Flipping Cars can seem like a daunting task to someone new to the game. I know that’s how I felt before I learnt how to flip a car. However, like anything in life if you split it up into lots of small tasks, you realise it’s easier than you think. In this article, I have broken down 11 key elements that need to be considered when flipping cars. If I’ve learnt anything, it’s that learning how to buy and sell cars can be done by anyone, especially people motivated to make some extra money from home. This article will provide an overview of all the elements however, I will be going into every point in more detail.
This doesn’t just mean simply going on Autotrader or other car selling sites and trusting that the seller’s price. A large part of flipping cars is paying as little as you can at the start so you make more money later. Bearing that in mind, you shouldn’t aim to be paying market value. Use different car valuation services to check yourself what each individual car you’re looking at is worth against what the seller is asking for. This could lead to you finding a car that is undervalued however, that is rarely found. Of course, if it’s overvalued either move on or make your case for a session of negotiation with the seller.
If you do find a car that is undervalued, even better. However, make sure it isn’t a scam or faulty. When you’re still learning how to flip cars, losing money is something you worry about a lot. For that reason, I’ve put together a checklist to help you protect yourself. Download it now, its free!
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Learn how to Negotiate when flipping Cars
This skill is very important when flipping cars. Most people think….. “n’awww, I’m not good at that!” Well it’s honestly not as hard you think, I swear it! I’m going to put an article together on that topic but for now, all I’ll say is NEVER pay what the seller is asking for. This is something I didn’t really abide by when I first learnt how to flip cars and I regret that now. Sellers are understandably looking to get full market value for the vehicle. This of course, doesn’t leave you room to profit so you need to create yourself a margin of profit. Essentially this is a people’s game, and you’re looking for specific kinds of sellers. This is an important point when learning how to flip cars so I’ll go into this in more detail I promise!
Trust your gut.
I’ll always advise you to learn how to conduct rigorous checks of a vehicle when flipping cars. Again, lucky for you, I have compiled another checklist for you of that topic. However, it’s also very important to pay special attention to the behaviour of the seller. Fidgeting, shady conditions and unusual behaviour are a big no no! You’re not dealing with pennies here and there are plenty of dishonest people out there, be careful.
I see a lot of scammers hoping to rip people off even before a viewing, claiming the vehicle in question is overseas, and lots of other rubbish. That’s why it’s important for you to properly educate yourself on how to flip cars safely as well as effectively. So, just tell them where to stick it!
Check the Car more than once!
Generally, the best buys when flipping cars are the vehicles most in demand, which usually are enjoyable to own. This of course, can promote reckless driving and can mean you’re buying a car that has suffered some abuse in its day.
Whether you’re experienced in this industry, or still learning how to flip cars, you should definitely try using the checklist I compiled for you when viewing a car. As well as this, consider using a third party to carry out a rigorous check by a professional. There are lots of options and in the grand scheme of things, they’re not that expensive. Especially if you’re investing thousands in flipping cars! Protect yourself from the probable wherever possible.
Each fault you find should be analysed from a financial perspective and should be accounted for in your sums. I generally don’t like to invest unless I can comfortably predict a £/$500 return on each flip.
Consider doing some work yourself when flipping cars
I’m not a mechanic by any means however, sometimes you don’t need to be. Something I realised when learning how to flip cars was the best way to maintain a profitable position was actually to do some of the work myself.
An example of that would be of removing light scratches yourself, it’s not that hard (I’ll show you don’t worry). Or maybe carrying out a polish and paint restoration yourself with some products you buy online.
The way to decide whether to outsource (get someone else to do it) or do it yourself is by putting a financial value on your time. For example, I personally like to set a value of £25.
This means that if something will take me AT LEAST 2 hours to do, and I can pay someone £40 to do, I’ll just pay that person to do it. This is a small example but the principle is consistent.
Create a WIN-WIN situation when flipping cars
You should aim to create this situation every time when flipping cars. Every flip should benefit you financially, whilst also aiding the buyer to feel like they managed to source a great deal. This comes down to a combination of the price you managed to source the car and your marketing skills. Both key elements when learning how to buy and sell cars.
Stay away from complicated situations
This is generally quite common with older cars with bigger engines. Take BMW for example, the older models have a tendency to cost an arm and a leg if it develops an engine problem. This fault could cost more than your investment and a lot of your time. Keep it simple, if you’re posed with this opportunity, walk away and go for a small flip. Risk reduction is important.
