#360 - Luke's Last Episode ???

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. I think, I don't know.

Oh, man. As much, as much business as we bring them, they're still, they're still sponsors. Come on, Jeff. Come on, man. Luke.

Happy New Year, buddy. It's the first of 2025. I assume all our sponsors are still lined up for this quarter. They're going to find out when we send them an invoice. But you're still here, I think, for the most part. How's the new year treating you, buddy?

Well, 2024 was difficult, Jeff, to say the least. Difficult personally difficult in business. I say it's difficult in business. Is our second most profitable year ever. A lot of people out there will be like, really? You know. Yes, it was. And only the only year that raveled it was 2021. And we all know the COVID years that year especially was very profitable for most of us. But 2024 was, was amazing. We bought some accounts we learned outside the business, which I think is a, a really awesome business. But then, do we want to jump into this right now or.

I think we need to hear what you've been up to, man. I don't know what else there is to talk about. I mean, okay, I'm pretty much still in vacation mode, so other than that, man, I, I, I don't know what I got going on.

So my dad and I, we've been partners since 2014. We entered into, I'm going to caution everybody real quick about this is going to be a lesson that, that I've learned, a lesson everybody else needs to learn. And we open our, and some backstory. We opened our dealership in 1984. October 1st of 1984. So we're entering 85. Why'd I say 84? 85. We're entering our 40th year. And I've been working day to day from 96. When I graduated high school, I went to college. And during college, I worked probably two to three days a week, if not every day. USC is not far from here, three miles or so. So I would, in between classes or whatever, I would come to work. And before that, you know, I worked as a kid, like a lot of people do that grow up in the business. And so I've been doing this for DAG, you know, 28 years, almost day to day. And in 2014, we had a partnership agreement drawn up and what it did was it gave me ownership in the business and I would earn ownership up to 49%, but I still had, I was running the business. I had the, I had the major share and I could do anything. That's, that's kind of the way it was. My dad has not been involved in the day to day operations of the business for a long time. So. And I designed what we do. Really, it's my, it's my handiwork. The day I started full time was September 1, 2001. And.

And that, hold on, you had 49%. This eventually grew out to 49% ownership. And your dad was the 51, or was there another?

No, dad was, that was 51.

Okay. Okay. So he had all the voting power, but you had the operational power because you were the one running it.

Yes, and essentially I had the controlling share. I know that sounds weird when you hear that people have 51%, but I actually had the controlling share. Hmm.

Okay.

So I can make decisions carte blanche, but the only thing I could make a decision on was whether he was able to, was forced to sell to me or not. I could, I could deny sales if he tried to sell off, but I could not force him to sell. Okay, an operational agreement ends and we're recording this for everybody know, 12:31, 2024. Our operational agreement ends today at like 5:00 clock Eastern. 11:59. Eastern Time. 11:59. And so I still, we're still in that agreement right now. Well, it was, it was figured that I would buy the remaining 51% of the business and close on. Yeah, I figured. And closed on it in, you know, within 2024. Well, I made offer to buy the business in October and the offer was rejected. So.

You're too stingy.

You know, I, I really thought that I made a very competitive offer on our business.

Briefly. How did you evaluate it? Just so other dealers can kind of wrap their brain around similar situations? Because I was there four years ago, two, three years ago, when I made that offer to my partner at the time, my brother in law. And so I valued it in a way that for me, I, I took all of our assets that we jointly owned, you know, our, our real estate, our portfolio, and then some investment properties and a management company we had. And I said, hey man, like here's two pots. I'm going to divide this right down the middle according to me and you pick which pot you want and I'll be cool with either you can either take the car lot or you can Take the real estate. Which one do you want? And he picked. So that to me was like completely unbiased, completely fair, no gun to your head situation, in my opinion. Right.

Yeah.

What about you? How do you value it when you already know, hey, I'm trying to buy you out of a business. I. It's not me or you. It's. You're out, I'm in. Here's what this thing's worth. Take a check or walk kind of a deal. How'd you do that?

Yeah. So I evaluated several bought and sold buy here, pay here dealership. So I feel like I have the knowledge to do that, but in this situation, I need an outside eye to look at this. So we've had the same cpa, hhm, who's very, very wise in, in the dealership space. He evaluated it and he looked at historical. And we actually have our company valued every year. So he looked at historical data, brought it forward, gave me two options. And I thought that. I thought that the lesser of the two options made more sense for me because I'm the one that built it. So the offer was made for all the property he and I own together that the dealership sits on, which is a four and a half, four and a half, five acres, which out there.

