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#410 - Two Brothers, One Distressed Deal: The Vamos Auto Story
#410 - Two Brothers, One Distressed Deal: The Vamos Auto Story
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About this episode
Travis and Casey Allison, brothers with deep roots in the automotive industry, share their journey in taking over Vamos Auto, a distressed buy here pay here dealership. They discuss the challenges of managing inventory discrepancies, the importance of data analytics in operations, and their strategic shift towards a higher average transaction value. The episode highlights their unique partnership, operational insights, and the lessons learned from navigating the complexities of the automotive finance landscape. Their candid conversation reveals the realities of running a dealership and the commitment needed to succeed.
In this episode of The Independent Dealer Podcast, we sit down with brothers Travis and Casey of Vamos Auto in the Dallas–Fort Worth area. 🚗💥 They break down how they took over a distressed buy here, pay here dealership, uncovered major operational issues, and rebuilt it into a premium BHPH operation. 🚀What you’ll learn in this episode: 📚🔹 How a Navy F-18 pilot and Top Gun graduate became a buy here, pay here dealer ✈️🔹 What it’s really like to take over a distressed BHPH with missing inventory and over-leverage 💰🔹 Why upgrading inventory to higher-ACV trucks and SUVs changed the business 🛻🔹 How data analytics drives smarter decisions in modern buy here, pay here 📊🔹 The real timeline for working through distressed portfolios ⏳🔹 Insights from a recent note sale and portfolio cleanup 📈🔹 Why disciplined growth beats empire building 🎯Key takeaways for independent dealers: 🎯✨ Consolidating locations to regain control✨ Building analytics systems from day one 💻✨ Shifting from a car sales mindset to a finance-first operation 💡✨ The importance of transparency with lenders 🏢If you’re an independent dealer, BHPH owner, or considering a distressed dealership acquisition, this episode delivers real-world insight on operational turnaround, risk management, and sustainable growth. 💪Support the businesses that support the podcast: 🔷🔹 BlytzPay — credit card processing and text communications (3 free months when you mention IDP)🔹 Buckeye Risk Services — education and reinsurance🔹 TaxMax — flexible tax return solutionsConnect with us: 🌎Website: @Email: @ependentdealer.com 📧Facebook Group: @independentautogroup 👥Luke Godwin: @lukegodwinJeff Watson: / sendtojeffw
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Technical
Too Afraid to Ask
Car
Porsche 911
"yeah yeah right so we can just fast forward through that I was at college I was a finance major at A&M and and my senior year was when 9-11 happened so yeah we all remember what we were doing that day and that was just one of those days that always look at my life pre 9-11 and post 9-11 that's"
The Porsche 911 is a famous sports car that looks really cool and goes super fast. It's been around for a long time and is loved by many car fans because it's powerful and fun to drive.
The Porsche 911 is a legendary sports car known for its distinctive design and rear-engine layout. Since its introduction in 1964, it has become a symbol of performance and luxury, often discussed for its engineering excellence and racing heritage.
Car
Chevrolet Silverado
"... half and half model in may of 2024 we had a red silverado on our front line and mind you we had been just s..."
The Chevrolet Silverado is a big truck that can carry heavy loads and is great for work or towing things. Many people like it because it's tough and can handle a lot of different tasks.
The Chevrolet Silverado is a full-size pickup truck known for its durability, versatility, and strong performance. It is popular among both commercial users and everyday drivers, making it a frequent topic in discussions about trucks and utility vehicles.
Car
Ford Focused
"...0 silverado as you can on a four thousand dollar ford focused right like in that situation i want the money to ..."
The Ford Focus is a small car that is easy to drive and saves gas, making it a good choice for getting around town. It's usually less expensive than bigger cars, so it's a favorite for many people.
The Ford Focus is a compact car that has been praised for its fuel efficiency, handling, and affordability. It has been a popular choice for those looking for a practical vehicle for daily commuting and city driving.
Term
vehicle service contract
"...the warranty weren't vehicle service contract stuff goes to some joe's auto shop they get a bill for 15 grand..."
A vehicle service contract is like an insurance plan for your car that pays for repairs after the original warranty ends. It helps you avoid big bills if something goes wrong with your vehicle.
A vehicle service contract is an agreement that covers the cost of certain repairs and services for a vehicle, often similar to an extended warranty. It can help protect the owner from unexpected repair costs after the manufacturer's warranty expires.
Term
transmission
"...they get a bill for 15 grand that's for yeah you know replacing a transmission that and and it's like they do a crap job..."
The transmission is the part of the car that helps it change gears and move. If it breaks, it can be very expensive to fix, sometimes costing thousands of dollars.
The transmission is a crucial component of a vehicle that transfers power from the engine to the wheels, allowing the car to move. It can be automatic or manual, and issues with it can lead to significant repair costs.
Select text to request an explanation
one of the hard things that we had to deal with is we were purchasing all this inventory from them
but the problem was we couldn't find a lot of that inventory. Okay, I'm talking not there.
Like not where we're not talking about uh skip. No we're talking about inventory that should be
there that's just not. Like on the books you know pretty quickly and within that first week it's like
well you know I mean you you're looking at your your at touring you're like this says we have 300
cars and well that'll see where are they?
Hello and welcome to this episode of the independent dealer podcast on site again but
on site again here at Vamos Auto. Vamos. Vamos. Muchacho. Muchacho.
Luke, who do we got? We have Travis Allison. And Casey Allison. And Casey Allison. A couple good-looking
guys. Great hair. Please look at this. I mean did your hair ever look like that? Uh no no not
since I was not even when you came out of your hair. No no no no. Four years old your hair
looked like this. Some of us are blessed with other things. They I was gonna say they get they've
got a product for that now I guess right? Moving right along. Guys thank you so much for your
time. This is exciting. We you have such a beautiful location here and some very specific
things I want to talk about in a minute because man what a unique business model you've got going
on here like blows my mind but let's just rewind this thing all the way to the back. Give us an
introduction to the podcast community. Where'd you guys come from? Like what's your background?
And then we're gonna talk a little about how you got thrust into this crazy crazy buy here pay here
business. Sure sure no I'll starve that thanks for having us again. Houston natives both of us
you know third generation car business our grandpa had a four dealership actually in
walks of hatching not too far from here back in the 60s 60s and 70s still have family with
some franchise stores in Houston a couple cousins that are working in the franchise world.
