Dodge Charger = $100K a year cashflow?

What if we could turn the 2015 Dodge Charger sitting in your garage into over $100K/year?

This week's newsletter will show you that renting out the assets you already own can bring you some serious cashflow. Speaking of cashflow, we held a webinar yesterday on "The Framework to Your First $100k in Passive Income" that brought in 60+ new members to the Cashflow crew! We're not doing replays, but you'll get the recording if you're a Cashflow member! Want that plus 100+ hours of other recorded educational videos? We got something for ya...

Today in < 10 minutes we’re going to talk about:

• Hard Truths. How to cut spending and increase earnings.
• Profit from the Collision of Boring and Tech. Build a 4-wheeled empire via the Turo platform.
• How to Turo up. The basics to the billy's.
• Tier 1 Turo Hosting. Host a single car or offset your everyday expenses.
• Tier 2 Turo Hosting. Scaling up from a single vehicle to begin world auto domination.

Lord Mr. Ford

Henry Ford famously stated that you could have a Ford in ‘any color, as long as it was black’. Depending on who you ask, Mr. Ford was:

• supremely confident in his vehicle choices, down to the color
• only able to mass-produce one color scheme

Regardless, the market evolved… as did the old Ford.

We think now the market is evolving past the standard car rental experience from companies who own all the cars, to you, renting out your own mini-fleet.

Let’s learn how to earn with what used to be your worst ROI-ing purchase ever, cars.

Hard Truth:

“To some generations, much is given. Of other generations, much is expected. This generation has a rendezvous with destiny.” - Roosevelt

I watch the world spinning around us and I pause. Roosevelt was right. Each generation gets a chance to rise or fall. What they don’t tell you? The calling isn’t a loudspeaker, it is not a megaphone... it’s a whisper. It’s the tiny voice in your head telling you do more, be more, rise up, stand straight.

And if you don’t listen, it gets quieter and quieter until the voice is barely a brush of air against the wind. So I suppose today I’d ask you, do you hear the call? Are you answering it?

The voices today are saying one word… inflation.

Those on high told us to ignore it, and they were liars. So we’re starting a segment all about the ways to increase earnings and cut spending to deal with the consequences.

But warning, be careful you don’t lose the voice altogether.

Turo - Boring + tech = collision.

Turo lets normal humans like you and I rent our cars. Simple. Scalable. You list your car, manage the process and get 70% of the revenue. Also, Turo brings customers to you and takes 30% of the revenue. This model has led to:

• 161,000 vehicles
• 7500+ cities
• 2.2 Billion miles driven
• $1.1B in host earnings​

The Airbnb of cars self-categorize hosts into three types:

• Your neighbor: host group 1 leverages the platform to pay off a car they own or plan to own
• Glad they're not your neighbor: host group 2 rents between 3 and 9 cars on the platform as a cash-flowing asset, typically to supplement existing earnings
• Bought your neighborhood: host group 3 rents 10+ cars, often owns their own garage, and pays others to manage their fleet

We’re going to tell you about how a small investment in this space can grow to thousands of dollars a year. But instead of telling you one story let us tell you a few. We have:

• ​Fernando Herrera who profited $14,000 in 9 months on his new Tesla through Turo
• ​Elan S making $50,000 a year gross (but with 9 cars) on Turo
• Paulo Acobo making $200,000 a year net (with a fleet) on Turo

TLDR: Paulo’s high-earning car, a Lincoln Navigator, brings in a year on average:

• Revenue: $32,354
• Profit: $24,350

He’s realized in order to make $100,000 in profit he needs to bring in $130,000 in revenue to account for taxes. That’s exactly 5.5 Navigators. We tell you this to show you, if you want to make six figures on Turo you either need a couple hundred thousand in vehicles or wealthy friends to use their cars. So if it was up to us, we’d probably use Turo as a liability mitigator not an income optimizer. Running a fleet of 5.5 cars is a full-time job. No way around it.

Turo Me Up

I have heard (and had) mixed reviews on Turo. So we went deep with this one and asked multiple Turo pro’s to give us the rundown. The next 5 paragraphs are essentially your HOW TO manual. Skip it if you’re not going down a Turo building rabbit hole. Oh, and you’re welcome if you plan on it.

Our Pros:

• Your Neighbor Fernando Herrera - full time Youtuber, who wanted a Tesla and got Turo to cover the payments
• Jordan Smith, a Turo host out of Saint Louis, Missouri who has achieved All Star Host status with Turo and has 5 cars for rent on the site. *Also this is cool, you can view top tier hosts across varying cities and essentially see what their “fleet” looks like. Great way to re-engineer your purchases.

