BiggerPockets

This is a follow-up to the thread on income streams not requiring real estate. I replied to a post about buying a self storage facility. Having bought one recently, I assure you it is NOT like buying real estate! It is a business, like restaurant or motel. If you HAVE money to invest and are wanting to create an income stream, read on. This is NOT a solicitation of any sort...

Here is a GUARANTEED way to make money, if you have some cash. I've done this twice just to prove it worksin different states. Drive through your city and look for the used car dealers(mid to nice ones) that don't have a jam packed lot . If they could handle more cars, they're short on capital, guaranteed. It is hard for them to find "flooring" to purchase more cars. Most of these dealers would tell you they can turn their inventory once a month.

With a lack of cars, they don't get as many "ups" to their lot. If someone wants a 4X4, there better be one on the lot, or they won't stop. If they want a convertible, there better be one, etc. Sometimes, they think they want a certain vehicle, stop and end up buying something else. You NEED the inventory
In a mid price range lot, profit per car is around 2K on a 10K car.(just an example) If you help him buy more cars, he'll be willing to pay you EXORBITANT RATES! 2-4% per month. Do the #'s
$10,000 car
$2000 profit gross
$2-4% interest to you($200-$400)
Net profit on ONE car to lot owner $1600-$1800 profit

He will LOVE you and your EXORBITANT rates! He generates more ups, his lot looks better, and he'll sell more cars. On your 100K, you'll make 2-4K income stream per month. You secure the loan with the titles to the cars he buys with your funds.
This is a really cool deal! Every dealer will tell you he can do better than he really does, for some reason. Even if he turns his inventory once every THREE months, he'll still make money while paying you 4 % per month. EVERY dealer will tell you it won't take him that long, so he won't mind your rate. I did this in 2 states and could do it here in FL in less than a week.
Would love some comments on this. If you have money, you can make money. Want other non real estate income streams? I have lots of them, I'm just too old. Rich

Try it Jon! They'll listen to you. Rich

Yeah, I could actually use to do something like that, but this would be IRA money, and I'm not sure exactly what an IRA would do with a car.

James,
If you use my idea, come back and vote for my post! I'm not on here as often lately and my influence is dropping like a rock,tic!! Rich

Pretty easy. Normally they have the titles to the cars on their lot. They had to pay for those at auction before they got the cars. I'll loan 70% of actual wholesale. They do the calculations and options list for me.
Getting rid of a car is just like the house. If you buy or loan low enough, no problem. A lot of times the loan will be paid off from sales of different cars. You must be in the area of the dealer. It will become a title switching nightmare. I've actually charged as high as 5 % per month.
In states I did the loans, there were no usury laws on business loans. Check out your state. Rich.

Hey Rich, great idea!

Do you think there is a way to make this work with less capital investment?

like, you take current cars that are for sale "under contract" at x percent from the owner(find them on Craigslist, etc., then you partner with the dealership and post your cars under contract on there lot. When they sell, you take 95% of the car, leaving 5% for rental and advertising by the car dealer.

After that, you can give the original owner of the car 95% of your 95% of the sale.. You would essentially have nothing down, and act as a middle man.

Thinking a little more, this might also work if you own land in general. Turn it into a lot for people selling cars to park them, and you take say, 5% to advertise and house the cars. It's different from a dealer because you dont actually own the cars and the risk is much lower.

Thoughts?

Kyle,

Your idea is very similar to how one sysytem works here in my area. At the college campus parking lot, there is a section where each weekend, people can bring their cars, park them, leave the keys, and potential buyers walk in to look at the cars available on the lot. This service is for a fee and you can pay for one weekend, one month, or "until it sales".

Pawn Shops! I've recently started buying the cash flow notes at some local pawn shops for 80 cents on the dollar. I have the owner guarantee payment, they pay if the person defaults, and collect then remit payment to me.

He loves it because they get to make more loans, and can turn around and sell the collateral, pay me, and still make money on a default. I love it because I've been making 25% a month for the past three months

I'm thinking about trying to incorporate and find some investors who want 10-15% a month and expanding past one shop.

As I posted elsewhere, I did this with one car and turned $7,000 into $9,500 in 4 days. But most of us do not want to be a car dealer. Rich also posted that he bought a diamond that appraised at 10 times his purchase price. Currently, I am buying gold at 90% of melt.

I find it interesting that nearly all of us on BP find ways to make money besides Real Estate. RE may be our bread and butter, but it is always fun to make money a different way once in a while.

I would think that this idea would work for many different types of businesses, you just need to be creative.

Rich I love this idea!