#190 - How I Built This w/ Kaleb Bryan

Hello and welcome to the Independent Dealer Podcast brought to you by Buckeye Dealership Consulting. Today we are going to speak with Caleb Bryan. Caleb is from the Autocave out of the Dallas Fort Worth area. We cover so much about his history. It is truly an inspiring story. Someone that Caleb just went. He went all in. He went all in. 100% committed. And it is super inspiring to me to look at how we just have different paradigms and sometimes we think like, yeah, if I can just get here, it's great. And then you look and you're like, this guy's like, so far beyond. They're like, why didn't I shoot for that? Like, why did I shoot for a bigger goal?

And Jeff, he started out by selling TVs. Holy cow.

Yeah, TVs. And flipping cars. Now to run an 1800 accounts and 60 employees on the daily. I mean, just a different thing. Caleb, thank you so much for joining us. And here's the episode.

Welcome to the Independent Dealer Podcast with hosts Luke Godwin and Jeff Watson. A podcast by Dealers for dealers. Here we go.

From South Texas, born and raised. Was trained to be a professional baseball player by my dad. Moved to St. Louis whenever I graduated high school. Weather was horrible. Came back to South Texas, joined the Corpus Christianum baseball team. Didn't get a starting position. And at that point, I made a very hard decision. You know, I trained my whole life to be a baseball player. I made a hard decision to quit baseball and go back to my apartment where I didn't have a tv. And I said, man, I need to get a tv. Got on Craigslist, found a deal on a tv. And my dad then says, you know, well, if you're not playing baseball, you're paying for your college, and, you know, you need to pay for your living. So I bought this TV on Craigslist for $200. And I was like, man, this is a deal. I could make money. What if I could replace my income? And that was like, the first thing I'd give to any kid. Like, I told my nephew, he's 19 years old, and I'm like, nate Dog. His name's Nathan. Call him Nate Dog. Nate Dog. The first thing you need to do, dude, is you're working at Marble Slab. You're making effective rate of like $5 an hour. So you're maybe bringing home $130 a week. What if you could just replace your income by flipping something around your house or just like, offering a service or selling a product. Flip a product or offer a service. Can you Replace your income. The minute you replace your income is the moment that you'll never have to rely on anyone again. And if you can become independent early in your life, you'll never have to become dependent, you know, down the road. And you can do whatever you want. You can own your own time, you can invest, you can fail. So I'm trying to get my nephew to start early, but that's what I did. It was nothing. That was like, you know, someone had told me it was just kind of instinct and saw this tv and I put it on Craigslist the same night, and I sold it for $300, made $100. Like, wow, I don't have to go to work today. What if I could do this again? And I did. So I was literally finding deals in Corpus on Craigslist. Ran out because Corpus is a small town. Went to San Antonio and found a bunch of people selling their TVs. Individuals. So I went up to San Antonio. I was like, man, this is hard. I have to, like, contact all these individuals. What if I could find a wholesaler? So eventually I did found a guy selling TVs out of a store, and he's like. I said, hey, I'd be willing to buy in bulk. I have, like $2,000 to my name. I'm 20 years. I'm 19 years old. And I said, man, what if I could buy many TVs at a time? So I come to my garage, at my house. I got TVs for cash. So, all right, cool, let's do this. So I go. I spend all two grand, all two grand. I throw them all in the trailer. I think I bought six TVs. I trailer them back to Corpus. I'm putting them on Craigslist on the way to Corpus. I have them all sold by the time I get there. That's how. That's how good the deals were. So I started at a very early age, going and going into business for myself. Learning lessons, making mistakes. At that point, I started supplying myself with TVs from this wholesaler for a solid, like, three months. And then I needed more. I Googled TVs for wholesaler or liquidation. And I found a company out of Orlando that was selling hospitality items like TVs, ironing boards, all sorts of stuff for hotels and motels. Well, they had TVs in bulk. Grade A, grade B. You know, your LGs, your sharps, and Grade B, your Phillips, and, you know, your cheaper brands. And I told him, what if I could buy 60,000 a time? I didn't have 60 grand. What if I could buy 60,000 at a time? He said he sent me the price list and he gave me, you know, all the discounts, like, great, that's the price I need to be paying. Said, well let me, let me do a test for 15 grand. So I borrowed five grand