Flipping cars is an excellent choice for a side hustle that you can turn into a business.
Making money flipping cars is so exciting due to the dynamic nature of the job. You have to meet many people, look for cars, and negotiate.
However, flipping cars for a living requires thorough preparation.
You have to get capital, license, contacts, and compliance with local regulations.
If you can secure those, you are ready for the exciting life of flipping autos.
The guide before you serves to answer the question – How to flip used cars?
Once you read it, it all comes down to your will and ability to turn flipping cars into a side hustle.
And, eventually, into a business.
Flipping Cars Legally – How To Flip Cars Without a Dealer’s License
Keeping your business legal is among the top priorities of any entrepreneur.
So, the first thing you want to do is learn how to flip cars without a dealer’s license.
In practice, that is possible, and you can do so. However, if you want to keep growing your car flipping business, apply for a license.
For instance, each state in the US allows you to flip a limited number of cars per year.
The limit varies from state to state, and somewhere the limit is as low as one car per year.
To start a car flipping business, you can start without a license.
Once you decide to start flipping cars, it is time to develop a car-flipping strategy.
That means that you want to know where to find the cars, buy them, and where to sell them.
For that, it is best to document your ideas and develop them into a concrete process.
Creating a Car Flipping Strategy
The car flipping strategy consists of several elements. First, you want to know where to get the cars for sale.
Then, you want to locate your buyers or learn the market. And, then you need to approach the potential buyers or advertise the cars to sell them.
Here, the whole thing depends on finding excellent offers for flipping.
That means you need cars that are in proper shape and affordable.
So, you want to search far and wide to find cars.
Even before you get the cars, you want to research buyers target market. Here, you want to consider where you live and how much money they have.
To learn that, look at the most sold cars in your area.
Finally, you need people to buy the cars.
For that, you can tap into your network, advertise locally, or advertise online.
One of the best ways to get more customers remains a direct referral.
Investment & Capital
Whatever route you want to follow, you need capital to flip cars.
In an ideal scenario, you have enough money to start a car-flipping business. If that’s not the case, you should look at jobs that pay at least 20 dollars an hour to earn enough capital to start this business.
However, that is not always the case. Instead, you need to loan money or find another way to get the initial investment.
It is possible to start a car flipping with a few thousand dollars.
However, to have a clean start, it is better to have around 10.000$-20.000$. If that is too much for you, look for loans.
Various banks and services offer loans and other ways to get cash.
Additionally, you can look for services to loan money, like hard money loans. Finally, you can ask people you know to loan you money.
Make sure to start flipping cars as soon as you loan the money.
That way, you can repay the loans and achieve profit to make your newfound business stable.
Where Car Flippers Find Cars
Now, it is time to look at the essence of car flipping. It all comes down to being able to find affordable cars.
Without affordable cars, you are unable to reach a profit margin to make the business viable.
There are several ways to find affordable cars.
And, it all becomes much easier once you get skin in the game.
But, for the first few months or a year, stick to craigslist and public auctions.
It offers you both offline and online methods to look at many cars in less time.
Also, you can make valuable connections during public auctions and get better offers for new models.
In the end, it all comes down to networking.
A newbie car dealer desperately looks for cars to flip.
A veteran car flipper gets a call and knows when there are offers worthy of flipping.
Craigslist is an excellent way to start flipping cars.
First, you can browse threads by topics and geo-locations. Second, you can place your offers and search for other deals as well.
Finally, you can set notifications and let the platform notify you when something of value pops out.
With craigslist, you need to be web-savvy. This platform allows you to buy any product/service on the planet, and people use it to start different type of businesses. We covered one of those in our guide on flipping furniture for profit.
That means that you need to know how to use platforms, search on them and browse them.
Without that knowledge, you have a hard time finding offers that are worth your time.
If you have no contacts or network, spend a few hours a day on the platform.
With determination, you can find those offers, contact people, and flip cars in no time.
Once you build a network of suppliers, you can rely less on craigslist.
Regardless, it remains a valuable source of information and contacts you can always use.
To become a veteran car flipper, you need to frequent public auctions.
Here, you can look at the cars, talk to sellers, and get a feel for car flipping.
With public auctions, there are two things you have to do. First, you need to know when and where to find them.
Second, you need to use them to build your network. Meet as many sellers as you can, get their contact, and stay in touch.
That way, you can find better offers and find cars faster than usual.
Of course, once your business grows, you can spend less time on public auctions.
Anyway, both craigslist and public auctions are there to help you grow a network.
The network is the greatest asset of a car flipper.
Car Buying Budget
Now that you know where to find the cars to flip, it is time to set a budget. It is best to start with $10.000 if possible.
Of course, that may not always be viable. So, you can halve that to $5000 as your initial budget.
After all, it depends on your ability to flip the cars. You can start even with $4000 if you know that you can flip a few cars for that money.
So, it is better to focus on car flipping, keeping a flexible budget.
Flipping Cars 101
Flipping cars is a simple process.
You buy a used car, fix it up, and then sell it to another person. That is all you have to do.
However, there are a few things to consider before you start flipping cars.
You need to know how to fix up a car. And, you need to know how to price the car.
And for the latter, you need a skill known as negotiation.
While it all sounds simple in theory, it is a much more complicated matter.
It takes a keen eye and experience to pick a car to flip.
Picking the wrong car can hinder your progress and profit, reducing your chance to sell.
Therefore, you need to identify the car almost immediately. That is if you want to make flipping cars a full-time business.
Fixing Up The Car
The first thing you want to look at is the state of the car. Usually, there are several types of fixes you have to fix.
First are cosmetical, second are car part fixes, and third is mechanical.
Start with the last mentioned fixes.
Mechanical car fixes are fixes that include fixing essential systems in the car to use it again.
In those cases, it is best to avoid buying a car. Those cars are more affordable, but it can be quite a hassle to fix them.
It is almost always the case that those cars come with additional expenses. Thus, if you encounter those problems, avoid buying the car.
Then, there are car part problems. A car you want to buy may experience a problem with a single part.
Depending on the price of the car and that of the fix, you can flip that car.
However, it is up to you to decide if it is worth buying such a car.
Finally, there are cosmetical fixes. These include paint or other aesthetic points of the car.
Also, these fixes are the cheapest and mandatory if you want to increase the price.
Do them anyway to increase the value of the car for flipping.
Pricing & Selling Your Car
You want to price a car to reach a profit margin.
For example, you bought it for $3000.
Now, you want to sell it for $4000 to make a profit of $1000.
That is a plastic example of how to price and sell your car.
Additionally, you can look at how you can improve the car to get even a better price.
For example, painting a car may be a quick and cheap fix to raise its value.
Also, always have a list of buyers ready to offer your new car.
Then, you may proceed to negotiate. Negotiation is the crucial skill you need to succeed in the business.
The simplest negotiation tactic is to find the middle ground with the buyer and upsell.
For example, always ask for a higher price you would like to get.
But, stay ready to drop the price to a point where you are willing to sell.
Whatever you do, stay calm and polite.
Ask them what they want, and try to find out what they need.
Then, try to persuade them that you have something to ail their needs.
Even if you lack the actual model a person needs, try to showcase your car as similar to that model.
Then, offer them a car at an upsell price.
If they disagree, offer them to do something, and reduce the price to the price you want in the first place. That makes the deal better than it is, and helps you to close the sale.
With that, you are ready to start flipping cars.
Take the basics here and start implementing in your business.
Make sure you have the initial capital for the business. Then, make an adventure out of it.
Make money and have an excellent time while doing it.