New Year 2020- Flipping Cars legally but not enough volume to justify getting a dealers license

L5wolvesf said:

mr2s2000elise said:

L5wolvesf said:

mr2s2000elise said:

 Dealer license (super easy), last 10 years here. Now no issues 

Just curious, what state are you in where the dealer license is super easy?

I am in CA. I meant it's super easy for me having a dealer license than dealing with DMV and getting noticed for selling more than 5 

I pay $450 for surety bond. Test and fees cost me about $300. Not sure if prices have increased since I got mine in 2008 

Doesn't CA require a place of business, dealer lot, zoning, etc..which costs money too?

TN has a lot of requirements to get a license -- place of business with a certain amount of road frontage and paved/gravel lot space, visible signage, etc.  It isn't a trivial process.  I've considered doing this in the past, but when you make your hobby your job it might just feel like work.  Maybe find a really nice car that isn't marketed well, but it and flip it on BaT?  Maximize those 3 per year and see if you're having fun?  It might make sense to lease some space and do it right after that.

In reply to dherr :

You might want to jump on these two Chevy Impala SS

One in Harrison, PA (which is not far from MD) and the other slightly farther in Cleveland but I bet you could get Pat to deliver it to Baltimore or York, PA for the right price and if you're patient. 

I can only imagine the classic Impala SS will appreciate in price. 

In reply to John Welsh :

Well I got three projects lined up already, so not in the market to add any more right now, but agree that the Impala SS has to go up in the near future.

Funny this thread came back to the top. Just minutes ago I won this Equinox. 

https://www.iaai.com/VehicleDetails?itemid=34570222&RowNumber=1&similarVehicleItemId=&isNext=&loadRecent=true

Completed, I think I'll have $2k into it and try to retail for $4.5k.  I think this will be a great seller at tax time. 

nimblemotorsports said:

I think California has similiar laws, but my friend exceeded their limits by a lot and never heard a word about it.

When she was flipping cars, she would try to keep the title out of her name, the paperwork shows they bought the car from the previous owner.

However, a competitor can report you to the state, that is the real risk, if you are big enough for people to notice what your doing and have it impact them.

So we are clear if you do not title the car in your name in California you ar fully breaking the law and they will find you eventually. They are not pleased about it as well and the fines can be astronomical. Effectively California does not care how many cars you buy and sell just that you pay your taxes and smog everything legally. 

In reply to John Welsh :

Looks to be a pretty clean car apart from the damage. Sounds like a good buy!

Uh, oh.  

I also just won this Focus... 

https://www.iaai.com/VehicleDetails?itemid=34660086&RowNumber=3&similarVehicleItemId=&isNext=&loadRecent=true

"Needs" nothing if your okay with cracks in the bumper covers but $200 will make it perfect.  Super clean.  Super tires, super low miles.  

I'll have $1,300 into it or $1,600.  A $4k retail would be great! 

Getting scary, I also will probably end up with this Sonic.  It is listed as "wont start".  When I looked at it yesterday,  when I hooked up the jumper, it would not start.  More so, even with the jumper attached the horn would not beep.  I left the jumper on longer and jiggled it a bit and sure enough, started, ran fine, and ran w/o jumper.  I figure that the battery is super-drained.  I was happy to see that the yellow sticker is for a timing belt change that just happened 3k miles ago!    

That is not damage up front other than a scuff and the corner of the bumper cover has pulled away.  Should be fixable with no parts.  Another $4-5k retail, I hope.  

https://www.iaai.com/VehicleDetails?itemid=33908775&RowNumber=4&similarVehicleItemId=&isNext=&loadRecent=true

John Welsh said:

Uh, oh.  

I also just won this Focus... 

https://www.iaai.com/VehicleDetails?itemid=34660086&RowNumber=3&similarVehicleItemId=&isNext=&loadRecent=true

"Needs" nothing if your okay with cracks in the bumper covers but $200 will make it perfect.  Super clean.  Super tires, super low miles.  

I'll have $1,300 into it or $1,600.  A $4k retail would be great! 

You'd have to spray it, but I've got a rear bumper cover in white that would fit that.

Ooh, I've also got the carpeted cover that goes over the hatch area, if you're missing that!

In reply to John Welsh :

I know the feeling. Won three cars in one auction once and only had room for one! Are you winning these on prebids? 

So I have the same question as the OP for you. I know Ohio the public can buy salvage cars but do you have a license to be able to move that many? 