from my brother in law, five grand from my roommate and I put my own five grand, sent 15 grand to Florida. And I'm waiting for this 18 wheeler to show up to my house in Corpus A rent, a rental house and you know, I have to wait a month. I'm seriously eating, I'm not spending anything. Had a girlfriend, had a girlfriend at the time. I don't know where she is now, but if she were ever to see this, you could ask her. I went on zero dates with her that month. There was no expenses. So 18 Wheeler comes into my neighborhood. By this time I have wholesalers that are, you know, coming to my house and I text everybody the, the time that the teeth that the 18 wheeler is going to show up. The guy, the driver gets out of the truck and says, hey, do you have a loading dock? I said, no, we're in a neighborhood. Like there's no loading dock here, buddy. Like we're gonna have to figure this out. And, and he's like, well you're gonna have to help me. I'm like, let's go. Like, let's get these TVs out. I had people lined up at my front door in a residential neighborhood at a rental house of mine. My cousin comes out, my roommate comes out. We're all grabbing these TVs, stuffing them in the garage. I have a video of it. It's funny. So anyway, got these TVs. 45 landed. 45 for 15,000 landed. I sold half of them that day. I sold the rest that week and called my guy in Florida. I said, hey, I'd like another load. Let's do that. 60,000. Borrowed the money again from my brother in law. He told me this is, I borrowed 45 grand from him and I had made like 5 to 10 grand on that load. So I put my own, my own money up. And he said, this is the last money I'll ever loan you if you don't pay me back. I said it's fine, it's fine. It was my first like, you know, time borrowing money. So yeah, that's crazy. So anyway, did that 1920 Met. So with this, an owner of a local motel came over and saw my ad, came to my house and Said, hey, I have a motel. Would you like to supply me with 30 TVs? I said, sure. And at that time, he said, well, my cousin has, you know, a motel in Kingsville. My cousin has a motel in another town in South Texas. And so I started meeting his family and just started supplying to, like, these motels and hotels in South Texas. It's crazy. So I'm missing a ton of school. I'm paying my friends to go to my classes, and, like, just random people, like, hey, could you go. Go to the class? Like. Like, take the test. Just not. Not good advice, but just trying to get it done. And I realized, like, I'm over my head. I don't understand. I'm moving too quickly. I'm not learning, you know, tax. I'm not learning proper business structure. I had a sole prop. I was kind of over my head. And so I had inventory and relationships. And by the time I was 21, I reached out to the guy in San Antonio, the original guy. I said, hey, this is a great contact. Would you like to buy my inventory and this cash flow of relationships that are buying, you know, residual year or consistently? He said, sure, I'll give you 50 grand. So here's. Here's how I got in the car business. He had a Porsche parked in his driveway. And I said, well, what about that Porsche? How much would you sell that Porsche for? And he said, I'll take 21 grand for it. I said, well, why don't you give me 30 grand in the Porsche? He said, okay. So he gave me the title to the Porsche plus 30 grand cash. I leave from his house, he takes my TVs, and I walk away from this business. I drive a Porsche back to Corpus. The first thing I do for the first three months is no. I didn't think about business or how to make money. I went to, like, the bars, showed off, lived that life, and figured out very quickly that the crap that you attract when you have. When you're. When you're doing that, it's like, dude, it's nonsense. And I learned quickly. I'm glad I did. I'm glad I did that.

You know, I.

Drinking and just having fun. But after three months was like, this is not my lifestyle. I'm out on this. And a buddy called me and said, dude, put it up on Craigslist. You know how to do it. I said, cool, I'll do that. So I literally transitioned all my focus to Craigslist and putting this car up for trade and what I would do, my Model Would be to buy a car for around 7,500 to 10 grand, trade it for a $15,000 car that looks like it's worth 20 and sell it for 20. And I did this throughout college, so paid for my own engineering degree. Went to college at Texas A and M, Kingsville. It was the cheapest one out of all the Texas A and M's. I paid like 4,000 a semester. And I'm over here like hustling during college. So I'm like thinking about the tuition. Like, okay, I'm fronting the tuition. So I'm gonna go to the cheapest one because, like, my friends are like, oh, go to College Station. You know, Anna, Maggie's, dude, I'm paying the bill. Like, I'm not gonna go there. You know, like, just give me the degree.

