#304 - How I Built This w/ Greg Reine

You are listening to the Independent Dealer.

Podcast with hosts Luke Godwin and Jeff Watson. Hello and welcome to the Independent Dealer Podcast brought to you by Buckeye Dealership Consulting, Another great installment in our How I Built this series. We love March. We love hearing the stories of other dealers. Luke, today we have a Texas dealer.

We do. And, and we know we love Texas. We do a little podcast on there for Texas every once in a while. And today it's, it's Greg Riney. And I said that right, I hope, of auto liquidators. And it's a big, big buy here, pay here dealer in Texas again. And it's so awesome to hear these stories of how they grow and how they do it in a big market and then they move outside the big market. So, Greg, thanks for joining us. Introduce yourself.

Hey, no problem. Hey, thanks for having me. It's always interesting to talk to people and tell them where I've been and where I'm going. So that way maybe so I can help somebody down, down the road. So we're a 32 year buy here pay here dealer. So we started 32 years ago. We've got about 2400 receivables, 75 employees. We sit about 32 million. Principal balance summary. We sell about 130 cars a month and we keep 4 million in inventory. And our leverage is very low. We're very, very low leveraged.

That's, that's super important right now with interest rates like they are, isn't it, Greg?

Yeah, it's great. You know, and, you know, and I had a lot of friends that were trying to de leverage here a couple of years ago, so hopefully they got that done and they're sitting in a better situation today.

Yeah, so, so, so you're 32 years. We've been in business for 38 years. So that's, that's a long time for any business. And you're, you're much bigger than we are and you're in the Dallas market also. You have, you have three stores, right?

Yes, sir. We started, we, we had grown, you know, I had a little store that I rented when I first started out on my own and then I purchased a store and then I grew to six stores. And then when Covet came in a year, we were kind of a little bit ahead of a curve. About a year before COVID we started doing online approvals, so we started doing online sales so that when Covid hit, we didn't need all these stores. The foot traffic slowed down. So we've, we've shut down all of our stores locally in Dallas, Fort Worth market, because we have two markets next to each other and we've moved to three stores and pushed two stores out. So we have one in Tyler and one in Waco, So about an hour and 15 minutes away from Dallas.

So Tyler and Waco are both about hour 15 from. From Dallas.

Yes. Tyler's a little further, but they're.

They're similar and both in the same direction. Opposite directions from Dallas.

Opposite directions. One's towards east Texas and one's towards Austin. So one's east and one south.

That's super interesting that you were ahead of the curve like that because I know that so many of us during COVID had to catch up to the online approval and to. To doing things without foot traffic. So that's something we can sure dive into here. Jeff, I'm assuming.

Yeah. What I want to know, Greg, is. So Luke's operation has been at it about 34 years, right. And 38 years. And you've been kind of. Luke, in and out of buy here, pay here retail, right? I mean, you haven't been 100, buy here, pay here from day one. No, I, I've been at it, what, 15, 20 years now. And I've been buy here, pay here from day one. And we are. I'm a fraction. I've grown to a fraction of what Greg has grown to. Greg, help me understand. How did you start 32 years ago? Did you start with the idea of being a buy here, pay here? Did you start. It's just a cash lot. And of course, back then, you know, would you buy a car for 50 bucks and sell it for 5,000 or something? I don't know, whatever.

No, I've got back in the day.

