Posted by MilNC on December 21, 1998 at 08:17:41:
Rent “GlennGarry-Glenn Ross” (sp)Is time better spent, IMHO. It has more to do with real estate, personalities, pressure,ethical challenge. Fargo-waste of time – whatever story was initiated by a car deal dissipates into non-stop violence. For lighthearted negotiation with min. violence–no one dies–rent “Cadillac Man”.
Cash for titles - Posted by Tim Kimball
Posted by Tim Kimball on December 17, 1998 at 14:15:13:
Where I live there are a lot of these businesses where you can get a loan against your car title. It seems that an investor could really take advantage of this abundant source of car paper. I’ll bet that the LTV’s on these loans are very small. Anyone have an opinoin on this?
have you seen the movie “Fargo”? - Posted by Cesar
Posted by Cesar on December 19, 1998 at 13:44:47:
If you have, then you know what happens to someone when they attempt to play the credit game with cars and financing.
John is absolutely right-the main reason for investing in notes should be safety of principal, which cars do not allow you to have.
As soon as I close my next deals (end of this month), I will be purchasing John’s program…
Anybody seen a green Jaguar? - Posted by John Behle
Posted by John Behle on December 19, 1998 at 12:05:45:
Real estate doesn’t have wheels. Cars drive away. Anyone making car loans either has to take possession of the car or be prepared to go get it.
Many of the “Cash for Title” places hold the car as well as the title. Others are experienced at Repossessions. They really aren’t much fun. You have to have a very low LTV on a car due to it’s constant “Devaluation”.
Most of the money made in car paper is through what they call “Lumpy lots”. Cars that are hard to finance in the normal market due to the age. The dealers usually take a downpayment that is large enough to cover their cost on the car. They are then financing only their profit.
When they sell the note to investors, the investors are financed way over the value of the car and dependent on the dealer.
Most of the money lost in car paper is also the same way. Dealers go belly up, use phoney car titles or do not back up the guarantees. In one case of a “Note” investor that was seduced into the car paper market, the dealer used phoney loans with phoney titles and the investor lost his shirt and the shirts of all the investors that had helped finance him. A skyrocketing note investor went up in flames.
In a local case, one of our car dealers just got out of prison for his lumpy lot operations. I’m sure his investors were burned bad. The cars were totaled by insurance companies and he straightened the frames and re-built them.
I’ve known several car paper investors that have made some great profits - - - for a while. It can be a dangerous game.
Haven’t seen it - Posted by John Behle
Posted by John Behle on December 19, 1998 at 16:33:25:
Haven’t seen Fargo. Is there something about car dealers or car paper in there? I’ll have to watch the video.
I know a bunch of people that have made money in car paper, but I can’t think of one of them that wasn’t burned later on. I know it can work if someone really knows what they are doing, trusts only their own due diligence and is willing to do a midnight repo.
Most end up trusting dealers and getting burned. Many used car dealers seem to be very “Ethically challenged”.
I had a rotten day one day and decided to see if messing up someone else’s day might make me feel better. I went and reposessed a car that I had financed. I didn’t feel any better, the car was such a mess I gave it away and the guy I reposessed it from found vindictive ways to get even. Not a great experience.
Very profitable, very dangerous… - Posted by raelynn mitchell
Posted by raelynn mitchell on December 22, 1998 at 24:15:55:
Imagine having to repossess a car … from a police officer. He comes out and catches you, says he made the payments and it’s all paid up. Not what the finance company records say, and the repo man hooks his tow truck up to the vehicle. In one case I specifically know of where the officer had litigation going on about the car, his response to the repo man was, “If you don’t leave that car alone I’ll have to arrest you…” with his gun drawn. Now imagine that this is not a law enforcement officer at the other end of the gun you are facing…
The profitable? I once met someone many years ago that had a “carry your own note” lot. Bankrupcy, no credit, bad credit, didn’t matter. A small down (all that they had invested into the car) was all it took to drive off the lot. This particular someone was located in Arizona, and in their contracts it specified payments due every Friday (yes, every week). If you were one day late, they repossessed. This guy had a car that paid for itself 22 times (no that’s not a typo, twenty two times) before someone finished paying on the contract and actually kept the car. All the other times the lot would repossess and get another “down payment” (cost of car) from someone else.
There have just GOT TO BE safer ways to invest in paper…
Food for thought.
raelynn