Interesting addendum to the buy-here-pay-here discussion


#81

I understand your point however this example needs some clarification IMO. A homeowner that is not in the business of renovations must hire people to do the work. Those people will charge full “retail” pricing with maximized profit margins for their expertise and time. A professional flipper usually has either a full time staff to do the work or has contractors they repeatedly use to do the work and get volume discounts as a result. The flipper isn’t paying as much as a normal homeowner would. In addition, most homeowners cannot do the GC part of the job so they need to hire someone to do that. Yet another middle “man” that has wages and profits added on. So the $150k profit the flipper gets doing the job in under 30 days (less holding costs too) makes it lucrative. The homeowner, not so much.

I sold a house not too long ago that needed renovation to appeal to a wider, move in ready population of buyers. I tallied up the costs and what I could get for it once it was all said and done. In the end, an extra $25k wasn’t worth all the hassle I’d have to go through. I sold it as is, at discount, and washed my hands of it…


#82

I work with a guy who flips houses on the side. He does all the work himself so he saves a fortune. He makes some money on it, but it’s obviously not a get-rich-quick scheme, otherwise he wouldn’t be working here anymore. :wink:

I also know a guy who flips cars. He’ll buy some old heap, change the fluids if needed, maybe new hoses and brake pads, and then sell it for $500 more than he paid for it. He also does all the work himself, buys most of the stuff from Rockauto, and probably makes 3 or 4 hundred per car. He does 4 or 5 a year. It’s more of an excuse to putter in his garage than anything else.

Whether it’s houses or cars, most work you do to them will not increase the resale value. It might increase the resale speed – i.e., I’m more likely to buy that house if it has really nice landscaping, but… Well we put 10 grand into landscaping at our house and we know full well we’re not gonna get 10 grand more than we would otherwise when we sell - but that’s probably 30 years off and we did it because we wanted to enjoy the landscaping. I’d never do something like that with the expectation of realizing a profit off of the work.

Same with cars. Oh, you swapped a turbo-6 into your Honda Civic? Neat, I’ll take it. No I won’t give you much, if any, more than an un-adulterated Civic would go for because I’m taking the risk that I’m going to have to come along behind you and fix all the crap you screwed up by cutting corners or being incompetent. If anything, I’ll pay you less than I’d pay for a normal one.


#83

Are you sure. Because Wells Fargo was opening accounts for people without their knowledge.

I stopped dealing with Banks years ago. Fee after Fee after Fee. Been with a credit union for decades. Now with on-line banking and ATM it really doesn’t matter what bank you use.


#84

Not our experience with our bank. We have free checking and on line bill pay plus we get cash from them once a year for using bill pay.


#85

For a while I had to deal with a bank because the closest credit union branch was 20 minutes away. Our bank and credit union (DCU) offered bill pay about the same time. And that’s when we dropped the bank. Bill pay at the credit union was free. But the bank wanted to charge us for it. I also get money back from my credit union when I get charged a fee for using an out of service ATM. But luckily most credit unions are part of a network, so there are no fees if I use an ATM at any credit union.

Back to cars.

My middle son bought a car a couple years ago. Best rate was through our credit union. The dealer he bought the car from even dealt with them directly.


#86

I once bought several “fixer upper” cars for somewhere in the $500 range, fixed them up, and sold them for a small profit. I looked them over to make sure nothing serious was wrong. They often needed brake work, a new waterpump, or similar. This was all great until I had some real nuts cause me grief. It was one of those situations where a guy decided he didn’t like the car and was impersonating a cop, trying to threaten me to take the car back. I called the cops of course and that was the last I heard of that fellow…

Anyway, I had a few other issues selling these and decided it wasn’t worth it. Again, it is like the HGTV shows in that these people buying a $1200 or whatever car had demands you would expect when buying a new car but not some basic beater like I was selling. I decided this wasn’t worth the hassle and sold the last one I had as scrap when I found more wrong with it than it was worth.

I agree that there is nothing real about “reality TV” and that it is all scripted. I guess having it normal would be boring but now this has altered expectations for everyone from car buyers to home buyers. People expect granite countertops and stainless appliances with all the frills when what was in the house originally is just fine. I have to say that the ones where the house looks like it is going to fall down at first and then looks great at the end are always fun.