Now I've got a crazy story if we have time to tell it, but, you know, back in the day, my father ran new car dealerships and, and I worked for him in high school selling new cars and always figured I would be a new car manager. So I learned that part of the industry. Then when I graduated high school, he went out and tried to start his own car lot and was under capitalized and, and made a bunch of mistakes and. And was not able to make it. But by his failures were my successes. I ran a store for him. I learned what to do wrong. I learned what to do right. So I had a little bit of an edge there than most dealers when they walk in and they start on their own. So then I started out, I opened my first car lot and I did everything. And then Back, back that story up a little bit there. So when I worked for him, I came down in my early 20s with cancer, Hodgkin's disease. And I had to go through the treatments and all that kind of hurt my credit. So I didn't have a lot of credit. Couldn't get funding to get loans to sell cars. So when I went out on my own, I sold my boat, my motorcycle and my car and took all my money and invested it into Buy Here, Pay Here. Now that's not a lot of money. So obviously what I did then was I tried to wholesale and retail and those all that money I put back into Buy Here, Pay Here and I was able to grow that into the six stores over the years. So, you know, I grew very slow. I did leverage when I had to go to my Dallas location because we went from selling 40 cars a month to selling, you know, 100 cars a month overnight. So I did leverage and that was the first time I'd borrowed money. I went from $8 million non leveraged portfolio to $24 million leverage portfolio, but still our leverage was only about 32% at that point. The real estate I paid off in four years. I did borrow for the real estate. And then after that, you know, we had started a CPI product as well, which I think every dealer should, should, you know, not be without it today. And through the CPI product and through the ability to grow the portfolio on its own capital, we were able to pay down our debt. You know, we pretty much paid our debt off. We had our debt paid off other than just a relationship debt here the other day. So. And we were able to pay for all of our real estate. We hold about 15 million in real estate as well.

That's, that's, that's, that's awesome. So Greg, where was your first store? Because you said you moved into the Dallas market.

My first store was in Duncanville, which is a suburb of Dallas, so it was right down the street. So. And that was my first store. And obviously it was just a shack. And I worked seven days a week. I detailed the cars, I mechanic the cars, sold the cars, I collected the receivables. You know, I went to the auction a wholesale cars. I went to the new car stores, bought new, you know, bought, you know, wholesale inventory. So it was a full bore. Seven days a week, you know, know, really eight days a week. You know, really what I'm curious about.

Greg, is, is as you're growing that and I know everything's bigger in Texas, right? So I'm Sure. Whatever your trajectory, how did you, do you have any insight or ideas? Because I know you've only been in what you've been in, and I've only been in what I've been in. How did you, how did you hit that trajectory? I mean, how do you go from starting with just the cash that's in your pocket from selling your cars and your boat and your motorcycle to having 4, what you say, 4 million, 5 million in receivables before you had to.

Leverage 8 million before?

8 million. That's ins. But see, that's. I, I don't fathom that kind of growth. Right. Like, how did you grow at that kind of a trajectory? Was there other things? Were you very flipping cars faster? Was it just.

No, very slow. Very slow. You know, one thing we always tried to do is, is. And one thing I think dealers make a mistake with that we've never done is chase our bad debt. We have never. We've sold what we have the money coming in to sell. That's what we've sold. When we opened six stores, we went very slow. We didn't open big, massive stores. We opened stores for real estate investment, for number one, number two stores that would sell 20, 25 cars a month. So I'm just barely adding to that portfolio slowly. And then when I got my Dallas location, which was the big location, you know, it started selling 50 cars a month and went to, you know, 70, 80 cars a month. Well, here we go. Now I've got to get debt, you know, I've got to borrow some money. And that was, that was, that was frustrating because when you sit, when you sit and you're watching your numbers on a daily basis, and you're sitting there going, when do I have to pull that trigger to borrow debt? You know, this is how much we have coming in. This is how much we've got going out. Well, you know, at some point my cash is going to run out and, and then you make phone calls and you say, well, who will bank me? You know, and then that's not, you know, that's a whole nother conversation itself.

But what's super interesting is, like, it, Jeff, you were talking about how long does it take you to grow to 8 million? Well, I mean, that's kind of the same boat we're in. We grew to $8 million without debt from 2001 to 2023. I mean, that's, you know, it's 22 years of doing exactly what Greg is talking about, only selling the amount of cars that that your portfolio cash flows you to be able to do. Right? I mean, that's, that's how you do it. That way.

Yes.

And I assume at that point you were doing a lot of cpi. Were you using some of the CPI money to do that as well?