Is worth like 40 bucks. Great. Great place to live.

Yeah. And it was four buildings. And anyway, I made the offer, and in the offer, I. I could not literally give him a check. Okay. So I was gonna need to finance. I was gonna need him to finance, though.

You weren't going to go on and take on third party debt to pay, buy him out?

I was not. And we don't have any debt.

You wanted to do it out of operations, say, hey, man, I'm gonna give you $50,000 a month for the next five years.

Yeah. And whatever that number is, and it wasn't that number, and it wasn't over five years, I stretched out a little bit because what I didn't want to happen was to put. To make myself cash poor and not be able to run the business properly. But the. The offer was rejected by him and his wife and I. And I think. I don't think that I would make any different offer than what I made to him. I really don't. It came down to him wanting his money now, and, and I was giving him a sizable down payment and paying him more than what he's currently getting paid every month. But he wouldn't accept it. And he wouldn't accept really any financing because he just wouldn't I won't go into any more detail than.

Why was there a counter offer?

There was not a counteroffer.

Oh, really? It was just. No, I don't like it. We're gonna, we're gonna just go to the nuclear option and de facto blow this up.

The nuclear option is, is to blow it up. And that's what we're. And that's, and that's what we're doing. So everybody out there. We are. After today, we are no longer in the buy here, pay here business.

Okay.

Okay.

Okay.

And you know, it's, it's been a great run. And at some point, and let's all buy here, pay here, dealers out there. At some point, you got to make a decision if you're going to collect it all out. It's really a hard, it's a hard deal to sell your portfolio. I, I'm still in the business of buying portfolios to a point. But to, to get what you think your portfolio is worth is impossible. If I think if I took our portfolio to market right now, and we have a 90% CRR over years and years and years, and you can look at it and tell, I doubt that I would get 78% for this portfolio. Maybe, maybe 80% max.

Right.

But I would also have caveats to that too. You know, buybacks and things like this.

They kick out the bottom part of your portfolio and a bunch they wouldn't take. And anything that's been amended or not seasoned or out of.

Yeah. So.

So you wouldn't get the whole thing sold anyway. So your effective cash out, even though it might look like a 79 or 70% or 80%, much less than that, when the dust settles, I think those are the options. And to rewind this and give kind of put a pin in some of these lessons that we're learning here. Dealers operating agreement. The fact that you had an operating agreement the first time, when you put that in place, whatever, 10 years ago, that's insane because so many people don't. And I bet that was a battle back then. I know with my brother, my partner, we didn't have an operating agreement in writing, and that caused a lot of issue. Who gets what, who does what, who's responsible? What's your comp plan? Like, you've got to spell out every sing detail. If you die. Am I in business with your spouse? No, like who, you know, literally, who's taking the trash out? Who's responsible to take the trash out. Like all those things have to be spelled out. It sounds so Petty and so ridiculous. But there's a million scenarios that play out. And if you don't have it in writing and agreed to, then it's just a. It's just Wild West.

And I agreed to things I shouldn't have.

Of course, back then you didn't have any leverage.

Yeah. And so I did have leverage, and I threatened to quit back then. And that's the leverage I had. And. And the things I left out should have been left out. And these are the ones you should never leave out. For one, you should readdress your operating agreement every year. It should be addressed at the end of each year. And I learned this from a good friend of mine, Bo Can f, who's who bought his dad out of another business here in town. And they readdress theirs every year until he bought it out. So it's something you need to do. Readdress it every year because what changes?

What are you looking at? Like the equity changes, the responsibilities change.

Responsibilities for responsibilities change, cash changes. All these things that you need to look at. Should we buy what? Should we reevaluate the buyout number? Should we have a buyout number? I did not have a. I did not draw a line in the sand in 2014 that said on this date, 2024, I owe you X amount of dollars for this business. I should have done that upfront or I should have done that at some point during that operating agreement. Because what happened is I took a business in 2014, let's say, that had $2 million of accounts receivables, that today has $10 million of accounts receivables. And I grew that without debt for 10 years.

