (03:03)
Yes sir.Hey, glad to be here. Thank you.
Dylan Silver (03:06)
It’s great to have you on here and talk about an interesting segue into real estate. I want to ask you about the motor sports space, which I know very little about. How’d you get into motorsports?Ross Smith (03:18)
Well, I mean, so a lot of you hear the old adage, the riches are in the niches, right? it’s been going around for a long time. And I saw some of my fellow realtors getting into, you know, specific spaces. Like I have one guy that does horse properties and that’s, he specifically goes with, you know, ranches, you know, there’s one guy that he’s a big golfer. So he wanted, he does just golf course communities. He knows the best courses. All the, know, he knows where the houses are on the best courses.And that was his niche. So I said, how could I work this into my sphere and the people that I know and coming from a motorsports background and obviously been in racing for quite a long time. you know, it was the natural thing. And, you know, it’s funny in my line, the, you know, so kitchens and bathrooms normally sell houses, right? It’s the garage for me.
So that’s exactly what I look for is I look for multi-car garages, land with shops or the new car condo things that have come out that are actually a really good investment and just natural fit for me.
Dylan Silver (04:22)
I want to back up and ask you about the motorsport space as a whole. I mean, you’ve been involved in so much. Is there any one area of motorsport that you love more than another?Ross Smith (04:33)
No, absolutely not. And I, told, am totally unbiased as long as it burns dead dinosaurs, you and I are going to be friends. That’s basically my, my montage. So if you’re into ATVs or if you’re a drag racer or a drifter or, you know, my, my family pretty much is road course folks. you you’re welcome in my camp.Dylan Silver (04:40)
YouI lived in Denton for a while and there’s a huge speedway right up there. And what’s interesting specifically, I would say about Texas is in a lot of ways there, it’s like the crux of so much culture in automotive, in motorsport. And sometimes we would take it for granted. I was mentioning this to you before hopping on here, but it sounds like you’ve had a lifelong passion for motorsport.
Ross Smith (05:20)
Absolutely. Yeah, I’ve been racing something in one form or another since I was a I was a child. It’s just always been in my blood. I’ve been a you know, an adrenaline junkie and a gear head and it’s just kind of kind of been my thing.Dylan Silver (05:32)
initially getting into real estate, especially from that background, were you focusing on retail, single family, homeowners and buyers and that type of thing? And did you see some of these other niches and think, hey, I’m gonna do that, but in the motorsport space, right?Ross Smith (05:50)
Absolutely. Yeah, I started out in residential was where I really cut my teeth. And then I you know, a couple of my my friends had said, you know, hey, I see that you’ve gotten your license, you know, hey, I’ve been looking for this. I’ve got six cars and only three, you know, three cars, you know, three spots in my garage. Can you find me something that’s out there? And unless you they’re they’re out there, but you just have to know where to look. SoThat’s how I got into the whole thing is like, dude, I will find you a spot. Don’t worry. I got you and come up with unique and interesting, you know, solutions.
Dylan Silver (07:12)
Yeah, there’s got to be a way to filter on the MLS for multiple card. I don’t know. I wouldn’t have never. I’ve never searched for that, but that’s an interesting one.Ross Smith (07:20)
It is you can actually filter by how many garage spaces that a property has. ⁓ Only a few, it’s interesting, only a few MLSs actually have that feature, which is odd to me. I figured that that’s one of the major, you you have the old 323 or 322, you know, the garage used to be part of the description that you would, you know, use in the MLS.Dylan Silver (07:39)
Yeah.Ross Smith (07:45)
And that’s kind of gone away, unfortunately. So that’s where I come in.Dylan Silver (07:49)
Now, for folks who are looking at those types of properties, are they also in the back of their head thinking about building as well? And is it, should I build or should I look for something that is, you know, pre existing with a larger garage?Ross Smith (08:04)
For sure. It all depends on their situation. There’s really three types of buyers, honestly, is the guys that have a, you they want to stay residential, but they need more garage space. So we find them a larger garage. There’s the guys that are done with, you know, residential and they want to go find a piece of land with a shop on it so they can do whatever they want.Or there’s the guys that really enjoy their neighborhood. Maybe their wife doesn’t want them to, you know, say, I love this house. We’re not going anywhere. Find another garage somewhere. And those are the perfect folks for the garage condos that are offsite individually owned garages.
Dylan Silver (08:40)
Garage. Did you say garage condo?Ross Smith (08:43)
Garage condos. they have these, I call them garage condos, they’re kind of garage suites, but mostly they’re commercial spaces that have been, they’re whole neighborhoods of garages is basically what they are. And that you go in and buy the garage and then customize it however you want to. And you can put lifts, can, mean, some of these things look like custom homes on the inside. They’re pretty awesome.Dylan Silver (08:45)
Okay.Good.
Do they, are these specifically for like automotive enthusiasts or is it a mix of people who are using it? Could they be using it as, you know, workspace as well?
