The Auto Loan Apocalypse Is Coming

welcome back to the iced coffee hour my name is lucky lopez with automotive life and so far the iced coffee hour podcast has made 239 thousand dollars 633 cents that's the closest guess we've ever had yeah ever 232 300 oh what do i win a high five man thank you guys for coming on the ice cream this is a trip because we've been friends with you for i don't even know how long maybe a year right yeah technically it was a year when we went to uh barrett-jackson actually they just reached out to me they're like are you guys coming are you guys coming because who was there again yeah and it's already been a year that's crazy just flew by it's insane we've hung out a ton in this past year and uh something with your sector of your business has been going crazy that's why we brought you on we think you can explain something going on with the car bubble the auto market bubble car values have gone up more by the way than real estate the s p 500 collectibles uh people don't realize that cars over these last two years are up how i think it's 33 yeah no i think it's even higher i think so use cars 33 new cars they have um above msrp purchase prices like the new corvette of 50 60 000 i tried to buy one of the new ford broncos and they want 35 000 over msrp and a brand new ford bronco was like 37 000 was the one i was looking at so it's almost the same price as the car which just blows my mind people don't realize that back when covid first hit you would you would have been best off just buying a whole bunch of used cars over stocks or real estate yeah outperformed yeah crypto stocks everything else i remember when when the epidemic first hit i had a few uh dealerships reach out to me and they were doing fire sales they were so afraid that the banks are going to shut down everything's going to end so my friends were giving away trucks and all this stuff and then all of a sudden they ran out of trucks the supply ended and then they started buying everything else and the numbers just shot up through the roof blew me away so what's your experience going into this like your credibility in terms of like what you see can you tell us like how you're involved in the auto industry okay so um i've been in the automotive business for over 20 years i've had multiple dealerships here in vegas auto repair shops owned a few rental car companies and what i currently do now on my channel is basically teach people how to set up their automotive business and so still today to keep my feet wet to make sure i don't look like a fake guru i always try to go out and still buy cars still wholesale still broke or still buy paper stuff like that and what we've been seeing is just astronomical it's the first time ever in history that a depreciating asset like a car is actually going up in value for the last two and a half years which just blows my mind and the whole thing about i guess the market right now is people feeling that there's this big shortage there's this big belief that there's not enough cars coming out of the factory and it's the completely the opposite um every chip manufacturer we talked to is currently building if you call chevy right now and say hey you know what i need a new computer for my 2022 chevy corvette column they'll get it in like seven days so when we showed people this online and we showed a few news conferences i did they were blown away they thought that everything was back order the only place i know that has back-ordered parts is tesla because tesla's not the greatest which we can get into you also hate tesla you say it's like your least favorite car make ever right yeah i mean it's i mean i like the car they're the first to market with a lot of the great stuff that came out the self-driving going 100 electric so i do commend them on that but they tried so hard to be a tech company in an automotive industry and it's just it's such a pain in the butt because like if you know like your lexus has issues we can literally walk in i can hey i got this car here's the vin number i could pick up the parts if they don't have it they'll tell me when it comes in try doing that a tesla i have friends that are literally been waiting weeks if not months and tesla will not tell them when their parts are coming in if anybody's ever crashed a tesla before or dealt with this they totally know what i'm i mean it's impossible to get parts and then if you try to do service you usually want to call a service writer explain our problems our issues you guys using the apps i don't know how you do it it's like yeah pick up my car where's your car i don't know it's somewhere and it's dead and ran out of juice and it's like they got to pick it up from wherever you actually got to direct them to it and you got to stand there with your phone so it's just a few things that are not very convenient and they're trying to buck that system of using automotive professionals in their system which i can't understand they want to make it different but if you want somebody working on your car i'm sure you'd probably feel better if somebody worked under multiple cars for multiple years when i was talking to some of these tesla attacks and i was like oh what did you do before were you like at ferrari mercedes bmw jaguar ford oh no i was uh i was an engineer for um you know like cisco systems and i'm like so you did like software setups and and everything else they're like yeah and i was like then what are you working on tesla's he's like oh it's very simple we just they don't fix anything you just replace and so it kind of blew my mind so i'm sure i'm going to get a roasted in the comment section for all the tesla fans because i know you guys have a bunch of them but it's completely different from most dealerships they don't like to share information like when i was fixing spencer's car i can look up online and say if you crashed your lotus i can tell you how many hours it's going to take to take off your bumper where i can get the parts how far back ordered i am and give you an accurate quote on how to fix your car tesla does not share any of this information so when i'm calling like hey like especially if the car is wrecked i don't know what was there before and i'm like hey i need to get some bolts and parts what was here before can i get a diagram isn't that because tesla likes to repair their own cars though 100 they really really want to do their own thing and repair their own cars but they're running into the big problem of you know there's not a tesla facility you know in a lot of states and a lot of cities so then they're subbing them out to other people so i have a friend that's in california that does tesla repair and he's a certified chop through them and it's still a pain in the butt to get parts and to work with them so during covid which cars did you see have the biggest increase in value what do people want the most i was actually shocked i figured it was going to be like luxury suvs or luxury cars it was trucks hands down anything that makes money i've never seen dodge ford chevy and even some of the nissan trucks and sprinter vans just absolutely explode in price you know usually trucks we use them for work we beat them up and and they take a beating in the depreciates a little bit but trucks usually hold their value i mean these guys were asking for sixty thousand dollars over on a gmc denali which i was just shocked i'm like this is just a truck i know it's a nice truck but why sixty thousand dollars over and they're like well you can't get them even though they got 13 of them sitting right there on the lot um i think that um those were really big hit and then also anything that was kind of rare like you're you're tesla now some of these like ford shelby mustangs they didn't make a lot of them so they just shot up anything with limited amount of of inventory blew up even my audi like i've owned it for a year put 17 000 miles on it and it's worth more today than when i bought it a year ago here's a question for you why wouldn't the auto manufacturers see this that people are paying these prices why don't they just say all right well that's the new price now we'll just make fewer of them and sell it at that price that's so i i talk about that on my channel and it's kind of like a conspiracy thing when people ask me what there's a shortage there's a shortage and i'm like if you're producing a hundred thousand cars and grossing 30 000 over msrp why would you make 300 000 cars and break even and have to give them away because i remember two years ago we were getting stuff back of msrp they were literally giving us vehicles like when i bought my mercedes i literally got it for less than wholesale and then when this happened like you can go to ford chevy whatever else you'll see that the lines are moving smoothly the only actual uh i guess supply shortage that i've seen was uh wiring harnesses for european vehicles because the main manufacturers in ukraine but i believe that's why they're doing that and the sad thing is it's not even the manufacturers the manufacturers give the suggested retail price it's the dealers they get to set whatever market price they want to so a lot of people keep blaming like ford honda chevy toyota and it's actually the dealers the franchisees that are adjusting the prices how do dealers work exactly because i know it's kind of a complicated more than comp more than what meets the i complicated situation right yeah right now there's a the way dealerships work is is very old school but it is sought out and it works and it functions but i'll kind of go into this right now everybody's trying to do what tesla's doing tesla's doing direct to consumer i thought ford is copying that is the first one that made a separate llc that's going to try to do their ev vehicles but still service them at their four dealers so this way they don't get sued by their franchisees which is going to happen but the way a dealership works is you know you make a contract with somebody like ford and you say look we're gonna we want to sell your cars when you sign that contract you have to uphold a certain standard of not only your building but also a service department you got to buy so much in parts every month and then you also got to get so many cars allocated so if you love everybody wants trucks they're all fighting for trucks but you still have to buy the ford escapes the the ford focuses the evs whatever that's not popular you still have to buy because that's part of your contract of being a ford dealer but with that if you have good customer service you have really high reports and people are happy with you you get specialty vehicles like ford's svt so the ford gt you weren't allowed to sell those unless you were a dealer with a really high csi report which all your customers raved about you and they thought you're really good but when it comes to dealers i do admit that the way they function is very outdated especially when it comes to finance i can