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Buying & Selling Cars/Exotics

26K views 36 replies 17 participants last post by  Lamborghininini 
#1 ·
Hi Everyone-

Long and the short of it is. One of my best friends and I tested out buying a few cars and flipping them on craigslist. He's the mechanic, i'm the one with some capital and some business smarts. They were a success. Perfect. I cashed out some of my investments and put up 15k. We're going to get get our dealer license and do it as a business now that we know we can successfully do it.

I have a few questions. Has anyone done this before? How are the auctions? I bought a program from exoticcarhacks.com and have been following it closely.

Which leads me to my next question. If I bought a Lamborghini Gallardo on craigslist, how easy is it to flip? I live in Houston. I found a handful all over the US which I believe are "good deals". Are salvage cars absolute deal breakers to you all? What about higher mileage? Any advice you can give me would be appreciated. We're just two 25 year olds trying to make it to the top. Here are a few examples, they're all from personal sellers so they are negotiable. It seems like most Lamborghini's for sale for a good price are in California.

losangeles.craigslist.org/lac/cto/5505596187.html
lasvegas.craigslist.org/cto/5467732134.html
orangecounty.craigslist.org/cto/5516282365.html
losangeles.craigslist.org/lac/cto/5488969220.html
 
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#3 ·
Greetings and salutations and welcome to Lamborghini Talk, ndavis. :)
Flipping Lambos is ... well, let's just say, risky.
I honestly don't recommend it. These cars don't move fast. You are going to have your money tied up for a significant period of time. Also, those "great deals"...aren't.
They are only average priced with the exception of the first, but I wouldn't be surprised if there are issues . Also, be careful with thinking that you can negotiate and knock down a lot from the asking price with a private sale. If the seller is willing to take significantly less than their asking price, they could simply go to a dealership and get immediate cash without any hassle. That is to say, they are selling privately so that they can get a better price...and are often willing to sit and wait if needed. But this is probably the only way to do it...establish a real dealership and try to find sellers and low ball them. If you find someone who is desperate to sell and can't wait for the right buyer, you will be able to get a car $20k-$30k under market value and be able to flip it.
As for salvage...almost always a BAD idea. The cost of parts alone will make a complete repair job very expensive. With a salvage/rebuilt title, you won't be able to recoup that money. This means that a lot of salvage vehicle repairs are "bare minimum" to get them road worthy. Not surprisingly, buyers shy away from salvage/rebuilt and that makes a difficult to sell car even more difficult to sell...
 
#4 ·
You can do consignment and escrow if you get a dealer license.

A number of us buy out of state and an escrow service would be helpful.

I know of a few exotics dealers. Most are privately owned. I think most of them push for consignment instead of purchase out right as working capital can be an issue for a small outfit.

For luxury cars it is often easier to buy out right. Craigslist is ok but I would also advertise on eBay.

Good luck!
 
#5 ·
Buying salvaged vehicles, fixing them up and selling them could be profitable. I really think it depends on the type of audience you are marketing to.

Your typical car enthusiast that cares and is meticulous about the condition of their exotic is probably not the right market. But there is a whole other world of buyers, that want a lambo for the sake of "balling" or "stunting" for videos, lifestyle projections, etc that this just may work for.

Im not sure as I dont have contacts or associate myself with people that live like that, but I am sure there are plenty of people out there that would like to be ballin on a budget
 
#6 ·
Thanks guys for your input. I was curios because I was thinking of selling my SL550 and picking up a Gallardo for lets say 70. Take it back home to Houston, get it detailed, take better pictures list it on Cars.com, autotrader.com, craigslist, eBay, as well as forums. List it for lets say 90. I would have it financed and drive it until I get a buyer. I would do this continuously. Then I would also grow my car business until I can eventually open up an exotics & tuning dealership. Ultimately own something like UGR as well as buying and selling exotics.
The reason for the question about salvage is, that first Lamborghini I had posted was 75k for a spider, it should be worth 100-120. But because of the mileage and salvage title, its at 75k obo. I prefer a clean title car myself, but I wouldn't be opposed to buying one for the right price. There's a handful of Lamborghini's I have found that have salvage title. If no one else felt the same way, I would know it would be an impossible sell.

