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What if there would be a way for the little guy to buy into the classic cars treasured asset class without breaking the bank? Wouldn’t a legal backdoor come in handy for small investors?
Rally Rd. is a trading platform that offers non-accredited investors a way to invest in classic collectible cars for as little as $50 through buying and selling fractional shares of classic cars. Although it’s not a stock, it provides a secondary market with bid-ask spreads to trade classic car investment in a similar way you would buy and sell stocks!
Today, for the first time ever, investing in classic cars is no longer a rich man’s game… In fact, you can join the 1% and profit alongside millionaires — starting with as little as $50!
So how can you own a 1969 Mustang for less than a monthly payment on a used Hyundai?
In this special article, I’ll outline all the details about this unique opportunity and walk you through the easy sign-up process. In fact, you can get started in less than 10 minutes.
If you find this post inspiring and useful, share it with your friends, please! (Virtual high fives and hugs to all my sharers out there)
The Story Of The $140,000 Mistake
Before I show you how to start investing in classic cars, let me tell you a short story and show you how lucrative this asset class is.
There’s once a guy who has always loved cars. Back in the early 2000s, he owned a 1987 Porsche 930. He picked it up for $30,000 and drove it for a year. For family reasons, he figured he’d buy another one and sold it for about $35,000.
Today, that car sells for as much as $175,000. That wasn’t an isolated incident, either. Collectible cars of all types have been exploding in value. Since 2005, Südwestbank’s OTX Classic Car Index quadrupled (a 300% return). Over the same time, the S&P rose only 145%.
The classic car component of the Knight Frank Luxury Investment Index returned 334% from 2007 to 2017. In contrast, the S&P 500 gained just 82% during that time. And in 2018 — when almost all asset classes lost money — the HAGI Top Index for rare classic cars was up 2.5%.
So you can see, over multiple time frames, classic cars have crushed the performance of traditional asset classes like stocks, bonds, and commodities.
Now, that’s great if you’re already rich and you can spring $200,000+ to buy into this game. But the little guy is locked out!
After years of scripting and saving, he finally saved up enough money to buy a classic car. He had set his eye on two: a rare 1994 Porsche 964 Turbo 3.6 S Flat Nose and a 1962 Ferrari 250 GT Cabriolet Series II by Pinin Farina (similar to the car in Ferris Bueller’s Day Off).
He loved the cars and he had the money to buy them, but he didn’t pull the trigger because of their price tags. It was just too much money to risk in one asset class. All of his investment training told him not to put all his eggs in one basket.
As sound as that advice was, he would come to deeply regret his decision. The value of the cars skyrocketed. The Porsche went up 10 times and the Ferrari seven times… That would have turned $100,000 invested in each car into $1.7 million!
His gut told him the cars were the right move, but he missed out on them because the cash outlays were too big relative to his net worth. However, millionaires and billionaires could buy these assets with ease.
Chris was frustrated. There had to be a way to buy into these cars without tying up all his cash, and that’s when he came up with the idea in this article…
In 2016, Chris joined fellow car enthusiasts Max Niederste-Ostholt (a former Barclays investment banker) and Rob Petrozzo (a former executive for various startup tech companies) to found Rally Rd.
Rally Rd. isn’t a stock. It’s a trading platform where you can buy and sell fractional shares of classic cars. And it’s the first and only platform to offer non-accredited investors a way to invest in classic collectible cars. It’s also the first platform to provide a secondary market with bid-ask spreads to trade classic car investment in a similar way you would buy and sell stocks!
The Legal Loophole Allowing You To Invest Like The Rich
In the past, you’d need to be a millionaire to get in on this kind of opportunity. But, thanks to Title III of the JOBS Act, there’s now a completely legal loophole allowing non-accredited investors to join the rich on these lucrative deals.
The provision makes it easier for small businesses like Rally Rd. to raise capital through crowdfunding. Crowdfunding is a way to raise funds online for a specific cause from hundreds, thousands, or even millions of people. And the JOBS Act created an exception under a federal law allowing companies to sell securities to the public via crowdfunding.
With crowdfunding, ordinary people can pool their money and invest in everything from classic cars, to real estate projects, just as the heavy hitters have been doing for years. Plus, it’s super easy… In some cases, you can start with just $50!
Enthusiasts who long to own a trophy car can now own a piece of one without having to fork over hundreds of thousands of dollars. (Typically, $50 is enough to buy one share of a car.) Investors looking for diversification and the potential for higher returns can do the same. Plus, Rally Rd. comes without the many hassles of blue-chip car ownership — such as storage, security, restoration, maintenance, insurance, and taxes.
