Serious Question - Anyone Flip 4Runners or Toyotas?

[gamefreakgc]

So, with my wife staying at home to raise our daughter, I've been looking at alternate ways to make money. I have a good job, problem is I work for a non-profit that doesn't pay a whole lot. I do a lot of investing, etc. but with low capitol to start with, I don't get a ton of income off those investments, not enough to supplement what we need. Did make a very nice profit a few months ago off a freak market incident but I can't rely on that happening all the time to keep the mortgage paid.

That leads me to the idea of flipping 4Runners. And no, I don't mean just buying them and immediately reselling them, that's kind of sketchy anyway and I'd feel like I was ripping people off. I mean taking a broken or cosmetically damaged 4Runner and fixing it up nice, detailing it and then selling it at a (hypothetical) profit. I have a good mechanical understanding of 4Runners, Tacomas, Pickups and Corollas so I figure I would start there. Plus, our engines are easy to work on, parts are readily available and these 4Runners seem to keep their value very well!

I know the major signs to look for, I have a code reader (to see if people are hiding anything when selling and to use at auctions) and enough street sense to know when someone is lying to me.

I want to do this legally and all that, so would not sell more than 5 in a year. I think my main costs would be:

Tax on purchase (7.5%)
Title/Registration fees ($30-$100)
Possible smog ($40) - if already smogged before sale I'd trying and flip it within 90 days to avoid this
Detail ($10-$70 depending if I do it myself)

And then of course, parts. I can get most body parts and cosmetic pieces used, only engine/suspension parts I would buy new.

What do you think? Thoughts? Advice? Warnings?

 

[I_bRAD]

I wouldn't want to flip a 4runner!

Seriously though, I don't know what the market is in your area but I think it would be hard to make a profit unless you've got a source for cheap parts (like your own junkyard) I got mine relatively cheaply and fixed it up, but there's no way I'd be able to sell it for what I've got into it much less make a profit.

 

[white_n_slow]

I have made a :edit: measurable profit selling a truck here and there--others I have broken even or lost a little. But compared to all the other vehicles I've owned, toyota trucks have always been the best resale.

To me, this is more a question of what your time is worth. You're probably not going to turn more than a few thousand bucks profit on any given vehicle. And that would be optimistic. Average "flip" would probably be less than that, and how much time would it require?

the point that I_brad makes is a good one too, the more money you put into the car, the harder it is to recoup.

Seems to me like a good hobby for someone who is retired and has nothing better to do. If you actually have a job that takes up real hours during the week, I would be pretty hesitant.

But you could always just start with one and see how it goes.

:edit: Just like flipping houses, I think this has just as much potential to lose you money as it does to make you money. And I have seen a lot of people lose money on houses

 

[jeremyc74]

I've considered doing the same thing. My regular work is sporadic, and sometimes I have weeks of downtime in between projects, so I considered flipping cars to keep me busy and out of the bars. At the end of the day I came to the conclusion that it wasn't going to be worth it in most cases after you factor in the costs of riding around and looking at vehicles, title transfers, and the chances of occasionally getting in over my head. So I bought an X-Box One and Forza instead. It doesn't make me any money, but it at least keeps me occupied and not spending it!

Of course, S. FL is a tough market for cheap used vehicles, so the math might work better in other locations.

 

[v_man]

The main concern I would have is that you're trying to do as a side job, what people do full time and professionally, make money flipping cars. It seems like stiff competition , especially with Yota's that have a pretty universal reputation for being reliable and holding their value. I say give it a shot until you actually start losing money. The more mechanical work you can do the better....

 

[02SE]

About 20 years ago, I thought I'd do a similar thing as a sideline business. I have a friend who is a car dealer, so I'd go to the auctions with him, and buy cars through him at his cost.

He was buying so many cars, that a few more didn't bother him.

At any rate, I technically made a return on my investment in the cars, but it took my time, during which I could have been doing other things. So I had to decide what my time was worth.

Ultimately I decided that the only way to truly make a living at it, would be to become a Dealer myself, and devote myself full time to it. Even then there's no guarantee of success. So I just stuck with my own unrelated business.

As a part time side gig, buying cars even at low dealer auction prices, and then reselling them, just didn't make sense for me.

I guess the only way to know if it will work for you, is to give it a try.

 

[1985taylor1925]

I think you could make it a profitable endeavor if you are very selective in choosing the vehicles to flip.

My long term goal is to get into real estate (flipping houses and accumulating rental properties) and I've been reading books on strategies to be profitable. Most investors use a formula which adds up all expenses for renovation, and then considers all the other stuff (taxes, amount of labor, turnaround time, realtor fees, advertising, etc, and of course the local market).

You could basically do the same thing with vehicles, and then stringently stick to your formula to determine if its a good investment or not. As long as you know when to walk away based on the numbers, even if the deal "looks" good, then you can be profitable.

I would imagine your biggest money makers would be projects than need a significant makeover, just like with houses. I.e. if the truck needs a new engine, tranny, axle, etc, and you can get the parts at a good price and do the work yourself. But on the other hand, you might find a truck for $5000 that just needs a tune up with brakes, plugs, a good cleaning etc, and be able to do the work in a few days and put it back on the market and get $6000. Maybe you only make 500 in profit, but if the turnaround time is quick its worth it.

