Musings: Restoration = Money loss! (ALWAYS)

[MLC Dodge]

I’ve been buying cars and “restoring” them for years. The term restoration can be argued about too—that’s for another day. I enjoy working on cars and making them look new again. I gather most on this board have the same addiction. Luckily, my wife supports this passion (but she says she doesn’t understand it). My question/discussion here refers to my consistent loss of investment during a restoration/build. I can honestly say that after owning/restoring about 10 old cars in my life (ranging from Jeeps, trucks, to, now, Mopar), I NEVER once made money on the deal. In fact, I typically lose about 30-40% of my investment—I know because I track every dime I spend on the process. This completely EXCLUDES my time. I never keep track of the time spent as this is real fun for me. In fact, my modus operandi has been buy a vehicle, restore it, hold it for a while and enjoy driving it, then sell it to get funds for another project. Unfortunately, I’m not wealthy, so I have to sell to be able to get something new. Otherwise, I’d store it somewhere (ha ha).
I guess I have two multi-part questions I’d like to hear from forum members about.
First, does anyone honestly MAKE money on their restorations? If so, what’s the secret to making money? Are these guys selling at auction houses making money (like I see on TV)?
Second, do most members lose money too and have the same addiction?
As an example, my latest project is a 1974 Plymouth Duster. I paid $3500 for the car. I have put exactly $4250 into the car (beyond the purchase price). It is a slant six, automatic car and I know that on the BEST DAY it is only worth about $5000. Again, this represents a 31% loss. (LOVE the car by the way).
Respectfully submitted,
MLC Dodge.

 

[mullinax95]

Yes it's sucks to lose money on a restoration. I guess it's like golf you will never get the money back that was spent doing what one loves to do.

 

[AdamR]

Cars are like houses. If your buying them to make a profit, Your buying them for the wrong reason and your gonna be disappointed.

 

[afbill]

you know you own an A-Body if your restoration costs twice as much as the car is worth. We do it out of love.....or lust for some.....

 

[orangetwist]

Honestly I havent lost on a car in years. Granted I haven't been going through them like I used to but I've had several over the past few years and haven't lost. My dad usually goes through 1 or 2 a year of various mopers and chevies and hasn't taken a loss in a long time. I think its about picking the right car/project. But the area someone is in plays a major factor too. For example im in Indiana sp there's a lot of rusty junk around that's either still rusty or been filled with mud. I would never buy anything that's too rusty or filled with mud. I know enough people that I can find good solid cars fairly easily and get good deals on them . And people will pay a premium for good solid cars. That's just my thoughts and experiences as of late.

 

[YY1]

I've owned about a dozen.

I don't really "restore" them, just fix what needs fixin' and maybe add some factory or period correct equipment here and there.

I've been pretty fortunate, and usually break even when they get to the point that the next item than needs fixed is going to be a costly one, and I deem it time to sell.

If you factor the value use of the car over the time owned, versus the depreciation for a newer car over the same time period...I think I come out ahead.

The secret? #1- buy low, sell high. I know sounds simple, and easier to say than do.

#2, buy cars with good quarters. Again easy to say, not to do.

#3, buy "desireable" cars, and know the market. Once more, much easier to say than do.

When coupled together, VERY difficult, but then if it was easy, everyone would be doing it.

No disrespect, but starting with a 3500 six cyl car is probably not the way to do it.

I passed on lots of cars before I bought my last.

I looked at several desireable cars with bad quarters.
I looked at several six cyl cars.
I looked at cars that were listed at a price closer to retail.

I ended up with a car with almost perfect quarters, that can be fitted with numerous "desireable" "factory" options, and was bought below wholesale price.

It's not the most "desireable" car, but it's close (1973 318 Satellite with working factory a/c), and with the good quarters and a few "value adds" (rallye mirrors, bucket seats, and tuff wheel [total cost- $250) already installed, and a few repairs )master cyl, trans lines, odds and ends) it should hold it's value and maybe even appreciate.

 

[orangetwist]

I've owned about a dozen.

I don't really "restore" them, just fix what needs fixin' and maybe add some factory or period correct equipment here and there.

I've been pretty fortunate, and usually break even when they get to the point that the next item than needs fixed is going to be a costly one, and I deem it time to sell.

If you factor the value use of the car over the time owned, versus the depreciation for a newer car over the same time period...I think I come out ahead.

The secret? #1- buy low, sell high. I know sounds simple, and easier to say than do.

#2, buy cars with good quarters. Again easy to say, not to do.