So it's very much our dad was used car guy our whole entire life actually just retired
two years ago I think 40 or 45 years in the used car business and then he has no hair. Yeah well
he does not ever. That's exactly right. It's not ever. So you know very much grew up in the industry.
I went into the wholesale side first I went to work for a desa auto auction in 2010
thought the greener grass was in retail so I went and tried selling cars did that for a couple
years I ended up back with America's auto auction I spent five years there helped open a
Greenfield side of theirs in southeastern as the operations banter for them and then I got
poached by a large buy here pay here dealer this was 2017 okay and I remember at the time going
I wasn't sure you know there there was you know kind of the the stigma around buy here pay here
I wasn't sure if I wanted to get back into the retail space
I took a leap of faith it was for some pretty good people and you know cut my teeth over the
last you know five six years in the buy here pay here space and so wow you said you're in sales
I know I thought you were just an operations guy here yeah yeah no I look that's why he's in
operations now the sales didn't work you gotta wash him out yeah I am I was not going to be a career
sales guy I knew that from the very start it just takes a certain type and so my love was always
with what was going on behind the scenes and so you know I fell in love with the operations side
of the business you know anything from you know buying the car to servicing the car I mean you
guys know there's just a big piece of the world that is that that is that you know and and I just
decided to make that my specialty and so you know fast forward you know 18 months ago you know we
kind of landed this deal and here we are relocated my family up here from Houston wow that's I mean
that's a trajectory but it's always been in the car but it's not my grandfather was a four dealer too
so I don't know how y'all feel um Travis how about you well um so obviously the same upbringing
yeah yeah right so we can just fast forward through that I was at college I was a finance major at
A&M and and my senior year was when 9-11 happened so yeah we all remember what we were doing that day
and that was just one of those days that always look at my life pre 9-11 and post 9-11 that's
really my I was at age because I was yeah I'm a year older than you so for me it was like
put on the suit go in you know go interview for a financial job but I just I had heard too many
stories of families that lost everything I don't I mean everything they're all all their employees
during 9-11 so yeah I was like I can't just sit on the sidelines here right so I went to the recruiter
put an application for a pilot slot in the Navy and somehow got one I don't know how they chose me
but were you did you have interest in flying prior to that not really I mean we you know once again
I always say the car business and aviation kind of go hand in hand so when you get into like my
grandfather was as a car dealer naturally got into aviation got out of plane you got to have so he
actually started assessing the dealership when we were little and so we were always around planes I
never looked at it as something I was going to do as a job like that was never that was going to be
the path yeah I'm going to go to the airlines or I'm going to go to the military I just wanted to
go be a college kid and wow started my new in the court like no no that's crazy okay I it wasn't
that I was like I guess against the military or anything I just I just wasn't the path at the time
for you know so I was business major and just thought that was be the route I was going to go
and so post 9-11 get a pilot slide in the Navy start flight school in Pensacola we'll go through
officer candidate school in Pensacola and then start flight school in Corpus Christi then advanced
flight training in Kingsville and then F-18 training in Oceania and Virginia Beach so spent
roughly 14 years active duty was blessed enough I was a top gun graduate so I went through a top gun
it's magic so it explains the hair yeah there's one so I mean they recruit you based on your look
or your abilities because I feel like you had probably both so a few deployments you know
Afghanistan, Syria, Iraq and then I we had two little ones at the time and I remember coming
home from my last appointment and my son I had surprised him like you know like you see on those
videos I called my neighbor and I said hey Matt you know make sure my wife's home and like you
know there's nothing nefarious going on at the house we're coming in with a camera so I surprised
and I came home and I remember my son looking at me like this that stare of like I know who you are
oh man oh but like I'm a little bit worried right now oh yeah kind of thing and that and he ran up
to my wife and just grabbed her leg and I just was like this is it I was like I'd done everything I
wanted to do in the Navy I mean I would have loved to stay and do it as a career but honestly I was
to me it was it's time to go be a family man you know and so I had before I left on my last
deployment I went back and got my MBA at William & Mary so I was knew I wanted to get back into
finance I just didn't know what my wife was from Dallas so she said can we move to Dallas I said
yes mayor yeah so fast forward we moved to Dallas I don't know anyone in Dallas other than her family
even though you grew up in Houston even they had just total two different towns as you know
and so then you didn't really have any connections here and and Dallas and was able to just like any
business world I met a guy that was a high net worth guy here in Dallas there's not many of those
around though not a lot and he offered me a job to come work at his family office and and and do
analytics and and help run their their family's money and then you know they had a private equity
division commercial real estate so huge huge here in Dallas hey guys just to jump in and talk about
Buckeye risk services they've been one of our sponsors forever they're great to the industry
they're one of your sponsors you don't even know it every time you go to a convention or something
like that they're there helping out isn't that right Jeff yeah absolutely I have not seen a company
so willing to get behind the dealers from an education from a support standpoint I mean there's
a handful that we see in our sphere that are very active and and always have our back but Buckeye
really sets the standard so when you're looking for a reinsurance company if you've decided it's
time to get into it you've got to call the guys and girls over at Buckeye I promise you will not
regret it yep uh reinsurance for savings account wealth building tax plan all these things go
together so call Buckeye now you're a freaking buyer about your dealers yeah yeah yeah it was a
yeah you know I've never you know like it's it's an ins and means for me like to me it's do you
enjoy what you're doing I don't care what the name what it would call it you know it's kind of
hold the thing now is you know the turf toe have you seen this thing like they're saying like they
need to rename it from turf toe because it sounds so benign or when these players get turf toe in
the NFL and they're out for six months yeah same thing with buyer payer I want someone to come up
with a new name yeah for buyer pay here combat brain damage here so you know someone needs to
come up with a better name than buyer pay here we can rebrand is that right so get in the family
office 36 starting all over again right so um I didn't want to go there anyway so jump into that
you know it was it was transitioning from the military it's not for the faint hearted yeah I
know and so because you come from a place where you're yeah that's your identity right and so you
used to be on top of your profession and then you start over which is fine but it's a it's a grind
again after about a year working in the family office I decided I wanted to take a different
route and and we were looking at that was reach out to Casey he was with America's auto auction
they were had this private equity owned I said okay this makes sense so went over there and the
corporate side and helped the auto auction from the private equity world okay so started there
kind of back in the car business and said okay like this is I kind of enjoy this yes it's great
