#359 - How I Built This: Harry Buchelly Follow-up

This is the Independent Dealer podcast, education.

By Dealers for Dealers.

Now here are your hosts, Luke Godwin and Jeff Watson.

Hello, and welcome to the Independent Dealer Podcast, brought to you by Buckeye Dealership Consulting. This for me, is a real treat, Luke. We've got a dealer on this week to get an update from the how I built this series way back in 2020, episode 150. This has been a guy that I've seen in the industry, and of course, you know, we've been around him. We talk often. Just completely inspirational. Like, this is a dealer who just. Just blows my mind. I think he's got like 40 hours in the day. I don't know how he does it. Well, he doesn't have more hours in his day.

Yeah, when you don't have kids, you got a bunch of hours there, Harry. But I tell you, you know, it's. But it is a delight to have Harry on because he's a friend of ours and it's always nice to talk to friends and always good to catch up because I don't feel like I get to catch up with Harry enough. So thanks for being here, Harry.

How are you? How are you? It's a pleasure to be here again. And, yeah, really happy. Everything's going fine. I one of your followers, I check your podcast all the time. I learned a lot from you guys, all the interviews that you guys do, and I'm really, really happy to share a little bit more of what I'm doing for the last few years.

Thanks, Harry. Yeah. Where are we in?

Well, I mean, there's so much to talk about because with Harry, I check in and there's always something going on. It's always something like he's the kind of guy that's just always thought outside of the box. Like, he challenges the status quo. He, you know, he just looks at things from such a different perspective that it just helps you be like, oh, well, you know, back in the day, if you go back to this episode, episode 150, Harry has always done a hybrid model, right? Harry? You've always kind of had the buy here, pay here, retail model going on, and you're okay flipping cars for cash and making money. And honestly, five years ago, that was like, nonsense. You can't run a retail dealership and a buy here, pay here from the same lot. You know, like, it was, you know, they thought you were crazy. But that's been a lot of the success that Harry's had in the way he's. He's built things so fast, is he doesn't listen to the, you know, kind of the. The basic common man information that we try to give people or education. So with that being said, Harry, let's talk about where you've been since that episode. If you guys want to get into episode 150, it's amazing, super inspirational. But back then, when we left you, Harry, I think it was like 2020, you the buy here, pay her for portfolio, the dealership, you're at about 1400 accounts, about 13 million on the books. How has that been for you over these last couple of years? Have you seen growth? Have you kind of contracted? Have you stayed the same? What's been your mentality around your. Your buy here, pay here side?

Well, yeah, you know what? I used to have a hybrid model, right? And I think around 20, 21, I switch it and I went completely buy here, pay here.

Okay.

I could put all the money into the finance, our finance company. And we decided to go 100 by here, pay here.

Why?

I. The reason I did it is because I knew right after Kobe, it was great for everybody, but I knew after call, after those, that period of extra money in the market, I knew something would happen. So I was preparing my. Myself. I said, you know what? I need to control my life. I can depend on finance companies in a, in a, in. In the kind of moment that we're going to get. And I decided to go all in. We buy earpay here. It's been doing great. It's been awesome. We are more than 3,000 accounts. Yeah, we are more than 35 million is doing fine. We work hard. I usually say that I'm always paranoid. I always think that it's going to be a bad month and I'm gonna go, you know, all the way down downhill. And that's the reason we keep, you know, I just finished a meeting and we have an amazing November, right? Was our best November ever. But we didn't hit the goal. We tried to head to sell 200 vehicles per month, and we got a little bit short. And I was like, what do we need to do for December?

Right?

And they're like, you know, Harry, December is slow for everybody. I said, we are not everybody.

Yeah, yeah. Get that out of your brain.

That's a.

That's a great philosophy.

I love that. That's.

Don't get me wrong, it's. It's been a good ride, but it's also. It's painful for anybody out there that is thinking, oh, I would love to get to the part and get, you know, 40 million portfolio, those kind of things. Yes, it's awesome because I don't want to lie, you make the money right. But it's a painful road and you need to be prepared and you need to know that. Balancing life, money. It says you move the line a lot. That's what I'm saying. It's not a, it's not an easy ride.

I want to, I want to dig into the specifics on that because that, that brings up a lot of questions. When you say the growth side of it, what I mean, your, your car lot still only fits like 50 up front, right?

