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NOTABLE! How to Buy A McLaren for $20K

biophase

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So this thread was started by me in 2011.

NOTABLE! - How to Buy A Ferrari for $20K

Now it's 2018 and the title should probably be changed to How to Buy a Mclaren for $20k.

I have a progress thread on the inside and I'm going to copy and paste excerpts that are relevant to this post.

Posted on July 8, 2018

So, sometime around the February of this year I got the itch again to get an exotic car. I almost pulled the trigger on a McLaren MP4-12C. I literally had my checkbook out at the dealer and we were $3000 apart on price.

I almost wrote a $130,000 check for a car that day and a funny thing happened after I went home though. I called my business broker that sold my business and asked him if he had any business listings asking between $100k-$150k. The next day he sent me 2 businesses that met my criteria. One was asking $150k and profiting $60k, or $5k a month.

Here was my thinking. I was approved for a $130k loan at 3.2% for the car. My monthly payment would have been $2340 a month for 60 months.

So if I purchased a $150k business, it would pay for my car loan AND I'd have $2660/mo cashflow. Granted I'd have to spend an extra $20k than the outright purchase of the car AND I'd have to run another business. But looking at the numbers it makes no sense to pay cash for that car.

Given my track record, I believe that I can make this business work for 3 years even though it was very Amazon dominated in sales. I figured worse case scenario is the business peters out and I sell it to someone else in 3 years for $50k after I've paid off my car loan.

But I decided not to go that route.

What I did was start yet another business. My new business launched in February and is steadily growing. This niche is not allowed on Amazon so it is a 100% your own URL ecommerce business. Sales are growing and May was its best month so far, June was a little crappy because I ran out of stock in the middle of the month.

I have since purchased alot more inventory and hope to see a good July. Profit in May was about $2800, and June dropped to $2000. But I'm really close to making that Mclaren payment already. Another couple months of steady plus $2500 profits and I've told myself I'm getting that car in October.

August 4, 2018 (I flip flopped on my car choice)

I'm going to call this the 458 business because that's my goal for this one. It did about $2500/mo profit, but I had to shell out about $800 in lab tests this month.

September 21, 2018

This one did $2300 last month. It's trending sideways. Again, no advertising costs at all. Just social media posts.

November 21, 2018

So I am changing its name from the 458 business officially to the MP4-12C business because I finally pulled the trigger and a McLaren is heading to my house as I type this. This business has been hovering up and down between $7-$10k a month gross and profiting between $2-$3k. I was hoping that it would grow faster, but at this point it's not too bad.

December 3, 2018

So I sort of cheated on this goal. I got my Mclaren today and yesterday I calculated that my business #2 only made about $20,000 this year (since Feb). So that's $2,000/mo and I really needed $2,275 to make the payment. So I'm $275 short, but who cares. I wanted the car for the Arizona winter. :)

It's parked in my warehouse because I have no garage room due to the home remodel.

TODAY

So looking back at this progress thread, in March I almost bought a Mclaren for $130k. Instead I decided to start a business that would pay for its payments. This business was in the works since January, so I don't want people thinking that it launched in a single month. My first inventory order for this business was just around $20,000. Since then it has sustained itself without any more capital infusion.

To date, it has made an average of $2000/mo. A car loan for my Mclaren would have been $2275/mo. So I'm coming out of pocket $275/mo for the Mclaren. But in essence, you could say that I bought a Mclaren for $20,000 so to speak.

D424D5C9-189F-4D24-AB20-D746DF6471EA.jpeg
IMG_2130.GIF 0.jpg 22.jpg View attachment 22760
 

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levijean

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Nice looking car.
 

Andy Black

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So this thread was started by me in 2011. Now it's 2018 and the title should probably be changed to How to Buy a Mclaren for $20k.

I have a progress thread on the inside and I'm going to copy and paste excerpts that are relevant to this post.

Posted on July 8, 2018

So, sometime around the February of this year I got the itch again to get an exotic car. I almost pulled the trigger on a McLaren MP4-12C. I literally had my checkbook out at the dealer and we were $3000 apart on price.

I almost wrote a $130,000 check for a car that day and a funny thing happened after I went home though. I called my business broker that sold my business and asked him if he had any business listings asking between $100k-$150k. The next day he sent me 2 businesses that met my criteria. One was asking $150k and profiting $60k, or $5k a month.

Here was my thinking. I was approved for a $130k loan at 3.2% for the car. My monthly payment would have been $2340 a month for 60 months.

So if I purchased a $150k business, it would pay for my car loan AND I'd have $2660/mo cashflow. Granted I'd have to spend an extra $20k than the outright purchase of the car AND I'd have to run another business. But looking at the numbers it makes no sense to pay cash for that car.

