I’ve joked around for a long time about buying cheap cars that requires an “expensive” fix for cheap and flipping them.
Is it really worth buying a $500-1000 car that doesn’t start, Clutch bad etc. Try to fix the GRM way and flip for a profit.
Or is it a bad idea to throw $1500 at a car and hope you can make some money
Yes
People who see me flipping cars ask me the best way to do it, and I always tell them the same thing.
Lift with your legs.
It's harder than it sounds. The trick is to stick with a small range of makes/models that you know intimately and pick your battles very carefully.
I used to help out a buddy who did quite well flipping non-interference engine 1.8 and 2.2 Subarus with broken timing belts in the 2000s. Now he's a Subaru indie and occasionally flips something he finds at auction with the "right problems," but the buy-in is a lot higher than it was 10-15 years ago for similar profit, so he's mostly a repair guy now.
I did the math on the Ford Probe I bought from auction, and in order to make a profit on it I think I would have to sell it for at least $3000, which, yeah nobody's gonna pay that for a salvage rebuilt Probe. But then, I had to have it shipped to me, and I didn't buy it to flip it, I bought it because it's cool and I'm a doofus with no ability to resist impulse decisions. But anyway, I would speculate that it would be tough to pull it off consistently.
Follow up
what do you do with the title?
transfer in your name and pay the fees?
dont sign it and explain why your name isn’t on the title and hope??
I’m mainly looking at cars on Craigslist that people post cheap because it’s not worth shop labor to fix
Subscriber-unavailabile said:Follow up
what do you do with the title?
transfer in your name and pay the fees?
dont sign it and explain why your name isn’t on the title and hope??
It's illegal NOT to transfer in your name and pay the fees. That doesn't mean people don't do it, but a) it's very expensive to get caught and b) not doing so typically means you're screwed if you misplace the title.
pick a car you know and love to play with it ,
one that has an expensive problem that is expensive to fix because of the hours and not the cost of parts ,
talk to the local shops and let it be known that you buy that car with that problem !
Like the guy above with the Subaru timing belts...
Do not overlook all the other problems that these dead cars will have , you cannot check brakes, gearboxes etc if it does not run .
Yes you can do it , just pick your battles
I've made some "hobby money" doing it with Salvage cars for the past 2 years. I even keep track of my dollars made per hour of effort put in. I have made $50 to $100 per hour. That initially sounds great but I only have 8 to 15 hours in each vehicle. It can be a nice way to make $1,000 but even my logic and math is flawed.
I account for the time on the cars I buy but this means I also spend about 2 hours per week shopping/inspecting cars at auction but I'm really only buying about 1 car every 8 weeks. If I were accounting for those 2 hour times 8 weeks that I do not buy or win something at auction then that is another 16 hours I need to account for. Some simplified math then means that my per hour profit is more like half or $25 to $50 per hour.
Said another way $800 every 8 weeks isn't life changing money or money to live off.
However, for me, it has been a way to play with cars, even just plain model cars, in a way that doesn't cost much...heck, I even make a few bucks.
In reply to John Welsh :
Your final comment is definitely something to think about for anyone looking to do this; is the goal to turn a genuine worthwhile profit or just to break even playing around with cars? The former is a lot harder than the latter, though the latter can also be difficult if you’re not careful about what you commit to.
I did it alot for extra income when my wife was on medical leave. I focused on full size trucks because they are popular here in corn country. Usually fuel pumps and broken rear axles. It's a grind with alot of hours but was the only way I could afford my own project at the time.
It's easiest to get your start when scrap prices are down and never shop for a good deal during income tax season. Titles were always swapped into my name because taxes are cheaper then prison but I once got a warning from the state because you can apparently only sell so many cars a year in Ohio without a dealers license .
In reply to Subscriber-unavailabile :
In my case, all the titles have properly gone in my name. Since I am buying the cars from a genuine business (the Insurance Auctions) they make sure they are following the state rules.
I have chronicled most all of my builds with budgets too.
Vibe, Montero, Avalon I made my best profit ever on the Vibe. I still have the Montero. The Avalon was driven 25k miles for "free" or a little better.
