Do any of you flip cars?

[Calendyr]

I believe this topic is already here on the boards....that being said i flip cars all the time at least two a month probably. The biggest advice i could give you is not to buy any vehicle with a major mechanical issue, ive learned hands on that these type of vehicles are major money pits. i look for vehicles that are more cosmetically damaged than anything else. I do my own paint and body work as well as detail so that helps alot. There are ways around johnny law dog as well.

Yep totally right. Anything like head gasket problems to transmission problems or anything major like that is a no-no!

Replacing an Alternator takes about 15 minutes so that's something I would not mind. Same for battery. Plenty of mechanical problems can be easy to fix and cheap too. Any engine issues or other major components I don't see a way to make a profit off those.

 

[Calendyr]

All it takes is one unhappy customer to complain to the law and you'll find your butt in court so fast it isn't even funny. You do NOT want the DMV/SOS to audit your transaction history. Most DMV/SOS have the ability to pull reports from their software to tell if you've exceeded the yearly limit. Title Jumping, which is selling the car without registering it to yourself, is highly illegal. To each their own, but know that in Illinois, it is a felony which will get you prison time.

No reason to break the law. Just declare the profit through your detailing company. And if there is a limit on number of cars per year, you can follow it. Even if you only flip 5 or 6 cars per year, that could mean a good sum of money. If I was in that situation I would only flip cars I could make 2,000$ profits on or more. Since you are limited on amount you can take your time with vehicules Worth more and harder to sell.

Good rule of thumb is to stay bellow 5,000$ sell price. So if you can find a car for 2,500$ and sell it work 5,000$ that's a good amount of money if you can do it 5 times a year.

 

[Calendyr]

"Flipping cars" still conjures up shady dealings to me.
Just can't get those images out of my mind.

And there is still way too many "flood cars" out there flooding the used vehicle market.
Some in the "new" vehicle market as well!

Bob

You want to stay away from Salvage cars as a flipper. It's bad business.

 

[Calendyr]

Amazing what you can find at auctions, too. Auctions don't JUST include wrecked cars- they also include older trade-ins that dealerships just didn't want to sell, and cars with mechanical problems. Some dealerships will auction any car older than 7-10 years as many financial institutions- including the ones the dealerships work with- won't finance cars that old. Since most dealerships offer a 'one stop shop' experience, handling financing and things in-house, they won't sell anything they can't finance. The well-maintained 14 year old Saturn I just sold would've been auctioned off had I traded it in, per my salesman.

Just because it's auctioned, doesn't mean it will be cheap. BUT, if this was the kind of hobby you wanted to get into, and you had mechanical knowledge (and an EPTG to check for body work and repairs!), you could get a cheap car or two. I've never done it, but I've had relatives who had. My uncle got an older Ford escort from auction with a blown transmission for $300. Bought a used tranny for $250 and spent 8 or 9 hours putting it in. Sold it for somewhere around $1800 if I remember right, a few months later. He was just looking for a cheap car to commute with instead of his gas-sucking truck, but he ended up turning a profit anyway!

And Bob,

I get what you mean with the connotation! So I guess we'll say "Does anyone have interest in refurbishing pre-owned cars for resale"? Hehehe.

The course I took warned me to stay away from auctions. Lot of problems can arise from buying at auctions and it's no longer Worth it. Private sellers who are lazy and don't understand the market is what you want. A good car that looks bad and is way bellow market vakue because of it.

 

[Calendyr]

Amazing what you can find at auctions, too. Auctions don't JUST include wrecked cars- they also include older trade-ins that dealerships just didn't want to sell, and cars with mechanical problems. Some dealerships will auction any car older than 7-10 years as many financial institutions- including the ones the dealerships work with- won't finance cars that old. Since most dealerships offer a 'one stop shop' experience, handling financing and things in-house, they won't sell anything they can't finance. The well-maintained 14 year old Saturn I just sold would've been auctioned off had I traded it in, per my salesman.

