Digital Social Hour: The Hidden Truth About Car Flipping Profits | JR Garage DSH #829

Release Date: October 25, 2024

Host: Sean Kelly

Introduction

In episode #829 of Digital Social Hour, host Sean Kelly welcomes JR Garage, now known as JR Aviation, a successful entrepreneur renowned for his ventures in car flipping, aviation, and coin collecting. The episode delves deep into JR's journey, uncovering the strategies behind his impressive profits, the challenges he has faced, and the philosophies that guide his business decisions.

1. Building a Successful Car Flipping Business

Early Beginnings and Success Metrics

JR shares the foundational rule that has driven his success in car flipping: "We have to make money from what we're buying. At least try our best. And we've only lost money on two cars ever." (00:00). With a portfolio of 100 to 150 cars, JR emphasizes the importance of buying at the right price to ensure profitability.

Learning the Ropes

Starting small, JR and his brother honed their skills by understanding car mechanics, titles, and auction processes. "You learn as you go, and fixing them up and learning about titles and auctions, and you can get screwed really easily. But we kind of started small and worked our way up," he explains (02:02).

Notable Experiences

One of JR’s favorite cars was a Ferrari FF, which tragically burned down due to misuse by a non-owner. "That was the worst phone call of your life," Sean remarks, highlighting the emotional toll of such losses (05:39).

Despite setbacks, JR has maintained an outstanding track record. "We've only lost money on two cars ever," he reiterates (02:00).

Favorite and Overrated Cars

JR expresses a particular fondness for older models like the Lamborghini Mercy Lagos, which provided significant profits. In contrast, he criticizes new BMWs, describing them as "a little overrated" and "boring" (08:33). This candid assessment underscores his strategic approach to car selection.

2. Transitioning into Aviation

Venturing into Plane Flipping

Expanding beyond cars, JR ventured into the aviation industry with the same profit-driven mindset. His first plane flip involved purchasing a seized jet at auction for $110,000, investing $20,000 in maintenance, and selling it for $235,000 (11:00).

Economics of Plane Flipping

JR discusses the complexities of plane ownership, including substantial maintenance costs. "It can definitely be expensive and just depends the plane you get," he notes (15:09). The episode highlights the stark difference between small piston planes, which require minimal annual inspections, and large jets that demand extensive, costly maintenance.

Challenges and Risk Management

Maintaining planes involves high stakes. For instance, JR anticipates a potential $40,000 expense for a windshield replacement during an upcoming inspection (46:22). Despite these challenges, JR remains optimistic: "It's nuts. I'm a little worried on that one. But you got to learn by biting the bull and doing it," he admits (46:42).

3. Exploring the Coin Collecting Market

Origins and Growth

JR’s passion for coins began at age ten, sparked by his aunt’s gift of old pennies. By 2014, his coin flipping business had surpassed one million dollars (21:27). He emphasizes the booming potential of rare coins, advising collectors to avoid cleaning coins to preserve their value. "Don't ever clean coins. Especially if you don't really know what you're doing," he warns (26:35).

Rare Finds and Education

Highlighting rare coins, JR showcases a 1796 quarter, the first ever made in America, worth approximately $15,000 despite grading issues (24:00). He provides educational insights on coin grading and the prevalence of fakes, urging collectors to purchase from reputable sources: "You have to buy from just actual coin shops then," he advises (33:07).

Combating Counterfeits

JR candidly discusses the rise of counterfeit coins, particularly from China, stressing the importance of certification. "Raw coins are fake, you know, ungraded. Just like this. These are fake. It's getting bad," he states (31:32). He shares personal experiences of inadvertently purchasing fake coins early on but credits his mentors for helping him navigate these pitfalls.

4. Personal Philosophy and Financial Strategies

Frugality and Investing

JR’s frugal lifestyle is a cornerstone of his success. He compares his approach to that of Graham Stefan, highlighting shared philosophies on financial prudence. "If you're not getting a return on whatever you're buying, unless you really, really need it or really, really want it, probably shouldn't be buying it," he emphasizes (17:27).

Family and Ethical Considerations

JR stresses the importance of supporting immediate and extended family before indulging in personal luxuries. "Your family number one, extended family number two, and then, like, friends three. I feel like everyone's got to be taken care of first before you go making those stupid purchases," he asserts (18:28).

Handling Wealth and Public Perception

Despite his wealth, JR remains grounded, avoiding extravagant spending on personal luxuries unless financially justifiable. He addresses misconceptions about his financial status and counters false narratives about his wealth origins: "But no, like everything I've always said on social media is true. It was, it was really tough growing up. Didn't have much money," (21:28).

5. Diverse Investment Ventures

Cryptocurrency Experiences

JR briefly touches on his foray into cryptocurrency, noting both the rapid gains during the 2017 boom and the subsequent losses. "Only invest what you can afford to lose," he advises, echoing a common sentiment among cautious investors (41:27).

Historical Collectibles

Beyond coins, JR expresses interest in historical items, engaging in trades like presidential hair and antique bills. He underscores the importance of provenance and certification in valuing such collectibles, sharing intriguing anecdotes about rare items like a $10,000 Morgan Dollar and a 1777 Massachusetts bill (34:00).

6. Future Prospects and Conclusions

Expanding Horizons

JR remains committed to expanding his portfolio in cars, planes, and coins, leveraging his extensive knowledge and strategic investment tactics. His cautious yet optimistic approach ensures continued success despite inherent risks in these industries.

Final Thoughts

In wrapping up the conversation, Sean lauds JR’s strategic acumen and risk mitigation skills, noting, "It's very strategic. It's partially luck, but partially doing your homework and just really knowing what you're doing and having the right people in your circle to ask questions to," (42:49).

JR encourages listeners to educate themselves before diving into niche investment markets and emphasizes the importance of authenticity and due diligence in all transactions.

Key Takeaways:

• Strategic Buying: Emphasizing the importance of purchasing assets at the right price to ensure profitability.
• Diversification: Expanding investment horizons beyond cars to include planes and coins.
• Risk Management: Balancing high-risk ventures with thorough research and strategic planning.
• Education and Mentorship: Leveraging knowledge from mentors to navigate complex markets and avoid pitfalls like counterfeit coins.
• Frugality: Maintaining a disciplined and ethical approach to personal and business finances.

Notable Quotes:

• "We have to make money from what we're buying. At least try our best. And we've only lost money on two cars ever." — JR Garage (00:00)
• "Don't ever clean coins. Especially if you don't really know what you're doing." — JR Garage (26:35)
• "Your family number one, extended family number two, and then, like, friends three. I feel like everyone's got to be taken care of first before you go making those stupid purchases." — JR Garage (18:28)
• "It's very strategic. It's partially luck, but partially doing your homework and just really knowing what you're doing and having the right people in your circle to ask questions to." — Sean Kelly (42:49)

Social Media and Further Engagement:

JR Garage can be followed across various social media platforms:

• JR Garage: Instagram | YouTube
• JR Aviation: Instagram | YouTube
• JR Coins (Coin Expert): TikTok | Instagram

Listeners are encouraged to connect with JR through these channels for more insights and real-time updates on his investment ventures.

This summary provides a comprehensive overview of the podcast episode, capturing the essence of JR Garage's entrepreneurial journey, investment strategies, and personal philosophies. It serves as a valuable resource for anyone interested in car flipping, aviation, coin collecting, and strategic investing.