Do any of you flip cars for profit ?

[PeteLife]

Flipping cars is small potatoes.

Sorry but I gotta disagree. As a matter of fact, I think this statement is dumb as shit. I know people personally who does this on the side and make 30k plus per month (in profits) just as an hobby. And ofcourse the people who take it to the next level by scaling and opening a car lot (or more) make the big bucks.

I was making about 2-3k in profits per car (average) when I did it in college. And that was only from selling ONE car in about a 7 day period, with about 2 hours of work. (I know that is small change but for 2 hours of work, ill take 2k/week anyday). Plus, there was also the perk of driving a different car to class every week. Girls loved it and guys envied me, lol. College days, gotta love it!

But seriously though, once you begin to scale, thats where the real money comes in. Plus, even if you fail, flipping cars is a great way to becoming a skilled sales person. The education behind it is surreal. Negotiating and pitching to potential customers. I always looked forward to the challenge. Helped me out a lot when doing other businesses. Great learning experience. I can sell water to a well, fire in hell, and ice in the winter.

Edit: A month and a half ago I bought a 03 BMW z4 for $6,700 (Owner wanted 10k for it), I sold it a month later for $11k. Thats a $4300 profit and I only had it on the market for 5 days since i was busy enjoying it for the hot summer days. Just had to throw that in there to offer a real world perspective.

 

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[vtlambo]

Edit: A month and a half ago I bought a 03 BMW z4 for $6,700 (Owner wanted 10k for it), I sold it a month later for $11k. Thats a $4300 profit and I only had it on the market for 5 days since i was busy enjoying it for the hot summer days. Just had to throw that in there to offer a real world perspective.

Was it salvaged?

 

[Kak]

It
Is
Small
Potatoes

Start a real business, not a hobby.

 

[MJ DeMarco]

It
Is
Small
Potatoes

Start a real business.

Most *real businesses* start off small. I'm sure if you ask any car dealer, or car lot owner how they got started, I'm sure the answer will be similar to a car flipping story. The garbage guy that owns 1800Junk started in one truck, and trolled the warehouses in his neighborhood. His start was also "small potatoes". You'll be hard pressed to find someone who got into a billion dollar business and started off at a billion dollars. Grass roots starts at the grass level, which means doing things that some would consider "slowlane" or "small potatoes."

I understand your point. The danger here is you are thwarting someone's initial process... the hardest step is getting started, doing something, taking action, and building momentum. Often that action starts as "small potatoes" -- once the entrepreneur sees what can be done, suddenly small potatoes can grow into a huge harvest.

 

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[Kak]

And 30k a month in profits is a giant load of shit. I personally know people who own small dealerships that don't make that.

Thank you MJ, that is a good point.

 

[Kak]

Was it salvaged?

Probably. He isn't creating creating any real value.

 

[PeteLife]

Was it salvaged?

Vehicle wasn't salvaged. Clean and Clear title work. I tried flipping a salvage vehicle a longgg time ago, took me 3 weeks to sell it and I barely broke even so I didn't bother with those vehicles. I got the vehicle for this cheap because of some basic negotiation tactics plus there were 2 small issues with the car. 1) The front bumper had some stone chips in the paint (if anyone has ever had a z4, you know how low it is to the ground). 2) The motor that controls the convertible top did not work when trying to put the top down. Both easy fixes, paid my friend $150 to repaint the bumper, and did a quick google search and figured out how to fix the convertible top (30 mins + $0 spent).

And 30k a month in profits is a giant load of shit. I personally know people who own small dealerships that don't make that.

Yea it is a shit load of money, but for that 30k, comes at a "time expense". He buys cars that looks like shit, does all the work to it himself, and in a week or 2 car looks brand new again. He then runs it through the auction. Simple process. Never deals with customers. So he gets top dollar for his cars while basically paying nothing for them. Like I said, its his hobby so that 30k does come at a "time" expense but he rather do the work himself rather than outsource it because thats what he loves.

Probably. He isn't creating creating any real value.

