Chapter 1 – Market research

Chapter 1

Market Research

Online and Offline Resources

My number one market research method for you to use in order to get started on finding deals is, to properly learn how to keep your eyes open for opportunity. That means looking in papers, looking online, and that means keeping your eyes peeled on the streets, too. For online scanning, Craigslist is one of my main sources for finding deals. You must constantly scan Craigslist a minimum of two times daily. It only takes about 20 to 30 minutes each time to scout for deals.Simply go to www.craigslist.com and create an account. You will need a free email like YahooMail, Hotmail or G-Mail to open an account. You’ll also need to provide Craigslist.com with a valid telephone number to verify your account. Craigslist has a ‘top posting rule’ meaning that you may not post your exact free ad more than once every three days. How it works: when you post an ad on CL, it will be posted in order it was received – so if 50 other car listings are posted after your post, your ad will be buried 50 listings down and people will need to scroll down to see your ad. This makes it unlikely for your ad to be seen right away. Being too far down (like 2 or 3 days down), leaves you at 500 – 1,000 postings down and possibly further down.The chances of your ad being seen gets much lower during each passing hour and day. To offset this, you would want to be able to get your ad on top every day. You’ll need to simply create three (3) accounts on CL or write “totally new ads” in a whole different format. I prefer to have 3 separate accounts and emails. I will explain the whole process in Chapter 10 of this manual. This method of finding and selling cars will work with any other online classifieds that are popular in your State, City or Country. Another way to find deals are newspapers, classified ads, penny savers or any local ad magazines on the streets.Other online classifieds that you may use include: http://www.craigslist.com (Most popular) http://www.backpage.com http://www.ebay.com http://www.kijiji.com (now known as eBay classifieds) http://www.gumtree.com http://www.sell.com    http://www.pennysaverusa.com If you want to find more places to get cars, simply use Google and do a search for the keyword ‘auto classifieds’ and your location name i.e. “Automotive Classifieds Los Angeles”. Honestly…for myself, my friends and most of my students…we only use Craigslist.com.

Simply go to Craigslist.com then click My Account and sign up. This is what the sign in process looks like. You can also post free ads without creating an account but you must verify your post through a valid email address each time. It’s up to you if you want to create an account or not to post ads on CL. Having an account linked to an email address just makes the process simpler for yourself.

 

Go ahead, create a craigslist account if you don’t have one. Go to: http://www.craigslist.com and click on ‘My account” at the top left, then “Sign up for an account”. Simply follow instructions when signing up It’s easy.

Ebay Bidding

 

 

Signing up for Ebay bidding http://www.motors.ebay.com/

Ebay is another excellent source for finding deals. You can bid auction-style and sell auction-style or have a “Buy It Now” offer which means that you sell it for a set price. You can also have a “Best Offer” sale and see what best offer you can get. Ebay is great for selling in the States. Unfortunately, in Hawaii, using eBay is not the best method.I’m sure it can be a great resource for you people living in the States. As I rewrite this new updated version of the manual, I will say that I have successfully bought and sold many cars from eBay and it’s easy as hell! If you buy a car on eBay and need to have it transported, eBay works with a company called uship.com and you can basically setup a bid-style auction to have transporters give you a bid on picking up the vehicle for you and deliver it to your door.I recently did 2 motorcycles and 3 cars that way with no problems whatsoever. Bikes cost from $200-$400 to ship and cars can go anywhere from $300-$800 depending on the distance. It’s pretty cool. I just sold a 1960 Chevy Bel Air for $10,000 cash on eBay from a buyer in Germany! And he didn’t even come to look at the car! How crazy is that? He wired me 10k cash to my bank. Two weeks later he had a trucker come and pick it up. Simple as that. You don’t even have to know how to sell when using eBay. Just list your ad and in 7 days…SOLD! I’ll have the details of this deal in my course videos, so look out for it.If you look in the course and you don’t yet see it, don’t worry, I am still in the process of updating the video course and it will be in there soon! If you are interested in buying or selling on eBay visit: https://scgi.ebay.com/ebaymotors/ws/eBayISAPI.dll? RegisterEnterInfo   Ebay has an extensive Help section that will help you with setting up an account and listing your first online auction.

The “PME” Profit Margin Estimator Tactic:

Introduction

Here is an example of the PME tactic. First, you’ll need to go to your local bookstore and purchase a Kelley Blue Book. If you don’t already have one, get one. Not the Dealer’s Version – but the original Used Car & Truck consumer version. Amazon is another great place to get yourself a copy.

