I have noticed lately that there seems to be a fair amount of other "car guys" on the forum lately and I thought I would share what I had been doing up until recently to build some fairly quick cash with cars.
I have now turned my focus to real estate in hopes create passive income and hop in the fastlane, but will essentially be doing the same thing "wholesaling" for the first year or so.
THE PLAN:
If you look on the websites for many local banks, there is an area for repos/foreclosures where they list the houses and cars that have been taken back.
The banks generally do not want to hang on to the cars as many times they are sitting in their lot somewhere making them no money. Often times they are willing to pretty much ditch them if you make an offer.
For an example here is the page at a local bank of mine: Repos/Foreclosures
You will notice that for each vehicle listed there are 3 prices. In general I know what a car is worth and what repairs will cost me to make (I do all my own repairs so there are no labor fees). You will want to offer lower than the lowest price listed regardless of what the are asking. (sometimes they are asking more than what the wholesale value is)
First you will want to check what the car "should" be worth. You can do this by looking it up on www.KBB.com and New Car Prices, Used Car Values, New Car Reviews & Car Buying Guides - NADAguides.com Official Site These should only be used for reference. You should then also check sites like ebaymotors and the like to see what similar cars are going for.
I then go down and look at the car to see what kind of shape it is generally in. I also check for obvious things that need repair, and make sure the big ticket items are all ok (engine is quite, trans shifts ok etc)
After I know what the car is worth, how much I need to make it look great, and how much the bank wants for it, I make my offer.
In general I will give a low offer but nothing insane either. The banks are not going to sell a 10,000 car for 2,500 bucks! How fast you get an answer depends, but usually within a few days.
In the instance that the offer is accepted, I then proceed to beautify the car and make it look as good as possible by detailing and fixing anything that needs to be done. PLEASE NOTE: it is not my intention to rip anyone off and it shouldn't be yours either. Word travels fast in a small community and the better your name is, the faster your cars will sell. Put some love into the car and truly make it a good deal.
I then price the car as competitively as possible while still making AT LEAST $1,000. You should know that you can make at least $1,000 before you even make your offer, so this should not be a concern. I can often make upwards of 2,500or even more on a "home run" deal.
I post on all of the free sites (craigslist etc) and tell everyone I know about the car. I can typically sell the car in a month or less by doing just this.
That in short is what I have been doing up until recently.
There are a few issues that you will want to consider if you are thinking about trying this.
1) Can you perform the mechanical repairs safely without paying a shop to make them? Paying someone else to do the work will likely eliminate your profit.
2) In some states (VA for example) only a certain amount of cars can be sold be an individual before they must obtain a dealers license. This has personlly put an end it this for me for this year. That and the fact that I found out you could do the same thing with property and make MUCH more money per deal.
3) You will need cash for the full amount that you offered to the bank.
4) Make sure that the title is clean and was not a salvaged car.
5) In general you will want to be doing this on the cheaper cars. Think about the cars that most people can afford and will want to buy quickly. For example: honda civics, toyota camry's, nissan sentra's etc. You will absolutly be able to get great deals on BMW's and the like, but these will not sell as quickly and the repairs will be much more. You will also need more cash up front and will generally make less. In my experiece these are NOT ideal.
6) Depending upon where you live there will be different tax consequences and DMV fees. I am not an expert on these area and cannot give you advice here. I suggest checking with your local DMV and find out what papers you need to sell a car to someone else BEFORE buying your first one. Finding out that you are missing paperwork when trying to sell a car SUCKS BIGTIME (ask me how I know).
If you have any questions dont hesitate to shoot me a PM. Its my hope that I have been able to offer some value back to the forum.
Good Luck!
I have now turned my focus to real estate in hopes create passive income and hop in the fastlane, but will essentially be doing the same thing "wholesaling" for the first year or so.
THE PLAN:
If you look on the websites for many local banks, there is an area for repos/foreclosures where they list the houses and cars that have been taken back.
The banks generally do not want to hang on to the cars as many times they are sitting in their lot somewhere making them no money. Often times they are willing to pretty much ditch them if you make an offer.
For an example here is the page at a local bank of mine: Repos/Foreclosures
You will notice that for each vehicle listed there are 3 prices. In general I know what a car is worth and what repairs will cost me to make (I do all my own repairs so there are no labor fees). You will want to offer lower than the lowest price listed regardless of what the are asking. (sometimes they are asking more than what the wholesale value is)
First you will want to check what the car "should" be worth. You can do this by looking it up on www.KBB.com and New Car Prices, Used Car Values, New Car Reviews & Car Buying Guides - NADAguides.com Official Site These should only be used for reference. You should then also check sites like ebaymotors and the like to see what similar cars are going for.
I then go down and look at the car to see what kind of shape it is generally in. I also check for obvious things that need repair, and make sure the big ticket items are all ok (engine is quite, trans shifts ok etc)
After I know what the car is worth, how much I need to make it look great, and how much the bank wants for it, I make my offer.
In general I will give a low offer but nothing insane either. The banks are not going to sell a 10,000 car for 2,500 bucks! How fast you get an answer depends, but usually within a few days.
In the instance that the offer is accepted, I then proceed to beautify the car and make it look as good as possible by detailing and fixing anything that needs to be done. PLEASE NOTE: it is not my intention to rip anyone off and it shouldn't be yours either. Word travels fast in a small community and the better your name is, the faster your cars will sell. Put some love into the car and truly make it a good deal.
I then price the car as competitively as possible while still making AT LEAST $1,000. You should know that you can make at least $1,000 before you even make your offer, so this should not be a concern. I can often make upwards of 2,500or even more on a "home run" deal.
I post on all of the free sites (craigslist etc) and tell everyone I know about the car. I can typically sell the car in a month or less by doing just this.
That in short is what I have been doing up until recently.
There are a few issues that you will want to consider if you are thinking about trying this.
1) Can you perform the mechanical repairs safely without paying a shop to make them? Paying someone else to do the work will likely eliminate your profit.
2) In some states (VA for example) only a certain amount of cars can be sold be an individual before they must obtain a dealers license. This has personlly put an end it this for me for this year. That and the fact that I found out you could do the same thing with property and make MUCH more money per deal.
3) You will need cash for the full amount that you offered to the bank.
4) Make sure that the title is clean and was not a salvaged car.
5) In general you will want to be doing this on the cheaper cars. Think about the cars that most people can afford and will want to buy quickly. For example: honda civics, toyota camry's, nissan sentra's etc. You will absolutly be able to get great deals on BMW's and the like, but these will not sell as quickly and the repairs will be much more. You will also need more cash up front and will generally make less. In my experiece these are NOT ideal.
6) Depending upon where you live there will be different tax consequences and DMV fees. I am not an expert on these area and cannot give you advice here. I suggest checking with your local DMV and find out what papers you need to sell a car to someone else BEFORE buying your first one. Finding out that you are missing paperwork when trying to sell a car SUCKS BIGTIME (ask me how I know).
If you have any questions dont hesitate to shoot me a PM. Its my hope that I have been able to offer some value back to the forum.
Good Luck!
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