September 25, 2007
Evenlevel is an Internet company and we’re constantly being reminded in the media of the recent wave of social networking online and its impact on the Internet and e-commerce. We all have our Facebook, LinkedIn, and Twitter accounts (to name a few). The Evenlevel founders have been throwing around ideas for how to build a really dynamic community around some aspect of the car business. One idea that has stuck has been to build a community around car flipping.
Car flipping is akin to house flipping. House flippers look for cheap properties and either resell them immediately because their original purchase price was so far below market or they rehab them and then sell them for a profit. I flipped a property a little over a year ago and had great success doing so and actually just bought another property a little more than a month ago and intend to do some extensive rehab and resell this property as well. House flipping is not easy, my business partner is an architect and I could not do this business well without her. However, with a little knowledge and a lot of hard work there is a ton of money to be made in that business, which now brings us to car flipping.
The concept is basically the same. Find cars at below market value and resell them at market value for a profit. I did some research online and found virtually zero resources for an aspiring car flipper, while you get inundated with books, seminars, and infomercials for people “specializing” in house flipping. I did fine one poignant blog post about car flipping at Get Rich Slowly. This article generated a ton of discussion comments. The comments seemed to go back and forth between some seasoned “car flippers” and those that seemed somewhat uninformed and skeptical of the whole practice and were calling car flippers “curbstoners”.
Curbstoning is essentially the practice of conducting business without a licence and often refers to the buying and selling of automobiles without a license. Here in the state of Texas, common citizens can sell up to four cars a year without a dealer’s license. You’ll need to check on the laws of the state you live in, but a Texas citizen can “flip” up to 4 cars a year. If you sell 5 or more cars a year and you’re not a licensed dealer, you’re breaking the law and are essentially committing curbstoning…not something you want to do.
However, you can have a lot of fun and make a decent profit by flipping the allowable number of cars in your state each year. In fact, it appears that many people are doing just that. I was mentioning our business to one of our local Wells Fargo bankers last week and he told me that he and a friend had been flipping cars for years. They were finding cars on Craigslist, buying them, and then reselling them on eBay or Craigslist . They were very tuned in to what was in demand in the local market and knew a good deal when it came across. They searched through hundreds of cars to find these deals, but had made more than $4,000 in profit on several occassions for vehicles that they resold for less than $15,000. A pretty good profit margin if you ask me. Once I told him about our business, he was immediatley interested in using our site to source vehicles as well.
The founders of Evenlevel think that our site could be a great resource for the car flipping hobbyist. First off, you can sort vehicles on our site by their absolute value under the market average for similar makes and models. Secondly, we just rolled out a new Email Alerts tool that will send our customers an email whenever a new vehicle is added to our site that matches their particular search criteria. And we’re working on some other goodies that will definitely help refine these searches even further to deliver only the choicest cars to the consumer that is either looking to buy a used car for personal use or buy a car to flip it.
I’m interested in hearing some feedback from any car flippers out there to see if they would be interested in a section of our site dedicated to flipping cars. We’ve talked about user submitted articles on best practices, what to watch for and avoid, and how to profitably flip cars while minimizing your exposure to risk, and how to conduct your car flipping business legally. Additionally, we’d love to start posting success stories and pictures of flipped cars. If we get some positive responses we’ll definitely push this up the chain on our priority list.