Consignment is a good idea, but there's people in Houston who already do that and their doing a good job at it already. Escrow is a good idea, especially because of how rare these cars are. But it seems like there's a handful of pepole who already do it and are doing it well. If i'm going to build something, its got to be either unique or better than what others are doing.
 
#7 ·
If you are trying to flip cars you should not be looking at exotics. I used to flip cars that were under $5k when I was in my teens, was an easy way to make a few extra bucks without a huge investment. You have a lot more people looking to buy a $5k car than a $100k car.

I would not touch salvage title cars no matter what the cost.
 
#8 ·
I appreciate it. And you're absolutely correct. We flipped a few cash cars (under 4k). They go quickly. Thats what I'm focusing on right now until I have more capital. It amazes me that Texas Direct Auto does 550 million a year in sales. They're like Carmax but more prominent in Texas. Even if they were operating at a 10% profit margin that's 55 million a year!!! I emailed the owner asking him if he would potentially mentor me or at the very least let me ask him a few questions. I never got a response.

The only reason I was asking about the exotics is because I could enjoy it while its for sale unlike a cash car lol. Also because its someone else's money tied up (the banks)
 
#9 · (Edited)
Of course you didnt get a response. Did you position to him in your request what was in it for him? Or were you only thinking about what you could gain?

Want to learn their operation? Why not get a job there and start talking to people that work in the different departments there? They make money because they are all about volume. They make 10% margin (or whatever they make) but live and die by the volume. Guess what it takes to drive the volume they do? A very large bank roll and a team that is excellent in operational efficiency.

Finding a gallardo for $70k and flipping it for $90k just because you took some nice pics just doesnt happen often enough for you to make a business of it.
"If i'm going to build something, its got to be either unique or better than what others are doing." - Whats unique about buying a broke lambo, detailing it and taking nice pictures of it and trying to flip it for 30% profit?

Honestly, if you are really wanting to get in this business, do what shabana motors does. Buy a bunch of cheap cars, finance them out to people who typically cant afford to pay cash for a car but can make payments. Put lojack on those bad boys and repo the car when they miss a payment. There has got to be good money in that. But you will also have to deal with repos and such etc. But nothing in this world is easy when it comes to making money.
 
#10 ·
Honestly I don't know what he could gain from me that he doesn't have already, maybe it was selfish of me to ask? I just figured most people are hitting him up for money, a job, etc. I was just asking for some advice over coffee or a day of shadowing him. I don't need money or anything serious. Just there is how I started, this is how I grew, here are some problems I overcame and how I did so. Thats all. I know I would do it for someone else.

As far as working there, that's a terrific idea. But to quit my IT Engineering job at HP to work for probably 1/3 of what I make is a very very very tough decision. I'm willing to do so, but I'm trying to avoid that if possible.

The flipping of gallardo's wouldn't be my business per se, it would just be some passive income and having the enjoyment of a gallardo.

As far as the shabana motors idea, I think its a solid idea. The only thing with it is, most of your clients you're selling to can't afford the car in the first place and you're also charging them a ridiculous interest rate. I have a heart and I can't rip people off like that.
 
#12 ·
There's not a lot of people on lamborghini-talk who would buy a salvage gallardo. But that doesn't mean they aren't out there, especially if you knew that it had been properly looked over and fixed. There's a guy who buys, fixes up and sells lambos, I think his name is Dr. Murcielago or something. People say he does the minimum work necessary and hides the flaws, so he has a terrible reputation. But if you developed a solid reputation, I think there's people who would spring for a salvage car for a good discount. If Roy from Cats or Jason Gianetti or someone with a good reputation brought me a salvaged aventador that had been gone through and brought back to good operating condition I would be happy to buy it. It affects resale but it changes the entry point and opens it up for a different group of buyers. If it's been brought back to spec by someone competent then the only difference is in perceptual value. If you add to that perceptual value with your reputation or add a warranty to it, then you might have a niche all to yourself.