Im sure you know everything Ive said, but those are my thoughts

 

[repo]

I think doing it as a hobby could be fun and pay for your own parts/upgrades but I doubt you could make any decent money from it. Plus the subprime auto loan bubble has messed up the used car market.

 

[white_n_slow]

Put it this way: if you have enough free time to buy/sell/work on cars in your evenings and weekends, get a 2nd job delivering pizza or waiting tables. You'll make more money

 

[KidVermicious]

I know a couple guys that flip for a living. Between working on rigs and going to auctions and trolling the classifieds, they burn 10-12 hours a day, six to seven days a week. They do it because they like it, not because there's huge money involved.

Every now and again I troll the classifieds looking for a quick buck. I find one now and again, and I've never lost money on a truck. But I've never made more than $1000 either, and I was in the right place at the right time for that one. $400-$500 profit is more likely, and I don't register the cars in my name before selling so take tax and license fees out of that if you're going to do it right.

 

[gamefreakgc]

Thanks for the input, it kinda confirmed what I was thinking. 4Runners sell for a premium in my area, much higher than what you'll see on Kelly Blue Book.

I enjoy working on cars when I have the time (I hate having to fix my DD in a time crunch to get it back on the road the next morning), so it might just work. I'm not looking to make a living out of it, nor register as a dealer. Just something to earn some money on the side. In CA, once you sell over 5 vehicles in a year you have to register as a dealer so it'd be only here and there.

A friend at my work bought a Mini for $6k and after $3k in repairs is looking to sell for around $17k. I don't think I could drop that kind of money though, so would be buying "fixer-uppers" in the $1k-$2k range and hoping to sell around $4.5k. That would give me a lot of room for error, in case I encounter a more serious issue.

Like you guys said I'm not about to quit my day job (2nd job is out of the question though, I want to be able to do this at home on my own time) but I think I might start with one and see how it turns out. Maybe I'll make $1k-$2k on it. Maybe I'll break even. Maybe I'll lose a bit. I think it all depends on the vehicle, I'll be patient and wait for the right one to show up.

 

[LeeMajors]

Thanks for the input, it kinda confirmed what I was thinking. 4Runners sell for a premium in my area, much higher than what you'll see on Kelly Blue Book.

Same here. I could buy them for 3k in FL and sell them for 6k here in SC. It's insane.

I paid 4800 for a truck that'd sell for 7k here.

I've toyed with this notion myself but besides the fact that my wife would never allow it, I feel like the risk for me to lose money would be pretty high once it got into hidden repairs.

I lucked out with a truck that was seemingly well taken care of, but the reliability reputation leads a lot of people to neglect the nuts off a Toyota.

 

[white_n_slow]

Same here. I could buy them for 3k in FL and sell them for 6k here in SC. It's insane.

I paid 4800 for a truck that'd sell for 7k here.

Maybe this is a better business model?

 

[Buck208]

I'd say go for it if this is something that you have an interest in doing and you have allocated resources for it. Stick with your budget and know when to walk away. Don't take out loans for this endeavor and reinvest the earnings into acquiring new "projects". Good luck and keep us posted.

 

[LeeMajors]

I'd say go for it if this is something that you have an interest in doing and you have allocated resources for it. Stick with your budget and know when to walk away. Don't take out loans for this endeavor and reinvest the earnings into acquiring new "projects". Good luck and keep us posted.

I agree, it sounds like a lot of fun. But as an income replacement, there are probably more profitable ventures to take on--like literal wage work.

 

[gamefreakgc]

Yeah, I just want something I can enjoy and maybe make a few bucks. Plus I can stay at home and spend time with my family at the same time - no other job I can do offers that.

I just became debt free so I'd definitely never take out a loan for something like this! Now to just find the first project...

 

[Scramble]

Yeah, I just want something I can enjoy and maybe make a few bucks. Plus I can stay at home and spend time with my family at the same time - no other job I can do offers that.

I just became debt free so I'd definitely never take out a loan for something like this! Now to just find the first project...

In NY if you get a dealers licence you don't have to pay sales tax on your purchase. Sales tax & paying someone else to do any repairs will really eat into any profits. I think if you get some cheap & fixem up nice you'll make some money. You know they have great resale value. GL

 

[68dave]

I've bought & sold plenty of toyota trucks over the years. They sell fast! i've sold a couple running & driving 4runners with rusted frames to a guy for export. Buyer said he don't care about condition as long as they drive and have clear titles. Just this pass Wednesday i bought a 1 owner 96 4runner with a seized 3.4 for $200. I'm gonna install a used engine, i told my wife i'm gonna flip it but i ain't making no promises.

 

[LittleCaesar]

Maybe as a broker but that is about it. Or if you like the business try and own a dealership.

If you want to make side cash increase your automotive DIY knowledge, invest in some good tools and start doing repairs. I paid my way through graduate school doing such. It is hard to find good AC repair for a fair price in the Southeastern US. My friend's father paid for his house by repairing GM 3800 engine leaking coolant elbows every weekend for seven years.

 

[SilverRidgeRunner1]

I tried flipping back in the day until the state busted my bubble and I go a letter from them advising me that u could only sell x amount of vehicles a year blah blah... Rig with blown head gasket on the 2nd gen were typically good turn around but I gave it up because free time is valuable...