Two weeks ago, I pulled into a guy’s driveway to check out a ridiculously cheap, $1,200 Honda Civic with the intent of cleaning it up and flipping it. But….I quickly found out why it was ridiculously cheap:
- the headliner was missing
- the front bumper was black (the rest of the car was green)
- the hood latch was broken
- there was a hubcap missing
- and it idled so rough I thought the engine might jump right out of the car!
I had made up my mind NOT to buy the car because there was just too much risk there to try to flip it. So, I told him straight up, “Sorry man, the interior’s ugly, the hood is about to fly off the car, and the engine is WAY too rough for my comfort. At this point, my offer would be far lower than you’d accept.”
“Well make me an offer.” He quickly replied.
I paused, thought about all the work that needed to be done and the cost for each item…”$800…” I said with a smirk.
…Apparently I just bought the car, and that’s where this flip began.
How to Flip a Car in Just Two Weeks for a Healthy Profit
If you ever want to flip a car yourself, you’ve got to:
- Be familiar with what it costs to make repairs
- Have a car guy that you can trust
- Know what to repair and what to ignore
Make a List of What Needs to Be Repaired
If you’re going to flip a car, you’d better have a list of repairs in your head long before you drive the car home. But, once you get there, be sure to formalize this list. Get out the ol’ yellow pad and start writing line by line what you think it’s going to take to get this car in tip-top selling condition.
As far as I could tell at the time, this was my list for the rough-riding 2001 Honda Civic:
To be completely honest, after writing out this list I was getting a little nervous. I bought this car for $800. If I put another $860 into it, that put me at $1,680. With an estimated selling price of $1,900, that didn’t leave me a ton of room for any incidentals.
BUT, there wasn’t much I could do about it then, so I decided to just get crackin’ and work my way down the list so I could sell this car for some money (Ha…hopefully!)!!
Take Action and Know Your Long Lead-Times
When you’re trying to flip a car and you want to do it fast, you have to be aware of your long lead times and take care of those things first.
In my case, my long lead-time items were:
- The engine and the SRS light – many times, engine and computer repair take multiple efforts, so these are always first on my list
- Paint for the bumper – I couldn’t find the exact spray paint match at my local stores, so I had to order it online. This typically takes a week for shipping.
- Hubcap – Chances are I wasn’t going to find the perfect match at the junk yard, so I quickly found it online and had to wait a week for it as well.
- Tax and Registration – I made a point to get to the Secretary of State as soon as possible because I knew it takes them 7-14 days to mail the title back. And I DEFINITELY couldn’t sell this car without a title.
By hitting each one of these long lead-time items early, I was able to get them all done in about a week, which made it possible to sell the car in a hurry!
Make It Shine and Be Honest
Put yourself in the buyer’s position. Would you want to walk up to a filthy car (inside and out), pay good money for it, and then have to stick your own hands in someone else’s grime?
No, that’s gross. AND, people often think, “If this person never bothered to clean the car, they probably didn’t take care of the motor either…” And, they’ll walk away without ever making you an offer.
Instead, get into that grime yourself.
- Wash the outside
- Fill in all the chipped paint
- Vacuum the inside
- Shine up the headlights (my secret: toothpaste, seriously)
- and be sure to spray in a pleasant scent to get rid of whatever odors might be lingering from the last owner
And beyond this, don’t try to deceive people when you’re selling the car.
- catch wind of your lies and run for the hills,
- make you a ridiculously low offer because they know something’s up,
- or they’ll hunt you down later after they get ticked off that you lied to them.
Instead, be honest with them up front. Tell them about strange noises they might hear during the test drive and explain what they mean (and why they shouldn’t worry about them). This will make you feel better because you’re not blantently lying to another human being, and it will make them feel at ease because they know they’re buying the car from someone that’s trustworthy. And in the end, it often nets you more money. Crazy how that all works huh?
How I Flipped a Car and Made $676.17 in Just Two Weeks!!
I drove the car six blocks to get it home. During that short drive, two warning lights came up on the dash (which by the way means the seller went out of his way to deceive me – likely by pulling the battery to clear the codes just before my test drive….grrrrrr).
The warning lights were:
- the check engine light, and
- the SRS air bad light were now on.
Neither of these were good news, but at an $800 buy, my maximum risk was just $500 since a non-functioning car could still be sold for $300.
So, I put my project manager hat on and got to work immediately.
The Engine and SRS Light
The 6-block drive home from the seller was pretty rough, but the 6 mile drive to the repair shop felt like an eternity. I distinctly remember sitting at a red traffic light, just trying to feather the gas and brake at the same time so my violently shaking car might smooth out a little! Anyway, long story short, I made it to the shop and got the diagnosis.