In reply to wae :

Noted. Thanks 

In reply to enginenerd :

More, later

And... Now I own a Sonic for $1488. 

In reply to dherr :

Greetings fellow Old Line State resident.  Not a dealer here, and have had years when I've sold more than 3 cars in that particular year.  Like many laws here, the issue seems to be not if you sell four or five, but if you sell four or five HUNDRED.  I.E., keep your nose clean, and they shouldn't bother you.  

I think most people here have had cars pass through their hands on an "open" title.  For me, its when I get something as a parts vehicle or similarly cheaply, and the cost of tax/title would be a significant percentage of what I paid for the car.  Again, I think this is more about the spirit of the law than the letter.  If I were flipping cars for profit, I'd either get a dealer license or re-title them.  

Incidentally, if you want to PM about what you're doing, feel free.  I only live about an hour from you, I think.  

I had to be on the road yesterday morning so these were all pre-bids.  In no way did I figure that I would get all 3, but I'm okay with that because so far, I think they are all good deals.  Common cars to sell to common folk seem to be much easier than unique cars to unique buyers.  

Quantity/dealer:  I blur the line a little because I own a medical transport company.  This means I have multiple vehicles on the road daily.  So far, I have just been buying these in my personal name.  For the cars I keep for the business I then title them in the business name.  IAA limits me to 5 salvage buys per year but no limit on repos.  I have never done more than 6 per year (calender year) in the past.  In reality it will likely be until April before I move through these 3 anyway.  I do this on the side and at a slow pace.  If I want more car I could then buy from Copart or if I want more IAA then I could also open an account in my real business name. 

Since I am buying from a reputable business, IAA forces every title into my name which forces the tax to be paid on every one.  I'm following the rules and the state is getting paid.   That should keep them happy.  Just buying too many does not qualify me to have a dealer lisence.  For that you need a real property, real hours, etc.  The state even has rules to dissuade "dirt lot" dealers.  One requirement is the ability to have a minimum of one car under roof.   

It seems my links above are dead so here are some saved pics.  

2006 Equinox V6 leather, 66k miles

2007 Focus SES (high model...for a focus) Auto.  Crack in rear and some previous lower crack in front.  Otherwise seems perfect 75k miles.  Seems old lady owned.  The mud is just from being stored on this dirt lot.  

2013 Sonic.  Low option model with auto and air but crank windows.  106k.  

It is now 9:00.  Quick stop at the bank and I'm off to pick them all up today.

In reply to John Welsh :

Wait...  2013 and crank windows?  I truly believed that it wasn't possible to buy anything build after about 2010 that didn't have power windows standard.  Now when my kids look at the Miata and give me that stupid look when I tell them to wind the window down, they can't use the whole "they haven't made these since I've been alive" trope!  ha!

2019 Jeep Wrangler , $32,000 can be hand with crank windows 

my dealer has 3 

Not to threadjack...ok, I'm threadjacking.

If an auction were to list a car with no visible body damage and all 4 wheels intact and upright what would you think they meant by Loss-Collision; Primary Damage-Undercarriage?

oh, it's run and drive

In reply to russde :

I'd be looking for damaged engine and/or trans pans.

Well it looks like I am now the proud owner of two 1994 M-Edition Miatas that are being delivered to the house today. No titles, but complete, one has front end damage, the other is rough but complete.  Plan is to part them both out to fund other projects. I figure that the wrecked car gives me all the parts to convert our NA car to a manual trans and the 2nd car will be parted out completely. Can't really lose at a total investment of  $550 each delivered. So that brings a total of three projects lined up for the year. I am also thinking that I can title cars in my wife's name so we can do 5-6 per year to keep under the limit.

In reply to russde :

To threadjack your threadjack, er-i mean answer your question.  I've had this exact thing happen.  My daughter centerpunched a median (tall curbing) with her new to her civic coupe.  Broke the engine cradle and pushed the powertrain back two inches. No visible body damage, all 4 wheels intact and upright.  The only telltales were both airbags deployed, a very small crack in the bottom of the front facia and the exhaust slightly misaligned in the rear.  I didn't think the damage was that bad until I looked underneath to change the oil, she had been driving it a week after the accident by then.  Called the insurance company and they totaled the car after their inspection, you could still see the yellow paint from the curb on on the subframe and engine cradle.. That one hurt (only had the car a month, I hadn't made the first payment on the loan yet.)