Great bootstrapping thread - how to create money.

[MJ DeMarco]

Folks, there is a really great bootstrapping thread going on over at the Lambo forum.

I guess the story is this: A lambo guy has been helping a friend get over a job loss (or something) and started running a "pawn shop" type operation just by trolling Craigslist.

The short of it, buy stuff from distressed sellers and resell for quick 20 percent, 50 percent, 100 percent profit. I think the guy said he was able to to $17K/mo. Of course, you need some working capital to buy.

Here is the link.
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I’ve got nothing to gain here, there is so much opportunity out there to do this type of stuff in a variety of geographic and demographic. You can do it with $500 or $500,000.

So don’t worry about crossing swords.

A few of the questions:

Q: In your post you indicated that you wrote $500 on each day of the calendar...was that the profit goal for each day?
A: The goal was to essentially buy product that would yield $500 in profit each day, not necessarily buy a certain value amount. For example, you could buy 5 iPad for $100 profit a piece or buy one jet ski that had $500 profit in it. Not so much about volume of transaction, about margin.

Q: you also said that each day you bankrolled him $5000...was his goal to buy $5000 worth of "product" every day? or simply the cash made available to him?
A: No. Not necessarily, but sometimes on big ticket items he needed $5K to jump start the day or a transaction. Only rarely did we consume all $5K, I think maybe once or twice to buy a car.

Q: what was the daily purchasing goal?
A: None.

Q: what was spent gross earning the $17k?
A: $42,000 was the total spend

Q: Is the bread and butter in smaller things like cell phones and computers?
or larger things like used cars?
A: Bread and butter are the following, with stars on the heavy volume items

--$5000 and under passenger cars
--Motorcycles of every price
--Recreation vehicles (Jet skiis, boats, RVs, travel trailers)
--Bicycles of every type, especially high-end offroad and onroad cycles
--Oakley and other brand high-end sunglasses
--Women's purses (ultra-highend only)
--Time Shares, low-end only
--Land (acreage only, no houses)
--Rims and Tires
--Laptops (current models only)
--iPhones, iPads, and all other Apple branded products
--Flat televisions
--Guns
--Safes
--Broken Gold
--Consoles (Xbox, Playstations, etc) and video games
--High-end furniture in excellent condition
--Trailer, car haulers

Q: What kind of mark up are you shooting to attain? 25%? 50%? 100%+?
A:Not necessarily a percentage, just as much as possible. I used this as a guide: $100 or less: double the money. $500 or more, 50% on a 7-day turn rate.

Q: Same city CL relist or nearby city?
A: Same city, unless it was an eBay sale or unless it was much more appropriate out of town (buy a snow blower in Houston, sell it in Minneapolis for example)

Q: Wait a period of time before relisting?
A: Immediately relist it.

Q: What are the best most readily available and easy to sell items?
A: Apple Products, cheap cars and motorcycles

Q: DO you ever get stuck with merchandise that you cant move?
A: Haven’t yet. Sure I will

Q:How can you decide what to pay for items?
A: This is the tough part. Use your mojo, or if you don’t have any mojo then use eBay, it’ generally a good starting point. Don’t buy anything you don’t know what to pay for.

Are you looking to pay half of the going retail or some fixed number?
A: You have to find the right mix for your area. Don’t spend a ton of time trying to figure it out. Just go buy a bunch of stuff and try it out. If you are uncomfortable with that, stick to Apple products only - as they are extremely easy to sell and even easier easy to buy.

Q: Do you test purchases on the premises?
A: Yes

Q:All offers are face to face?
A: This is sort of the magic beans. You don’t want to waste your time running all around town, but at the same time you need to set the expectations for the seller. I don’t have the answer for this, but I will tell you that when I offer $500 for an item worth $1000 over the phone, I almost always get the item for $300 when I show up with cash. Make sense?

Q: $5k total for a month or daily?
A: Again, it’s a function of cash. The more you have, the more you can buy.

Q: Do you lowball people?
A: That's the whole point. 85% of the people will hang up on you. 15% will sell you something. You do the math. If you don't like rejection you'll fail, because it's 85% "go screw yourself" responses.