Score! The cost was only $129 vs. my $250 estimate. Thank goodness the motor was still fine. I was starting to feel a little better about this flip already.
The next roller-coaster ride was the SRS light. The shop called me, told me the issue was in the seat belt, and that they’d probably have to replace it to make the light go off (and so the airbags would actually deploy if you were in an accident…which is kind of important…).
“No big deal.” I thought to myself, “How expensive could a seat belt be? $40?”
The quote…was $350.
Annnd I pretty much had a heart attack right then and there. But, thank the Lord the conversation continued.
“But…” he said gently, “A lot of times it’s just a dirty sensor. I did my best to clean it out, but the light is still on… Wait, no. My mechanic just told me that it went off. We’ll see if that did the trick.”
Additional cost to fix the SRS airbag issue: Absolutely nothin’! Woot woot! Feeling good!
I bought the car with a black bumper. It was an eyesore and really needed to be painted. No way was I going to pay a body shop $500 to paint the bumper of an $800 car, so I decided to just do it myself with a few cans of spray paint.
The exact match was $10.89. To cover the entire bumper and a few rust spots on the doors, I probably would have needed to order four cans. Instead, I decided to order just two and paint a close-ish color match on the first couple of layers.
Here’s attempt #1. Ha, I was a little off on the green…
Here’s attempt #2. A much closer match for the base coat.
And here’s the final product with the color match paint! Not too shabby, huh??
Total paint cost for the bumper was $30.67.
The hood was closing okay, but it just seemed loose once it was shut. Either it wasn’t catching right or the latch welds were coming loose. After a closer inspection, it was the welds.
The initial quote from the auto body shop was $100. Ppbbbbbbb (me making the sounds of an annoyed horse…) – You know what? I’ve got a buddy that I’ve been meaning to visit that owns a welder. Maybe he’d help me out.
Again, long story short, he secured the latch, we had a good time talking, and I paid him $15 (it would have been $20, but that’s all that I had on me). Sa-weet!
The Gas Flap…Ugh
Ha, this was a fun one….NOT!
After I got the car home, I decided to start messing around with all the controls to be sure everything was working properly.
- Windows, check
- Radio, check
- Pop the trunk, check
- Open the gas lid…..open the gas lid…..c’mon…
Nothin’. (FYI – If you’re going to flip a car, expect to run into something unexpected…this was mine.)
I’ve never encountered this before, but the gas lid lever did absolutely nothing. And, the only other way to open the lid was by going through the trunk, dismantling the side wall upholstery, and literally pulling the plug from the backside. And, after going through the process, this is obviously what the previous owner had been doing and decided not to tell me about. What a jerk.
At the dealership, this repair typically costs between $400 and $500. Was I going to spend that kind of money? Of course not. It was time to consult YouTube (what did we all do before YouTube? I have absolutely no idea…probably spend way too much money on stuff like this!).
Check out my repair below. I had to secure the wire that was leading to the gas flap since it was cracked and separated.
- Step #1: Wrap the heck out of it with duct-tape.
- Step #2: Secure it with mini-hose clamps to make it last
Voila!! A $500 fix for just $1.21. Gotta love ingenuity.
The Actual Costs in Total
Remember the three keys to flip a car?
- Knowing your costs
- Having a good mechanic
- and knowing what repairs to ignore
I decided that the car didn’t really need a new headliner, new tires, or a new windshield. The buyer of this car wasn’t going to expect something perfect. They’d likely want it because the outside doesn’t look too bad, it’s cheap, and it would give them crazy good gas mileage. So, I ignored those three items and took my chances.
Check out the final costs vs. my initial estimates. BOOM! Killing it! Now I just had to make the sale.
The Selling Process and the Profits
I listed the car for sale on August 26th, just a week and a half after I bought it. Now I just needed a buyer…
Just one day later, I had a guy come to take a look. He liked it, test drove it, but was concerned about the check engine light (for emissions – this is common in older cars) and the balding tires. He left and never came back.
Another day went by and I had another text. This guy was coming right after work on Wednesday. He cancelled.
Finally, I had a guy coming at 8pm on Thursday.
- He walked up, took a quick look, asked if he could test-drive it.
- He was gone mayybe 5 minutes, rolled back into the driveway, and asked if I would take $1,800 cash.
- I pretended to think about it for a second and then agreed (while doing a Snoopy happy dance on the inside).
From start to finish, this car flip took me only 2 weeks and 2 days to complete, and I cleared $676.17. (Oh, and for all you nerds out there that are trying to tie out the math and are off by 87 cents, I found that much change in the car and added it to my list of profits!. 🙂 )
Another successful story! What do you think? Will you ever try to flip a 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.