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The How to the Why

Single vehicle vs Fleet:

Renting cars on Turo? We would suggest starting at Tier 1 as the Your Neighbor Profile.

Say you want a really nice car, but you don’t want to pay for it. Here’s the model in 5 minutes or less that we are going to be using to try out our own Turo renting enterprise. After all, why build your own 10,000 hours when you can steal (ahem borrow) someone else’s?

Step 1: Rent your car on Turo?

• Must be an eligible passenger vehicle, have permanent plates, rent exclusively on Turo, registered anywhere EXCEPT New York, ≤12 years old, with less than 130,000 miles, maintained in accordance with Turo’s maintenance standards, have a clean title, never been declared a total loss, meet Turo’s insurance requirements, ≤$200,000 fair market value (must have OEM tracker if ≥$125,000.)

Step 2: Can you buy a car to rent exclusively on Turo? Of course you can! There is a strategic component to consider because Turo has two host types:

• Experience Hosts (Teslas/Mercedes/etc-these folks will rent less often at higher daily rates)
• Everyday Hosts (Toyotas, Nissans, etc for example - these folks rent often with less expensive cars). Here’s the recommendation:

• Research your local Turo market demand for cars aligned to your host type (Experience or Everyday) that you can afford. Seek out high demand in your market. Turo’s Car-culator (lol) breaks down vehicles by budget range and regions.
• Find your price range. Use one of the many calculators online (we are partial to Edmunds.com’s calculator). CarEdge.com has some pretty good ones for car lifecycle costs.
• Find cars from the price range above. One of the reasons we like Edmunds is because they have a calculator to calculate monthly payments and a second to help you find WHICH car you can afford with that monthly payment. Using affordability numbers the calculator provides a sticker price range AND analytical insights, presenting cars in your calculated price range.

• Buy old… 9 times out of 10. The goal → have a car worth more than you pay for it. We typically like to buy at the lowest possible point in the depreciation curve. If you look at the curve, you’ll see that after the 7th year. Once you hit the bottom the depreciation drastically lowers. Unless you are going for luxury cars at a higher price point (not a bad model often in the right market).

• If you are car savvy, there are deals to be had on Facebook marketplace or Craigslist. Jordan recommends you keep cash on hand and always ask these 2 questions:
  • Does the car have a clean title? Do you have a Carfax and will you provide it please?
    • Trust, but verify on a site like: https://www.autovhr.com/deal/ to get cheap Carfax reports.
  • Please provide the VIN.
  • Please confirm mileage with a photo.
  • You also want to do an inspection of the car. If you know nothing about cars, use Lemonsquad to do your inspection for you, or find a trusted mechanically aligned friend to tag along.

Step 3: Make a Turo operational plan

To run your Turo as a business for cash flow, you need a couple of things at a minimum:

• An LLC: Always smart to have one to protect your existing assets
• Materials: Fernando details Turo Tips for Beginners, identifying 6 must-haves. Though you should watch it, here’s a spoiler:
  • a GPS Car Tracker (Zubie or Bouncie are good options)
  • an ozone machine (he had a weed-smoking renter)
  • spare key
  • lockbox
  • pre-written texts for guest check-in/check out
  • pictures before/after every trip (Turo won’t cover you with insurance without them)
  • His bonus tip: a working relationship with a body shop/car auto place.
• Cleaning equipment: Buy car detailing equipment (vacuums, brushes, window cleaning supplies, etc). If you don’t already have one, a shop vacuum is a must to detail the inside of the car. Money-saving ideas: Jordan used his kids to help detail his cars and works out deals with local car washes for discounts. He has a coupon that his guests receive for 50% off a car wash-since they have to bring it back in the same condition they dropped it off (i.e. newly washed).
• Understand the Platform: Research Turo’s host tools section to ensure you optimize listings, leverage best practices, understand your market/seasonality/etc. Ensure you read Turo’s guides to photographs and learn Turo’s cleaning and disinfection policies.
• Develop a Turo insurance strategy: This is your largest expense as a host (excluding your car if financed), according to our friends. Turo is very clear regarding their insurance plans, which they call the 60, 75, 80, 85, and 90 plans. There are a lot of important details, but the basics are that the # represents the portion of the trip price you as a host earn; the more you earn, the higher your risk (via deductible).

• Calculate your earnings or break-even points. Turo’s business planner is here and pictured below, while Fernando’s is here.

• Price your vehicle. Very important to price your vehicle to rent, and ensure you surpass your break-even calculations. Remember to include pricing for things like maintenance, cleaning, and Lyft or Uber rides to and from your drop-off point or have an alternative way to return home after drop off. Do competitive research in your market as well and look at other hosts' listings as well as the large rental companies as these are your competitors.

