“What did I just get myself into…?” I murmured to myself as I rumbled away in my newly purchased piece of crap 2001 Honda Civic…
Here’s the story in a nutshell:
- We were saving up money to buy either a rental house or a flip house
- An opportunity came up sooner than expected on a flip house that would have left us a paper-thin emergency fund
- I thought, “Why not find a flip car to make a quick $1,000?”
….and that’s what led to this next car flip.
Flipping a Car One More Time: The 2001 Honda Civic
So here’s the idea with any car flip.
- Buy a car for a ridiculously good deal (this is the most important part)
- Fix it up to look good enough for a quick sale (fix any mechanical repairs and clean both the inside and outside)
- Put on your sales hat and sell it for WAY more than you bought it for
I’ve done this successfully four other times…so this is lucky #5….I hope!
I was laying in bed, just thinking about how we would come up with the money for this potential house flip… Naturally, when I can’t sleep, I do what any other intelligent individual does – grab my phone and randomly look through my apps. It didn’t take long before I discovered my Craigslist app and had that light-bulb go off inside my head.
“Hey! I could find a cheap flip car and earn another $1,000. I’ve done it plenty of times before, and it would give us a little more cushion if we bought the flip house!”
Within 5 minutes, I discovered a forest green 2001 Honda Civic. It was listed for $1,200. I texted the owner and made an appointment for the next day. And I was once again thinking about flipping a car…
* * *
I walked up, gave it the quick glance, and it honestly wasn’t as bad as I thought it’d be. The bumper was unpainted (but I’ve painted them before), it had just a tiny bit of rust, and there were a few dings here and there. I asked if I could take it for a test drive and took it for a quick spin around the block.
Honestly, it ran pretty rough, and the headliner (the inside ceiling fabric) was ripped out, so the upper view was bright yellow foam core – not too appealing.
When I rolled back into the owner’s driveway, I had my mind made up: I wasn’t going to buy the car.
I told him the few quirks I had noticed and that my offer would probably be far lower than he would accept. He told me to make him the offer anyway.
“$800,” I said with a smirk.
“Sold!” he responded.
“Uhhhhh.” I stood there in disbelief. First of all, I probably should have said, “$600”, and second, I wasn’t sure I wanted this car now! He was pretty quick to say yes to a fairly low-ball offer. There must be something seriously wrong with this thing!
He assured me that they just wanted to get rid of it fast since they had just purchased a new car and had absolutely no use for it.
So, I handed him the money and rumbled out of the driveway.
I had my flip car.
2) Fixing It Up
To be honest with you, I’m writing this post at 4:00am because I’m so freaked out at all the repairs I’m going to have to make on this car. Will I even make any money? That’s what I’m trying to figure out in my head right now. Writing it all down on this post will hopefully help calm me down a bit…and hopefully not freak me out even more…
Alright, so for starters – what do I think this car could sell for if it was all fixed up and looking pretty?
I’d probably list it for $2,200 and expect to get $1,900. That gives me $1,100 of wiggle room to break even. Okay…that makes me feel a little better at least…
And what are the issues with the car? And what would it cost to fix each of them?
- The rough engine – my estimate, max $250 (I’m really crossing my fingers that it’s a $10 spark plug issue! 🙂 )
- The SRS light is on (this illuminated about 30 seconds after I left…grrrr) – my estimate, $100 to install a new seat-belt, a known Honda issue
- Unpainted front bumper – $25 for paint and clear-coat
- Missing hubcap – $30 for replacement or a whole new generic set
- Faulty hood latch – the front hood doesn’t latch all the way down and will need to be repaired – $75
- Missing headliner – $70 for a nice replacement. Less if I figure something else out…
- Cracked windshield – $150 for a full replacement…but I might just leave it as is
- Balding tires – The tires work, but they’re pretty bald, figure $100 for two newer-used front tires
Alright….well that’s quite the list.
Oh, and I still need to register the car and pay the tax to make this whole thing completely legal – $60
If everything is as expensive as I think it will be, the total cost to fix up this car is…. $860, which would leave me a profit of just $240. That’s obviously not great, so it’s time to find some cheaper options!
What’s your guess? How much money will I make (or lose) by flipping this car??
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.