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How to Buy A Ferrari for $20K

sparechange

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I wanna know where he found a 2006 360...
 

biophase

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Actually it's not the reason you're thinking (my apologies for bumping it up with respect to your recent "activities") but I look forward to reading whatever you report!

MJ, let's hear your story!
 
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MJ DeMarco

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Jeff Noel

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I need to read more on the process of purchasing an existing business. This thread really got me interested (maybe not for a Ferrari to begin with, but a nice Kia (lol) ?)

All the businesses for sale in my area are exotic restaurants (sushi, chinese food, etc.). From what I heard from my friend who owns a restaurant, it's a LOT of work to manage that kind of business, especially in the state they are (really old buildings - 1940s).

Does anyone have interesting books or ebook or anything on the subject of purchasing an existing business ?
 

Argin Gerigorian

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So a few weeks ago I'm looking at this 2006 Ferrari 360 Modena in red with nice wheels. Asking price is about $100k. I'm not one to spend $100k on a car, because every time I've had money I've put it into investments. So my other thought was I should just buy an investment condo which returns about 8% per year.

But then I came across an ecommerce store for sale for $100k which puts out $100k a year or $8k a month.

This got my thinking. Why would I ever pay $100k cash for a car or buy real estate if I could purchase online stores like these?

So I did some numbers and I could do the following:

Buy the store for $100k
Take the $8k monthly
Which is $6k after taxes
Buy a Ferrari with $3000/mo payments
Buy a home with $3000/mo payments
Why wouldn't this work?

And why doesn't everyone do this?

Poke some holes in this plan please or else I'm going to implement it this year. :)

Wow that's a great price for $100k, what website did you buy the business off of?
 
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YoungPadawan

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Man @biophase , you are a rockstar. I've been reading through your old blog and this reminds me of the website that you started to buy yourself a pair of hiking shoes. An excellent value-adding philosophy to have. :thumbsup:
 

Jeff Noel

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Wow that's a great price for $100k, what website did you buy the business off of?
I don't know if it's similar in the US, but here in Canada, most RE agencies list commercial properties and also businesses for sale. There's probably websites dedicated only to the business part, but I didn't find any (didn't really search either).
 

Jonathan Hoch

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How the F*ck am I showing up on this forum so late to the game. Great thought process. And I'll always love the blue 575 from Bad Boys II. Cheesy movie, awesome car!
 
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Champion

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Well... its not as easy to get a $100k loan to buy an online store as it is to get a $100k loan to buy a house or to buy a car, no?
 

Champion

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Probably the same amount of work to get a 100k business loan or a 100k mortgage.

Definitely not the case in Germany! Maybe in the US it is different though.

Maybe I will move to US, use this method and then export the car to Europe and drive with it haha :D

The mindset and idea as a whole is great food for thought though, thanks a lot!
 
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BizyDad

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@biophase I just want to say thanks.

When I first joined the forum, I read some post of yours talking about buying a business and using the proceeds to buy a car. I can't find that post, but I found this thread, same difference.

Anyways, I've been wanting a new car since before I joined the forum. I drive a paid-off dadmobile sedan. It's point A to point B, and it ain't fun.

Instead of giving into the urge for more fun, I stacked some cash and am now finally closing on a business for 1-1.5x. I'm going to give it 6 months to ensure everything is as it should be, then I'll go get a car I actually want.

So again, thank you, for helping me make a smarter decision with my time & money.
 

biophase

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@biophase I just want to say thanks.

When I first joined the forum, I read some post of yours talking about buying a business and using the proceeds to buy a car. I can't find that post, but I found this thread, same difference.

Anyways, I've been wanting a new car since before I joined the forum. I drive a paid-off dadmobile sedan. It's point A to point B, and it ain't fun.

Instead of giving into the urge for more fun, I stacked some cash and am now finally closing on a business for 1-1.5x. I'm going to give it 6 months to ensure everything is as it should be, then I'll go get a car I actually want.

So again, thank you, for helping me make a smarter decision with my time & money.

Thanks for bumping this. I went back and re-read it and it is so interesting that I talk about selling ecommerce for 1.5-3x back then. The numbers now are crazy from 3-8x.

I'm going to go back through the post in more detail. Alot has changed in 10 years!
 

BizyDad

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Thanks for bumping this. I went back and re-read it and it is so interesting that I talk about selling ecommerce for 1.5-3x back then. The numbers now are crazy from 3-8x.

I'm going to go back through the post in more detail. Alot has changed in 10 years!
Don't I know it! The only reason I got the deal I got is because I'm buying a client's business. I built up rapport over 6 years, and now I'm partnering with the owner's son to buy the dad's business since he is retiring.

I mention it here because I know a lot of Fastlane Fam have agencies, but very few consider the opportunity before them of building a company up and then acquiring a piece of it for themselves.

Still, the principle of buying a business to fund a car purchase still holds true. Thanks again.
 
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Raoul Duke

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@biophase I just want to say thanks.

When I first joined the forum, I read some post of yours talking about buying a business and using the proceeds to buy a car. I can't find that post, but I found this thread, same difference.

Anyways, I've been wanting a new car since before I joined the forum. I drive a paid-off dadmobile sedan. It's point A to point B, and it ain't fun.