My parents had some friends selling a house. The buyers were demanding they replace all the HVAC systems because they weren’t new. Everything worked just fine. The sellers were like “We lived with this equipment it is is fine so we are not going to replace it.” I think they ended up reducing the price a tad to provide an allowance for increased bills over having newer equipment and to go towards the cost of replacement when that time came.

It always amazes me when someone complains about a minor dent or a car being the wrong color when buying used. If you demand perfect, buy a new car at full price.


#87

I’m with you on the idea of doing stuff I can enjoy. It took me a while to realize I should make improvements while I own the house so I can enjoy them versus waiting until before I sell it to do them. Then only the new owner gets the benefit.

Kitchen, bath and or increasing # bedrooms are surest bet to increase resale value. Speed is very important if you have holding costs. It may not affect sales price but will affect profit if you can sell faster so in the end, it can have a positive monetary effect. I was holding two homes once and the taxes, insurance, heating costs etc added up fast.

I can’t see flipping cars being lucrative. 10% on a $500k home? Decent. 10% on a $5k car? eh.
And like you said, anything out of ordinary is usually detrimental to value.


#88

Yeah I’m sure, but thank you for your concern, but I read the paper.


#89

I’ve flipped a few trucks. I made $12-$1500 on two of them, broke even on the next one, and I think I lost $100 or so on the last one. It was more of a hobby than anything else. I drove the trucks a while and fixed little things while I used the trucks. I liked working on them, but selling them got to be too much of a hassle. I got tired of hearing the “what’s your bottom dollar” line before the people had even seen or driven the vehicle. No matter how low you set the price, people want to offer you less than you’re asking and they act like you’ve committed a mortal sin if you won’t budge on the price.

My current truck, the guy was asking $5k. The truck had 137k miles, no rust, no dents in the body, 2005 Sierra extended cab 4wd, V8, and new tires. It’s a base model truck, but still. I just have the guy the $5k. Seemed pretty fair to me, so I paid what he was asking.


#90

Do you actually read a news PAPER @Bing ? I thought they were as out of date as drum brakes. I know my local paper lost me more than 30 years ago.

And more and more the local bank where I I have had an account for many years appears to have little appreciation for my business. Oh well, like television the banks are catering to their younger customers.


#91

We have similar philosophy.
I hate selling because people say they will be there and don’t show up, say they are interested but don’t have the money etc. My all time favorite was a well worn B2000 I was selling. Was out by the road for all of 1/2 day when 2 young guys stopped to look. I was asking $800. Gave them the background and after some back and forth the guy interested says you want $800 but I’m afraid something might go wrong on it, would I take less? I told him I could almost guarantee that something will go wrong, that’s why it’s priced at $800! Plus, it’s been out by the road for only 4 hours and I’ll take my chances. He ended up buying it and I saw it around town for another 3-4 years, hauling stuff for his business.

I used to enjoy buying well used cars and trucks. I’d fix the stuff it needed and run them for years before scrapping or giving them away (to avoid selling hassles).


#92

I sold an old Caddy I owned. It was 15+ years old and extremely rusty. I was asking $200,

This jerk came by to look at it and started going over it like it was a ne car giving me a list of all the things wrong with it. Basically asking me to fix these problems (costing maybe $2,000) before he gives me $200, Needless to say I told him where to put his offer. Following day I sold it for $200. The jerk called me back and asked if the car was still for sale…When I told him no - he got real pissed. I hung up on the little jerk.


#93

All TV does that, not just reality TV. Lawyers have been having problems with juries for years because the people on the jury have seen CSI and think that’s how murder investigations go, and so when they can’t provide crystal clear photos of the actual murder taken from a security camera 30 miles away, and the DNA test took longer than 45 minutes, well, the guy must be innocent!

For some reason people really do have a problem figuring out the difference between fiction and reality, even if the fiction isn’t branded as reality. Remember those idiot teens who got themselves killed by lying in the middle of the lane marker while cars shot past at 70mph because they saw the football team do it to toughen up in a movie?

I can, but you’ll have to refer to the buy-here-pay-here discussion for the proper technique! :wink:


#94

Yep I do, every day. The paper version. Yeah I also look at various on-line versions also but some of them now limit your free access. I can usually get around it except for one. Actually my main bank has activities and trips for the seniors about every month.

I remember telling our affirmative action officer once that I was going to my in laws golden wedding anniversary that weekend. She said “I didn’t think people did that anymore?” Not in her world, but happens a lot in mine. I also still check books out of the library-paper one, but also do the electronic ones.


