My Barrett Jackson thoughts

[ProdigyCustoms]

I just thought I would write my view of "the State of the market after Barrett Jackson 2006". Being around the automotive collector / toy market for 25 years, and having rode a couple of the previous "waves" in the "toy" market. Some people look to me for my opinion. And then throw it away, LOL! I must have received 20 phone calls, and had another 20 live conversations this weekend about Barrett Jackson. Everything from, WOW, how about that bus! To, can you believe that LS6 convertible! to, how come the guy in the Ferrari hat bought nothing? But the most popular subject was, what happened to the high end ProTouring and Hot Rods?

Some of these conversations are genuine and inquisitive from people that respect my opinion, but many are from "friends" that are the bolt and nut restoration guys, that just think it is F--kin fantastic these cars did not bring back the investment cost, and would just LOVE to see my business, and all other hot rod builders, that destroy American history, die a slow pain full death!!!!. A lot of these guys know, that if only for a few short seconds, both Bill and Michael thought about the possibility of taking The Goat and Prodigy to BJ. Both Bill and Michael stared the devil in the face with considerable unsolicited offers at SEMA on each car. So, if only for a moment, we had to at least consider the possibility of running them through BJ, if nothing else as a pure business decision. Both Bill and ourselves decided we DID NOT build these cars to sell for profit, but to enjoy, cruise and show. My "FREINDS", knowing about the high offers at SEMA, all wonder, (really want to rub it in), if we made the wrong decision not selling at SEMA? And what if we would have taken it to BJ? And what happened to the market for these cars?



Well, I think what we saw this weekend was resistance in the "hot rod / resto rod" market, let's say north of $125 to $150k. For a couple years Time Machines has been offering copies of the Six Shooter for $250K, and the original only brings $170k and $130K respectively? The 29 T gets all kind of press as the coolest thing since sliced bread, and brings didly? Former Riddler bring only 90K? It seems like buyers were willing to spend a hundred grand or so for a cool toy, but not really willing to step up for huge bucks, north of $150k for hot rods, no matter what the original build cost, awards, press, etc. Another thing i think we saw was their are considerably more people with $100K to spend, then $400K to spend, on a toy. Just about any home owner gained $100K equity in their home the last couple years which they can equity line and buy a toy with for 1 point over prime. But the main thing we saw at BJ as it relates to Hot Rod value, is It really is all about being new and fresh. The offers that tend to fly around SEMA appear to be from guys wanting a fresh, crisp, not shown piece, which they can campaign as their own so they can receive the , "WOW, look at that" instead of the, "there's that car again". I told Bill, while neither the Goat or Prodigy were for sale at SEMA, I felt they were never going to be worth more then they were that moment or possibly this BJ auction, and if one wanted to "cash in", now would be the time. As disappointed as some may be that the Motion car "ONLY" brought $450k, the reality is the car brought supreme money that exceeded the build cost as a fresh piece. The Six Shooter, the 29 T, the riddler car, all support my "stale and previously shown to death" theory.

So what does this mean for guys like us building these cars? I think hobbyist will still continue to invest more in cars then they are going to sell for after a few years on the circuit, just so they can be the one to receive the trophy, or have THEIR name in the magazine story, instead of buying the car complete with trophy's and old stories on the previous owner. I also think the hobbyist is very safe investment wise at $100K to $150K, which will get you a KILLER car, but no Prodigy, Motion, Six Shooter, etc built, but probably return nearly the same amount of money after a couple years.

So, the bad news is, if you build a high end Hot Rod, north of $200K that we will call high end, and you show it and have fun with it for a year or two, your probably going to take a little hit. The good news, is it will be worth $100k to $150k, it use to be worth $50K!

So, what does all this mean us personally, It probably means we made a ****ty business decision and probably lost $100K by not taking Prodigy to Barrett or accepting the offers at SEMA, on the other hand, Michael and I get to enjoy the car and maybe we will get a few trophy's and press with our names on them. Surely their is an accountant in here that can amortize that!

[Rick Dorion]

Thanks for the perspective, Frank. I, personally, like seeing the cars used and not flipped for profit. Of course, it's easier for me to say that not having one!

[speedster]

Frank -
Thanks for your insight. I really do value your opinion.
I feel that BJ has somewhat of a feeding frenzy attitude, and everyone says "wow, if car X went for $250K, then my car Y will go for $150K even though I only invested $70K. That is most likely not valid, but I think most of us build PT's and Hot Rods for presonal satisfaction not "the flip". And that is a good thing for shops like yours. Both for us having you building our personal cars as well as for you not having so much competition when you do decide to sell one of your creations. For me, the build is half of the fun. The people you meet, the ideas, the designing, the choices, the forums, its all part of it. It stretches the excitement over months or years and then you also have the fun of driving the finished product and going to enthusiast events.
Anyway my < .02 cents.

[rocketman]

i have always felt that to sell a hot rod,street rod etc.you have to take it to the fellow hot rodder or street rodder.i think most the guys at bj are either car collectors wanting a dust collector,or one of these speciality used car guys that are all over old car trader looking to buy cheap and sell for a big profit.i have been to bj and normal guy stuff goes reseasonable.most of us on here arent going to give a million dollars for a bus,ls-6 chevelle,or a hemi cuda.and most of all they most likely wont buy are 100-150 thousand cars for 300 thou.the auction is fun to watch,cool to go to,hell i've even bidded on stuff out.(in my price range).