The concept is very simple… Rally Rd. lists a car like an initial public offering (IPO). Investors buy shares of the car. Once all the shares have been sold, it’s the equivalent of an IPO selling out. After 90 days, the shares are eligible to trade on the Rally Rd. platform. Assets are available for investment and trading in all 50 states and the District of Columbia. So far, it’s listed dozens of cars. Here are some examples:
| Car Offering | Market Cap |
|---|---|
| 1985 Ferrari Testarossa | $165,000 |
| 1955 Porsche 356 Speedster | $425,000 |
| 1989 Porsche 911 Speedster | $165,000 |
| 1983 Ferrari 512 BBi | $350,000 |
| 1993 Jaguar XJ220 | $495,000 |
| 2002 Acura NSX-T | $108,000 |
| 1991 Mitsubishi 3000GT VR4 | $38,000 |
| 1994 Dodge Viper RT/10 | $57,500 |
| 1972 Mazda Cosmo Sport Series II | $124,500 |
| 2011 BMW 1M | $84,000 |
| 1980 Lamborghini Countach LP400 Turbo | $635,000 |
| 1988 BMW E30 M3 | $141,000 |
| 1963 Chevrolet Corvette Split Window | $126,000 |
| 1976 Porsche 911 Turbo Carrera | $189,900 |
| 1994 Lamborghini Diablo SE30 Jota | $597,00 |
| 1965 Alfa Romeo Giulia SS | $178,500 |
| 1988 Lamborghini LM002 | $292,000 |
| 1993 Ferrari 348TS Serie Speciale | $137,000 |
| 1975 Renault Alpine A110 | $84,000 |
| 1990 Mazda Miata | $26,600 |
| Car Offering | Market Cap |
|---|---|
| 1969 Ford Mustang Boss 302 | $115,000 |
| 1988 Lamborghini Jalpa | $135,000 |
| 1995 BMW E36 M3 Lightweight | $118,500 |
| 1990 Ford Mustang 7-Up Edition | $16,500 |
| 1998 Dodge Viper GTS-R | $130,000 |
| 2006 Ferrari F430 Spider “Manual” | $199,000 |
| 1999 Lotus Esprit Sport 350 | $69,500 |
| 1992 Lancia Delta Integrale Evo “Martini 5” | $165,000 |
| 2000 Ford SVT Mustang Cobra R | $49,500 |
| 2006 Ford GT | $320,000 |
| 1961 Jaguar E-Type | $246,000 |
| 1965 Mustang Fastback | $82,000 |
| 1961 Maserati 3500 GT | $340,000 |
| 1988 Porsche 944 Turbo S | $66,000 |
| 1999 Shelby Series 1 | $137,500 |
| 1994 Ferrari 348 Spider | $145,000 |
| 1992 Chevrolet Corvette ZR1 | $52,500 |
| 1989 Ferrari Testarossa | $180,000 |
| 1980 Porsche 928 | $48,000 |
| 1989 Ferrari 328 GTS | $127,500 |
Offerings have ranged from $16,500 o $635,000 in market cap. Just like stocks, the values of the cars fluctuate based on market demand for the car. Based on the list above, it would cost you about $7.5 million to buy all of those cars. But with Rally Rd., you could have bought a stake in all of them for a total investment of just $2,665.
Think about how powerful that is. Being able to have a stake in $7.5 million worth of highly collectible assets — for just $2,665. That opportunity doesn’t exist anywhere in the world.
Depending on the price of the car, Rally Rd. divvies its cars into share allotments of 1,000 to 5,000. Original offerings last anywhere from a couple of minutes to a few days. As mentioned a 90-day lock-up period follows the initial offering. Then, regular trading windows — when buyers and sellers are matched, similar to the stock market — occur either once per month or once per quarter.
On average, about 6% of an asset’s float (outstanding shares) is exchanged during trading windows. The Rally Rd. app and web-based platform allow users to see car specs — including proof of authenticity, rarity, manufacturing location, restoration details, and mileage.
All asses are fully insured at their current market value. They are also professionally maintained and stored in temperature-controlled facilities in Pennsylvania and Connecticut for preservation. On top of that, they’re guarded by around-the-clock security cameras and serviced by a concierge.
While all this sounds great on paper, before I could endorse this company, I wanted to make sure it would be the right fit for you. So, I sent gathered some information for you to rest assured that you’re in good hands!
More About Rally Rd.
Rally Rd. is a new, alternative platform, but it has the backing of world-class VC investors. Below is a list of subjects we asked the Rally Rd. team about:
VC investors – Rally Rd. raised $10 million through two seed rounds. Its list of investors includes Up-front Ventures (which has a portfolio that includes Uber, Airbnb, Ring, etc.) REV Ventures, Anthemis Group (a well-respected fintech VC firm), Howard Lindzon of Social Leverage (which has a portfolio that includes Robinhood, StockTwits, Wag, etc.), Jeffrey Katzenberg’s WndrCo (a $1 billion VC fund), hip-hop artist Nasir “Nas” Jones (his firm Queensbridge Venture Partners has had 33 exits since 2014), Betterment co-founder Eli Broverman, and Acorns co-founder Jeff Cruttenden.
User demographics – The platform has a large group of millennials and 60-plus-age users. Management told us its typical user invests in alternative assets, such as real estate and cryptos. It’s also seeing people with disposable incomes getting tired of stocks and bonds who want to invest in alternative assets.