So let me break in real quick. So Caleb, from, from selling TVs to selling cars, at this point, you're, you're a curbstoner. Everybody's going to, gonna raise cane at you for a bit. But how many cars, how many cars you sell in a month to, you know, to, to make it at that point?

That's a great question. So my goal was to do 10,000amonth, you know, clear 10,000amonth after expenses. And so I could literally do that. I had, I probably had 100 grand at that point to work with. And 100 grand could buy me, you know, five cars, six cars, seven cars. I was, I was doing classics and more high end sports cars. That was my niche.

Yeah, I mean, that's when you, when you're in that space, you have to have a niche. What, so you graduate. How long were you. Did you automatically decide to go get your dealer license or are you still in that gray area for a bit?

So here's how I transitioned. So 21 to 23, I'm really curbstone. It is what it is. And there's some big lessons there. I didn't know what it was. No one ever had told me that this was something that you cannot do. I had no dealer friends. And this is common. We all deal with it now.

Oh yeah, we have so many people talk about how they started with curbstone.

Yeah.

Now I don't like curbstoners. So transition to 23. I'm about to graduate from engineering school and luckily I met a great dealer. His name is Jay Chatfield. He's no longer in the business out of Kerrville, Texas. And that guy was one of the guys that changed my life. He believed in me and he said, Caleb, Come over to my dealership, let me show you how to do it right. Because he recognized I was doing, I was curbstoning. And he's like, what if you just do your license and get it right? And it was, it was hard for me to, you know, say that's my, like at such an early age, this is what I'm gonna do with my life. For me and early and younger guys, younger kids, it's hard when you're younger to dedicate and commit to something early in your career. And that's what I was doing by getting a license. At least that's what it meant to me. So at 20, at 23, right before I graduated from engineering school, go up to Kerrville and I learn how a dealership works. Licensing taxes or sales tax, remitting your sales tax, your vit. In Texas, every state's different. But I learned how to manage the dealership and how to hold a license. And so I decided at that point when I graduate because I had been going to interviews and these interviews, you know, they were offering, they said, well, starting out, we're going to start you out at 40 grand salary and you can, you know, learn. Like, dude, there's no way I'm going to start that. Like I'm gonna go get it and if I fail, I can come back. So I decided to pick up my bags and move to Dallas. I didn't know a single soul. And I. That summer, that summer I went to go look for warehouses. I found an 1800 square foot warehouse for $1800 in Carrollton, Texas, which is kind of in the middle of vfw. And that's where I held my license and I started, I started the autocave. So in 2014, I was 20, just turned 24, and that's when I got my license.

Well, how old are you now, Caleb?

32.

Yeah, so eight years. And you were originally in the car business? Very specialized. And I. And having a warehouse, that's a great way to do that when you're buying and selling classic cars and things like this. When did you start buy your pay here?