[coolclassiccars]

frank ,well said,the fact of the matter is,muscle cars in general,let it be pro- touring or the numbers corect restorations , well the demand is still way up and the peak is not in sight.these cars are strong,and so is the economy, at least where these cars are concerned.did anyone notice that pro-touring is now a verbal catagory with the anouncers?let it be know that any nice restored pre 70's car is worth more than it sold new for.

[BADVELLE]

I see this all boiling down to 2 things, either you build to enjoy or build to sell. I don't actually believe that you built Prodigy to sell, I think that is great. You all built a car exactly the way you wanted it and now you are going to enjoy the heck out of it. The same goes for Bill (I just picked up the mag this weekend, great article and pics). BJ is all about investment, at least that is what I think of the auction or any auction for that matter. Kudos to all of us that are building to enjoy, not to flip on the first high offer!

[kennyd]

my pocket book feels better that i fliped our( sema) car for for profit !

royce wanted 250 for the 29 pickup
the 55 orange and black , burman built , cost 500+ sold for 190ish
the mauve 37 olds , burman built , cost 500 + sold for 120ish

[BADVELLE]

my pocket book feels better that i fliped our( sema) car for for profit !

royce wanted 250 for the 29 pickup
the 55 orange and black , burman built , cost 500+ sold for 190ish
the mauve 37 olds , burman built , cost 500 + sold for 120ish

Are you talking about the red Nomad you have/had? With all of your labor hours and parts you were able to make a profit, someone must of really wanted the car bad or your labor hour is very cheap. I have always been under the impression that the money in this business is in selling the parts, not in building the cars. I guess it always depends on how much time you have in the car that you are building.

[Travis B]

someone must of really wanted the car bad

that pretty much sums it up!
yes it was the nomad it is cali now!

[BADVELLE]

that pretty much sums it up!
yes it was the nomad it is cali now!

The perfect scenario! Thanks for the info.

[kennyd]

Are you talking about the red Nomad you have/had? With all of your labor hours and parts you were able to make a profit, someone must of really wanted the car bad or your labor hour is very cheap. I have always been under the impression that the money in this business is in selling the parts, not in building the cars. I guess it always depends on how much time you have in the car that you are building.

build a nice car ,and they will pay . our labor rate is 45 . if there was not any money in building cars ,pepole like troy,allanj,tucci,burman would not be in business .just like frank said ( and i agree ) pepole are willing to pay more for un-shown cars , i would not want to own royce's 29 pick up because it will always be royce's truck .

[kennyd]

frank,
is this the first car you have built that you wanted to keep ? i have not yet built one i like enough to keep ! and what i mean by this is i hate to clean them , work on them after they are finished ,or drive them for fear of tearing it up .

[vanzuuk1]

There is a degree of luck involved, when you see two guys bidding to the moon that wouldnt happen if one guy had stayed home. You need two bidders for a bidding war to get crazy.

I thought the nascar superbird would go higher than the chevelle convertible, I kind of felt bad for a nascar legend watching "his" car be sold off cheap (relatively)

I missed the pure vision gtx go, anyone see how much it went for? I love that car.

[Damn True]

Frank,
In the long term it's probably a far better business decision to build a car that you dig, AND shows off the ability of your shop to keep and drive rather than flip.

Odds are you won't get back what you put in, and using it as a calling card will IMO help you to create more business in the long term than if it disapeared into some silver spooners private collection.

Besides, it's far better to turn $10k in profit off of ten customer projects than $50k from one.

Plus you get to drive it, and isn't that the point?

[Damn True]

There is a degree of luck involved, when you see two guys bidding to the moon that wouldnt happen if one guy had stayed home. You need two bidders for a bidding war to get crazy.

I thought the nascar superbird would go higher than the chevelle convertible, I kind of felt bad for a nascar legend watching "his" car be sold off cheap (relatively)

I missed the pure vision gtx go, anyone see how much it went for? I love that car.

Was the superbird an actual raced car with an authenticated logbook?

[Travis B]

Frank,


Odds are you won't get back what you put in

I don't know of many car builders that loose money on builds!

[vanzuuk1]

They said it was an authentic car but I didnt hear them mention any particular history, maybe I missed it. Baddass car though.

On the way to daytona for bike week years ago we saw a winston cup 77 monte for sale cheap, wish I had bought that car and saved it.

[Damn True]

I don't know of many car builders that loose money on builds!

Well since Frank clearly intends to drive, show and have the car shot (mags) he will never sell it for what he might have on a straight flip.

I'm sure shops that are commisioned by people to build cars make a profit....thank you captain obdvious. And I know that builders frequently build on spec provided they have a reputation that attracts buyers.

But for a shop that is really starting to cut their teeth in this kind of thing trying to build a big $$ car in hopes of a big $$ flip would be downright foolish.

Far better to build something nice and use it as your billboard to attract customers and build the reputation than try to hit a home-run on one pitch.

[Travis B]

Far better to build something nice and use it as your billboard to attract customers and build the reputation than try to hit a home-run on one pitch.

I agree with that statement 100%...I see it happening all the time to!

[BADVELLE]

I don't know of many car builders that loose money on builds!

I am sure there are more than you think. I was told by a builder at Des Moines one year that they loose money building cars. They make there money from endorsements and selling there parts or being a dealer for other manufacturers'. I guess it all depends on what the customer wants and what they are willing to pay for the work done.