When it comes to selling, all of my cars are on eBay or Craigslist, and that’s it.
Now, keeping your overhead low to zero while you do this is key, and not getting buried by the cost of some lousy car that you’re never going to make money on is the other key. That’s where a lot of people get caught.
One of the biggest pieces of advice I have to give in terms of making this business work is this: Don’t get yourself trapped. Don’t decide that you’ve got $15,000 in it already and you’ve got to do all this fixing it up to get to a certain point before you can let it go, and blah, blah, blah.
Do your math!
If it’s a loser when you bought it for fifteen grand, well, it’s not going to be a winner when you’ve sunk a bunch of time and money and effort into it. Get rid of it then and there so your margin of loss is a lot less. Sell it to somebody else who wants a project car. There are plenty of those folks out there.
Cutting your losses before they get worse is hard for some people to do, and you need to assess whether or not you’re one of those people. If you are one of those people who can’t let go, learn that about yourself and find a way to change your behavior. If not, this business might not be for you.
Don’t be that guy!
Another thing: there’s a lot of competition in the car business. Even just here in Dallas there are probably six to eight guys who are as fast as Dennis and me. They’re watching everything, too. So you’ve got to be quick. Don’t be hesitant. If you see a car you want at a price point you can turn a profit on, trust your knowledge, trust your gut, and f—king yank it.
Your knowledge of cars is going to come from trial and error. There’s no shortcut. There really isn’t. So be prepared to invest some time and money, and don’t be afraid to acquire that education over time. In order to be quick with your knowledge and your gut, you’ve got to put the time and experience in to develop that knowledge.
I played strictly with $8,000-to-$10,000 cars for the longest time just as a hobby on the side when I was younger and running the printing business. It was no big deal. I did four or five cars a year, maybe, tops. So when I decided to really start doing this, I gotta tip my hat to Dennis Collins. He would give me advice and steer me in the right direction. He’s been in the business of buying and selling cars since high school. That’s all he has ever done. He and I make it look easy now, but that’s only because we’ve been doing it for so long.
Want some of my absolute best advice? Start out slow. Save your money. Do four or five car deals and save those profit dollars until you’ve doubled your money, then move up to the next level. For instance, let’s say you decide you’re gonna play with twenty-five grand. So play with that twenty-five grand until you’ve made twenty-five grand in profits. Then put your original twenty-five grand back in your bank and play with the money you made. Then? Keep compounding. If you’re smart, if you focus on making that 15 percent or whatever number it is you stay focused on, if you don’t get killed in a single deal but instead try to make money on average across all of the cars you buy and sell, it’ll add up.
Think about it this way: if you add twenty-five grand to your bottom line every year, in four years you’ll have made yourself $200,000. If you get yourself to a point where you have $200,000, you can go ahead and flip cars and make an additional $200K a year. If you get to $500,000 sitting there, ready to go, it is my opinion that you can flip cars constantly and make a million a year. Not everybody can do that well, of course, but that is definitely a possibility. I know because I’ve done it. I know because we’re doing it here at Gas Monkey.
Here’s the other big secret of my success. I’m talking long-term, lifelong success here, which is what I hope you really want. The trick is, do it right. Stand behind your s—t. Don’t be shady.
There are a million shady car dealers out there, and there’s a reason people think of used-car salesmen as the stereotypical shysters and jerk-offs who are just robbing you blind every chance they get. Don’t be that guy.
Right from the start, with my very first flip as a teenager, I’ve told people exactly how it is. Don’t try to hide a flaw or a defect. Don’t try to hide the truth about the vehicle you’re trying to sell. There are buyers out there for every car. They might not be buyers who are willing to pay whatever pie-in-the-sky number you think a particular car is worth. But there are buyers. There are buyers who want project cars, who want something that’s dirt cheap just so they can mess around with it in the garage or fix it up as a long-term project. The marketplace will establish what the price is for any given car, and you’ve just got to accept that. Don’t try to sell somebody something that’s far less than what they think it is. Be honest. Be up-front. In the long run, that will bring you more customers—and repeat customers. And best of all, it just makes you and them feel good. Never forget: karma’s a bitch!