literally tell you a million horror stories of how financing works because when we tell like people even like when i had my dealership here and i would tell them how it works they never believed me and now that like i talk about it on the channel people still laugh but finance is probably one thing let's talk about finances because when i saw your video originally i did a lot of research into everything that you said and what i found the most surprising was that it's common to get a loan up to a hundred and thirty percent of the car's value so if you have a car jack that you wanna buy for ten thousand dollars you could find a bank who will finance that car for thirteen thousand dollars thirty percent more and the reason is because they they add in the sales tax the registration the titling fees and all the other miscellaneous stuff up to 130 and i'm thinking how are they doing that with a car that loses 20 as soon as it drives off the lot and all of a sudden a person knows 50 more than what the car is worth within like a week yeah how could you explain like the process of this yeah so that's that's actually the average now 130 percent we have some banks that go up to 170 percent of ltv which is just mind-blowing what's yeah the way they did it is they were saying they were adjusting for inflation because as you guys know with the the pandemic and the vehicle shortage all the cars started rising up in price so what the banks did the dealerships did the combat is like well if i'm paying let's say the car's worth twenty five thousand dollars if i'm going to the auction paying 25 grand i still got to make a profit so then i would show this slip to the bank and say i need to get more money i need to make five six thousand dollars on this deal can you finance it up to 150 of ltv and at that time the government was pretty much obviously giving people stimulus money and they were backing all these loans so they're like yeah just go ahead and i've never seen banks change their lending so quickly and so freely where before like even when i bought my r8 they didn't even ask me for proof of uh income they didn't ask for proof of residence they just kind of bent the rules and traditionally we only do that if the customer has good credit and a good history and what happened during the pandemic is they just literally let the floodgates go so if you had let's say you were a waiter and you made twenty five hundred dollars a month you know and you just let's say become a plumber and now you're making thirty five forty dollars an hour normally what we would do is we would say okay that's an actual profession we would give you more loan to compensate for your new income if it's something like seasonal work or something that's temporary like stimulus money we don't ever give you more money because we know that that's only temporary it's going to go back down to normal well during this pandemic they were like oh well this guy's making four grand his his spouse is making four grand and they're not paying rent and they're putting twenty thirty percent down let's just give them 150 160 percent and they're just giving away all this money these over-inflated numbers and the banks were just taking it because they figured okay if worst case scenario happens we're just going to bundle this paper you know get a triple a rated sell it out to somebody and either one of the banks is there no oversight is there no one who has a standard on these loans and they say this person is getting money from unemployment they cannot afford this once that runs out there's not like an authority there there is every bank kind of governs themselves there's fbic has regulations for certain types of lending like predatory lending it came really big back in the day i could sell you a hundred thousand dollar car for 300 000 and there's nothing you could do as long as you sign a contract you're on the hook now it's got to be somewhat in a certain range where we can't oversell to you but i believe after this they're going to make a lot more regulations now that the default rates are going up and banks are seeing this they're starting to pull back their books but yeah the banks regulate themselves and a lot of these banks if they get their money from like wells fargo bank of america they have to abide by their guide roles but there's so many of these hedge funds and and bigger money that's private money that's investing into these banks they can write whatever they want this kind of sounds like the 08 housing crisis it does for cars 100 like we were making that joke it's like you know they at least back then you know people were losing their repos i think it was like that it was about fourteen percent thirteen five um was the repo rate back then but people you know were so upset on their houses that's why they let him go now we have people that have houses but they actually have equity but you look at the cars once that that market starts to dip like right now retailers are talking about slowing down less bank loans are being given interest rates are going up people don't have the money that they used to so now all these dealers are stuck with this overpriced inventory and we're watching them the numbers go down and i think that's one of the hottest topics that i talk about is like you could see it come down and i hear people well the dealer won't go down on his price i'm like give it time it's it's happening we've seen all the repos like the video you guys saw it's all piling up but i think it's going to come to full ahead probably within the next three to six months when we talked about it about six months ago people thought it was weird and you know tin foil hat and whole shebang now when i'm starting like with news companies asking for interviews and people are sharing my stuff like on reddit forums and twitter now it's like it's kind of nice to see that the cracks the foundation are showing people are actually scared and people like yourself and your guys's channel that are more well known are talking about it because it's going to be a really really big deal yeah what's your prediction on what will happen my thing is i honestly believe that we're going to have probably not a big collapse like like the house market it's going to be like a 20 30 percent dip but it's not the price of the car that's going to scare everybody it's the ability to finance once these banks like you know what mortgage and stuff like that a lot of them were government-backed they were able to pawn them off whatever else a lot of these automotive loans are not like that they're not backed by the government they're sold to these hedge funds people got them in their mutual funds you know so they're just sitting there and if they default the banks when they show that much of negative equity in their portfolio they're going to stop lending they're going to make it extremely strict just like they did after the housing market where i'm going to go off your income and you could only afford what i can say you can afford and that's what a basically people are pushing themselves into doing is to being governed by people because the access of you know i know people i won't mention names here in vegas that live in a thousand dollar a month apartment but drive a two hundred thousand dollar car why we gotta name names we gotta know yeah who is it that guy but uh but that's like some of the stuff that we're seeing and so that shouldn't happen but i believe that that's probably gonna be the next step is if this collapses as bad as what they say it is i think the government's going to step in just like the last time we're predatory lending and they're going to change a lot of it but i think it should be like that it to me that seems reasonable that there should be a standard that says if you don't make a certain amount of money you shouldn't qualify for this payment yeah i mean there's there's pros and cons to each of that it's just like at the end of the day if if you make let's say 20 bucks an hour but you have 200 000 in the bank and you want to buy a lambo for 300k i mean to me you have the down payment you should be financially sound enough but the bank's going to look and she'd be like this guy only makes 20 bucks an hour why are we why are we going to take his 200k and he's not going to be able to afford the payment we know you can you could be successful you could be rich it could be on social security and they still won't take it they're even bucking like the original loans they used to ask for like your bank statements your w-2s some sort of paper trail you know to justify that they stopped asking that because um when the bill of rights came out with this new federal credit protection where it's predatory lending if they know that you make too much or you don't make enough and they don't give you the loan all these banks are worrying about getting sued because they'd rather give you a 30 000 car and if you fail that's on you if you succeed great but if they show that they did some sort of malfeasance or they were judging you by your income or your character or your race or whatever else they get like a 30 000 fine from the fdic and so that's some of the stuff that they're really really scared about so it's weird it's like they want you to verify everything but then they want to push the documents out and sell the car and not have to worry about who they're selling it to so what do you think that's going to do to car values let's start with new cars oh geez so you know we talked about how the msrp people are asking like 20 30 000 over it um just last week we were able to get a lamborghini huracan or technica here in vegas nothing over msrp i can get a new corvette nothing over msrp um a lot of the allocations they were talking about how oh it's going to be 18 months it's going to be 24 months before you get your car now we're down to like eight 12 months so the i believe that the market's going to start cooling down already like if you drive by sahara you can see the lots are full of cars you know there are some spots here um in the united states that have low inventory especially when it comes to the northeast they just i don't know why they just don't have a lot of cars here or the west coast we have these massive lots so they just stack three 400 cars and just leave them you know and if you watched my video a lot of these banks and even some of these dealerships have holding yards so even though they do have inventory sometimes we don't show you everything like if you look at my lot you'd never guess how many cars i got i got a 150 cars but that's like i said that's just from back there i put a few up online a few at the auction and i think that's what's going on so do you think the worst case scenario for new cars then is just selling at msrp that doesn't seem that no bad that's the perspective yeah the prices like i said it's it doesn't seem that bad until the people try to go buy them when their rent is doubled the gas is doubled their