O wow, so if the vehicle was salvaged, that means I am not creating any real value??? Funny thing about that is that I recently read an article about a dealer who stopped dealing with clear titled vehicles and only dealt with salvage (vandalized/stolen etc, never totalled or flood vehicles). He said he started making 3-4 times the amount he was making when dealing with clean titled vehicles. He realized not a lot of people in the biz went after these vehicles because of the value depreciation of a salvaged vehicle so he had no competition when buying them. He bought them for dirt cheap, fix them up if he needed, then went through the process of clearing the title through the state. 2 weeks later he has a clean title from the mva in the mail ... like clockwork. He then sold these cars at retail value with a CLEAN title.
So for not creating value, I look at situations like these as a barrier to entry: The industry doesn't want to deal with them so why not tap into that market.

As for adding value, I believe I have added value to the OP original question giving him my experience in the field. Simply saying "Flipping cars is small potatoes" is where I see a lack of value. Wish you had given some type of reasoning behind that statement which would've been more valuable. We all need some method for aquiring money to meet our fastlane goals, and this is just one proven method. And if somebody do decide to make this fastlane, flipping is the best way to start. As for me, this is not my fastlane plan but I know this information can be helpful to others.

Like the OP said:

This can help all of us make some more profit towards our goals !

 

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[Vigilante]

I think that flipping cars is enjoyable. I've done it. I did one a few years ago just to prove a point to someone.

It also can lead to a more significant business, with fastlane prospects.

It also can fuel money for other projects.

However, I also am calling bullshit on someone netting $360k a year "on the side" flipping cars, especially through an auction. That's no side gig. That's full time, with all of the stars lining up right. That's one car every 10 days, with each one netting $10k per sale in profit net of expenses. That's a huge operation, not someone's "side business."

This makes about as much sense to me as your original (now edited) comment does that you could have sold your flip car for $2k more than you did "if you wanted to..."

I worked with BuyHerePayHere lots for a while. None of them were throwing off $360k a year in profit.

So.... while I think the concept has value, I think it can be accomplished without exaggeration of the potential.

Also, be mindful of state regulations. For example, in Minnesota... you can only do (5?) cars before you have to become a licensed dealer.

 

[Kak]

Guys, I changed my mind. Flip cars for profit. It is fastlane. It will make you wealthy.

Sorry for the confusion.

 

[PeteLife]

However, I also am calling bullshit on someone netting $360k a year "on the side" flipping cars, especially through an auction. That's no side gig. That's full time, with all of the stars lining up right. That's one car every 10 days, with each one netting $10k per sale in profit net of expenses. That's a huge operation, not someone's "side business."

Glad to hear your thoughts on this Vigilante. Yes 30k a month is a ridiculous amount. But I did not say he makes 360k a year doing this which he doesn't Since he doesnt do it every month. I should've clarified that. This is a guy who fixes planes for a living. And when he is not/work is slow, he buys, fixes, and sells cars. Simple as that! Only deals with Benz and BMW only (thats his specialty). He will go a couple months without doing this, but when he does do it, you see cars coming in and out of his garage like its a drive thru. And I know for a fact he makes +- ~30k a month when he does it since I've picked up cars for him before and sometimes help work on the cars (I know how much he buys for and sells for). By going through the auction, his cars are gone the second he fixes them, hence he can go though cars quickly. And if he doesn't get a decent price at the auction (based on his reserve), he simply runs it through on the next go. So he NEVER loses by going the auction route. Its a decent process.
p.s. I know I said I made 2-3k selling a car in a week,so let me clarify that I did not make ~$10k/month or $120k per year doing this. I did that on the side to offset college cost. not a weekly thing.

This makes about as much sense to me as your original (now edited) comment does that you could have sold your flip car for $2k more than you did "if you wanted to..."

Yea I edited that because to get the additional 2k price mark I would've had to go beyond 7 days on the market, which I rarely do. The price for an 03 BMW z4 roadster sports edition with 96k miles in my area goes for 12-14k. I sold mine for 11k, hence ~2k more profit was left on the table. (see pic)


Someone posted a thread about 2 months ago titled "What do you drive?", check post #32 to see a pic of the car.
https://www.thefastlaneforum.com/current-events-sports-off-topic/46611-what-do-you-drive-2.html

So.... while I think the concept has value, I think it can be accomplished without exaggeration of the potential.