Network and talk to as many people as possible
This means to both online and offline. Join associations, forums, and owner’s clubs. That way if you find a possible flip that needs a specialist part, there will be an owner that already had it done and will let you know how much it cost them.
Face to Face is also vital. For example, I heard about someone who was about to trade in his Bentley at a dealership. They were offered £10,000 for the car. The car had a few bumps and bruises here and there. The paint needed fixing in a few places and an electric window had developed a fault, hence the low offer from the dealer. Luckily a friend of mine gave him a call randomly and was told about the deal. He immediately offered the guy £11,000 for the car and is currently working on the fixing the faults in partnership with a mechanic he knows. He is looking to spend less than £2,000 to fix all the issues. The market value of the car afterwards is approximately £16,000.
That’s serious money for anyone. This deal wouldn’t have happened if he hadn’t made a few calls and that’s the point I’m trying to make. Making calls and getting the word out are key elements when learning how to buy and sell cars. Do the same as my friend, and let people know you’re interested in buying cars. I see a lot of people that shy away from simply picking up a phone and speaking to people. Don’t be that person. Talk, mingle and create your own opportunities. If you’re serious about learning how to flip a car and making serious money be prepared to put yourself in uncomfortable situations in order to grow.
Stay within the law when flipping cars
Within the UK, if you’re flipping cars you need a motor trade insurance policy and possibly some dealer tax plates (but you can get away with this, I’ll show you how don’t worry).
Within the U.S. it’s a little more complicated as its split up by each state. As this is a complicated issue, I’m going to do a special post just on this topic. So if you’re serious about learning how to flip cars hang in there!
Think about the bigger picture
You should envision multiplying the amount of cars you hold at a time and keep thinking about flipping up. I know of people who have literally flipped up to a Lamborghini. I know someone who now owns 3 Bentleys from flipping cars! Crazy right? They aren’t car mechanics or even specialists within the automotive sector, they just learnt how to buy and sell cars, kept their eye on the ball and kept flipping. Now they have assets worth close to £50k. It just shows the potential of what anyone can do. That of course, includes you, whether you’re a stay at home mom, or a bored student with time to kill whilst applying for a soul-crushing job (lol).
The idea of this blog is to guide you through that process anyway and show you exactly how to buy and sell cars, and maybe own a few Lamborghini’s yourself along the way! You have to start though, teach yourself how to flip a car, just one, and then look to move on to more.
A key point is never run out of deals, keep yourself a pipeline of potential flips for around the corners and make sure you maximise your time effectively. Never stop looking for the next opportunity for yourself, as soon as you stop, the money will stop. Your goal should be to buy at least 4-5 cars per month and create yourself an extra £2,000-3,000 per month. If you fall short of this, no problem, just keep your targets high and even if you fall short, you’ll be better off than most.
Failure when flipping cars
A mistake some people make is assuming that failure is a life-destroying occurrence that ruins dreams, ambitions and means that you should give up.
I’m lucky enough to have failed in business ventures myself and I honestly, looking back, feel like I benefitted from doing so. That may seem ridiculous to you? If it does it means you haven’t properly committed to business before. All the role models and entrepreneurs I follow speak about the value of failure and how it has shaped their mind-set and character into the person they are today.
Now in our case when flipping cars, failure could mean making a loss on a flip. This happens to some, rarely may I add, but it does happens. It is important however not to give up and let it cripple you. My advice is after you make a mistake in anything! WRITE IT DOWN. Document exactly what you did wrong and what you should have done instead. Keep a journal of your mistakes and come back to it once a month. If you’re reminded of your mistakes regularly, you will rarely repeat them. Alternatively, failing to make a note of what you did wrong means you will forget about the mistakes you made and most likely only remember them after you repeat them.
I read about this technique in an amazing book you’ve probably heard of, ‘How to Win Friends & Influence People’ by Dale Carnegie. I usually listen to it on audiobook once a year just to refresh the skills in my head. The book covers the best ways to deal with people when attempting to achieve your goals. Its worked wonders for me and helped me grow as both a manager and a car flipper
You should do the same.
Don’t sell yourself short, you can start flipping cars yourself and make some serious money from home. You don’t need much, just some seed money. I’ll show you all about how to buy and sell cars, just bear with me and subscribe to my newsletter and I’ll have to excellent content for you.
If I missed anything out, please let me know in the comments, your input is invaluable!
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