 

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[MJ DeMarco]

Is $17,000/mo good money? Hellz yeah. But you got to think bigger than that.

The problem is this is "event driven" thinking and it is why they never succeed, let alone earn $17k/mo.

They want to jump IMMEDIATELY to $170,000/mo but won't learn the steps, or the process to earn $17,000/mo.

Who would I bet my $$ on to earn 100K+/mo?

1) The guy going for it immediately.
or
2) The guy that already knows how, and is, making $10K/mo.

My money is on #2 because he shows the ability to engage in a step-by-step process. Guy #1 is probably more event driven and will give up because his eye is on the mountain top, and not at the rock right in front of him.

 

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[RHL]

1. Impossible to scale
2. Impossible to automate
3. You can never sell it as a business

I do something like this with cars. I've made numbers ranging from $8K-15k/flip. The only thing stopping me from pushing that number into the 20's or higher is that I'm under financial strain buying stuff for my fastlane that hasn't started making money yet. Also, as u/Lighthouse called me out on a few weeks ago, I was too chickenshit to go "all in" to the degree required when I first decided to explore the fastlane. I was toying with it, and I was a coward. I'll be paying for that mistake for at least the next eight months, and God knows how much longer when the snowball effect is taken into consideration.

Anyway, all that stuff you posted is true. In it's current form, my car shtick is impossible to scale or automate, and you can't sell it as a business. I can't even recruit other help, even from my most trusted and savvy associates, because my very extensive knowledge of cars and ability to "close" with salespeople at thousands and thousands less than their listing price is integral.

But consider this. Before I got a hold of MJ's book, I was making $42,000/yr working 49 weeks (3 weeks PTO), 40 hours a week. That's about $22/hr. Maybe bump that to $25 or even $30 considering I got medical/dental for free and that holy grail of all workers, an employer-contributed pension.

When I buy a car, the actual time I invest in focusing solely on that, like I did when I was working, is about 80 hours (photos, listing, picking up and returning, cleaning, meeting with potential buyers who flake out, tons of other things that increase value, etc). From that, heck, let's consider my best ever, and say I get 15K.

So, I could either make $30/hr at a desk

or 15,000/80= $188/hr flipping cars. That means every time I work 1 hour doing this, I make as much as I would working 6 hours at my desk. While the process is slow (I'm not doing one of these flips every 80 hours, I'm staying under the state cap for non-dealers of 5/yr and may have to hold a car for several months to get what I want for it), it allows me to live at the same level as my slow-lane job does, with 1/6 of the time invested. Imagine that instead of working 49 weeks, you work 8. Instead of working Jan-Dec, you work Jan-Feb, then are off the rest of the time. Like a reverse school teacher. That's what this buys, freedom of a lot of time.

The other nice thing is that a lot of the flipping happens on my time, on weekends and in the evenings if I want. As crazy as it sounds, I'd rather work 22 hours on Saturday and then not work for five days, than work 8 hours five days a week and have Saturday off. I'm young, my body recovers from a single long day. A desk job devours your whole life. Want to go to NYC to hang out on Wednesday afternoon? You can't, because of work.

Post liquidation guys, feel free to call me out if I'm wrong, but it looks to me like truly 100% passive income systems exist only in scammy affiliate marking ads. There's always some connection to time, it's just very slight in the most extreme fastlane plans, like two hours a month answering emails, responding to criticisms, on the phone, etc. Because of that, it seems to me anyway, that something like this is the seed, the germ of the fastlane, because it makes my time four times as valuable as it was before. That's disconnecting my income from my time, slightly. That's what the fastlane is all about, getting 40-45 years of work out of the way in 6-8 years. In my mind, everything that advances that goal is helping to build the fastlane mindset (at least, I hope it is). So if you're making $30/hr, and you can find some way to make that same hour worth $60, you now have to work half as long in your life, and are beginning to grasp an idea which, when multiplied many times over, will eventually have you working four hours a month at times you choose, in other words, free.

 

[vinylawesome]

I was cleaning out my Evernote notes and came across the screen captures I took several years back regarding this thread and the Lambo thread it highlights. Hopefully they will be useful to some.