You know, our average this year was 35. Big.

You average 35 in inventory a month, but you sold 200 in that month. So you've got a 30, a 48 time turn on your inventory. That's insane. So these things aren't even, I mean they're not even hitting the front line. Like you're not picturing them, you're not photographing them. They're just literally going right out.

So yeah, yeah, we, we have a, we have a way to do things that prevent us to do that. Right. But yeah, some, some vehicles, we're not able to even take pictures or they never going to be in our website.

Yeah, that is absolutely wild.

How, how do you source that many cars, Harry?

What do you mean?

How do you buy that many? That just seems, you know, 200 cars a month or how many do you recycle? Repo every month. And then how many are you buying?

So we have a wholesale department is run by three. You know, we have three people buying cars everywhere. We get some, you know, repos, but I would say 80 of our vehicles, we, we buy them, we go to different auctions and Texas, California, Arizona, we go different places. They are full time working on buying vehicles. We have some rules about how much we pay per vehicle. So we never go above that one. That keep us keep that, that kind of thing allows to keep the prices in a, in a decent way. You know what I mean? We're buy here, pay here. We always, always going to be a little bit overpriced, but we're not that crazy. That, that's, that's one point. We, we made mistakes along the way, of course, and at the end, I don't know if I told you that last time we decided we only have probably like 15 or 12 models that we sell. We sell the same vehicles because our mechanics know how to work on them. We have the parts we have, we have different. We have a jar when we have all the vehicles for parts, they've been wrecked that we can collect parts from. So it makes us look work actually in a faster and better way. So we don't. We. I usually say we try to be kind of a boring, boring dealer ship. Like we only sell what we are sure that we, that we can fix and we can sell that we understand and that's actually made. That will be, that will make your life easy. Right. If you keep it in that way.

Yep. I, I love that model and I think, I think it makes a lot of sense. Jeff and I have talked about a lot. If you focus and I've said this, we focus on primary Asian cars and it just makes life easier when it, when a customer calls and said it's doing X, you go, yeah, I already know what's wrong with it. Right. And the customer is like blown away. And you can, you can keep. I'm able to keep cars sitting in, in our lot that we have parts for. It's helpful for cpi. It's helpful across the board. So I love that. Harry. That's, that's awesome.

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No, actually we close our line of credit. You know what, that's a good question. And we've been through this question a lot of times with different people.

Yeah.

When you, when you sustain your grow in debt and I understand some people will let me, will say I'm. I'M I'm dumb or I'm stupid because I didn't do it. I didn't take advantage of that free money, almost free money that it was like five years ago, four years ago, right? 2%, 3% interest rate. But this is the thing, you're not getting a, like a mortgage loan that you're going to keep paying that amount for your whole life.

Right.

And when you get, when you get into debt and some recommendations that I heard before, 40, 50, 60% debt, and you're, you're thinking you're having a good deal, right? You're getting a 5 or 7%, 8% even with some line of credit and you're okay, I can pay those 8%. Right. But when something changed in the market, like now, and now you're paying 12, 14. And if you're using floor plan and you're paying 15, 20%, that's the reason you get in trouble. So we decided to grow only with our money. And the way I saw is this. There is no other business or stock market is going to give me 80, 18 return. My business give me that. So I'm going to put my money into my business so I won't pay interest to another bank. And I want to keep making the 18% that I make it. That's the way we did it.

Yeah, Jeff, I think we talked about that on a podcast earlier in the year about what is the actual rate of return, you know, for our business. And I think we were Both in that 18 to 22% or somewhere like that. It's a good point, Harry, that, that if we take our money, because I have money sitting on the sideline, that that's in the stock market, that's another. But if I took that and invested in my business, how quickly could I grow that and how, you know, can I get that 18% return over and over and over again? And you decided that your investment, your investment facilities is just you and your business is that, that's the long and short of it, right?

Yeah. And I control my business. I know. And there is no trying to figure out what's going on. I know this business, I've been doing it. So I was like, what, what's the point to put the money on the stock market when I put it on mine and be sure about what we're doing. And that's the reason we went from 120, 130 vehicles to 200 vehicles per month. And we grow almost, almost three times our portfolio.

Geez, how I gotta know. Like, I mean Is that where.

How.