I guess we did not do CPI until about 10 years ago. 10 to probably about 10. Let me back that up. Probably 14 years ago we did CPI. And, and that was, you know, that, that was kind of a mistake I made because I left that contract sitting on my desk for about a year before I signed it. Because I just was not, you know, I'm a very, I'm a very slow guy sometimes. I, that's. If you have a mistake, that's probably. I, I could have grown faster, but that's part of my success too. By growing sort of slow.

Yeah, I, I'm with you with the cpi. I left the, I left that on the table probably for five, five years too long. You know, you, you talk about being, being sl. I just want to read this. This is from Jeff Martin, the CEO of niada. And speaking about Greg, he is known as one of the best operators in Texas. I mean, that's pretty freaking high honors, right, Greg?

It is. And you know, it's exciting. You know, we don't have egos around here and you know, we're, we could always do things better. But it is exciting because to hear that come from him. And I know there's some dealers that I look up to in Texas and it's, you know, that I've always looked up to in Texas that I always thought was great, that were great dealers and helped me. You know, I learned from those dealers. They never lent me any money or, but they would answer my phone calls and take my questions, my stupid questions and, and they weren't afraid to answer, you know, truthfully and give me opinions and, you know, those things help. You know, those things help. As a dealer.

Hey, everybody, real quick to jump in and let you know it is tax time. Time to get your tax max sign up going, get your staff educated. There's still a couple weeks left. You can run the fourth quarter program or you can be ready in January when people start bringing those W2s in to file their taxes for them. Get that money straight into your pocket.

Yeah, we were on a, a training call today with tax max. We are getting on it, so it's time to do it. I had a dealer call me, I think yesterday or day before. Hey, what's this about? Does it help? Yes, it helps 100%. If we're talking about it, we believe in it.

Yeah, it's awesome program. They have a situation this year where the customer actually files themselves. So like I reached out to my website provider, I said hey will you, will you add this banner, this button to my website? So now right on my website, whoever's shopping gets the banner that says click here to start your tax return. So I could wake up in the morning and have someone had already filed with a pending return coming in for their down payment. So it's a really cool deal. Make sure you use VIP to get 40 off the VIP package with tax max. Can I ask you Greg to get into some of the nitty gritties of. I get I'm still just stuck on that trajectory thing. I'm like man how do you, how do you scale that fast? So talk to me about your business model. Like when you buy a car are you, you're 100 buy here payer. You guys don't sell anything cash retail?

No.

And you're you all your prices are on your website. So you're not, you're not payment or.

A down payment type joint.

What is the structure? Are you looking to get a ten thousand dollar car and sell it for fifteen? Are you looking to buy low mileage? Are you all SUV truck down there in Texas? And how does your basic deal structure work out?

So you know I may look at that a little bit different than some guys that have covenants and bank, you know that have to do certain things, certain year models. So some of my approaches may be different than other people can do but my approach is always and, and obviously 32 years ago that approach has changed then to today. You know back I can remember, you know back when I bought a car for four $500 and sold it for 500 down and I went home and I was kind of a little bit upset. My said what's wrong with you? I said I just put $4,000 on the street and that person's probably never going to pay me, you know so. So the model today is a lot different today I try to spread that inventory out. I try to have some cheaper inventory and I try to have more expensive inventory. Obviously we have to have some more expensive inventory for our repeat buyers and our, you know what we would consider to be a gold buyer that can come in and then, and we have some cheaper inventory. ACVs probably around you know 5,500. Top end ACVs are probably around 15,000.

And say a $5,500 car ACV would become what kind of a retail unit?

Ten, nine to probably eleven. Nine. We try to mark them up five, six grand.

Okay.

Traditional buyer pay your model.

Yeah.

So even that, like about double. And that 10,000 ACV would go up to 15, or would that one go up to 20?

No, that $10,000 ACV would go up to around, you know, I try to put it up about 6,000. Okay, 6,000 markup on it.

Yeah.

So. And then some of the stuff that's 15,000, you know, I can push it up to 22N, 24N.

Wow.

And what kind of a down payment do you get? Or what's your standard? What, what.

Our average down payment's a thousand dollars, so. Wow. That's our. We're very. But you got to remember we're in a very competitive market here.

