Flipping high-end luxury and exotic cars?

[limitup]

Long story short I've been doing "Internet stuff" for years and I'm totally burnt, and I'm REALLY sick of sitting in front of computers. I'm going to semi-retire for at least the next year or so and recharge - but I'm looking for something fun to do really part-time to at least cover my expenses and not live off of savings, etc.

I'm a total car guy, and have owned tons of high-end cars over the years. So my first thought was to flip high-end cars. I'm thinking cars in the $50-120k range where you could potentially make a 5-figure profit on each car.

I live in SoCal so have access to a huge market of buyers and sellers.

I figure that no matter what's going on with the economy, etc. there are always people buying high-end cars, and there are also always people who need to sell their high-end car for quick cash for one reason or another.

My goal would be to simply buy low and sell high. Basically just trying to buy cars from motivated sellers, and flip 1 or 2 a month maybe. My pitch would be simple - if you want to sell your car FAST I can be there with cash within 4 hours (or whatever).

Obviously I would be offering a good bit less than the car is worth in return, but I know there are people out there in situations where they need to raise cash quickly and discreetly (i.e. no banks, no inquiries from quick cash loan places on their credit for the next 7 years, etc.)

Has anyone done this, or doing it now? Anyone see any reason it wouldn't work? The way I see it, it's basically no different than going around making lowball offers on real estate. Should just be a numbers game right?

Just for fun I am thinking of tracking all for sale listings of high end cars in SoCal for the next few weeks, and emailing every single one of them my "pitch" and see what kind of response I get. That's what I need to do, but I'm still curious what you guys and gals think about my plan ...

 

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[theBiz]

that's funny i was doing what you want to, then switched to your position (behind a desk) ..better quality of life btw. The grass will not be greener on the other side, maybe your problem is your not growing big enough to stop using a computer... if you had a big enough web business, you would manage someone doing the work and be out playing... if you go into this business with the same mindset of being an operater not a business owner (which you will because buying vehicles one by one is not scaleable and no one will be competent enough to work as hard as you will in that type of role) life will be rough i promise.

I figure that no matter what's going on with the economy, etc. there are always people buying high-end cars

This is the case for anything in the world, as long as its priced right...I was buying and selling ALOT in the worst of the worst economy and would sell things in hours at $20k-30k plus.... i understand its not expensive but trust me people would doubt me everytime and say work is slow, you cant sell machinery or trucks used for construction companies right now.....

My goal would be to simply buy low and sell high. Basically just trying to buy cars from motivated sellers, and flip 1 or 2 a month maybe. My pitch would be simple - if you want to sell your car FAST I can be there with cash within 4 hours (or whatever).

I do not believe this is appealing nor will it work that well.... at the end of the day i agree, its all about what you pay for it..... marketing was important but i found my money was made the second someone said "ok, take it" at the price i knew i needed to get it for.

Your targeting a low volume business... "get cash fast" works in a high volume business, dont get me wrong, it can work, but its not going to convert enough to make you a living, good money maybe, but not a strong enough strategy.

i had software that i would input custom variables and would wake up to heaven.... local leads of exactly what i was looking for...

so i would type in
(not actual pricing)

year:2008
make:bmw m6
mileage:less than<30,000 miles
Price: less than <$45,000

You had to know what to look for obviously to do this but i had about 10 laser targeted things set. So every morning i would wake up and call the ton of leads that came to me automatically and make sure all of my setting were up to date and adjusted (the prices obviously change every once in a while as time goes on)

So considering that wasnt enough to fill my day and/or no good deals came in/couldent make a deal work.... id also have set searches in certain industries and places for "MUST SELL TODAY" or "NEED GONE TODAY" "MUST SELL TODAY" .... i had about 60 variations of that stuff too and had alot of negative keywords (phrases it wouldent search for to weed out crappy stuff ... example -shovel....) so "MUST SELL SHOVEL TODAY" ....

once negatives were set and everything i was buying so much stuff.. SO much stuff.. it was a nightmare life, constantly running around, dealing with liars, people trying to screw you, dangerous situations... but there is big money in it once you know what your doing.... either way the back and fourth wasnt for me so i gave it up... i tried to open the program yesterday and it froze my computer it had some many pending leads i havent checked.