To actually make money at this, you'd need to have a solid mechanic as a partner and deep enough pockets to go for a few unprofitable years while you built up your reputation.

We are headed into uncharted territory, 14000 used Gallardos floating around and getting down to the price point where it's a first exotic for a lot of people. There's going to be a lot more Gallardos needing parts and probably a supply of salvaged Gallardos. There's probably a business opportunity in here somewhere for someone, but it won't be for the people who are currently supplying full price Lambo parts. There will be a new breed of DIY lambo owners who figure out how to hack their own LARAS systems. We're not talking about your typical lambo owner who trades in for a different exotic every few years. The Gallardos are going to end up with guys who bought a dream car as a life goal and they're going to keep it forever. Or midlife crisis guys who might have bought a vette. Or they are going to become reasonably priced track cars. Either way, there's 14000 of them out there living in a new price point, with owners hoping to maintain them at a much cheaper cost than it's traditionally been. Any time there's change, there's opportunity for those who can see where the road is turning.
 
#16 · (Edited)
I appreciate everyone's input. I'm not trying to get rich quick or not put in the work, thats hogwash. I read a lot because it allows you to borrow someone else's brain and learn from their successes and failures.

Also - for every single person here that said I cannot find a "deal". Here is a perfect example.
http://www.lamborghini-talk.com/vbf...e-rebuilt-2004-murcielago-150497/#post1283209

I am going to potentially buy it tomorrow. I'm not some kid who makes 10 bucks an hour. I cleared 103 last year, at 25. I'm no where near as successful as most of you all. Flat out. But I'm working on it. You don't have to be mean and say stuff about "successful businesses owners. I will get there. I'm just trying to accelerate it.

My main questions honestly was- Does salvage scare you. Does higher milage scare you. Julio from craigslist whose buying a $3000 Maxima holds a different mindset of someone who makes a half million a year whose looking at Lamborghinis. I'm not "flipping lambos" as a scam or anything like that. I'm buying a Lamborghini because I can afford it, but If I get the one above for 60 i could easily sell it for 80 I would think. I was simply asking for some advice from people who have been around the block longer than I.
 
#18 ·
Does salvage scare you. Does higher milage scare you.
Yes, salvage scares almost ALL of us. Partly because of the quote below from sam23. And most of the rest of the reason would be difficulty reselling, even at a reduced price, because again, salvage scares almost ALL of us. Bargain Lambos are about as scary as bargain surgery.

Higher mileage? Doesn't scare most of us. Older car with low mileage - more scary.

Fixing it to a high level (which would build a good reputation) is cost prohibitive because parts are so expensive. It's not like you can easily go to a salvage yard and "pull" parts from junkers. Sourcing parts means going to a dealership and very expensive parts. It might look like a $10k repair job, but trust me, it is NOT. There is a reason the insurance company totaled the car. A member on this forum got rear ended while stopped at a light and the repair bill came out in excess of $50k! That is without frame damage! Now imagine what the repair estimate must have been for an insurance company to total a car and auction it as "salvage" or "rebuildable". What it means is that you will end up with a vehicle that costs MORE than the market value for an equivalent CLEAN title vehicle.
 
#21 ·
What are you basing that on?
Have you inspected the car personally? Have you sent the car for a reliable and independent PPI? Are you taking the word of the seller (because seller don't lie, right)?!
Again, do the legwork first. THEN ask for advice. For starters, negotiate with the seller first and see where you stand. Then contact your bank and see if you can get financed. Then contact your insurance company to see if you can get insured. Then find a place where you can get the car inspected (PPI). Get the PPI and see the REAL condition of the car and how much it might cost to fix it to near mint condition (a PPI at a Lamborghini dealership would be best for this). To sum it up: find out if you can afford it, can insure it, can fix it. AFTER all this, you will know what it will cost and you will be in a better position to know whether or not you can recoup this on a sale. If you are still unsure or want confirmation, then you can ask here. There are many knowledgeable people who can assist you then but right now it is just meaningless speculation.
 
