School me on opening a small specialty used car lot.

[Sean88gt]

sounds like he's not to bright to sink 5k at the sale on inop's none the less. If 10k can put you out of business you shouldn't be in it in the first place IMO

If you're established, yes, if you're a start-up, that can be a massive blow. But, his guy doesn't sound like he's too quick on the uptake. If you can't buy vehicles at a discounted rate and turn a profit then failure is your path.

[War Machine]

sounds like he's not to bright to sink 5k at the sale on inop's none the less. If 10k can put you out of business you shouldn't be in it in the first place IMO

some people aint got that train money CHOOOCHOOO!!!$$!$!$!$$!

[onemeangixxer7502]

If you're established, yes, if you're a start-up, that can be a massive blow. But, his guy doesn't sound like he's too quick on the uptake. If you can't buy vehicles at a discounted rate and turn a profit then failure is your path.

Yah, I just wouldn't open a lot with that little of start up capital.

[Sean88gt]

Yah, I just wouldn't open a lot with that little of start up capital.

I've actually been wondering what a magic number (if there is one) of cash would be to open on and weather the initial storms.

[JC316]

This thread has me itching to look into doing a side car business again. I'm assuming your 10k figure includes acquiring the lot, I've already got the lot, office, etc, just set up a cheap LLC, put up a sign under my current one and get the license.

Yeah, 10K includes leasing a lot. My family and I bought ours outright, so it added a significant cost to opening. I will say that auction prices are fixing to start going stupid high in anticipation of tax season.

Only advise I can give is to stay small. I'm stressed out of my mind constantly. If I had it to do all over again no way in hell I'd ever get in the car business. Anyone serious about doing this bullshit full time feel free to buy me dinner and ill piss all over your dreams of own a car lot and getting rich. This was a good business before 2008 every since then it's been downhill.

I am doing pretty damned good right now and it's the off season for selling. My biggest advantage though is that I am a mechanic. I can avoid problems at the auctions and fix my own shit.

[8mpg]

Southlake aint going to let you run a dealership in their city

[Chili]

I've actually been wondering what a magic number (if there is one) of cash would be to open on and weather the initial storms.

To do it right... I bet the magic number is $100k. That is sufficient for all of the start up expenses plus the first 6 months to 1 yr of barely breaking even, or losing money.

I would not try to start any "real" business with less than $50k or so.

BTW, that is $100k available. Not necessarily cash in the bank.. I would thing at least 25% to 50% in cash, the rest on a LOC / financing if absolutely necessary.

[Sean88gt]

To do it right... I bet the magic number is $100k. That is sufficient for all of the start up expenses plus the first 6 months to 1 yr of barely breaking even, or losing money.

I would not try to start any "real" business with less than $50k or so.

BTW, that is $100k available. Not necessarily cash in the bank.. I would thing at least 25% to 50% in cash, the rest on a LOC / financing if absolutely necessary.

I'd say that's fair. I was thinking a shoestring budget of $25k with some low price/quick turning inventory but that would be a longer buildup. $50k gives you some options, $100k gives you some ability to look at growth.

Please make the check payable to Cash

[mikec]

My father in law was in the used car business for about 35 years, had lots all over Garland Road, Forrest Lane and the like. To back up Buzzos number of 2008, he said to hell with it in 2010.

Good luck man, I truly wish you the best. Getting your hustle on is NOT easy. I'm busting my ass at this roofing/general construction thing and it's hard work just getting the work, so that I can actually go work!!!

[David]

High end autos leased or sold to people with zero credit and high risk. Take advantage of the poor and their want to live a style they cant afford.

I have a friend who does this and makes a ton of money.

[mikec]

Your friend has a really good repo man.

Come to think of it, I have one of those...

Hey Al or Jody, wanna make some bank? Have an active auction license we can put to use...

[Chili]

Your friend has a really good repo man.

Come to think of it, I have one of those...

Hey Al or Jody, wanna make some bank? Have an active auction license we can put to use...

The trick for tote the note type places is that your down payment should equal your wholesale cost for the car.. That way you are whole if they put a DP and never make a payment. Every payment is your margin. If you have a good repo guy and can flip repos quickly (from delinquency to resale) you will always keep a good cash flow.

I would never do that though, cause you're usually dealing with the worst segment of society.

[Whiteboy]

To do it right... I bet the magic number is $100k. That is sufficient for all of the start up expenses plus the first 6 months to 1 yr of barely breaking even, or losing money.

I would not try to start any "real" business with less than $50k or so.

BTW, that is $100k available. Not necessarily cash in the bank.. I would thing at least 25% to 50% in cash, the rest on a LOC / financing if absolutely necessary.

Damn!

[Chili]

I'd say that's fair. I was thinking a shoestring budget of $25k with some low price/quick turning inventory but that would be a longer buildup. $50k gives you some options, $100k gives you some ability to look at growth.

Please make the check payable to Cash

Don't get me wrong, I'm sure there are others that have done it successfully with less, but that is just a bigger gamble. Unless you have a LOT of capital it is always a gamble. It's just like craps, if you know your shit you can make it work in the long run, but you have to have a sufficient bankroll to weather the down-turns. Short term success is luck, breaking even is an issue of bankroll, making it long term is a grind.

The problem usually is that people are hoping to win big fast with: little capital, little effort and lots of hope.

[Chili]

Damn!

Granted, I only speak as an outsider. I did do inventory finance for dealerships for many years (primarily audit and risk roles), so this is an "educated" guess. Your business model is great but you are an exception and have carved out a nice little niche.