Yeah, yeah, you're putting a lot of money on the street.

Yeah, we're in a very competitive market. So.

So let's talk about that competitive market and how you've dealt with this charge off. Seem to. To be really big in the Dallas market. What is your charge off rate like? And do you have a secret sauce that you use? Because I know I had some friends who are dealers in the Dallas market, and they would, they would charge off so quickly so many cars that they were just recycling a lot of them. I don't really think that fits. What you do. Is that. Is that the case? Is your charge off lower than most in Dallas market?

I think my charge offs probably consistent to the. To what I would call the good, you know, the good operators in Dallas. Mark. Dallas, Fort Worth market, all of our charge offs probably about the same. I can't speak for other guys, but, you know, before, you know, obviously, you know, before COVID we were running about 2%. A month after Covet, you know, we're. During COVID you know, everybody's, you know, we're running 1%. You know, we're probably running some months, 3% right now, just with the market the way that everything's, you know, happening in our industry. So a bad charge off month for us is probably about three, three and a half percent. An average charge off month's probably about two and a half to 28 somewhere around there.

Okay. I wonder, Jeff, do you know this is the Dow. I mean, is the. Is a Texas charge off above or below the benchmark for 20 groups? Oh, no. Yeah.

I would think it would probably be regional. It's like you said, when you're in a. When you're in a highly competitive Market, it's just so much more enticing for that customer to just drop your car and go somewhere else. Right?

Yeah.

So they're probably more likely to walk away from something. And then you're probably also, you know, the miles that folks put on cars out there, they just drive, drive, drive, from what I understand. So you're probably getting a car that's in a little bit of a rougher shape than what it was when you sold it. What, what, what's your, your demographic of customer? Are you Hispanic? Mostly English speaking. Combination of both.

We're a combination of all three. You know, probably.

So third language?

Well, just Spanish and English, yes.

Oh, okay. Some.

I didn't, I'm sorry. There.

Awesome. That sounds like. It seems like it's like opening an ice cream stand in the Sahara. Like if opening a buy here, pay here in Texas, like, you are instantly popular. You are instantly, you have lines out the door. And so we always, outside of Texas, we always kind of joke around about, well, if I was doing this in Texas, I'd be crazy successful. But there's a lot of great operators. How did you learn to become a good operator? Like, is this all self taught? Did you have mentors? Did you participate in masterminds and things like that? Like, because it seems like you've got it dialed in here. And of course, you know, 32 years in the business, you probably had a lot of learning experience, but did you have outside education or input?

You know, for me, it's been rare because I've, I was never association guy for years and years and years. And now I'm, I'm, I'm a heavy association guy. I'm a VP with tida and by being in the associations, that allows me access to speak freely with other dealers without wall. Without walls. So I would say three of my biggest competitors in my market are very good friends of mine. And we compete every single day. But we communicate as well and we're open with each other and honest with each other. And we talk about our numbers and we talk about what we're doing, we're talking about where we're having struggles. So never in a 20 group. I would say my friends have been in my 20, you know, have been my 20 group. They have been in 20 groups. I'm not saying that there's anything wrong with the 20 group. I would suggest a dealer get in a 20 group. I just have not needed one. So another thing I do is I use an industry accounting firm. So that industry accounting firm usually benchmarks me Every year I have that performed so I can compare to their people that they do accounting for and to the benchmark and they provide those numbers for the national benchmarks. And I'll tell you that they've, you know, they'll, you know, I always ask them, you know, in your top 10 dealers that you account for benchmarks, you know, am I in the top five? And I'm usually in the top five every year, you know, profit on dollar, which makes me feel really good. So I gauge where I'm at in the industry and then I communicate with a lot of my friends and what they do may not work for me. And different dealerships have different personalities. I can have a dealership 15 minutes apart and that store 15 minutes from another store has a completely different personality. The way one may sell cars on Saturday, the other one doesn't sell cars on Saturday, it sells cars at night. So I think you have to feel those things and learn those little nuances about your business and, and turn those into gold, you know. And so I've learned from other people and taking the best that I can, taking the best nuggets from everybody else and put it together to make my, to make my business.