Step 4: Operate your Turo Tier 1 fleet with an eye to ‘level up’

• Rent your vehicle. Deliver the vehicle if you agree to (significant upcharge potential here) and work your return transportation. Some keys to first, and subsequent rentals:
  • Maximize your availability so you are easy to rent from
  • Minimize your cancellations. Continued cancellations make your car show up less on Turo’s algorithms.
  • Achieve All Star Host status and Turo’s algorithm will ensure your car(s) get seen more often.
  • Consider early bird discounts for trips booked more than 7 days out and discounts for 7-day rentals as well as 30-day rentals. Jordan offers unlimited miles for a fee per day or for a trip duration as well which gets him a couple of rentals each year.
• Take before pictures of the vehicle for insurance purposes. The Turo application-guided interface reminds you of minimal pictures to take (body of the car) and then allows as many additional as you want. Fernando typically does 40-45 he says.
• Verify your renter's information (Turo lists requirements); some tips here include requiring your renter to take a picture of themself with their license and the car (there are folks who will rent on Turo intending someone else to actually drive the car) in the background.
• Use those pre-approved texts you prepared to welcome your guest, provide instructions, coordinate logistics, and thank them for their business.
• Make relationships with local used car dealerships. This is keeping the eye on finding your next Turo as part of your future fleet. Maybe you got a great deal on your first car, maybe you didn’t, but now’s the time to think about purchasing something for less than $15/$20K per vehicle and with as much down as possible.
• Conduct regular maintenance. This one will sneak up on you if you’re not obsessive about it in your personal life. Having an eye to the future is establishing relationships with local maintenance shops to get your pricing down and to get faster turn-around times on repairs. Jordan tells us that he’s had 9 cars totaled (9, that’s right! and 14 in significant accidents) and that his local mechanic and he have a strategic relationship that gets his cars back on the road quickly.

Step 5: Level up and scale

• Be strategic about debt. Jordan’s biggest piece of advice to us about leveling up was to be careful about your debt ratios. Generally, debt is a lever and can really be powerful as you are purchasing cash-flowing assets. But your vehicles are your primary assets with Turo and they ARE going to get damaged. It’s a statistical fact that the more something gets used, the more it can break/get damaged/be stolen, etc. While Turo insurance will cover SOME revenue loss due to renter-induced damage, it’s not going to be near the revenue you make by renting.
• Grow your fleet without buying. Do you have a neighbor's car you could add? What about your parents? Coworkers? Or can you raise money to purchase cars without the debt being all in your name? This is a business like any other, get creative about financing.

There you have it, five steps to your first Turo up and running.

In case you think that I just tell other people to optimize and don’t do it myself… we rent out all our houses, even our primary residence. We plan on doing the same thing with our cars as well.

Abiding by one of my favorite mottos of all time, “Don’t ever fall in love with something that can’t love you back.”

Things are just things. If you are going to buy them, have them get to work.

Build your 4-wheeled empire,

Codie

The Not So Boring Section

• Get An Airbnb for $100: This is cool, they allow normies to invest in alternatives → https://here.co/ P.s. I Invested in them through our fund.
• Stop Being Anxious AF: I shake like a leaf with too much coffee. Switched to Casablanca half-caff roast. Now I’m not insufferable in the AM.
• Run An Empire But Own Nothing: I have been binge listening to this episode on building businesses and lives with less things in them.

Wanna be a Millionaire Investor in 2022?

As we enter a depression that is here to stay, we need to find alternative ways to make money DESPITE the economy. As Nathan Rothschild said “Buy when there’s blood in the streets, even if the blood is your own”.

This week's YouTube video is brought to you by Fundrise, the future of real estate investing.

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Disclaimer – This is the “Be an adult” section. Everything mentioned above isn’t advice, just a recount of what I did. That said: This article is presented for informational purposes only. The opinions stated here are not intended to recommend any investment or provide tax advice. Neither are they an offer to sell or the solicitation of an offer to purchase an interest in any current or future investment vehicle managed or sponsored by Codie Ventures, LLC or its affiliates. All material presented in this newsletter is not to be regarded as investment advice, but for general informational purposes only. Day trading and investing do involve risk, so caution must always be utilized. We cannot guarantee profits or freedom from loss. You assume the entire cost and risk. You are solely responsible for making your own investment decisions. We recommend consulting with a registered investment advisor, broker-dealer, and/or financial advisor. If you choose to invest with or without seeking advice from such an advisor or entity, then any consequences resulting from your investments are your sole responsibility. By reading/sharing this newsletter or consuming our content on our other channels, you are indicating your consent and agreement to our disclaimer.

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