Ross Smith (09:20)
Well, these these particular establishments are all automotive or recreation related. Now you can run your business out of it and you can have a shop, but there’s restrictions in place, obviously, for you know, you can’t open up a plumbing shop next door or plumbing supply or whatever it is, it has to stay automotive, which really makes these places unique.Dylan Silver (09:42)
Now, you’re in Houston, Texas, is that right? How far outside of the major metro are these garage condos? Are you seeing them in the mix with subdivisions or are they on the outskirts?Ross Smith (09:58)
They are a lot. Most of them are in. They are near a large demographic of people that can afford them. Put it that way in specific neighborhoods. And most of them basically, you know, for real estate purposes or the cost of it outside of the major metropolitan areas. Now, there are some in inside like inside the loop, but they are very expensive.Dylan Silver (10:22)
I’m thinking about that as a developer. What an interesting like deal to underwrite. Hey, we’re going to have these garage condos. We got to make sure that we’ve got the buyers for us. You got to put them in the right area. But then also too, you got to figure out, you know, what’s the going rate for a garage condo, right? So you’re trying to see, what, what, what are other people doing? I’m completely, this is brand new to me in, in like Houston, how many garage condo developments are there?Ross Smith (10:39)
That’s right.seven believe it or not. There’s a few of them and it’s becoming a bigger and bigger deal once you realize that the space is there and that this concept exists. Go Google it. I mean there’s they’re all over the United States and Florida you know all there’s some big ones in Florida but yeah there’s seven locations that we know of in Houston and they run everywhere from you know Shell
Dylan Silver (11:38)
Okay, so it’s not like it’s inundated, right?Ross Smith (12:04)
$165 a square foot, which is way on the low end and a basic building. I mean, some of these things built out are selling for $300 a square foot. Like it is wild how crazy it gets.Dylan Silver (12:17)
So they’re selling them, they’re not renting them out or a mix of both.Ross Smith (12:22)
No, most of these are, you purchase them. Like you actually own it like any other real estate. So there are, I mean, I don’t know of anybody that’s doing a rental model right now.Dylan Silver (12:27)
Okay, so build.I was thinking that the rental model was the, it’s interesting, because I was almost looking at it like a storage facility type of thing, but for a car, but they’re looking at it as built to sell. Now, when folks are looking at, you know, garage condos, new homes with larger garages, is there also some level of restriction in adding to their garage, maybe because of space wise or HOA, and it can be a limiting factor in that regard.
Ross Smith (12:59)
And that has, and I’m glad you brought that up because that that’s kind of the natural progression of how these properties go is because if you’re in a neighborhood that will allow you to add onto a garage, it’s only going to be so much. So depending on the size of your collection, you may be forced to go either to a garage condo or to a piece of land with a larger shop that where there’s less restrictions to be able to do that.Dylan Silver (13:24)
Now, I like to say that real estate investing and cars are like two totally different games because one is more of a passion project that you might burn some money. The other one, you could burn some money, but you could make, I would say, a larger upside in real estate investing than in a personal car collection. But when you are looking at you know lifestyle and when you are looking at what brings you happiness versus whatRoss Smith (13:34)
Right.Right.
Dylan Silver (13:53)
you’re going to be investing in Texas is one of the first places that comes in mind to me to talk about the of the mesh between these two spaces. I know a lot of real estate investors with a great car collection. So I’m curious, are you seeing as well that there are investors who are building these car collections and you know, not necessarily having a place to store them and soIt’s almost like, well, where am I going to put this? I don’t necessarily have a place. Well, I got to now learn where where to go store it. And it’s not something that they necessarily think about until they’re realizing, hey, I got to protect this thing.
Ross Smith (14:32)
For sure. My typical client, especially on the initial contact is the guy that has his eye on something else that he wants. And he knows good and well that he doesn’t have the storage space to be able to accommodate that, but he really wants that next purchase. So he’s willing to make big moves to make that happen.Dylan Silver (15:33)
And I think about this and when we talk about, you know, the different ways where real estate can mesh in with other areas of life, a garage condo, I’d be curious to see, you know, how that could work potentially even as a deductible expense, you know, depending on, you know, the use case for the cars and so on and so forth. ⁓ I’ve had so many people, yeah.Ross Smith (15:56)
a of these guys,go ahead. Well, a lot of these guys will use them as home offices and then write it off as a business expense. Like they’ll have an LLC by the condo and then they’ll rent it back from that LLC so that it’s a tax break. And then you go and do a cost segregation study on it and you can write a huge portion of that off in a single year.
Dylan Silver (16:16)
Yeah.I was just gonna mention that, yeah, cost seg on the garage condo where you’re storing the vehicle, what it’s a business, that’s the play right there.
Ross Smith (16:23)
Yeah. Right. That’s right. There’s a couple of different angleswho can make this work really well.
