Flippin Cars

I've been thinking about doing the buy a cheap car, fix it up a little and sell it for a profit thing. do any of y'all do that?
How's it working for you?
Any tips?

Thanks, David

I've been tempted to do this for years, just never pulled the trigger.

Most cars I buy for dirt cheap become my project cars. With my OCD I ended up dumping so much money into them there is no profit possible. If I bought one of these rodents with the intent to flip, I should be able to make some decent money.

I've done it in the past. If you have the equipent, knowledge, and time to fix/replace bad automatic transmissions and blown head gaskets, I think you can do good.

Those are two things that typically cost more to have repaired at a shop than the car is worth.

I bought a few old escorts and turned around and flipped them.

The thing is...there is an almost endless market for cars that will pass inspection and get the buyer to work tomorrow.

Wait for the right deals though.

It's NOT easy money, of course...but for an auto hobbiest, it works out ok.

Clem

what works best is Automatics with A/C. Thats all. I try to keep my eye out for cheap toyotas or hondas that are auto and have ac...

And don't plan to find any cheap cars around tax time...the dealers hoard them knowing they can over price them in April.

Also...my state only lets you sell 6 cars a year (transfer 6 titles) before they tell you you need to get a dealer license (something that ONLY dealers can afford to do). So keep that in mind if your state is similar.

To try to beat the system (in case I maxed my quota) I started using a business address and my middle name on some of the titles ;).

I buddied up with a small time dealer (this guy was at THE BOTTOM of the barrel) and was able to buy some cars at auction through him for a fee (figure about $100 per car). I made money on all of them...but let me tell you...the cheap cars at the dealer auction are a pig in a poke. They'll run ANYTHING through there. Just assume it's got a bad auto tranny and/or a rod knock that's been quited by sawdust in the crankcase.

Clem

and I thought this thread was going to be about rollovers...something I learned about on accident a few weeks ago ;).

I haven't been able to find any good deals in years. Last one I bought was a Mazda 323 wagon with a blown motor (new trans!). I doubled my money on that one. You used to see these fixer-uppers all the time in the free papers and stuff but not anymore. Only deals I find are on the wholesale lines of some car lots and they frequently won't deal with the public.

I've done it a few times, and made pretty good money doing it. There are a few cars locally that I wish I had the time and money to flip right now, but I don't have either.

My buddy would bypass the dealer license thing by not putting his name on the title. He just left the "buyer" portion blank when he bought it. If he flipped it quick enough he could just put the new buyers info into the original registration. That way his name was never listed as an owner. Saves on taxes, fees, and the ability to sell more than 6 cars per year.

I've more than doubled my money on the last three cars. Buy something that has value, buy it dirt cheap, and do all of the work yourself. Even 6 a year is hard to do.

This post inspired me to search and post on Craigslist for broken Ford Escorts (and Tracers, course).

Thanks!
Clem

I do this! I have done quite a few Escorts successfully. They usually are the dependable, get you to work, cars with emphasis on dependable. It helps to be a good troubleshooter and know the known problems with the target cars. Since I stick with Fords I learn odd stuff that can be profitable. Once bought a 96 Mustang with a blown headgasket for $500. Headgasket was a warrenty repair to 100,000 miles and this had 87,000....GOLD! It is amazing what simple stuff will nearly scrap a car with some people. Latest examples of cheap fixes to non running cars....wire came loose from the key switch, inertia switch tripped, broken shifter, a wet leaf on a carb vent hole, loose battery cable etc.
But some can be expensive and hard...a broken timing belt can kill some cars to the point of nonprofit. Escort 1.9 is $20 and 40 minutes! Working AC is a price doubler on these cars.

If you stick to certain cars or makers, a parts car is a great thing. $400 nice car with a blown engine combined with a wrecked $400 parts car yielded an $1800 great car with a transmission and interior for the next project and hood and headlights for the next. Even the blown engine donated it alternator, IAC valve and throttle body for my daily driver (Escort!). Danged if the parts car also happen to have new shocks and a working steering rack for the one I'm working on now!

Current car ran great after I cleaned the leaves out of the filter box and put in new plugs and other maintainence items. I did strip out a plug hole in the head and needed to buy a new tool to fix it (new tools....make me smile!)

Bruce

I've done it alot. In fact, that was a major factor in feeding my family for the nearly 2 years I was unemployed. There's lots of strategies. I typically look for "off-season" deals. I'll buy a miata in the late winter and sell it in the spring for a fat profit. I'll buy a forester in the late summer and sell it mid fall. I've turned $2400 into $4000 with 3 cars.

I haven't tried flipping cars yet, but I think it will be in my future as well.

Andrew

DrBoost wrote: I've turned $2400 into $4000 with 3 cars.

Do you mean $2400 into $4000 3 times or it took 3 cars to do so? If it's the latter, hope your kids don't eat much....

I've always failed, but that's because the only times I've tried it..I did European cars (parts $$$$). Stick to Japanese and domestics, you may be able to do it.

