Building Cobras for Profit?
 

OK, it has long been a dream of my little brother to build his own Cobra. However, as a mechanic with 3 kids, it will be years before he could afford to do so on his own. Because he is an awesome mechanic, I suggested building a few for profit as a way to create the cash he needs to own his own. I have heard of this being done, but haven't spoken to anyone directly about it. This is where you guys come in. My main question is "Is this possible?". Beyond that, what is the best way to do so? And, most importantly, which kit car company should we go with? We actually put a deposit down with street beast, but from what I'm gathering, that may have been a mistake. Right now, we are focusing in on Factory Five Racing. We need all the help we can get. As we are going to be building for profit rather than personal use, we are very open to the build setup. We assume that we should make the car as "period-correct" as possible and are considering using a 302 or 347 for the engine. Beyond this, we are clueless as to what adds value to the final price and what should or shouldn't go in the car. Also, where do we sell it to get the highest price? So far, I've been told to take it to auctions like Barrett Jackson or list it on cobracountry.com or even take it to as many car shows as possible. Any and all input here will be greatly appreciated. As an entrepreneur having owned several different businesses, I know that if it is possible to make money doing this, I can help him do it. So, what do you think?

A period correct 302 (347 or whatever) in a 'period correct' car? For that engine selection you have two choices.
1. FIA style body.
2. 289 street style body.

A period correct 427 model? You have two choices.
1. S/C style, hood scoop, side pipes, single roll bar and 427 engine.
2. Street style, under car exhaust, no roll bar, no scoop, 428 engine.

FIA and 289 have a limited market within an all ready small market. Street cars also have a limited market. By far what sells the most is the classic S/C body style. It is also the easiest and cheapest to obtain.

Period correct AND make a profit? Puhhleassee, here pull my finger! :LOL:

Compromises will have to be made along the way, most of us do that. Some embrace the 'new' replicas and talk of how modern technology is so much better than what we had in 1965, OK, but generally speaking, I'm not impressed. Some go to excruciating detail to 'get it right', there are few and I admire them. But it cost a BUNCH to play that game and demands a serious passion. We all strive to find a balance, within our budget, within our realm of possibilty, within our skill level.

There are certain 'key' elements that should not be compromised, in my opinion. Steering wheel, wheels and tires, over all body shape, forward shift lever, correct dash layout and gauges, engine appearance, wheel base. In short those items that are readily 'visible' and 'obvious' (with the possible exception of wheel base if you stay within REASONABLE parameters). This assumes 'period correct' is a basic goal. You got your work cut out for you, good luck with that!

A truly 'period correct' car is pretty rare these days and commands the highest price. It will likely cost more to build than it will sell for, hence the market is flooded with 'not quite right' replicas utilizing modern technology for one simple reason, it's cheaper to build!

OK, maybe I misspoke when I said "period correct". I did mention that I'm the "accountant", right? Basically, we want to build the car that will sell the easiest and have the highest profit margin (if there is a profit margin). For example, we plan on painting it red/white or blue/white because these seem to be the most popular color schemes. And, it's pretty obvious that a pink one would limit our target market to testosterone laden Mary Kay reps.

I don't think you will see much of a profit margin without using alot of used parts. Hypathetically speaking, you could build a hurricane fairly easily for $20k if you did ALL the work yourself to include paint. That would be with a pretty mild engine, 351 with heads and intake, or even a 5.0. Nowdays, your best bet would be to buy a foxbody with a decent engine and a t5 and swap them in and then sell the foxbody as a roller to recoup some cash. I would still not see this car being sold for much more than $23-25 MAYBE. Depending on the quality of your work, could be more, could be less.

Something you might consider... Get it totally ready for paint and then let the new owner choose the colors. You might have a decent chance of getting a little extra if it is the exact color the potential buyer would want.

There are a lot of people already doing what you are thinking of doing but they have also proven with cars built and sold they know what they are doing. Like any car on the market one that is built in the economy mode will bring less profit mainly because after you put a certain larger price tag on it, those that have done their home work will say for that price I could buy a Shelby or a Kirkham. If you could come up with the money to build a cobra and sell it for a profit very unlikely, you would be more likely to break even and get your money back. Most that have built and sold Cobras for profit have built a personal Cobra which was sold with or without a profit but because it was so well done they advertise to build one for a client and of course a profit margin would already be built in. When I first moved into southern Florida I met a guy building Cobras out of a small shop called the Cobra Shop in North Fort Myers. He had been a boat builder and knew fiberglass, he made his own frames etc., all cars where sold as turn key only and had BB Ford engines the only thing you got to pick was color inside and out and whether you wanted it to be stick or an automatic. His partner was the painter and still runs the business today and has kept the name Cobra Shop but no more Cobras are being built as the original builder stopped building over 5 years ago. Doing everything himself he had $17,000 invested in each car and they where sold for $39,900. These where really nice looking Cobras when finished and I have some local members in the Deeper South Cobra Club who own one. With say around 50 shops world wide today building Cobra replicas from the large shop to the very small shop and another 40 shops that have come and gone, sure step on board.