Given my track record, I believe that I can make this business work for 3 years even though it was very Amazon dominated in sales. I figured worse case scenario is the business peters out and I sell it to someone else in 3 years for $50k after I've paid off my car loan.

But I decided not to go that route.

What I did was start yet another business. My new business launched in February and is steadily growing. This niche is not allowed on Amazon so it is a 100% your own URL ecommerce business. Sales are growing and May was its best month so far, June was a little crappy because I ran out of stock in the middle of the month.

I have since purchased alot more inventory and hope to see a good July. Profit in May was about $2800, and June dropped to $2000. But I'm really close to making that Mclaren payment already. Another couple months of steady plus $2500 profits and I've told myself I'm getting that car in October.

August 4, 2018 (I flip flopped on my car choice)

I'm going to call this the 458 business because that's my goal for this one. It did about $2500/mo profit, but I had to shell out about $800 in lab tests this month.

September 21, 2018

This one did $2300 last month. It's trending sideways. Again, no advertising costs at all. Just social media posts.

November 21, 2018

So I am changing its name from the 458 business officially to the MP4-12C business because I finally pulled the trigger and a McLaren is heading to my house as I type this. This business has been hovering up and down between $7-$10k a month gross and profiting between $2-$3k. I was hoping that it would grow faster, but at this point it's not too bad.

December 3, 2018

So I sort of cheated on this goal. I got my Mclaren today and yesterday I calculated that my business #2 only made about $20,000 this year (since Feb). So that's $2,000/mo and I really needed $2,275 to make the payment. So I'm $275 short, but who cares. I wanted the car for the Arizona winter. :)

It's parked in my warehouse because I have no garage room due to the home remodel.

TODAY

So looking back at this progress thread, in March I almost bought a Mclaren for $130k. Instead I decided to start a business that would pay for its payments. This business was in the works since January, so I don't want people thinking that it launched in a single month. My first inventory order for this business was just around $20,000. Since then it has sustained itself without any more capital infusion.

To date, it has made an average of $2000/mo. A car loan for my Mclaren would have been $2275/mo. So I'm coming out of pocket $275/mo for the Mclaren. But in essence, you could say that I bought a Mclaren for $20,000 so to speak.

View attachment 22757 View attachment 22758 View attachment 22759 View attachment 22760
Love the car, and the way you think.

Enjoy!
 

MJ DeMarco

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TwoPresidents

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This is an awesome story, and I just love that you turned an idea to get a loan for a car into generating an income to pay for your liability. Congrats, man.
 

ZeroTo100

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Love the concept...I would do this on a smaller scale for my everyday car/mortgage/etc.

150k can get you 4-5 sites @ around 1k a month per site. Reduce the risk of buying just 1 site. Scale the sites into 3k each a month. Continue to pay the car off. Sell the sites in 3 years. Sell the car. Repeat lol.
 

Traction

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I called my business broker that sold my business and asked him if he had any business listings asking between $100k-$150k. The next day he sent me 2 businesses that met my criteria. One was asking $150k and profiting $60k, or $5k a month.
Can you share your process on how you find and evaluate these online business you choose to buy?
I'm ranking you as an online version of Warren Buffett!
 

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Raoul Duke

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eliquid

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Congrats.

I have a honest real world question about it though.

Did you factor in ownership costs in these setup scenarios?

Things like tax ( purchase and renewals ), insurance premiums ( I was thinking $250-$350 a month at least ), maintenance ( every 10k-15k miles about $2k on tires, plus other things ).

I know these are all variable per situation, but could be something for others to think about and factor in before they make the same jump and realize they might need another $600 monthly to own it and use it.

.
 

Xeon

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Love the 2nd last pic!
 
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biophase

biophase

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Love the concept...I would do this on a smaller scale for my everyday car/mortgage/etc.

150k can get you 4-5 sites @ around 1k a month per site. Reduce the risk of buying just 1 site. Scale the sites into 3k each a month. Continue to pay the car off. Sell the sites in 3 years. Sell the car. Repeat lol.
I had 4-5 sites before. I wouldn't do it again. It's 5x the work and it doesn't scale well. Imagine posting 5 IG pics and 5 FB posts a day, and then responding to comments, instead of 1 of each. I'd rather have 1 site that I can build and brand than a bunch of little sites. Also, small sites sell for less multiples than larger sites.
 
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biophase

biophase

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Can you share your process on how you find and evaluate these online business you choose to buy?
I'm ranking you as an online version of Warren Buffett!
Well honestly, if the business sells on Amazon and is FBA, all I really need to see is its sales graph over the past year and their PPC spend. I can pretty much evaluate it based on that alone. The product ranking and competitive landscape I can research without any backend data. So with an Amazon FBA business I can say yes or no with 15 minutes of looking at the data. If I can log into the backend and see the sessions, sales and PPC numbers, I know exactly what they are doing.