Yeah, so I'm over here busting my ass, flipping cars, doing the same game I was doing in college, but nothing was scaling. And I think for anyone that, you know, as you get older, you want more consistency, you want more stability. I was looking for that. I was also looking for a model I could scale. And with the classic cars, it was very hard because there's so many variables, so many years and makes, so many niches with financing it's different. You can really, you know, once you loan the money on a car, you're going to get a payment and you can calculate, well, If I have 10 loans paying me $300 a month, that's $3,000 a month. And I could say, well, I could actually hire somebody because I know that money is coming in. It's not as big of a grind. But in late 2015, I met a buy here, pay here dealer and here in Dallas and I went to go do some drone shots for him at his dealership. I really enjoyed drones at the time. And he said, well, how can I pay you? I said, man, don't pay me, just teach me what you're doing. You obviously are doing something right. His customers were just like lined up in his dealership and you know, he was selling so many cars and I didn't understand it. So he takes me out to dinner and he says, you can, you can buy a car for about, you know, $5,000, sell it for 9,995 at 24% interest and you know, make a term of 36 months or three years or 24 months, depending on the risk. And that's it. I mean it's, he laid it out kind of very simple like that. And I said, why would anybody sign up for, you know, that type of rate? I was just so mind blown. I'm from South Texas, I just, I don't know, I mean they have buyer payers there too, but I'd never been introduced to the business. And he said, man, people have bad credit, poor credit, credit issues. You know, they've, they've failed their lenders in the past. Like they're going to need, they're going to, there's always going to be this need. And when I recognized that, I went back to my warehouse and I just transitioned almost overnight. I said, let me go buy some cars. And so here's an important thing and I don't want to get too much into this. When I was in engineering school in 2012 and 2013, I had about 150 grand saved up. When I graduated during college engineering school, I created a mobile app and I launched it into the App store. It was called spotigory. It was a location based app and it showed you what was happening around you through photos and I could not figure out how to generate revenue. And So I lost 125 grand when I was 24 and 2014. And so when I transitioned to buy here, pay here, I was literally transitioning, trying to figure out What I was going to do next because my app had just failed. I was just kind of, like, giving up on it after that big loss. And I had almost $0 to my name. What I did was I sold my classic car, which had a value of $40,000 on it. I sold it to my wife, and I had her finance it. I took the 40 grand, and I started the buy here pay here. I bought eight vehicles for $5,000 each.

Well, Caleb, that's quite a story. And, you know, if people don't know the Dallas Fort Worth Arlington market, it is probably the mecca of buy here pay here in the country. And to see that other people were doing it. Did it ever scare you that there are so many people doing it in that area? I mean, it's. It's a buy here, pay here store on every corner there.

Yeah. So the market's huge here. And when people ask about, hey, anybody who asks, where are you from? Dallas, Texas. Oh, my gosh. What. What about the competition there? That's like, the first thing that they ask is, like, about the competition. It's like, dude, there's no. There's no comp here. Like, there's such a large market that, you know, keep your head down, do what's right, fulfill your commitments to your customers. Here's what I recognized early on. This is where. This is what separates us and probably separates a lot of us. Dealers that are part of the groups that we're in is what I realized in late 2015 when I started the buy here pay here was that customers needed two things. They needed affordable financing combined with reliable transportation. Yeah, that was literally the missing part. I saw it with so many dealers. So when you say there's tons of dealers. Yes, there's tons of dealers out here. But what they're not doing is they're not providing reliable transportation with the affordable financing. And sometimes they.

Yeah, and I think that's probably. If you look at buy your pay your stores across the country, the number one downfall is the vehicle that won't make the term or wanting to make a percentage of the term, and that creates problems. So you identified that real early, so.

Or the dealer unwilling to help the car make the term. Right.

Yeah. Yeah.

I noticed you guys provide warranties.

Yeah. So we decided. I mean, we're. We're in Dallas and in Dallas. I feel like nothing against Dallas. Dallas is very different from Fort Worth. But Dallas expects more. Take it how you want, but Dallas expects more. So we try to. We really try to go over the top with it. So we offer a 36 month, 3 year, 3 year warranty on all of our cars, and we don't charge the customer for it. We fix a lot, we spend. I'd have to confirm this, but probably around 20 to 25 grand a month on just warranty expense. Just fixing cars for customers.

And let's talk about how many cars you're selling a month, how many locations and how many accounts do you currently have?

Yep, accounts is somewhere around 1800. We have two locations, one in Irving, one in Dallas. We have another location in Arlington, two retail lots, and then we have an office in Arlington which is. We're developing into a real. Into a dealership. So we'll have three sales locations by the first quarter of next year. We sell on average 100 to 110 vehicles a month. And that keeps our portfolio stabilized. Once we open up Arlington, that's going to grow our number of accounts and it'll help us grow as a company, too.