ClemSparks wrote: The thing is...there is an almost endless market for cars *that will pass inspection* and get the buyer to work *tomorrow*.

QFT. And since the economy's not "getting better" for po' folks, the market will be here for awhile.

Clem's right about the work it takes, though. I didn't mean to snip his comment about that.

After dependable you should stress making the car CLEAN!! I have learned that a super clean interior is time well spent. I go as far as pulling the carpet to powerwash it. Remove the door sills and clean the dirt out of the screws and such. Best is to start with a pad of paper and write down the items that bother you from the first minute you sit in the car. That is exactly the impression a buyer will have. If you don't write it down, you might get used to a particular quirk and your buyer will discount the price for this.

Bruce

I paid my way through college by parting out or fixing and selling cars and Jetskis. There are cubic dollars to be had if you can pull it off.

Know your market, and know how to lie, cheat, and steal like a used car salesman to be on top. Bust ass to be first to the good deals.

Best profit-takers for me were buying heavily modded but beat or broken DSMs or Mustangs and putting them back to stock and running, then selling the aftermarket parts separately. It was pretty easy to buy a car for $3500 or so, sell $4000 worth of parts off it, buy about $200 worth of used stock take-off parts, and sell the car in good running stock shape for $3500.

I made the most money by sticking to cars I knew and had parts for. I had a lot of parts for 1G and 2G DSMs and Galant VR4s and Fox Mustangs and my roommate was basically Mr. Jetski. Nothing kills a profit like having to buy a $250 power transistor new from the stealership when you can just go to your box of spares and grab one you have from a car you parted

egnorant wrote: I do this! I have done quite a few Escorts successfully. They usually are the dependable, get you to work, cars with emphasis on dependable. It helps to be a good troubleshooter and know the known problems with the target cars. Since I stick with Fords I learn odd stuff that can be profitable. Once bought a 96 Mustang with a blown headgasket for $500. Headgasket was a warrenty repair to 100,000 miles and this had 87,000....GOLD! It is amazing what simple stuff will nearly scrap a car with some people. Latest examples of cheap fixes to non running cars....wire came loose from the key switch, inertia switch tripped, broken shifter, a wet leaf on a carb vent hole, loose battery cable etc. But some can be expensive and hard...a broken timing belt can kill some cars to the point of nonprofit. Escort 1.9 is $20 and 40 minutes! Working AC is a price doubler on these cars. If you stick to certain cars or makers, a parts car is a great thing. $400 nice car with a blown engine combined with a wrecked $400 parts car yielded an $1800 great car with a transmission and interior for the next project and hood and headlights for the next. Even the blown engine donated it alternator, IAC valve and throttle body for my daily driver (Escort!). Danged if the parts car also happen to have new shocks and a working steering rack for the one I'm working on now! Current car ran great after I cleaned the leaves out of the filter box and put in new plugs and other maintainence items. I did strip out a plug hole in the head and needed to buy a new tool to fix it (new tools....make me smile!) Bruce

Scary. Escort 1.9 is an interference motor.

I've done it successfully a few times, but you need to do it with a car that is popular (easy to sell), has a good enthusiast following (lots of reliable info available online and elsewhere) and has parts that are cheap and easy to come by.

You need to look for something like a Civic, Miata or Jeep Wrangler. Avoid that Maserati BiTurbo and the 944 that ran last year.

My father and I have done this for YEARS. The only cars I can remember truly losing money on was my 30,000km 2004 Golf that I got a loan for, and the Talon I recently sold. Almost every other car (unless I just sold it for what I bought it for to get rid of it) usually had a $500 net profit.

If I move back to Edmonton and into a house, I'm going to start again. The only issue you run into now is that "back in the day" you had to sift through things like the Bargain Finder (a subscription based buy/sell paper that covered western Canada for everything, but dealt with a lot of cars) or Autotrader. It was actual work/required a lot of patience. Nowadays everybody and their mother does it (which causes the price of used cars to go up) because they just hop on Craigslist, Kijiji, Autotrader, etc and search for exactly what they know they can fix.

The formula is something like this: buy car for under $1k that runs like poop, has a big leak, or needs a headgasket. Clean it until its the nicest car you've ever seen. Fix the one major issue, and maybe do some mild maintainence to it. Post pretty pictures online and profit

I do this semi regularly around the work I do for co-workers on their cars (I work at a school and many "educated" people have no clue what makes their car tick!). I was dealer trained on VW so that's my bread and butter. Find a make you are comfortable with, get to know the quirks and use parts cars as you find them. Do it!

93celicaGT2 wrote:

egnorant wrote: ...a bunch of stuff about cars... Bruce

Scary. Escort 1.9 is an interference motor.

Nope, it's not.

16vCorey wrote:

93celicaGT2 wrote:

egnorant wrote: ...a bunch of stuff about cars... Bruce

Scary. Escort 1.9 is an interference motor.

Nope, it's not.

Arg. You guys do be correct. Disregard.