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  • OT going in debt in attempt to make money

    I am curious if anyone else does something like this besides the obvious one that go into business. I have an interest free unsecured loan that is pretty much always open and ready to use just in case. Well yesterday I did something that I have only done once before. I used part of the loan to buy up two cars in hopes that I can make some extra cash off the sales. The cars are not stock and looking over the used part prices on ebay I should be able to clear a 2K profit by the end and have a couple parts left over for my own car. However at the same time I am nervous because the prices for these parts are all over the place and I can just imagine going threw all this work to tear down these cars and only break even because of low prices or worse.

    I am interested though if others do this same thing as well or if I am the only one that takes a risk like this with a loan?
    Andy

  • #2
    Not a great time of the year for new ventures.Likewise it will be March next year before the people who buy used car parts get over Christmas.
    But,you`ve done it so will have to see how it pans out.,

    Comment


    • #3
      My boy does things like this. Always seeing money in things...Thing is asking price and selling price and the lower cost items are going to sell if they are similar to the higher priced parts.Your price will need to be attractive to sell. You may be stuck with stuff for a while.I think he comes out ahead but I doubt he makes enough to justify all the flakes that you have to deal with.

      Comment


      • #4
        Use craigslist to list the parts so you don't have to pay a lot for advertising.

        You don't say what kind of cars, but around here most parts cars are non running and very cheap or free.

        My youngest brother has a deal going with a guy that hauls scrap. The other day the guy brought him a Chrysler LeBaron that was in pretty nice shape but didn't run. He told my brother he would take an old van that had a blown engine in an even trade. Little brother put $14 into a new part and has been driving it ever since.

        How bad are the two cars? Would they be worth more if they were repaired and running?

        Brian
        OPEN EYES, OPEN EARS, OPEN MIND

        THINK HARDER

        BETTER TO HAVE TOOLS YOU DON'T NEED THAN TO NEED TOOLS YOU DON'T HAVE

        MY NAME IS BRIAN AND I AM A TOOLOHOLIC

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        • #5
          Many years ago I was buying cars to fix up and then resell. I also had two yound kids that were driving. I would fix up a car then let them drive it for a while then buy another car then sell the old one. I made pretty good money doing that and I always new the kids were driving reliable cars.
          Not sure how well that would work today.

          As for borrowing money to make money. Some people think that is a brilliant idea thinking it is better to use someone else's money instead of your own money. Now days these are the same people I see in bank ruptcy court.

          I pay cash money most of the time I make a purchase. I always buy myself a new truck about every 8-9 years. I sell the old truck outright to a private party and never trade. Then I buy the new truck outright but get a 5 year loan from the local credit union. There are usually rebates and incentives on the new truck that I take advantage of. Then I pay off the loan in 12-18 months.

          I'll pay interest to the bank but it will be a minimum.

          Outback
          So much to learn, so little time

          Comment


          • #6
            Originally posted by outback
            Many years ago I was buying cars to fix up and then resell. I also had two yound kids that were driving. I would fix up a car then let them drive it for a while then buy another car then sell the old one. I made pretty good money doing that and I always new the kids were driving reliable cars.
            Not sure how well that would work today.
            Not sure, but I know that finding used cars is getting harder and harder. Cash for clunkers was such a wonderful idea.

            Comment


            • #7
              used parts buy you only a bit of time, then you gota go new, spent the last 6 months rebuilding the monte carlo and still its got bugs , you cant sell used ball joints or tie rods inner or outer, these are not safe and are far cheaper new, also unless your rather skilled you cant tell how much life is left in them suspension parts are a 50 50 deal just cause the spring is good dont mean the shock or strut is, engines trannys only worth a few hundred each ,bearings well in a pinch il use a used one 20.00 is sometimes better then new price but again its a 50 50 and untill the weightof the car is on it its not a 100% that its even going to work out,

              not many sales in dash boards and steering wheels, clusters very rare,
              wiring harnessx not alot of money and you gota know how to test it all to make sure there are no problems with it,

              i can keep on going, also given peopel these days they all want the stuff for free or next to free so best of luck when your not a wrecker you have to bargen more when your just a joe blow striping a car and you cant even warranty a darn parts so your prices have to be cheap as hell..

              best money in cars is buy then cheap, fixt them up for a safty go a few extras for the extra cash and you will have alot more profit, when your done..