In the eleven years I have been flipping cars as an actual business, I have bought back three cars from unsatisfied buyers. Three. That’s it, out of hundreds and hundreds of cars. Well, guess what? I turned around and resold every one of those cars for more money than I sold it for in the first place, all without putting another dime into the car.
If you’re flipping cars, every once in a while you’ll get a guy that’ll call you up after the sale is done and say, “Oh, you didn’t say it was this and this and this,” and all they’re really trying to do is get you to return some of their money. They think they’ll be able to guilt you into giving them a thousand dollars back or something.
I had one guy just recently who paid, I don’t know, let’s call it ten grand for some car I was selling. He called me up a few days later and was like, “Well, it’s gonna need at least two thousand dollars’ worth of work.”
My response? “Well, sir, I feel like I described it correctly.”
“Maybe so, but I’m not happy. I think you owe me that two grand. So why don’t you send me two thousand dollars back and we’ll be good.”
“That’s not how it works,” I told him. “Look, I want you to be happy. If you’re not happy, you’re not happy. So I’m gonna send a tow truck over. They’ll be there in an hour and I’ll give your ten grand back today.”
“Oh, man! No, no. I don’t want to give up the car.”
Another guy bought a car from me and took it to another state before he tried the same tactic. I knew I didn’t want to tow the car anywhere. It would’ve cost me $1,800 in shipping. So I called a local storage lot and had it picked up, and I told the guy exactly what I was planning to do: “Dude, I’m gonna put it back on eBay, and you watch this.”
So I sent him his money back, picked up the car, put it in a storage lot, put it back on eBay, and I sold it for $4,000 more than he paid for it. He calls me up and he goes, “Well, that’s just f—king bulls—t.”
I said, “What do you mean?”
He goes, “Well, you owe me four grand!” He wanted the whole four grand! He goes, “That’s my profit.”
I said, “Motherf—ker, you said you didn’t like the car and you were unhappy. You have your money in your pocket and I picked my car back up. You’re not entitled to s—t!”
You have to watch out for real crazies, too. For instance, we had a green Mustang that we put on eBay right after we featured the car on Fast N’ Loud, and it went for a bid of $207,000. The deal ended up not happening because it was just some idiot being stupid on the Internet. He didn’t have that kind of money and it was never going to happen. He wasted a lot of people’s time and energy over nothing.
Long and short, be careful. Don’t be stupid. Don’t let people take advantage of you or try to rip you off. Especially online, you need to verify everything and be sure you’re dealing with real people, real money, and real vehicles.
Dealing with all of that sort of s—t isn’t for everyone. You’ve got to be tough, and fair, and determined, and willing to work hard and put up with a lot of BS to make money in the car business. There are a lot of people out there who lose
their shirts selling cars! Don’t be one of them. I don’t want to hear people complaining, “Oh, Richard Rawlings said flipping cars was an easy way to make a living, and now I’m broke.” I did not say this was easy! If you’ve read this book, hopefully you understand how much time and effort and blood and sweat went into building Gas Monkey Garage, and a whole lot of that time and effort was spent learning how to flip cars, going all the way back to when I was a teen. If you think this is gonna be easy, go back to the beginning and read it all again.
Is it fun? Hell, yes! It can be crazy fun! But that does not mean it’s “easy.”
Whether you’re jumping into it as a little side hobby or thinking about making it a full-time job, flipping cars is a business. The only thing I can guarantee is this: if you’re a true Gas Monkey type of individual and if you’re willing to put in the work, you’ll have a whole lot more fun flipping cars than doing just about anything else you can think of with that stash of cash that’s sittin’ in your bank account.
FLIP TIPS
To sum up, here are a few things to think on as you go about your flipping business. (My thanks to Tony and Aaron for chiming in on some of these, too!)
Don’t limit yourself to your local area.