Build a cobra for profit? Ha, look at this nice F5, only pulled $28k. http://cgi.ebay.com/ebaymotors/ws/eB...155070617&rd=1

Profit
 

The idea of doing this and making money is like any business... hard. One of the challenges you face is the fact that a lot of Cobra guys like building them more than owning them or want to do more than one build but can't justify keeping two cars. (especially when the next one will be done better) Your also competing against a lot of small shops trying to live their dream of making "cars" for a living too.

Another fact to contend with is there is no reason to pay a premium to buy a car "built to sell" from someone who does not have a reputation unless you can figure out how to make the car special.

There are a lot of cars for sale on CobraCountry right now and I suspect there will be plenty more for sale over the next several years.

Getting into the game a little late, aren't we? :LOL:

To build a car, figure the costs...and then tack on another 10 - 20%.

Unless, you are a high volume manufacturer/dealer, very little money can be made on these cars.

Find a better investment for a business, Cobras ain't it, the market is saturated.

Mr. Bruce:

True, but, even though that car is awesome, it does have 35,000 miles on it and it has been raced. Not sure how much that deflates the value, but I'm sure it knocks off quite a bit.

John:

When you say add 10-20% do you mean for all the little stuff that you will invariably fail to include in your original plan?

that, and problems/fabrications needed along the way, a customer wanting a car just right/ etc.

Cobra owners are very particlular and run the gamut from period correct to mucho mods. Hard to nail it down.

Also, what is your expected build time? Whose kit will you use? Dependent on kit, may determine the build time based on completeness and ease of assembly. Figured in the cost of man hours? Why only red and blue? Tons of those on the market already.

You would probably fair better in trying to resell existing cars, but even then it may take a year to move one.

If he is an "awesome mechanic", he would most likely make more money fixing cars on the side as compared to building Cobras. Go with his strength. I have a friend who fixes cars on the side, and he is very successful with his side job.

Right. How is he with bodies/paint? These cars require lots of hours to prep the bodies for paint, not a straight edge on the car. Get a seam wrong and it will show up in the final product....wavy. More hours=less profit.

Everything you outsource besides the mechanical work that your bro does, cuts into your profit. Unless you can do it all yourself, its near impossible to profit. Good companies clear a few grand on each completed car.

I guess I should revise my statement a little. We want to build cobras and we aren't necessarily trying to get rich doing it. Both of us have a main income. We just don't want to lose money building cars. Which company would you guys go with? What method would you use to sell it? etc.

We'll definitely have to outsource the paint work for the first couple. Now, are you saying that companies that do everything, including paint, themselves still only clear a few grand per car?

In your case, I think i would definitely go with a shell valley or Hurricane first. These kits come with just about everything needed for the build and will get you familiar with what parts are needed. Then who knows, maybe you can start from scratch! I went with Hurricane and can't say enough about their fantastic customer service! I email them and Have a reply back in a maximum of 48 hours. They mailed my 202pg assembly manual to iraq so I could familiarize with it before I begin my build! Definitely High class guys over there!

Have a look at this build site, it is pretty well detailed and documented.
http://www.cassidypics.com/cobra/

If your trying to make a huge profit, your looking in the wrong place.

Just look in the For Sale section.
Price out a Cobra.
Your an accountant.
See for yourself

If he is a good mechanic and wants to do something in the cobra area...I would suggest him to specialize in rebuilding the Jag Rear End's. Hunt them down, rip them out and go through them......sell to ERA or other. Now he is rubbing elbows with the Cobra Mfg crowed. Good benefits here…..

For a complete car...FF and keep your costs low with the donor car. Build it as a 50/50 car....with no emissions or computer crap. Sell it as a weekend warrior track car. (Tons of fun!) You can get cheap stuff off of Craig's list ....over time. You also need an in at a good salvage yard...........
Stay away from the period correct cobras ....but still want the look an original ...an example what not to do,...high back racing seats do not look right for these cars...yuck! Period correct costs will eat me...and you alive. I know…I’m in that rabbit hole…….and I have seen Alice!

To make a financial profit, you need to be able to write off your time - in other words time is what you are selling and that is what the buyer will be paying for. Don't expect to cover your time AND clear a profit. There is little profit on the parts and components unless you can strike a wholesale price deal with a manufacturer. That again would be dependent on establishing yourself as a volume customer or maybe convincing them that you will be getting their product some exposure and potential sales in a (geographic) market that they haven't penetrated. If you can put together a good (Ford) engine/transmission combo yourself and install it along with some minor assembly and body prep/paint, final assembly of a good "pallet kit" for customers might be an option. Bear in mind that most manufacturers already perform this service so you would either be competing against them or working with them as a licensed assembler.

For an inherently "correct" looking car with all the right stuff already included, you really should look at Unique Motorcars. http://www.uniquemotorcars.com/Pages/kits.html
Their deluxe pallet kit is one of the best on the market and they are recognized as one of the oldest and best in the business. The Weavers ars first class people to deal with and their product is top notch. No fabrication - just straightforward assembly required. Good luck.
P.S. Don't overlook the suggestion about the Jag rearends - it's a good one.