Dylan Silver (16:32)
⁓ When folks are getting into that space, we’re talking about garage condos specifically, are you able to help them or point them in the right direction when it comes to some of that strategy?Ross Smith (16:45)
Yes, absolutely. And that’s kind of where being more of a specialist really helps out because I know all the facilities that are in Houston. I know the differences between them. I know the sizes, you all the different things that go into really solid decision-making when it comes to these units. And then there’s quite a bit. I mean, they vary differently by security, by size, by…amenities, there’s a lot of different things. It’s almost like picking your golf course or your country club that you want to go to. There’s certain things that certain ones offer that others don’t.
Dylan Silver (17:23)
How long have these garage condos been around for? Years and years?Ross Smith (17:26)
Andhonestly, the last 10 years, I would say they started to grow and now they’ve kind of started to explode. Like it seems like there’s a new one on my feed, you know, every couple of months ⁓ that I didn’t know about popping up across the country.
Dylan Silver (17:43)
Now, how do these track along with the general real estate market? Do they follow real estate trends? Or I’m imagining because you know, your car collection is not your primary residence, that they may be impacted maybe greater by the ups and also greater by the downs.Ross Smith (17:59)
They don’t turn over as much because people tend to stay in them because obviously they’re where else are they going to put their collection? They bought it for a reason. ⁓ But as far as value is concerned, they do fluctuate with the just like the other real estate inside the commercial market because most of these are commercial spaces. They tend to appreciate more.And there’s more of a value add when you go to sell them after the build out, depending on how fancy your build out is. And that’s where you get into the really astronomically highest price per square foot.
Dylan Silver (18:35)
Now know you’ve also been involved and we were talking before hopping on the show here in some other segments of real estate, including, you you’ve wholesale some deals. That’s the segment of real estate that I came from where I cut my teeth. And so having done so many different types of deals, was there one deal maybe in the wholesale space specifically that you remember and you thought, wow, that was, you know, that was a lot of effort.Ross Smith (19:01)
There there was one that I can’t actually I can’t really disclose the details of it, but ⁓ it was it was an airport. It was not even going to end. was a small like municipal type airport, but trying to trying to sell an airport to a developer or something. It’s not either some other entity. And it was only a 30 acre track. It wasn’t that big a deal.Dylan Silver (19:07)
Sure.my gosh. Yeah, that’s…
Ross Smith (19:27)
But as soon as it’s outside of somebody’s wheelhouse and what they know, they all of a sudden kind of step back a little bit and they’re like, I don’t know. Even though it’s just really raw land with some buildings onDylan Silver (19:38)
Yeah, that’s amazing, an airport. I’ve heard a lot of things, I’ve not heard an airport before. Do you have anybody in the motorsport world who reaches out to you looking for real estate to develop tracks on?Ross Smith (19:51)
I there’s been multiple people actually that have I’ve collaborated with. And honestly, all of them have not come to fruition, unfortunately, because of either local ordinances or the community coming together and saying, Hey, we don’t want to racetrack, you know, near us. So they’re few and far between and honestly, racetracks don’t make a ton of money. So it’s more of a passion project for somebody that has a great deal of resources. So that doesn’t come up veryDylan Silver (20:06)
Yeah.When we talk about, you know, racetracks, airports, right, totally new area real estate for me. Are there aging racetracks and airports and generally speaking, are there buyers for them or do these properties, you know, tend to become distressed and dilapidated across the country?
Ross Smith (20:42)
For sure. is, ⁓ you gotta think, there’s not a whole lot of turnover in that space, right? But take, for example, the airport that we were talking about, there was a whole bunch of hangers, which is where the garage thing originally originated from, was hangerspaces. Like they used to buy these hangerspaces and store their car collections. And somebody just translated that over into the commercial space.So that’s what this gentleman had done is he had converted the hangers over to storage facilities and was renting it out to racers.
Dylan Silver (21:18)
That’s how you do it. hangers to garage condos, right? ⁓ But yeah, I’m thinking about a couple different small airports that I saw growing up and then living in Texas. And I’ve always kind of never put too much thought into who actually owns the airport, but someone’s got to own the airport or group of people do. And so, you know, that’s, that’s another type of transaction.Ross Smith (21:38)
And talking about niches,those luxury, they have the same kind of concept with hangers. They have luxury hangers. And that’s another niche where there’s quite a bit of opportunity. Not a whole lot of people in it.
Dylan Silver (21:49)
airplane hangers.That’s right. Come by a hanger. We’ll get you covered in all areas. We are coming up on time here though, Ross. Where can folks go if they’re interested in reaching out to you? Maybe they’d like a garage condo for themselves.
Ross Smith (21:53)
right?Right.
Okay, yep.
For sure. You can go to racetract.com. That’s my website. Or you can find me on Instagram at Motorsport Real Estate. And ⁓ we’re on any, all the socials. So we actually have our own podcast. It’s the Garage One podcast. If you want to go look that up too.
Dylan Silver (22:25)
Ross, thank you so much for coming on the show.Ross Smith (22:27)
That’s been fun. Thanks, Dylan. I appreciate it.