Also, be mindful of state regulations. For example, in Minnesota... you can only do (5?) cars before you have to become a licensed dealer.

Vigilante, there is no exaggeration here. I respect this forum too much to do that. Check post #14, and 20 of this thread to see a little more of my insight on the business and my process. I even talked about the state regulations for selling a maximum of 5 cars and what I did to bypass that law. And that was a post I made almost a year ago.

Everything I ever said can be backed up by some old thread or something here.

 

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[JM35]

I started flipping cars this summer just for fun and a bit of extra cash, if you dont know much about cars, theres a good chance you will buy the car and then find out it has a pretty serious problem.

Also, dont trust the KBB value, no one pays kBB value. I found a mustang valued at $6k, worked the asking price down to $3100, spent $400 fixing it up and then turned around and sold it for $5200.

We just hopped the title and didnt have any problems with the process.

 

[CommonCents]

When you say someone makes 30k a month, it is assumed that is sustainable, different than saying some guy made 30k in one particular month one time. So I made $100 in a minute once, that doesn't mean I make $6,000 an hour. A huge difference.

There's a lot of talking past each other in this thread, because of the varied definition of "flipping cars". In my mind, flipping is more like arbitrage, doing very little to the car. An individual would have to make it a full time job and be a good mechanic, but then again, its not going to become passive and is more of a job. So in that regard not real fast lane potential.

A buy here pay here lot and more of a dealership makes much of its money on financing, kinda like payday loans/pawn so less of "flipping" and financing is the value. A guy buying an old trashed vette and building it is more of a builder/fabricator than flipper, IMHO.

Fastlane is independent of industry. Any industry could be fastlane as any one could be slow lane as well whether its cars or software/online biz. An individual flippin cars? meh not so fastlane, but it could eventually be developed or pivoted into more of a fastlane business.

A handy tool is getting on Manheim auction site to see the real wholesale prices of cars. KBB and such can be wayy off, and some of those guides quoted to customers are rigged in the dealers favor. Most dealers buy and sell cars at a Manheim auction, dealer to dealer. NOT open to public auctions where the real junk goes. Dealer auctions are a great way to buy cars as well. High line lease sales and bank sales. To get your own nicer car, work with an independent dealer to get you a bmw or mercedes financial lease sale car and negotiate a flat fee up front.

 

[TrendSettersInc]

Ive done it from time to time with cheaper cars ($500-2500) An it worked well, I think it just depends when and of course the area you are selling in. I have a Buick T-Type/Grand National I bought below value and put a bit of cash into that am looking to flip now. You make your profits when you buy. Getting the car with low mileage or very good condition always helps too.

 

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[chrisbiz4444]

Because if someone has a small amount to invest such as $2000 where else can you put that small amount and get such a great return? Plus it is a great way to build investment capital without working for someone else. (Who wants to be bossed around for peanuts ?)

 

[jayd]

The only issue I can see with this is here... You just said " Who is going to come to your home and buy a car with 10k Cash" If you are floating titles you are going to be selling under the person you bought the car from. Therefore your buyer will be writing the check out to the person on the title. ( That's a problem, Cant cash it lol.) Another problem I see is registering the car because you are limited to a small number of cars per year without a dealers license. It is ruff, that is why im considering getting the dealers license. It might be worth the investment.

Yeah, it could be an issue. I just sold a car for $10500. However it was my cousins who works like a dog and has no time. He paid me 15% though. See the video I made telling how it all played out

 

[jayd]

Also, dont trust the KBB value, no one pays kBB value. I found a mustang valued at $6k, worked the asking price down to $3100, spent $400 fixing it up and then turned around and sold it for $5200..

People don't take it as gospel, but they do use it as a gauge for what a car could potentially be worth. You are savvy so you knew you could get it for much less - but remember what you sold it for...much closer to KBB than what you bought it for

 

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[jayd]

Because if someone has a small amount to invest such as $2000 where else can you put that small amount and get such a great return? Plus it is a great way to build investment capital without working for someone else. (Who wants to be bossed around for peanuts ?)

I agree - yes as someone mentioned above - it's not passive.