              here is an example , the 95 monte my kid bought cost 400.00 for the car seemed ok untill we uncovered the trunck and thoes dame strut toweres were rotted $$ to fix ok but we did it our selfs , dam good thing iam a mechaninc,

              then there was the pre safty the last ower had done what a joke and the mechanic should have his licences pulled casue he got it all wronge so lotsof new parts some used but not many thats for sure,

              so a 400.00 dollar deal costed in the end with some speicalty tools the taxes on the car all the parts total bill was like 2800.00 just to get it to pass a safty,and even thou the tires and suspension passed the min he still had to get winter tires for it its a big car, and he is going to need a new suspension by this summer for sure,

              had she let us take the car to our guy that does saftys the kid would have probley walked away from it, mind you he knew in advance it was a hi matiance car so he had and idea what he was into , should things go wronge and boy did they but now he has a solid car and a safe one, there was no labour cost involved to him that would have costed at shop prices here of 80.00 and hour and extra 3000 + for labour and the cost of the used parts would have been 4 times more cause the shops here deal only with a local wrecker for used stuff and that guy is freaking nuts on prices when its stuff he has to have shipped in cause these guys here dont deal in 95 stuff, only my buddy that has a place out of town deals in all ages of cars still.

              still want to get into car parts,

              if you do just the min for safty and do all the work your self, then get a class A to pass the work you can sell a certified car for some decent profit, but you gota know
              A what your buying
              B proper pre safty from your own mechanic
              C max retial you can expect vs cost out lay to certifie the thing
              D do all the work your self and have all the proper tools right tool for the right job is a must
              E go a bit extra on some stuff to make it that much better of a car and you raise its value more
              F buy it cheap as you can get noting even it and research the car ahead of time, also make sure all recalls are done on the car this speakes volumes to the buyer
              G bullsh** comes back to haunt you so be honest about it.

              flipping cars has more profit then selling off parts,

              now if you are buying antique cars then you really gota be super carefull on what your getting into there just cause a car is old it might just be worth alot less then you can image
              not all of them have value even in show room condition some are wothless, its a very criditual market in the antique car stuff, parts are even more scarce and really costly some stuff will have to be custom made cause you just wont get the darn thing , and you dont want to have to start making ball joints tierods inner and outers, you dont want to have to start making a master brake cyclinder unit so if you find one it might cost you as much as the car did..


              not trying to be to negitive here but when you start talking cars there are more cons then pros sometimes,

              we are going to get into flipping a few cars in the next while, just cause we know what were doning and own all the tools needed, and now that i have the newest safty list, from the MTO we can now take a jack with us go over the car on the spot then bargin price a bit more, if we are not comfortable with the price or the car even we walk away from the deal, the other thing to is the conditon of the engine and tranny is something you have to know upfront, and never take the oweres word for it, and if the car has been off the road for more then a month you are going to have some extras to look forward to that you might not want expecially if the car was parked on grass

              now more on parts selling there are alot of parts on cars you will never ever sell so beaware of that to..how good are you at body work some parts might need to be reconditoned before you can sell them even if it minor fix it and that means more money.

              there are pros and cons to flipping cars and the same in buying stripping and selling off parts..

              take care merry christmas and happy new year

              Comment


              • #8
                These cars are what I am sure allot of you would call ricers. The yellow 92 civic in the pics is built for the track with all good parts and wasn't used much. The other car is basically the same thing but a couple years older and supercharged.

                I have a plan and have allot of work to do I just hope it all works out. I am hoping this yellow civic sells as a whole which should take care of 2/3's the loan. Selling the near new supercharger off the other car should pretty much finish off the loan and I should still be left with a full car to part off or sell as a whole.





                Andy

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                • #9
                  Nice car.
                  A lot of people do some of the same sort of stuff you are doing. If I see a bargain on something I know a little about - cars, machines, tools, guns mostly - I'll buy it to use, then later sell it when I no longer need it.
                  I can sell it off at my leisure. I'll usually try to sell enough to get back my purchase price quickly, then make money on the balance.

                  My progession is
                  1 - Craigslist and local .forsale newsgroup, special-interest forums, other free classifieds.
                  2 - ebay fixed price sale
                  3 - ebay auction

                  Most things never get past #1.
                  Ebay is best for smaller items that appeal to a narrow range of interest.
                  I try to limit it to things that fit in USPS flat-rate boxes.

                  Sometimes it takes time to get the price you know something is worth.

                  Comment


                  • #10
                    I'm more curious about how to get the interest-free unsecured loan the original poster noted. I thought those were only for financial institutions . . . so they could profit on the spread between near-zero and a percent or so of interest. That's about the only way I know to borrow and make money with zero risk.

                    More seriously, hope your informed guess about car part prices turns out right. No sense looking back now that you're in.

                    Comment


                    • #11
                      Originally posted by vpt
                      These cars are what I am sure allot of you would call ricers. The yellow 92 civic in the pics is built for the track with all good parts and wasn't used much. The other car is basically the same thing but a couple years older and supercharged.