So i think its a good idea to focus on buying and selling 1 or 2 things a month... if you can make that work its better that way... sometimes id make a big hit, it was extremely easy and very profitable, other times, a nightmare in which certainly was not worth your time....

Just remember though its far from fastlane doing this, i built nothing, when i woke up 0 things happened unless i physically got up and executed... not where you want to be IMO, it was a good paying job, with terrible quality of life....


Your going in the right direction with internet business, just keep trying harder.

Here is a suggestion i have applied which really helps when working from home and going crazy.

1) Set mini-goals

a) I will have 40 leads on my site or for my product
b) I will sell 3 out of those 40

Apply a penalty to yourself if you dont do it.... this is really important, otherwise youll be accomplishing nothing in those long hours behind the computer... if you dont reach the goal force yourself to either work more or just something you do not want which will push you harder.

2) Do something every week in routine that cost money

a) Go to slightly expensive dinners (may sound stupid but as you keep doing this and depleting funds, it will force you to make money or go broke....doesnt work for everyone but does for some)

b) Find something you want in 6 months that is not cheap..... put it on your walll, look at it everyday, when you wake up figure out what steps need to be taken in order to get there)



Basically use the sink or swim approach, too many people sit around and play baby games and dont get anything done... again its too comfortable working from home... no repercussions or employees watching your progress saying this guy sucks as a leader... ive seen people move out of home and make 10x the amount of money quickly... others go broke, either way stop avoiding it, make a list of what needs to get done, and do it everyday.

 

[limitup]

^^^ Thanks for the reply.

I understand it's not fastlane - as I mentioned it's just something I'm looking to do as a fun "lifestyle" business on a very part-time basis while I "regroup" over the next year or so.

I've actually been quite successful online. I've developed, bought or sold at least 10-12 profitable web businesses over the past 15 years. I'm just sick of it, and honestly don't enjoy it any more. It was always only about the money. Now that money isn't as motivating of a factor, I really have no desire to keep doing it.

I'm thinking I'll take some time off and see if I feel the same way in a year or so. I can always come back to what I know. But as a really active person and competitive athlete I also really hate the way sitting in front of a computer hours a day wrecks your body, and I'm really hoping to get into something else at some point...

Sounds like you were flipping all kinds of stuff. I would only be focusing on luxury cars, with a goal of doing 1 a month or so. That's it. Nothing else. I wouldn't be doing this and deluding myself that I was building a real business or anything. Like I said, just something fun to do on the side that involves something I love (cool cars).

I'm an "internet guy" so I can build similar software to what you described in an afternoon. Basically wake up every morning to a report detailing all the cars for sale in SoCal that fit my criteria, etc.

Hell, it could even automatically fire off emails to all of them detailing my "pitch" so I only dealt with people that replied. I can build this kind of stuff in my sleep no problem.

Who knows, it could also lead to something else car related, which would be awesome. Unfortunately there isn't really much money in businesses related to my primary hobby and #1 passion in life (aside from family and all that). So something to do with cars is about the only thing I can come up with right now.

I know, I know. No one cares about my passions and all that jazz. Believe me, I know. I've made a bunch of money and I'm going to "chill" for awhile. I just want to try a few things that sound like fun to ME.

 

[theBiz]

I've actually been quite successful online. I've developed, bought or sold at least 10-12 profitable web businesses over the past 15 years

well thats great, you know better than anyone that internet businesses once successful usually require more of a managerial position then busing your a** type of situation....

Have you gotten to the position where you can get a team together? Maybe go more that direction of building a bigger type of business where it would take 4 hours a day of going over the operations and direction of your online business with employees....

Im assuming all of this work your doing is either heavily intensive on software (that only you are creating with your hands) or heavily SEO intensive.... thats why i ask what type of businesses these are.

With all due respect..., are these businesses your growing real businesses that eventually will require less of your time once set up or is your current competitive advantage the fact that you can develop code and utilize cheap traffic yourself (seo) which is selling time for money?

 

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[limitup]

No offense but it doesn't really matter. I want to get off the computer for awhile and I have ZERO interest in web stuff at the moment. Let's talk about flipping high end cars, not Internet stuff.

I know someone who does this quite successfully with high end watches. I just have no knowledge about, or interest in, watches - so I want to do it with cars instead...