and that's when I started because I went we had a we bought a store in an auction in Virginia
was poorly run and so you know they were trying to I said you know what I'll go up there they
wrote it all right yeah like I mean if I'm going to be taken serious in this business you got to go
boots on the ground so went up there and ran it for a year and you know you just meet all walks
of life at the auction business and really started realizing that you know this buy here pay here
whatever we name it the rename it yeah it's you have a little bit you you can really put your
stamp on this business right where we grew up like I said where our was retail franchise world
and you there's no stamp there's the franchise is like here's the playbook yeah and execute the
playbook and if you execute the playbook you can make a lot of you'll make a ton of money right
and there's nothing wrong with that yeah I just said you know hey you know this sounds a little bit
more interesting especially from a financial side and so when I was coming back from Virginia
once again and Casey reached out to me and said hey we have a CFO position at this company would
you like to you know so I went and interviewed and they hired me as a CFO of that a nice of that
buy here pair dealership and was able to really cut my teeth and and and by doing that that's where
I started building all these bank relationships right so the one thing that I wanted to do was just
when I got there I realized hey you know this business is really ripe for some some analytical
growth like actually bringing some substance behind the buy here pay here where it's not just like
yeah on a piece of paper yeah it we we've talked about that you and I've talked about that that
data is so important in this business and it's neglected it's still neglected and it's neglected
because we don't have the resources to analyze it every day all day long and one of the things
y'all've done here is brought in the data yeah data and what was great about we had 10 000 accounts
I had there was a tons of data to strip through so that's the beauty of having all the data and I had
really realized the power of data when I was at the family office and doing the private
daily stuff but I really noticed that when I was at America's auto auction we went to
capital one to pitch getting their repos and we sat down and it's the conference room like this
and I don't know why they chose me to go with the other people but anyways our sales people you
know sat down and gave out the goodie bags and I remember them the head of the capital one division
just said do you have any analytics for any arbitrage numbers on why we should choose America's
auto auction versus manheim or desa like you know which makes no question yep and uh I just remember
the sales people oh no we got a goodie bag didn't you see what's in the goodie bags in there yeah
there's tens and I see what I had and a mother and I remember him saying
he looked at every one of us and said listen data is the new currency oh man you can't mine your own
data we don't have time for get out of here yeah like right I left and I thought okay well he just
confirmed what I was thinking yeah right and so I started going okay well how do we mine our own
data in this business right and I had worked with a software company a sales force product called
Tableau when I was at the family office so I knew that it could source a ton of data but the problem
was is when I started sourcing it I realized that all the data that was going in was just garbage
yeah you know so you had to start back and garbage in garbage yeah and so that's when it
dawned on me that hey let's get a little bit more analytic driven and it was not that we're gonna make
decisions solely based on analytics but it'll at least give us an idea of how to go in those
directions when you and when you're looking at a portfolio of 10 000 yeah you can get good yeah
for sure so many buy here pay here's are probably like the the two and the three hundreds right
and you can get data but that data is just not skewing right quite a bit it's not exact and
and one thing that will and you'll know about us as you you know force this relationship with us
as we move on like we're an open book we don't we don't have trade secrets that's just not the way
we operate you know the way I've always just it's like the old football coach is like look
this guy's the starter in front of you if you want to win the job beat him that's right right
like you're gonna get the same plays to work with well we got hammered last week South Carolina
that is got hammered last week because we couldn't block or tackle it's back to that right simple
right and so I just think that the more you can help the industry the better the industry can get
as a whole right and I'm not saying that I'm like you know we're the savants we have all of our
struggles yeah but I want to help and so if you want to look at my numbers I'm fine with it like
it's not I don't have anything to hide from it that's interesting to me so I mean help me paint
the picture like you guys are both working for a large buy here pay here yeah probably doing
just fine and you've got a lot of options you say hey I can get into the software business I
understand data I could I could graduate into a larger like buy here pay here you know a venture
backed massive firm but you guys took a different route yeah and help us help us understand that
like how did this opportunity present itself and when did you say I'm gonna go from being data driven
to like I want to take the whole step I want to I want to own this place I want my name on the
building like I want to like run this joint what was the you know the happen you know opportunities
present themselves when you're not expecting them so it's not like I was out searching for anything
but it's the bank relationships that we had built over my time you know which is
doing the right thing being transparent just you know having a good relationship we're never
burning a bridge kind of a type of thing uh one of the our lenders had reached out to me and just
said hey would you be willing to help this company out like when I say help just sit down with the
operator show them what you're doing you know this would be a big help to us we're we're just having
some struggles with them and so that was it that's how it started okay so I meet with the operator
sit down with him do exactly what I was telling you hey here's what we look at here's it this isn't
you know completely turnkey but like these are little yeah pillars that I would number is in
fix them yeah exactly right and so I started working with them just as a I mean I didn't ask
for consultant fee I was just doing as a favor to the lender right to the bank and just saying
you know look because at the end of the day I wanted to help them out and them so there's
not another I just I don't want anyone to go out of business right I hate it it hurts my heart
and I'll do anything to help someone stay in business and I hope if we were ever in that
situation somebody would come to ours right and so there that's how that started and then
um after about you know six seven eight nine ten months of doing that
it was Christmas time and they maybe a little bit after that and they had just said hey look
we're at the point now where we're probably gonna make a move with the operator um and would this
be something that you might be willing to take on and I said well I have a job and I like working
there yeah you know these people are good people and all those type of things and so you
know I had to do a lot of soul searching and Casey was the first person I called and said
once again I know my strengths in this business and I also know my big weaknesses and my weaknesses
are operations I if I didn't have Casey we would be out of business in a week so that's what's so
great and unique so many people have to start a business on their own yeah oh yeah and y'all
y'all are yin and yang sure and that's how you make things work well that's what I said I and I had
told the lender I said listen I'm not going to do this without my brother not because he's my family
but yeah in my opinion he's the best in this business when it comes to pure operations yeah so
I need to have a conversation with him because the last thing you want me to do is saying I'm
going to do this thing and I got no one to right to help right and so full transparency we wanted
