Can you make a living "flipping" cars?

In reply to curtis73: This.

And the dealers actually have access to the auctions, and are still having a heck of a time.

This can be done, but it is high risk ,hard work, and it only take ONE car to wipe out a lot of money. I did this for over a year and put about 43 car on the street (not in M.D). The two main things you should do is find a platform or brand you know how to work on and what will interchange with each other, and find your price point.

The first part is not that hard the second can be a bit hard, if the price is to low you are walking a razor thin profit margin but you can have quick turn over, if the car is priced high it may take longer to sell the car (read dealing with banks) but you have more profit.

Some points you need to consider is how you plan to deal with you new and former customers? How do you reach them, where will you make the sale, how do you conduct test drives, how do you deal with people after the car is sold, State inspections/ smog test (yes or no?) in some states these things can be a MAJOR pain in the a$$ and can greatly change the selling price of the car.

This is the short list of things you should be thinking about. You are looking in to some very murky water filled with snakes , leaches, and a few sharks.

Two more things, read up on "curb stoning" this has been pointed out in other post as the laws very from state to state, and ASE is a bad joke save your money and buy some harbor freight hammers as they will give a true return on investment.

Good luck

I've done this off and on since the 60s. Back then it was easier to find deals. I also got into it pretty heavy in the late 70s and 80s and made a lot of money. Deals on Brit. cars just kept comeing my way. They usually sold to the first person who looked at them. Now it seems that money making deals are rare. In general people are a bit wiser in pricing their vehicles and often think it 's worth more that it is. As a side line you can still make money on it. I've watched used car lots going out of business rapidly over the last 10 years so unless you know something I don't I wouldn't try that right now. Take your time buying. Figure out what it needs and what it will cost to fix it and the minimum you'll take for it. If the numbers give you the right spread, go for it. Stay away from used motor homes, cheap boats, & PWCs unless they're running good, look great, and are dirt cheap. If you're in the right location you can make money on bikes.

wearymicrobe wrote:

Twin_Cam wrote: The reason I've got these entrepreneurial ideas in my head is that, long story short, myself and the other brewers at the brewery are getting boned HARD when it comes to shifts. Trying to reason with the management isn't getting us anywhere. I would just quit and open my own brewpub, which has been a goal of mine since I knew what a brewpub was, but I (and everyone else) had to sign a non-competition agreement when I was hired.

Non competition clauses are almost impossible to enforce. Check you state labor laws to even see if it is legal.

Sure they are. But they have to be within a reasonable time frame and geographic area.

I had to sign one 11 months AFTER I was hired one time. I called an attorney and he said "sign it. My job wasn't worth fighting for" and the more unreasonable it was, the easier it was to break if you need to fight later.

Truth spoken here

Graefin10 wrote: Stay away from used motor homes, cheap boats, & PWCs unless they're running good, look great, and are dirt cheap.

Boats might be the only one that you might make money on, buy in the fall and sell in the spring running right. If you are not near a large body of water this might not work out.

Graefin10 wrote: If you're in the right location you can make money on bikes.

I know a guy that is in to bikes and he has good luck and has been burnt a few times over the years. All he works on is liter bikes from the mid 80's - mid 90's

I have been asked to sign twice. Nope, no way. Hired anyway. I did work with a salesman that had signed one with Diebold and then left. They tried to come after him, to no avail. I would not worry about it, especially if you are being treated like a slave.

With scrap prices so high, I like the "Buy non-running 60's car from grandma for $100, sell $300-$400 worth of parts, get $500 cash money at recycler" plan. Maybe not enough to support a family, but good supplemental scratch if you've got a truck & trailer.

In reply to Twin_Cam:

I know people who flip on the side. Going to get in on it soon. Its hard to do. You find the problems they "forgot" to mention. Hard to make a large enough margin. I use the garage of a friend and give him a cut of the profits. Not flipping, but fixing for friends.

Summing things up. Not enough money in it, but you can make some nice extra cash for more toys. We all need more toys.

In VA, not having a dealer license would make your life much harder. You need to get a ride to pick up the car, trip permit, go to the DMV to title it at a minimum + if you want someone to be able to test drive it, you need tags, insurance, safety and emissions. By the time you get all that done, you need to make $500+ just to break even on the vehicle.

I've thought about it. More buying cars with the intention of selling them in 6 months to a year and using them as a DD, not so much flipping them really quickly. My last 2 DD Saturns have been profitable for me. The first one especially so, as it was rear-ended and I got a significant amount of $$ from insurance and didn't fix a thing.

And of course, the more money you want to make, the newer cars you need to buy. The newer the cars, the faster they depreciate, thus the more risk.

most of the good points have already been covered.