Greg, do you see yourself now? Because I know I've gotten two phone calls from dealers today and I probably filled 10 or 15 calls a week from other dealers. Do you, do you get that same thing or, I mean, are you glad to give back now?

I am glad to get back because I feel that I'm on the other side of it, you know. You know, and me and a dealer had this conversation the other day. We only want to sell so many cars a month. We only have capital to sell so many cars a month. So there's no reason for us to be in a competitive head to head with each other. There's enough business in Dallas Fort Worth Market and Tyler Market and Waco Market in Texas that we don't, you know, we can help each other versus hurt each other. And I am happy to give back. And I, I, I do get phone calls. I probably, and to be honest with you, I probably had more phone calls in the last 30 days with a lot of the things we have going on in the industry than I've filled it in a long time. You know, I have had a lot of dealers concerned calling me that are capital, you know, that have a lot of capital borrowed. I have dealers call me and ask me all kinds of questions like you probably do as well. Everything from real estate to investment to portfolio to shop to you know, you name it, I get it.

Yeah. It's funny how when you, when you run into other dealers at the auction, it's almost like you're in this, like, battleground, you know, it's like, it's hard to just like be real with a dealer when you're in the lanes with them. But when you're at an association meeting or of course in a 20 group, now all of a sudden you're on the same team and you're fighting the same battle together.

Yeah.

And you're willing to share that info. So that's definitely a plug for part of your state association. Don't think that it's a bunch of dealers in a room holding their best secrets to themselves and, and, and trying to, you know, have a fight. It's just a totally different feel. Right?

Yeah. And, and a young dealer, when a young dealer comes to me today for advice, maybe a CPA firm sent them to me or another dealer sent them to me, and they ask advice, you know, the first thing I ask them, are you a member of your, you know, your local and state association? And typically if they're not, I tell them, well, become a member of your local and state association and roll up into the nida. And then, and then I'll help you. You know, I answer little questions for you, but if you want to take a lot of my time up and you want to be successful, then let's start you off on the right path to be successful and get you with other people other than me. Because my business model where I'm at today, may not work. You can get nuggets from me, but that business model at 32 years, you know, is, is not going to work for somebody just, just starting.

Hey everybody, let's talk about Buckeye a couple more times this year. As you hear, heard Greg talk about this. CPI is such an important product. Buckeye can help you get all that set up. It's taken me. I should be kicked in the face, Jeff, that I wasted so many years not doing cpi. It is a game changer. Reinsurance is a game changer. Call Buckeye, they will get you set up.

Yeah, it's kicked myself in the face too. Look, I'm still wasting months not being it, not tracking it the way I should too. And that's what dawned on me during this interview with Greg was he mentioned it a couple times how much it was a game changer. And I do it and I'm trying to push it, but I'm not really tracking it. Like I'M not. We shouldn't be tracking this CPI number the same way we track, you know, payments the way, same way we track sales, the same way we track dollars collected. Like, I got to put that in my spreadsheet as a number that I want to look at weekly.

I. I look at it daily. That's how important it is to me. So get out there and do it. Greg, let's. Let's dive back into your dealership a little bit. You had. You said you had 75 employees, right?

Huh?

Can you break that down? Like, how many you have in the shop? How many do you have in collections? How many? Oh, now you're gonna.

Now you're gonna put me on the spot.

Ballpark. Ballpark.

Ballpark.

Oh, you know, I don't want to tell you something that's wrong. I can get you the right answer real quick, but I'm going to say that as far as production techs, we have nine production techs to build inventory.

And that's producing 130.

30 units?

31,3000.