#3, buy "desireable" cars, and know the market. Once more, much easier to say than do.

When coupled together, VERY difficult, but then if it was easy, everyone would be doing it.

No disrespect, but starting with a 3500 six cyl car is probably not the way to do it.

I passed on lots of cars before I bought my last.

I looked at several desireable cars with bad quarters.
I looked at several six cyl cars.
I looked at cars that were listed at a price closer to retail.

I ended up with a car with almost perfect quarters, that can be fitted with numerous "desireable" "factory" options, and was bought below wholesale price.

It's not the most "desireable" car, but it's close (1973 318 Satellite with working factory a/c), and with the good quarters and a few "value adds" (rallye mirrors, bucket seats, and tuff wheel [total cost- $250) already installed, and a few repairs )master cyl, trans lines, odds and ends) it should hold it's value and maybe even appreciate.

Good reply. That's what I was trying to get at but couldn't word it exactly like i wanted. Must still be tired.

 

[71dartswinger]

I bought my dart for 2000.00 and put wheels and tires /seat cover/carpet and a
shade tree engine rebuild (pressure wash and repaint) and drove it for 11 years and sold it for 5500.00 71 dart /6 at/ps/pdb

 

[challengergary]

If you are buying a car to restore, you'll never make money on it especially if you are doing it because you love cars. If you are buying a car as an investment, you have to have a totally different mindset. You need to look at every dime from a Return on Investment standpoint. I used to "flip" cars for years and can honestly say that out of the 50+ cars that I "restored" to flip, I only lost money on one - a 1966 Mustang Convertible. I invested way too much money in new parts (heck you could buy EVERYTHING for these things and CHEAP too) without paying attention to the actual market value of the done cars out there.

On your Duster for instance, if you were looking to "flip" it, you should not have paid more than $1000 for it. Why? Because no matter how much money you put into it, unless you put a 340 between the fenders, she'll never be worth more than $5K. Also, when looking at a car from an ROI standpoint, it's the little things that don't deliver "bang for the buck" that really kill you.

For instance:
New carpet - good investment.

New sill plates - bad investment, you should just clean up and paint the old ones with some dull aluminum spray paint.

Installing New Legendary Seat covers - Bad investment, cost is over $600 for front and rear sets, plus time/labor costs to install
Getting seats redone at you local trim shop - Good investment as they can frequently just fix what is bad on your seats.

Shiny New Cragar Rims - Bad investment. Cost over $150 each. Rims are a personal taste thing and a lot of people get fixated on the wheels and tires. Although the car may look great with those wheels and tires, potential buyers may not like them.

Used Rallye rims - good investment. You can frequently find them on CL or at swap meets for a couple of hundred bucks a set. This way you have a good looking set of wheels and the buyers can easily look past them if they are thinking about going aftermarket.

Whenever I was looking at a car from a "flipping" standpoint, before I even bought the car, I made a quick list of the costs to get the car up to snuff in order to resell it. For instance, two weeks ago I looked at a '69 Coronet that was on CL. The price was seemingly reasonable, $1800, so I thought maybe I can start flipping cars again. However, when I went to look at it, I realized it needed EVERYTHING. The body needed multiple panels replaced, the engine did not run, and the owner had no idea if the tranny was good nor even if the engine was good. Even if I could have gotten the car for less than $1000, it just was not worth it.

Here is a 71 Duster that I bought as a daily driver a few years back. I paid $1300 for it and drove it home. It had a few leaks and needed a little help with some wiring but those issues cost less than $50 to fix. I found a "new" front seat on CL for $100 that was perfect, the guy I bought it from had gotten it recovered and then later swapped to buckets seats. Got a new Legendary back seat cover on eBay for $100. I picked up a set of hubcaps on eBay for $25.00. I painted the car with "oops" paint from Finishmaster for $250. For the roof, I used some "leftover" PX9 black from a small project I did for a customer. All totalled, I had $2294.49 into the car (not including my time obviously). I drove and enjoyed the car for about 8 months, then I sold the car to somebody who DROVE IT HOME from TX to PA for $4500.

 

[383Duster]

A couple of very good answers here.... To summarize, you do it cause you like to, if you happen to make money on one that's a bonus.

 

[Garner22]

I agree with what has been stated above, its all about finding something to start with at a decent price that doesnt need every panel and part replaced. I passed on several cars before I found my current project, a rust free, no bondo, 71 Duster. I bought it for $1500 as a car that the previous owner had dismantled and lost interest in. At the current price that these cars are selling for I dont see any way that I wont come out ahead. I also think it is important to buy as many used parts as possible and refurbish them as compared to buying new, as well as doing as much of the labor that you can handle yourself.

