Wake up, Buy Here, Pay Here people. It's a beautiful day. Go grab yourself another cup of Joe and say hello to Jim and Michelle Rhodes on the Buy Here, Pay Here morning show. Take it away, you two. everybody good morning or afternoon if you're on the east coast no nine ten eleven twelve it's late morning it's late morning late morning this is still morning wake up and so I'm hoping that you're like um uh not too job it out yeah you know grab a cup of coffee that kind of thing we had an early start to our day over here we did took a couple of phone meetings and yeah some extra stuff going on yeah preparing for a meeting that comes later in the day yeah oh and those of you guys who listen frequently know that coffee time is pretty sacred. So like when Jim gets a text and says, Hey, can you call me? It's like, are we interrupting coffee time to take a call? And we did. And you know, I'm glad that we did. So sometimes you just, you do what you do when you have to do it. Absolutely. Absolutely. So quick updates. Okay. um we have decided first of all last night was our last v-eight meeting of twenty twenty four we had kind of consistent like um concise schedule because of the holidays so we're yeah we're kind of officially um are we on are we on um um like so many companies the two weeks or the week between christmas and new year's they're like we're not working but we're still working I'm also be working we're going to take some break from some client meetings next week But the week after, we'll be back in business. Well, you know, when you're the one that directs all of the stuff, it's like, okay, so we're just trying to wrap up the year and make sure we've got everything ready to start the year. off and going so we've got a meeting with our we're calling them team now we're engaging some folks to uh join our team and play different roles happening today yeah so we're kind of trying to take some steps with our own business and uh and it kind of ties into our conversation we got dealer calvin ruth from oklahoma standing by he's going to talk about his own growth and and so it's something uh we're familiar with and I look forward to kind of having our audience get to know calvin a little bit we've spent a little bit of time with him I met him just here and there at conferences and of course there's some of those people that you know through social media more but um part of what um I wanted to share was that he what prompted me what first he was featured in a dealer spotlight for um niada in their publication yeah And then I saw some of his videos socializing his, where he acquired some real estate and growing his recon side. And this is, we see this kind of question, this kind of thing coming up quite frequently with our dealer clients, V.A. and personal coaching clients. And it's, it's a big question for a lot of them about should I, shouldn't I, am I doing it right? You know, all of that. And, and those of you guys who know us, it's like, we're not, we're, we're, I'm not going to try to use very definitive words. We advise, we don't tell. Yeah. And so it's like, well, based on this, it looks like it's a great idea. Or here, have you thought about this or whatever? So the thing I find myself saying a lot is, you know, certainly through V.A. with our coaching and the morning show, we just try to gather information and present it to dealers in a way that they can make their own decision. Like dealers are smart. They're way smarter than they get credit for being sometimes. I'm just trying to, I don't have to tell them what to do. I just put information. Well, and that's, Jim has had to teach me little by little. It's like, okay, please don't use the phrase, well, you need to. Yeah. It's like, say, we advise, or we strongly advise, or we strongly, strongly advise. Mm-hmm. Um, and then let people, you know, do their, do their thing. Cause it's, uh, you know, running a business. Sometimes I'll resort to saying, look, if you don't do this, I'm going to quit taking your calls. Um, Bert, you did interrupt coffee time and it's okay. Oh, no, it's good. It's all good. Yeah. Uh, but it was, it, you know, when we saw, when we saw the message, we were like, okay, do you sound and, and, and it's one of those things that, that we both look at each other. It's like, is it a good. Okay, then go. And Burt, this was different this morning. A lot of mornings, we're not prepared for the morning show. This morning, we were prepared. We were ready. That is absolutely true. Should we bring our guest in? All right. So let's bring him on in. Calvin, it's a pleasure to have you here. Good morning. Thanks for having me. You're welcome. If you'll allow me, I'm going to introduce Calvin. Okay, go for it. Because one, he's a fellow Okie. I'm originally from Oklahoma. He's in Northeast Oklahoma. I'm originally from Northwest Oklahoma. When I was a dealer, I had my dealership in Southeast Oklahoma. And you and I have been to Tulsa. We've been out there in that market. And his dealership is called Scissortail Auto Sales. Is that right? Yes, it's the Oklahoma State Bird. There you go. Very nice. Of course, I knew that, and I was going to tell Michelle, but you beat me too. But yeah, that's good stuff. And it's also, the scissor tail is on the license plates in Oklahoma. You see a lot of those, the blue and white license plates. Yeah, on the older ones. They recently changed it. Oh, yeah. So if you're cool in Oklahoma, you don't have one of the old ones anymore. I mean, yeah. And I couldn't tell it was a Citadel anyway, Calvin. You have to kind of study that license plate to even realize that's what it was. Anyway, enough about that. I think it's a cool name for your business. And we reached out to you because I saw, first of all, that NIAD was featuring you in a dealer spotlight. They did an article. Congratulations. That's kind of fun. Yeah. That was pretty neat. Thanks. Yeah. Yeah. And so, you know, I had also seen that part of what was happening with you is you were making some investments, especially in your recon side of your business, trying to solve probably some