 

[theBiz]

Aright no problem i understand.... at this point in the game you can get this stuff going easier than ever, go get yourself an rss feed program... set up some cars.com and CL URLS (do the custom search then copy/paste the URL)

First order of business is find one car and pick a year range between a 2 year span, mileage, and price point....

Once youve identified what car it is you want start calling, see if it sold, if so say hey if you don't mind im trying to get a good deal on this car can you tell me what you sold yours for so i just know for future references?

Make a log book of all of those that actually sold.. to me i think that was the key, no one calls, they just look online and think listing prices matter, they dont... see if the thing actually sold, who cares if they are all listed at 100k, does not mean they sold.

 

[hughjasle]

I will offer all I know of a buddy who does close to what you want to do, but as I am not him I can only tell you second-hand so this info may be worthless:

The key to doing what you want is the having the large network of contacts who are constantly buying and selling. That is the key. My buddy owns his own truck and trailer and hauls cars all over the US. In doing this over the years he has created a relationship with each buyer and seller and has created a position for himself where one of his 'clients/acquaintances' tells him hey I've been really wanting an original Shelby Series 1 or whatever the car is. Usually one of his other clients has that car and he will go ahead and approach them to make a deal happen otherwise he will search the car out for them, make the purchase and deliver it.

He, like you, is not so much in it for the money. He has many other assets that would let him retire and do nothing if he wishes, but that's just no fun. He likes cars and he likes his client friends, so why not. It doesn't make a huge amount of money, especially doing the delivering yourself, but a cool few hundred a year to feed your lifestyle.

In the end, if it is what you want to do then there are ways to make it happen. Sounds like with your network all it is going to take to get started is to get your name and feelers out there that you are willing to help.

Even though you may be the secret sauce to this business initially, you could even make a brand out of it and eventually hire out management to search out deals and such if you did get serious with this as a business and not a hobby. But it would definitely start with just you working it as much (or little) as you'd like.

Enjoy the new venture. I hope this helped.

 

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[limitup]

The key to doing what you want is the having the large network of contacts who are constantly buying and selling. That is the key. My buddy owns his own truck and trailer and hauls cars all over the US. In doing this over the years he has created a relationship with each buyer and seller and has created a position for himself where one of his 'clients/acquaintances' tells him hey I've been really wanting an original Shelby Series 1 or whatever the car is. Usually one of his other clients has that car and he will go ahead and approach them to make a deal happen otherwise he will search the car out for them, make the purchase and deliver it.

Hey thanks for the reply. That's definitely one way to do it, but I was just thinking of possibly doing it for a short while (say 6-12 months) so I'd probably keep it simple at least to start.

I'm in SoCal so within a 3 hour drive I have access to literally 10s of 1,000s of high-end and exotic cars. Probably one of the best places to try something like this I figure. My plan was to simply find the motivated sellers at any given time and make them a same-day all cash offer for a 10-20% discount.

I got myself into a really bad cashflow crunch at one point and almost had to do something like this, and I actually know people who HAVE done it (sold their cars for 10-20k less than it was worth because they needed a fast sale for one reason or another). I figure there's always at least a small percentage of people out there in this situation that I could help ...

I'd probably stick to late-model cars that were still under warranty so I didn't have to even think about that part of the equation like most car flippers do.

 

[Michael W.]

I'm still curious what you guys and gals think about my plan ...

Sounds fun, is it really failing if you have a Lambo and can't get rid of it?

How are your selling and negotiation skills? Have you kept them sharp enough for the offline world?

The owner of secretentourage peruses these forums, I would imagine he would have a little more insight into the lifestyle world. Just a suggestion.

 

[Stu_Hefner]

Yes, secretentourage has some info out there about driving luxury cars for cheap and making a profit out of it. Also flipping luxury watches, like you mentioned. He might know more about the market you are trying to persue.

 

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[limitup]

The secret entourage ebook just talks about holding an exotic car as a business asset so you can write off depreciation and a lot of the costs. The focus is on how you can drive one as inexpensively as possible, not on flipping them for profit.

 

[RBefort]

This would be hella fun, but market seems rather small. How do you plan on getting around taxes on the vehicles after you purchase? I've looked into this a little bit, but by no means close to an expert. Just remember reading in my state, you can only "flip" 5 cars (aka buying from seller and not filling in your info on the title) and just assigning it over to another buyer. Otherwise, I think you need a dealer's license for more?