No investor fees – Rally Rd. doesn’t take a management fee or free shares on offerings. The company makes a small percentage from the seller in deals for its platform. And it plans to build a subscription service for premium customers who want access to special events and care.
Museum/storage facility – Rally Rd. has several state-of-the-art storage facilities to provide museum-quality care for its assets. In addition, the company recently opened a showroom in the SoHo neighborhood of New York City, where you can visit some of your investments in person.
Unique structure – Rally Rd. runs Securities and Exchange Commission (SEC)-registered Regulation A+ offerings. (Essentially, Reg. A+ is a provision in the JOBS Act allowing small businesses to raise funds from Main Street investors in “mini-IPOs.”) Rally Rd. uses a “series structure” for each car investment. This means one LLC (a subsidiary, RSE Collection) holds all the cars. Each asset is held in a separate legal entity with its own bank account, balance sheet, and shareholders. So each car is like a mini public company. If anything happens to Rally Rd., the assets will be safe.
Trading and custody – Initial offerings are transacted through Dalmore Group. Secondary trades and post-offering shares are managed by DriveWealth. Both firms are SEC-registered and licensed broker-dealer.
Skin in the game – The three co-founders use their operating capital to invest in each car on the platform. That means they buy the same common shares as you would. So the company is putting its money where its mouth is. This practice aligns the company’s financial fortunes with its users and ensures that only the highest-quality opportunities are offered on the platform.
Dividends – Yes, cars can collect dividends. Rally Rd. wants to monetize its inventory. It will create earnings from special events (e.g., model photoshoots, merchandise lines, sponsorships, etc.). This hasn’t been done yet, but the structure is there. It’s coming soon.
Underwriting standards – They’re high. Management looks for originality, proper restoration, history, original paint and colors, and so on. Rally Rd. has built a team of in-house experts, recruited from auction houses and investment banks. These experts evaluate potential asset acquisitions. Since 2018, they’ve screened 3,000 cars. Only 42 have made it on the platform. That’s an acceptance rate of just 1.4%. So the company only wants the best of the best.
Selling the cars – Management is constantly looking at market data and trends. Anyone can make an offer through the app to buy a car. The company will poll shareholders if there’s a legitimate offer. Ultimately, the advisory board decides whether to sell. A 2000 Ford Mustang SVT Cobra R was sold in April 2019 for an 18% profit. And a 2006 Ferrari F430 Spider Manual was sold in May 2019 for a 16% gain. Remember, these investments tend to have a long-term time horizon.
More than just cars – In 2019, Rally Rd. introduced four new asset classes (rare books, collectible handbags, vintage watches, and sports memorabilia). This is truly a one-of-a-kind opportunity. No one else offers this right now. We’re thrilled to be the first to bring it to you!
How To Get Started on Rally Rd.
It should only take a few minutes to set up a Rally Rd. account and link a bank account. Here are the simple steps:
- If you’re on an iPhone, click here to proceed to the App Store to download the app. If you’re on a computer, go here to sign up for Rally Rd. on your PC. And if you have an Android device, click here to download the Rally Rd. app on Google Play.
- Once you’ve downloaded the app or web platform, enter your email address and create a password to sign up.
- You’ll get a brief tour of the app.
- Next, you’ll be prompted to enter some additional information before you can invest, like your legal name and address. You’ll have the option to link a bank account.
- Roughly 5% of users will have to go through a secondary verification. Otherwise, it’s instant verification. (Note: You don’t have to deposit money in the account. Rally Rd. will pull the exact amount of money needed from your bank account when you purchase shares.)
- There are two types of investments on Rally Rd.: “Initial Offerings” (when an asset is first listed on the platform) and “Trading Windows” (a secondary marketplace where you can buy/sell shares with other platform users). Note: Participating in Trading Windows requires a cash balance (which will take a one- or two-day transfer). But you can participate in Initial Offerings without a cash balance. The funds will transfer when you invest.
Conclusion
Collector, classic, and vintage cars have always been reserved for the riches of the rich. And the uber-wealthy have exclusively enjoyed this niche asset class for years. It’s outperformed bonds, stocks, commodities, and almost every asset class over the long haul.
But the innovative car experts at Rally Rd. have opened the doors for ordinary investors like you and me. We believe a small asset allocation to a diversified basket of collector cars will serve investors well over the long term. Along with market-beating returns, this asset class offers downside protection and low correlations to what you have in your portfolio right now.
This opportunity is the only logical way for non-accredited investors to access this asset class. Please take a long-term approach if you invest through Rally Rd. for diversification purposes, we recommend gradually building a portfolio of five, 10, or more cars.
A decade from now, we’re confident you’ll look back on this investment decision favorably — and be happy with the relative returns of this special asset class. We predict an allocation to collector cars will outperform traditional asset classes over the next 10 years. Reasonable, Rally Rd. could generate an average of 10-12% returns per year over the next decade.
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Cheers,
Odeh Ahwal