Here is a picture. It’s only $9.95 and they come out with a new version every six months. I use the same book for a year and recalculate the estimated price subtracting a hundred dollars or two off the current value every year. Auto values depreciate a few hundred dollars each year…No Big Deal. Inside the book, you will see that all of the autos are organized alphabetically.Trucks and SUV’s are located at the back of the book. You might ask, “Why can’t I just use the Apple application, Tony?” Good question. When in the field, looking at cars at auctions or when on a computer, it’s actually faster to research when you have the physical book in your hand. Seriously. At least try it out. But of course,  it’s also nice to have the App. Do a search from your phone and get one installed.

Here’s the App site: http://www.kbb.com/company/mobile/

When in the book, you’ll see auto values

in this order:  

Trade-In Value Fair & Good –  Good – Retail Excellent. 

The Retail Excellent is what a dealer may sell it for if the car is in excellent condition. The Trade-In value Fair & Good values will be your best friend. You want to try to buy below the Trade-In Fair value. If not, then as low as possible near that price range. Then you look over to the Pvt-Party Good value to see what you can get for it.Depending on the condition of the vehicle (if the car has LOW miles and is in Excellent Condition), I will price the car between Pvt-Party Good and the Retail Excellent Condition Value. Most of the time, I like to sell at a nice competitive, attractive price to blow the car out FAST! So I usually price them a few hundred dollars below the Pvt-Party Good condition value. This is what you will want to do when selling your cars. Sometimes when you scoop the car very low, you can blow it out in a day or two by selling it for Trade-In Good condition. It all depends how FAST and how much money you want to make.Try not to get greedy and ask too much or you’ll just be sitting on the car for a while longer. A few friends that I taught tried to use this method of selling cars at a higher price point. YES, they might make more money per car but they end up sitting on it for weeks at a time. I personally do not like this model. You’ll come to figure your own method after going through this course. See what works best for you. The money is in the numbers. Car deals are abundant – They are everywhere! I am happy at $1,000-$4,000 profit per car. Sometimes less. We all need to enjoy life, too. Can’t let that pass us by, right?

Example of the (PME) Tactic. As of Nov 2014 Kelly Blue Book Online Version.

I just picked up a 2009 Honda Odyssey LX Van with all of the standard options on it. Nothing special. Look at it online at the KBB site here: http:// www.kbb.com/honda/odyssey/2009-honda-odyss… conditions=&options=&path=&vehicleid=226652&mileage= 100000 As you’ll see, you have three options to choose from.

  1. Trade-In to a Dealer,
  2. Get an instant cash offer (which we don’t use) and finally,
  3. Sell to a Private Party tab.

First, you’d want to look at the Trade-In To A Dealer

tab to get some info on what dealers are paying for the vehicle. Browse all of the tabs. Fair through excellent. You can see the values are around $7,300 – $8,200. Remember these prices are a general ballpark quote, they may pay more or less depending on the condition of the vehicle.

Second, click on the Sell to Private Party tab. Check out the “All Conditions” value. You’ll see that they range from $7,800 – $9,500 if it were in excellent condition. Now, if you look in the physical KBB, you’ll see a price tab that says RETAIL. This is what a dealer will try to list the car for in most cases unless they are wholesale dealers.

This retail price is a price that you CAN USE to your advantage when listing the vehicle for sale in your advertisement, but it’s a price that you really don’t want to sell at.For example, I would say in my ad:   Retail Blue Book $14,500 Asking Only $10,500 OBO (Or Best Offer)   You always want to seem negotiable. You will get more interested callers that way. If you do that, it looks like you really are offering a deal. And it works. Plus if you got the car for around $7,000 like I did, you have room for negotiations to make the deal even sweeter! If a buyer came to look at the car and offered you $9,500, would you take it knowing that you just made a $2,500 profit? I’m sure you would.But, never take the first offer because you can make the deal more enticing to the buyer by being reluctant on the first offer. And if you did take the first offer too quickly, don’t you think the buyer would think…. ”Wow, he took the offer so quickly. I could have probably gotten it for less.” So after getting your first offer and by saying things like… “Let me think about it, I have other interested people.” It makes things more real and natural. Continue on saying things like… “It’s a really great and dependable ride and I know I can get a little more for it.”

…And just say a few PROS about the vehicle to make them think about it and want it even more. Give him or her another two minutes to think it over quietly, then you come off and say….