I mean, you're in a huge market. I get it. Like, Austin is massive. Like, you maybe have unlimited customers, but it's also very competitive. So where are you finding that kind of growth where you can just like, hey, let's, let's go from 120 to 200. Like, let's just sell more cars. Like, I don't understand that. I say, let's sell more cars. And I could stock this, but I only have so many customers walking in the door. Am I missing something?

The market helps, Jeff. But remember, I'm paranoid all the time, right? And every time that we hit a goal, I want a bigger goal. And I think the mentality in the, in the, in the dealership is the same, right? So we went from 90, 100, and every month, like we hit two, three more. We were trying, okay, you know what? If we hit 93 last month, we should be hitting 97 this month, right? And there were random numbers, but we were pushing it and pushing it. And one day we're selling 200. So it's, it's a day by day, month by month goal that you set up for your team. And they wanted. And one thing, though, I attach almost everybody in the company to commissions, right? So the finance people, of course, all the salespeople, the shop manager, all the people is attached to commission. So when I say you want to sell more, everybody wants to sell more because they're going to make more. But it's a, it's an staple paranoia. You want to do it, it's not going to be from today to tomorrow, right? If you're selling 30 vehicles right there. So now I want to sell 50. It's going to be a. Is going to be not easy. It's going to take a while. But every month you have to push it. And sometimes what I feel talking with different, you know, fellow dealerships is they are in 30 and they, they say, yeah, I would love to set 40, but they don't do anything to sell those 40, right? They're expecting, I don't know, a miracle to happen. Now, your good question about Austin is a. It's a good market, but it's not the biggest, right? And we go social media all in. A couple of those ideas from social media I actually got from you, Jeff. But we do social media completely, all in Facebook. We own it, we know how to do it. We've been doing it for the last nine years. We do TikTok, YouTube, Instagram. We are creating content all the time. We are Tracking every single lead, every composition. That's. That's what we do.

And you're. And you're.

You're.

You're buyers. I mean, you're 90% Hispanic.

Yeah, I would say 90. 90. Yeah. 90% is an accurate number.

And so I think that's what's interesting is sometimes I sometimes am like, well, are they. Are they on social media? Are they on Facebook? Are they on Instagram? Are they on TikTok? And it's like, yeah, yeah, they are.

You know, like, remember, everybody has a phone.

Yeah. And they're on. And you're. I assume, obviously all those posts are going out. You're primarily Spanish. Those posts are going out primarily Spanish. Spanish speaking Spanish, actually. What's that?

We're only doing it in Spanish right now.

All prime. Yeah, just 100. Oh, that's so interesting. Yeah. So maybe an English subtitle.

Yeah, no, no, but let me tell you what it was. It was actually planned. I was like, you know what? If I spread myself to think with the budget going Hispanic and, you know, English community, I would have less impact. So I decided to go with one first and say, you know what? Let's go all Hispanics so we can target our money to that community. And after that, we'll see. What we found out is it's a huge community. Nobody was doing it in that way. And we decided to say we with something that was working for us. H. That.

That adds. And you. And you, from an underwriting standpoint, when you say everyone's commissions or everyone's pay is tied to sales, there's obviously got to be a check and balance there, right? Because if I just went out and said, hey, guys, the more we sell, the more you make. Yeah, we would probably sell 200 cars next month and then be bankrupt and do a bunch of bad deals. How are you keeping the quality there for the finance company? Are you, like, super, super strict with your underwriting? Are you, like. I mean, they have to, because I know you do a lot of alternative income, which is really easy to fudge for the underwriting model. Right. They can be like, oh, well, you know, he cuts lawns and gets paid cash under the table, and it's five grand a month. It's like, no, he's done that one month out of 12. Like, so how do you. How do you ensure that the deals are still being underwritten?

Well, well, we're using Neil, and that helps a lot to prevent those kind of things. Right. That the F and I department do something different that they should be doing. We only qualify amb. It's a numbers game, Jeff. More people, more leads, more options to pick and choose. Right?

Yeah.

That's 700 leads every month.

So 700 to sell. 200.

And we only said 200.

700 application. 700 applications, not just leads. Right. 700 apps.

Yeah. Through our website, through a future chat fuel, through our Neo system, through Facebook. Yeah, we got like 700 with numbers and, you know, names, trying to.

Scoring. You're scoring 700 apps, basically.