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Original Source: http://www.lambopower.com/forum/index.php?showtopic=58618

 

[DeletedUser394]

Everyone has to start somewhere. It's really as simple as that.

I'm not thinking about scale, or magnitude, or CENTS, or any of that other stuff.

I need the money, and I need the skills. So what am I doing? I'm finding ways that I can build capital, and learn business skills at the same time and doing something of this nature works for a lot of people.

 

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[garyfritz]

Love it! I'm sending the links to my 16-yr-old. He loves Craigslist and pawn shops. He's bought & sold a few things on CL before but he never had the ambition to get serious about it. Maybe I can get him to think about something besides video games.

 

[Jeremy Groover]

Cool Idea! I might try this just to pass the time. One thing though. Carefull with cars and motorcycles. Your state likely has a limit to the number you can legally sell assuming that you register them under your name. It isn't legal but many people who "flip" cars try to get the seller to leave the date blank when he signs the title so the title can be floated to the next buyer in order to avoid a) the expense of titling and registering and b) the limit to the number of cars you can sell in a 12 month rolling period. NM says you can't sell more than 3 cars per 12 month rolling period, but you sell three under yours, another 3 under your spouse's name, and so on and so forth as long as you have people willing to register the vehicle for you.

Actually in the United States you cannot purchase a car with the intention of "flipping" or profiting from it. Not even one without a dealers license. Yes I still do it, yes I don't care lol. Just figured I would chime in on this. You cannot purchase a vehicle with the sole intention of making money on it without a dealers license.

Craigslist is an amazing thing. I am not a member of the forum yet so I cannot read the thread but I love making deals on craigslist. I have been using it for right around 8 years. I would say I have made close to 10k a year off of it most of those years. I use words like "divorce, need to sell, need to sale (yes I know that is stupid, but there are stupid people on Cl), moving, needs tlc, needs work, needs a new home, get it out of here, come get it, need it gone, need it out of my driveway, medical bills, having a baby" anything of the sort. My most recent craigslist score was a 98 Harley Davidson in nice running condition that I traded one of my $500.00 guns for. With new tires and a $100.00 gas tank, I will get over 3k for it.

You cannot be afraid to hurt someones feelings or make them mad on craigslist. Beat them up on price as much as you can before you get there, that way when you get there you can beat them up a little more. Point out every defect. I even mention how long the item has been posted if its been over a month and they are desperate to sell the item. If your not going to at least make 35% QUICKLY including travel expenses then do not be afraid to walk away. Obviously if it is a bigger ticket item a lower percentage is acceptable. I usually wont leave my house if I cant make a few hundred dollars on it quickly. If I know its going to take longer to sell, I wont do it unless I make over 1k.

When I buy cars I never buy them if more then one of the 3 mains are wrong. (Interior, exterior, mechanics) if more then one is no bueno, I walk away. At that point, I wont be able to sell it quick enough or I wont make enough off of it for the money invested.

Just my .02

Jeremy

 

[theBiz]

i have been saying this for so long..... its stressful and takes alot of driving around but you can make real money doing this.

I generally drive hours away to get things at a real low value.


Buy a car that selling for 5k in your area go get it for $2800 somewhere and sell it for $4,200.

As long as you market it correctly, make it look like new whatever that takes, big pictures etc it sells.

The more you spend the harder it is to move but more money you make.

In this economy people are still buying used cars lets say for under 10k and after 10k its harder to get people to come up with the cash.


Buy and sell cars and truck under $8,000 think b2b trucks for businesses and such it really just takes research, phone calls, and real work (driving around, inspecting, negotiating, but its tough to make this type of money in this economy.

I personally have built a portfoilio of things ive bought and sold and people were so impressed they wanted to invest with me but i did not need the money so i declined. Maybe buying and selling planes or big ticket items is where the money is im too scared to try it though.

try to get the seller to leave the date blank when he signs the title so the title can be floated to the next buyer in order to avoid a) the expense of titling and registering and b) the limit to the number of cars you can sell in a 12 month rolling period. NM says you can't sell more than 3 cars per 12 month rolling period, but you sell three under yours, another 3 under your spouse's name, and so on and so forth as long as you have people willing to register the vehicle for you.