There are car bargains to be had all over the place—but they might not be where you’re located. You’ll notice on the show that we drive up to Michigan and Missouri and all sorts of places to find the diamonds in the rough we’re looking for. The fact is, sometimes a car that’s worth only $2,000 in Michigan will sell for $6,000 in Dallas, Los Angeles, or Miami. Know your markets, know what cars are going for in different parts of the country, and cast a wide net in your eBay searches.
Craigslist is a little more focused in that it’s local, so it may take more work than eBay. If you want to find cars in the Dallas area, you go to that site. If you want to cast a wider net you have to look at Craigslist St. Louis, or Craigslist Atlanta, and so on.
One of Tony’s tricks is to use a site called SearchTempest, and a subset of it called AutoTempest, that will search all of those sites and the broader Internet all at once. SearchTempest allows you to put in search terms for exactly what you’re looking for. You can modify the search to weed out stuff that’s more than a certain distance away, or to only find stuff that’s close, or only stuff that’s a certain price. Or, if you’ve already looked at eBay, you can eliminate eBay from your search. It’s pretty rad.
Then, of course, you can pull away from technology entirely. There are a lot of people out there who don’t use the Internet, who don’t have a digital camera, who wouldn’t know how to list a car on eBay if their lives depended on it. So if you really want to get dedicated you can search through the local classifieds for the local papers, but just like with Craigslist, you have to look in each city. Houston, Austin, Dallas, wherever it may be. Some papers list their classifieds online, but some of the smaller ones don’t. And you never know what might pop up in some local classified somewhere. The best thing you can do is keep your eyes open. Don’t be afraid to spread the word, too. If you’re looking to buy cars, let your friends and family know so they’ll keep their eyes and ears open, too. They might not know what kind of vehicle you’re looking for or how to tell a gem from a rock, but that doesn’t matter. As long as you’re hearing about it when a car comes on the market, you can use your skills and knowledge and gut to know if it’s something you want to look into or not.
You also have to consider shipping costs if a vehicle is located far away. If you’re looking to buy a $3,000 car and it’s $1,000 away, you really need to think about whether it’s worth it or not. You can also use that as a negotiating tactic. “Hey, I like your car. But it’s a thousand dollars away and you’re asking too much already.”
Don’t be judgmental or afraid of any particular location, though. Honestly, some of the cleanest cars we’ve found here at Gas Monkey have come from areas where you don’t expect to get clean cars. You think of a place like Michigan as being terrible on cars, because of the harsh winters and the road salt that’ll rust a car out twice as fast as it would rust out anywhere else. What you might not think of is that those cars might have been kept in a garage and not driven in the winter. Especially the fun two-door sports cars that we like to pick up and flip the most.
One of the cleanest little Comets we ever got was out of Detroit. It sat in a barn and only had like six thousand miles on it. You could look at it and put the story together: it looked like a car somebody bought for his wife to run to the store and she was simply not driving in bad weather. So it sat around and was driven very little, and never in bad weather, and all these years later it was a great car. It was absolutely original. No rust. Original hubcaps, tires . . . six thousand miles!
On the flip side, when it comes to selling a car, don’t even limit yourself to staying in the country. The beauty of eBay is it goes out to the whole world, and there are certain types of cars that people in Europe are just clamoring to get their hands on.
With eBay, you throw up some pictures, a good description, and it goes around the world. Looking back on it as we’re writing this book, out of the last ten Model As we’ve sold, six went to the UK, one went to Germany, and one to Finland. They can’t get enough of them!
Get on the freight train.
You might wonder how in the heck people are affording to purchase cars from overseas in terms of shipping costs alone, but I’ll tell you this: it can be cheaper to ship a car from Dallas to London than it is to ship it from Dallas to Los Angeles. It only costs maybe $300 to get it to the port here, and then the car goes into a container and onto a ship that won’t get there for six to eight weeks—but it’s cheap. To get a car to L.A., you have to pay for a driver and a proper transport. If you’re going on an open transport and lumping it in with a bunch of other cars, it might be cheaper to get it to L.A. But in general, on a car that’s worth $10,000, the Londoner’s going to get the better bargain in terms of shipping costs.
