I have a good friend that owns a used car dealership. He buys and sells cars wholesale for a living. He wasn’t just the typical car salesman, he was also a Chicago Policeman.
He had a near-death experience in 1990 after a horrible car accident. While heading home from work, he was hit head-on from a drunk driver crossing the median on the expressway. The man who hit him had no car insurance.
He was in a coma for almost two weeks and he nearly died. I met him roughly a month after he came out of the coma and was released from the hospital.
Around that time, he placed an ad for a used car salesman. When I noticed the ad, I really wanted the job. I continued calling until he finally caved and told me to come in for an interview.
The meeting went well. I think he could tell that I was genuine and eager to work. Since he wasn’t 100% physically and needed the help fast, he took a chance and hired me.
Dan had a real knack for the Car Business
He would buy cars at the auction and I would be flipping the cars on his lot for a big profit. He taught me how to go after the big hits, not the small $200-$400 profits here and there. He didn’t believe in just turning over the car inventory for small profits.
Since I basically had full reign over the lot, I would always move the cars around in different places and when doing this, it gave people the perception of the lot always having new cars!
I was surprised at how many people would say that they always see new cars on the lot — even if we weren’t selling many cars at the time.
Being a policeman, Dan had a lot of connections with the police department and he would sell to them month after month. I met a lot of great people while working for him over a two year period. I started flipping cars myself and partnering 50/50 on the cars and motorcycles we bought.
I Started Flipping Cars & Motorcycles
I would even buy cars out of the paper when they were a great deal, not just from the auction. One time, I remember it being a hot and sunny Saturday afternoon at the car lot and I was flipping through the paper ads and saw a motorcycle ad that caught my eye.
It was a great asking price on a Kawasaki GPZ 550. I went out and looked at it immediately. The bike was in excellent condition and I bought it for $1000.
I drove it for the weekend and I flipped it on the car lot the very next week for $2,850. That was a nice hit!
Dan taught me a lot and I’m forever grateful. We are still friends to this day and he is still a wholesaler selling cars in the Chicago area and in Arizona.
He even buys cars in one state and sells the cars in another state for a profit. I setup a website for him in order to get him car buyer leads. In exchange for setting up his site, he charges me very little to buy cars at auction using his license.
Here is the car lead website that I setup for Dan (previously mentioned in post).
I Lost over $4,000 On A Bad Deal & Wholesaling Cars Helped Me Recover
I discovered the importance of Dan’s wholesaling and exactly how to become a wholesaler when I got myself into a real pickle. At the time I was working at a dead-end, low paying job. The job may have seemed descent to some people, but it certainly wasn’t my dream job.
At the time, I was very unhappy in my current situation so I started looking at get rich ideas. Not the best idea right? I know, I know!
By desiring something new, I ended up getting myself talked into a situation on a phone call and there is no turning back.
It was a $4,000 training on how to sell “seller carry-back notes”. I flew to Vegas to learn about this strategy. I paid the $4,000 in advance. Along with my plane ticket, hotel and expenses. So I was out $5,000 before I even catching my flight.
While in Vegas I immediately knew that I got myself into a real pickle. I knew this seller carry-back notes thing was definitely not something I felt capable of doing. Maybe it was for some people but it definitely wasn’t something I felt ready for.
I remember getting home and being so sick to my stomach. Just knowing that I financed the $4,000 through the companies finance program at a high interest rate made things worse. The only chance I had to get out of this was to contact the company.
I was basically manipulated and swindled over the phone while at work. The way their sales guy Todd finally got me to sign on the dotted line after several attempts was by saying that he had family in my area and he was coming to visit them.
Todd aid that he would meet with me and take me under his wing. He also claimed we would have a deal done before I even got on the plane for the Vegas training!
Of course that never happened and he made excuses why he wasn’t able to meet with me. I know it was stupid on my part but I was desperate and I hated my job. I know better now and learned from this experience.
Once I called and told the owner about how I was sold, he was shocked. So long story short, I had to come up with the $4000 but they waived all of the interest on the loan.
I Had To Find A Way To Make Money
So now I had to figure out what I was going to do… And all I could think of was to call my friend Dan McCormick and find out how I can start wholesaling cars. My friend Dan was similar to my dad.
My dad used to tell me “Jeff, why don’t you just get a couple cleaning accounts or start selling cleaning supplies and chemicals that I sell, you could do very well!” I would always tell mu Dad that I wasn’t interested.
My friend Dan used to say the same thing. “Jeff, why don’t you pick yourself up a couple of accounts!” Dan meant for me to get new car dealer accounts where I would walk into new car dealers and buy their used car trade-ins wholesale and flip the cars on the lot or at auction.
When people buy brand new cars at new car dealerships, they trade in their old cars. Well, that was the opportunity. Used cars is where the money is to be made!
To get an account, you would have to walk into the new car dealer and ask for the used car manager. Next, you would let him or her know that you’re interested in buying their new car trade-ins. You wanted the high mile cars that they didn’t want.