Plus actually moving the vehicle without registering it in your own name is a problem, and that means there is no insurance so if it gets stolen or wrecked in the middle of your sale your out.

this is the only problem with this business, but if it was easy... you know the rest.

 

[Jcapuano]

I hope everybody is using searchtempest.com and not just craigslist, since searchtempest gets results from all surrounding areas.

 

[wiredniko]

Only problem with this is:

1. Impossible to scale
2. Impossible to automate
3. You can never sell it as a business

Is $17,000/mo good money? Hellz yeah. But you got to think bigger than that.

...and yes #1 is debatable.

 

[dreaminBIG]

I was recently wondering how morally-correct this is. A friend of mine does this and I tagged along for one of his trips to pick up an item. The guy selling the TV was hurting for money and I couldn't help but feel bad for the guy as my friend talked him down in price even more. If preying on the weak is how a business model works, count me out!

 

[MakeItHappen]

Problem here... Bought a motorcycle for 1,5k last saturday. Know that it sells for 2,5. Up til now the interested ones made unreasonable offers.

Problem is: I'm running out of cash. What now? (yeah, have to sell it anyway fast)

Well if you have to sell it fast you have to reduce the price.

 

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[Rawr]

bump..

there are deals everywhere, just do your homework.

Guy selling Mazda 6 for 6.7k

after ONE email he told me his bottom price is 5.5k = $1200 difference in ONE email.

When in person I bet you could get it for 5k.

looking at CL cars range right around 6k average. $1000 right there.

 

[TK1]

Only problem with this is:

1. Impossible to scale
2. Impossible to automate
3. You can never sell it as a business

Is $17,000/mo good money? Hellz yeah. But you got to think bigger than that.

...and yes #1 is debatable.

Sorry mate, but all those are wrong.

Not attacking you, but:

#1 Scaleable = You start with stuff for a few bucks, learn skills and build up capital. With more capital = you start selling premium priced products and look for deals like cars, bikes and anything that costs a few thousand. And what comes after that? Real estate for example.

#2 Automate = When you can hire people, you can automate. Sure, you can't automate like an affiliate business, but it's possible. If you get the knowledge by the time, you can teach other people, too.

#3 Sell it as a business = If you have customers and do a great job of customer service you can build a brand, a complete own business / ecommerce site etc. out of it. Add some employees from #2 to the equation and cut yourself out by the time and you have nothing more, nothing less than any other business that sells computers, socks, real estate etc. (what your specified brand stands for).

My point is the most important thing is the learning in the process. And when you sell and learn making deals you develop one of the most important business skills.

For the other 3 things you've listed: When you can sell and you care about customers you made it half way, because customer service will always be a USP.

Again, not trying to attack you, but just adding my .02 for all people trying that out. The most important thing is to get STARTED, learn SELLING and KEEP LEARNING (and learn how to make customers happy).

TK

 

[Kencan98]

I post multiple real estate ads on CL at the same time. No worries.

However, CL doesn't like you to have multiple ads active for the same house at the same time. Doing so will get you flagged and ghosted.

Got it. Thanks. I guess what I read about "multiple ads" is more geared towards the people who post 200 "work at home" ads a day. I guess if you post 5 or so it will be ok.

Only one way to find out - I'll just start selling.

 

[Davidla]

I 've done some digging on old posts and came across a great thread with some more great advice from a forum member on bootstrapping Broke? Try Ebay

 

[bernieshawn]

Only problem with this is:

1. Impossible to scale
2. Impossible to automate
3. You can never sell it as a business

Is $17,000/mo good money? Hellz yeah. But you got to think bigger than that.

...and yes #1 is debatable.

That's not the point - I'm sure MJ meant this as a way to create money for better ventures.

 

[jtmoniii]

Just wanted to say thanks for the car idea. I've been flipping cars for about 2 years and haven't made any real money - BUT I haven't had ANY maintenance expenses in 2 years and have made money in the process without carrying a car note!