Yeah, yeah. So, and so you're selling, you're selling 28 of the, of the apps you're scoring, which, you know, I, we don't, we can't, we can't get to that number. I've tried.

And so how many, Luke, how many of the apps you score do you sell?

A low number, like 12%.

Okay. I mean, is there bad apps or just because you can't get them back in or.

That's what, that's what the point I was gonna, gonna get to out of. We, we take 200 apps. I mean that's pretty, pretty average, about 200 apps. Right? And we're only, we're only approving A's and B's as well, Harry. And we're getting to, and I think we were, we were getting A's and B's on, on less than 40%. So we were at like, let's say 80 graded ready to go. And we were only selling, you know, about 30 of those. So 30 of the 30 of 200 puts us at what, at 15%. So we're only selling 15% of our sold apps. And you're, you're selling double that, which is impressive because I, we, we can't get to that. And I often wondered if I put more money into the, into the pipeline to get more apps, was it going to get worse? And it sounds like yours are, are staying about the same. And you know, I, I, that 15% sold is killing me. I, I needed to be closer to that 30%.

Look, it's, it's, it's a matter of numbers, right?

Yeah.

Yes. If you put more money, you're gonna get more bad applicants, but you can also gonna get better ones, right? And you're just gonna try to pick those ones. But don't get me wrong, we make a lot of mistakes and it's not like the perfect life here, right? Some, some days our charge of ratio, monthly ratio goes really high and I get concerned and I go back and say, what happened here? What, what, what's the reason? And we go one by one and see why did we charge up this vehicle? What happened with this one? Did we approve them? Wrong. Right. So it's a lot of body work every month trying to figure it out and the next month and we do the same things, the same parameters to pick those customers to approve them and we have a way better charge off rate ratio. So it's, it's, it's, it's not that easy now. Yeah, I, I average something around 33 charge of annually. And that is hard.

Yeah.

And I, you, you talk to people and they are under 25, 24 and say look, I can get to that. So I, so that, that, that math.

Starts to add up. Okay. Because you're at 30, would you say 33% and I'm at 12%.

There you go.

So there, there's, there's a difference. And yeah, so, and so that, that makes me feel better.

Sometimes when you go to a conference or you talk to someone and you only hear one part of the story. Right. And everything looks fine and you're like, I'm doing something wrong. You're doing. It's a different way to do it. That's it.

Yeah. What would you, Harry, do you know what you're spending on a, on an advertising budget, per sale? Like because you're in such a saturated market, are you spending a lot more to get to generate those kind of looks at those applications or do you know where you are on a per sale ad spend?

I can tell you this. My advertisement department altogether with the people that work and the money that we spend is around 17,500 per month.

What that seems really low.

That does for 200 cars.

So that's what we. Yeah, that's what we spent. And that's taking in consideration what we pay to the two people that work doing the content and doing the.

Wow.

The campaigns.

But you know, I can, I can see that on a, on a Facebook generated social media. If you're doing it right. Okay. That's a lot of money to spend on that. If you're doing no other, no other advertising?

No.

Well, I think part of them, what Harry does is what I used to do and I got away from was you're better off spending $5,000 a month to have a really good content creator that's putting out a lot of really good content for free on a lot of the free platforms and then put a little bit of boost behind it. Whereas what I've done for the last 12 months, which I'm stopping this month, is I'M paying a company to put a bunch of boost behind a bunch of crappy ads, right? And so I'm paying Facebook a ton of money each month just to try to break through the noise with just the generic cookie cutter ad. That's not unique, not interesting, not different to me. So I got completely away from my earlier social media philosophy on advertising, right. Harry's laughing at me because he knows I'm wrong here.

I the creator from you and I recommend you my guy many times before.

Yeah, well, what's funny is actually I think the guy I'm with right now was recommended from you. The company that I'm spending with was recommended from you, I think before. And that's the one I'm cutting off because he's just running generic ads. Say that again.

For the last 10 years.

It's the same guy.

My guy. Yeah, the same guy, Alex.

Oh, okay. I don't know if that's who I'm using.

I think.

I'm pretty sure you recommended someone to me. But, but it's not, I'm not generating my own content enough. I guess that's what I'm getting at is I don't have, I think the in house content creator because we lie, we asked the salesman to do it and that's tough, right, because it's taken away from their selling. They don't know how to cut things, they don't know how to edit. So they'll spend two hours making a 30 second video that's gone by the next day it's lost in the news feed, right? So back when we had a part time social media girl, that was her job was to come in, shoot some quick videos, get them edited, get them posted and then just do that every single day. Which I think was working well for us. So anyways, I, I gotta get back to that.

