Making Money on The Buy
When it comes to successfully making money on any car, it boils down to one thing – Buying the car as cheap as possible or even better, getting it for FREE. That’s essentially where the free money comes from.
There are many ways and places to get cars at a very low price or even for free. Again, I always say, keep your eyes open. Open on the street, open on the net and open in the papers, too.
As of now, I have actually scored about 15–20 free cars.
I don’t know the exact numbers but it is somewhere near those numbers.
I’ve even put notes on cars that I’ve noticed sitting in drive ways, parking lots and on the streets for a long time.
A simple card that says,
“Hey, I am interested in your car. Please call me (phone number).”
Sometimes people just don’t have the time or the know-how to sell a car and they just do nothing with it and let it sit and rot in their driveway or on the street in front of their house.
They even let tow companies pick up the car and give it to them for free, yes free!
Tow companies are another great secret resource where I pick up cheap or free cars.
I have a few tow buddies and they actually hook me up with cars for a few hundred bucks, sometimes free!
Even if you sell a free car for $500 bucks, it’s $500 in profit.
You need to be serious and start making friends in the industry, if you are looking to making money with this long-term. It will only become easier and easier to scoop deals.
I had a friend whose uncle left town and he had a nice Triumph Spitfire that he just gave me for free. He had ordered a new interior set for it too. It cost him $300 and he insisted me to take the car for free. I felt bad about getting it for free so I gave him the $300.00 that he paid for the interior kit.
I painted it blue.
It took me about 2 days for paint prep and I sold it within 2 weeks for $5,000 cash.
The guy who looked at it fell in love with it and paid me on the spot. I was so surprised of the quick sale I sent my buddy an extra $500.
I had made $4,500 in only 2 days. I was Happy! And so was my friend!
When buying a car, calculate the cost for repairs as best as you can then make your offer and bid.
NEVER get on an emotional high and overpay for a car.
I’ve learned the hard way and paid too much for many cars in my early days. Never go over your final bid price – just stick to your guns.
Most times, the seller will call or email you back for you to buy the car, and at that point, you are in control.
If the seller calls you back in a day or two because nobody wants to buy his overpriced car, thinking your offer was low until he got lower offers on it. You are now in control!
You can easily make up a story saying that you’re looking at another car and maybe your initial offer to him or her might have been too high anyway.
Then offer the same seller a little less for the car…and a lot of times. You can still get the car.
This way, you get an even better deal. You’ll see this happen to you at one time or another, for sure.
“Getting Paid On Your Terms”
When it comes to getting the price you want, you must know how much profit you’ll be happy with in the end.
I usually say to myself that if I can make a quick $1,000-$3,000 per car I’ll flip, I’ll just let it go.
Even though I know I could make a little more profit if I waited for a few more calls, showed it to a few more people or waited a few more weeks.
Timing and Speed is everything. Keep moving and keep searching for deals. Flip faster. You’ll get what you want.
Buyers will be silly happy that he or she got a DEAL and everyone is happy! Try to create a win-win situation.
This is why I like to try and sell below the Private Party Excellent Condition values.
The buyers check the Blue Book and see that they are getting a deal while your profiting $1,000-$2,000 per car.
“Negotiating Over The Phone”
You’ll often have people call you to make an offer for your vehicle over the phone on a car they haven’t even seen.
When people do this to you, don’t take them seriously at all. They’re just tire kickers and lookie lou’s.
They are not serious. I usually say…
“How can you make me an offer if you haven’t even seen the car yet?”
They usually reply with something like… “Well, $2,000 is all I have and I wanted to know if you would take it?”
If this was for a car that I put on Craigslist for $3,500 OBO, I simply say that I already have an offer for $3,000
…”Are you still interested?” They usually say “no” and hang up.
Sometimes you’ll get people calling you, offering you crazy amounts of money. I had one college girl call me when I was selling a car for $4,500 and she said she has $1,000 in cash.
…“Why don’t you go look for a car in that price range. I already have an offer for $4,000. Thank you, goodbye.”
This is how you weed out many of the tire kickers so you don’t waste your time on showings.
Try to get rid of them on the phone call or email and text stage first.
Let’s say, you have a car for sale at $4,750 and you know that if you got $4,500, personally, you would be happy.
Then you’d want to tell callers that you just got an offer for $4,200 and you are trying to get a little more and that the car is worth it.
