The United States Automobile industry is worth $35 billion as of now, which is roughly equivalent to GDP of Yemen.
Yes, you read that right. And this $35 billion does not even include Car Flippers who buy old sets of wheels for pennies on the dollar and yield a huge chunk of profit by reselling them. Car flipping is a huge unorganized industry that is a livelihood for some and a side-hustle for many.
The best part about flipping cars for money is that one gets hooked to it. The money is decent and cheap thrills of earning good cash for just changing hands are so extravagant that you feel like Wolf of The Wall Street.
But before the greens start coming in, you need to learn how to flip cars; how to make money flipping cars? Well, that just happens over the course of time.
PRO TIP: Flipping cars as a side hustle is fine, don’t sacrifice your full-time job for this.
How much money do I need to start flipping?
Before learning how to make money flipping cars, you need to figure out how much hard-cash you need to launch this side-hustle. Thankfully, you don’t need to take a loan or something to kick-start your flipping empire.
Just pull out $3,000 to $5,000 from your savings and that much money should be more than enough to hit it off. Make sure that you don’t take a loan if you do not have the money; you can wait for a while, gather your savings and then start flipping cars.
When it comes to your first flip, play it safe; invest a small amount in your first car and be prudent. Doing so ensures that you mitigate the risk and if your first flip is a failure (let’s hope not), you learn a lesson and don’t end up losing too much money.
Where do you get cars to flip?
You need Eye of the Tiger for this one, any car can be your next potential flip, it might turn out to be your greatest yield yet (and that’s when you get hooked to this endless enigma!) or you might crawl into your bed every night while ghosts of your failed-flip haunt you.
Here are the three best places you can search for (and find) cars to flip:
If there was a Mecca for people flipping cars, Craigslist would be the undisputed winner. As a person learning how to flip cars, you need to learn how to spot a good deal instantly. For a start, post an Ad on Craigslist; you can start with something like this:
“I want to Buy a Car, I’ve CASH Right Now! So Don’t Trade Your Car, Sell it to me”
PRO TIP: It doesn’t really matter if you notify the buyer/seller that you’re flipping car their car(s), Keep in mind that be it buyer or seller, they all prefer dealing with an honest person.
The people replying to your queries? They’re your potential clients, contact them. If there’s a phone number mentioned then call the person right away. Meet your prospective clients at public places for your safety and theirs.
2. Your very own Neighborhood
If you find cars sitting in lawns, covered with dry leaves and weeds growing all around the wheels, there’s a cent-percent chance that car is up for sale and the poor owner is too lazy to sell it off online (or he/she hates human interaction!).
If you find a catch like this one, ring up the doorbell and politely ask if they’re willing to sell the car. Even if they refuse, notify them that you’ll pay cash up-front and look at their face light up. Cars like these are well-maintained and just need some elbow-grease and good-ol’ hand wash to come out as new.
PRO TIP: Even if you don’t seal the deal, give your contact details to people in the hood, they might refer you to some potential clients next time someone tells them they have to ‘sell their car’.
3. Car Dealers
Car dealers do exactly what you’re trying to do- the only difference is that they make money flipping cars for a living. To start a car flipping business, one needs a license, but what you’re learning in how to flip cars as a side hustle, because $1,500 extra once in a while wouldn’t hurt.
PRO TIP: Car dealers might offer to sell you and take a sliver over the cost price (plus any overhead expenses) if you make it clear that you’re buying the car to flip it later.
They might call you later if you’re a ‘good person to deal with’, if they need a new car/ they have a good deal for you to flip. Either way, it’s a win-win situation.
‘How to Flip Cars?’ for Rookies
When a new student joins college, s/ he’s provided a ‘handbook’- which is nothing but a beginners guide on how to survive that place. Keep these 7 points in mind before flipping your first car:
1. Law of the Land
Just to make it clear, flipping cars isn’t legal everywhere. A casual one-off flip won’t hurt and you’d get a decent idea on how to flip a car, but don’t forget to go through DMV’s rules and regulations.
If you’re REALLY hooked to flipping cars (that means we did our job well) then get yourself a dealer’s license. Maybe flipping cars is your true calling and now’s the time to shine!
2. Know your Car’s value
A fool cannot fathom the value of Gold. This might sound offensive, but as a newbie you still need to learn a thing or two about how to flip cars. Hence, you cannot determine a car’s value by just looking at it- that comes with experience.
Kelley Blue Book is the best place to go if you need to figure out market values of new and used vehicles. Once you are aware of the price bracket your car can be flipped in, it is very easy to take a decision whether to flip it or not.
3. Sweet, Liquid Cash
Pull out your fanny packs, because flipping cars means you have to deal in hard cash. Many people prefer to enter into a contract with car-flippers who deal in cash because it’s simple; just like old times.
If you really want to learn how to flip cars, remember that cash deals always call for brownie points. Most of the people who sell their rides are in urgent need of money and if you offer cash you are in a position to bargain.
4. Big flips call for detailed Research
Learning how to flip cars is easy, but to make money flipping a car you need to know what you’re into. Flipping cars is a real challenge as every new flip calls for the same procedure altogether- your next flip’s market demand, market price, re-sale value; it all comes back to square one.
Local car dealers can help you with this- go there as a buyer, enquire everything about the car you plan to flip, and then tell them about it. Their colors will change in an instant as the advice would now come as advisors rather than salesmen.
5. What’s under the Hood?
We are going to be honest here- If you don’t have good knowledge about cars, get it checked by a mechanic. Yes, we know it would cost $200, but you don’t want to stand on thin air when your buyer points out the fault in the spark plug, let’s not forget that you told him/her that the car’s in ‘mint’ condition.
Sellers target first-time flippers and people who don’t know what they’re doing to con them. So if you don’t know how to flip cars or you’ve never witnessed a flip, get a mechanic and check what’s under the hood.
6. Physical Examination
Tire wear, oil gauges, check engine lights; check anything that may need to be replaced or could be costly to fix down the line. Common issues might be timing chains and/or brake pads that could be getting worn out.
Sometimes these small discrepancies might result in a big hole in your pocket when you get the car repaired. Also, take note of the paint job. Unlike a book, a car is judged by its cover. Make sure there aren’t any scratches that cannot be fixed.
7. Mutual Trust Paperwork
When it comes to money- Trust, Integrity, Loyalty and Respect seem to get lost in the horizon. These good deeds are replaced by Greed, Lust, Gluttony and Anger. (Yeah, I quoted Dante there, sue me!) Remember, if there’s money involved, a contract is a must.
Be it your kin or your very best friend; always do the paperwork BEFORE EXCHANGING MONEY. If you don’t do so and something shady happens, it’s just your word against theirs. You don’t want to be stuck there, believe us.
You’re ready for the First Flip!
Now that you’re aware of the basics, all this should be adequate to try your hands on the first flip- you know how to flip a car, make good money from it, and earn good $1,500 (at-least) in the process if you’re thinking right.
Put your throttle-obsession to good use-Who knows you might earn enough to upgrade your wheels to something flashy?!