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00:00This guy rents out supercars and makes 800k. This is what we're talking about this week.
00:08This is a guy who's living every teenage boy's dream. Fast cars, Miami Beach lifestyle,
00:14and tens of thousands a month in profit. To be young and entrepreneurial in America today
00:18has actually probably never been a better time than right now. So today in like 10 minutes,
00:23we're gonna dive into race car rental, how to rent out supercars, break into cash, car
00:27arbitrage, car supply and demand, and why it's sort of off balance right now. And then lastly,
00:32how we're playing this market. I think this is going to be fun. Today we're going to talk about
00:36money. All right, how do I know inflation and market bubbles are here? Well, race car rentals tell you
00:45the whole story. You can buy a Lambo new for 200k-ish and then rent it out for big dollars. And finally,
00:51you can turn it around and after you've rented it out, put more miles on it, done more things to it,
00:56you can sell it for $220,000 to $250,000. That's a weird supply and demand imbalance. He's calling
01:05it car-bitrage. Let's break down how one guy does the rentals, how another guy buys the supercars for
01:11the wealthy and takes a cut. And finally, how you too can car-bitrage, especially if you're in Miami.
01:16Three ideas for making money from cars. Idea number one, I met a guy in Miami,
01:21he rents out 30 supercars. He makes 13 to 40k a month per car. This 30 something is living every
01:2816 year old dreams, buying luxury whips, renting them out, reselling them for profit. I sat listening
01:33to him explain the business model and one line really stuck out to me. He said something along
01:38the lines of, what if you could buy a supercar with a loan, in case somebody else's money,
01:42put a fraction down, rent it out for tens of thousands a month, and then sell it for more
01:47than you bought it. That's what he says he's doing. To which I reply, tell me more and it'll
01:52be our secret slash my tens of thousands of contrarians. We'll hear about it. Well, pre-COVID,
01:57he was dreaming about driving these bad boys while watching YouTube videos. Now he's executing. He
02:03saw a market opportunity in Florida with the massive amount of high tax state transplants moving
02:08and record tourist levels. There was a shortage of rentals and that fast paced lifestyle is perfect
02:15for Miami. They like shiny objects. So he thought, okay, I could probably buy the cars I've been
02:19obsessing about for decades, rent them to other people, drive them by myself, and maybe make a
02:24little money doing it. But he didn't think he was going to make this much. He put up a website,
02:29some images, got a loan for a supercar. You'd probably need like a decent credit history or a
02:34backer for this potentially. But then he started offering rentals. That led to a business he now
02:38overseas, but spends candidly not much time on. The model in action. He bought a 2011 Rolls Royce
02:45Ghost in October. $109,000 with warranty. Retails for $129K. I guess he got a deal. He rented it out
02:52during the busy season in Miami of November to May for an average $1,200 a day, which is crazy. Who is
02:58he renting this out to? People who own NFTs? His Ghost is out 13 to 30 days a month. In slow season,
03:04that's seven to eight days a month. So that means he's making $15K to $30K a month revenue on one
03:10whip. Let's break down the profit and see what he's actually charging. Overhead storing cars,
03:16pretty cheap. $100 to $300 in Miami. Delivery driver who does drop off and pickup costs, $25
03:21both way. Pro tip, client pays $150 each way and then he pays the worker about $25. Maintenance,
03:28$1K to $2K a month, but usually under warranty. Insurance, $100 to $200 a month. I couldn't believe
03:33it was that cheap. Tires, expensive actually. $500 to $1,000 a month or so on average. That
03:38means his profit is $9 to $29K. I thought that was fascinating. He did say there's one problem,
03:45which is that often people try to steal the car, so he also has to have a guy. And the
03:49guy, well, he follows these people and I guess gets the car back somehow. But when they do
03:54that, he actually has a charge for them and he has a hold that he puts on the credit card
03:58for people. So even if his big scary guy comes after you, you're paying for it. What's interesting
04:03though, is this gent has not one car, but $30. That's $300,000 to $870,000 per month. No wonder
04:11he's such a fast talking smiley dude. Now the downside historically was that supercars and exotics
04:18depreciate about as quickly as a, I don't know, a used wedding dress. So in a normal market,
04:2350% of the profits would be eaten away by depreciation, AKA the car is worth less today
04:28than when you bought it. But in today's market, he makes money flipping them. Wild. We're going
04:33to get to that. Now, idea number two is don't buy for you, buy for them. This guy's name is Sahil
04:39of RPSS Group, LLC. He comes from a long line of Indian entrepreneurs and hustlers, his words,
04:45not mine. And he's loved cars from a young age. What guy doesn't? I guess I never really got
04:49it, but okay. But obviously cars are a pricey mistress. So he started researching how he could