It is in excellent condition, the AC is cold and blah blah blah…whatever the hot points are on that specific car you’re selling.
When a potential buyer calls, you must pay attention to their voice and enthusiasm.
Try and listen to their questions and concerns about the car that you have for sale.
If you hear a low voice low enthusiasm person most likely you know that they are tire kickers. You will get many people calling you and actually say that they will call you back and even make appointments to see the car and never call back or see the car, ever.
This is just part of the game, there will be a flake rate. Just like anything else, people flake out on decisions. Every minute, people change their minds for no reason at all.
You could have the best car deal, the best little beater in town and get a person who is so serious, even give you a deposit after a test drive and never hear from him again.
Well, thanks for the free money.
I’ve had a guy give me a cash deposit for $300, $500 and flake out.
On the contract, I wrote that there will be no refund of deposit because I will turn other potential buyers down to show the car.
I would be losing money. Make sure to tell the person to confirm the appointment and hour before your meeting.
This way, you know that the buyer is on the way and you don’t need to drive to the meeting location or wait outside your house for 30 minutes for nothing.
Example phone call questions that you can use to learn more about your vehicle:
“Hi I’m calling about your 2006 Honda Civic…”
- How many miles are on it? – Remember 10,000-12,000 a year is average, unless the car was used to travel really long distances.
- Is it a clear title or a salvaged title? – Of course, a clear is best. I recommend not buying salvaged title cars from private party sellers, unless you plan to keep it for a while and know exactly what kind if damages it had.
- Are there any problems with the car?
- Does the AC work? Are there any oil or water leaks?
- How are the tires, the brakes, etc.?
- Are the papers current? Registration, safety, smog inspections?
- How is the interior? Clean or dirty?
- Finally, you’ll want to ask if they have gotten any offers on the car yet. They might try and fake you out with a number, but don’t take any number seriously at that point.
- Are you negotiable on the price a little? – I ask this sometimes, not always. Just go with your gut.
If they say yes and they are negotiable, then ask how much they are willing to let it go for.
If they hit you with a price, don’t take it seriously. If they say no, don’t worry, you can still schedule a time to look at it and make a cash offer.
You always want to try to be the first person to look at the deal. You’ll have a better chance to negotiate and grab the deal.
I’ve scored many deals this way. Be the first to look at it, the first to negotiate and the first and last one to close the deal.
It’s a lot easier when you’re out in the field and actually doing this.
The reason why I say not to take the price that the seller just quoted you too seriously is because this is how you’ll also play the game to weed out tire kickers when you’re selling a car. Think about it, that’s what they’re probably trying to do.
Let’s say, someone calls you for a car that you’re selling and asked you if you got an offer on it…
I usually say yes even though I haven’t, to make it appear that the car is going to move fast if they don’t take action on it soon.
For example, say that I’m selling a 2004 Toyota Camry for $3,995 OBO and I have a total of $2,200 invested in it.
If I get asked by a caller whether I had gotten an offer on it, I would say yes…that I just got one for $3,200 and would like to get a little more for the car and it is still available.
While on the phone, I would continue to sell the car. I would mention that it has new tires, and that it runs very good.
I’ll mention that I’ve been getting many calls on it and ask if they would like to see it.
I might even say that I would consider letting it go for around $3,500.
Most likely if they come to see it for $3,500 then it means that you have a serious buyer on your hands and may want to negotiate when it’s time.
By taking off an extra $100 when dealing, you might just make their day. For a sale of $3,400, you’ve made a quick $1,200. Of course, you can play with the price points and make more or less. It’s really all up to you and your personal goals.
When you know the market value of a car and you know that your asking price is already a deal, you’ll be in control of the asking price and get what you have in mind when it’s time to sell.
This is when you know that you’re starting to master the game. When you can give the buyer a discount on the price of the car and get what you wanted in the first place.
The buyer feels like he got a super deal, you came down a few hundred to be cool and you got what YOU wanted all along.
This is why you must study the market. Gain the sense and know what your car is worth. Offer a competitive price and you’ll always sell them fast!
Sometimes, I probably could have sold a car and made an extra $500-$1,000 on it easily if I waited.
I usually have a goal in mind, saying to myself
“I’ll be happy if I make X on this car”.
The game is a numbers game. The better the deal you have for the buyer, the quicker it will sell, which leads to more turnaround power.
You can quickly double your money every month or week depending on how good you get with this.