Hey Jeff, we're going to talk about CPI later on in this episode. And I'll be willing to bet you that one of the reasons Harry is so freaking, you know, debt free and killing it so well, it's because he's killing it with cpi. You can pay off a lot of debt if you have your CPI done properly. And the guys at Buckeye Dealership Consulting, that's the place to do it, they'll teach you how to do cpi and they've got a great program built for you. Sign up, get it done. CPI is the best thing I've done.

I mean the quick math on that, you got a 80, 90% penetration on whatever he 4,000 accounts add an average of $300 or a hundred dollars a month. That's three.

I mean, that's half a million dollars a month in CPI revenue.

Yeah, yeah, yeah. Quarter a million a year. A month. That's insane. Even at, even if you had some crazy claim ratio, it's still.

His net's about 200, 250amonth. And that, that's how you pay debt off.

That's crazy. Or grow the portfolio.

Or grow the portfolio.

All right, so call the guys at Buckeye. Get signed up asap.

Those little bit of make a difference, though. I, I took your advice and I hired someone to create content. And you. I saw the results right away. Right. And I give you another idea. We have like 15 mechanics, right? So replacing tires, I didn't have someone who was doing it right. Every mechanic without depending on what they needed to do in the vehicle. If the tires needed to be replaced, they did it. Well, I was having a lot of issues with the balancing, the proper balancing, someone taking care of the machines. I decided to hire someone a little bit less expensive than paying a mechanic to do it. We have no issues now. He's doing more tires per day than before. And my mechanics are focused on what they know and what I need it for. Right. So those small details makes a big difference at the end, though.

That's, that's, that right there is, is super important and people that may not have understood what's going on, but he created an expert to, to do tires, right? And so if he, he's essentially got this person trained him because doing tires are easy and goes across the board. You can take anyone and train them enough to make them an expert. And so tires, social media or whatever are collections. If you train them enough, they'll, they'll be an expert. And I just, I love that. I wish, I wish that I. One thing you do have is you have scale. Harry and Jeff and I have talked this, talked about this before. You can get into a gray area in, in the car business where you're, you're, you're kind of big, but, but not quite big enough. And, and so you're big enough. You're selling 100 to 200 cars a month. You can hire enough people to do those type jobs selling 30 to 40 cars a month. You can't quite hire someone full time to do your social media, right, Jeff?

Yeah, I would think you could. I mean, what's your, what's your advertising budget? Right.

Yeah, I mean, we're, you know, we've been essentially $5,000 for forever. Right. And. And I've often wondered, if I just cut everything out, would I sell any less cars? I probably wouldn't. So it may just make more sense to hire one person that knows how to do content really well for 5,000amonth.

Exactly. Let them.

And let them go wild. Because I think it would probably work.

Yeah. And stop spending with Facebook or Google and go more organic by creating content. And maybe they put a little boost behind something that's doing well. But instead of just trying to feed the machine and spend more money to break through the noise, you're actually creating better content. And I've seen Harry's stuff. If you guys have been on his Instagram or his Facebook page, he's got a couple little secrets to his sauce that I think definitely make. Make the ads more appealing. Let's say.

I got to look it up now.

And I don't know if that was just a phase or what it was, but we definitely check it out. So. So let's move forward. Okay, fast forwarding now. Harry, you got into some real estate. Are you still doing real estate?

Yes, yes, we, we. Yeah, I'm doing it. And we're. We're growing as well. We're building some homes right now, some houses here in Austin. So, yeah, this is doing great. Of course, Austin was the boom town for a little bit, and after that, you know, it went a little bit down. But if you, if you, if you think about a lot and you do it properly. Yeah, that's what we're doing. And it's. It's doing great. Yeah.

That's awesome. That's awesome. So is this something that you feel like. Does that take you away? Like, is the dealership running on semi cruise control where you don't feel like you're dividing your attention?