#22 ·
Absolutely, completely understand, you're right most people talk but it's a matter of going through with it. I'm contacting a few banks today. Anyone have any they recommend, especially in regards to rebuilt titles. I'd like a 72-84 month car payment. I absolutely will do a PPI at Lamborghini of Houston. I received an insurance quote of 600 a month. Up from 150 a month on my sl550. More than I would like but still affordable. The gallardo would only be around 300. Ideally I want a Lamborghini between 60-85k that will hold its value and or increase slightly when I sell it. I just want to look and get the "right" one.
 
#23 ·
600 a month for insurance is affordable ... yet you want to finance a salvage exotic for 7 years?

AND you are choosing a salvage for its resale value.

This does not add up AT ALL.
 
#29 ·
I'm in agreeance with you in the sense I too believe it's more than just a window regulator or motor going out. I'm sure there's more.

I did a regular 2004 murcielago non salvage title. Do you recommend anyone besides State Farm? Who does everyone else use? Does anyone know if salvage rebuilt there's better companies to use?

Nick
 
#33 ·
I don't think you can finance a salvaged title, know why? Because the bank doesn't have an asset as collateral, they have a hunk of metal that should be a car but was fixed with shoddy work.
600 a month for insurance plus finance fees, don't forget a loan like that will certainly have an early payoff fee. So you plan to finance a car for a couple of months and then flip it... Let's run the numbers.
Since your mostly looking at a salvage title plan on 12 months to sell, no seriously it will take 12 months unless you unload it for the price you paid. During those 12 months you will rack up $7200 in insurance and around $6,000 in finance fees not to mention any repairs needed which I would guess average around $2,000 per year. Yet your car is salves so something was missed.
So a year later you will have spent 15k on a car that you want to make 15k on. Now you have risk so you are getting zero return on your risk...
As you said, you are not as successful as so,e of us so take our advice and forget this idea for 5 years until you are successfully flipping 50k and over cars.
Baby steps
 
#35 ·
I have done my fair share of flipping cars and still have a dealers license. I was fortunate enough to get it through family who own dealerships.

Its not as easy as you think. It takes lot of time, patience, and dedication. I did not really read through this thread fully but im sure people have advised that.

Especially on a higher end car, most people that are looking for that car usually have money and dont wanna buy something salvaged. The customer that will come in for a salvage car is usually on a budget.

Start small, the cars that are 5k and under you will make more than the high end market. I have a family member who has 200 cars on his lot and they are mostly 15k and under yet sells more of this 5k and under cars more.

and lastly, craiglist is not the best place to advertise. Gotta hit the big boy ad platforms like cars.com, autotrader, cargurus and etc. which cost an arm and leg
 
#36 ·
i say give it a shot you are young and can afford to make some mistakes. just dont over extend yourself.i own 2 used car lots that i self finance the cars.the average cost of the car is $6500.yhis is a good business.it doesn't sound like you have the capital to self finance the cars. the reason i started doing the self finance is i couldn't compete on the $15000 cars with the established dealers. if you could find someone with capital to back you it might work

GOOD LUCK!!!
 
#37 ·
I think buying and flipping 5k cars should be your bread and butter.
If you can swing a loan for working capitol and buy 5-10 cars and flip those . Buy flip reapeat. You will get to a point where you can afford to get into the higher end vehicles.
Remember you make your money when you buy the car. Buy the car 'right' and its money in the bank.
Dealers licenses arent as hard to get as people think. In California you need a bond, insurance, a parking spot and a sign. Some properties zoned for autosales sell office space and a parking spot for small dealers like yourself.
Flipping cars on craigslist is illegal in ca after your 5th car in a year.
Pay your taxes.
Buy a gallardo at a good peice enjoy it then have a chance to get your money back or possible a small profit.
Stay away from salvage or rebuilt titles. In my experience they are a headace
 
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