One month I needed to make some money fast to pay some bills, I simply sold 5 cars in one month by starting with a car that I purchased and had a total investment of $2,500 into it. It rolled into $4,000. Boom! $1,500 profit!
Then I bought 2 more cars with that $4,000 sold one for $3,500 and the other for 3,750. Boom! Turned $4,000 into $7,250. Profit of $3,250!
Then, I did it again.
I got 2 more cars under $2,500 each for a total investment of around $5,000 both cars (car price and repairs included). And sold those.
One sold for $4,000 and the other for $4,800.
I made about $3,800 profit from both cars.
Let’s do the math. I flipped 5 cars. I made:
$1,500 on the first one.
$3,250 on the second set. And…
$3,800 on the last two cars.
For a total of…
$8,550 Pure Profit.
Only starting with $2,500. Let me say that again, I had a total capital of $11,050, starting with $2,500!
I ended up making a profit over $8,000 that month. Remember, this was all part time.
I don’t think I had a week’s work in all cars.
A week’s time meaning 8 hour days, 5 days a week, totaling 40 work hours.
This is why I say, stay in the $3,000-$5,000 selling price range. It’s the best overall price range to buy and sell at.
You’ll have people calling you consistently. With the right car, good mileage and an attractive ad with a sense of urgency built in, you will sell cars quicker and I’ll show you how to write killer ads in a little bit.
I always try to sell a few hundred below the Private-Party Excellent condition value.
Unless you have a top-shape, low-mile, in-demand car, why not ask top dollar? You can always drop the price down as you go.
You can always test your market by asking high at first then lowering the price of the car every few days or so.
Sometimes, I’ll drop the price $100 every other day until I start getting more calls.
There was a car that I did a few years ago. It was a Chrysler PT Cruiser. The mileage was a little high – 122,000 miles.
He was asking $3,800, which was a good selling price. I ended up buying it for $3,200 and invested $400 into it for minor repair.
A mistake it was!
This is why I’ll tell you not to buy on emotion. Just because it looks cool or you always wanted one, does not justify you buying it.
Always ask yourself
, ”Why am I doing this?” I’ve made many mistakes because of buying on “Cloud 9”, the emotional high. I sat on the car for three weeks trying to sell it for $4,250 OBO. I finally got $4,100, which meant that I only made $500 on it.
It was not a loss but not a great investment considering the time it took me to buy a fender and paint it. It was like doing a paint job.
I simply paid too much for the car. The ideal buying price would have been around $2,000-$2,800 in order to make a profit that was worth the time.
Hey, for you $500 profit might be a great goal!
But as you get better, you’d want to try and make at least $1,000 per flip. Then it makes it all worth it. Do a few every month and you’ll have a nice extra income.
Leaving Emails & Voice Messages
When replying to ads on Craigslist, you will see a URL that looks like this email@example.com
Just copy and paste it into your mailbox and write a simple letter such as:
“Hi, I am interested in your 07 Ford Focus. Please call me at 888-888-8888 Thanks, Tony.”
I usually do this for ads that don’t have any phone numbers in them or when it’s late at night and it is not the best time to call the seller. You can also just text.
By being one of the first in their email inbox, chances are they will call you first thing in the morning and you’ll have first crack at the deal.
If they do have a number and you get a voice mail, just simply leave a message like this…
“Hi, I’m calling about the xxxxx. If it’s still available, please call me back at 888-888-8888. I have a few questions and might want to look at it. Thanks, my name is Tony.”
Again, you can always just phone text nowadays.
Just remember that you may not get calls back within the next day or two. Sometimes I get calls a week later for cars that I emailed or called and I have no idea what car they’re talking about.
If this happens to you, just say,
“I’m sorry, what car was this and how much are you asking for it again? Sorry, I was calling a few sellers.”
Then begin to ask about the car. You’ll begin to have people call you about cars that you inquired on weeks or days ago.
When you’re at this stage, you’re basically just planting the seeds for deals.
Then gather the information either in your head or if you are not sure about the PME on the spot, tell them that you will call them back in 10 minutes because that you’re a little busy at the moment.
Get the PME values down then ask more questions and you may want to take a look at it.
“Types of Sellers, The People’s Game”
There will be many types of sellers that you’ll end up talking to and meeting once you begin to look for deals.
The ignorant seller who doesn’t know crap .
The first type of seller is the one who doesn’t know crap about cars and doesn’t even know the real value of their own car.