When you’re shipping a car in from a long distance, be sure to shop around for the best transportation price. There are online services such as uShip where you can enter in what you need shipped, and when, and where, and various individuals and companies will bid on the job. That can work out pretty well if it’s just a one-time or occasional thing.
Here at Gas Monkey we use a professional auto-transport broker. Basically, there’s a woman Tony can call up anytime and say, “Hey, we’ve got a Mustang at this address in Minneapolis. How much is it going to cost me to get it shipped down here to Dallas in the next week?” And she’ll give him an estimated price. She then puts it out to her various transportation companies at that price and sees what she can find. Ideally, what you want to find is a truck that’s already coming through that way, but they have an empty slot they can fill with your car. That’s gonna be the most cost-effective way to move a vehicle from one part of the country to another, by far. And all of those costs affect your bottom line, so if you can save a hundred bucks here or there, it’s worth it.
Now, occasionally when you’re getting something from way up in Minneapolis or especially Detroit, it’s a real chore to find someone to do the job. In those cases, if nobody bites at the price you’d like to pay, you have to raise your price by $100 or something in order to entice some trucker to go out of his way.
Any way you look at it, using a broker or a bidding service of some kind is going to be a huge savings over hiring some individual tow truck or flatbed driver to go and fetch a vehicle for you.
Don’t be afraid to ask for more pictures.
In the Internet age, buying a car unseen is something you’re going to have to do at some point. Here at Gas Monkey, we do it all the time. It’s scary at first. It really is. But there are some things you can do to make it less scary.
First of all, it’s possible to make almost anything look good in a picture or two. The right lighting can cover up all the blemishes and flaws. Super-savvy Internet users know how to use Pho
toshop to clean things up, too. So you’ve got to be careful. We have had a few cars, luckily not too many, but we have had a few cars that weren’t as nice as they looked in the pictures. They come in and the paint’s a little rougher than you thought it would be, or there’s some hidden rust that needs major repair work.
Make sure you open up the pictures as big as you can, and really look ’em over. If you find something that looks fishy, contact the seller and ask them to send you some close-up shots of that fender or whatever it may be. Just be diligent. It’s sort of like having a car inspected before you purchase it in person: if you find something’s wrong with it, it doesn’t mean you don’t buy it. It just means you go, “Hey. This car has this and this and this wrong. You’re asking fifteen grand, but I’ve got to fix all this. So it’s only worth twelve.”
Do your research when assessing value.
The most important thing is to make sure you’re buying at the right price. Everything has a right price, and I mean that. There are junkers that are valuable as parts. Rusty pieces of old ’50s fenders and doors can be cut up and marketed as decorations to sell for people’s bars and man caves and shops, if that’s what you’re into. That’s not a business I want to be in, but there’s truly some kind of value in everything, and it’s up to you to know what that value is.
For the older cars that we deal with at Gas Monkey, there’s really no easy way to assess value, either. There’s no Kelley Blue Book or Edmunds valuation that’s going to keep up with the marketplace or even mention stuff like a Model A or a ’32 Ford three-window.
Your best bet is to just keep track of what’s selling in your area. Look on eBay, not for the listed price, but for the sold price. If some guy has a car on there listed for $50,000 and it doesn’t have any bids, it’s a pretty safe bet it’s overpriced. If a similar car is getting lots of bids and it’s hovering around twenty-five grand, then you’re looking at a pretty accurate read on the marketplace most of the time. If you can find a bunch of closed auctions for a particular type of car, and there’s an average price that they’ve all sold for, that’s about as accurate an assessment as you’re gonna get. Then all you have to do is compare and contrast: Does the vehicle you want to buy or sell have better brakes? Is it in better condition? Does it have special features, and are those features desirable? What’s holding it back? Is there a must-do $2,000 repair or replacement? Because if so, you need to build that at least partially into the value you’re assessing for sure.
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