pipeline stuff. And so I think before we get into that, I kind of want to give folks the background. I asked you before we started, you started your dealership in twenty twelve. You then added an RFC and stepped into reinsurance about twenty nineteen. So I'm just trying to give folks a feel of kind of your own progression and growth. you know, as a dealer and how that's kind of evolved. You want to tell folks a little bit about what you did before you were a buy here, pay your dealer. How did you, how did you, I, uh, I was actually an x-ray operator on the pipeline. I did that for about four or five years. Um, I helped my dad open up a gas station. Um, and then, uh, there was a, there was a spot in the back, an old car wash that I, uh, I opened up a detail shop. So I did a lot of details for a lot of buyer payers in town that were open at the time. Eldorado Motors and Joe Cooper, Easy Credit Auto. I don't think Eldorado's in business anymore, but Oklahoma City, I think, so. Yeah, yeah. So talk to me about why become a buy here, pay here dealer. Like we know when, but why chose that business? I don't know what I was thinking. I, uh, I know I want to do, I knew I wanted to do something. Um, and, um, my girlfriend at the time, she needed a car and this was back, I don't know, two thousand nine, two thousand ten. And, uh, we just, we just started driving up and down Leavitt street and, um, you went inside, started talking to him about prices and this and that. And, uh, there was a, there was a Ford escort there for sale for, uh, they wanted a eighty nine ninety five. And, uh, I just started thinking about it. I'm like, eighty nine ninety five for a Ford escort. Like, yeah, that's crazy. You know, so, but then I just did some investigation and, I said, well, shit, I'm going to try it out, see what happens. That's also probably why you see so many coffee shops, because people walk in and say, seven dollars for a cup of coffee, right? So now you've got all these coffee shops. And by the way, Jimmy Rambo from Spartan is just a great guest. You must be working with him, and you know him, but he just wanted to say. Oh yeah. Yeah. I work with those guys. Yeah. Yeah. So we're awesome. Yeah. Obviously you've grown your business. And, and so talk to me about like what kind of challenges you've kind of had to face and overcome. And obviously as it relates to your decision to step into, to invest in some real estate for your, your recon part of your business. As far as a recon challenges. Sure. Right now, I mean, I'm wanting to sell more cars and service more vehicles. So, um, I mean, I, I bought an old car wash about ten years ago and, uh, it's kind of a converted service lot. Uh-huh. Two thirds of an acre. Uh-huh. So I can't really fit too much, uh, inventory on, on, on the lot. And my mechanics, they work, um, they work out of like each wash bay, closed in wash bay. pretty tight quarters only got like one lift per mechanic and so I was like well you know I figured I'd look for something a little bit bigger and I couldn't find anything to buy so I figured I'd just buy some land and and build what I want, you know, where I want. Right on. Good. So, yeah, I saw some of your videos that you were socializing, some of what you were doing, kind of your plans around that. And you shared with us that you're currently not taking any service off the street. You don't do, you know, customer repairs from outside. You just do your own recon and then you do, you know, obviously customer pay or customer repairs to support probably your reinsurance program. Yeah, that's all we do. We don't have enough manpower or more time to do that. Are you anticipating when you when you because you've you've bought the land that you're going to grow into having more time to do that? Or is that just something that you're not interested in doing? I don't think so. I did buy a wheel alignment machine. I might do wheel alignments. But for the most part, I just want to focus on buying buy and buy her pay her inventory and getting it fixed up and and financing it. So on the timing of this, is your decision to go do that is really just to solve a recon problem, really to solve a flow of inventory problem? The reason why I chose to build another facility, a bigger facility in a second sales location is to sell more cars and to grow my portfolio. I've been kind of stuck for the last three or four years and then in the same, like, you know, same size portfolio. I've grown a little bit this last year, I think about fifteen percent. But I'd like to I want to double my portfolio. So, you know, if I if my charge drops are going to remain the same and I'm still going to sell the same amount of cars, I need to kind of need to double my sales volume to get there. Gotcha. So I think as I hear that, you know, one of the things we've been talking about in our V eight groups, and I know you're a member of a twenty group, so I'm sure that you guys have conversation around these kind of things is probably amongst the things that would have influenced your thought process and decision to move forward is kind of feedback you get from them. But when you say you kind of shared some of your increasing your sales, is there like a goal? Like, are you you're just looking to like double your portfolio? Is there a number? And I'm just trying to understand like what the goal is and why. Yeah, right now I think I'm around six hundred. I got about six million on the street, but I'd like to do I'd like to be in a thousand range of twelve million, somewhere around there. OK. What is it that's like this is this is where I want to go. I mean, what else am I going to do? You just got to keep busy. Yeah. So part of the reason that even comes up and we obviously expect you to have a lot of success in that area. And we just are mindful, like I think at this juncture, one of the things we've been talking about in our V eight groups is the idea that we've been recently starting to analyze cash flow and especially positive cash flow, right? What does it take to get to a place where you're positive cash? And one of the things