because we had so much respect for the people that we worked for we wanted to make sure that
if we were going to do this it wasn't one of those things where it was like
jerry mcguire thing yeah and he's coming with me you know like and so we made it a you know we
just said look I talked to Casey and then after about a month and I'm doing some due diligence
with the banks you know they were like look we're looking to move on this you know relatively quick
if yeah so let me ask you yeah Casey how did that go what's that vocalization yeah what's
well you know it's I'd be lying to if I told you it's not hasn't been a dream of ours right yeah
and you you grew up in the industry and obviously the the you know the big picture over time is that
you know you hope you get to do it with the people you love and and um and so while again while we
weren't searching for the opportunity when it came knocking on our door it was like oh crap okay this
this is getting real yeah and so you know I mean both of us you know prayed a lot about it talked
to our families a lot about it and for for us in the beginning it was like you know the idea was I
would stay in Houston and he would stay in Dallas and we would kind of run we knew we wanted to run a
kind of a two-store operation yeah and so we closed at the end of the march and the signing
had come up here to see the facility all I'd seen is pictures they say fantastic and um yeah I came
up here to visit and I remember going home and it was actually uh Easter Sunday I told my wife that
morning I said I think we're gonna have to move to Dallas and she goes what and uh bless her heart
she I mean I was up here working you know on nature Friday I've got two little kids at home
she sold our house we bought a house wow and we were up here because it was all hands on deck I
guys know this is not something you can kind of turn a blind eye on for very long and so
especially a volume yeah absolutely and you stepped into some instant volume right that was
there was you know obviously this was the last that they had I believe seven locations but this
was the last standing one at the time so with that boy they had been solidated yeah you know but
you're having repos all across the state of Texas okay right so it's not like you're just
repoing in this square mile right and so and we had known we had talked about you know the business
model that we wanted to run and you know run all that through the bank and I don't want to get lost
in the in the whole story is partnering with the right lender matters oh yeah for sure okay and
our lender slash bank is a salt of the earth right so we knew it was going to be a blood bath
they knew it was going to be a blood bath there's no secret that I can tell anyone that says you
know there wasn't a lot of negotiation because we weren't coming in with any equity for the most part
yeah I mean I didn't come from I wasn't a military yeah so you know like it wasn't like I had this
treasure trove of money to just throw on the table right so but it sounds like the bank understood
that they understood that they understood that it was in their best interest to have someone
knowing what they were doing to unwind this yeah and we've talked about this there's so many banks
to just pull the plug exactly yeah and that's the worst thing they can do the worst thing
how big was the yeah talk to us about the deal structure you guys got into as much about yeah
so it was 15 million dollars and then part of it was purchasing the inventory so they're
they were they ran a little bit different they their floor plan and the revolver was all in one
so we wanted to separate the two I just believe in having a separate floor plan and a separate
revolver they're just you keep separation between church and state you know and you're just it's not
all co-mingled so one of the hard things that we had to deal with is we were purchasing all
this inventory from them but the problem was we couldn't find a lot of that inventory okay I'm
talking not there like not where we're not talking about skip again we're talking about inventory
that should be there that's just not yeah like on the books well I'll tell you you know one of the
things that we were that made it and we were talking about dms's earlier we came into idms
we came into neo those were all systems we were using before so on day one I was able to go in and
just start digging through and you know pretty quickly and within that first week it's like well
you know I mean you you're looking at your your inventory and you're like this says we have 300
cars so well now I don't see where are they like I see 30 in transit what do you mean in transit
like where you know Travis he always says this but you can tell a lot about a buy here pay here
operation by how their back 40 looks you know and we believe that whole hardly and sure you know it
was gotta keep you turn yeah I mean you can walk back I mean y'all been in this business long enough
you can walk any buy or pay here and within five minutes I promise you can say what their financial
should look like if they're doing them right yeah you know and just the health of the company yeah
real quick rewind a little bit more because you did you were in the previous owners books for six
to eight months were you surprised that there were things that you're like hey man you should be
tracking this and you're not at your scale that's a that's a problem like anything specific that you
could pick out that you're like guys how are you not paying attention to this at your size I mean
I'll be honest with you is is getting the data on your on your repos and your charge offs and just
how long they're sitting on the lot like when I ran just basic numbers on how long their their
repo on hands you're talking a hundred days they just repo carny would sit on the it would just
sit somewhere in the corner and they wouldn't process that I said why they didn't want to see
the charge off hit or because they what they don't want to charge off it they don't want to get hit
on their crr you know the barring base all that kind of stuff and so that was like we were out of
covenant but they show they were out okay yeah and so I just said look all this is fixable but it's
going to take a hard conversations with the bank and it's going to take you having to take some
major concessions just on getting through because it's going you're going to crater for a little bit
but if you're willing to have that conversation with the bank you can get out of it it's just going
to be tough and so the idea is what y'all know is once that water starts building up on that dam
it is you're gonna have to release it but it's hard to just you're gonna take a major hit
and a lot of times the banks can't handle that can you talk about the leverage percentage that
we all get into and we're like oh my this is this is a nightmare I mean it was over leveraged by
10 to 15 million probably and it was just getting worse yeah you know and not getting better
uh and you know that's ultimately what led to the now the deal structure was pretty simple I mean
we said that with the bank and said okay look this is what it's going to take for us to walk
through in the first first day you know we've got to have a line because we've got to be able to
buy our inventory we got to be able to have a floor plan we got to have the floor plan to
buy the inventory we have to have the have a line to be able to start building the business and you
know we work with that with them you know and then we came up with a purchase price for the
and it was you can try to figure out what the it's it's never going to be what you think it's
going to be and it's it's not anything the bank's going to think it's going to be so was it at a
discount sure was it at the discount that be either the bank and I thought it was reasonable no no
you know you both disagreed on how much it means it's perfect yeah so you know but that was you
know at the end of the day that's why having a lender that is going to sit by your side and I
said listen we can nickel nine this thing all day long but none of us are going to know until
we until we get there and all I ask is as we go and we peel back this onion it's not a 9-1-1
six months in yeah right like this needs that we need to have commitment on both sides you want
commitment from us that we're going to do the right thing on the flip side we need commitment
from y'all the y'all are going to stick by our side as we go through this this process yeah because