Well, that's incredible. Yeah, yeah. I mean, that's. I mean, to get that big, the scale is crazy. So we need to talk about how you can scale. Hello, everyone. Sorry to break in on the episode, but we got to talk about Buckeye. Jeff.

Yeah, yeah, Great, guys. Hopefully you listened to our episode from last week. Yeah, last week or the week before last week, Luke gave us the breakdown on their new dealer performance groups. So Buckeye has taken the initiative. They put their money where their mouth is. They are supporting the independent dealer.

And I met Caleb, our current guest at Buckeye Performance Group, last week. Great guy. And I know he has reinsurance. He knows the value of it. And Jeff, you know the value of it, right?

Yeah, yeah. And it's a great networking event. These guys are bringing dealers together from all walks of life and some that have never been to these things. So it's a great company. Great products for reinsurance and now for consulting.

Yeah. And as we know, building wealth in the industry is through reinsurance. And these new performance groups are awesome. You need to be a Buckeye member to join. The next event is in January in Phoenix, I think it is. So let's get signed up and get there.

All right, guys, back to the episode.

Because you go from having $40,000.

Yeah, right.

To having 1800 accounts and five years. Yeah. I mean, less than 10 years. How can a dealer do that? Because if you don't have the cash just sitting somewhere.

Yeah, that's mind blowing. That's an incredible velocity. Caleb, how did you guys get there? What were those factors?

It was all organic too. So we did not buy portfolios. But I mean, man, the year is like the sacrifice and the level of discipline that you have to have. Anyone can do it. But we took some major risk. Like for instance, I borrowed $40,000 from myself, you know, financing my classic car to fund eight vehicles. But. But what happened after that month? I sold eight vehicles. Then what? Yeah, where did I get the cash? So that's exactly what happened. I freaking ran out of money. And I was like, oh, crap, I just sold myself out of business. I have no money. How do I continue? The biker pay here. And that's when, that's when a friend of mine said, well, you can use this lender that I use. And I mean, I did not know anything about borrowing money at the time or borrowing from finance companies. I went to this finance company. Great people, by the way. Great leadership team. I'm not gonna, I'm not gonna say the name, but great leadership team. Just because their effective interest rate at the time was 37%. Their effective rate of borrowing capital was 37%. So me, I've got a business to run and I need to sell cars, I need money. I don't care. I'm going to be financing at 24% and my gross margin is going to be more than 70%. So I'm just doing math and I'm saying, well, for now I'm a young buck and I need the capital I need to grow a business. It is what it is. I'm going to be over leveraged, whatever. If I keep my head down, I can dig my way out, no problem. Either that or go back to doing something pretty boring. So I wanted to grow a business and I had to take the risk. So I borrowed that capital for one year and I found another lender that would loan at 14% interest. Once I did that, it cut my costs in half and I was able to really scale. So I went from zero accounts to a $2 million portfolio. And then once I had about two to $3 million in terms of portfolio size, leverage pretty, pretty high. I transitioned to a new lender at 14%. And it was really cool because there's a few players with that group. The cfo, the cfo, and then the business development, Business Development manager, I guess that's the title. They came in and they saw my want to learn and they took the time to show me. I mean, the CFO of the company sat down with me and said, Caleb, if you do this rolling template, you'll see how you can pull Levers to operate your business better. And he gave me this template, and I ran with it. And from there we borrowed that money for two years and we grew it up to a $20 million portfolio. And I mean, we're blowing loans out the door. The issue with it is I never learned early on the importance of underwriting. So how do you grow so fast? Well, yeah. Yeah. What if you just told everybody that you would accept you that they were approved with simply a driver's license and cash?

Oh, yeah.

What if. So my life, you can imagine, like chasing repos. I'm repoing it for AM every night. You know, like, I'm in. I'm in the hoods, I'm in any neighborhood, country, you name it. So it got rough there for the first two years just because I underwrote such back poor loans that didn't perform and I had to repo them. I had to go get my money.

Yeah.

I mean, when did that. When that philosophy changed for you? When did you decide, hey, this is not the business model I want to be in? I can't just, you know, blow, blow loans out.

