Learn me: The finer points of vehicle flipping

I feel like I understand the basics. I can spot a decent deal, I can negotiate a bit, I can turn a wrench and detail stuff, and I can take photos that put the typical CL seller to shame. My state allows 12 vehicle sales per individual, per year before a dealer license is required, so I have awhile before that becomes a concern.

So, what am I missing? Do you guys title/insure your flip if you don't plan on driving it? If someone asks why you're selling it, are you up front about it being a flip? What other nuances are there? I'm not interested in owning them for months or years, or major rehab projects. I'm thinking of a more compressed timeline of days/weeks before it gets put back on the market with little more than minor repairs and clean up involved. Price point would likely be within Challenge budget to minimize risk. At least until the training wheels come off. What say you wheeler/dealers?

I've only done a couple but I was honest not only to my seller but to my buyer on both that I was flipping. "I need to make money." explains why you have to be firm on price. We've aimed at the $1000 - $1500 market because it seems to be quicker easier cash deals.

Invest in a good DSLR. Spend the time to get great pics at a sexy location.

I've done well by staying away from the obvious Japanese enthusiast cars. I'm able to get better deals that way.

Captain obvious here, but the best money I've made is by making sure I'm buying the car way below it's real value.

Find places other than CL to buy cars. The competition for Deals on CL is fierce.

I've been able to sell special interest cars on eBay motors for much more than I could have gotten on CL.

How expensive/difficult/annoying is it to title a car in your state?

Buyers might have a hard time buying a car from you with a title that's signed by the previous owner. One of the perks of a dealer's license is the ability to reassign a title without paying the sales tax/title fee (in MA at least)

This guy seems really good at it.

https://www.youtube.com/embed/ocjZwAh_QKY

In reply to JG Pasterjak:

That guy definitely knows some maneuvers! I don't know if I'll ever be that good

My brother and former stepfather are flipping cars. They got the minimal dealer approval not a full dealer license for Oregon. In the town they are in Albany the city actually allows like 2-3 cars for you to be selling at once without being a lot or something. Anyway what they have been doing is going to the IAAI auctions and look for things with clean titles

In reply to JG Pasterjak:

beat me to it

The secret is that there is no secret. You make your profit when you buy. The goal is to minimize the effort (overhead) required to sell the car for more than you paid for it. Overhead adds up quickly: Time to buy and collect the car. Time to detail the car. Time to advertise the car. Time and inconvenience in dealing with buyers. Time to do whatever paperwork to transfer the car.

What needs to be mentioned is that being in the right place at the right time with cash in hand takes some effort (read "time") on your part. Your "Job" is to find undervalued vehicles. This takes time and often requires that you make snap decisions before the vehicle is gone.

When it comes to making money at this, my history says I bat 50-50 on the game if I am rally being honest with myself; that $1000 dollar markup that I celebrated on an $8000 purchase was really more like $200 when I was all done, I have decided that there are easier ways to make money.

Edit:

Best bet is to go out and just do it Pay attention to how much time and money really goes into the effort. If you don't win, don't just quit, take the time to see what did not work, and see if it can be resolved.

Not the flipping I thought...

If you want info on really flipping a car let me know though - I'm a pro.

I feel like there's a lot of money to be made buying terminally broken cars and parting them out. Just do one car at a time, pull all the parts worth >$50/ea (look on eBay recently completed to find those), and scrap the rest. Then list all the pulled parts, and once they're listed, organized, and the big parts are out of the way, start on the next car.

I see a good demand for parts for not only enthusiast cars but also mid-level prestige cars. I bet you could make $5k+ on one car, bought right. It's a lot more work than just selling the car, but it's also a lot more profit.

If you wanted to spend 5-10 hours a week on it, you could do a car every couple months and make $30k, minus overhead, per year.

If you wanted to spend 5-10 hours a week on it, you could do a car every couple months and make $30k, minus overhead, per year.

You will spend that much time just dealing with clients and shipping stuff.