However, if you work your a$$ off, you can put together enough money to invest in vehicles that do offer passive income.

It all depends on what you want.

Some people just want some extra money and this is something they feel comfortable doing.

I'm a full time internet marketer living in the fast lane, but I do it for the thrill once in a while bc I feel like it and when I come across as close to a sure thing as I can find.

 

[wackemnstackem]

Flipping cars is small potatoes.

I gues my question is to KAK... Have you made a million dollars? Better yet, have you even made enough money to call your self WEALTHY? And in your opinion, what is wealthy? What amount of money is WORTH investing your time and money in? Because i can guarantee you this... The deals you make right now in your daily life, are considered "small potatoes" to somebody. Because you are in a different financial situation than this man, does not qualify his amount of return as "Small Potatoes". I know this because this is EXACTLY how i started my venture! To the "T"! I started with $2000. Ive now turned that $2000 into $370k+ and it all started with flipping vehicles! You see, its not the AMOUNT you make on the flip, its the percentage of return you make. For an example, if you start with $2000 and all you needed to do was make 2 flips a month for a 20% return, in 12 months that measly $2000 would accumulate to $158,932 in 1 YEAR, assuming you made 20% return each flip (which i will tell you right now, if you know what your doing, 20% is chump change). It all starts somewhere! There is NOT a better or quicker way to make this much of a return on your money IMO! IF there is a better idea out ther, DONT TELL ANYONE! Im not saying i solely flipped cars...but thats how i started, and it turned into flipping Motor homes, travel trailers, boats, motorcycles and so on. If i could do it over again, I would do it the same exact way! Its SO easy! I mean, if you want to work 8-10hr days thats just fine for me, but i will never again be BROKE because of the knowlege i have learned from this venture. If there is any advice to anyone out there trying to do this is the following: DO IT! The longer you wait to start, the longer it will take to build that first 20,000. Once you hit 20k, its becomes "Silly" how easy it is. There is always a way around the "RULES", if you think its illegal...prove it. Because in the real world, in order to convict someone of illegal activity (no license), would nearly be impossible. Its a cash business. Its untraceable, at least the way i have perfected all of my transactions. There is nothing illegal about flipping, even without a license. Should you need a license to flip iPads, computers, PS3's and the biggest of them all...Real Estate! There are ways around the rules! Look at the Rich...why do they pay less taxes than a doctor that makes 200k a year. Because there will always be a way around the rules.

There... my RANT is over!

 

[RHL]

I think Kak's point is that flipping cars, especially as a non dealer (capping your deals-per-year to 5 legally in most states) is a good way to build capital, but not fastlane in itself. On a brilliant flip, you might make $3,000. There are people in the fastlane who make ten times that in a day doing much less work. Also, the law of percentages at some point needs to convert to real numbers. Say I can get 30% return on flips every time. Awesome. But if I'm flipping $700 cars, I still won't have a lot of money when I'm done. This is why it's not viable to flip video games or other low-priced goods as a source of income: The 30-50% returns don't scale well.

The trick is to get 10-20% on a huge deal, where profit margins are much slimmer but the physical dollar amount in your pocket is much greater. It's much easier to get a steal on a $1,000 car than it is to get a steal of the same magnitude (50% undervalued) on a $40,000 car, but if you make 10% on the 40,000 car, you've made ten times what you'd make making 50% on the $800 car.

Now, I flip cars for profit, but I'm flipping a different league of car than most of the people in this thread. While the $8,000-16,000 purchase/sale range is absolutely is best in terms of quick sales and low risk, low risk does not engender itself to the fastlane, and time is a great ally of mine because of available liquidity and space, something desperate sellers and dealers don't have.

So I deal in high end sports cars and low end exotic cars, and shoot for a minimum profit of $6,000 per deal legally (after I pay the 6% sales tax). This is a tactic that fits some unique advantages afforded to me by my slow-lane job; it won't work for everyone. Yes, the taxes suck, but I'd rather lose $2,000 on every deal than lose my freedom to the law.