”OK, I’ll tell you what…Give me $10,000 and it’s yours.” Most times, if they really like the car, you would have made an instant sale and an extra $500 in your pocket. Maybe they would counter offer and say, “Okay, I’ll give you $10,300.”  …Then the ball is in your court. I usually say …”Fine, it’s yours.” And Boom! An extra $300 for 3 minutes and a little negotiation.That’s a big payoff. That’s an awesome night out. More savings for you, for sure. Remember, your goal is to buy your cars below or near the Trade-In values and this is easily done every day just by searching the Private Party Market in your local area. You just need to be persistent at it and search every day. Every morning and night before you go to sleep, jot down numbers to call or text in the morning. I prefer calling if there is a number. But email works just fine if there is no other option. What I like to do if I have to use email is, put my best number in and say to call me as soon as they can and that I’m very interested.You need to be fast. Deals are scooped by the faster person. I will talk more about this in detail. Now you know how to research the price points – where to look and where you can sell at. 90% of the time, I list my cars for sale BELOW the Private Party Good Value even though the car is in Very Good or EXCELLENT condition. Back to the 2009 Honda Van that I just picked up. The owner was asking $8,700 for it on Craigslist. I was the FIRST to call him, the FIRST to look at it and the FIRST to make an offer. I managed to scoop it for $7,200 cash on the spot. $1,500 less than what was advertised! How and why was I able to do that? Good question. I looked at the van and felt the seller out. He really wanted to get rid of the van because of a recent new truck purchase that he made.When negotiating a deal, you can start a bid extra low because of the natural bid bounce-back that will occur or have a GOOD reason why you will stick at your initial offer. My initial offer was $7,000 cash. I knew that he would make a comeback of $7,500 – $8,200. And he did at $7,800. I gave him a small smirk on my face like a ‘I’m- Not-so-sure’ look. Not a happy smirk but a Thinking Smirk! Plus a sigh…You need to use your bluff sometimes. Before looking at the car, I had formulated a game plan of what to say when we were in negotiation mode. I said to myself, “I’ll tell him that I’m also going to look at another 2010 Honda Van. A newer one with a little more miles that was going for $8,000…” $700.00 less than his listing price and a year newer. This tactic really put’s the heat on sellers. I made-up a competitor! Sellers have no clue of the other cars that you plan to look at, so simply make one up! Just use my example.What I was basically saying was, “Look, I have $7,200 cash now. If you’re not interested then, I will look at this other 2010 Honda Van and the seller is only asking $8,000. But, the reason I like yours better is because your van has a little less mileage on it.” I also said that I have cash right now in my pocket and I am ready to buy. He looked at his wife and talked to her for a minute first then looked back at me and said, “OK, You got a deal. “ DONE DEAL! He had the title with him and signed it off to me on the spot.I mentioned that I was buying the car for my sister-in-law and asked if he would mind leaving my name off the title so I would be able to transfer the title directly to her name when she arrived town (which was true by the way), and he did. He signed the title over to me, I have him the cash and walked away with the van and title in hand.

Another way to bid…

You can bid extra low at first and get the price that you really wanted to pay in the first place. Example: “Look, I’ll give you $1,400.” He will bounce to $1,700 or $1,800 and you can say… “OK, I’ll meet you in the middle. How about $1,650?” Get the idea? It is always best to have a game plan in your mind before you buy or sell a car. It is the Art of Negotiation. Be Prepared To Win! You’ll most likely do this with every deal to create a deal. This is how the profits add up.You can easily add up profits by using this method and also by applying the quick bonus spruce-up tactics that I talk about later. IMPORTANT TIPS: Always try to be the FIRST to look at the car and the FIRST to make the deal. Calculate your PME and do your market research. Look at the car and see if you can make a profit that fits your personal method and budget. See what the car needs. You might need to put a little elbow grease into it and clean it or do some minor body work or a little tune-up. Maybe the car really doesn’t need anything but a light wash and a detail – maximizing your profits need not take much time or a huge investment. Work on your negotiating game plan. The more you do it, the better you’ll get.

How to Find Profitable Deals

I like to buy at the Trade-In value or as low as possible when buying from private personal sellers. When buying at auctions, I like to try start a bid at 50% or lower of the Trade-In value. Keep in mind costs for repairs such as body work or mechanical work, etc. It will cost you more out-of-pocket if you plan to have this work subbed-out. It will also be to your benefit to form and maintain respectful relationships with specialized mechanics and auto body men as you start to buy and sell more vehicles. Using this method of bidding and combining it with searching for deals on the computer and applying savvy negotiating strategies will skyrocket your chances for success. It is a very simple model of automotive arbitrage.

The Best Vehicles to Buy & Sell in This

Economy

 