Well, we. They at full. Full capacity shop can run about 150 to 160 units a month. Okay, so we have nine, nine production techs, two customer service techs, CPI tech that does CPI repairs. We don't have a body shop here, so we don't do any paint work here. But he will do, you know, just general, you know, replace offender doors, front end. I'm going to say that we probably. We outsource our detail department. There's three in there. We don't. We don't have that under us. We have two in qc. We have one tech that just does troubleshooting that works about to. He's a retired tech that we got that can that does very well troubleshooting. So he just does troubleshooting. We have our own record. So we have a record driver. We're just putting our own transportation company in. So we've ordered a trailer and a truck. And so we've got a guy that we've sent CDL school for that so we can start to transport our own cars. Tyler store probably has a selling man, what we call a selling manager, and three salesmen. Waco has the same thing, three cells and the selling manager. Our Dallas store has two people on the desk. It sells, you know, around 80amonth. So it has two people on the desk that help manage the floor and probably five to six on the floor there. We have a collection manager that she has probably, I'm going to say, eight collectors underneath her. We also have accounting and accounting. We have a title girl and then we have two in accounting that just does standard accounting. We have one that does shop accounting and then we have two parts people. We just instituted a parts department here probably about a year and a half ago with the. We don't struggling like everybody does to get their parts. We were on AutoZone preferred dealer. So AutoZone supplied us with an employee and we cut that out and we went to two of our in house ourself because of the, the struggles with getting parts. And then I've got a, a CEO that runs everything for me that sits on top of everything.

That's interesting to me. Greg, what. So what's your day to day? What's your involvement of the dealership? When you've grown this thing, you've been at it for so long. Is this still something you have a passion for? Are you in it daily or what? What, what have you found that interests you now?

So let me back up just a second too before we get to that because I left some stuff out. So we have an online sales department as well, underwriting department. So we have people in those departments as well. How about.

And your buyer, is that in there somewhere around there or are you buying?

So I buy a lot of stuff online. I have a buyer that does not work directly for us that, that buys for me and then I have a brother that buys for me. So it's three of us that do all the buying. So I was buying cars online last night at 8 o' clock at home.

You know, so that seems to be one of the last thing that dealer owners let go of is never give it up.

Never give it up. It's. Yeah, it's hard to give any of it up when you built it, from when you did everything. And then now you're tour. I mean I used to clean the toilet. So you know.

Would you say that's the majority of your time is. Is acquisition?

No, it's not. It's probably. It used to be probably 5 before COVID It was probably a lot of my time. You know, I bought 80% of it before COVID but after Covet I did. I quit going back to auction. And so to answer your question, do you want me to. Yeah, please go back there?

Yeah.

Yeah.

So yeah, I still have passion. I always have passion. Some people ask me if I'm going to retire or sell or get out or do I have an exit strategy and I say no, you know, I just don't have any interest in retiring. I love what I Do I've got it in a position now where I've got some really smart people and some really good people that I've surrounded myself with and they've been with me for a long time and you know, I've done some things to secure those people. So in that sense, you know, I can, I can, I don't have to be here every day. I do work, I am, if you ask my people, you know, I am very involved with my business on a day to day basis. You know, I'm not an owner that comes in and works an hour a day or goes to you know, a different state on vacation for 30, 60, 90 days. You know, I'm in my dealership.

Greg, do you mind? And you said, you said something there that's intriguing to me. You said you, you did something to tie those people up. They were super, you know, super important to you. What. Can you enlighten us on what that was?

Oh, well, I mean if you like.

Blackmail, if you don't want, I can't.

I can't give up all my secrets. But no, I, you know, I put, you know, you know, some of them, you know, I've just made situations to where it's benefit for them to stay with me.

Okay. I've often wondered that. You know, it's, it's one of those things to get someone to really have amazing buy in, to, to run it the way you would. I, I don't ever want to give up anything, any of my business. But if you have to, to pay someone, you know, a really good amount of money to make that happen, I, I, I get that. And, but then you start wondering is, is, is money enough? I don't know. But it's, it's neat that you've been able to, to keep those people.

Yeah. And yeah, I mean your people, you, you know, you, I'm not, you know, by any means am I an attorney, but I have to oversee legal aspects every day. I'm not an accountant, but I have to see over, oversee accounting aspects every day. So you know, I've always tried to surround myself, you know, hire attorneys where they need to be hired, let them handle certain situations, let the accountants handle those situations. Let me just run my business, you know, on a day to day basis.