#95

Yeah, selling a car for $200 is probably less than scrap value. I know someone who bought a car for $100. The previous owner just didn’t want it and was offered that much by the salvage yard. The person I know bought it for $100. I think it might have needed new tires but that was it. It ran fine and was in great shape for a car of its age. It was an older smaller Saturn and was used for a commuter car which was appropriate as the mileage was great.

I always love how the cheaper stuff always brings in the real nuts. That is how it has been for me. I probably wouldn’t have much of an issue selling $5000 cars but the $200 ones would bring in the real gems! I think I sold 4-5 cheaper cars back in the day. It just got to be too big of a hassle so I quit. One guy gave me a good tip… He said to ALWAYS put in synthetic oil so the engine will hopefully run for at least a year when the next owner never changes the oil which I guess is typical for these types of cars. That way they won’t come back mad at YOU when it blows or locks up due to lack of oil changes. Again, the person who buys a $200 car and never changes the oil is going to be the first to blame you when something goes wrong. That is just how people are and probably why the buy here pay here business model is the only one that really works on these lower end used cars.

I tried to sell some riding mowers needing work this summer. They were projects. I sold two but the rest went in for scrap and there are a couple more that I will be giving the send off. Trying to sell something like this was also more of a hassle than it was worth. I keep the parts that commonly wear and fit my other units before they head off as scrap.


#96

We just bought an old Avalon for our niece. $350. Looks like it’s been through a war, but runs like a top.

I don’t get the attitude of being mad at the previous owners if something goes wrong. I mean… it’s $350. Our niece will quickly outstrip what we paid for it if she gets gas on the regular. If we wanted something guaranteed to last for years we’d have spent more money.


#97

I’m another guy who actually reads paper

We get the sunday times delivered. It’s good reading, while eating my breakfast

And I actually drive to the local library to borrow books.

I always check on-line if a reasonably close library has the book I want to borrow. If so, I’ll head over there, but I won’t drive more than 10 or 15 minutes. If no local library has it, I’ll place a hold on the book, which means they send it to my preferred library, and I pick it up when it arrives.

The library has a few large walk-in vans to move books and stuff around, but we don’t service them at our facility . . .


#98

I must have sold and given away over a ton of books, most old shop manuals, when I closed the shop and cleaned out the basement. Now I wish I had all of them back. Often someone asks a question here and I know that at one time I had the answer in Mitchell, Motors, Chiltons and even some factory manuals going back to the mid 60s for domestics and the mid 70s for Asian and European imports not to mention some great literary classics like How to Talk Dirty and Influence People.


#99

It seems the local newspapers here are kinda dying on the vine as well and several have closed. I really feel they could have been viable but many are owned by the same large holding company that basically runs them into the dirt. The company is parasitic and spends no money on the papers so they don’t have the resources to put out a paper worth buying. A couple new ones are popping up to replace ones that closed so we will see how they go. They actually look pretty decent for being new because the owners are willing to spend money on them. They are also locally owned.

I find that advertising my business in newspapers usually gets a decent demographic though. They seem to be more mature, have a higher level of education, and more affluent than the general population. You don’t get calls like crazy but the ones that come through are good customers. The phone book is the same way and definitely still worth advertising in which kinda surprised me. These may seem outdated to younger people but they still work. I was talking to an attorney and he said that the yellow pages is pretty much the only place you want to go to find an attorney as the internet is filled with legal scams. Again, he said it made no sense to him when he started out but that is where he gets most of his customers.

As for the old beater cars, this can be the best kind if you get a reliable one. I was looking at a totaled one with a salvage title out of state because it had been in a major hailstorm. It was a new car being sold for pennies on the dollar. I did some research and it was going to be a major pain and cost lots of money to get it into my state and certified as roadworthy so I quit looking at that one. I figure if you have the time and know more about this than I do, you can get some great deals on cars. Again, it looked as dimpled as a golf ball but was a new car for a fraction of the price.


#100

A classmate at Ft. Huachuca, AZ arrived from Texas with a brand new hail damaged 1978 Chevrolet Monte Carlo. Not one of my favorite cars but he paid less than 40% MSRP. I bought a 1957 Chevrolet 2 door sedan 235 cu in I6 3spd M/T in 1968 for $100. It had a poor metallic blue paint job but looked OK from 50 feet away. Otherwise it was in great shape even the tires. I drove it for 2 years with no problems.