 

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[futhey]

Nothing I really committed to before but I've been taking advantage of craigslist/local - ebay/national arbitrage for years now to make some money on the side, although not with cars or bikes or any big ticket items. It definitely works, and it's not hokum. It's a tested and proven business model, even though most people will not immediately recognise it as such.

Also there are other forms of arbitrage/added-value that gets missed, like buying used iPhones on craigslist and selling them unlocked on ebay. I've even worked out cowboom - ebay arbitrage (although it's much harder).

And barrier to entry / competition are not really that big of a problem. This isn't a simple business model (Just ask anyone who has worked in a pawn shop how easy buy low sell high is). The more complex the buy the more profitable it becomes. How many people can confidently value and verify the condition and market price of a car? Sounds easy but to me it sounds easy to get burned as well.

Sorry to keep rambling, but this is where I learned to buy and where I learned to sell, and to think about costs and overhead, even market forces. Maybe it's not fastlane, but I'd wager it's a fastlane to getting a real-world MBA. (just my two cents)

 

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[awkwardgenius]

I've been doing this on a small scale with musical instruments for awhile since I know them, and whenever I saw a deal, I'd snag it and flip it. Hell, sometimes I could do it locally, if I happened to snag something that was absurdly cheap and was simply the first to jump on it. Seeing this makes me think I might need to step it up a bit to grind out some capital to get my other ideas off the ground.

 

[Runum]

Is anyone familiar with the Craigslist limitations on posting?

From what I hear I can only post 1 ad per day. If that's the case, unless the process is selling high ticket items at high margins then I don't really see how decent money can come from this.

I'm going to research more on posting ads in volume because I really wanted to use this to fund my Fastlane idea.

I'll post here if/when I find a solution.

I post multiple real estate ads on CL at the same time. No worries.

However, CL doesn't like you to have multiple ads active for the same house at the same time. Doing so will get you flagged and ghosted.

 

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[smartman]

what kind of cars are you flipping? that's pretty awesome.

I am at a similar spot, I am fully in understanding of the fastlane concepts, but I have been having a hard time finding anything to jump into that is technically "fastlane" since I do not have much of a technical background for things like affiliate marketing. I have been focusing on flipping, started with phones and ipads, moved to some bigger items, now onto cars and motorcycles, and figured I would keep rolling like that until I found an idea or opportunity for passive income.

I am so very badly in need of a fastlane mentor.

 

[Mike Kavanagh]

are we bumping this for a reason?

Yes, so new people can see it.

Edit: Smartman, the reason your question has not been answered is because it has already been answered. Seek and you shall find.

 

[rc08234]

I was cleaning out my Evernote notes and came across the screen captures I took several years back regarding this thread and the Lambo thread it highlights. Hopefully they will be useful to some.

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Original Source: http://www.lambopower.com/forum/index.php?showtopic=58618

Any more notes on the gift card aspect of it?

 

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[vinylawesome]

Any more notes on the gift card aspect of it?

I posted the only notes I have. The thread is still live, though.

 

[Jeremy Groover]

Lol original post is 5 years old... Thats a bump from the fiery pits of hell. I need to check the last post more often before posting haha!

 

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[Robre]

What about adding wholesale items to this?

 

[Komelika]

Cool Idea! I might try this just to pass the time. One thing though. Carefull with cars and motorcycles. Your state likely has a limit to the number you can legally sell assuming that you register them under your name. It isn't legal but many people who "flip" cars try to get the seller to leave the date blank when he signs the title so the title can be floated to the next buyer in order to avoid a) the expense of titling and registering and b) the limit to the number of cars you can sell in a 12 month rolling period. NM says you can't sell more than 3 cars per 12 month rolling period, but you sell three under yours, another 3 under your spouse's name, and so on and so forth as long as you have people willing to register the vehicle for you.

 

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[darkjediii]

been doing this with bikes, but more of a hobby so I can ride em then sell. Just picked up a Ducati 848 for a steal not too long ago.. I think it's time to sell

 

[Brootal]

Speed +++ for this one.

Funny how there are a million threads asking "how do I get started" and then when MJ posts a surefire way to do so with little money, the thread gets 4 posts.