Best options for buy-clean-sell scenario??

[KevinTodd]

Given the wide range of experience and opinions on this board I am posing this query:

What are my best options for buying, cleaning up, and re-selling a car?

To narrow it down--I would like to start with something very affordable and then gradually buy better cars as I am able to do so.

I would drive the car daily to cut down the amount of mileage I am currently putting on my P-car but would still like to be able to sell within a reasonable amount of time.

I would prefer to have vehicles that need little more than basic maintenance and a thorough detailing--I simply do not have the time to wrench too much.

So.....

10 year-old 3 or 5 series?

Jag? ( I almost already know the answer here)

Saab? (see above)


Any comments are appreciated--and BTW do I need a dealer's license to sell this way, even if it is for my own protection?

Thank you!

T

[Embraer]

really depends on your skills. i've been doing this with cars for years. i just turned 30, and ive owned over 30 cars. Jags are hard to make any money on. people are hesitant to buy them. (i had a cherry XJR that i was able to make a little money on last year...but not much.)

each state has different laws. where im from, i was able to sell 3 cars per year without being considered a dealer. whether or not you title it in your name is up to you and your local laws.

right now im selling a karmann ghia. i bought it from an old man, and replaced the pans on it, and did a basic clean up, buff, polish, etc. did the routine mx stuff on it, too.

searching craigslist seems ok...although everybody seems to think their cars are worth a lot of money. i drive around out in the desert and find cars. lots of the shanty towns have crappy houses with old cars behind them. some of the people need money....easy way to pick up a car cheap when you have cash.

just last week i found a Ferrari 308 GT4 literally just sitting out in the desert behind a crappy house. i havent stopped by to talk to the guy...but i guarantee i would not make money on that car!

[KevinTodd]

Thanks for the input, Mike.

I agree on the Jags--just seems like there are alot of them around at not much $$$--obviously resale difficulty is the reason.

[Por_sha911]

If you are going to drive the cars you will either have to title them in your name so you can be insured or get a dealers license. Check on what insurance costs for dealers. Keep in mind that uncle sam will want a piece of the profits.

[sammyg2]

The best way to make a small fortune flipping cars is to start with a large fortune.

You gotta figure out a way to keep the gubmint out of the deal, they're the only ones guaranteed a profit.

[Z-man]

In this given economy, flipping cars for a small profit is, IMHO, not a good way of making money.

If you have the space, you can, however, buy some nice machinery for a relatively good price, and then sit on it for a few years and sell it -- hopefully the market will be more advantageous then. The hard part is finding a car that will appreciate enough to make it worth your while. And if I knew what that car is, I'd have a few more dollars in my bank account!

-Z-man.

[aigel]

The only way to make a buck is to buy cars that need work. Transmission, head gasket, clutch, check engine lights, not running right etc.

If you look to buy, clean it up and sell without doing anything else to it, the margin is just too small. The difference in value of a car that is dirty and maybe sold without good advertising and you cleaning it and selling it well advertised is probably 10% or less on average. It likely will cost more to register and buy supplies.

I have made my best money on cars that ran crappy where someone got frustrated trying to sell or fix it. Then figure out what's wrong, fix it, do a few maintenance items, and sell again. I have never done this for making money. It was always for fun and after driving these vehicles for a year or two. I have owned about 25 vehicles in the last 10 years and haven't taken a bath on any of them.

George

[aigel]

What vehicles?

I would focus on vehicles that are very common, where parts are cheap. For example, you can do new shocks and break pads all around for $100 or less on most domestic or common import cars. Trucks are always a good choice - trucks are always needed in good running condition and will always have a market. They are easy to work on and the parts are cheap.

HTH,

George

[mtaylor100]

The only way to make a buck is to buy cars that need work.

[LeeH]

I went through all the red tape and got a wholesale dealer's license a few years ago. The industry is extremely competitive. I did make money, but not enough based on the amount of work I put in. There are people who must camp out on Craigslist hitting refresh on the fsbo car section all day long. I found that anything advertised under market value would sell within in hour or less.

I recently used a mobile mechanic to put struts on one of my cars. He said he makes good money buying inoperable cars and repairing them. May be a head gasket, engine swap, etc. An example he mentioned was a Chrysler Sebring convertible neeing a head gasket he bought for $500 and resold for $3500 once fixed.

[trekkor]

Find older desirable cars that need work.

Look for cars that won't pass smog. They are sold as-is or as parts cars.

I've already made $1200 this year on two quick sales.

I still have some parts for sale and am looking at another car to flip.


KT

[Dan J]

It's very tough to make money at this. It's fun but you won't make a living

[asphaltgambler]

I did E30 bmw's a lot a few years ago. There was a stretch where I did 6 cars almost back to back and did very well. Then the supply of decent cars started to wane................then the economy hit.

