Business Idea...

[Originalsin]

Has anyone ever thought of being an auto broker. It runs on the same premisis of flipping houses.

First you find an undervalued vehicle, boat, motorcycle, etc and offer an even lower cash price. You offer a one week option to pay at the end of seven days. You clean and detail the vehicle and place it on ebay motors, autotrader, etc with a decent mark up.

The buyer shows up, pays you, you then take your cut and pay the original owner his cut.

This is a rough plan, but it seems like it would work. Like I said, it works in real estate, it should work here.

[jackpot]

I also have wandered about that idea, and I think its a great idea. If you think about, that is what used/new car dealers do. When you have an older vehicle and would like to buy a new one, they usually offer you a price for the old one way below the blue book price to allow themselves profit when they turn around and sell it. The only problem if any is, one may have to acquire a dealers license.

[F360]

A post by me ages ago...

Have you considered buying underprices cars, then changing the oil/filters and giving hem a good polish, thens re-selling them. I havent done this (yet ) but I know alot making good money doing it. It is also how quite a few car dealers get started, just working their way up. I hear the best money is in buying cars for about $2000/$3000 and selling for $3000/$4000. Quick money if you know about cars, but if you buy one car you cant sell it can hold you up on buying other deals.

(Dealers license is only required if your doing many cars a year (about 6+ I think)

[Originalsin]

I think it would be easy to to 2-3 a month at at least $500 a piece. Not too bad for a few hours of work.

[kozuch82]

Refurbishing anything is adding pretty much of value, which is always good !

[more freedom]

I think an undervalue real estate will be a better idea.

For an understand value vehicle you'll have to sell it ASAP because it will keep depreciating in its value

[WanganRunner]

I've been doing this for a couple years now.

Unless you're into cars, I wouldn't recommend it. You MUST be willing and able to do your own work, as even if you don't intentionally go seeking "fixer uppers", there will be things that go awry, and shop rates will eat your profits for lunch. Second, you have to have an innate feel for the demand for your inventory, you need to know where prices are, because you can't rely on KBB or any sort of listing. The bottom line is that the used auto market is inefficient and you need to seek arbitrage by exploiting this inefficency. The listed prices are the incorrect ones, you need to know the right ones in your head and be able to make buying decisions on the spot with zero research.

I only got into it because I was into cars, and wanted to buy stuff for myself on the cheap, so I learned to find deals. I eventually found more than I'd ever be able to use, and so I started reselling.

The model also only works with certain cars. I clear triple-digit margins as a rule because I don't go buying things willy-nilly. I know specifically which vehicles have the greatest price differentials with market, and I focus on that. The average used vehicle retailer just sells everything, and wastes time and energy chasing after vehicles that will only return a miniscule margin.

I don't mean to scare anyone off though, done right, you can make a ton of money doing it.

I bought a car about a month ago for $1,800 and sold it for $5,500 six days later, only transaction costs were autotrader fees and carfax.

Generally that's the price range I work in, because it has the greatest variances and thus the greatest percentage returns, although I've also done a couple of exotics. Exotics return preposterous amounts of money, but it's a connections game, because the trick is knowing a bunch of guys who are consistently in the market for six-figure rides.

[brownbob06]

It's funny you say this because my dad does this ALL THE TIME. Of course it helps that he owns his own shop, haha. He'll find a car that has something wrong with it (major or minor, depending on the cost to fix it) pays an EXTREMELY low amount for it, fixes it and sells it for a profit. The best way to do this is to have a good market, of course he puts them for sale outside of the shop. People call him to ask if he has any cars for sale all of the time. Also, it's ideal because sometimes people's cars break down and it can be VERY expensive to fix a car that's a beater anyways, so they just buy a new one.

He makes different amounts of money on different cars, sometimes he buys a running car for 200-300, cleans it, and sells it for 1-2k. And sometimes he buys them broken for 100-300 (sometimes cheaper) fixes them, then sells them, but generally he buys running cars, cleans them, then sells them.

And Wangan is 100% right on not being able to use kbb or anything like that to value cars, especially when buying.

Also, he does all the work for some of the migrant workers that come up here in the summer. He knows what they like (Vans and SUVs specifically) and knows what they will pay for them. So he buys them cheap and just keeps them till the migrant workers come up. It also helps that the completely trust his work, so he has a GREAT reputation built around here.

Also, you better know what you are doing, if you don't, you can get burned real fast, pay too much for a car and you're screwed, buy one that nobody wants, you're screwed, screw a bunch of ppl over...you're screwed (srry, had to throw that bit of irony in there!)

I guess the bottom line is, this business is very profitable, more shops probably do it than you think, don't get into it if you're not doing your own work, know the market IN AND OUT, don't just research kbb or anything like that, and be prepared to sit on some cars for a while...sometimes (sometimes be prepared to have it sold before you finish fixing it, haha)

[brownbob06]

I think an undervalue real estate will be a better idea.

For an understand value vehicle you'll have to sell it ASAP because it will keep depreciating in its value

But if you don't pay for the real estate without a loan, interest and other payments will kill your profit if you don't sell it ASAP