Anyone here flip cars?

[Rick Lee]

I've already discussed this offline with Onewhippedpuppy, but am looking for others' experiences. I'm thinking of getting into this. In AZ we're allowed to sell four cars a year without a dealer's license. I'm thinking of wetting my beak with a few ~$5k'ish Honda-types to see if I can make some money on them before going the dealer license route. In 10 min. of scouring the local Craigslist, I've found plenty that were priced under NADA trade-in values. Obviously, I'd plan to do some minor repairs and detailing before flipping. I probably wouldn't try to float titles. Any ideas?

[1990C4S]

Maybe Christien will chime in here to talk you out of it...

[uncle_scott]

My limited experience with car flipping has been in 70s-90s VW Golfs, GTIs, and Rabbits. I have been fortunate to find a few very inexpensive cars, or cars with minor mechanical issues (to me) that cause the seller to get rid of it. Examples of mechanical fixes that I look for are worn clutches, check engine lights, bad CV axles...I look for the kind of work that I know I can do in a weekend at home, that the seller doesn't want to pay a shop to do. I used to try to find one to two cars per year. The last couple of years I haven't dabbled as much, but I want to get back to it. I made on average $500-1000 per car. Other cars I have lost money on though, so it can be a wash.

A good rule of thumb is to really know the product you are buying. That is why I stuck to VWs. I knew the major failure points, I know those cars very well, so I am able to both spot a good deal and know a bad deal.

Good luck. It can be a fun side hobby.

[Rick Lee]

Originally Posted by 1990C4S

Maybe Christien will chime in here to talk you out of it...

IIRC, he was on the financing side. I want no part of that. I don't even want to get into having a retail lot or location, issuing titles or plates, etc., just a garage to store and work on a few cars and to maintain the licensing requirements. I absolutely don't want this to go beyond cars I can find, fix, detail and flip on my own.

[GH85Carrera]

I try to keep cars with the tires down and the shiny side up. No flipping here.

If you really enjoy detailing cars and fixing a wide range of problems go for it. I love WATCHING Wheeler Dealers. I wish I had someone like Ed living close by me. To see what they go through and sometimes only make a few bucks makes me know it is just not for me. Good luck.

[fastfredracing]

My entire life , I always have 1 or 2 going at any given time. I sort of do it differently . Most often, I daily drive my flip. I only buy what I like at the time, and try to grab up fixer uppers that look like easy $ to me.
Usually , they end up being base hits, but I get to drive whatever I want, and make a little extra coin on the side, but every once in a while , I hit a home run.
It is my single most favorite hobby, and always has been. I have also supplemented my income nicely over the years doing it as well, no way could I have gotten to where I am without doing this on the side .
My one main piece of advice.... you make your money when you buy it, not when you sell it.
I did it with a partner for a little while, and he just bought up everything. We moved a bunch of junk, but were really only working for the sake or working.
If you know the market, and are calculating in your buys, one can do well.

[Rick Lee]

Originally Posted by fastfredracing

My one main piece of advice.... you make your money when you buy it, not when you sell it.

Yes, I totally agree. For now, however, I think I'm limited to Craigslist and don't know how to research what those cars finally sell for, other than looking at local, completed eBay auctions. I sort of want to stay in a price range where people hand over a wad of cash instead of waiting for financing or calling the bank to verify certified checks they bring.

[VincentVega]

Good luck RL.

If you dont have a resell license how will you handle titles? License transfer fees/tax eats up a bunch of profit right off the bat, at least in MD.

[Rick Lee]

Originally Posted by VincentVega

Good luck RL.

If you dont have a resell license how will you handle titles? License transfer fees/tax eats up a bunch of profit right off the bat, at least in MD.

There's no sales tax on private party sales in AZ. The vehicle licensing fee here is like the PPT in VA, but will be nominal on old beaters in the $5k range. It's a weird formula based on original purchase price and then on a declining value scale. I think it's $125/yr on my 993, so it has to be next to nothing on the cars I'm looking at. When you sell a vehicle, DMV refunds the prorated portion of the tax. So, assuming I keep the vehicle long enough to receive the paperwork in the mail, the prorated tax would be probably pennies or a few dollars.

[fastfredracing]

Yes it does, Vincent, you just have to calculate that into the equation . So does commercial insurance, and lot rent if you go the legal dealer route.
I never curb titles, If I am not planning on driving the vehicle, I just transfer the title in my name, and hold it. If I'm driving it, I have to pay regristration fees, but I would be paying that anyhow, so to me, it is a wash.
I like to stay under 10k , like you said rick. They just hand you a pile of cash, and go about their merry way.
Around here , a sub 5k 4x4 is a quick sell, if it is inspected and in decent shape. My buddy does pretty good buying trucks with rusty rocker panels, replacing them, cleaning it up and flipping them . He does about 1 per month.

[porsche4life]

Craigslist is a pain in the ass in Phoenix. Everyone and their dog is flipping more than 4 cars a year illegally with open titles. Seems like the good buys go within the first day of two, and when you go to sell, all the flippers want to beat you down.