Dealers, if you're listening to this, dealers, just because you sell a hundred cars a month, how many are you repoing? When I got to. When I got to the point that I was selling, call it 80 loans out of one store. I'm selling 80 loans out of one store, and all of a sudden I'm repoing 80. I'm like, wait a minute, wait a minute here. How am I gonna make money? Why am I just literally going on a mouse wheel? I'm in a rat race at that point. And that's not the game we're in. The game that we're in is to have loans that actually perform loans that are loans that are structured correctly and help customers, you know, stay in their car. So I was. There's a guy, shout out to Ken Terkel if anybody knows him. He's a. He's great and OG in the business out of Houston, Texas. He came in and I actually paid him to come and consult for me. He's a great friend now, but he came in and consulted for me. He said, caleb, you're not verifying income. You're not underwriting. That's your problem. Your gross charge offs. You're going to literally go out of business in late 2017. I made that flip. And can you imagine what that does to your floor? So dealers, have some balls. Go to your sales manager and tell them they're going to sell about 50% less cars.

Yeah. You're taking a huge pay cut.

Yeah. Yeah. Look at what that does to your morale. But, guys, if you're running a dealership, like, come on. If you're running a dealership, it's your dealership at the end of the day. Like, either you make the change or you go out of business. Like that. That was my choice. I was left up. I was left with that. And I tell all the employees, I said, guys, y' all still want a job because, like, you're gonna either take a page pay cut or lose your job. And how.

How high was your leverage rate at that point?

Um, I was pretty. I was pretty disciplined with it. Even though it sounds high, I was about 52%. That was the highest I've ever been.

And where are you now?

20 points lower.

So, I mean, that's a. That's a huge difference.

Yeah.

It makes you sleep better.

Night, for sure.

Yeah.

It's a great place to be.

What Covid affected all of us, Caleb. And you know what? How did it change your business there in Dallas? Well, what'd y' all go through, man?

It forced all businesses to understand the importance of being. Of being efficient online. And when Covid hit, the first thing that you got to ask yourself is, were you prepared to take your business and move it to laptops? Did you even have laptops? The first thing I did when Covid hit is I ran to Best Buy, and I bought, like, I don't know, 10 laptops just so that I could have my collectors keep collecting money, let alone talking to my sales department and having themselves, you know, figure out how to manage the customer base and actually originate more loans. So at the time, it forced us to understand, you know, could we adapt quickly. It also taught me a lot about my employees attitudes. You know, some. Some employees literally, like, just broke down and quit. They were. It was too much for them to handle. Like, wait a minute. The store is closing. The city's gonna close the store. How am I gonna feed my family? I can't do this anymore. And they went home, never came back. So I had employees do that and employees that were on salary getting, you know, getting a good compensation just out of fear. So it was hard to. It was hard to see that. But at the same time, you really. It really strengthens and shows who you're. Who your strong players are, and your key players are in your group. So it was cool to see who persevered through that.

Yeah. Jeff, you and I have seen a lot of the same thing, haven't we?

Yeah, yeah. You know, I think we see so much. What really interests me, Caleb, and to touch on those points is you've been to zero before, right? Did that play into your philosophy of being able to leverage and saying, hey, you know what, I'm going to leverage, I'm going to take out some loans because I'm going to grow this thing? You know, I mean, I think a lot of dealers do get scared and of course borrowing can be very risky and you have to be very smart about it. And we've seen debt take down as many dealers as it's made successful. But does that mentality play in at all? I just keep thinking back to a 24 year old who has 100,000 in the bank. That is, I mean that's like, that's like all the money in the world as a 24 year old, right? Even back in 2015. But to then be like, hey, I went to zero and I didn't go on dates and I ate ramen noodles and I didn't do these things. So guess what, I can do it again. Like if I go to zero again, that's fine because I'm a scrapper and I'm going to figure it out. Does that, that play into your mentality or does it play into your mentality you've been able to grow?