Yes. Let's say this, exactly what you said. It's a semi cruise control. It's not completely autopilot. I, I have to focus probably 60 of my time at business. So I don't know if you guys remember, I, I handled my finance company, like, independent finance company, and we used to finance other dealers as well. We used to, you know, finance paper from other dealers. So we, the finance company is managing a completely. As a completely different company. Right. They have a. We have a different office. It's like 10 minutes from our dealership, different personnel. It's independent. Right. Like 10 people working there. And that is with Ron. And it's actually. My wife runs the finance part and I have a general manager here at the dealership. So We, I was able to put the people together in some way that I have like 40% of my time that I can focus on something else now. I could and that's what I'm working on. I could get a little bit more free time if I, if I, if I'm able to educate my, you know, my managers in a better way. And that's what I'm working now. So they can make the decisions, those complicated decisions. They can make it on their own instead of depending on oh, you know, what is a major decision. I just going to ask Harry when they can make it because they've been working with me for a long time so they, that's what I'm working on.

It's so important. And you say that like. Yeah, I don't think a buy here pay here dealership is ever, you know, full self driving. I don't think it's ever doing it itself. It's always kind of a, maybe a cruise control, maybe a slight autopilot situation because there's just so many moving parts. Right? There's just so many moving parts.

Supervised. Supervised. Full self drive.

Yeah, supervised. You got to keep your hands on the wheel, Harry. What else are you getting into?

Well, I think I told you we're developing a website for the industry. It's called Harry's Track, Harry Strike. And I couldn't find another name. Don't blame me.

You didn't run that.

We decided to run with it. I think it's going to be ready by the end of the beginning of next year and that will be on a space for us to rate our vendors, to talk about things, to combine all those different small groups around it to be able to have access to education, podcast, those kind of things. So it will be like a website for us as a, as a businesses independent unfranchises. Being able to, you know when you go to a Facebook group and you're going to find, hey, can you recommend me a GPS company or I need a towing or a repo agent in New Jersey and it's difficult to find an answer. So that would be the answer to those questions. Logging in and being able to, you know what? I need a repo agent in New Jersey. Let's figure it out. You showing five, three and I can see the rating stars on, on those guys. And I can go to the forum and I can actually, I don't want to make a new question. I just want to check whatever is there on the same matter. And so that's, that's what we're building. It's been more difficult than what I thought. But if everything goes right, we'll be ready by the beginning of next year.

Can we. Can we also add on there how to rate our customers too?

That would be amazing. That would be amazing.

Wouldn't it be great if we could leave Google reviews for our customers? I think. I just think that would be awesome.

But is not their credit report.

Well, I wish it could be to. To the public a little more.

Well, that's. That's really interesting, Harry. I mean I think, you know, as people that provide education and we're active in a lot of the dealer stuff like. Yes, there is no one spot to go to to get answers to questions. There's no one resource for some of these either vendor questions or like you said. Yeah, I mean a repo resource for. We see that posted every single day. Hey, I got a repo in Tallahassee. Does someone have a good company? You know, and it's like that question's been answered five times somewhere in the thread.

Yeah, you.

We just. It's just not there. It's not like an easy resource. And then the independent reviews, you know, like, hey, who do I use as my. You know, I need a better Facebook marketing company. Who do I go to? And if I ask that question, I'm going to get the responses from the five or six guys that are just always in the forums. They're just always there. And so they're going to respond with their company that they like or that they have an angle on. Not necessarily from everybody and definitely not from the successful dealers who are literally never in those forums, but once a month, you know, so I can see where like a. A kind of a timeless database of, you know, resource information. A Rolodex, you know, could be. Could be super useful and you know.

What on a space for us so we can be. We can feel free. Sometimes you go to a conference but you don't want to express yourself because you want to hurt feelings. Right. And, and I just, just any space. And you can, you can say the good and the bad things. Not only the bad. Right. You really have a good. Like for example, my Alex, my Internet provide. My social media provider is. It's. It's an amazing guy I can recommend all the time and I have quite a few vendors that I really like and I think they do a great job and every time that I needed they were there. And sometimes they are small, they are not as big as the big company and they deserve, you know, to be there on the spot because they are doing a great job. And we need to be honest in this industry. I think most of the vendors are great and they are honest. Some vendors, when they switch, you know, ownership quality sometimes drops a little bit, but sometimes we don't have the way to express that look. And we are like what, 80,000, 90,000 dealerships between independent franchises and we, we should be able to express better. That's what I'm saying.