They might price it way over Blue Book or way under Blue Book values.
When you spot the kind of seller who prices their car way below Blue Book value, you want to make sure to jump on that car ASAP!
Get it and move on, and get the deal. Do whatever you need to do to close the deal and get the car home before he starts to get a boat load of calls on it, then realizes that he had priced the car way too low.
Never leave a deposit on deals like this. Always bring cash and close the deal ASAP. Get the title and take the car home immediately. Even if it means leaving your own car down the street, just arrange to pick it up later. A done deal is a done deal. 🙂
This is why I’ll urge you to use a simple Bill Of Sale just to cover your butt if something ever comes up.
The Overpriced Seller
The second kind of seller, the seller that over prices his car like he’s on drugs and he has no idea where he got the price from.
Maybe he’s pricing it high because he invested hundreds or thousands of dollars into a low valued car and thinks he can get his money back.
Yeah, right. He will be sitting on his car for a long, long time.
You’ll want him to sit on the car for a few weeks and as you see his price dropping in his advertisements, you might want to give him a call and find out what the story is.
Maybe you can scoop a deal.
As time goes on, days and weeks…sellers change their minds.
Think about it.
I’ve had times where I was selling a car one week, turn down a not-too-bad offer, then end up sitting on the car for a few weeks, beating myself up because I could have sold it weeks ago had I not been greedy.
”Now, I’ll be happy if I got offered that price again.”
Then finally, selling it lower than my original offer because of just wanting to get rid of it.
It happens. So, don’t be greedy.
The Desperate Seller
The next seller is the desperate seller and really knows what the car is worth, but advertises it for a super steal just to get rid of it ASAP.
This is why I’ll tell you to stay on top of deals online or off- line.
If you snooze, you lose. These are the sellers where you can make an easy $2,000-$3,000 off the car without doing much.
Maybe all you’ll need to do is a wash and a detail.
These deals really do come along. I say you will get one every few months if you stay persistent.
“Types of Buyers, The People’s Game”
Just like many sellers that you converse with, you’ll have a gang of weird buyers calling you for a deal.
You’ll get the caller who’s slow-talking with a ‘not so sure attitude’ when asking you questions about the car then all of a sudden, turning into an extremely responsive buyer.
Try to excite the caller by saying,
“YES, it’s a great car, the AC is super cold, nothing is wrong with it. It has a new timing belt, new tires, etc.”
Then just see what happens.
People get hooked on other people’s enthusiasm, it really rubs off. Then you make an appointment to show the car. He looks at it and makes you an offer! WOW.
Make sure not to get too excited about vehicle showing appointments that you make until you get the confirmation call.
You must always tell them to call you when they leave their house or when they’re on their way.
The “double caller” are those that call you back after they say they would. Usually, these buyers will buy your car if it is what you say it is because they are interested.
After setting an appointment with a potential buyer, for your own sanity, just make like they never called you in the first place.
This way you won’t ponder or wait for the call.
50% of the time, they won’t call you back anyway so just forget it. You’ll start to tell the serious ones from the flakes, as you go along.
Don’t get excited on every call you get because most people are shoppers. I say, for every 4–8 calls, 2-4 will see the car and 1 will buy it.
But, I’ve also had many ‘first look buyers’. That’s always nice!
The other type of buyer is the one who sounds very enthusiastic, says he loves the car, loves the price, makes an appointment and never calls back.
Don’t worry about these people – they’re a dime a dozen.
Then you get the callers that really want your car. They won’t even negotiate with you. You can make them more hungry by telling them that you just had a person who looked at it and they really like it but they said that it would take them 2 days to get the money.
Tell them that you want to get rid of the car ASAP and wouldn’t take a deposit. So if they are interested come take a look, chances are you’ll sell it with a quickness!
The best way to avoid the cocky buyer who wants to give you $800 for a $2,500 car that you have For Sale is by getting rid of him at the phone stage by saying that you already have an offer for X,XXX.
Don’t just say nothing and let him waste your time by setting a time for a viewing and all he does is say how bad your car is and how much work it needs, etc. and he’ll give you $800 for it.
These are the people who try and scam for cars.
They think they can buy and sell cars and they only wish that they can.
You’ll come across many types of buyers and sellers in this game, just make sure to keep your cool and be cool.
If you sell the cars that I recommend to sell, good on gas 4-cylinder clean cars, you won’t have a problem selling any of them.