 

[roadrunnerh]

First off, I'd like to see more pics of that white Duster!
As far as losing money, here's my 2 cents....

I purchase a car that is CLEAN. When you get into major rust repair, the $$ go up quickly. How long are you keeping these cars before you sell them?
I purchased my numbers matching 68 Road Runner from the original owner down south back in 1993. I never tried to sell it, and I never will. The price I paid was LOW. That was right before things in the Mopar hobby exploded and prices of cars went through the roof. Since then, I've owned 6 old Mopars that I drove daily, while the RR stayed in the garage with an Antique plate. I did basic maintenance on those 6, added wheels and other relatively inexpensive add-ons. I did not put big money into them, they were clean drivers. I sold them all for the same price I bought them for, or in a couple instances I made a couple bucks - and most importantly, I enjoyed them all!

Last year I bought my '75 /6 Scamp for $3k. It's CLEAN, but not a highly desireable car. I bought this car to drive more frequently than my RR and I always wanted to build a hot street car that will see the drag strip sometimes. I have a spare 383 and 727 which I purchased for $250. The plan is to rebuild the 383, use the Schumaker kit and headers and drop it in the Scamp. I already installed a 8.75 A-body rear with 3.55's. She's still a Slant six cruiser for now. I don't plan on selling this car either.

My advice? Buy the cleanest car you can afford regardless of how popular it is. If you like it, that's all that matters. HAVE FUN WITH YOUR OLD MOPAR! :blob:
If you are in this as a hobby, don't expect to make money. Do not put more money into a car if you are even thinking about selling it soon. If you are a restoration shop, you can. The average guy will find it very tough to try and flip Mopars and make a profit in doing so.
I hope I made sense - still not finished with my morning coffee.....lol

 

[jos51700]

Cars are like houses. If your buying them to make a profit, Your buying them for the wrong reason and your gonna be disappointed.

I disagree. It's easy to make money on both. You just need to know what you're getting into, and what you're doing.

I bought my dart for 2000.00 and put wheels and tires /seat cover/carpet and a
shade tree engine rebuild (pressure wash and repaint) and drove it for 11 years and sold it for 5500.00 71 dart /6 at/ps/pdb

This is not really a valid comparison. Your investment increased in value over 11 years as the rarity and popularity of the vehicle changed. This is not a guarantee and is the exception rather than the rule. Did you factor in the maintenance, storage, and repair costs for the whole 11 years? Cost of fuel? etc.?

As far as the OP, you're paying too much for a common car to EVER flip it for $. You're buying common cars, stuff we see nearly everyday. It's never going to be worth anything if everybody has one. The bellybutton analogy. Either buy rare, or make it rare, and your value will go up.

(Make it rare? What? Ever heard of the stamp collector who bought all ten known examples of a certain stamp, and burned 9 of them publicly before selling the tenth?)

 

[MLC Dodge]

I bought my dart for 2000.00 and put wheels and tires /seat cover/carpet and a
shade tree engine rebuild (pressure wash and repaint) and drove it for 11 years and sold it for 5500.00 71 dart /6 at/ps/pdb

I love that Dart! Nice color.

 

[waggin]

well when i bought the waggin for 601$ then the expense of retrieving it from the woods of georgia ended up with about 1000$ in the rusty old schlepp, then some parts from e bay, some used cragars and new tires, paint and body supplies, electricity, parts car and some headliner materials, used engine and trans, some wheel cylinders a master and some brake pads turn the drums I'm at about 3000$ not including my time which as was said is the part we all kinda like doin this after all that is the hobby...so I figure any car you can daily drive is worth at least 1000$ per year not including maintenence so I been drivin the waggin for like four or five years now.....my math says I owe the car more money now!!!! smiles per gallon :cheers:

 

[71dartswinger]

I love that Dart! Nice color.

its Tawney Gold do not see very many mopars painted that color

 

[pishta]

Most cost effective thing to do on an old beater is paint. Prep it yourself and roll it over to One-Day or Maaco for a high impact color. Wax it 2 weeks later and sell it if you are not going to enjoy it and drive it. Lots of guys can do mechanical and interior "pull and replace" but paint is an area that is scary for many. Just dont paint it brown or olive green...I bought a '65 "S" 100% original for $800 back in '93. Too bad I starter resto-modding it or I could probably add a 0 to the price now..oh well, its probably worth 9000 now with its new paint, interior, stroker motor, disc brakes and 8 3/4 SG...but that all took time and money where as a little elbow grease and cold storage would have been all but free. Wanna lose money very quickly? Buy any new car.....Its a hobby, enjoy it. you wanna MAKE money on a restoration, do up a 55-57 Chevy. Every part can be bought repopped cheap, (made in Taiwan) and there are enough rich old farts that are done wrenching to sell to. Sad fact....