A couple of Subaru that I sold right away, cheaply. Almost no profit on either but a learning experience. Both went to GRMers.
2007 Ford Focus. Another driven for free for 25k miles
Mercury Milan which I ultimately sold to one of my closest friends.
2006 Vibe was a straight up flip
2005 Malibu, also a straight flip
Silver Prius sold to GRM'er
In reply to John Welsh :
John:
Your builds/flips are always fun to watch. Thanks for taking the time to post them
BBC
In reply to Billy_Bottle_Caps :
Summer has been busy and I have lost some focus on two cars that I currently have. Both have passed state inspection. The Saab was supposed to leave yesterday but I'm fighting a power steering leak.
I had one GRMer considering the Vibe but conversation has gone cold. I'm enjoying driving it. Might sell. Might keep.
I used to do it a ton, best money was made by buying modded cars and returning to stock then selling the cars. Focused on one model/brand so I had lots of knowledge and spares.
Nowadays my day job keeps me busy and well-fed so I focus on smaller stuff. Lawn mowers, swap meet flips, etc.
Becoming a dealer will allow you to not transfer the title for each car. There might be other legal ways as well
As with flipping houses, I would ASSume the “profit is in the purchase price.”
At the Challenge one year we were talking to some folks up north who told us if we were to bring the sub $100 Hondas we were buying up north, they’d fetch thousands.
I still think it’d be a fun gig if I can ever retire.
I met a guy a while back who buys older Chevy pickups in GA for ~$5k, drags them up to his buddy’s small warehouse in Michigan, and flips them for $10k-$20k.
Seems like a solid business model.
It's all about finding your niche and knowing every little detail about it. I paid rent in college by flipping Ford 8.8 rear ends and rebuilding Holset turbos.
I always thought the most efficient way to flip (most $ for the least work) would be to buy running/driving vehicles that had terrible pictures and/or were dirty. It just seems like a lot of times the biggest difference between a $1000-1500 vehicle and a $2500-3000 vehicle is how it's presented. Negotiate the price down as much as possible based on the condition and then spend an afternoon cleaning, washing, detailing. Spend 20-30 minutes taking reasonable pictures that showcase the vehicle in the right light/angles and throw it out there with a well written description.
No special tools or knowledge needed, and the technique could be applied to any make/model that can be bought right.
I try to do 1 or 2 per year (4 is max before the state dealer thing kicks in) for hobby cash.
Some good points here, specifically;
“stick with a small range of makes/models that you know” – PLUS vehicles that are in short supply where you sell.
“pick your battles very carefully”. Don’t buy a non-runner, look at several before putting out the cash, and be willing to walk away
Do your research, know the market you’re buying from and selling to.
I’m in a smallish town, but I can buy certain model vehicles in the big city, via CL and turn them fairly easily for a profit. Similar to what STM317 described.
Keep track of what you and/or the prior owner did – receipts are proof and worth money when you sell the car.
You will buy the wrong vehicle. Learn to cut your losses and not spend way to much time rebuilding the top end of a 2002 Explorer. It is a buy it right business not how much you can save doing the repairs. I like to buy Nov/Dec when people are desperate for cash and sell Feb/Mar when people are flush with cash.
Do not fall in love with any car you bought to resell !
And dump the dogs if they do not sell in 60-90 days
My wife’s second cousin made a living buying luxury cars and flipping them between Chicago and Birmingham, AL. He drove to Chicago and lived here a week and made his deals. Sadly I forgot which way he sold them. He used a 5-6 car transporter to move them.
The funny thing is if Grandpa needed a ride to family he would go with him.
Never thought about sticking to one make/model. Things that get me curious are ads like this
https://austin.craigslist.org/cto/d/austin-2007-ford-freestyle-needs-work/6943660182.html
won’t go over 40 mph need work . Just using this an example, but something like that sounds like easy fix, unless the trans is toast.
on my local CL there’s tons of cars with bad clutches listed for few hundyS
Also never thought about dealer tax issues. That alone makes it alsmost not worth it. Bad enough Texas charges few hundred to transfer title into your name.
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