Yeah. And if you're the primary operator, you're still splitting that nut 50, 50 in the end. Right. Even though the other partner might be not completely absentee right now. They got you there and they maybe put you into business and there's maybe some value on that, but eventually, what is that growth worth? Is it 50? 50, or is it 60? 40. Yeah.

And what happened is the number got too big and that's my fault. And it's something I should have addressed years ago.

Yeah.

But I didn't address it.

We have a good friend, a good friend that. That is in that same situation. He has built massive wealth in his portfolio, almost a hundred percent on his back and brains. And he has a partner that's been along for the ride, and it's gotten so big now that he just. He doesn't even know how to address to get this partner out because their, their dealership has gotten so big.

That's the reason it has to be addressed.

Hey, everybody, real quick, you know, exciting news coming from Luke. You know what excites me right now?

Tax time, baby.

Tax time. Now we are in. We are in the first quarter. First. First quarter of the first quarter. We are in the beginning of the first quarter. So people are going to be getting their W2s in hand today, tomorrow, all the way through the 30th of January. This is the push time. Get those W2s. Get those, get the tax filed. Defer the down payment.

It's your money and it's not just about, about down payments, Jeff. Use this money to collect those portfolio and you know, that's what we're focusing on. And we're going to use that tax money to get these people paid down.

Yeah, call the guys at Tax Max. You can still get set up. It's a super quick process. There's really zero training because it's so easy. They can either self help and file themselves or you just walk through the screens the Tax Max has, or you call them, they pick up on the first ring. Guaranteed. Super easy to get answers. So taxmax.com use the code podcast 2024 and get 20, 40% off something.

40% off the IP package.

Yeah. Make sure they know that we sent you and not that other podcast. While we're with you though, because this is really entertaining podcast. We're finding out what's going down with Luke. We're also going to talk to you about Blitz Pay. We also think they are continuing to sponsor us for 2025. I don't know. I think all these sponsors might jump boat once they find out Luke's out of here, so. But for now, get signed up with blitzpay to collect your money. It's been great for us. We started this month taking no cash in our office. We are making a concerted effort to go completely cashless from our payments because I don't want to have cash in the office. I don't want our people to be collecting cash. I, I don't like the risk, the security. So we're using the BlitzPay cash network for those customers that just only deal in cash.

Yeah, I've been using BlitzPay for a while. My staff's been using it for a while. And actually I was in there really hard the last couple days because I've been helping my collectors collect this money. And I'm going to be able to do this virtually, Jeff, because the BlitzPay is so convenient. We're not going to have to be in the office to collect this money. Yeah, we're. We're just going to send text and it's. It updates my dms and. And we take the money right there. So I'm super excited about that. It's going to really help me wind down my portfolio well.

And I want to point out that it's a really great feature that if, you know, we all talk about losing touch with our customers if they don't come in and pay us physically in the office. But in Luke's situation, this might be beneficial because they're not used to coming into the office. And so it doesn't even matter if the office is open. They are used to paying online or at the Cash Network locations. So they're. They're not going to be surprised when they're. The doors are closed, the lights are off, and all the cars are cardboard cutouts.

80, 85% of our customers use blitz pay when they're paying.

Yeah, perfect. So give them a call, get signed up for 2025.

Readdress the operating issue agreements every year. Jeff. That's the only way to figure this out. And it's something I didn't see. I didn't draw a line in the sand that's on me. I waited probably a little too late when the contract was about to run out to really start pressing it. And I had no idea in September when he said that he wanted to pull some money out the business, that that meant that we were going to stop doing what we do, but that's what it meant. You know, I was frustrated for a bit in October about this, Jeff. Super frustrated, because this is all I'm known. And let's ask Luke.

So we talked about the operating agreement and what dealers can learn from that side of it with your father. Now let's talk about the lessons you've learned as. Because, you know, buy your pay. Your dealer, specifically, there's two components, right? You've got the portfolio that you need to wind down, and you've got the dealership. And we'll talk about that later because any dealer is going to have that situation. What do you do with a dealership? Now? Buy your pay here is inherently more of a rat's nest, let's say it's more of a headache because there's so many moving parts. We always talk about. There's kind of the three options, right? You can try to sell the portfolio. You can try to absentee owner or move it on to Somebody else to run like your. Your son, if you want to be gone, which is a headache and creates all these problems, or three, which I think was your choice is, well, we got to collect this out, you know, we got to wind this down and stop doing in house financing. How's that been?