 

[limitup]

Market doesn't seem small in my area (SoCal). There are 10s of 1,000s of high-end cars within a few hours drive of my house. I haven't looked in to it yet but I have to imagine there are at least a handful of motivated sellers at any given time.

I'd have to get a dealer's license to avoid taxes, but it's not that big of a deal from what I can tell. At the end of the day you just need to fill out some forms, pay some relatively small fees, and setup a "place of business."

The place of business can be as simple as a tiny lot with a tiny office in an "out of the way" place that you could probably rent for $1000 a month. I believe that technically you only need parking for the vehicles you're selling (i.e. a "display area"), so if you never intended on having more than say 2 cars for example, it seems like you could get away with just renting a tiny office as long as it comes with dedicated parking for at least 2 cars.

Definitely a small hassle to do all this, but not prohibitive and you could be setup in a week or two...

 

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[LibertyForMe]

Well, sounds like you know what you want; go do it! Looking forward to seeing your progress on this.

 

[TopChef]

Limitup.

My opinion is that you should go for it, so long as you don't try and go to far to fast before you know the game.

I think that whether it is fastlane or not doesnt matter, because it is taking you into a direction that you really enjoy and would be motivated to wake up to everyday. Suppose you do this for a full year and you have some great gains and some bad beats and make a mere 20k, but along the way you are learning how this market operates and what really motivates buyers and sellers. I think in time you will figure out some angles to pursue to make this your fastlane business.

At first, don't focus on making money. Focus on learning from everyone. You will meet sellers who are very good at buying and have been in the exotic car game for years. Give them a good deal and see if they can unveil how the exotic car game really operates. You will meet guys who are flipping cars in the same way you want too, offer to do some grunt work and offer leads for the opportunity to learn. My take on people who drive exotic cars is that they love to talk. They love to tell stories about how they got their car for a steal, be it from gov auctions, having the right connections, etc etc.

I think you will be surprised at how well your years in making money on the Internet will have fine tuned a lot of processes that you can take into the physical world. Not being an "all my eggs in one basket" kind of guy, I would pursue three or four things you enjoy at once in case being in the high end car game doesn't pan out.

 

[CommonCents]

Run a few ads or reply to some cars for sale to test your idea to see if there are some motivated luxury car sellers. Sounds like with your background you have the tools to get a good read on demand in a hurry.

The other point to consider is what would be your unique selling (or buying) proposition. Why would a luxury car seller want to deal with you instead of selling their car to an existing dealer which would offer them some wholesale price on the spot as well.

good luck!

 

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[secretentourage]

This is what I do, I can answer any questions you have...simply ask.

 

[InLikeFlint]

This is what I do, I can answer any questions you have...simply ask.

Do you need a lot of capital to start?

How do you ensure that the cars run well and don't have any 'hidden' problems?

Where do you find the cars for sale?

Where do you sell the cars?

How do you store them while waiting for the sale?

 

[SideSwipe]

The secret entourage ebook just talks about holding an exotic car as a business asset so you can write off depreciation and a lot of the costs. The focus is on how you can drive one as inexpensively as possible, not on flipping them for profit.

One leads to the other though. Assuming their book tells you how to find the cheaper cars before all the tricks to writing off ownership (why not keep a car or two while you're flipping based on their system?), you can still turn around and sell it at FMV

Tried and true business for sure, just make sure you know your cars before investing into heavy hitters like that.

 

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[secretentourage]

Do you need a lot of capital to start?

No, but its helps as you will make mistakes and depends dollar of cars you play with. I would say 2-3 cars to start is a good play

How do you ensure that the cars run well and don't have any 'hidden' problems?

You get really familiar with the models and years that had issues, the type of issues and the typical mistakes owners made on them. You start becoming good at getting a feel on how the car was treated.

Where do you find the cars for sale?

I buy from people who are desperate to sell and have modded their cars nicely but simply wont get the dollar back. I also look for really clean cars with the wrong mods. (nice M6 but the hood is expensive VF hood unpainted carbon) While I know the value of that hood, I also know that painting it will appeal to 100% more people than unpainted. Pictures are everything...

Where do you sell the cars?

Same thing, to people via forum, ebay etc... But today, my business is very different than before, I only broker cars on order from clients.

