74 TURBO on BAT

[pip]

saw this this morning. thought it was neat

http://bringatrailer.com/2012/07/12/original-and-needy-1974-bmw-turbo/

[ClayW]

Turbo F-bomb. I like it.

While I'm sure that this one will go to a restoration shop immediately to get a full rehabilitation before being sold to someone with an air conditioned garage, I'll admit that I would have driven it to Vintage as-is before restoration.

[oldguy]

that guy's got 15.5 on the hook and is reserve not met still?!?!

Reminds me of someone who will say. NADA book value on this car that needs restoration is 36k. I can't take less.

I don't know with those pics how much more the guy thinks he's going to get. Guy doesn't even have a US title and the only reason I can think for that is he doesn't want to pay the sales/import tax.

Take some pics of the interior and show me the red gauge pod, the boost gauge, and that the headliner and door panels aren't full of holes and you may get a real buyer.

There's a nice "like new" 74 turbo with 5spd on 2002ad for $55k.

If they think they can rebuild the motor, and straighten/paint the car for under 20k, they're mistaken. Just buy what you want instead of building a never going to be as good clone.

[bracohen]

He posted it in the classified section and was asking about 22k, probably what the reserve is if you're wondering.

http://www.bmw2002faq.com/component/option,com_forum/Itemid,50/page,viewtopic/t,374942/

[ClayW]

I'll add this thought, though: The price seems high for a car in need of so much work.

There is an inherent risk in buying such a project and the price should reflect that. The pricing formula for these barn finds seems to be:

Restored Value - Restoration Cost = Barn Find Condition Selling Price

This is flawed.

There is zero risk in finding the barn find, so the profit shouldn't be that high. The risk of buying from the finder and investing in restoration before sale is where profit should be made.

For the record, the pricing formula for selling a barn find should be as follows:

Restored Value - 25% of Restored Value - Restoration Cost = Barn Find Condition Selling Price

The guy that buys the barn find and intends to invest in the restoration is taking the most risk and should be rewarded with the most profit in the life of the project. All my opinion, of course.

[Beck180]

The guy that buys the barn find and intends to invest in the restoration is taking the most risk and should be rewarded with the most profit in the life of the project.

+1

[Stu]

If I'm not mistaken there is a large rust hole in the frame. Check out the underside pic.

[ziff73]

Enlarging those pics, it looks like that thing is hemmoraging rust...every crease and seam...I bet it's a nightmare in there. Probably was bought sight unseen, shipped here, new buyer pooped his pants when he saw it, and is now trying to get out of under it.. I'm completely making that up, but it's a good story...;-).

[markmac]

Correct me if I am wrong but from what I read .... he is trying to get out from under it.....As far as the price goes, as long as he discloses to the best of his ability the condition of the car (and I believe he did for the most part), the market will speak, then he and decide to take it or not. It appears to be all there, however anyone buying it that isn't experienced or "thinks" that they aren't going to have to dismantle every nut and bolt AND do extensive metal/body work is a fool. Unless you are the guy doing the work yourself, it is likely a losing proposition (in terms of thinking you could potentially make money on the car some day ). Those of us who have done restorations know this painful fact.

There is enough documented in the images to tell you logically that the car has rust "issues".

www.alpinabmw2002.com

[williamggruff]

I'll add this thought, though: The price seems high for a car in need of so much work.

There is an inherent risk in buying such a project and the price should reflect that. The pricing formula for these barn finds seems to be:

Restored Value - Restoration Cost = Barn Find Condition Selling Price

This is flawed.

There is zero risk in finding the barn find, so the profit shouldn't be that high. The risk of buying from the finder and investing in restoration before sale is where profit should be made.

For the record, the pricing formula for selling a barn find should be as follows:

Restored Value - 25% of Restored Value - Restoration Cost = Barn Find Condition Selling Price

The guy that buys the barn find and intends to invest in the restoration is taking the most risk and should be rewarded with the most profit in the life of the project. All my opinion, of course.

TLDR version of the babble below: Sales of unique items aren't likely to follow any arbitrary rules, and opinions expressed about the value or price of a unique item have little or no measurable impact on the market price of the item.

The guy that buys the car on eBay and intends to invest in the restoration is definitely taking some risk. He'll be rewarded for taking that risk if he does his homework up front and truly understands the item on which he's bidding, successfully wins the auction at a price that enables him to make his target profit after expected costs, successfully executes the restoration, and subsequently sells the restored vehicle at a price and within a time frame that results in him earning his desired rate of return on the project as a whole. Lots of ifs in there. Of course, he could pay $50k for it, crush it into a small cube of metal, rubber and plastic, and subsequently sell it as art for $300k. The future is unknown, hence it is inherently risky.

The guy selling the barn find is in a position to profit right now. But at some point that same guy was in the same position as the new buyer. The current seller presumably purchased (I doubt he got it for free) a car that was on the other side of the planet and had it shipped to the US, presumably at his own cost, on the premise that he could or would restore it. So he's also in a position to suffer a loss right now. For all we know, the seller has more invested in the car (purchase price, shipping, storage, cost of capital for 10 years, etc.) than he's going to make on the sale.

Perhaps the seller has $30k invested in the car. Selling it at the current bid price of $15k would mean selling it at a substantial loss. Would that make his reserve any more acceptable to non-selling, non-bidding parties on the FAQ? Would that justify or invalidate the implementation of an arbitrary pricing formula?