Everything else is public. I can see their reviews and tell if they are legit. I can see their rankings for keywords and I can see their competitors. The only thing I'd need to verify after that is their cost of goods and I can also get an idea of that by sending out quotes on alibaba.
 
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biophase

biophase

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Congrats.

I have a honest real world question about it though.

Did you factor in ownership costs in these setup scenarios?

Things like tax ( purchase and renewals ), insurance premiums ( I was thinking $250-$350 a month at least ), maintenance ( every 10k-15k miles about $2k on tires, plus other things ).

I know these are all variable per situation, but could be something for others to think about and factor in before they make the same jump and realize they might need another $600 monthly to own it and use it.
No, I didn't factor that into the purchase numbers. The cost of ownership on these cars is ridiculous, and if you could only afford the payments you have no business owning one. I got a warranty on this car. The warranty was $5k a year and I'll likely keep renewing it. Insurance is $4k a year, registration is $2500 a year. So I'm at $11,500 just to own this car annually.

Tires, brakes, oil changes I don't even count because that's the cheap stuff. LOL

There's a problem with my touch screen right now and that part alone is $12,000. I'm glad it's covered by the warranty. Basically any time this car has a problem it's going to be a five figure bill. With the Ferrari I was glad any time the bill was under $1000. With the Mclaren I'll be happy if any repair bill is under $5000.
 

MoneyDoc

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Kenric... you gotta post a back side pic too... that's where the beauty of the McLaren is at.. please and thank you :)

And congrats man.. been following you since the days of your Ghillie Suit brand.. huge inspiration.
 

ZeroTo100

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I had 4-5 sites before. I wouldn't do it again. It's 5x the work and it doesn't scale well. Imagine posting 5 IG pics and 5 FB posts a day, and then responding to comments, instead of 1 of each. I'd rather have 1 site that I can build and brand than a bunch of little sites. Also, small sites sell for less multiples than larger sites.
True, unless it’s a content site. I find that these tend to sell for higher multiples because they require less time to operate and buyers are usually building their portfolio. You really have to know what you’re buying.

But you’re right - could you imagine running a social campaign for 5 separate sites? Kill me!

Sick car though man. Congrats - wish there was more of this happening on the forum. Kind of reminds me of that movie boiler room without the suits! Lol
 

MJ DeMarco

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Insurance is $4k a year
That seems a little high... you have tickets and accidents? I remember my Lambo was down around $2,800.
 

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biophase

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That seems a little high... you have tickets and accidents? I remember my Lambo was down around $2,800.
Yeah it was way higher than I thought. It was the glass policy. Just to have no deductible glass was $1300/yr. I may get rid of that. I have a $2000 deductible. A windshield replacement is $3000. I think I'm going to drop it down to $1000 deductible and remove the glass, that should bring me down to around $3000/yr.
 

Lionhearted

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Yeah it was way higher than I thought. It was the glass policy. Just to have no deductible glass was $1300/yr. I may get rid of that. I have a $2000 deductible. A windshield replacement is $3000. I think I'm going to drop it down to $1000 deductible and remove the glass, that should bring me down to around $3000/yr.
Why not go for a high deductible $5000+ and drop the glass? You can afford any damage that's your fault up to that deductible or more and the money you would save in two years on insurance, that you will most likely NOT cash in on, will cover the deductible. In a sense you become your own insurance company.
 
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biophase

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Why not go for a high deductible $5000+ and drop the glass? You can afford any damage that's your fault up to that deductible or more and the money you would save in two years on insurance, that you will most likely NOT cash in on, will cover the deductible. In a sense you become your own insurance company.
Once you go above $1500 in deductible the premium barely drops. I think the difference between $1500 and $5000 was around $200/yr. I’m going to drop the glass and move down to $500 deductible.

Btw, cracked windshields is really common in AZ. Everyone I know carries non deductible glass here. Lots of rocks on the road because the sides of highways is all desert and rocks.
 

karakoram

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If only I could pull the same trick with an F1......sigh
 
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biophase

biophase

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Once you go above $1500 in deductible the premium barely drops. I think the difference between $1500 and $5000 was around $200/yr. I’m going to drop the glass and move down to $500 deductible.

Btw, cracked windshields is really common in AZ. Everyone I know carries non deductible glass here. Lots of rocks on the road because the sides of highways is all desert and rocks.
Just an update on the insurance. I got the insurance down to $2200/yr with $500/deductible comprehensive (no glass), $1500/deductible collision. I lowered my coverage limits too because I had umbrella insurance also, so I was double covered and paying too much for no reason. Dropping the glass was the biggest change as it went down from $3500 to $2200 just for that.
 

JokerCrazyBeatz

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Do you have any tips for using social to build your business organically ?

It's a new challenge I'm facing
 

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