$656/hr flipping cars?!?!? – Ram 1500 Case Study

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Late last winter I drove an hour away to look at a 2003 Ram 1500 pickup. It’s a quad-cab with 120K/mi on it. The guy was asking $2300 for a ‘needs work’ pickup. Now, I’ve done my homework. I know two things. First, that these trucks “blue book” for close to $7500. Of course, what I also know is that it’s hard to get more than $6k for them. Still, plenty of profit potential – right? Right.

So, here I am looking at the truck. It is very dirty, but generally well-taken care-of. Some minor rust repair needed, but not too bad. He tells me the heater-core is bad – an $1000+job. But the truth is, it is so far under market-value, that none of these things scare me. Heck, even if the engine blew-up, I could break-even!!! Now my suspicion is that the heater core isn’t bad. But I’m still imagining $500-1000 in repairs. We agree on $1700,  I buy it . .. and drive it home.

Now the ride home is a little tough. Why? It’s running VERY VERY hot and I have to keep pulling over and shutting it down to cool it off. It is clearly a stuck thermostat. I get it home and when trying to change the thermostat realize the housing for it is stripped. Now, I’m only a limited mechanic, so I pay a friend to do the job: $300+$25 in parts.

With mechanical repairs completed, I now go and buy a custom batch spray can color matched by a professional car paint dealer: $30. I also do some minor fiber glass work on a rust hole.

Let’s look at costs:

$1700 truck

$325 repairs

$30 paint

$20 fiberglass

______________________

$2075 TOTAL

I sell the car on Craigslist. I know full well that I am discounting the truck for a quick sale. But hey, I’m asking $4900 – still plenty of profit for me! Quick story is this. First guy who calls comes and buys it for $4700/cash. So, if I’ve spend $2075, that means I’ve cleared $2625 for about four (4) hours labor. That’s $656/hr. I can live with that! How about you! And the truth is, I likely could have sold it for another $1000. Live and learn!

Maybe I make it sound easy. There are lots of things to know, to think about, and take into consideration. But we are also here to help. Learn from our experience! Most importantly, get of the couch! :)

 

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