 

[71dartswinger]

Repairs over 11 years
radiator 300.
remain carb 130.
brakes 100.
1 set tires/alingment 500.
4 oil changes a year (avg) 100.
Power steering box 200.
Cragars w tires were 200.
carpet and seat cover were 400.0
and i drove the car daily for the entire 11 years i owned it
car had 39000 miles when i bought and 86000 when sold
still wearing the factory paint also


This is not really a valid comparison. Your investment increased in value over 11 years as the rarity and popularity of the vehicle changed. This is not a guarantee and is the exception rather than the rule. Did you factor in the maintenance, storage, and repair costs for the whole 11 years? Cost of fuel? etc.?

 

[MLC Dodge]

Thank you all for your perspective. First off, thanks roadrunnerh...I like my Duster a lot! I thought I did good on this purchase--my first Mopar. I looked for months for one and this one was head and shoulders above the rest. It didn't need paint and ran fine. I realize now, unfortunately, that the slant six was a mistake. I was wanting a V8 but the good body swayed me. Now, it's too expensive to convert properly to a V8. I just plan on driving the car and enjoying. I may eventually put a small block in her. That can be my NEXT project! Lastly, I really don't want to flip cars, I like restoring them. I guess my point was that if you do the restoration correctly and properly, I don't see how you can make money.

 

[jos51700]

Repairs over 11 years
radiator 300.
remain carb 130.
brakes 100.
1 set tires/alingment 500.
4 oil changes a year (avg) 100.
Power steering box 200.
Cragars w tires were 200.
carpet and seat cover were 400.0
and i drove the car daily for the entire 11 years i owned it
car had 39000 miles when i bought and 86000 when sold
still wearing the factory paint also

300
130
100
500
100(11)
200
200
400
+2000 Initial Purchase
=$4930

So you sold for $5500, a $570 profit. That's pretty good! Saving the oil change, these are all things that a resto would take (Cragars notwithstanding).
Were it not for the appreciation in the car, you'd have almost certainly lost money, but to prove the OP's point, it'd be hard to spend $569 dollars on a resto and still turn a profit.

Really, driving a car for ANY length of time and selling and turning a profit is pretty good, and you've done well for yourself with this one. It's not often a car pays you to drive it!

 

[Bulldozer]

here is a 73 duster 225/6 3 speed manual i paid $3000 for 2 years ago because it is 98% rust free and it is still wearing its FY1 original paint. yes , maybe a little much, but they just dont come much cleaner around here. i have added the scoop, the go-wing, new grill , V8/727 with headers and related components, buckets, tuff wheel, wheels and tires adding up close to $2500 - $3000, so i have $5700 give or take a few hundred into it. today, i would be lucky to get $3500. i do it because im addicted to mopars and im not looking to get back what i have into them.

 

[hemitheus]

No disrespect, but starting with a 3500 six cyl car is probably not the way to do it.

i agree.

a 6 will always undersell an 8. and 3500 for a 6 going into the deal. We would have to see the before pics but that seems high.

 

[clifftt]

My wife buys candles...lots of em, because she enjoys them. No return on her investment.
I look at my car and motorcycles the same way, for the enjoyment. I know my hobby is more expensive, but I'm frugal and spend modestly. I'm not looking for a return on investment, but in the end, I feel if I have to part with one of my toys, I haven't lost my rear on them.

 

[OwdKasd]

One quick note: Certain things just don't count when figuring investment amount. ie; Tires, Tune up parts etc... But you are correct. It's just the nature of the beast. I watched a very nice Orange Duster sell for only $8500 on Mecum auction last night(may have been a repeat). I'm sure they had more into the restoration than $8500. It was a nicely done 360 car. If you really want to make $$ doing this, You need to pick the right car to start with. And everyone and their brother are trying to do it right now which drives the price way up for anything that can bring a nice return. I hate to say it but Chebbies are easier to make a profit on. But what fun is that? I'm sure I have more into my '73 Dart than I can sell it for but I smile ear to ear when I drive it.

 

[MLC Dodge]

This is what I started with.