Yeah, yeah, for sure.

So, yeah, it's hard when we get in the as doers like you said, guys that used to clean the toilets, guys that used to pick up the trash and do everything. It's really hard to not get bogged down in some of Those like repetitious tasks that, or things that maybe are outside your qualifications that you should be outsourcing just because you think you can do it. Right?

Yeah. Yeah. You have to recognize that.

Yeah, this is beyond my pay grade or not a good use of my time for good or for bad. Right?

Yeah.

Do you, do you remember the first person you hired and what, what job did you hire them for?

The first person that I hired was a retired guy to help me move my cars on a day to day basis and watch the lot when I would go to the auction. The second person I ever hired was to do collections. That was the second person I ever hired.

How long did it take you to hire a salesperson?

Oh gosh, when I opened, not when I was in a shack. Now my first car lot was actually a portable building. It was just a shack and we would sell 25 cars a month out of there and I did all of it. So when I opened another, the second location, I had to hire salespeople. That's whenever, you know, the game changed and that's a.

Hiring salespeople in buy here, pay here is a little scary. Right. Because salespeople like to sell and you've got to make sure that you're hiring a person that understands your business philosophy and, and that collection, the collection portion of the sale is way more important than the sales portion of the sale, right?

Yes. Yeah. And we've always taken the attitude, we've a couple of attitudes that we've taken in our, in our 32 years is that first of all, we want to buy a product that we feel is good for the consumer. We don't want the default to be because of us. Are we going to buy cars that are going to break? Yes. They're mechanical, but yet we don't want that receivable to go bad because of, of a bad car. If we sell them a bad car, we want to put them in another car. The other, the other thing that we've taken is that if we can't collect it, we can't sell it. So we collect what we sell, what we can collect. That goes back to your cash flow. So if we collect enough money, then we can sell it. If we don't collect enough money, then we, then we have to tighten our portfolio up so we can maneuver those strings of cash flow through whether we loosen the buying product up or tighten the buying product up on the paper side. So that goes back to a little bit of what you asked me earlier about how do you cash flow that so it's just, you know, pushing those levers forward or backwards for 32 years. And when you pull backwards, you can take that cash, put it in your pocket and in, you know, reinvest it back into the market, back into your car market.

That's. That's something that I made a mistake when I. I mean, I think it's a mistake. I mean, you don't know for. For a long time, it seems like. But when, When Covid. When prices spiked during COVID I pulled back and. Because I thought. I thought it was gonna be transitory, of course, and I. And I pulled back. But I was able to build a stockpile of cash because we tightened up, we tightened up the inventory buying and we tightened up who we were financing. And then all of a sudden, when I was ready to grow again, we were able to use that cash to go back in. It's amazing how, how something as simple as tightening up who you finance can produce a lot of cash. That's a really good trigger point.

Hey, one more time. Primal End, great sponsor of the podcast, A great place to go to get money. Like Greg, he'd grown organically, which blows my mind that you can get to that scale, growing organically, because I've been trying it for 15 years and I'm nowhere near that type of trajectory that he has. So if you need to borrow money either for your real estate or for your buy here, pay here, or for any reason, talk to the guys over at primaland.

Yeah, as soon as you get to that point, Jeff, it never, it never fails. No matter how long you've been to buy here, pay your business, you may need some capital. So don't wait. Get it set up, get your finances in order, and call prominently having cars.

That run the loan or run the note. Right. You want to buy something that the car is going to be successful, you don't want it to break down because. Or the loan to fail because of the car. You guys are doing all the buying. Looking at your website, it seems like you guys are big fans of Chevy products. Dodge and Nissan seems to be kind of the lion's share of the inventory. And only one truck on your car lot is that typical for your area.