Instead of giving into the urge for more fun, I stacked some cash and am now finally closing on a business for 1-1.5x. I'm going to give it 6 months to ensure everything is as it should be, then I'll go get a car I actually want.

So again, thank you, for helping me make a smarter decision with my time & money.

YoRU05O.jpg
 

missinfinity98

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Thanks for bumping this. I went back and re-read it and it is so interesting that I talk about selling ecommerce for 1.5-3x back then. The numbers now are crazy from 3-8x.

I'm going to go back through the post in more detail. Alot has changed in 10 years!
I would love you to share your thoughts after you go through it! I am young and just starting. I know how much I can learn from those, who have already walked those paths. I am curious about your insights after these 10 years
 

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@biophase what's the funniest car you have owned so far?
Which one have you liked the most?
 
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biophase

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I would love you to share your thoughts after you go through it! I am young and just starting. I know how much I can learn from those, who have already walked those paths. I am curious about your insights after these 10 years

So it looks like back in 2011, you could purchase ecommerce stores for 1x multiples. I remember the company we were looking at was selling sports equipment, but big stuff like pitching machines. They had high dollar items that cost $200+ each. I don't remember if they were dropshipping, but I think they were. There was no Amazon FBA at the time. We were all competing with Amazon.

Now in 2021, the landscape is so different. You've got Amazon FBA businesses mixed with Shopify stores selling at 5x-7x. Online businesses are hot right now due to the pandemic. They are viewed as "safer" than brick and mortar.

Found this quote from a reply in 2011.
"Thanks for the heads up but I really have zero interest in any kind of online business. I only buy assets I can see and touch, I'm old fashion."

This sounds exact like Kyosaki back in 2006 when he told us to get off the internet LOL.

It looks like the title of $20k for a Ferrari came from buying a 25% share of this business for $20k and getting $2k a month. Back then a $2k a month car payment could probably get you a $100k car with a year payment and $10k down.

Guess what, it still works today in terms of numbers because interest rates are so low. Because businesses are selling at 4x+ you would pay $100k for a business that makes $25k a year. The problem is that now it will take you 5 years of running the business to pay off your $100k car. To me that seems like alot of time working off a car.
 

biophase

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@biophase what's the funniest car you have owned so far?
Which one have you liked the most?

I really liked the Mclaren. The problem with any of these cars isn't the purchase price. It's the maintenance costs. It's not that I couldn't afford them. But it just doesn't feel like you are getting any value for your money. The Mclaren was probably $8k-$10k a year just to have it. $2k registration, $1200 insurance and $5,000 annual service.

However, the current market is a little different because these cars are now increasing in value. Especially the older they get.

The car I bought a 2003 360 spider is now worth about 20% more than I paid for it.
The second car I bought a 2008 Audi R8 is worth about the same that I paid for it.
The third car I bought a 2012 Mclaren MP4 is worth about 10% more than I paid for it.
 

biophase

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Also I started this thread "How To Buy A McLaren For $20K", but I went a different route. I started a new business in 2018.

That business is still up and running and has made around $260k ish in its first 4 years. The Mclaren has been sold for over a year, but the business is still paying me. :)

 
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BizyDad

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@biophase I just want to say thanks.

When I first joined the forum, I read some post of yours talking about buying a business and using the proceeds to buy a car. I can't find that post, but I found this thread, same difference.

Anyways, I've been wanting a new car since before I joined the forum. I drive a paid-off dadmobile sedan. It's point A to point B, and it ain't fun.

Instead of giving into the urge for more fun, I stacked some cash and am now finally closing on a business for 1-1.5x. I'm going to give it 6 months to ensure everything is as it should be, then I'll go get a car I actually want.

So again, thank you, for helping me make a smarter decision with my time & money.
@biophase Just wanted to thank you one final time. The business cash flow was twice what we projected, so I took possession my new-to-me 2020 Rav4 today. It's funny, these are hard to find, but I got lucky enough to find the color and model that had me saving all my money all those months ago.

Patience paid off this time. Thanks for planting the right seeds.
 

Antifragile

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@biophase Just wanted to thank you one final time. The business cash flow was twice what we projected, so I took possession my new-to-me 2020 Rav4 today. It's funny, these are hard to find, but I got lucky enough to find the color and model that had me saving all my money all those months ago.

Patience paid off this time. Thanks for planting the right seeds.
Only one question- why “one final time”? No chance you’ll thank him again in the future? Breaking up after this?
 

biophase

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@biophase Just wanted to thank you one final time. The business cash flow was twice what we projected, so I took possession my new-to-me 2020 Rav4 today. It's funny, these are hard to find, but I got lucky enough to find the color and model that had me saving all my money all those months ago.

Patience paid off this time. Thanks for planting the right seeds.
That’s great to hear! Now you have car payment income and can buy multiple cars!

Sacrificing and buying income generating things allows you to buy even more later!
 
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Goodfella999

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That’s great to hear! Now you have car payment income and can buy multiple cars!

Sacrificing and buying income generating things allows you to buy even more later!

Im new to the forum, read the whole thread. Would you say now as of 2022 purchasing an online business with current ROI isn't worth it compared to 10 years ago?
 

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