When buying a car to resell make sure that it’s an In-Demand vehicle. Nowadays, light cars & trucks and small SUV type vehicles move fast – especially when fuel prices are up. I’ve had good luck with Japanese and Korean sedans and also many types of light trucks, vans and SUV’S which are the typical 4-cylinder, good-on-gas transportation cars. 6-cylinder vehicles are also good. A few good examples in order are Toyota, Honda, Nissan, Subaru, Suzuki, Mazda, Hyundai, Kia, VW, BMW, Mercedes and Volvo.Then come the American trucks and vans – Chevy, Dodge, Ford and Pontiac, being the most popular. Asian trucks and vans also do very well. I try to stick with the Asian ones the most. But you can find Chevy and Ford deals out there too! Don’t pass them up if you see you can make a good profit on them. As for the German cars, many people like the 3 series BMW and the C class Mercedes Benz. The VW Jetta and Golf do very well also. The 98-2006 4th Gen E46 BMW 3 series is a very popular model and can be purchased relatively cheap. http://en.wikipedia.org/wiki/BMW_3_Series Another popular one is the Mercedes C Class W203 body style 2000-2007. http://en.wikipedia.org/wiki/MercedesBenz_C-Class Please keep in mind that these are the cars that are very popular in my City and State. It will vary in yours. Maybe you’re in a town that has a rush for big trucks or American cars. The PME Tactic will help guide you on your profit margin. Remember, the more luxury the vehicle, the higher your target market will be.This means you’ll be asking more for your cars. Most times the higher the vehicle price, the longer it will take for you to sell. But it will sell for the right price. Anything will sell for the right price! The art of flipping quickly (my favorite money-making method), is to stay below the $8,500 end sale price range. You’ll appeal to the masses that are looking for a great little dependable economical light car or truck. The best part is that these kinds of buyers are all over. Even better if you stay in the $5,000 range. Make sure you’re selling 10-year old vehicles or newer. If you sell much older cars, they tend to need more work and are less valuable.Classics are another ball game and we will get into classics a little later. Staying below the $5,000-$8,000 selling price range means… You’ll flip more cars quickly which means more money for you. Besides, this is the end goal right? – To make fast money. This means you’d want to try to buy between the $1,500-$4,000 range, but by all means if you want to invest in higher-priced vehicles which may make you higher profits, then go ahead. I’ve had my best flips buying and selling cars at this lower price range and selling at around $5,000-$8,000. Try to stay above the year 2000 cars unless you find a deal for a few hundred bucks and you know you can make a quick $500 or a $1,000 on it. Just use the PME for all years – IT WORKS! If you have really new cars like the affordable Hyundai or Kia’s, try and sell them at a competitive price.They are cheap cars and you can actually buy 2002–2006 models for a few thousand dollars. Again it all depends on the PME. Just do your research. The reason why I like to say to stay above the year 2001 is, people like newer cars. Selling older cars are fine, but when you have something in the year 2001 and up range, consumers love it and they sell much faster. Think about it, the 90’s vehicles are old. 2000 and up models are IN. What’s even better is, if you deal with the 2004 and up vehicles. I like to stay within 10 years old. Just like the 80’s, would you buy an 80’s car now? I don’t think so. Now, when it comes to classics and collectibles, that’s another genre.I’ve had my share of classics cars such as a 1966 Pontiac GTO, 1967 RS Camaro, 1960 Chevy Bel Air, 1957 Chevy, 1954 and 55 Chevy and even a 1969 Buick Riviera. All beautiful cars – perhaps this is when America really built cars! There is nothing like American muscle cars! This 66 GTO that I had was purchased for $3,000. I painted it Tangerine Orange and sold it for $8,500 only three weeks later – profiting an outstanding $5,000 after subtracting paint materials.

1966 Pontiac GTO Painted Tangerine Orange With Silver Metal Flake Bodywork And Paint Finished On The 66 Pontiac GTO. Sold For $8,500.

Following is a 1967 Camaro. It was bought for $1,800. It didn’t even have a front end on it. At that time of my life, I LOVED working on Classics. I invested about $10,000 in it and sold it a year later for $19,000. It was more of a learning experience for me rather than a motive to make money.

The profit that I made on it was not worth the time and effort that I put in that car. Many weekends and nights were put in over 9 months for a complete restoration. New everything – from the engine, suspension and interior. The only thing I worked on that wasn’t completely new was the body. Here are a few before and after pictures of the Camaro. When buying cars to flip, do your market research. It’s the most important part and is fairly easy to do. Popular cars in my State may not be as popular in yours. See what everyone is driving. What do your friends and family drive? Chances are if they all drive trucks then you know you need to look out for truck deals. You might be living in the Colorado Rockies filled with truck fanatics. Cater to the trend and what the masses are looking for. This way you’ll always make money. Simply search for the car you plan to sell or are selling on the online classified and compare prices. See what note what people are asking for cars.

Some cars may be too competitive to buy and sell. Out of all the cars that I sell, Honda’s are only about 20% of my flips – Honda’s are highly priced in advertisements and sell very quickly! I don’t find many Honda deals but when I do, they usually sell within the first day of my ad posting and I make very good money with them.

Here are a few cool pictures of a few mini cars that we don’t really see much, from my recent trip to Japan.

This is a Suzuki Twin. 3-cylinder 0.7l., Cold AC, no power windows…LOL!

I just thought you’d like to see some cool small cars from Japan.