How do you store them while waiting for the sale?

I no longer do this. At first was my house, then was 2 nice warehouses in LA and DC. Now its juts one office in FL. Less inventory is better but my actually business model has changed a lot through the years as i am not a car dealer.

 

[secretentourage]

One leads to the other though. Assuming their book tells you how to find the cheaper cars before all the tricks to writing off ownership (why not keep a car or two while you're flipping based on their system?), you can still turn around and sell it at FMV

Tried and true business for sure, just make sure you know your cars before investing into heavy hitters like that.

Yes, my book does tell you how to find cheap, what to buy, what to look for and how to sell. Also gives you a list of preferred models to buy. While the book's purpose is to enjoy the car in between the buy and sell, the system or method is no different. Its actually easier when you sell immediately as you dont accumulate miles.

 

[DarkZero]

Which book is this? I'm assuming the "Drive an exotic car and get paid" and not the "drive a luxury car for free"? Or is it both

 

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[InLikeFlint]

Which book is this? I'm assuming the "Drive an exotic car and get paid" and not the "drive a luxury car for free"? Or is it both

As far as I know they only sell a package deal with all of their books so either way you will have to buy them both, and therefore might as well read them both

 

[DarkZero]

The package deal is cheaper, but they do sell them each individually.

 

[RBefort]

Yes, my book does tell you how to find cheap, what to buy, what to look for and how to sell. Also gives you a list of preferred models to buy. While the book's purpose is to enjoy the car in between the buy and sell, the system or method is no different. Its actually easier when you sell immediately as you dont accumulate miles.

I actually had a question about the formula you used...it's been awhile, but I vaguely remember you tacked on 3-4% for tax or something like that...shouldn't this be a lot higher? I think that's a major issue when I think about flipping a car, unless you go the route of not assigning the title, but the sales tax automatically adds thousands unless you do a trade in? Could be way off base, but wondered on that part.

 

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[secretentourage]

Actually at the time I registered cars in VA which was a 3% sales tax and that was where the swaps were done. There was an advantage and disadvantage. The sales tax in VA was low but there was no tax credit when trading. in FL, I now pay 6% sales tax but get a tax credit when swapping so i pay once and then never again. In VA I paid it everytime. Honestly, except for Cali, it pretty much evens out regardless of where you live.

To answer the question as to buying the bundle or separate books.

Drive a luxury car for free is about how to buy, hold and sell.
Drive and get paid is a more complex tax write off loophole that a few can use if they own a business.

 

[JasonR]

except for Cali

What do you mean buy this? I'm assuming California's taxes are out of wack?

 

[Pinnacle]

Make a log book of all of those that actually sold.. to me i think that was the key, no one calls, they just look online and think listing prices matter, they dont... see if the thing actually sold, who cares if they are all listed at 100k, does not mean they sold.

Amen, amen, amen. I was in the car business for a few months and got haggled to death by certain customers arguing what they thought their trade was worth. We had to operate based on what comparable vehicles sold for, because this information was proof of what the market was willing to bear. Sometimes it would fall on deaf ears when I explained this and even showed them records of recently sold comparable vehicles in their region.

This is extremely important advice for flipping cars.

 

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[CEBenz]

Amen, amen, amen. I was in the car business for a few months and got haggled to death by certain customers arguing what they thought their trade was worth. We had to operate based on what comparable vehicles sold for, because this information was proof of what the market was willing to bear. Sometimes it would fall on deaf ears when I explained this and even showed them records of recently sold comparable vehicles in their region.

This is extremely important advice for flipping cars.

That's always been my beef with price guides(regardless of industry). The top rule of buying and selling is, "something is only worth what someone is willing to pay for it."

What I'm curious about is the level of capital required for doing this.

 

[nausbot]

Thought about exporting? To Canada, for example?

I know our dollar is about par, but in general the market here is stronger vs. the states. Don't think it would be too difficult to deliver to the Vancouver area from Cali. Normally though our prices on similar goods are a few grand higher, so you may be able to tell a similar car for more here.

Some cars will require mods to get them to our road standards - lights I know have to be always on vs turning them on/off in USA. Other stuff you'd have to look in to.

Disadvantage would be the size of the market I guess. However if you're buying a Lambo, you're buying a Lambo regardless of location.