What somebody else pays for unique item X is only useful for speculation, which is risky business in itself. If buyer A pays $45k for the turbo on eBay, there's no guarantee that buyer A will pay the same for another, similar car in the future, or that a different buyer B will be willing to pay a similar amount for another, similar car in the future. Maybe the fact that buyer A pays $45k for the car will trigger other owners of unrestored turbos will conclude that $45k isn't enough, and decide to hold onto their turbos, hoping to cash out at a later date when the price goes up. The resulting drought of turbos on the market might thereby drive the price of any turbos that are in circulation up beyond $45k. Or it might result in so few people being familiar with 2002 turbos that the price falls as the market dies out. Then again, maybe the sale will convince a bunch of turbo owners to sell their turbos within a short period of time, creating a glut and driving the price down immediately. Maybe the car on eBay won't sell at all. Who the hell knows?

The transaction risks are borne by both the buyer and the seller. Their risk/reward metrics are theirs and theirs alone. Their risk/reward metrics, and the decisions based on those metrics are influenced by momentary circumstances, so their willingness to pay $45k for this specific, unique 2002 turbo may be different now than in the future. This appears to have been the case with the current owner, as he embarked on a restoration project and subsequently ended it prematurely.

If the car is sold via the eBay auction, the price paid at auction will be the instantaneous market value under the conditions in place at that very moment. Three minutes later and somebody else might have bid $100k. Three minutes later and the winning bidder may have learned that he lost his job for spending so much time watching eBay, at which point his interest in the turbo has declined to $30 and a ham sandwich.

No assessment regarding the future price of the car can be made based on the sales price. It cannot be assumed that the sales price is the future price of the car. Maybe the winner will think that he paid far more than the car's value, after which he might adjust his personal opinion regarding the value, and be willing to accept $43k to sell it. Maybe the buyer will think that he got a real deal, and will continue to value the car at the higher value that he assessed independent of the auction, and will try to flip it on eBay with a reserve price of $60k, only to find that he was the only person on the planet willing to pay more than $15k for it. The owner's opinion as to the current market value of the car, and the owner's investments into the car are just as irrelevant as our expressed opinions. The price paid in the next exchange will determine the instantaneous market value at that point, not the owner's opinion(s), and not ours either.

The expression of our opinions might impact the future sales price, but that's risky business as well, as it's difficult to predict whose opinion(s) will be weighted highest in the next exchange transaction.

The instantaneous value of an item is determined by the individuals willing and able to engage in the exchange transaction at the point in time when they engage in the exchange transaction. Everyone else's opinion regarding price or value is just that--an opinion. If you bid on the car, then you've expressed your opinion via a legally binding offer. If the seller accepts your offer (which amounts to him accepting your opinion of the fair exchange value), then you've reached an agreement on price. It doesn't matter what you think the item is worth or what the seller thinks the item is worth prior to the exchange. You might think the item is worth $50k, but offer $18k. The seller might be thinking the item is worth $16k, and gladly accepts your $18k offer as a new and welcome opinion. The rest of the market can continue to express opinions regarding the value of the item, but the buyer and the seller establish the price of the item at the point in time at which the exchange is made.

The price is also dependent on the circumstances under which the transaction takes place. Access to, and familiarity with the specific item being auctioned has a huge impact on a bidder's offer. Access to, and familiarity of the buyer with the seller also has a huge impact on a bidder's offer, as well as a seller's pricing decision. We can't assume that the externalities that exist between two long-time friends would be extended between an anonymous buyer and seller on eBay. So the price agreed to by one pair of buyer and seller may not have any bearing on the price agreed to by another pair of buyer and seller.

All this to say that the turbo will change hands if the seller receives an offer that exceeds the reserve within the time frame specified in the auction, and the expression of a preference for an arbitrary pricing policy related to unique items isn't likely to have a measurable impact on that price.

[c.d.iesel]

...nice car. I hope it finds a nice home

[ClayW]

I'm really just asserting an opinion based on the recent barn finds and their respective pricing. Regarding this car (and probably others), I certainly made a bunch of assumptions about the purchase price of this particular car and the intentions/perspectives of the seller, but my point remains the same: In my opinion, for many recent "barn find" car sales, this one included, it seems to me that the sale price is bumped up because of the potential value of the end product and that just bothers me.

I understand that (as much as I hate to admit it) any item for sale is ultimately worth what it sells for. My opinion is that, should a seller want to stay on the good side of karma, the FAQ and/or the Flying Spaghetti Monster, that seller should try not to screw every dime possible out of a buyer based on the item's potential.

I also hope that one day, everyone will hold hands and sing Kumbaya.

[saaron]

I think that might be the same one I inquired about some time ago. 2002ad had it for sale on their site.

They told me they were going to restore it, but found a better one to restore, so they were letting this one go. I think they might have had a price of around $15k-$20K on it (I could be wrong - memory isn't what it used to be). They sent me lots of pics of it, that's why I can say I think it is the same one.

My "plan" was to sweet talk Eurotrash into getting it running for me (he loves a challenge), and just keep it the way it was. The title thing freaked me out. The nature of the rust didn't help.

Alas another one of my half-baked plans that didn't pan out.

I'd love to have it, though. Turbos and E30 M3s...love them, but didn't buy them when I could (sort of) afford them.

Someone on here get that thing!

Scott

[Anschauer]

You could sum it all up as the "Greater Fool Theory", to which all of us succumb now and then.

The more we invest (maybe not the best word to describe how some of us sink time and money) the less likely we've been to recoup our costs - ie the less of a chance of finding that Greater Fool.

We tell ourselves these things give pleasure, so we put up with the pain, much the same as marriage (which seems to be a common enough paring in a lot of posts), and try as we might to stay on a budget...

Now, what about the "Turbo Crate Engine" Ebay for $6k? Seems absurd?

[ClayW]

But, then again, Grice, our parts stashes (along with many other 02ers.......) show that none of us have a grasp on realistic automotive expenditures.