that's what it it takes because it doesn't look pretty at the beginning you and I were talking
about this um that this is not a one-day exit no it when you're in the buy here pay your business
if you decide that you want to close down it's a multi-year process for sure to maximize the
income right yep and so um even taking over it's it's no different it's no different yeah and so
we're trying to once we get boots on the ground it's let's start buying our own inventory but that's
going to take some time to try to get that inventory shipped here right and so we buy it in in March
April we walk through the door April 1 me with the staff April 1 and April pulls that April yeah
right so and it might have been April set whatever the Monday was and I can't don't hold me to that
whatever Monday was the first Monday of April of 2024 then it's like what do we have I mean that's
when we went through the and you know we knew that we didn't want to do that inventory we knew we
didn't want to do that business model uh did you sell any cars in April we did we sold 22 okay right
but it was like we've got to sell something to just like make yourself feel good yeah make ourselves
feel good and to just you know show some good faith to the banks that we're getting but I told them I
said look we're the first few months are just repo it was all the only thing we sold in April was
what was already just there and deals that were probably in the works and that kind of stuff I mean
really April was just a come in and clean up figure out staff figure out process yeah because if you
would have told me we didn't sell any cars for two months I'd have been like okay that makes it yeah
yeah we we use May 1st or no yeah May 1st June 1st is our really our first month okay so April's
kind of selling what's here May's like we've got some new inventory let's see how that works in here
and then it was like okay let's just cut the cord yeah June 1 our underwriting our business model
our everything right and so you know look if we were having to redo the financials you know I didn't
like the way the financials looked not necessarily from like an optics standpoint but just how
if your thing was laid out you know I want something that's simple easy to use banks can
understand so anyways it was just luckily Casey and I said hey we're just gonna divide and conquer
you go handle operation I'm gonna go you find the cars yeah find the accounts yes did you ever
did you find all the cars did you dig in and be like wait a minute they had a 2024 McLaren that
was sold for two dollars like where did that go we did an attempt to not throw the other people
under the bus because they're not here they came to defend themselves look where's their stuff that
you uncover that you go seriously yeah of course you know but I'm not on their shoes not my thing
yeah like yeah even going even going into consult with other dealers you you look at things and you go
come on man well come on man that's about you know we had a lot of those come on man yeah and a lot
and those things hurt because yeah you had to purchase them right i.e. the inventory you purchase
this inventory that's nowhere to be found yeah like is this a golf simulator what is this what is
this receipt for whether you like it or not whether you got a retailer or not I mean that's cash for
us and so you know it was really important to us that we you know even if we were gonna wholesale
the inventory you want to host as much as you can and collect those dollars you know I mean that's
I'm a big believer in that let's talk about that transition from the just the quality of
inventory standpoint because that's such a blaring obvious difference right now you guys have swum
upstream like you didn't swim you took a ladder like you were you were you ejected yourself upside
the salmon of a capacitor on it was yeah bigger than that like did that happen over time or was
that deliberate from day one and also the transition of like those were two different customers you
guys I mean the brand had branded itself as someone that was a bargain by here pay here your
typical run-of-the-mill now you guys are a premium uh in-house financing or whatever you want to call
it and you're dealing with a much higher acv how was that transition sure so right wrong or indifferent
you know how when we came in here vamas had kind of landed into kind of the last stop on the block
right just based off of inventory they had and you know it was just I call that a cpi dealer yeah
exactly that's exactly right and so you know like I said from our previous employment you know we
knew the higher acv model could work and we had seen it work we had seen it work successfully
you know is it a different customer yes right it's a little bit higher income earning but
there's still subprime right we knew we have seen kind of the track record I had been on the buying
into that for a really long time so I knew exactly what worked being on the service side I knew what
what bro from yeah yeah right like what what I don't want to buy um and I kind of I had a buy
list in my head from day one um we kind of had an acv a acv target but again it was kind of coming
into this market we were like well let's just hope it's kind of like houston hey real quick break to
make sure you guys know about blitz pay it's who I use to take all the payments at my buy here pay
dealership we've been with them for almost three years now and it is absolutely amazing it's great
yeah uh the product is so simple even an idiot like me can use it but uh you know when even when
my collector's out and I'm just taking a phone call here there no matter where I am I can log into
blitz pay and I can take that payment I can see the customer's texting in and say hey can you run this
or whatever's going on it's always on top of it and the money's in the bank almost the next day
and that is to me so important and the support is great if we do have a charge back or a dispute
we get an email that says hey there was this dispute and then their team goes to work to
help us resolve it it doesn't they don't just dump it back on your table with some random
notification or email that you barely ever see like my previous processors yeah that it's so
helpful um and a lot of times it's because our our customers did something wrong but when it's not
they'll fight to the to the end with you and get that money back in your account yeah so give them
a call the guys and girls over at blitz pay great partner to have a definitely an essential tool
to have if you're a buy here pay here dealer get it work immediately you know you'd be surprised but
you know may when we first started it was about half and half model in may of 2024 we had a red
silverado on our front line and mind you we had been just staffing and stuff we didn't really start
marketing or anything um we had a walk walk-in drive up put 18 grand down on it immediately boom
and i think him and i looked at each other and we're like holy crap gone so this might
yes might be good it's a different beast right um obviously takes more capital right to do this
model get once you get to that point and it sure should yeah it uh yeah you gotta build it up you
know but you gotta do that just you know sit but but to your point too i mean you're not as you
can't really be as flexible on a you know a 20 000 silverado as you can on a four thousand dollar
ford focused right like in that situation i want the money to look far and in your situation talk
to us about that like that mentality shift of no no like we protect the asset at all costs here
because that 20 000 truck can be a two thousand dollar pile of metal again we talked about this
earlier is we were very fortunate that we had people that wanted to come you know when they found
out we were doing and relocate and do whatever you know one of those people is our finance director
and he understands you know what we're trying to set out to do we try to offer what we believe
is fair interest rates fair pricing um in turn premium inventory right but your contractual
you know obligation to us is on time payments and those aren't you know no mind you people
things happen right but we are dealing with a pretty new new portfolio right and so you've
got to earn some of that credibility both ways right but he understands that you know and he
cut his teeth in rent to own oh man that's tough and he's talking good collective 30 years in rent