I do it with higher value cars for a couple reasons: One, I've got the liquidity, and two, I am fanatical, like foaming at the mouth, in employing RK's axiom "make your money on the buy." I wait patiently for that one listing... you know the one, the one that makes your heart race because it's so insane. Someone just wants it gone. I know these cars are available in limited quantities, so it's easy to see that what I have in front of me, for example, the cheapest one of a certain car available in the USA.

I only find "that" deal a few times a year (and I have certain tricks and tips to help find it), but when I do, it has a few advantages over the smaller flips:

1. More "fastlane." I can do one deal that earns the profit of ten smaller deals. All I have to do is check for the car several times a day, which takes maybe 5 minutes and provides a good break from work.

2. Chance of a loss of money is virtually nill. The deals I move on are so good that even if I get absolutely hosed by some hidden mechanical problem, I'm still making like 5% profit. This is also why, so far, I've avoided Ferraris and Lambos, because a blown engine on a Gallardo or 360 costs as much as the car, so it risks the principal.

3. Executing just a small number of these deals every year is an alternative to "investing" to grow my cash pool. Right now, I'm looking at around a 30% APY on my entire net worth just from wheeling and dealing, which beats the hell out of the 7% on my max IRA contribution and what my pension is promising in the future. It takes the pressure off of trying to find a deal every day: I'm not looking to make a million, I'm looking for that magical 12-15% return on tens of thousands. I'm shooting for that because I can pull these deals several times a year. If I can make 15% in 3 months on $40,000 and do it multiple times a year, my APY was not 15%, but more like 45% or 60%. It's' more work than letting the bank passively make money (which is work for a broker, which he gets paid for, with a bite out of my nest egg), but it takes an average of four work days to buy and sell a car for me right now, and I don't make $5,000 in four days at my slow-lane job. That's more like what I make in a month. For now, therefore, this satisfies the commandment of time.

4. I basically have the knowledge of a professional mechanic, which is a huge boon in this area. I've never worked in the field, but my dad was, and my grandpa worked for GM as one, and I know pretty much every facet of the limited brands of car that I buy and sell. I have never met a seller or dealer, even one who had lived with the car for years, that understood its workings and problems better than I did. That's a very powerful weapon: I always go in knowing more than the seller. At times I even toyed with the idea of putting a lift in my garage and buying high mileage Hondas or Toyotas in good condition, replacing the clutches, and then reselling them at a 50% markup. But nothing could be less fastlane than clutch swaps. LOL.

 

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[Motley crue]

PeteLife, I apologize first of all for reviving such an old post, but I'm looking to get into the flipping business myself. I would love to hear some advise if you don't mind helping out a rookie. I used to flip furniture, so I know a bit about the flipping business but flipping cars is new. My plan is to get a co-op dealer license and then buy cars of craigslist ideally for no more than 3k but I plan on going up to cars in the 8k range once I've made some money doing it. Once I buy the car I plan on going to dealer to dealer auctions and setting a reserve just high enough for me to make $500 bucks or so, and if I make more from a car, than good news for me. I'm curious as to what coop dealer you went through, I've looked into some and the best known one seems to be auto income but I've heard some bad things about the company, that they'll shaft brokers, and wipe their hands clean of a situation if something goes wrong. I don't know, but that's what I've read. I've also read this article http://tobeacardealer.blogspot.com/2009/02/co-op-dealership-option.html that somewhat confused me. It seems to explain the dealer has all the power and I would be no more than a salesperson to the company. Any info you're willing to give is much appreciated and thanks in advance

 

[Fox]

I flipped 25-30 cars throughout University in Ireland to pay for tuition, drinking money and bills. I always made money but it was still small time.

Method:
-Buy for cheap from an older rural person near to my home place on the weekends. Look for a small car that is in great condition but badly advertised (no/bad pics, inconvenient location). (2 hours) Buy car for as cheap as possible. Offer cash with a take it or leave it approach. This is where most of the money is made, not when you sell it. 'If you can do it for $950 I can be there in 15 minutes with cash?'

-Bring it to my city University and place a good ad with excellent pictures. Park in a central location with FOR SALE CALL XXXXXXXX in thw window. (30 mins) Mark up $500-$1000.