Thanks for the insights so far. I want to clarify that I'm not looking to make this a full time thing. I have a decent job that allows me to work overtime when I want if extra cash is needed, so from a $/hour perspective these flips would have to beat my overtime rate or it isn't really worth the time. That's why partouts and major repairs won't be what I'm looking for. I'll be pretty selective about them, and make sure there's enough profit to justify whatever minimal work I do. I have no specific goals, I just want to be ready to capitalize on a handful of good deals per year as I find them, to bring in some play money.

I'm willing to listen to any more ideas or suggestions though, so let's hear them.

I get the feeling that it's kinda like modern law practice. Maybe if you had three to four guys and broke it down into specialized fields it could work with enough volume. Buyer; Mechanic; Detailer; Seller for a rough idea. But then the profit only comes with volume and four perfect humans which is possible. Or maybe the profit is that months beer fund and life would be a bowl of roses. I'm probably a little too chuffed with this solution. "Self-congratulation is not a basis for society" or a car business.

I will say there is something to that. Just like the guys who troll garage sales for used appliances or golf clubs. You might be able to find a niche of models that you can get in one part of the country and fix up and sell in another for a profit.

I know some guys in the PacNW built a business out of refurbishing the diesel TDI's especially the larger older desirable Passat wagons. As an example

NOHOME wrote:

If you wanted to spend 5-10 hours a week on it, you could do a car every couple months and make $30k, minus overhead, per year.

You will spend that much time just dealing with clients and shipping stuff.

Not really. "Dealing with clients" is pretty rare with eBay sales. The ones that need their hands held should get ignored unless they're spending enough $$. Shipping is super fast if you have a good shipping area set up. It takes me all of 10 minutes to ship a part. It's all in working quickly and efficiently and not letting your work area get cluttered.

Speaking of which, I need to go clean in the shop!

Ps I doubt you'll top a good overtime rate per hour flipping cars. You're gonna have a lot of hours in even a simple car sales transaction. On selling parts my best estimate is I make about $60/hr. I doubt I could clear that with flipping cars. But I don't have much luck with it maybe.

I have done well on my only flip, but like others have said, you have to get them below market price. Here is my example (all figures in CAD):

• 2005 Subaru WRX wagon - clean chassis, blown motor - $500
• 2002 Subaru WRX wagon - junk chassis, good motor - $500
• Swapped good engine into 2005, sold for $6500

• Parted out 02 - sold over $1500 worth of parts

• Net profit - $7000.

Key was that I picked up both cars for well under market but when they became available I jumped on them. The 05 I originally looked at in July and the PO wanted $3200. I said no way. By March it was mine for $500.

Blown engine WRX's are ridiculously priced by their owners, in my opinion. I missed out on a lot of cars, but other people were willing to pay way more than I was.

I think I'm really targeting the stuff that I'd just spend a day or so, or even just an afternoon on. Stuff that needs to be cleaned, have better pics and a coherent write up put together. I know it's not going to be easy to find these things, but I'm confident in some cases I could do pretty well with them if I'm patient enough to find the right stuff. Am I crazy to think that sometimes the difference between a $1000 car and a $2000 car is just general clean up and better presentation? If I can buy them right, I feel like I can capitalize on this area a bit.

STM317 wrote: Any other advise?

Know when to cut and run. Don't chase yourself down the rabbit hole over sunk costs.

bought a car that you thought needed a sensor, but it turns out the trans is blown? dump it. eat the small loss and move on.

Also, stick to what you know. You'll know parts guys, fixes, and common failures on makes you're familiar with.

Lastly, I've often made good money with a 2 cars = 1 buy, rather than just buying parts outright. Like say you find a clean car cheap that needs a motor. A junkyard motor might be $350, but I find a rearended car with a good drivetrain for $500 instead. Yank the motor, sell the trans ($200), wheels/tires ($100), and a few bits at random ($20/ea... $100ish). Scrap the rest for $100 and you just got a free motor. I like having a quick target on this kind of stuff so I don't end up with junk sitting around. Get what I need out of it and scrap it quickly.

