If you love cars, you may want to consider the flipping car as a serious business in making it as a profitable hobby of your own. Why not? Let’s start with the car flipping itself, basically, you buy cars for a very lower price then the value is added by investing some to sprucing up the car and finally sell it for a profit of 20% to 30% at least. In general, this method similar to “Buy Low, Sell High”. Sounds interesting?
How to start and how much money to start with? Before you start, it is advisable that you learn with laws and regulation in your state in regards to the flipping car. In term of capital, the minimum is the better to reduce the risk. In general, you do not need too much investment. If you have $2000 and $4000, that would be fine to start. It is not recommended to borrow money from the bank for the first flipped car.
By flipping car, the profit margin that you can obtain range on the 25% per car. For example, if you bought a car for $2000 (including the repair cost), and you sell the car at least $2500, it easy to see that you are making $500 in profit. In fact, you can make more money if you flipped higher valued cars.
One consideration in this step is, what kind of car that you want to start with, common or luxurious car? Common cars have regular customers and easier to sell, on the other hand, luxurious cars take some time to sell but the profit margin is very high. In this case, most importantly is how much budget you have.
Ugly looking cars that are buried in the dirt are good because with some treatment will make it like a new again. Remember, do not buy a car with awful paint jobs and tonnes of dents and body damage, because it will cost you a lot on the repairing. It is also important that you follow the trend, always look on the market on what cars that currently on demand.
Where to find the best deal cars? Craiglist is a place you can start to find the car. Another is by asking information from dealers, and this may incur fees as part of the services they provided. Another thing that you can do is visit the auto auction, or even through referrals.
When you already find an offer about a car from a seller, making sure that you will check the cars for details. If possible youan create your own standard operation procedure to check it. Digging the history of the car as well as noticing the miles have been taken are essential. The first is making sure that the car is not a stolen car or under bank’s possession, while the latter is when surpassing over 150.000 miles it is advisable not to buy it. Always buy the car in the range of 125,000 miles. Check the transmission and listen to engine carefully. Also, it is very important that you test drive the car before you decide to buy it.
After all of the checking, you need to be able to establish the value of the car. In this case, you are not going to pay even a penny more to the seller after establishing the car’s value. Some useful rule of thumbs that may help are after three years a car’s life may depreciate up to 50% and a car will lose it’s value from 15-20% each year.
For a beginner, valueing can be done by using KBB or Kelly Blue Book. What you need to do is fill details like the car’s name and model number, mileage, etc and KBB will give you the estimated value of the car. There are also other similar websites like KBB that can help you to value the car such as Edmunds, NADA, etc. Mastering the price range of the car is not going to happen overnight. You can become a pricing expert by spending more time on KBB website and learn how the same car can be valued differently. Important notes that difference in value could be because of mileage, transmission and how well the car is maintained.
So, are ready to find the car?