to own yeah mom and so he knows the customer it's funny when i get brought into any type of customer
situation i'm like oh maybe you know my heart's more in it than his yeah he could see right through
yeah yeah you know you're exactly right you know get the car back as fast as you can short leash
i imagine the insurance situation i mean is this uh when you're dealing with those acvs are you
guys still do you do you sell a cpi product or do you i mean because i'm scared of that i'm scared
to put those in my portfolio my cpi i was originally and now mine's not quite as high in as is this
oh we also you know charge a little bit more yeah yeah i mean you make up for it the only bolt-on
products that we'd sell are cpi gap and then the bill of service contrast sure you know and those
are things that we just feel confident about you're 18 months in are is the other portfolio
going now no it's close but so we we started with the 15 million and we got it paul and his team and
the finance department really did a bang-up job just getting it to a place where it was current
paying customers right okay and so we had to work through a lot of chaff to use the military term
right when a lot of charge off so we had about a little over 2 million uh with roughly 300 accounts
left and um we just couldn't see the force through the trees it just and you've mentioned
it takes a long time to wind down and it takes longer than you ever can imagine you think it's
going to happen in a short amount of time it doesn't it just takes i mean you got to realize
we're 16 months into this and we still have 300 accounts active and those none of those got put
on while we were here yeah right so you can start doing the math it's going to take you two to three
years to wind down something yeah and do it the right way so we have built the portfolio
down to about two million dollars 300 accounts and i just shopped that portion of the portfolio
around was able to get four different bids on those uh on that portfolio and then i was able
to go to the lender and just say hey look this is what i think the best option is you know we've
got to see the force through the trees at some point and these things are just dragging us down
it's a sea anchor it's just not going away and so we all agreed like let's move these notes so we
just closed yesterday on the on the note sale so and we ended up selling about 240 accounts yeah i
thought you got a good number yeah i mean 70 74 percent which is good yeah uh you know it allows
like it's not going to be uh it's not a huge you know world win of cash it just allows us to
pay down our debt and it's just brain damage you don't have to deal with and brain damage we don't
and you know we just we can start like i said we can now start focusing not that we have it but
it's just been all yeah it's been muddling the data for earlier time does that make sense plus your
collections team i mean that's those are needy accounts your collection team can focus on the
high dollar stuff service problems with them you know cpi all the yeah everything so where does
followers go from here well i mean i'm sure casing i have the same answer but it's just
maintain the course and the course is not overgrowth sustainable growth slow growth
if that makes sense we're not trying to break any world records and sales uh and and just
what we we talk about all the time and and um when we started we had to be a a car selling company
we had to sell vehicles we were we were really a retail lot now we're a finance company yeah so
where we go from here it's being a finance company being a legit finance company using the front side
to you know still you know put in the barrel put fresh water but it's it's the back end y'all know
and by a payer that that's real money's made that's where it is so we don't have any grand plans to
expand we're two stores is all we want that's our comfort level uh we have you know good forecast
with the banks for a few a couple years you know all what we want to do uh and you know
look there'll be pin grenades thrown in here we'll have to but you know there's no i mean you can
add but there's we don't have any grand like what you see right now is it's pretty great is what you
get right you know and i think we've been afforded the you know opportunity to kind of see what
happens with explosive growth and um kind of the world and you guys know right right now is i mean
these last few years have been a very volatile time in our industry yeah the last couple weeks have
been a couple weeks even more and so you know you look at all these you know you look at all
these businesses and you know there's a lot of common denominators right and for Travis and I
we don't need any accolades right uh we're not trying to do any side businesses right now this
is it and we know that the the path to that success is focusing on this it's very important to him and
I that we live here right and we're back and forth to the Houston location um one of us is here yeah
most of us are both of us are here normally every day except when one of us is in Houston but there's
also not this delusion or at least for me that I want to grow to be a 50 store buy or pay here
operation yeah right you can make so much money in two locations that you can't spend it all
all right jeff we're getting close we are getting so close to get getting that money in the bank
you can smell it those checks are just flying out right I smell those checks so we we're doing
our refund advance right now we're in the fourth quarter we're doing some estimates with with the
with their last pay stub and when the tax mac says hey this is good to go they let you print the
refund advance check so we're not too far away from that which is really really exciting um the
second we start filing in our location we are also going to be able to start printing out the refund
advance checks which is a huge huge helper and and honestly when you look at the customers and
they say oh well this is going to cost me a little bit more it doesn't matter because they're getting
the money now and it's completely worth it for them to get into a vehicle today as opposed to
waiting another eight to nine weeks yeah just imagine the amount of money you say by buying a car in
december then when you buy it in march uh from from the same person because prices go up unfortunately
during tax season but if you buy it early you're good to go yeah and and what I tell my customers
I say look if you wait until march april that car won't even be here if it's third row SUV if it's a
truck if it's in demand it won't be here by then so act now let us file your taxes let us get you
the refund advance so we can get you on the road today it's super easy call the guys and girls over
at tax max use VIP code to get 20 off the VIP package do it right now it's not too late and
don't forget to use it for collection strategies too Jeff so I'll tell you after going to conventions
and being at 20 groups and coming from a big dealer I'll tell you the kind of the I've come full
circle where you know I've looked at these guys these smaller guys have been doing it for 10 20 years
that are on their own money now where in the beginning when I worked for a big group I'm like
you know you sell 50 cars a month we're doing 500 like yeah you're you know but I'll tell you when
I go to those when I go back to those conventions and those 20 groups like those are the guys I
hone in on now because they have figured out the the path I mean just like you guys there's nothing
for me you know I don't have this big ego issue that I want to grow to this you know you know be
the the number one you know whatever I've seen so many super super successful dealers that have
one in two stores yeah and they they get to the point that no leverage sure yeah they're just
printing money yeah I mean that's the I think that's the end goal you know but you know you do
enough case studies in business school to know there's no overnight success no you know there's no
there's 16 months into this we've got a long road yeah at what mark you know you're 16 months in is it
is it five years in or six years in when you finally can take a breath and go you know what I
think we got well you know I don't think we'll ever take that breath I'll be honest with you
because I just no yeah well I'm shutting down so yes now yeah now you can take the breath but you
know I don't think you know I'm not gonna sit here and stay with five or six years you're gonna