that we're seeing is that some of our dealers that are large portfolios, thousand, two thousand accounts, they're not necessarily any closer percentage wise to positive cash flow than the other. So I think this is why we kind of want to understand as we talk through this on behalf of dealers that are new or dealers that next year will be making the same decision you're making is like, you know, what is the goal? Obviously, you know, it's probably would be some motivation around cash flow. And we're just saying, let's let's kind of analyze that and recognize what does it really take to get cash positive and why does it matter? Right. So this is part of why we're we're asking and we're drilling down to Why that target? I want to be more profitable. I've got the personnel now. I don't think I'm going to have to hire that many more people to make it happen. That's the thing. More cash flow coming in. I'd like to be able to... kind of snowball it, you know, as far as keeping the expenses, um, yeah, well, last year was tough. I mean, with all the charge offs from the COVID COVID stuff, but we're doing a lot better. So talk to me about your reinsurance, like details, but would you say like, if you've got another dealer who's considering reinsurance, would you say, yeah, that's been a win for me? That's definitely a win. I mean, defer your tax, you defer your income. So put as much money as you can into your reinsurance. So for sure. Yeah. So it's been a while. You probably also support you probably have saved some charge offs by having I don't know if you do a warranty or service contract or what you do on the mechanical side. You can share a little bit about that. I just think it's helpful for those. A lot of our listeners on the morning show are newer dealers. You know, they're brand new to the business. We're trying to help them kind of understand you know what these things are and why it matters and especially I can say that the dealers I've spoken to over the years most all of them and we've done a lot of math on reinsurance and it looks to be a really positive investment it's there's a lot of cash up front sometimes getting it going right but but for you you're saying it's definitely been a win and so you would just say you want to do it and what have been the benefits for you uh I would start off small Maybe do like a three hundred dollar per car. I don't know that go lower, maybe like three month, three thousand mile warranty type deal. I mean, you're going to fix the car anyways. The road. Right. So might as well. I don't want to pay taxes if I don't have to. So it's a great. way to defer that income. Yeah, for sure. So that's actually a first. Again, I'm not I don't have I'm not the subject matter expert married into buy here, pay here. You know, we do a lot of morning shows. That doesn't make me an expert. But it's the first time that I've heard the reason for reinsurance is to defer tax. um you know you you see things like uh rfc can you know is something that people do to do that but that's the first time that I've yeah I remember hearing that I honestly don't think about it as much in that context either that's not the that's an interesting because we're operational coaches first calvin like we're working with people more on this kind of day-to-day operations so we're thinking about You know, the things like obviously you're going to it's a wealth builder. You're going to make those investments now. And we see that that reinsurance could definitely build a lot of wealth for dealers. We can see that it solves a lot of internal challenges by having a ready solution there in terms of a warranty service contract gap, whatever it is, it can help solve problems quickly when the customer does have a setback. So there's those benefits internally, operationally that you also see that are a little more difficult to measure. And then, like I said, the tax advantage of being able to put that money, you basically are spending that money now and putting it into another entity. And that lets you, you know, treat it. The treatment that you have in your in your sales company, you know, obviously gets to see some tax advantage as a result of doing that. Yeah, it was it was pretty fun to explain to my banker when I was going to get financing about all the different entities and what they're doing. And yeah, because, you know, they look at my tax return and, you know, Scissortail's losing its ass and pardon my language. And, you know, you know, and so you got to bring in you got to you got to show the reinsurance tax returns to show that income and explain that, you know, to your to your banker, you know, especially your local banker. That's not a really a buy here, pay here, you know. Financing. It's something I've done. I don't think Michelle's ever seen it. In my own dealership years ago, I wrote a cover letter that every time I would release financials to the bank or other parties, I would have a cover letter on the dealership side and a cover letter on the RFC side. This is why this looks like this, right? And so now, now I do the same thing for dealers and with our clients too jim is like I don't do accounting but I have taken accountants through how this works and taught them how it you know how to look at it kind of thing and why it matters and we were talking just the other day about an accountant that he works with that they had a really big conversation around this and the accountant went oh my gosh I just learned a lot now I understand this difference okay I mean especially with the loss of uh the the loss you take when you sell your receivables over if you don't if you don't if they don't know what to look for and you you really got to point that out to them because they'll look at that and be like he's losing his you know yeah you know what and we're not going to loan him any money but yeah yeah they do need to understand the complexities and kind of the layers of it and I always tell dealers look be prepared uh that when you set up this rfc you need it for tax deferral purposes but you're going to squash your equity like