- Don't drop price more then $100. Let them test drive it for 10 minutes then give them 10 minutes to make a decision. (3 meetings x 20 mins = 1 hr)

So for three hours work I would have a different car to drive to Uni every second week and maybe make $600 and top of my other student business. Ireland has a very easy system for buying and selling cars though with no fees and easy paperwork.

Maybe something for the younger guys here who are still in school to look at. Minimum cash investment but also not huge gains either.

 

[Motley crue]

You seem to have the right idea but I think the biggest concern and most importantly discussed topic here (or at least the thing that concerned me the most) is the legality of it. While I'm unsure of the laws in Ireland, here in the states it is illegal to sell cars for profit without a dealer license (contrary to popular belief you can't flip even one car a year legally, as the law states you can't sell x amount of cars per year OR sell cars for profit). Flipping cars on it's surface seems to be a phenomenal way to fund fast lane ventures, but if you get caught flipping, you're way out of the green and deep in red. Petelife mentioned using a coop dealer program which again on it's surface is a solid idea, but upon looking into the programs, you can get in just as much trouble, if not more without using the coop dealership if you're selling retail. I've had two ideas using these programs to wholesale vehicles. the first idea was to buy cars at auction in the northeast, then sell them at auction in the southeast, because vehicles cost more in the south for the same vehicle. Problem is I couldn't find a way to affordably transport the cars, and would ultimately be losing money. second idea was to do as you did, hunt for vehicles on craigslist that are poorly advertised, and that I could get inexpensively, and bring them to auction. issue here is I'm unsure of how well vehicles sell at auction, and it's near impossible to find auction results without dealer access so I have no way to know if 100% of cars sell at auction or if 90%, 80%, 70%, 60%, or 50% sell. lets say I start taking cars to auction, sell every time for the first four weeks, and on the fifth week I ramp up production by taking 10 cars to auction. none of them sell. now i'm stuck with ten cars I can't unload, and might have to cut my loses and accept scrap value just to make some of my money back.

 

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[LynnD5000]

I was wondering if any of you flips cars. Not to low of a price cars im talking like 10k and up worth cars, pretty much good sport cars well maintained. If so what kind of cars are easier to flip ? How do you do it so that the guy/gal who buys the car doesnt question you about the title etc. Since your flipping it. If someone how is well experienced in this can give us a quick guide. This can help all of us make some more profit towards our goals !

It sounds like flipping cars could work really well...
Here is idea that I heard about a few years ago...I have NO idea if it would work or not...In the Midwest salt is used on the roads this results in a very short life span of the car/truck bodies - leaving drive trains and motors with low mileage behind. In the west they don't use very much salt so they wear the drive trains out....leaving sound car/truck bodies behind -
Perhaps you could develop a system of legally harvesting car/truck drive trains in the Midwest and legally harvesting car/truck bodies in the West and create a legal refurbishing factory in the middle that distributes reconditioned cars and trucks to your exclusive used car dealerships (for a handsome profit of course) at a great price....

Think Producer and Scale Ability!

L

 

[RHL]

I did it for a long time. Is still do, from time to time, but not the way most people here are suggesting. Posters in this thread are correct, that selling even one car for profit in a year is illegal, and selling a car you have not registered or paid taxes on is very, very, very illegal. You need to find ways to lawfully (and also ethically, at least for me) get around that. The thing about crime is that it's the invisible hand that can come back and topple your empire even if you later decide to go big and go legit. Don't risk it. As you climb, lots of competition will be looking for any way they can find to take it all away from you.

I wouldn't spend much time thinking about hustles unless you have a real nuts-and-bolts fastlane idea that you simply can't finance without hustling. Hustling should be like bending over and picking up a dollar blowing across the sidewalk-sweet, easy, and requiring no thought. Don't get sucked in, or it can become another job.

 

[BlakeIC]

I was going to get into this, but WA is very strict with deadlines of registering the car and the whole bill of sale thing, so I did not bother

After 3 cars sold you are required in WA to get a used car sales license

 

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[Motley crue]

Hey RHL, if you don't mind sharing, how did you go about getting around the laws? I agree flipping cars itself isn't fastlane, but it is an excellent way to fund other fastlane ventures so long as you can make money at it