look like down the road but you know I don't I do know enough about businesses that do fail
and they can be for example this place that we took over was riding high for a long time yeah
and then all of a sudden it was the operators weren't here anymore yeah I have the ball you know
and then all of a sudden start that that water starts filling up so I know the pitfalls there
you know and so I don't think they'll ever be a yeah and you know I just I like working
but you know what does that look like you know look it's deleveraging I mean that's the name of
the game I mean you know talk about that so much it's it's get to a place where the money we're
taking in is paying down the debt okay and so cash flow it's the whole you know and we can get into
a long discussion on on you know where I think people get them you know fall under that that's a
whole it has been into in fact yeah so you know that's I don't know how many years that's going
to be you know I mean I know that the next two years are are crucial for our business here which
is as we continue to grow the place of where we start paying down our debt right that's what
we're getting to yeah okay so but we have to it's a it's just very nerve-wracking business when
you're having to take on debt to eventually pay down that debt yeah yeah right so that's the
that those are the things where you go okay I know it'll get there if we do if we don't try to over
commit to things but it's going to take time and you know sometimes once again I go back to if you
don't have the right lender they don't understand that time you know in our lender who is it's
willing to walk through us has a way and being a owner who's willing to have those hard conversations
when when they're needed with your lender yeah well they're you know I I sat down with them
in the the bank owners and when we first started doing this and I just that's because it was the
truth I just said what do you want out of this yeah no like I mean so we're on the same page you
know this is before I we said we would do it this was just kind of and then look they said look we
want to be in this business we do believe that it's a good business like and but we just need someone
that's willing to do it the right way show us some things you know because they you know they get
their lenders they have oil deals and cattle deals and yeah you know buyer pair deals and
franchise deals and floor plans and you know internet you know you name it they're lending
money to all walks of life so they don't have a certain specific person that is a subject matter
expert and buyer payer and if you you kind of have to have someone there our lenders they understand
that they're willing to learn the room to say look we want to learn and you and luckily you have a
business to read and smart enough to help educate them well I mean cause so many of these dealers
don't look I mean with them I talked to them regularly look we're not trying to get into
bacon fatigue that's not like I'm calling them every day you know I talk to them once every
couple weeks I like to fly up there once a quarter I mean with the whole leadership team
and I just let I say pepper me with questions I give them a you know a presentation of where we
are to go to the bad and the ugly and I say go just bring it yeah a lot of it or where do you see
that you know like we don't understand like why you would do this or have you ever thought about
this or why do you know and so you have to be confident that you're giving them the right
information you have to know your data yeah and you have so that's where it goes where you know
you've got to you understand the analytics you understand what's going in and then it helps
you know with that so that's the main we'll use well I was just going to say you know the you
know with all of kind of what's happened over the last few years I just think that the banks
are realizing more and more that you know they need and want to see the data from us right and so
um they better you know well I mean and for good reason yeah right we again we walked in
had the data analyst that he's been with forever and we're able to kind of provide a very clear
picture of what's going on right there's sometimes I run the data and I'm like gosh I
don't want to show I don't want to show man but I just say you know what I mean what am I I mean
what it is you know and so you know you just go through those those trials and tribulations
you know you look you get better for it and kind of been our MO is full transparency you know I look
I always went to you know I didn't go to a ton of 20 group meetings I'm I could do a whole episode
on why I think that they can shouldn't be around but they're uh look at the military was when you
debrief a flight yes you're airing your dirty laundry and you don't take it personally but
you don't grow flood your numbers yeah okay you don't grow from what you do right you grow from
what you do wrong and so I'd go to these 20 group meetings and it was just a bunch of people talking
about how awesome they were and uh if you were in and for me it was like you know you did the best
idea award and I said well why are we doing the best idea let's do the worst idea because that's
how I'm going to learn right you know this is what I did it was really dumb you know like that's
how you're going to learn from the industry it's going to places where people are willing to have
honest conversations with you and say look I tried this it didn't work doesn't mean you can't make it
successful but don't do it this way here's what I wouldn't do and hear the pitfalls versus saying
oh yeah you know because everyone always I always laugh because everyone inflates their
cash down percentage by at least five percent am I supposed to be doing that I haven't been doing
I don't know I'm supposed to be doing that you know so it's like oh I did like yeah really like
come on let's let's just be honest here you know that way we can all get to the same spot you know
when it's different everyone looks at numbers different that's that's right y'all mentioned it
it's it's independent dealers for a reason there is no playbook yeah there is no one size fits all
everyone's got a different capital stack everyone has a different way of looking at things and so
it's important it's and you can't get and you can't get people on that same page in one sitting
you know this has been so great thank you so much thank you so much generous for letting us come in
here and answering so many questions so candidly you know and being transparent on that is super
interesting before we leave sure I do want to go look around the place you'll take us a tour
yeah through some of the features you got going here through the shop I want to see what you've
done and I mean some of the inventory man all right man thank you thank you guys yep
I like that wall that wall is neat because it you know it's I always want to do one with like
wooden frames or different sizes all of people yeah this is like this is what you come from like you
you understood this inventory yeah this is more you know familiar to us just because of what we
came from previously yeah right the nice thing is which was good about this was obviously the
service center was here that's a great spot so you know we'll service all the cars here and then
KC ships everything to Houston so we don't do any and we do service cars in Houston but all the
buys and repos come here oh they all get done here recon and then they'll go to Houston just look
what's the number one place your money leaves yeah for sure you need to have your hand on it right
and so and it's the hardest thing to track analytically we can do all the analytics in the
world but it is really hard to do service analytics it's almost impossible you know and so who's your
service software I'll make I'll make you okay same here man we're like identical I'm just like a
little it's hard to you can see how it's an old bank you see that like yeah so the front
one was a bank as well yeah this was like the drive this was a commercial the commercial side
like the drop box yeah drop everything you see in here was here facing the only you know he took
out a few lifts because you'll see it was really really tight so one of the one of the things that
was kind of unique previously is they at one point try to third party all of their service work