So, no, we've pulled that back. It has become more typical of our area. You have a lot of dealers that do a lot of trucks. We used to do probably, you know, 15% of our business used to be trucks and large SUVs. It's about 20% of our business with SUVs. But, you know, the Larger vehicles have just become so expensive now, you know, to buy a Suburban that we feel is going to run the, the loan is so expensive, you know, I just don't want to push our ACV up that way. So the truck situation is a little bit different in Texas. You know, they drive them a bunch of miles and they work out them, you know, so, you know, you have a tendency to get stuff torn up. So you've got to be a little careful in that market. We will still do trucks. We just don't have as much of them because of the price range. You know, for me to get a truck, you know, you're starting to push 15 grand and up envelope.

Yeah.

And then that becomes a cash flow issue. Right. Because that, because that 15 grand is only gonna, you know, that's, you know, two seven, 500 cars, so.

Yeah, exactly. I think about that all the time when I look at these cars, like, do I want that one or do I want two of this other one?

I'm not smart enough, I'm not smart enough to figure that out. I just keep buying 15,000. Yeah.

Yeah. I'm surprised by how many Altimas, you know, Nissan products you have. I'm, I, I feel like I'm scared to death of Nissan's as a buy here pay here car. But it looks like it doesn't seem to phase you.

A lot of the Nissan products don't phase me. The transmission we all know is an issue. You know, if we buy those products that need a transmission, sometimes we can put a Nissan transmission in from Nissan and get a three year, 36, 000 mile warranty on that transmission from Nissan. So if I buy that vehicle. Right. That doesn't scare me. We have the manpower in house to change those transmissions. So, you know, a lot of guys stare away from some things that I don't because of my shop and the capabilities of my shop. It goes back to learning your business and your business model. What are we good at and what are we bad at? You know, what are we bad at? We stay away from it. What are we good at? You know, we relish in that. Attack it.

And what's also good is when you have a really good CPI program and you're selling a lot of the same product, you can start stockpiling those parts. Yeah, it's, it's ingenious when you do that because as we know, people wreck cars. Right?

Yeah. That's how Southwest Airlines made it. Right. They flew the same plane.

That's right.

So, so we go out and we go out and pick those transmissions and those motors and those doors and those fenders and. And we just keep right on moving.

Greg, I thank you for all the time you've spent with us today. What is, what's the best thing you've ever done in decision you've made in the car business?

Oh, gosh. I mean, there's so many of them. You'd have to do a whole another segment on it. That's good.

Yeah, we got time.

You know, we've. We've had a lot of successes, you know, obviously to where we are today. We've had a lot of successes. I think, you know, we would have to sum them up into a. A lot of different things, honestly. You know, some of the successes I've had is I've surrounded myself with people smarter than me, better in situations than I'm in. In certain situations. I recognize my weaknesses and my strengths and where my weaknesses are. I try to make that up with people around me that can pick those up. You know, I don't have a big eo, so I'm able to tell my people my weaknesses and where I need help and, and I'm able to tell them where their strengths and weaknesses are so we can all pull the chain together. We run it like a football team and a football coach, and we try to win the game and we all try to pull together. So, you know, CPI would be a product that I think that every dealer should have. I think that every dealer should be a member of association and, and not be scared to talk to other dealers and take adv. Other dealers. You know, I've had dealers fly in from other states, you know, and spend a week with me. I'm not scared to, you know, I've seen dealers, their mistakes and I've seen their successes and we all could do better in certain areas. You know, there's no place we. I could improve in areas too. So I just think being able to communicate with other dealers and have other dealers as friends has been a big help to us in our journey.

That's so true. Here I just. Being involved in a podcast and, and being. Becoming friends with Jeff and, and all the acquaintances I've met in these little five years that we've done this. Jeff, I know I've become a better dealer in these five years.

Absolutely. Absolutely. Greg, thank you so much for your time. Very, very generous for you to join us. Just so everyone knows that's listening, we sent a message to Greg and said, hey, will you come on here and tell us your story. Greg has no idea who we are. He doesn't know anything. And he jumped. He immediately responded and said, sure, if I can help dealers, I will come on and talk. So thank you so much for your time, Greg. Really appreciate it.

Yeah. Hey, thank you guys so much.

Dealers helping dealers.

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