RelayRides Investor’s Plan: Buy BMW Roadster, Rent It to Strangers, Come Out Ahead
As a venture capitalist at Shasta Ventures, Rob Coneybeer invested in RelayRides, the marketplace that allows complete strangers to rent each other’s automobiles.
Now he’s placing a second bet on the San Francisco company.
Over Memorial Day weekend, Coneybeer plunked down $10,250 on a 2001 BMW Z3 2.5i high-mileage roadster, with the sole purpose of trying to make money on RelayRides.
He told me the goal was to buy a car that was fun to drive, attractive to renters in Palo Alto — including Stanford students — and cost below $5,000. But his budget quickly increased to $10,000, Coneybeer explained in a blog post.
At that cost, he still believes he can make money:
Assuming a used car loan rate of 4.35%, no down payment, and a term of 4 years, the purchase works out to 48 monthly payments of $227 each. I haven’t added in insurance or maintenance yet, but I’m assuming that will roughly double the monthly cost. Given that the top cars on RelayRides can regularly make $600-$800 per month for their owners, this would equate to a free car!
Coneybeer thinks he’ll list the car for about $10 to $20 an hour, or $50 to $100 a day. Total return on the investment will depend on utilization, he admits. “We’re creating a new market, so utilization depends on awareness,” he said. He has some experiments in mind on the social media front, but so far isn’t sharing what those might be.
Everything was going according to plan — until, that is, yesterday, when the Beemer wouldn’t start.
It already needs a new battery.