Just because it's auctioned, doesn't mean it will be cheap. BUT, if this was the kind of hobby you wanted to get into, and you had mechanical knowledge (and an EPTG to check for body work and repairs!), you could get a cheap car or two. I've never done it, but I've had relatives who had. My uncle got an older Ford escort from auction with a blown transmission for $300. Bought a used tranny for $250 and spent 8 or 9 hours putting it in. Sold it for somewhere around $1800 if I remember right, a few months later. He was just looking for a cheap car to commute with instead of his gas-sucking truck, but he ended up turning a profit anyway!

And Bob,

I get what you mean with the connotation! So I guess we'll say "Does anyone have interest in refurbishing pre-owned cars for resale"? Hehehe.

Ya, in essence the most important thing besides the price is knowing how to do a thorough pre-purchase inspection. First every problem you find allow you to negociate the price down, and that is more profit in your pockets. Second once you know how to spot major issues you will know what cars not to purchase. An other thing you can do is buy a OBD2 scanner to read the car's computer diagnostic software. If you see a list of major issues pop up, just say "No thanks" and move on

The course I took suggest aiming your efforts at asian cars that have 4 cylinder engines and are good on gas. Those things are very easy to sell. Also you can look at what is popular in your area. If for instance everyone drive pickup trucks, then that is what you want to buy and sell. Same goes for any type of vehicule people like where you live.

I would personally stay away from American brands because they are not reliable as a rule. Also stay away from German cars because they are insanelly expensive to fix. But that's just me.

 

[Chicago Tommy]

No reason to break the law. Just declare the profit through your detailing company. And if there is a limit on number of cars per year, you can follow it. Even if you only flip 5 or 6 cars per year, that could mean a good sum of money. If I was in that situation I would only flip cars I could make 2,000$ profits on or more. Since you are limited on amount you can take your time with vehicules Worth more and harder to sell.

Good rule of thumb is to stay bellow 5,000$ sell price. So if you can find a car for 2,500$ and sell it work 5,000$ that's a good amount of money if you can do it 5 times a year.

Canadian law might be different than US law regarding this matter. Most states in the US do not tax the seller on private party vehicle sales. It's about abiding by the law regarding how many cars you can sell as a curbstoner and not jumping titles.

Something else I forgot about that might help some of you become the next Gas Monkeys, some states do allow a title only transaction, but the car can not be driven on the road. This worked out well for me since I had a 2010 2500HD GMC and a trailer. Also, your state might have a silly low number you can sell, like 5. Well I can sell 5, my brother can sell 5, my sister can sell 5, my brother in law can sell 5, and on down the line of trusted family members. Im the MAN

 

[Detailed Josh]

Just check with your state from the rules to do it the right way. I believe in Illinois if you sell more than 5 you need a dealers license which cost around $1,000 last time I checked and you can then get dealer plates/etc. I'd rather just stick at the less than 5 a year limit till I got setup to maybe take on more serious repairs of cars I see on sites like Craigslist so flip more.

 

[Calendyr]

You can also ask people you know to buy and sell for you and share the profits with them. If you pay them say 200$ to do the trade Under their name they benefit from it and so do you. So depending how large your familly and friend circle is, you could have the potential to do more cars than you can handle that way. And they will love you for the extra cash

 

[Calendyr]

Just purchased my first car to flip. Although I probably won't sell it until spring, just too cold to fix issues with it at this time (0 Farenheigt this morning LOL).

Paid 500$ for an Hyundai Accent 2002 Hatchback.
Got issues with the trunk not opening
O2 Sensor to replace
Rust in right quarterpannel near the Wheel
Rust on the roof near windshield
And of course headlights needs to be restored

Book value for private party is 1754$
I plan on spending 250$ to fix it so roughly 1000$ profit if I reach my goal.

Wish me luck

 

[Romans5.8]

Just purchased my first car to flip. Although I probably won't sell it until spring, just too cold to fix issues with it at this time (0 Farenheigt this morning LOL).