right and so they they just leased it out they leased it out to another company
it did not go probably like anybody wanted it to go but of course that company came in and they
fit every lift that they couldn't hear that made absolutely no sense logistically and when I got
here I was like we don't need all these lifts right you know and so what do you usually need more
right like that's I mean that's what most people think when it comes to service I just had more
lifts and I just had more technician and so we were able to take those lifts and move to Houston
yeah okay so like when we were down in Houston you weren't doing I don't think any service work
down there yeah we we got a customer service technician okay higher down there now okay
um and so I mean I'm sure you guys have seen a million shops but yours is so cool yeah
if you need any TVs the TVs were on the wall we've never turned them on
you know maybe we'll put uh you know uh something on there one day Edgar and rodeo
like a shop work board so how many we've done today how many we produced for the month I always
thought it was kind of neat because it gives everybody an idea of what's going on yeah that's
what they were trying to do yeah you know I just never got so most of this stuff was here
all like the rack machine like dude what a great I mean Casey put in the fan I put the fan a big
ass fan such a great gig to come in after someone who's like gone over the top yeah because they're
like I would never do this but you did it so I'm gonna use it yeah yeah what a great building
great size it's a good size you know I don't really see us outgrowing this anytime in the near
future no we will not you know like I said because they were a seven store operation they had an
off-site detail shop that was maybe a mile down the road so they just didn't have the space and so
we came in and immediately shut that down and we brought our detail crew here yeah and so they're
on the other the stores was this the only was just a recon yeah okay yeah wow and this is a very
if you're in Dallas area this is a great spot for for hubby's boat yeah yeah I mean this Arlington is
we've been really surprised with Arlington yeah very center located I mean this was like I mean
we were gonna have to figure out how to make this work anyway anyway it didn't matter yeah and so
you know the big question mark for us was we knew the higher ACV
customer was a possibility in Houston we just didn't really know anybody that was doing was doing
it here and so we kind of took that same model and said okay let's let's mimic this here see what
happens and it has outperformed our Houston market by probably 10 to 15 percent and kind of every
aspect which has been pretty I mean that's always a good surprise right right yeah
that's interesting interesting yeah I mean I I would think this would be a better market just
but but I mean if you knew what you knew down there if you just don't know yeah yeah wow what
so you're buying online all over Texas and wherever and they just shipped here first yeah
and do you have an inventory control manager I do okay right yeah so I mean I've got
I've got a service manager here and then like I said we were really blessed that when we took
this on we had a few a few people willing to relocate with us yeah and so my inventory manager
relocated from Houston my service manager relocated from Houston you know our sales manager relocated
from Oklahoma and I mean that was really gave us the ability right off the bat to have people
we trusted because obviously when we came in here there was a it was fully staffed right like
and so I came into a service manager I didn't know sales manager I didn't know
um and because of you know right or wrong but because of what had been going on for the last
year it's really hard to turn the corner with those those people and you know it was really
important to us that really quickly we ripped the Band-Aid and brought in the right people
into the fold did you keep anybody from the old uh yeah okay let's say not a ton not much
there's always there are always some good people there is I mean but it's you know you learn
in the military the only way to change your cultures with a shock I mean and so you got to
bring your people in and it's just you know there's time is money in this business we didn't have
six months to hope people are going to turn around and get on board and they don't because they
think that we're the the bad ones we you know and now they're a good deal is done how many
technicians do you have to to recon 100 plus cars a month so here we've got I've got uh one customer
tech I've got three recon techs that can kind of they'll they'll take on each other's work
depending on workload I've got two GPS techs that are light parts installers with us one of those
guys can do state inspections and two detailers wow that's crazy yeah that's a lot of production
can you do that much production with that limited staff the calls of the inventory you're buying
sure you know that that doesn't hurt right but as because you got to realize one another part
that's kind of unique to us is we didn't keep any of the vamas we call it 1.0 inventory so when we
repo from that portfolio it goes straight to the auction okay so we really for those first that first
year are hardly recycling any of our inventory right and so now we're getting to that part where
we're recycling more of our own inventory and you know the the repo inventory is just different
yeah right and so it takes a little bit more work so we're kind of at that point now where it's
like it's getting a little harder to maintain those numbers about what you are is in what are you
doing it here yes okay not all of it yeah yeah if they're outside of certain radius they can take
right yeah okay I'll take their car wherever that was the big idea of trying to get someone in Houston
because we we didn't have enough notes there yet enough cars on the streets to justify hiring someone
down there full time but now we're at the point where you know it is you send your the warranty
weren't vehicle service contract stuff goes to some joe's auto shop they get a bill for 15 grand
that's for yeah you know replacing a transmission that and and it's like they do a crap job and it
didn't fix it then you got a real man so we just hired he started this week or next week or next
next week so and that'll just allow us to be more in-house because when it's in-house you can
manage it so yeah yeah yeah crucial so you have one one person that handles like all customer
complaints like service wise yeah yes okay that's just their job that's their job policy and service
contract and warranty issues yeah and all the service contract repair approval goes to Casey
in the service right because we've seen that somebody takes the incoming call schedules things
and they improved because I'm just oh yeah I know it's we we witnessed it a little bit last month
in august saw service plane spike and we just sat down and said that we've got to get a better
handle on us because these people just it just cuts through all your reinsurance yeah and so
um anyways you just have to this is my
like this is what keeps me up at night it keeps me up at night service is have a couple things having
a frustrated customer keeps me up at night right and then having a having their car in service and
we not be able to fix it is I hate that yeah because I know what it's doing to my account
I know what it's doing to my staff I know what it's doing we're losing money yeah we're just
throwing parts at it what we're doing yeah yeah exactly so it's like I said it's hard to track
analytics in the service but it just is really hard it's brutal yeah and so and we're we're pretty
you know one of the things that our finance director and I we sat down and figured out we're
not figured out but really kind of made a decision to do was you know we were gonna really
um push our customers to stay current on their payments when their cars were in service I've
seen that get out of control yeah for sure where customer cars are in service and they're just
I'm not paying until my car's fixed and so we started from day one both of us said look we're
gonna do our best job to to to get these cars through as fast as possible you know and he was
like look we'll we're gonna do our best job to to keep them current right so one thing we've tried
really hard that's super important
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