I have also done this on the side in years past. With used car prices currently being stupid high, it has been harder and harder to find any smoking deals... it seems everybody has caught onto Craigslist.

I know VW's, so when my work/income was cut in the '08/'09 downturn while I was working in the auto industry I started buying/fixing/selling Jetta's/Golfs/etc. Money makers were 1.8T's with a blown timing belt. Dealer wants stupid money to fix, people buy a new car. The head is almost always salveageable. I'd have the head gone through and zero decked by a pro who does it on the side, and slap it back together with fresh gaskets/valves/belts/etc.

I also had a GMC Jimmy 4x4 that put me about 3 cars worth backwards... terrible buy. Finally sold it after losing way too much time on it (and a few dollars). I also didn't know these vehicles as well, and bought something I wasn't familiar with. Learned my lesson. I would have been far better parting and scrapping it immediately when I found it needed more work than I initially thought.

It seems this is more feasible if you can take advantage of the multiple tangents. I agree if you have a rollback/tow truck you can then also make money hauling cars. If you have shop space and property you can stockpile a few donor cars for your specialty (whatever that may be) and then part/scrap out for metal as well.

Lastly, the cars you DO put together for sale, it seems the guys who actually make a good bit of money at this are buy here pay here lots. You're not making money on the flip, you're making money on the financing. This comes with it's own huge pile of headaches, but if you can get into cars for cheap it lowers the hurdle for each one. ...and if you own a tow truck you can play in the repo game as well.

As far as the straight fix and profit on outright sale, it seems this is only really viable as an "on the side" venture. The storefront/taxes/licensing/overhead/insurance/etc. would make that very very challenging as a formal used car lot. Obviously, it can be done... (used car lots exist), but I also see lots that open and fail.

cpl retirement schemes were flippin' cars and houses until the meltdown... dreams gone for now.

I know a guy that does this in PA. He is in it all the way, registered as a dealership. Most of his cars come from auctions. And he trends towards higher end cars. Audis, Volvo's, etc. He does his research and knows the common issues as well as which of those issues can be fixed cheaply and easily.

Twin_Cam wrote:

mrjoshm wrote: if you feel like relocating, i'm in pittsburgh. i could open the brewpub, and "hire" you as whatever position you can hold on paper until your non-disclosure runs out, and when it does you'd officially just own half the pub?

That's a sweet offer, but Mrs. Twin_Cam is currently doing the "second career" thing at a local college, and really doesn't want to move. Plus I could never root for the Steelers I'll look into the non-competition thing. I would also have to find out if any other local breweries are hiring, but I think one is. Sierra Nevada and New Belgium were both looking into building East Coast plants near Philadelphia, but they both (!) chose Asheville, NC instead.

I'd pick Asheville, NC over Philly too!

wasn't there someone here who "had a friend" that would buy cars with blown head gaskets for cheap, run some head gasket fix crap through it and unload it at carmax?

I think you guys are thinking about this way too hard, but then again, maybe my expectations of cash/income is a lot lower than yours.

Also, whoever buys a domestic vehicle to flip is not quite right in the head, xflowgolf, nobody actively searches out buying a Jimmy (ok, a few do, but still) what a horrible vehicle to try and flip.

I only do european and japanese vehicles. Maybe the odd domestic that is in high demand.

At the same time, I always keep the initial buy-in below $3k (preferably below $1500 if I can help it). Everyone needs a "cheap" car, they are a lot less picky down there at that price range as long as it runs and drives well.

Edit- And having to pull heads/get machine work done? That is not a successful business model for this type of side operation IMO. You want the EASY stuff. Blown headgasket. Lunched water pump. A couple of toast struts and some bad suspension bits. Even a tranny swap (if a manual transmission) or clutch. Anything that requires it to leave my own garage is a no go.

In reply to xflowgolf: I wasn't even considering doing this and you talked me out of it. berkeley that E36 M3. I already got a job!

My friend makes serious bank off this, doing nothing but 4x4 compact Blazer/Jimmys and W bodies.

He buys every one he can get for cheap and swaps parts around to build nice ones.

Says WHO?

HiTempguy wrote: Also, whoever buys a domestic vehicle to flip is not quite right in the head, xflowgolf, nobody actively searches out buying a Jimmy (ok, a few do, but still) what a horrible vehicle to try and flip.

I have found more money in domestic cars than euro and jap cars. Parts tend to be MUCH cheaper and easer to find.

HiTempguy wrote: And having to pull heads/get machine work done? That is not a successful business model for this type of side operation IMO. You want the EASY stuff. Blown headgasket. Lunched water pump. A couple of toast struts and some bad suspension bits. Even a tranny swap (if a manual transmission) or clutch. Anything that requires it to leave my own garage is a no go.