I mean it did, but that's what, like that's what that was, the light under my ass to get out and go repo that car at 3am when someone couldn't find it. That's what caused me to skip trace an account that, you know, tried to steal my vehicle because I could not afford to lose the money. When you're leveraged like that, it's like, see, my mentality may be a little bit different, but I think it's more common with a lot of guys with the right intentions. If you don't have the right intentions, you may not be thinking that way. You may be thinking, oh, I'm good. Even though they're leveraged up, I've got this cash flow. Let me go buy, you know, a nice home, a nice Ferrari. Yeah, I've seen this over and over. Dealers, really, they're over leveraged in their business, but they almost, they're living the.

Lifestyle like they're not.

Right, right. So I'm frugal by nature. Where I come, it's where I come from too. You know, I just didn't grow up with money and I wanted more for myself, I wanted more for my family. Um, and, and that's just been a driving factor. But I was also raised in an environment where it was a hundred percent dedication with baseball. Like, that was a. Every day, the intensity levels were so high with our training. So when I get out of that, when you transition from that to something else, that I still apply that same intensity. I still have that same passion with my business. So, I mean, there was no, there was no thought in my head, oh, am I going to make it? No, it's like, how am I going to make it?

Yeah.

If I have to scrap three, no problem. Like, a lot of people do fear borrowing money. And you just got to think that the collateral, the lenders typically are not going to loan you more money than what your collateral is worth or that what the, what the, what the money is being loaned against, they're never going to really loan more than that. That's why that 55% or 50% leverage that Luke just mentioned earlier, you know, what are you leveraged at? We speak on leverage. For those who don't know, leverage, when we speak on that term, is relating to your liability, which is the money owed on your credit line divided by your principal balance, which is your portfolio. And typically your portfolio is worth almost double what the collateral is worth. So if you're leveraged at 50%, it's almost like the lender is just giving you money for what the vehicles are worth.

Yeah.

As you collect the payment. If I can break it down. Yeah.

So now, Caleb, how many employees do you currently have?

You know, Covid took us down. We really leaned out. I think as of today, we're maybe in the low 60s range. 62, 63, 64. Last year we were up to 75. But it all depends on the season of the business. If we're looking to scale, like right now, we're about to start scaling in the first quarter of 20, 22. So we're going to start adding in October. We want to add more employees because coming into the holidays, you know, we just, we want them to be focused. We want them to be able to be trained before the holidays. Because if you hire, if you hire somebody on Christmas, you know, like, they're going to be like, bellies full, you know, slow to learn. You're going to have all these distractions. So we really try to hire our people in October and then hold off November, December, and then go right back to it in January.

Yeah, that's same here. Where do you see yourself getting, where do you see yourself growing to? Are you big enough or do you.

Want to get bigger, man? Time is on our side. So, you know, being 32, I have a partner in the business. He's 28 years old. So, I mean, we're just two young bucks, and we have a lot of time on our hands. He started early, too. His story is phenomenal. He started when he was 15 years old. So we were just two guys that have started very, very early in our career. But with time being on our side, you know, my goal is slow and steady. Slow and steady. I've grown. I've broken a lot of stuff on the way on fast growth. Fast growth is exciting. You know, the best phone call is to one of your friends. Yeah, man, I'm opening two dealerships, or hey, I bought this portfolio, or, hey, I got a new location. That's the most fun call because it's exciting to everyone around you. But that's not the reality of business. Business is black and white. It's numbers. So for us, slow and steady provides the stability, the consistency, and the quality in our business that we want. And so in terms of where we would like to go, my first target is 50 million in the next three to five years. And then depending on where we are at that point, I'd love to have a portfolio that's about 100 million. I think we can manage it. We have all the resources to do so and the time. So, yeah, I'd like to take it up notch. I mean, we're in Dallas, so we can. We can take advantage of the opportunity.

We want you back on it. 50 million and then back on at 100 million.

Right?

Right, Jeff?