Last year I found a string of z 3's that were almost back to back flipping. Out of 4 cars I netted @$5500 after all expenses. Two were home runs. One I did ok. The last I only netted $800 - of course that one needed the most work and time!!


Flipping cars of any kind, just like any other investing, takes dedication, knowledge, persistance and descipline. My basic formula: Buy a veh with the right options and color combo under market - fix it properly, make it shine, make it a no excuses ready-to-drive and price it to sell under market. Present value AND underpricing............an irresistable combo

[HHI944]

I put 85k miles in my w210 wagon and when it was totaled got 3k more than I paid.....

[aigel]

Originally Posted by HHI944

I put 85k miles in my w210 wagon and when it was totaled got 3k more than I paid.....

Wrecking cars to cash out isn't really a solid business model.

G

[Zeke]

I only have a Jag because I stole it. They are dirt cheap and don't sell well.

If you can buy cars cheap and not pay any registration or tax, you can make some money. That doesn't work too well here in CA w/o a dealer's license. And of course the big money is in financing the cars yourself.

[KevinTodd]

I appreciate the invaluable input here, guys...

I certainly am not looking to make a living at this as I have plenty to keep me occupied.

....just thinking out loud as my dad used to say...(still does, actually)

[kaisen]

You CAN make a living at it. Easily.
Most profit is made in the intial purchase. Become a good buyer and the rest will come.
A good detailing will add more than the $$$ and/or time invested
Learn to photograph, spell, and make good Craigslist ads
Almost anyone can make a couple grand a month flipping cars part-time with very little work

There are legal components you'll want to understand. Only you can decide whether doing things the legitimate and legal way is worth it. There are thousands of flippers doing things illegally. They may never get caught. Just understand the penalties if you do.

I have a dealer's license. You should look into it.
Georgia is like most states. They require you to have a physical location, a permanent sign, a working telephone, a place to securely store records, and a place to hold/display cars. Local zoning ordinances may have more strict requirements.
Georgia requires a $35,000 surety bond, and minimum $50K/$100K/$25K business insurance. Neither will be very expensive.
The license is $170 for two years.
You must have fingerprint cards, and must disclose any convictions
They require you to attend a seminar before applying for license.

http://sos.georgia.gov/acrobat/PLB/laws/35thru36_Used_Car_43-47.pdf

(17)(A) "Used motor vehicle dealer," "used car dealer," or "licensee" means any
person who, for commission or with intent to make a profit or gain of money or other
thing of value, sells, exchanges, rents with option to purchase, offers, or attempts to
negotiate a sale or exchange of an interest in used motor vehicles or who is engaged
wholly or in part in the business of selling used motor vehicles, whether or not such
motor vehicles are owned by such person. A motor vehicle wholesaler and a motor
vehicle broker shall be deemed to be a used motor vehicle dealer or a used car dealer for
the purposes of this chapter. Any independent motor vehicle leasing agency which sells
or offers for sale used motor vehicles shall be deemed to be a used motor vehicle dealer
or a used car dealer for the purposes of this chapter. Any motor vehicle auction company
selling or offering for sale used motor vehicles to independent motor vehicle dealers or to
individual consumers shall be deemed to be a used motor vehicle dealer or used car
dealer for the purposes of this chapter except as otherwise provided in division (x) of
subparagraph (B) of this paragraph. Without limiting any of the foregoing, the sale of five
or more used motor vehicles in any one calendar year shall be prima- facie evidence that a
person is engaged in the business of selling used motor vehicles.

[willtel]

Originally Posted by kaisen

You must have fingerprint cards, and must disclose any convictions

Is this common? I looked into getting a license so I could attend and bid on damaged vehicle auctions but I don't have a storefront and I'm not interested in getting one.

Some of those requirements are ridiculous. All so the government can make money on the sale of property that has already been taxed.

[kaisen]

Originally Posted by willtel

Is this common? I looked into getting a license so I could attend and bid on damaged vehicle auctions but I don't have a storefront and I'm not interested in getting one.

Some of those requirements are ridiculous. All so the government can make money on the sale of property that has already been taxed.

Dealer associations are powerful lobbyists. They are motivated to keep the barrier to entry high.

When you are wearing the shoes of a buyer, you're happy that the industry is heavily regulated.

If I were a convicted criminal, I couldn't get a dealer's license.
If I had bad credit, I couldn't get a surety bond
If I had a previous DUI/DWI or bad driving record, I couldn't get insurance

If you are an existing dealer, and have too many complaints, your license won't be renewed.
Trying something shady? Your records are subject to inspection, without notice, at any time. Better have your ducks in a row, i's dotted, t's crossed.

If you think auto dealers are scum, think of what it would be like if the floodgates were open.

For now, the scum are forced to operate illegally, as flippers. Beware.