So interesting. Well, we look forward to it. Of course, like you said, if it launches in January and you kind of start setting out some, some feelers will for sure have you back on here to talk about it because that, that is a resource for independent dealers is, is huge. Hey, everybody, one more ad here in this episode to make sure you have the right payment processor. Of course, when you're scaling like the way Harry's done, it's really, really important that you've got a payment processor. Then get that cash back into your account as quick as possible. That's a huge volume that he's got to be doing on credit card and reoccurring and even cash because he's pretty heavy. Latino. If you're paying straight fees on that and you don't have the right kind of model set up to mitigate processing fees, you're going to pay a lot of money in credit card processing fees.

Yeah. Blitzpay makes it easy for you and easy for the customer. And that's really what matters. They if they've got to pay a small fee to make it easy for them, they'll do it. So let Blitzpay show you the right way to collect payments from your customers via credit card and cash.

What else? Harry, I know at one point you had mentioned maybe going more into the finance company as a way to simplify the buy here, pay here. Because all we all know that the buying inventory, the reconning the selling is like a lot of the headache of our industry. And if you could just be a finance company and, and use your recipe across multiple dealerships, you could maybe simplify the process. Is that still kind of on your brain or, or would you see a future there.

With the construction part? You know, with the development company? It takes money and it takes time. And the best thing about that one is I enjoy doing it. I really like the construction part, the development part, because I have informed with that one and that takes a lot of resources from you. That's the reason we put that one on hold. And I want to explore a little bit more the construction side and see how we can. Can I get to.

That's. You know, what's funny is I told Jeff, I told Jeff the other day, I said, you know, car dealers get into the car business and we, and we work in the car business for a while and then we make pretty good money, right? And then if you really want to make real money, you get into the development business. And I'm looking forward to being in the development business.

Well, just, just to be clear, for, for our independent dealers out there, probably like 10 years ago, right, I went to a conference here, the Texas Convention, and it was this guy that actually was a landlord on one of our first locations, and he was having a conversation with everybody and he said, look, if you're expecting to make money, like your big money out of the dealership, from an independent dealership, you are wrong. What you need to do is buy every single piece of property that you can while you have that business, because the banks are going to loan you money because you have the business. If you don't have the business, they won't ever, ever loan your money to buy that piece of land or that building, whatever. So he said, if you're expecting to make the retirement, the retirement money from the dealership, you are wrong. You make that retirement money from every property that you buy during that process. And even if you don't make money on that list, he was like, you can buy that one. You can tell the bank that is going to be a second third for location. And even if you don't make money, but at least you pay your mortgage, you're going to be just fine. Because in 15 years, that property, property is double that. You can sell for double, or you can rent it for a huge amount, pay and live from it. So I don't think it's completely accurate that you don't make money out of the dealership. Yes, you can. But at least I think he's a lot of accurate accuracy right there. Unlike, you have to buy every single piece of property that you can.

That's interesting. That's really interesting because I mean, as a retail dealer, and if any of you have listened this far into the episode today, that is part of the issue is if your doors aren't open and you're not selling, you're not making money. Right? Because it just. You have to sell to make money. So, yes. What's your retirement plan? And if you're not buying the property underneath your dealership or buying as many other properties as you can, the bank will look at your income and say, okay, great, yeah, you can handle this. And if you can duplicate this again, another duplication will give you another loan for another piece of land. Like, you're right, Harry. They will lend you money and the SBA will give you loans if you have an income generating business. As a buy here, pay here dealer. Obviously we say, hey, we have our portfolio. And maybe that's where we're socking our money away for our retirement. But the same philosophy applies to. You really should do the best, at least own the land underneath your dealership. Right? I mean, that seems like that's, that's number one.

Yeah. And then go from there. You know, we just, we keep buying property around our dealership. Every time it comes up, we just buy it. And you know, it's, it is best when the people that own that property just come to you. It's never advertised and you just go, yeah, I'll just take it. I just, I'll just take it. Oh, okay, I'll take it. Yeah, that's the way it goes.

That's because land out there is basically free.

Oh, my gosh.

Jeff.

Jeffrey.

Jeffrey.

Luke just pulls the money out of his wallet. He's like, what do you want?

The reinsurance. The reinsurance money is really good and you can loan it to yourself really cheaply.

You know what? That's the answer. The reinsurance money.

You guys both are, are definitely you heavy in the cpi, right, Harry, You've been doing that for a while.