Okay, so I was buying cars like gangbusters. Up to them, too, Jeff. So when, you know, when we, when this was done, it was about October 14th or 15th. When, when this came about, I had about a hundred buy here, pay here cars that need to be sold. And so I think we're down to about 15 now.

Okay, when you say down to 15, 15 cars or 15 buy here, pay here cars?

15 buy here, pay here cars.

Okay, you still got cars. You're still selling cars, right? Outside finance, retail cash. But as far as the stuff that you would put on a note, you. You've stopped purchasing those, whatever that tier is.

Yeah, we stopped purchasing those October 15th. Yeah. So, yeah, those are done. We will buy your pay here. It's one of those things. This is a rat's nest, as you just, as you just said. And so what we, what we kind of think is going to happen is that we're going to. We're going to have to have a few buy here, pay here, cars here, and you go, well, why are you going to have to do that? Well, one of the reasons your portfolio performs as well as it does because sometimes you have to trade people out of cars. And so what we'll do is we will not purchase any more buy here, pay your cars. We'll take repos that are in good condition, keep those for customers that are in our portfolio currently that are having car issues that pay as well. And so we're going to have to kind of migrate them.

But if you rewrite that customer into a new car, are you going to try to get them on a buy here, pay your car, but outside finance, you're not going to put them back in the portfolio and restart the clock on that loan.

Both are. Both can be true.

Okay.

And so what we can do is we can shorten the term to match the rest of the terms.

And so if you can make that work for them financially. Right. I mean, you're putting them in another. You're restarting the clock.

We may, we may reduce the price of the car enough to make it match.

Interesting.

Because all we're doing is looking to pay out and we're trying to land the plane at the same time. And, and if I look at my run rate on all my portfolio hit historic, historic run rate, we see that we should be finished collecting November of 2027, that's when, that's when the plane should land.

Do you think three years from the day you started? It will take three years to get to zero. Basically.

Basically. Now are we going to have some stragglers? Yeah, probably at that point we will probably sell those off.

Well, the last 10 months you're going to have peanuts too. So it's going to be a, it's going to be a shell of an operation for the last six to eight months when you, you've taken it down to just a handful of people that are all probably paying you like clockwork.

Yeah.

And everyone else, all the headaches and the troublemakers have already been weeded out because they're seasoned for 24 months. At that point, those guys are either paying to the end or you've already picked them up, repoed them or something. Right.

So will, we'll see a lot fall off this year. And so in 2025, what we'll do is we're going to, we're going to land this plane at about 850 accounts. So we'll see the run rate, you know, kind of, kind of lessen as we go. But we've been, we've been running about 24 accounts a month that run off. But we'll see that, we'll see that level out, I believe. And I've told my collectors, you know, I'm going to give you a job for, for two years and I think that will get us through. We still have CPI that's coming in. We still have a lot of payments coming in every month. So the first quarter is going to be a real, you know, real key to this operation. And so, so I've told, and I, and, and my dad actually hired me to collect a portfolio.

Fitting. Yeah.

So I, because I told him, I said if we go this route then I'm, I'm leaving and taking a new job on January 1st. And he said, well, I think the best thing for both of us is to, to you stay on and, and collect it out. I said, but, you know, I'm not going to do that for what I currently make. And so we negotiated that and, and we've got it settled out and know I get 49% of everything that comes in, he gets 51% of everything that comes in. And you know, it's going to, it's a different thing, but I can get this set up. I've been in collect collections My whole life I know what I'm doing, I know how to work and everything. But I tell you, it's a, it's something that I don't know how to do. And really there's no playbook out there to do it of what I'm trying to do. Now we can go down the rabbit hole of what I'm trying to do. And if it works, it'll be a case study on, on winding down a portfolio here.

I think some of the key factors that you have that are of benefit that a lot of these other portfolios that quote unquote wind down or get liquidated don't have is you've got to keep the location. Right. Like you have to keep the name, the phone number. You can't. When you sell these off to a third party collector, everyone just scrambles. Right. And they all know that mom and dad are gone and the babysitter is now taking care of things. And we're test and we're going to see what we can get away with. Right. So if your customers don't listen to this podcast and they have no idea that anything's changed, they're not going to know that anything's changed. Right. You've got to keep a full lot, you've got to keep similar hours. Yes. Your staff's going to get cut back. Yeah. It might be a little bit weird when they want to buy a second car for their kid or their son and you're just trying to push them over to the, you know, the subprime financing bank or, you know, you just don't carry anything that would fit their needs anymore. But I think that's crucial. Like, I think you have to have the lights on. I believe it's going to be just scrambling.