insurance is doubled and they're trying to maybe afford a 600 car payment that's what they qualify for maybe this new car that's at msrp is 750 now they're not going to qualify for it that's my big worry is that people are not going to qualify for these types of vehicles anymore because of they're going to get stricter they're going to ask for more down payment they're going to ask for better stability because a lot of my banks like as a dealer every few months we get a notification from our lenders hey we want to do 2015 and above we want to stay cars 105 000 miles and below we don't do maybe mercedes or we don't do anything rare like saabs they'll send you out these structures to let you know what to lend on how to set it up and i've noticed that we used to get these maybe once a quarter we're getting these things every two to three weeks now of we're not doing this anymore we're not doing 84 months we're not doing 2.9 we're going back up to 3.5 minimum job time instead of one month it's six months so little by little it's like i said it's starting to show and bubble to the surface but the problem is the public won't see this for another three to six months it's the dealers and the people inside the industry that are seeing it now but they will never see it because they're the ones that are holding all the inventory and they don't get stuck with a bunch of overpriced stuff what about used cars used cars here's the problem if you're buying something under 12 000 i think those cars are going to go up because once just like an 08 that's why i started selling like more cheap affordable cars is because people can't afford those 30 40 50 60 000 cars after their credit shot after they don't make as much money or their debt to income is not what it's supposed to be so anything under 12 grand i believe is going to hold its value if not go up like you're miata you're going to laugh and two years from now i bet you'll be worth double what we bought it for you know it's it's just i think it's almost already there you know but uh it's that's what we're seeing is people that normally didn't have money during that stimulus time they got those back checks that were getting five ten fifteen thousand dollars at one time they were buying all cheap affordable cash cars so there are some people that were smart after the 08 recession that like i'm not going to get myself in debt i'm going to buy something cash own it and have no bills so when people ask me what's the hardest cars to get it's cheap cars i mean alex knows i've been trying to find him a truck forever you know when we were looking for your miata it's anything that's affordable is super super expensive and it's almost like doubled you know where before i could get you that miata for like two grand now it's like four actually no no it's like six to eight thousand dollars for a decent one you know without being beat up now what about cars like the ford gt or like collector cars like an sls amg a z8 all of these cars have gone up like 50 to sometimes they've doubled some of some have tripled the dodge vipers now oh my gosh nobody wanted those cars for years and now i'm looking at the values and bring a trailer they're they're selling it ridiculous amounts right now yeah with specialty cars like yours i hate to say it it's only worth what somebody's willing to pay for it yeah the more where they are obviously they're going to hold their value but what we've been seeing is a lot of people liquidating a lot of their uh their collections you know like you like it for gt i would just keep it because even if it drops 20 30 percent i would still get it because you'll never know when you'll be able to get another one but we've seen a lot of the exotic cars like barrett jackson was just here hundreds of cars go up bring a trailer cars and bids all these places um one interesting statistic that i saw that was saying that 50 of the buyers on bring a trailer and cars and bids are dealers now i can't confirm this yeah so i watch those bids religiously i have so much fun sometimes i'll send jack the cool ones we'll all watch it together with uh alex too and uh i click on the profiles of the people that are bidding on the cars and i'm like what what are they buying some of them you know they're individuals when they bought very specific cars and maybe they're building a collection of like only buying red cars and like they're all red but then some i've seen that they're buying like 30 cars a month and they're all in like different price points so and sometimes i feel like are those are they bidding on behalf of someone else who just hires them to go and buy these cars you're saying they're dealers yeah most of them were dealers like i was shocked like when i put my smart car up there i figured it's a fun toy somebody just wants to buy it for fun i'd say about 80 of those when i was messaging them back and forth and some hit me up on instagram they're all dealers what are they gonna do with it flip it oh yeah one guy said that he had he was gonna finance some guy for thirty five thousand dollars and i was like you're gonna sell the smart car for 35 grand and he's like yeah he goes i got a guy he's got 10 grand cash he just can't afford it and the bid right now is like 11 grand i was like you know if that's what you want to do but there were so many dealers like they had inside deals with banks just kind of like what i have where we could finance almost whatever we want now how does that work let's say they're bidding on behalf of a person like that what's to say they don't win the car then the person backs out that's the problem that's why i don't do auto brokering when people ask me like why don't you go to the auction and show me how to buy cars or take me with you i want to buy a car it's not worth it because that's what they do got it back out i don't like the color i don't like the smell you know i thought it'd be nicer in person so yeah that's the run the risky run but a lot of these dealers they just had a blank check you know with the stimulus money and ppp loans like i'll tell you what that's what i think that drove up the the high line prices because i remember same thing we bought a viper for like 38 000 bucks i think that thing sold just recently for like 70 80 000 i've been trying to buy a delorean for like six months i can't even touch them they just they i've never seen them for like 10 15 20 000 now not even running 30 grand it's interesting because we uh we got the lotus wrapped check out the graham stefan after hours channel we're going to post there uh sometime soon but anyway we'll throw up a picture here from purpleflare wraps and i was talking to the owner and i said how's the business going and he said that people are preparing right now for a recession and they're buying fewer cars they're spending less money customizing their cars and like he in my opinion is one of the perfect people to talk to on this because he sees it firsthand when you're spending money on a car rap chances are you're doing well enough to spend you know whatever on a wrap but when people are scaling back on that and they're preparing for this um and at the same time that you're seeing people selling off a lot of those cars like a lot of the ford gts are being sold and bring a trailer and it makes me kind of think hmm they're all selling these cars why why are they selling them um so i could definitely see us potentially heading in that direction where people are beginning to sell off their cars just to prepare for maybe what might happen yeah i i think that that fear is already out there and especially a lot of people learned after 08 where i remember the economy is great the government said the same thing the economy is great we're going to keep booming there's no problems and all of a sudden it just it fell out and so now like same thing with me i'm trying not to listen to different people like trying to influence my decision like whether to sell cars buy cars but my advice would be if if you can afford it like year for gt you love it it's your dream car it's actually my dream car too i would keep it i wouldn't get rid of it have you found the the car market to be a leading indicator of bigger economic problems or like a following i i usually do because we we talk about the subprime auto market like that's one of the things that when we start to see repos piling up we start to see defaults that's usually the first indicator of us like the economy's slowing down the jobs are not as great so we like i said we're kind of talking about this on my channel about six months ago and everybody's like man we're struggling to hire people and i'm sure you guys have seen like you know we're dying for people we're trying to mgm grand was offering bonuses here a lot of my friends owned restaurants are offering bonuses was it last month month before stop like instantly everybody put hiring holds they stopped doing it a lot of these tech companies are laying off hundreds of people if not thousands carve on the laid off what is it 2500 people which we have to talk about them too that's like the worst but that's one of the things that we see is we see that about six months to a year before like the real estate market when people started defaulting on their cars and letting them go we were wondering why so many people were doing it we figured it's because they were buying too many houses because everybody we knew even the walmart greeter owned three homes in vegas you know from those ninja loans but we started seeing all these people letting their cars go and we didn't think anything of it we're just like we're just going to buy these and turn on and sell them and then it just slapped us in the face you know thank god i was able to liquidate a lot of them but a lot of my friends they didn't come back from that they lost a lot of money so i do see that that's kind of the main indicator of what's going on because people i think now instead of the other way around they would always get rid of they'd stop paying their house get their car and then just drive around their car now i think it's the other way around they're just going to get rid of their cars keep their house because they got equity because why pay 40 000 for a dodge charger when you could see one in six months from now selling for 25 000 at a dealership for half the price and half the car payment i feel that's what's going to happen people are going to start letting stuff go and buying it back for for cheaper just like it was in the weight with houses now you're mentioning carvana could you explain what's going on with them so carvana is another one of those companies that wants to be a tech company first and then a car dealership second which the theory sounds great it was like the darling of the stock market a while back and so um i personally dealt with them on several occasions when about maybe about four years ago we used to fix their cars my dealership was right across the street from drive time