                      I have a plan and have allot of work to do I just hope it all works out. I am hoping this yellow civic sells as a whole which should take care of 2/3's the loan.
                      "There is no hope there is only do or not do" Yoda

                      I have a son-in-law that does stuff like this but he jumps from one project to the next.
                      He is currently into jeeps, just bought one to fix up and got half of it home.
                      Now he tells me he just bought another because he sold the last one. Drives me crazy.

                      Somehow he always manages to make a profit so I can't complain too much.
                      Therein lies the key: Your sales ability must at least equal your mechanical ability and you can't go wrong.
                      Put a decent amount of effort in the selling and don't take a loan bigger than what you can comfortably pay back if it falls thru

                      Originally posted by PeteM
                      I'm more curious about how to get the interest-free unsecured loan the original poster noted. I thought those were only for financial institutions . . . so they could profit on the spread between near-zero and a percent or so of interest. That's about the only way I know to borrow and make money with zero risk.
                      This is known as the bank of dad, only I charge interest, a lot.
                      The kid has to learn how this stuff works and playing with a manageable amount is a good teacher.
                      Don't know if this is the case with the OP.
                      Last edited by KIMFAB; 12-21-2010, 02:01 PM.
                      Guaranteed not to rust, bust, collect dust, bend, chip, crack or peel

                      Comment


                      • #12
                        I guess it all depends if you want to keep track of what you make for each hour expended. That may discourage you.

                        My son and I have pieced together several 1985-1988 4runners in the past several years. Buy a good body with bad motor, Then get one with a bad body and good motor. I have enough car parts laying around (body parts, wiring, doors, tail gates, etc) but it really is hard to sell them. Too many jerks and from Oct to April NO ONE wants anything. We have a 1988 sitting here now for sale that is just taking up space.

                        If you keep track of every nit picking thing you put into one of these endeavors you may be surprised. 6 cans of brake clean, 3 rolls of shop rags, brake fluid and the list goes on and on for ever. Then there is time to chase parts, clean the garage, towing, inspections, stupid burned out lights, 3 weeks of insurance, plates, tax man, etc.

                        Bottom line is we will probably make 8$ an hour on what first appears to be a $1500 profit. on a $3500 vehicle. Oh yeah, my son is a toyota mechanic and is VERY EFFICIENT at doing the mechanical/electrical work and we have all the right tools.

                        I have a 86 vette I got dirt cheap 2 years ago. Fixed it up and still haven't got around to selling it because I keep thinking I may hot rod it for myself. A money pit waiting to happen. Could part it out and make some money but the problem is if you sell any crucial parts it instantly is a non drivable.
                        (maybe non movable) basket case.

                        Oh yeah, I front all the funds too.

                        Comment


                        • #13
                          There's a magic number in pricing used cars, something like $1800 (this is pre-recession). The number indicates the amount below which typical buyers are able to pay cash.

                          Above that number and financing is needed.

                          I don't recall where I read that, I do remember the author was a long time used car dealer.

                          Once you get above the magic number your chances of selling as a private individual are far diminished because you don't have seller financing. Plus the fact that financial institutions are reluctant to finance anything older.


                          Anyway, back to the question of investing money this way , I've done it a number of times (not cars though). Never borrowed the money, always had it.

                          Comment


                          • #14
                            Originally posted by KIMFAB
                            This is known as the bank of dad,
                            Bank of Dad is a wonderful thing when you need 10 bucks. My Bank of Dad bought me a machine in October of '08 when we put a down on a machine the day they they passed the TARP crap. Had no problems before, 700+ credit on both me and my business partner. Couldn't get a loan.

                            Bank of Dad stepped up(I didn't ask). He had the cash easily, but he put it on a credit card loan. 3% for a year, and 9.9% after that. I offered him 10%, but now he's not making anything on it.

                            Just for fun, even though we had the machine paid for, kept the bank guy bouncing just to see how bad it actually was. Offered up 25% down and up to 30% interest, still couldn't get a loan.

                            My Bank of Dad doesn't do zero percent. He may not make money on the deal, but he makes sure I pay.

                            Back to the OP, spending money to make money is not a new thing, going into MANAGEABLE debt to make money isn't a bad thing.

                            Going into debt for something that you are going to part out and sell, that gets into the gambling range.

                            Hot rod parts are always fun. Been messing around with it a bit here lately.
                            In process.

                            Comment


                            • #15
                              I bought parts from a local fellow who was buying wrecked Jaguars and parting them out on E-Bay. He later moved into Mazda Miata's and seemed to be doing well. I suspect late model expensive cars would be most profitable for parting out but would be more risky.
                              Don Young

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