I flipped that truck back in the winter and made good money, but I bought it back in OK and drove it out.

[aigel]

I have never done it on a semi-pro basis, but during my heyday as a car nut, I probably bought and sold 2 cars / year. I would drive them for a year or so, work out the flaws and then sell them. Very wide range of cars. Usually made some money, but nothing you'd call an income stream.

IMHO you will be hard pressed to make good money going through CL. There are a lot of people out there doing this, looking for "mechanics specials". My best buys would always be through word of mouth. Someone at work or a friend of a friend wanted some heap gone quick for a few hundred bucks. I'd fix it and drive it for a while and then sell for a grand more.

G

[Rick Lee]

Originally Posted by porsche4life

Craigslist is a pain in the ass in Phoenix. Everyone and their dog is flipping more than 4 cars a year illegally with open titles. Seems like the good buys go within the first day of two, and when you go to sell, all the flippers want to beat you down.

How do you get away with an open title if you want to drive the car anywhere, even for a test drive with a buyer? Do you slap on a valid plate from your other car? What about insurance? I know how to do it all with a dealer license, but I don't want to go that route until I've done a few deals and know it's viable. Obviously, I'd not try to sell to other flippers, wanting to beat me down on price.

[fastfredracing]

I am not sure how many you can do here in Pa, but I have flipped a metric butload over a 20 year span, and other than the occasional letter wanting more sales tax, because I bought them far under book value, I have never had an issue . I've done more that 20 cars in a year, with out a hitch. I think I did 4 last year, and I am on my 4th for this year right now. They get their sales tax , and fees on every one.
Craigslist is a pain in the ass, but it WORKS , if you can navigate your way through all the silliness. I usually get worried if something I have listed does not sell in the first 3-5 days. Make em look good, price them right, and they get snapped up quickly . People are looking for deals.

[porsche4life]

I didn't try to get by on an open title. I tagged and smogged and had it insured....


Not sure about AZ, but most states require you to have a business location, with a sign, etc to have a UD license. Renting a location that satisfies that will be 1k a month at least. Lee may know more, I think he used to have his UD license

[Rick Lee]

CL does bring out the loons. But I figure, if I'm doing this in the hopes of making it a fulltime thing, I'd be pretty ruthless and just ignore the loons. I sold an amp on CL two days ago that I had listed forever, it was not a real common or desirable amp and I regretted trading a bunch of ammo for it. Buyer wanted it, but didn't have a car, offered me $10 over full asking price to deliver it to him in the hood. We (SIG Sauer and I) went there and all was fine. I was overjoyed to be rid of it.

[fastfredracing]

Originally Posted by Rick Lee

How do you get away with an open title if you want to drive the car anywhere, even for a test drive with a buyer? Do you slap on a valid plate from your other car? What about insurance? I know how to do it all with a dealer license, but I don't want to go that route until I've done a few deals and know it's viable. Obviously, I'd not try to sell to other flippers, wanting to beat me down on price.

This is exactly why I title most of them, that way, I can register them, and make them legal with current inspection stickers . For me, that is worth the extra expense of doing it legally , and I get it back when I sell a legal , good running car/truck.
Sales tax and registration fees on a 5k car come out to about 375.00.
If you are doing one a month, that is way ,way less, than what it would take to have a dealers license , at least here in Pa.
Buying at the auctions is not easy anymore either, you are bidding against the whole world, right from the comfort of their living rooms/ or office desk.
It also gives me an excuse to go out on all sorts of wild adventures with truck and trailer in tow, and see a bunch of cars, and meet some interesting people.
I generally like everything about it. .

[Rick Lee]

AZ requires a location where you can park two or more of whatever you're selling, doesn't specify indoors or outdoors, a sign not painted on glass that can be see from 300' in daylight and the primary purpose of the bldg. has to be to sell whatever you're selling. That sounds to me like it leaves a ton of wiggle room. Where I work now there's a huge warehouse with 150 new cars inside and 200 out in the parking lot, all from the local dealerships to store their overflow. I will see what the boss would charge me to have 2-3 spaces here and a sign in the back corner that no one can see from the bldg. or main road. Otherwise, I was thinking of checking with all those small dealer lots on Deer Valley Rd. to see what they'd charge for a co-op or shared license under their name.

[fastfredracing]

Ignore the loons for sure, although, I ( glock and I ) recently delivered a truck bed to the ghetto. He kept calling, and wanted it, but had no way to get it. Paid for my fuel to deliver. The guy was happy as heck, handed me $500.00 cash, and I helped him and his buddies set it onto his truck frame. No drama, Just gotta be smart

[porsche4life]

Ok then sounds like you've got it worked out rick. For now though just title them. Its not pricey at all in AZ. The only trouble I had with the pickup was getting it to pass emissions. Had to replace the cats to get it to stop throwing codes.

I've thought about renting some space to store my toys plus flip a few cars. But honestly I'm working enough evenings as is, that adding 2 or 3 nights jacking with cars isn't high on my list.