My family memories involve selling Beanie Babies at the flea market and going to auto auctions with my stepfather, Tommy.
I still remember the excitement I felt when Tommy invited me to my first car auction. I became intoxicated by the action between the auctioneer and bidders. Tommy’s voice cut through the chatter to shout the winning bid for an ugly but reliable SUV.
Two weeks and one paint job later, I watched him sell it for a $2,500 profit.
I was instantly hooked. That was 12 years ago, and I’ve been flipping cars part time ever since -- including my fastest flip to date: three hours.
Tommy taught me there were two types of auto auctions: auto dealer-only and public. I loved public auctions because they sold the same types of cars as dealer-only auctions.
Although auction rules vary state to state, the ones in my state allowed anyone over the age of 18 to bid on any car they wanted. Even when competing with dozens of other bidders on each car, I was almost always able to purchase the car below its retail value.
Craigslist became another great place to find deals. There are thousands of new listings posted every day -- and it’s totally free to use!
Over the years I learned how to consistently make a few thousand dollars on each car I flipped.
But there was a problem.
About two years ago, I noticed I was spending hours and hours searching for deals. Car-flipping was becoming an obsession that took up almost all of my free time. Sure, I was making money but considering how much time I was investing, was it really worth it?
There had to be a better way.
That thought led me to this question: What’s the shortest amount of time I could possibly spend on the entire finding, buying and selling process?
I didn’t know the answer, but I was determined to find out.
Luckily, I had experience on my side. There are really just three steps to buying and selling a car:
1. Finding and buying a car at a great deal: I typically don’t spend more than $4,000 on any car that I purchase to flip, but I’ve purchased a few cars for less than $400.
2. Repairing any cosmetic or mechanical issues and cleaning the car: For some cars, this is just a simple car wash. For others, a complete engine replacement might be required.
If you make a repair that large, you’ll need to make sure you have plenty of margin to still make money on the flip after you subtract the cost of the repair.
3. Advertising and selling the car: I recommend you advertise and sell your cars where I sell mine: Craigslist. Classified ads are free and you can post them in just a few minutes.
I also learned that the most important step was the first one, which also happened to be the step that often required the most time. I found I spent nearly 75% of the car-flipping process just trying to find a car at a great price.
So I developed a strategy to get deals to come to me instead of going out to search for them myself. The crazy part is it worked.
Here are the top three strategies that worked for me:
CPRO is a great smartphone app for setting up Craigslist alerts for new listings that meet your criteria. I set mine up to send a push notification anytime an ad description contained “must sell” or “make an offer.”
Sellers who need to move quickly are much more likely to sell their car at a deal, and CPRO helps you get to those deals first.
The free version allows you to set up a limited number of alerts, but I recommend spending a couple bucks to buy the paid version so you can set up as many as you want.
These aren’t your granny’s wanted ads. Target your ads specifically to people who want a quick sale, which usually translates into a great deal for you.
And the great part is, wanted ads on Craigslist are 100% free. Here’s an ad that I used:
AD TITLE: I want a car today. I have CASH!
AD DESCRIPTION: I’m looking for a reliable vehicle ASAP. I have $2,500 CASH and I can pick it up today. Text or call with what you have to (555)-123-4567
Just about everyone knows someone who is thinking about buying or selling a car. I offered to pay anyone who helped me find a car that I could flip.
If I made $2,000 on a car referred by a friend, I gave them $200 as a finder’s fee. That kept my friends happy and motivated to bring me deals.
A few days after I implemented my new strategy, I received a new notification through CPRO. A charcoal sedan in excellent condition had just been listed on Craigslist by a young couple who urgently wanted to sell before moving out of town. They were asking $3,800 for the car, which was already less than its Kelley Blue Book value.
That’s when I read three of my favorite words in their ad: make an offer.
I quickly called the seller and offered $2,800 pending a test drive. I made sure to mention I could buy the car immediately and I had the cash in my pocket.
After a quick test drive and a 15-minute visual inspection, I bought the car on the spot. The couple mentioned how relieved they were that they found a buyer so quickly and thanked me for making the purchase so easy for them.
On the way home, I stopped at a car wash and gave it a quick rinse for $8. The clear spring weather made the paint sparkle beautifully in the sun.
As soon as I got home, I listed the car on Craigslist, expecting it would sell in the next day or two.
Fifteen minutes after I published the listing, an interested buyer was on his way to meet me. After taking a quick look under the hood, he handed me $4,650. I gave him a bill of sale and he drove the car away.
I’d started out by wondering about the shortest amount of time I could possibly spend on the entire car-flip process.
Three hours and $1,800 later, I had my answer.
Your Turn: Have you ever flipped a car? How much money did you make and how long did it take?
Jeremy Fisher has been a car flipper for over a decade and the only thing that excites him more than finding a deal is showing other people how to do the same. That's why he started the 3HourFlip blog.