And Jeff, I think your point is, is spot on. I believe that to do what we're trying to do, best case scenario, if someone comes in and opens a buy here, pay here store on top of yours and they allow you to collect it out, I think that's best case scenario.

Really? Or they collect it out for you or. Yeah, yeah, collect it out underneath them. I see that being both. Worse. I think what, I think switching to a retail subprime model is a way better idea. Well, don't originate any in house loans. Just kick out that bottom tier of customer.

That's, that's what we're doing.

So I think that's the best way to go, in my opinion.

But so I'm again, I am, I'm done with buying and selling Cars. I don't, I don't want anything to do with it. I will, I will help. And so what we came up with, just. So what we came up with is my, and I shouldn't say I'm done buying cars because I'm still buying cars, buying cars for other dealers and whatever. But my, my sales manager is very good, very good sales manager. I think he has potential to own his own business and to be a car dealer. And so we're, we're buying prime retail units only and that's what we're going to try to do. We're getting set up with banks. I don't, I don't, I'm, I'm kind of at the end of my wits dealing with subprime customers. So I think we're trying to move into the prime space only. And so that's what we're doing. And we've already started buying cars for that. We've already recon cars for that. And also our, our service department is very retail focused. And so over the last 60 days, my, my service manager who's been my right hand man for a long time, I'm putting him in business as a, as a retail service provider. We, we're building, we built a new website where we're advertising to get customer pay in more than we currently do. Now. We were up to about 30% customer pay, but we're building that business. We have, we have the space to do it, we have the operations to do it. We have all the tools to do it. So we're not reinventing the wheel. It's already its own separate company. It's got to be here for a year anyway to service our warranty stuff. So we're focusing on retail service now. Again, I'm not doing that. I have, I've had my, I've had my share of it. I will be a consultant to his business. I was to own a portion of it for a bit, maybe forever, but I'm just, you know, I'm, I'm kind of done except for collections and I, and I think I can, and I'm, I'm buying cars for the retail lot until I can get him up and going on, on how he should buy. And I still have customers that come to me every day and. Hey Luke, can you buy this car for me? Yeah, no problem. I got it. So just, you know, our goal is to probably sell 15 to 20 cars retail for 20, 25. Just to keep the lights on. Jeff. Just to keep cars out there. It looks like we're still in business because it's gonna be crucial for us to. To do that, to collect these accounts out and, you know, the first. After the first quarter, I'm going to move to a virtual type setup and. And give them my collectors every three days. And. And I'm gonna go get a job. I think, Jeff, you're gonna see.

You're gonna see Luke down at the Quickie Mart doing. Selling Slurpees or something.

I'm hoping. I'm hoping you'll hire me, Jeff, and I can move to Utah and do this.

Yeah, yeah, yeah. We got some ideas out here. So a couple of things on that. Really interesting. I. I guess I could imagine showing up to Luke's lot and just having a bunch of shells of cars out there, but none of them actually have engines. Like maybe even just cardboard cutouts.

That might be the case. Yeah.

Like those army guys do to, like, think that there's a presence at the car lot. And. And how do you keep employees from just scrambling? I mean, I think that would be a big thing. We see that a lot in dealers. Like when we talk to Nick Marcosian last week when sales start to wane or everyone jumps off the ship, right? Like, they don't want to be the last one there. They think that it's sinking, so they all want to get out. I think that's going to be hard, even from a collector standpoint, because they know they've got this sunset of a year or two years. If they have a job opportunity come up, they're going to be like, hey, sorry, Luke, I only got a year left with you, and I got to take this one or I'm done. See you later. And now all of a sudden, you can't rehire for that position. Like, you're going to be doing well.

So as soon as we. We told. We told the staff about October 30th or so, what was going on, we immediately fired two people. Not fire. Just tell them they were gone. So I guess, yeah, so you need to find a new job. And then we sat down with our technicians, and if y' all ever had technicians, you'll kind of know how this goes. But technicians are always looking for another job.