I feel like you could also "specialize" in a certain model or generation of car that is notorious for an issue and get really good at doing the repair. If you see something commonly popping up that could be an opportunity to educate yourself on the fix and then repeat it multiple times, getting more efficient each time.

For an example, I think it was Neons that had a head gasket issue, which would seem like game over to most people, but when perfected could be done in under an hour. It seems like scenarios like that are a great opportunity to buy something on the cheap (since they are unwanted), do the known repair, and then resell for a pretty safe profit.

Maybe Prius's with a couple dead battery cells? Tahoes/Suburbans with DoD issues? I am not a flipper, so just some ideas. I did formerly attend the local machinery auction with some friends and we would pick up a couple cars to flip for small profit, but then registration fees went through the roof and there was little room left to make $$.

Edit ^^ Yes, 1G neons had HG issues but it was still not a 1 hour job. I could do it in about 4. I did actually do my first flip for something almost identical, a '99 neon I paid $50 for with a seized water pump (sold for $2500). When I was 18, this was insane money. I'd still do a head swap for $2k today but that was also a crazy deal on a car that wasn't old at the time. Today, wouldn't take a neon for free.

I've done this a lot. Ultimately I hate to say it, but if you want to make money, here's the method:

-Don't title it. Insure it just in case. In PA this means finding a 'friendly' notary. Paying title and tax fees will cut out any profit quickly and most states limit the number of private sales you can do per year before requiring a dealer license.

-Don't waste your time doing maintenance or upkeep. It just cuts into the bottom line. Fix problems, forget maintenance. I'm awful about this but it takes up time and $ for no added sale cost.

-Clean clean clean CLEAN CLEAN. This is 99% of the game. If it looks good, people will buy. Don't buy a car with cosmetic problems.

Notice all 3 points follow what dealerships do? Clean it up, don't title it and only fix major issues. There's honestly not much money to be made in this game unless you get an insane deal. Economics are a bitch and once you consider how much your time is worth (which should be VERY high if you're doing this on the side in the few 'free' hours you have) I've realized that I can make lots more money doing something else, all without trying to skirt the law and deal with CL idiots.

dculberson wrote: If you wanted to spend 5-10 hours a week on it, you could do a car every couple months and make $30k, minus overhead, per year.

10 hours a week for a year is ~500 hours. $30k/500 = $60/hr. Before overhead, expenses, anything that goes wrong. Which it will.

I usually hit the brakes at the apex of Turn 10 on Summit Main.

Blaise wrote: I've done this a lot. Ultimately I hate to say it, but if you want to make money, here's the method: -Don't title it. Insure it just in case. In PA this means finding a 'friendly' notary. Paying title and tax fees will cut out any profit quickly and most states limit the number of private sales you can do per year before requiring a dealer license. -Don't waste your time doing maintenance or upkeep. It just cuts into the bottom line. Fix problems, forget maintenance. I'm awful about this but it takes up time and $ for no added sale cost. -Clean clean clean CLEAN CLEAN. This is 99% of the game. If it looks good, people will buy. Don't buy a car with cosmetic problems. Notice all 3 points follow what dealerships do? Clean it up, don't title it and only fix major issues. There's honestly not much money to be made in this game unless you get an insane deal. Economics are a bitch and once you consider how much your time is worth (which should be VERY high if you're doing this on the side in the few 'free' hours you have) I've realized that I can make lots more money doing something else, all without trying to skirt the law and deal with CL idiots.

This is helpful. Thanks!

Blaise wrote:

dculberson wrote: If you wanted to spend 5-10 hours a week on it, you could do a car every couple months and make $30k, minus overhead, per year.

10 hours a week for a year is ~500 hours. $30k/500 = $60/hr. Before overhead, expenses, anything that goes wrong. Which it will.

Uhh yeah; That's exactly what I said..?