Yeah.

What's your.

We have like 95 penetration.

Oh my gosh.

So your monthly CPI income is ballpark, half a million dollars, couple hundred grand a month.

Okay, I tell, I tell you this, that is the I. Now, I've made mistakes, but not, not, not doing CPI earlier is probably the biggest mistake I ever made. Oh, man. I don't even talk about it.

Okay, let's wrap this up. Harry, give us your parting words of wisdom or where do you see the next five years? In the industry or for yourself, where is that going? Where do you see yourself three to five years from now?

Thank you for the industry, though. And, and I have this conversation many times. You know, I have friends and other people that they just know about me and they give me, you know, a cold call and they ask me things. I said, look, a lot of people is nervous, right? Some dealerships are closing down. Some dealerships, if you, if you hear about it, right? They like, okay, business is bad. My, my sales are, you know, low. I'm not selling the same thing that before. And, and I Think for me, and the way I see it, it's just, the market is, it's just accommodating itself. Everybody was doing great because it was free money all around, right? And that's when you get greedy. And that's what I think. It happened to many people. They saw that money, they, they thought they could do better with, you know, loaning money that cheap. And when the times, you know, when the market correct itself is when you're in trouble. My advice is this, and this is what I've been doing. And probably I'm wrong. I'm just a guy that has been lucky and I've been, you know, taking some decisions and it's been working for me, but probably I'm wrong. But when you bet everything in a huge debt, 40, 50, 60% and you don't prepare yourself, you know, properly and you don't feel like you need to improve what you're doing in, in every part, right? How can I sell more? How can I keep my customers? How can I actually spend less money in things that I don't think I should be spending? So when you're like, okay, I have the money, I have the loan, I have the line of credit and I want to take a trip to France because it's cool and I'm going to have three cars and then the next one I'm going to buy another Ferrari or whatever, that's when you get in trouble down, down the road. So for me is this. I keep living my life in the same way when I used to have 1500 cars before. It's the same, the same way of living, though. But I control and like I said, I'm really paranoid. So I try to control the debt situation and I have no debt. And again, I can be a mistake. I, I can be wrong for me, right? But at least I don't have any banks calling me tomorrow in the morning saying, I need you to pay my portfolio right now. And I tell you this, and I got really upset a couple of years ago hearing someone, if you owe 40% and they call you, you have no business. You have to liquidate. You're going to have to let people go. You're going to have to set probably a property because it's too big. But if you have two locations, how are you going to handle that? You won't have that extreme income stream that you had before. So my advice for the industry is just keep it tight even when the times are great and you feel, look, it's, this is a shift, right? And it happens all the time. We go up and we feel that we're great and we go down because the market is always in the same thing. Keep in mind this. According to history, every 10 to 14 years, we get into a kind of recession in the economy. Right. That happens. Doesn't matter if you're Republican or Democrat. It will happen. So we're due and we're doing so before.

Yeah, and we're due for one of those.

Yeah, we're pretty doing that one. So what I'm saying is, if you prepare yourself instead of thinking with that look, I seen dealers, they buy everything with a floor plan and then finance with a line of credit.

Yeah, you're broke. Yeah, you're broke if you're doing that. So. And there's dealers out there doing that. So. Yeah, great, great wisdom. You've got to manage this debt to be successful.

That's the main thing. And when the times are a little bit more difficult, you have a lot, you know, a lot of more breeding room to. To make some changes instead of like going crazy. Because now you have to pay the bank 14:15 on. On interest, though. Yeah, that would be the main thing, though.

Yeah. Harry, it's awesome, man. I got notes here. I got things I know I gotta do and get it figured out. It's always great talking to you. My final question is the, the. The clean cut look, you cut your hair. You went from the man bun to this business thing. Does that mean you're like on a new phase of dedication? Like, is this business, Harry? You got back to business, Harry, I.

I passed my midlife crisis.

Oh, okay.

So. So I decided, you know what? I'm old.

Whatever.

I don't care.

You're still going to edc, right?

I try.

Yeah. This guy acts like he's all business hairy, but this is.

And you know what? You know what else? I think my accent is getting worse.

It's the same. It hasn't changed.

No, no. Just put some club captions right there. So people.

Yeah, yeah, yeah. All right, buddy. Thanks so much.

Thank you, guys.

See you, bud.

See you.

Bye.

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