which is also owned by the same family it's a father and son duo and so they would buy the cars carvana would pay to fix them and then after they fixed them they would sell them to drive time and then they would pay for like little minor repairs and send them back and like why are they guys why are these guys taking such big losses you know and they're not making any money on these cars why are they selling to to drive them doesn't make any sense so we just thought new company they made mistakes with buying they didn't have any qualified employees they were buying stuff virtual online so they're one of the first ones to do that so we're like okay it's just learning learning pains well fast forward three years later nothing has changed you know if you're one of the biggest automotive companies that's buying and selling cars to people you know you want to be to have the smartest people in the room you want to hire the best qualified people when you go to most caravana stores there's no store it's just a person driving around a truck the buyers for the cars it's usually maybe a guy that's never really bought a whole lot of cars they just go around and just pick up cars that you enter online they look at the calculator which we'll show you here just come up with some formulated plan on how much it's worth and you just pay you for it i have videos where we sold cars to carvana that were just absolute junk and they're paying us you know three four or five thousand dollars over market value and the kid wouldn't even start it like we gave him the keys and you know we put like squeaky toys in the seat and like funny stuff on the steering wheel just so it it'd be funny when he walked in he just looked at it okay that's the car i'm like yeah i was like here's the title okay here's your check and just walk back in didn't start it did wow look at it and it blew my mind and then that was the beginning of the end because when we made that video they started being sued by multiple people people are selling flood cars damaged cars salvage cars people were duplicating titles and duplicating vins which that's why they were getting sued like in texas and chicago because they were i'm selling people stolen cars so imagine buying a car from a reputable massive dealership you know and then finding out that it's stolen and then the feds come banging on your door because the gps says it's over here or they they tried to go get it fixed at a dealership and they ran the van and they found out it was it was stolen so they had multiple lawsuits and then on top of that as a dealer you know you're supposed to be in charge of your paperwork so if you buy a car from me i'm on a time limit i gotta get you your title or the bank the title within 30 days and they don't hire anybody that does title clerk and they always send it out to some third party company so they got their license almost pulled in texas illinois and florida because of that they're actually they got they were able to grace by it they had to buy back i think it was like 200 cars from people but now they're being sued again because people have been waiting six seven months they still haven't gotten their plates they still haven't gotten their titles and the the scary thing is is they lose about 25 to 3 500 per car on every transaction so their joke was we're gonna buy odessa which is a major auto auction if we buy this auction we're going to be able to lower our costs by a thousand dollars by shipping and by repairing your cars but if you're losing two thousand dollars a car it doesn't matter if you save a thousand you're still upside down a grand and so they did that just for another round of funding just to basically kick the can down the road so i don't even know how they're doing this but we were talking about this when their stock was i think it like 310 and we're just like oh man if i i'm not much of a trader but like if i could short them i would short the hell out of them and next thing you know i think it's now what 27 26 dollars you know is what their their shares are trading at and the worst thing is is they keep getting bailed out by these companies and it blows my mind how people are just so blindly giving these people money like oh this this is legit we're just we're taking a market share that's the tech way market share market share market share we don't have to show you anything that makes money just market so bad zilla was doing the exact same thing when they were buying properties it was the zillow instant offers where basically you could go on you type in your address you give them information and they'll spit you out an offer and they'll buy your house cash um and all they'll do is they'll send one rep to go and just you know take a visual once over make sure everything's fine make sure the roof but yeah but uh people started reporting that zillow was paying five percent over uh what people were getting in terms of their offers and already inflated value zillow will come in and beat that by five percent just to buy the property yeah and people started reporting on reddit first before they discontinued people showed that they would sell their house to zillow instant offers they would wait a month they'd see zillow list the house on zillow no offers and then they would reduce the price below what they paid for it yeah and so people were joking be like well i'm going to sell my house to zillows and offers so i could buy it back cheaper but but basically the whole business model was broken because the people that they hired didn't care i mean they were just hiring so many people who just had a quotas to phil i'm sure it's just like okay we got to buy x amount of houses to buy market share and that's how they uh spun it that yeah it's a temporary loss but we're going to take over the market with instant offers and people are going to use us and then they discontinued that yeah and so that that was their their leverage like well if we buy an auction house we can control the flow of vehicles so if we over pay for a car too much we'll just take it to the auction and get our money back and they are literally losing their ass on every single car and the worst thing is is i think that their last round of funding got turned down i think they were trying to go after like another 110 million i think they only got approved for i think it was like 80 million and so now they're like basically running on just a very bare-bones skeleton crew trying to get as much money but they're still losing they're saying it's even more now it's twenty seven hundred dollars average per car so if they keep losing this money i don't see how they're going to last within the next six months to a year but that's what most of the the news outlets wanted that video that's what they all wanted to interview about was they're they're all betting the same thing they called it a ponzi scheme so i didn't say it but they didn't but that's what they believe that it is because all their loans i thought it was a lead gen for their loan company because they own bridgecrest and another company that does all their loans and so you know think about it if you're getting a billion dollars in loans at average let's say five to eight percent i mean the interest you're gonna make on that is just astronomical so even if they file bankruptcy on carvana they can hang out for the next three to five years and make all that money not including that the father and the son were selling off stock at the 300 uh dollar peak as it wrote its way down they stopped selling because they pretty much ran out of stock so it's very interesting if you get time look up that it blows my mind i'm i'm not much on that end but when i saw what they were doing i'm like nobody's noticing this and now everybody's just like oh my god it's a sham it's a sham and i'm like should have said it about a year ago wow how do people make money from this oh well i can't give out financial advice but i can say that if you're gonna short or bet against anybody i would definitely do any type of major institution like this ally ally has their own they're publicly traded right like they're i remember their ceo went on tv saying that they're doing great and they're they have the highest uh prime loan default rate out of all the banks from what i saw on a bank sheet yeah it's them wells fargo bank of america and then like a bunch of these other little small banks so i think that right there like i said we we know that subprime lenders are gonna have repos because they just where they're more riskier with their loans but when you start seeing prime lenders people that are getting like two three four percent start defaulting on their loans yeah for a bank like ally how much do they have in loans in relation to everything else now don't they just package their loans and resell them every bank that's one funny thing that i explained another person they didn't believe me every bank keeps a chunk of their portfolio to make interest off of but a lot of them bundle the paper and they sell it to other banks because they don't want the risk so if they think the paper is risky they'll bundle it and they'll sell it to another bank and the funny thing is is every bank gets allocated so much money every month every quarter to lend and they gotta lend it because if not they won't get the next chunk of money or the next chunk of money will be a little bit less so the way i describe it is almost like musical chairs you know well i'm gonna bundle i'm gonna buy this paper from graham and i'm gonna make three percent or two percent and then i'm gonna hold it for six months and then i'm gonna sell to you jack for another maybe one point two points whatever else and it just keeps going around in circles everybody that we didn't do enough loans let's go buy some portfolio and they just keep literally moving it around and around and eventually when the music stops and like i said the prices fall now your portfolio assets are worth you know about 75 of what the actual portfolio is that's when they're going to be screwed because nobody's going to want to buy it they're going to buy it for 50 cents on the dollar and no with no interest back in and they're going to be like oh i don't want to sell it for that because i paid you know jack x amount of dollars for it and that's it and that's like i said that's what's going to lead to all the banks really tightening down and no longer landing and that's what scares me is the prices are going to be the prices but when the lending stops then it doesn't even matter what the prices is because if the banks are not lending and they're so afraid of this it starts with cars and it usually works its way up to commercial loans real estate and because a lot of the the big banks don't care it's the small banks your your local credit unions you're everything else like that if you look like at america first credit union here majority of their their assets are in auto loans i think their auto loan portfolio