04:55be around dream cars without having to buy them. And he went to local dealerships near where he
04:59grew up and developed relationships. He would help any connection that wanted to buy a luxury car so
05:04he could get face time with the salespeople and managers. Essentially, if you're super rich,
05:08you don't have a lot of time, you want to buy a car, buying a car. I mean, how many of you guys
05:11have went and bought a car? It's terrible. It's the worst. So he does it for you. That turned into a
05:16pretty big consulting business, all focused on finding the cars, dealing with the headaches,
05:21those hot dogs that the car salesman bought, all around working with the wealthy and getting
05:26wild whips without the headache. Now, he's bought and sold for investment 150 luxury cars. And
05:32Sahil's got a few for himself. I'm just telling you. Perks of the biz, I guess. But the model makes
05:37sense. You buy a car in a lower ring of Dante's Inferno, even when you're spending hundreds of
05:43thousands of dollars. Sahil cures that pain for the big timers. He acts as the middleman between
05:49the dealer and the seller, negotiating the best deal, warranty, add-ons, as well as finding you
05:54that perfect lime green Lambo or whatever the kids buy these days. For his help sourcing and dealing
05:59with the hellacious pain of a used car salesman, he gets 2k retainer and 15% of the total purchase
06:06price. So if he helps you buy this $489,888 Ferrari Spyder, he makes $74,833.20 to be specific and
06:172,000 upfront. So he makes $76,000 when you buy a car. Now, I don't know if you're thinking what I
06:23was thinking, but why in the world would anyone pay an entire year's salary for one car purchase when I
06:28can find them myself? Well, when you buy at this level, the game is a bit different. Oftentimes you
06:33can't even buy the cars without connections. This blew my mind. The average wait time on a custom
06:38Ferrari, according to Sahil, is five years. Think about that for a second. I got a million bucks.
06:43I want a hot wheel. Ferrari says, awesome. We'll sell you one in five years. Sahil also negotiates
06:49the add-on packages, the purchase price and warranties. His game is that if they could find
06:54a better deal out there without him, money back guarantee. So if you're likable and have good
06:58connections, happy to wheel and deal with car salesmen and know a thing or I guess 27 about
07:03cars, maybe car consultant is your new business card. For me, I'd probably just hire Sahil.
07:09And so I was just wondering, Sahil, do you do any deals on Hondas? Because that's what I'm in the
07:14market for. The third idea I have about cars is what we talked about earlier. Carbitrage. I love
07:20naming things. Now, this model I'm testing out. Let me show you. 101 lesson on supply and demand. Cars
07:25are massively in demand. Supply is massively limited. What happens in that kind of market? Well,
07:30the price goes up to meet the demand. Case in point, my husband and I went out to go buy a Tesla.
07:36I mean, we moved to Austin. We're here for like a year. What do we do? We turn into tech bros buying
07:40Teslas. But other story there is essentially it costs more to buy an old Tesla than a new one.
07:46Wild. Then I thought, is this an isolated incident? It's the same with Porsches, which are an eight-month
07:51waiting list. The problem all starts with the delay in new car manufacturing. There were 3.3 million
07:57cars in lots last year in 2020. This year, do you know how many there are? 970,000. That is one-third
08:03the inventory. Why? Chip shortages. There aren't enough chips. Not those kind of chips. There aren't
08:09enough of these kind of chips. These are the electronic components of cars. Why? Because car
08:14makers shut plants during COVID-19 pandemic last year. And these chips are used in laptops, gaming
08:21consoles, that cool Oculus, leading to tighter inventory. We also bought more cars than expected last
08:26spring. Let the rock tell you in Chinese, Chinese-
08:31Great.
08:34The sanctions against the Chinese tech companies have further exacerbated this crisis,
08:38I guess, by Tesla crisis. Which means that for now too many people want whips, not enough
08:43people are going to get them. Eventually that supply and demand curve will equalize, but
08:46but in the meantime this is wild there are hyundai's hyundai's hyundai's going for 10k
08:53over asking for an old one the new mercedes gle they're sending without gps those things are
08:59cheap because they're out of chips and they're just gonna insert later rolls-royce has a 3.5
09:04year waiting list for a customer standard rolls-royce wait time is 15 to 18 months that's about 2x
09:10and a 219 rolls-royce with 30k miles on it is going for 40k more than a brand new 2021 version
09:19the industry expects these surges are going to kind of get cleared out this year in 2022 but
09:24i don't know have you seen all those ships waiting outside california but for those of us who want you
09:29know a little risk in the game maybe the only thing to flip isn't houses your instagram game is about to
09:35be lit with all these hot rods that you're actually making money on well i can't promise you anything
09:41what do i know about cars question everything we'll see you here next week oh if you like this
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