everybody needs to understand we're going to we're going to squash the equity that's in the business when that happens and And as long as everybody understands we're doing that as a strategy, it's tax strategy and it's purposeful. We still have the same assets. We're just squashing the equity because we're moving the assets to another company. And so it's just complex stuff. And it's, you know, when you got in the business, you didn't expect to have to know all this. I got to tell you quickly before we wrap up that We had a V-Eight meeting last night. We'd already socialized that you were going to be a guest on the podcast today. And one of our V-Eight members says, I know Calvin. He's one of the best numbers guys. That guy runs numbers in his head better than anybody I know. And that's, I think that's part of what it takes to be a successful buyer-dealer. So I'll tell you after the broadcast who it was. Yeah, yeah. But yeah, it's a fellow Twenty Group member. And they really had great things to say about you and said you were definitely a numbers guy and run numbers well. That's part of what it takes. But I think we should let Calvin get back to being a car dealer. And we appreciate you making time to chat with us, especially on behalf of these dealers who are newer to the business and learn a lot of this stuff. So before you go, though, is I would just like to ask you, I mean, if there's like one big piece of advice that you wish that you had had when you started, what would that have been? That it's like, man, I had to learn that the hard way. Get involved. a lot sooner. Oh, good. You know, with your association, your state association. OK, good. We don't I don't think Oklahoma has much of a learning state association, but get involved with the ADA and join a join a group. Go to these the buyer payer summits and the buyer payer ignited and all that stuff and talk to vendors and learn. Because if I would have done that, When I first started off, I would be way more head than what I am now. Great advice. Great advice. And we've seen that again and again. I see that, you know, that those folks who kind of think they've got it all figured out tend to be the ones who suffer the hardest hits, you know, and so because they won't allow themselves to say, you know, I don't know at all. I need to go learn the rest from some of these folks who've been there, done that. We see that. Yeah, definitely. We see that frequently. Yeah. So that's great advice. I think it's kind of a. Yeah. Yeah. I've been around this twenty plus years I don't know at all like I'm there's way of tons of stuff to still figure out right so we're just learning and and sharing what we learn and helping bring dealers along and to that to your point that's part of what the associations are about so we definitely would be recommending find out if you've got a state association the way to find that out is reach out to your NIDA you can always find them Hashtag J-Y-S-A. Join your state association. And so get out there and get a part of the association. And they've got a conference coming up. You've got the BHPH Summit coming up in April. United Summit in April. And then you've got the National Conference in June, which will be both independent. Always over my birthday. I always remember. It's always over my birthday. They're kind of back to back. Yeah. Yeah. and then the one in november next year because I just wrapped up the last one yeah just very recently for the dealer which is really really growing and being popular so yeah so all good stuff calvin we appreciate you making time yeah thank you glad to get to know a little bit more about you and your operation I look forward to stopping in on you and when we make it back out yeah absolutely um is it okay if I put you backstage and if you stick around for just a minute we'd like to be give you a proper goodbye when you're done all right all right excellent thanks again so much calvin All righty. Good stuff. Good stuff. Always fun to get to know these folks. And I didn't prepare him for the kind of the why questions, but I think it's always fun to just kind of find out. He did great. Yeah, yeah. He did really good. I just think it's important to kind of understand the, you know, why I choose some of these things like, We talk about, we don't have all the answers. So when we meet somebody, we say, well, we've seen dealers do this and we've seen dealers do this. And here's why they told us they did this. And here was the outcome, right? Yeah. Yeah. Well, it's just a conversation we're having. Those of you who listen, we talk buy here, pay here. pretty much all day yeah um and that was part of the conversation is is this you know there's a way that uh as as we're bringing new coaches in and things like that it's like it's great that you have that we have experience in our own business but it uh it um it it doesn't always translate to the exact same thing for the next person so it's like approaching it as here's a way yeah this has worked for me what other you know and maybe I've seen this or whatever further I can say I know a dealer in such and such who would tell you they did this and here was the outcome so you can call them if you like and they'll tell you this was their experience exactly um all right so it is friday TGIF. I mean, when's the last time people actually used that? I don't know. It's been a long time. It dates me because I think that was like way back when Full House was on or something like that was on a Friday night lineup on NBC or CBS or whatever. So thank goodness it's Friday. TGIF. And it's... everybody there are very few days left to shop if you have not started or finished your Christmas is next Wednesday it is it is so I hope you all have a great a great Christmas we will see you on Christmas Day it'll be recorded then but we're really grateful that you guys all join us but we will see you it will be recorded on Wednesday and then we will be back on Friday with Brent and Carmichael. So we're really looking forward to that. Again, thank you everybody for joining us. I hope you guys have a great holiday.