and their housing portfolio are almost like matched side by side you know but they do that because they make more interest make more money off of cars that's why a lot of people like to buy car paper that's why a lot of these hedge funds buy that but now it's like i said now becomes yeah it's more money but now it's a riskier asset because when it's depreciating and two like these people are driving them off crashing and not having insurance on them so that's kind of what's going on with that how are you trying to make money off this what are you doing differently um what i'm doing right now is i've been working a lot directly with banks to put in offers to purchase cars directly before they go to the auction so most banks they don't like to sell to dealers because dealers most of them are most most dealers are so you know and you could say a few naughty words and we'll leave them out there for the children who watch the iced coffee hour yeah most of the dealers are not very nice guys and so um they don't like to deal with them because they're always low balling and stuff like that so the banks have to get three competitive bids or ticket to auction so i'm one of the few people that are able to go to these these dealers and buy some of these cars and normally i buy cheap cars i don't like to stay extend myself any further because cheap cars they're cash they move quickly i take them to the auction i can sell 20 30 of them every week not have any headaches but recently as you guys seen we've been getting these exotic cars left and right all these people that had yeah ppp loans that took a hundred cattle their pvp loan put it down on a rolls royce never made a payment you know that's more the stuff that we're starting to see now which is really scary could you talk about that because i see you going to la and you post these pictures of these cars like a you know kind of crash dash aston martin rolls royces audis really nice cars and you're buying them and bringing them back a few you've explained were repos and you've shown up and like the guys is like yep here's the keys i get it can you explain like how how you do this like how you're involved in this and like how does someone be uh get the ability to go and do that um well first you got to be a dealer or not a broker that's the very first thing the next thing is building a really strong relationship with a bank or lending institution because a lot of the banks they're not dealers they don't care about any of that they just want to get rid of the asset to them it's not a card it's just a it's a pain in their butt the sooner they get it off their books they can go out and lend more money so what i do is i'll go to like a repo yard or a holding yard and i'll try to get a hold of the banks first before they go to the auction and i'll try to say look i'll buy all those cars at once right now i'll just write a check and try to get everything i possibly can they show me what they owe you know how much money they're upside down in it whatever else if i can pay a little bit more on some cars and save a little bit of money on the other cars then i'll buy the deals and i think that's why a lot of the banks like me because no dealer ever wants to overpay for a car they'll overpay at the auction but if they buy a car from a friend or a bank they always want to lowball them and so that's one of the things that i try to do is to purchase every single thing from them directly now when we actually go out to do repos like some of these companies if i physically go out there and help them repo the card because some of these banks are back east or it's like a small mom and pops bank or credit union they don't have the facilities or the personnel to do it so we'll literally go door knocking for them we'll knock on the door and we're always nice hey you know we're here with so and so bank they told us that you know you're going to be surrendering your car today you know can i get the keys thank you so much is there anything in the car you need to get most of the people are pretty chill wait so they know ahead of time that you're going to be there you don't just show up because i've seen videos on tick tock where the guy pulls up in a truck is like all right we found the car and they're parked outside of a restaurant they tow the car and the guy because yo what are you doing with my car yeah so like so you asked them instead of like i okay no um just for full transparency when when it's my loan and i had my dealership unfortunately i did it the other way i would show up on my tow truck and i would just snatch the car up i wouldn't even talk to him because every time i tried to be nice and civil they would want to start fights pull out guns uh i had one guy stick his dog on me you know some guy how did that okay what happened when that when he sicked his dog on sick the dog yeah oh i feel bad it's probably made me look bad but when the dog jumped i literally just threw him up over me and he just flew over the truck and so was it a small dog no it was i i was like some people mix something how do you go over the truck oh because as soon as i saw him i just literally just freaked out and went like this and he just just continued on floating oh yeah he was already in there when was he fine i didn't want to check i was more worried about getting in the car and getting out of here before i got bit in the ass or she he said sick him yeah no he literally grabbed the dog and went like this and threw him and the dog jumped it over and i just went over there um i had another guy he he threw a molotov cocktail in the car and caught myself through a molotov i was like did this guy just like sit there in his kitchen and actually cook this up or was he just like sitting outside with it but all of a sudden we look back and i see a bottle break i'm like oh this guy just threw a bottle at the car and next thing you know my i have it's called a spotter it's the guy behind me that finds the car in the regular car and then i come in a tow truck he's like dude the car's on fire the guy threw something i think it was a molotov cocktail i was like are you serious we pulled over car burned to a crisp and then the guy the guy tried to sue us because we uh it was full of his kids gear his baby seats and uh his music equipment everything else personal property yeah and i'm like you caught your own car on fire and then you try to call the insurance company to get claimed to get paid and then we told him that he did it so they paid us they didn't give him any extra wow yeah i mean unfortunately i got way too many stories i want to hear some more stories yeah tell us another story oh jeez um god what can i tell you so what about like personally endangering stories where your life was threatened lucky that's what jack is getting at yeah like so one time we went to go pick up this this and this one's gonna laugh because this one's super embarrassing but it's pretty hilarious so we had this guy that um wanted we had this really cool almost uh ford um explorer minivan that was all pimped out had tvs had all this stuff it's a rare kind of van truck thing it's hard to explain but it has a folding out bed in the back it's made for camping right so we're like okay this is going to be cool we're going to snatch up this car because i was trying to be nice to the guy he wouldn't answer my phone calls so i'm like i'm just going to pop the car so i wind up popping this car and i'm driving out of the way all of a sudden the doors fly open this guy is butt naked with like two other people in the back of this van and one of the the i said this bigger guy rolls out and falls out of the van butt naked rolling in the middle of uh desert inn and uh paradise and i'm like trying to take off with the car and all of a sudden the cops pull us over we wind up getting arrested that night because they said we did it like lawfully but that one i guess wasn't really that threatening but it was just absolutely hilarious i've never seen somebody naked like fall out of the back of a van but i've had like you know wannabe gangbangers pull out guns i had a pimp one time pull out a gun on us and told us we can't take his car what do you do in a situation like that i usually pull my gun out no are you serious yeah i'm not going to get shot yeah but don't you just say you wouldn't take the car yeah you're getting shot if you no because most of these guys have never pulled the trigger so they're willing to risk that like take the chance because you don't know these people it's kind of hard it's like reflex i mean think about it it's like if i throw something in your face you're going to want to go like this so as soon as i see it that's the first thing i do so nasa's word like like if you pull out a gun or if not you but the other person do you like it can we call it a uh a boom stick from now on yeah oh yeah yeah okay yeah so if someone pulls out a boomstick and they point the boomstick at you do you just like point it back at them or do they just show you a gun and then you show them a gun sometimes if they they do the little flexing the showing then i'll i'll show mine boomstick or i'll actually like if they point it at me then i'll point back but that's those are that's only happened twice but why is it why would that be worth taking the chance wouldn't you say that they point a boom stick at you all right you know what let me you know leave call the police handle it another way i i'll be honest with you that's stupid i don't recommend anybody doing that it's just it was more of a reaction thing it's just like so what happened in these in these two instances where you guys had each of your boots oh you're gonna on on the one guy the the pimp he actually came paid the car off in full apologized and brought me rolling uh smoke barbecue said he just broke up with his girlfriend he lost his main girlfriend and he was really heartbroken and upset and frustrated that was probably the nicest one the other guy um he called the cops on me but when the cop showed i guess he had like two warrants out for his arrest and so they they ended up taking him away i thought i was gonna go to jail because i admit i was like yeah i did point a gun at him but he pointed one at me first her boom stick at me is it true people do this thing oh yeah like i had the thing like we we used to have these crazy like um off-site sales and we used to do like these crazy giveaways so i used to give away a car like once a month like to do something funny and we actually have people that will show up because they see all the people they think there's a lot of money they'll try to show up and like you know point the finger thing like hey man i got money i know you got all these people's tax returns in the bank give it to me you know it's funny at one time they did it with my dad my dad just told him to get out of there and he threw a chair at him and the guy who ended up running away which i don't recommend doing that but it's