In the past, I wasn’t interested in doing this. I was too shy and didn’t feel comfortable with doing it. I would always tell Dan “no thank you”.
I Had No Choice, I Was Broke – I Needed To Wholesale Cars
But now, I had no choice. I needed a way to make money fast and this was the only idea that came to mind. I called Dan and he immediately told me what I needed to do. He gave me the blueprint for wholesaling cars for profit.
How I Bought Used Cars Wholesale At Dealers & Flipped At Auctions:
I knocked on a lot of doors at new car dealerships. I knocked on one door after another after another. I told them that I was a wholesaler and I was interested in buying the used cars that they brought in on trade. I wanted the cars with high miles (over 100K) that I could resell through the auction at a higher price.
What I found was, most of these new car dealers did not want to do business with me. They already have someone in their back pocket buying all of their trade ins. I also discovered some of the used car sales managers already had these cars pre-sold to buyers that were lining their pockets with cash under the table.
The 11th Car Dealership Sold Me A Van to Flip
It was around the 11th car dealership when I got my break. The used car manager was someone that I met through my friend Dan. They knew each other from the old neighborhood.
They were old friends from the Chicago neighborhoods and when they saw each other, their conversation went something like this (seriously):
Joe – Hey Danny, what’s going on?
Danny – Hey Joey, same old thing, what’s goin on?
Joe – How’s biz Danny?
Danny, biz is good! You gettin a lot of actiont?
Joe – Yeah, we had 8 ups in the last hour and I just delivered 3.
That’s how the conversation usually went. It was really more like the sounds and dialogue from The Sopranos series. At first, it took me a little while to catch on to the car business jargon, but it was very interesting to say the least!
So that was my break. This was somewhat of an in for me even though Joe already dealt with several car buyers. Regardless, it still took me several more visits before they got sick of me and finally offered me a car to buy.
My First Wholesale Find At A New Car Dealership
It was getting late on a Wednesday evening and it was right before closing time at 9:00 PM…
It was clear from the look in his eyes that he wanted me off of his back, the general manager that is. He looked at me and looked back out the showroom window. He pointed to a Chevy Astro Van and said “tell you what, I’ll give that van for a quarter”.
So what he meant was the van was mine for $2,500. The previous owners just bought a brand new car and they were clearing out the van. It was a new car trade-in and it was absolutely filthy. But I didn’t care! That is exactly the kind of vehicles you want to buy. They look horrible on the outside but can be cleaned up and turned into beauties.
I contacted Dan while looking up the value of the van in my used car auction books. These were books from the auction showing prices of vehicles that sold the previous weeks. I looked up the van in the books and saw the price ranges between 4,200-4,700. I immediately knew there was an opportunity for a good profit!
Making $2,000.00 Profit
We ended up buying the van. Dan put up 100% of the money and since I found the deal, I would get 50%. We detailed the vehicle and ran it through the auction the next week. I’ll never forget when Dan called me. He said “Jeff, the car did $4,685”. After expenses, I made nearly $1,000 and Dan made $1,000 too. I was so excited! I couldn’t believe it actually worked!
I kept doing the same thing over and over with buying cars and Dan would front the money. We would detail the vehicles and run them through the auction. I ended up flipping enough cars to make up for the $4,000 that I lost plus more — in record time.
It was an incredible learning experience as well. Dan was shocked when I told him that I wanted to take a break from wholesaling cars. But at the time, I felt done. I accomplished exactly what I set out to do.
I CURRENTLY BUY CARS WHOLESALE & SELL CARS WITH MY DEALER CARD
To this day, I still have my dealer auction card under Dan’s license and I buy cars wholesale at the dealer only auction. Actually, I recently bought a few cars at the auction to drive and later sold them for a profit. It’s a real thrill!
If you’re looking to buy cars wholesale and flip the cars for a higher wholesale price at auctions, you will need to become a wholesaler. You could also buy cars wholesale and flip them to the public retail for even higher profits.
There are a couple ways you can begin wholesaling cars this way:
- Look in your contact list and see if you have any family or friends that are in the car business. And see if you can partner with them.
- Visit used car dealers in your area and connect with the owner. Try and work out a partnership where you will pay them a percentage of the profits on the cars you buy.
- Google search; “car dealer license” + your state. You will find companies that you can pay monthly that will allow you to get a wholesale dealer’s license. I actually did this in the past before working again with my friend Dan.
- Your Own Dealer License: This way is more expensive but you can also consider getting your own dealer’s license. It does take time and it can get costly, but if you do it this way you will make 100% of the profits.
- Buy wholesale out of the paper, Craigslist, etc. and flip for a profit. There are restrictions set by the state for the amount of vehicles you can transfer in your name and sell in a given year. Check with your state for confirmation.
Did you ever wholesale cars for profit? Leave a reply and let me know!