Paid 500$ for an Hyundai Accent 2002 Hatchback.
Got issues with the trunk not opening
O2 Sensor to replace
Rust in right quarterpannel near the Wheel
Rust on the roof near windshield
And of course headlights needs to be restored

Book value for private party is 1754$
I plan on spending 250$ to fix it so roughly 1000$ profit if I reach my goal.

Wish me luck

Pics will be required!

 

[Chicago Tommy]

Just check with your state from the rules to do it the right way. I believe in Illinois if you sell more than 5 you need a dealers license which cost around $1,000 last time I checked and you can then get dealer plates/etc. I'd rather just stick at the less than 5 a year limit till I got setup to maybe take on more serious repairs of cars I see on sites like Craigslist so flip more.

It's a LOT more than $1000 in Illinois. By the time you buy a bond, rent a property, have the state police come out to inspect the property, etc, you're well over $1k.

Just purchased my first car to flip. Although I probably won't sell it until spring, just too cold to fix issues with it at this time (0 Farenheigt this morning LOL).

Paid 500$ for an Hyundai Accent 2002 Hatchback.
Got issues with the trunk not opening
O2 Sensor to replace
Rust in right quarterpannel near the Wheel
Rust on the roof near windshield
And of course headlights needs to be restored

Book value for private party is 1754$
I plan on spending 250$ to fix it so roughly 1000$ profit if I reach my goal.

Wish me luck

Good luck. I try to avoid rusty cars. They don't move well in my experience.

 

[Calendyr]

Yes I will take pictures. Right now there is 3 feet of snow where I live, so not the best time to take pictures LOL. I still might take a few just for kicks.

Well, rust can be removed That's what I plan on doing. Grinding it off and repainting the 2 pannels. I think the sections are small enough that I can do a good job with paint cans. I need to check the local store for 2K Clearcoat in a can. I don't think it will be too difficult to find at specialized car paint stores. At the same time I will very likelly use it on the headlights to seal them. From what I have watched latelly that is the best way to insure they don't go bad again after restoration.

 

[Paul Mitchell]

You can also ask people you know to buy and sell for you and share the profits with them. If you pay them say 200$ to do the trade Under their name they benefit from it and so do you. So depending how large your familly and friend circle is, you could have the potential to do more cars than you can handle that way. And they will love you for the extra cash

I don't know about Canada but in Washington State you can sell up to four vehicles in a 12 month period. Sell a 5th vehicle and you've broken the law. You have 15 days to have the title transferred to your name. On the 16th day you've broken the law. I suspect that having friends and family act as a "strawman" is also against the law. I recommend that anyone who thinks this is a good idea contact their local department of licensing and discuss it with them at length.

The below paragraph is a quote from the Washington State Department of Licensing:

If you don’t have a dealer license, it’s illegal to:
Sell more than 4 vehicles registered to you in any 12 months.
Buy and sell vehicles for the purpose of making a profit.
Sell any number of vehicles that aren’t registered to you.

 

[Romans5.8]

I don't know about Canada but in Washington State you can sell up to four vehicles in a 12 month period. Sell a 5th vehicle and you've broken the law. You have 15 days to have the title transferred to your name. On the 16th day you've broken the law. I suspect that having friends and family act as a "strawman" is also against the law. I recommend that anyone who thinks this is a good idea contact their local department of licensing and discuss it with them at length.

+1.

Such a scheme does not make it legal. You're still selling more than X cars per years; AND you're still buying the cars with intent to sell- which makes you a dealer, which requires a dealer license. A scheme like that simply makes the crime harder to prove and catch- but doesn't make it not a crime in most jurisdictions.

Generally, if you're trying to make money or start a business while skirting the law or ignoring things like taxes, insurance, and licenses- then it's not going to be successful in the end. You can sure bet that once you've been nailed for selling cars without a license; the IRS will be after you for unreported income.

 

[Calendyr]

Then just get a license if it's worth the time and money. Or limit yourself to x amount of cars you feel comfortable doing. 4 cars per year at say 2K profit each is nothing to sneeze at.