it's one of the things of the business i don't like that's why the repo part the repo the the being you know like the people are super aggressive like i love the the giving cars away with the funny contest we used to do like we whoever sang the worst song we give you a car if you throw a football through hoop we give you a car you know just funny stuff but then you get the bad things where you have people like that's the thing everyone thinks dealers are bad and they're horrible people for every one bad dealer there's 10 000 bad customers i'll tell you some of the bad stuff like we've had people like lie to us about um their bank check stubs the they'll give us fake ones they'll give us a fake social security number it's called the cpn they'll give us this number we'll run it oh everything's good this person's got good credit all of a sudden two weeks later the bank calls me hey lucky this loan it's not legit these people have fake documents i'm like oh crap so the bank wants their money back now i got to go find the car most time when these people commit fraud they just disappear with the cars no why is that fall on you so every dealer has to sign an agreement with a bank so and this is the part that people don't know about and this is why people like why was the dealer so mad why won't he lower the price it's because as a dealer we're on the hook for depending on your recourse it could be a one payment it's a three payment recourse so if you as the consumer doesn't make the first three payments and you just take off i have to give the bank 100 of the money back and i have to chase you for it but as long as they make the first few payments then then we're in the clear but a lot of these people they they don't that's what we're seeing now a lot of people are first second third payment defaults or the the one thing is if they give you fraudulent documents and they can prove it then they can come back a year from now and say hey uh this document was fake this is not a real driver's license we need our 30 thousand dollars back and you're like well i don't know where the guy is it's been a year the car's gone maybe it's in mexico or canada or something and we have no recourse have you ever just completely lost cars hundreds what happens you have insurance for that it's cost of doing business when people ask me like because that was one of the reasons i left the business is because everybody thought we were rich when you have like 200 cars on your lot and you're selling cars and you see all this stuff they're like man lucky you're doing really well you got all this money i was broke i'm not even gonna lie most dealers will lie i had two million dollars in and flooring lines which is lines of credit we were constantly paying payments so every time you drive by a dealership think of like each car on their lots costing them 500 to a thousand dollars a month and then every month we lose maybe one maybe two cars whether somebody steals them somebody does bank fraud and and pulls us over you know um i've man like i said they they do whatever it takes they'll run off with your cars i've had people had to chase down on test drives like nice old people oh we just want to drive it around okay no problem folks here go ahead drive it around feel safe let me know what you think and we this older couple i think they're in their 80s they drove out my car to mexico yeah they left they left it on at a bus stop and said sorry i left a note did they just need a ride probably they were broke and needed a ride and like that yeah you send to go pick it up in mexico um we have repo companies all over the us so we just tell them to pick it up and take it to a local auction because by the time i fly down there or ship it back it just wasn't worth the headache or the problem but that's some of the stuff that we have to deal with you know and and the worst thing is is like we dealers will be more aggressive they'll tell us that we need more money down we have to do this and people like dealers are so mean and rude like a lot of people don't realize if you have let's say you're a first-time buyer and i'm selling you that 2020 twitter camera we were talking about if you have good credit or okay credit the bank is probably gonna charge me like maybe a thousand eight hundred bucks to buy your deal but if you have bad credit they could charge me up to two thousand dollars three thousand dollars and then on top of that they'll add two to three month recourse so now i was hoping to make maybe three thousand dollars on the car but if your buy fees twenty five hundred dollars for the bank to take your loan i'm making five hundred dollars i got to pay my sales guy commission to 500 bucks my finance person of you know 250 and i have you know office personnel that needs 10 plus overhead that's why i hated the business it's like the banks made all the money one thing i've never understood about car dealerships is you talk with the sales rep and then you give them a price you're comfortable paying the car let's say it's it's listed at 30 000 and you say i can do 28 dollars and then they go and they talk to their manager right like what is that interaction like and also how do you actually come upon a price they are able to agree on for the car is there a price floor that is the base that you can hit as a consumer how can you find that price floor oh that's the problem a lot of dealerships uh just play a lot of stupid games i never did that like when you know like advertising like you looking for a car and you see oh look this car is 30 000 that's the car i want so you go drive there it's thirty thousand like origination plus stock fee plus destination yeah service conditioning reconditioning whatever fee you know so now it's 38 000 and you're just like that's not what i wanted i wanted this for 30. so that's the first one so i never did that if my car was 35 grand it's 35 000. i put it on there i didn't care if car gurus told me i was overpriced craigslist facebook marketplace i'd rather have you show up knowing the price that's that was the first step but a lot of dealers i'll tell them hey look with your credit and what i bought the car for i need to make x amount of dollars this is what i'm gonna charge you i need to get thirty two thousand five you tell buyers that i would show them and what would they what was their reaction do you think it was actually it was in your favor yeah because it wasn't i was like you know hey this is what it is folks if you have good credit i could i can go down to 31 but you have bad credit bank's going to charge me 1500 and sometimes i'd even show them look this is this is what it is this is what you're charging me and it sometimes they'd freak out and they had no idea most people don't know how it works that's why i try to talk about it on my channel but like most these dealers how can i get gross how can i get the most money so instead of making your i'd rather get you pleasant in and out in an hour and you tell all your friends about me i've only made a thousand dollars off you but hopefully you'll tell you know graham then you'll tell alex you know and go so on and so on these guys they don't care the old dealerships of the guys that like used to send you christmas cards and stuff like that those days are gone these guys just want to rip your head off bury you in a car and then kick you down the road and just it's it's not their problem me i'd rather make sure you're happy don't put you too far into debt so this way every year you can come back and buy another car for me that's what i want and a lot of dealers got away from that they got really focused on the gross i was more on the volume model like walmart so what about when the sales rep goes and speaks with a manager what are they trying to establish is does the sales rep already know the price floor for the base they can tell them yeah well sometimes some dealers will tell the sales people but some don't because they don't want the sales people to give away the car yeah and so i have a feeling if they really knew they would automatically just come back down to that price because they don't care they want the sale yeah any type of attention they're like the customer's like oh yeah this car is 32 000 32 000 okay 2850. you know it's like that so so on a let's say a 30 000 car or a camry let's say it's it's you know 35 or whatever what is the price what would the price floor be about for a car of that price um usually you take about 10 15 off of that so let's say if you put it out for 32 they're probably into it like maybe 28 28 you know but that's why like people don't understand car business is still a business they got to make money i hated it when people were like well you're making 500 bucks i'm like are you kidding me i go would you wake up in the morning and take on all this debt and talk to people like you for 500 and i used to love telling them that they would get so mad people like me i was like yeah you're sitting there yelling at me being mean to me because i always used to go out like my my commercials that's why i started doing youtube but another reason is because i had these funny commercials so i was i always wanted to make people laugh and joke so when they came into my dealership they were smiling instead of like angry and mad and don't talk to me i don't want you to sell me anything i'll get you when i need you okay no problem folks i'll be standing right over here let me know whatever you need i get yelled at more hey good morning folks how you guys doing you know go get bent get out of here kick rocks you know i'm just like dude you're in my business like i could be because i think you're trying to sell them something yeah so if you're nice it's like oh he's buttering me up he's gonna try to extract money from me now oh yeah i used to love it like that i didn't think like when people try to play hardball i don't want to argue i'm like look folks i can do 28.50 that's all i can do i want it 27 sir i can do 20 50 that's it oh and they start arguing i'm like just take this or get out of my shop i don't care i don't care if i sell to you or sell it to somebody else somebody's going to buy it so it's either you or them and i'll get to the point where i just started kicking people out of my lot i know i probably lost a lot of sales out of it but it just wasn't worth the headache and i'd rather not burn a relationship with the customer where i'm like look folks i'm being 100 honest this is all we can afford and this is what we're going to do and so i do admit it was a pain in the butt but i have been recently talking about maybe opening up another dealership here in vegas so i'm kind of when you initially had that dealership what kind of dealership was it you know when i sold my dealership it was the happiest day of my life but it was also like the saddest because i actually do enjoy like you know hanging out with with people selling cars yeah because i tell people it's like you know like you were