They always. Their boxes constantly. That's why it's got wheels on it.

That's right. So we. We sat down with them and said, hey, you. You know, we're going to be letting go a couple y'.

All.

We just don't need it because our volume's not going to be. So if you are looking for a new job. We would recommend you taking it. And so we trimmed down our, our technicians pretty quickly.

They all ran for the door.

No one did immediately. And he's already, and it was the one I didn't want to leave. He's already come back. But we have, we two more leaving. So. Yeah, and they, you know, they got us through the year and you know, I backed my comptroller. She's going back to, she's going to three days a week. I don't know how long that's going to, I don't know how long that's going to work. And then, and I, and I, I didn't promise her two years. And so, and with the sales manager, man, he's got a real opportunity to have his own dealership with, with us as silent partners that are, that are buying the cars and paying for the cars and, and packing it and then splitting the, you know, splitting the net and, and that's kind of what we're, that's kind of what we're looking to do. Again, I do not want to be involved with Godwin Motors and the headaches that it, that is created throughout my life anymore. I've, I've been, I've been doing this a long time. You know, any, anybody that's worked in a career for 25 plus years, you know, I, I'm young, I'm still, I'm 46 years old. I got a, you know, I've got 15, 16 years. I can go off and do something new. And so I'm, I'm exploring all those options. And, and I do have options. And if anybody else out there wants to give me some more options, I'm more, more than happy to.

I got some ideas for you. So it sounds like we're gonna be, this is, you know, we're gonna follow you through this adventure over the next, you know, couple months or years. I assume. The podcast will now be called the Independent Dealer Podcast with special guest Luke Godwin. Or I guess Luke's looking for a new job. I'm also looking for a new co host. So if anyone info@the independentdealer.com we'll be taking auditions for older operators so we can stay independent and impartial.

You know, I, who knows? I may, I may work for a vendor for a little bit. I may do something.

Don't be that guy.

I'll probably do some consulting. So any of you dealers out there that want to hook me up on a, on a monthly basis, I am, I am taking on some new dealers. I will have time. Yeah, that's a great idea.

Maybe you could respond all those emails we don't get to.

That's possible.

You know, book those, book those guests that we don't get around to do that, do that show prep that we don't do.

Yeah, and that's, that's actually something I probably need to work on.

Maybe check out the newsletter that hasn't got out in months. You can do that.

The newsletter starts this week. You and I discussed that. Hopefully, hopefully restarts this week. But you know, I'm still going to be a valuable, hopefully valuable asset to dealers.

That's questionable.

That is questionable. And I'm here to help. You know, I'm, I'm going to do some, and I've already started some real estate development and as I've said before, car dealers end up being real estate developers because you, you make real money in real estate. And so I've already gotten three projects up and going and we'll see, we'll see how that goes. I.

Finding a way to lose all that hard earned, buy here, pay here money.

Well, as you said, our, our property here is so cheap, it doesn't matter.

Yeah, that's true. It's just like pocket change. And so it does sound like obviously, you know, Luke's, you're going to stay in the industry, stay very connected. I think you're still going to be at our 20 group meeting. I don't know how long you're going to be in the 20 group, but we'll probably still unfortunately see your face at conventions and things like that for the next foreseeable few months.

Yeah, yeah. I, I will moderate our 20 group this, this January. That will be my last 20 group as, as a member. And actually I don't even know if I'll be a member at that point.

I don't know if you have been for months, so it's probably the same thing.

Hey, I, I've put my numbers in. I'm going to put my numbers in again. But I will definitely see, see dealers out there. I'll be at conventions, I will be presenting at conventions. You and I both. And so I'm here to help. And if that means me flying into your dealership, because I will have time to do that and sitting and, and, and consulting with you for a couple days, I'll do that. It will cost, it will cost you money, but I will do that. I will get on the plane, I will fly. I may even be, you know, partner with some dealers. Doing different stuff. So I was even the other day, buddy of mine who's got. Who's got real money said, hey, let's just go buy a new car store.

Yeah, there you go. And I have a Nissan franchise.

No Nissan. I said, the only way I'll do that. Toyota, Lexus. So our Subaru. And he's got the money to do it.

Subaru in southern Utah. I've got the land.