Yeah, yeah, yeah. That's. That's ambitious. Ambitious and what's cool, Caleb. And when you talk about that or, you know, kind of organic growth or slow growth or natural growth, but. But you also. You did something uni unique where you did say, hey, you know what? I'm young, I'm ambitious. What I'm going to do is I'm going to blow through the tough years because selling cars or being a buy here, pay here, it's really, really tough when you're in the 0 to 20 cars a month area. Right. And if you're a buy here, pay here, and you're under 200 accounts, you don't have the cash flow to support a staff that can take the headaches off your plate so that you can focus on the big picture. So Kaleb was out repoing cars at 3am because he had to. But what he did is he blew through that phase in the first, you know, two to three, to four to five years so that he could get to the point to have 60 employees where now he's got a guy that's going to go repo at 3am and keep tabs on this, that or the other and make sure things are happening. So there's definitely something to be said about scaling to the point where you can have the manpower to make sure that you're kind of paying attention to everything and you're not the man wearing all the hats. Now, Caleb, I don't know what your day to day is, but I imagine with 60 employees and 1800 accounts, it's mostly doing the stuff you want to do like managing your money or hiring or buying or whatever your passion is.

Yeah, that's right. My day to day is I love analytics, I love data. So I look at our portfolio data every day. Every day. I look at our portfolio metrics every single day. I have a great portfolio manager. He has scaled, he scaled with a very well known dealer in town, a franchise dealer in his prior career, from 7 to 85 million in five or six years. So he's seen it, he's managed it, he does a phenomenal job. But together he sends me reports daily, we review them. So I love to see the numbers every day. I also spend time in real estate where we're trying to build our commercial portfolio in real estate. My idea is to continue to owner occupy our real estate, but also because of our dealer network in Dallas, because of our network in general and our resources, we have the ability to deploy capital to real estate and we can quickly find tenants too. So I'm looking for good real estate investments and so that's studying the marketplace is something I do daily. So going back to the passion like doing, doing what I'm passionate, passionate for and a lot of that is if you can get to the point where you can only do the things that you're great at or strong at, you're going to become very efficient and very productive.

Yeah.

Isn't that funny how in the early days you're like, I'm waking up and I'm getting out of bed because my neck's on the line and I've got to make that dollar every single day. And now you go to work because not so much because the debt man's chasing you every morning, but more so because now you're doing the chasing, you know, so it's still kind of in the back of your head like, yeah, I owe some people money and I have 60 people and families who rely on me. But also now I'm going because I've got this passion and this new drive to like find a new deal or close on a new property or grow the portfolio or deleverage. You know, you kind of have these things that are pulling you instead of kind of pushing you maybe.

Yeah, yeah. I call it sport mode. I call it sport mode. Yeah, you turn on sport mode and all of a sudden you're in sport mode. You're in player mode, like you're just having fun.

Interesting. I'd love to know the percentage of minor to league baseball players that get into the auto industry. I feel like that's a large percentage. Something about the DNA of a high school and college baseball player. Just like your guys, either determination or drive or hustle or something. I just your breed, your, your, your. I know a couple of guys like that and it's, it's super interesting how that develops. Caleb and just kind of wrapping this up. Advice for dealers. Any other tidbits or takeaways, things you could give the dealer community that, that they could learn from your man?

The dealer community is so large, you know, independent dealers in general, such a large wide range of, of people with different ambitions. I would tell anybody that if they want to grow a buy here, pay here portfolio, it is easier today than it was 20 years ago. A lot easier. Why? Because access to capital is much easier. Why? Because. Because managing the assets from a lender's perspective is much easier today than 20 years ago. They have borrowing bases, they have spreadsheets, they have templates that allow them to see the business's position and the levers that they need to pull to ensure that their asset is secure. So my point is that if you want to grow a business and you're an auto dealer and you want to do buy here pay here, you have all the opportunities in front of you to go do just depends on your ambition. The world is out there. You can get as much of it as you want. And I got a whole handful the first two years. I got more than what I wanted. And that's what you'll learn. You'll pull back and you'll say, holy crap, I think I took on more than I can chew. And you'll swallow that big chunk and probably go in little bites, you know, after that.

Well, that's, that's great advice, Caleb. And we look forward to seeing you grow and everything you're doing there at the autocafe.

Thanks guys.

Thanks, Caleb.

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