real estate you know when you sold somebody a house you know you see them light up they're super excited you know you're making commission but it's like you're a part of somebody's like life future whatever else and the way i did it is just i i actually had a lot of fun the last few years i i stopped caring about it as a business and i made it more of like just like i hate to say a social experiment just having fun and doing whatever um but the reason why i'm thinking about doing it now is i started back in 2012 when everything was going bad and everything was going down and people told me i was a fool just like when they're trying to buy real estate same thing with this so i decided you know what why not get back into it because this time around i want to do more of the financing myself i want to hold my own paper i want to become like my is that dangerous it is a little dangerous you know you you are financing people with your own money but the profits are just crazy now can you pull money together from investors like let's just say hey you know like i could give you some financing give you 500 grand go and loan this out as you see fit can you can you accept money from other people to then yeah loan out yeah so part of the the group that i'm talking to they actually own a hedge fund and they were talking about giving me money to go out and do loans because we were kind of talking about like you know like the whole influencer uh auto sales like financing people like ourselves where you know if you go into a bank and you're like hey i'm a youtuber here's my bank statements i make you know 10 20 30 40 000 a month off of youtube most banks don't have a category to stick you in they put you as like self-employed something bad and then a lot of people get turned down especially for like 60 to like 120 000 car financing so i figured i may do a few cars like that to build like the influencer brand and do specialty financing but also to help a lot of people because i remember in 2012 when i started i was doing a lot of cheap cars all my cars were under 999 bucks under 10 grand and i helped so many people people that i saw during the 08 you know 0506 or 708 that were only construction companies that owned three to five to six to ten houses you know they lost everything and now they're buying a ten thousand dollar car for me to get back on their feet so not saying it i'm hoping it doesn't happen this go around but i think that the market's going to be wide open and a lot of these dealers are so over leveraged that i think now the time is right to actually get back in just for fun sake i got two more questions for you okay so number one is before this you said you're going to tell us how you actually make money and how we're going to be very surprised by that so we get into that then also we have three patreon questions that we're going to get to right after that so how do you make money lucky how do i make money um first is only fans i'm joking uh first is basically um training dealers setting up dealerships um setting up different types of franchises almost like houston what is chicken i do the same thing for dealerships i try to set them up uh do the correct things get them lines of credit financing set up the rental car companies lines of credit help them get uh fleet lines so they can multiply their vehicles but the big thing that i do is actually go out and i buy portfolio from different banks so one of my jobs or one of the things i like to do for fun is i'll go talk to banks and see how their numbers are performing so a lot of my numbers that i get is a lot of inside information so when people are like well where can i look this up or how can i look at it you can't unless you work for the bank which they'll never tell you that's how i see the default rates i see what the average loan is what the average payment is which is a thousand bucks which is awful and so we go around and my job is to go basically knock on doors ask the bank hey do you have any paper you want to sell three to five to ten million dollars we only do those chunks and then what do you do with those huge chunks so once they tell me what they they have i look at it i put a value on to it and then my job is to go find another bank that's willing to purchase it so you wholesale wholesale paper yeah it's almost like how you guys wholesale houses you get the note and then we just shop it around exact same thing but just with banks your dealership training kind of sounds like if you listen to our homozy podcast what do you do with the gym launch 100 it's like it's the same concepts once you learn the system and you can expand it like that's why i started doing youtube because it's like i loved marketing all my funny ads on facebook just blew up so i figured let me try youtube you know and uh but i really like the fact of like i don't want to get out of the automotive industry because i loved it so much but i keep trying to get away with it i'm trying to do youtube more and more but the more i do youtube i feel like more people like dude show us how to do this show us how to do that come on oh no i have a course but it's i want to show people i don't want to charge people i want to show them like like when we walk into the replay yards we walk into the auction or like next time when we go to la i'll take in one of the repo yards i think you'll laugh you'll see ferraris lamborghinis trucks motorhomes taco trucks like everything you know watches like when i go to the feds oh that's one you gotta come with me when we go to the fed auctions when they impound all the stuff from the drug dealers we bid on couches tvs um i remember we bought this like uh like three thousand pound elephant like marble statue we couldn't move it we ended up selling it to another guy because we were trying to get it back here to vegas but you could buy the most crazy stuff at some of these auctions okay and that's something i'll hopefully in the future i'll be able to take you guys too and then what about uh any any other income sources you could think of um i mean obviously the flipping cars you guys see that on my youtube channel and instagram we go out we buy cars from the auction stuff like that um the next one is where we're getting ready to set up a bank where we can actually start funding multiple dealers and we're purchasing vehicles from them so almost like the company's called my vehicle value it's still up and running we're still going through the software phase but we're buying about a thousand cars a month through california nevada new mexico arizona and colorado walk us through because i know you've had a bunch of different jobs and you've worked in the car industry but doing a lot of different things within the car industry walk us through your income over time how it's gone up how it's gone down how it you know the o8 recession affected it and what you were doing at each time oh geez when i first started this was back in like 2000 i had a shop in chinatown and i was just just a regular mechanic i was 18 years old i wanted to work on cars at that time i actually wanted to do music but i ended up getting in the cars so i was like i'm gonna make some money and then pay for school and whatever else and so i started working on just different types of cars in the area i started doing the body kits this is when fast and furious was really popular we worked on the most junkiest cars ever and i think i was clearing maybe thirty thousand dollars a year after paying all my expenses back in 2000 you know yeah but i thought i was balling i was an 18 year old kid just in for inflation that's like 700 grand yeah i know exactly yeah and so but i mean i was i was 18 years old i had this like crazy mazda rx-7 and so i was sick yeah so i started fixing up more and more cars fast forward two years later and i started to get into customizing i was like i wanna i wanna work on some nicer cars i wanna do like this is when pimp my ride and overhauling was like at its peak everybody and their grandma was like bro i got 20 grand let's do something crazy to my car so we just started doing all this crazy stuff that was my first year i broke a hundred thousand dollars i think i was like in my like early 20s and i was just super really good yeah and i was like man this is great i can't wait so we opened up a body shop after that fast forward a few years and we were doing really really well and that was the first year that's when i was at my worst my douchiest i was a 25 year old kid living in turnberry towers back in the day i think my rent and my penthouse was like six grand a month i was driving a 05 or 06 bentley cotton lgt convertible wow i mean you couldn't tell me nothing i thought i was the man i arrived i was such an idiot did you still work on cars or were you just oh no i worked on cars i i realized this is when i started developing my skills for marketing because i would hire people and they were way faster than me i could do stuff better but they could do it much much faster than me that's when i decided to step back and more of a sales role management because my guys couldn't sell a job to save their lives or i'd go in there hey man we're going to spend 20 grand this is what we're going to do is we're going to do sign here and it just kind of just kind of flowed so then i just started door knocking asking people for their business and that's actually what led me to doing like exotic cars when i was door knocking i ran across dream car exotics they were the biggest rental car company here in vegas there was no ferrari lamborghini dealership here so there was nowhere for them to send their cars they either had to send them to scottsdale or ship them to la so i was like well let me work on your cars i figured working on ferrari can't be that hard it must be simple it's all the same stuff and we worked on a few 355s and 360s they're easier to work on than a honda accord wow i thought it'd be super complicated we need all this crazy tools no so we were doing timing belts swapping out clutches because these guys were doing clutch drops and these rentals and blowing them up um i flew to new york did this like training class for a lot of these italian cars came back and i was like i'm going to do exotic cars i'm going to specialize in this and so we reopened rebranded i think the company it was las vegas motorworks we did nothing but exotic cars and highland cars anything under 60k i would consider them a peasant and throw them out of my shop that was the year i went down in income i went i think i was making like a hundred grand what were you making before that when you're doing 250 that was when you were doing the bentley continental yeah i was i was working on regular cars this is where the switch came on so during that time i saw these people that couldn't afford these cars you know they'd buy a brand new 80 000 truck and then fix it up drop 20 grand and turn on sell it and go buy another one or then to go buy a maserati uh a ferrari