I've already told you I want to. I want to do that. And so, you know, there's 46 is young, and I'm ready to do something different. I just tired of banging my head against the wall. And, you know, people say, well, why don't you just collect your dad out and. And do it that way? I'm tired. I was. I was tired in Covid. And y' all probably heard it when I was, you know, when I was doing the podcast. And then all of a sudden something switched. You know, I think it was cpi. CBI got me re energized. Shout out to Buckeye. And Jason re energized. And I picked up the phone one day and in 2023, and I called Jason, I said, hey, man, I'm reengaged. I'm going to figure this out. So, you know, and I was re engaged and I was very happy, and I wanted to buy the business. I wanted to be mine, all of it. Because I saw how much effort I was putting in, and I just couldn't. And I couldn't do it anymore. Being 50 owner, it just. It wasn't going to work for me.

That's. That's was my realization post Covid, you know, 2021, when I just said, hey, yeah, like, I've got a partner here. But it's not. We're not equally yoked in this as far as our desire to grow. So we've got to split, and this has got to be 100 me and. And. And again, back to our episode last week with Luke or with Nick Marozi and his dealers. We are entrepreneurial and we need something. So when it becomes the daily schlog of. Of collections and underwriting and, you know, buying cars is what we all grab to because it's new and it's exciting. And that's where we kind of wrote we. We gravitate towards the buying of cars, and then we gravitate towards buying stupid cars, and then we gravitate towards buying properties or boats or planes or if we have a new endeavor in our business, like, it's cpi, you know, you can get excited about that again because it's like, hey, this new revenue stream, oh my goodness, it's so profitable. And it was right underneath my nose.

Yeah.

So those types of things like, really get us excited and rejuvenate us in the business. And so I think all dealers that might feel that, you know, kind of mundane, like, look at those little niches in your business. What can you get excited about? You don't necessarily need to go out, buy a plane or a boat or do something silly that will distract you. You know, try to find the joy inside. That's kind of where I'm at with 2025 is saying, hey, you know, instead of me starting to look left and right, can I just refocus inside of this and really appreciate the dealership for what it is? Because it is a, it's a little cash cow, man. These things just, yeah, they crank off cash and, and it's okay to be a 30 car, 40 car a month guy and it's comfortable.

Yeah. Dealers out there do not get on this hamster wheel of debt. And I just, we never were. And that's something my dad really instilled in us. And, and it gave us the opportunity at this point to collect our portfolio out because we don't have to worry about covenants, we don't have to worry about, you know, paying somebody back. We own it and so we're able. If I don't want to do anything else the rest of my life but collect this portfolio out, I can probably do that. I'm not going to do that because it's just not my nature. But be beware of debt, because if you have debt, you can't all of a sudden walk away. You can, but it's going to, you're not going to walk away with anything. And selling 20 to 30 cars a month that Jeff's talking about might be the right answer. Use the debt to grow just a hair. Pay the debt off. Use it to grow a little bit. Pay it off. Because if you continually just stay on that hamster wheel, stay in growth mode, you'll never pay your debt off.

And if you're not, part of that is if you're not disciplined enough to pay your debt off, then you're not running an operation that's capable of paying the debt off. And that's the bad part is people need the debt to keep the doors open the next day. They don't know it because they don't know their numbers well enough. But if you can't spin off that extra money to pay that debt down in cycles. I get you grew during tax time you had to borrow, right? Yeah, that makes sense. But by December, hopefully, you've paid all those lines of credit off so you can reborrow against them again in January and grow again. And everything has gone up. Now, if you're not able to pay those off because you're using them all for operations, that is the debt cycle that you get stuck in.

Yeah. And it comes from not watching your collections properly, letting your inventory age too fast, and paying too much for money. Just pay attention again. I'm here to help if. If you need. But you gotta. You gotta stay lean and mean.

Yeah. Well, Luke, this has been super depressing, exciting all at the same time. I don't know if we have an episode for next week.

I think we do.

Okay. So, I don't know. It's gonna be the Independent Dealer podcast with guests Luke Godwin.

No.

Stay tuned. Look forward to us next week and Happy New Year to everyone. Hope your 2025 is gonna be a great one. I know mine is. Sounds like Luke's is as well.

Yep.

All right, see you guys next week.

Thank you for listening. Please leave us a review. We'll catch you in the next episode.