The days of people selling or trading cars with bad water pumps (Less the Chrysler 2.7) seem to be gone. Most people are fixing car and even some that should not fixed. You can find a lot of money in fixing engines and transmissions, but this can be a loaded gun and sometimes used units can be the way to go.

YMMV

Donebrokeit wrote: I have found more money in domestic cars than euro and jap cars. Parts tend to be MUCH cheaper and easer to find.

Like I said, then in my mind, you (the general you) are doing it wrong. You shouldn't have to be putting that much money into the car to flip it. Buying basket cases doesn't earn money. A car with one problem that a normal individual can't fix is what I go for.

93gsxturbo wrote: My friend makes serious bank off this, doing nothing but 4x4 compact Blazer/Jimmys and W bodies. He buys every one he can get for cheap and swaps parts around to build nice ones.

I guess the market in the part of the US he is from is different then. I couldn't sell one of those here for a profit if my life depended on it (as they are terrible vehicles, and everyone knows it).

HiTemp some times you have to take what you can find and in your price range. Back when I was doing this type of work I picked up a very clean Dodge neon (DOHC) with a busted timing belt for scrap money the valves were all bent, a good DOHC head was very expensive at the time so I replaced the valves and made a killing on the whole deal (think 12X what I paid for the car).

If you can find cars with small stuff wrong with them , you should buy them ASAP. Until the economy recovers buying used cars with small issues will be very hard to find.

HiTempguy wrote: Like I said, then in my mind, you (the general you) are doing it wrong. You shouldn't have to be putting that much money into the car to flip it. Buying basket cases doesn't earn money. A car with one problem that a normal individual can't fix is what I go for.

Yes stay away from basket cases, one and done.

HiTempguy wrote: Also, whoever buys a domestic vehicle to flip is not quite right in the head.

I don't want to turn this thread into another domestic vs. foreign thread, but I will say that you've made a very broad generalization here. I know plenty of people that have flipped domestic vehicles every bit as successfully as imports.

My entire car hobby is supported by the flipping or parting of cars.. all my tools and project cars are funded this way.

My hobby costs me nothing but time.

I think over the years I have probably earned about 3-4 bucks an hour..

But I have had a lot of fun.. and it didn't cost me anything..

Back in '05, there was a dealer here that went to the auctions and bought up every rental Stratus, Neon, and I think PT Cruiser. Most of them had accident damage in front. For about 800 bucks in parts fixing them, he had an on the payroll body guy paint them to match, he was turning almost 3k profit for every car on his lot.

There are still some deals out there, but you have to be quick and cash in hand to get them.

Tom_Spangler wrote:

HiTempguy wrote: Also, whoever buys a domestic vehicle to flip is not quite right in the head.

I don't want to turn this thread into another domestic vs. foreign thread, but I will say that you've made a very broad generalization here. I know plenty of people that have flipped domestic vehicles every bit as successfully as imports.

Domestics are stupid easy to flip. For about $400 in tools, I can flip just about every GM FWD with a 4T60 that is blown for maybe $200 in parts for near book value.

Around here, I'd be scoping out Outbacks with bad head gaskets.

HiTempguy wrote: Also, whoever buys a domestic vehicle to flip is not quite right in the head, xflowgolf, nobody actively searches out buying a Jimmy (ok, a few do, but still) what a horrible vehicle to try and flip.

apparently you don't live in Michigan. 4x4 = premium. I would have made good money on this had 3 or 4 more major components that I was flat out lied to about by the PO weren't also bad (and I didn't have enough experience to know to look for prior to buying). Here in Michigan I have a few friends who make very good money flipping nothing but domestics, and parts used are everywhere and cheap in Michigan junkyards.

HiTempguy wrote: Edit- And having to pull heads/get machine work done? That is not a successful business model for this type of side operation IMO. You want the EASY stuff. Blown headgasket.

...this goes back to knowing your product. I know that most VW 1.8T 20V's that chew on valves are salveagable, and most 2.0 8-valve motors don't even bend the valves at all. MOST shops or dealers will try to sell the person an entire new motor in the case of the 20V, and most belts pop just after 100K, when the car is still shiny and otherwise in good shape... that dealer maintained car owner is now staring at a quote for a new motor of $5K+. The car is only worth ~$5K. People take the retail sale value, subtract the repair value, and think they're getting out ahead or even when I put $1000+ in their pocket. I can do a complete head rebuild and get it back together for <$1K with new belts and BS. Turn around and sell it for $5K.

To me a head gasket is more of a crap shoot. A person may have run that thing hot and hard causing far more damage to the motor. Not always a quick fix. warped heads/etc.

When I do the math I'm sure I haven't made great money per hour, but I generally have fun doing it, and it's all "extra" money so it funds tools/garage/racecar stuff without dipping into the family budget.