a lambo you know and they just kept buying all these crazy cars and i was charging these people ten twenty thirty thousand dollars and they're all using their credit cards nobody's paying cash anymore which i started notice that because my my credit card bill was insane but after paying my people after paying my extravagant living expenses i made a hundred and fifty thousand dollars less that year and it blew my mind so i was like you know what i'm going to start branching out so i opened up two or three locations of auto repair doing regular cars and i got up to about back to the 250 marker working on regular cars but i got too caught up in the mystique of working on the exotic cars i thought that was the way because everybody wanted to come hang out at my shop i had a couch area like this where my friends would come out and this was a glass wall and we'd watch the guys work on the cars and do stuff like that and i thought it was really cool and that's when i got on this tv show if you google it's tlc's rides i was on the uh the pilot for that they came here and shot it in vegas so that was way back in 06 07 i think that was the prime time of that yeah i was hitting my ride and i was such an idiot after yeah they film the pilot and they're like true life can we come back and film some more and i'm like oh you guys gonna pay me they're like no i'm like why am i gonna film like i thought it was if i want to know now like i did back then i could have been oc choppers or something special but i just got irritated because i'd i'd put an alternator into a car and like okay that looks good now go ahead take it back out and walk back and do it again i'm like what are you talking about i just put the alternator in this car why am i going to take it back out and go back again oh we want to capture from a different angle this time and that's when i first started learning about how these media companies did that but anyways i i told them no i really lost an opportunity and then 08 happened market collapsed everything went bad i actually decided to join the army when i was 20 something i figured i was going to take a break from the car business joined the army and went and flipped houses in texas for about two years and then that was fun i actually i made more money down there and i was stupid i missed vegas and i came back and then i came back to vegas and then i opened up my dealership in my rental car company how much were making flipping houses not to sound bad it was so easy down there because nobody had any style everybody was like super country oaky i know this is probably gonna be roasted in the comment section but like everything was barnyard and wooden doors and i hated it so we were doing everything modern and so we'd buy these like little tiny houses for like 20 30 grand i mean this is so cheap back then this is like in arlington and fort worth and dallas and we would just buy these houses modernize them we'd put you know smart dials smart keypads in them we would do modern fixtures we would do like concrete countertops way back then we were doing hardwoods instead of carpet everybody was doing carpet and like veneer walls it was awful i their style down there was just completely weird so we just copied everything we did here in vegas and it just worked out really really well we met a hard money lender out there and we didn't ever look for houses he just gave us all the houses that people defaulted on which was really bad that's when i first really learned about repo this guy had so many houses he had a fund of just just giving people money to get houses oh yeah these guys gave us 20 grand down they they tore down everything down the studs and they found termites and they walked away from the property do you guys want it i'll give you six months no payments and no interest sure we'd take it on he wouldn't we'd balance out his books we'd fix the house up turn on sell it we'd make our profit he'd make his big back his investors were happy it was really really good he was actually mad when we left when i came back here to vegas i reached out to him to see if he could get back into flipping houses and his investors didn't want to do the vegas market because at that time we were one of the biggest ones that crashed so then i just got back into cars and opened up my dealership and started that way because like i said when i came back here people that i saw that were driving lambos and ferraris were driving like 2003 toyota corollas and camrys because they couldn't afford anything that's the first time i learned the term cross collateralization when they lost one thing they lost it all and it was crazy i mean people fell hard so i opened up the dealership started selling cars at that time i think we were clearing maybe 80 000 a year at that time wasn't a whole lot and then it's same thing i went bigger i got the two lots peaked at like 250 300 cars still would make like 100k here couldn't couldn't crack the mold until i started doing uh these like when i just stopped carrying really i started doing the funny ads started selling uh i hate to sit started selling cheaper cars again and just got back to the basics and that's why on my channel i can do exotic cars i can do all these fancy stuff but if you just sell cheap affordable transportation your money you make your money by far you usually make double or triple where when i sell like a like this bentley bentego or this rolls royce i'm going to sell it i'll make like 50 grand but i tied up 120 000 and it's going to sit there for you know a month and a half while i'm fixing it and waiting for parts i could have bought 70 80 regular cars and maybe double my money off of that by then so that's kind of why i decided to do that but that was kind of my flow of the business now with youtube and everything else um i'm hoping this year to crack the 450 500k marker that's my goal i really want to get get to that point but my biggest goal is and you're going to laugh and i guess this james ramsey thing i want no debt the only debt i want is my car payment that's why i don't mind spending a crazy amount on a car because i don't know credit cards i don't own a house you know which people think it's crazy but i i can't afford to i can't i can't afford it i just don't want to afford to overpay for a house i just think it's stupid i'd rather just wait and use my money to make money is better off invested in cars at this point yeah you know and it's just like no matter what happens like we talked about investing stocks i just feel safer with the car market and now that you know the the the bear market is here and the gravy train's gone and everybody's a magical investing wizard all the money is coming back to the automotive industry for for high interest lending so i think that'll open up a lot a lot of opportunities that's why i'm interested in starting a dealership now because these guys are going to want to make more money on their investment and they can't get in the stock market now so now they're going back to hard money lending with cars and houses you want to ask the patreon questions yeah so for those that don't know we have a patreon down below in the description but uh part of the perks of that could be asking our guests questions along with a whole bunch of other benefits like getting the episode early without ads by the way but uh what do we got here well first of all i just want to mention i just got a text from an alex hormozy and he sent me over his wife laila hormozy's phone number and it looks like we're gonna have laila hormozy on the podcast potentially next sunday so if you're still watching at this point be very excited for the next sunday because that's going to be a crazy yeah yeah you know what actually if you want to get in and ask her questions uh we'll link to the patreon down below in the description i'm not sure when we're going to be doing this but potentially you could ask her questions that we'll ask that that brings me to a great point graham if you haven't followed me on instagram no soliciting alex questions all right let's see all right enom khan says what is one thing that you would do differently if you could go back in time and who is your mentor um my one of my mentors the car business unfortunately people are not that friendly and they don't want to share knowledge and so one of the nicest guys ever met his name is uh is tony fernandez he owns a dealership here in vegas he was one of the few dealers that would give me words of encouragement tell me a little bit about how to stay away from some of the problems and just an overall great guy so i i wouldn't call i mean i guess he could be a mentor because he did teach me quite a lot about the business and about life so i would say that'd probably be him and if i could do one thing differently um it would be i would have done buy her pay here which is doing your own auto loan portfolio way back in the day because if i would have done that back when i first started i'd be just a millionaire when you're a bank that's where you make all your money so that's probably my biggest mistake is i didn't do it holding the notes and collecting yeah i was too busy trying to learn other banks programs because i didn't want the headache i didn't want the overhead but then i wound up working in the wrong way because at the end of the day if i would have done that i would have been doing just like the banks just sitting back collecting money and selling paper now colin l asks what are your thoughts on sponsorship revenue and what is your plan for your channel if sponsorship revenue declines i mean i think it's a great source i'm probably one of the few channels that i still to this day i haven't taken really hardly any sponsors i'm kind of just going off of my own dollar like a lot of people don't realize that i spend my own money running my channel um i think i make maybe five six grand a month in ad revenue which is not a whole lot but i would say that you know i should have taken it on probably a little bit earlier i was actually following graham's thing because i noticed when you first started you didn't take a lot of sponsors and i didn't want to sell out if i want to have a sponsor i want it to be something legit where i can either feel it helps my my audience out or it's something i believe in yeah and unfortunately my industry in the automotive business there's not a whole lot i believe in or trust all right so this is kind of a controversial question from matan he says you've been in the car industry for a long time you know how all the different companies make money is it not obvious to you that tesla is winning on all fronts and is clearly going to take over the industry if they haven't done so already oh it's one of my favorites that's why they're making their own materials for their cars which not a lot of other car companies are doing correct so like i said tesla is great because they were first to market but if you look at a porsche tycon compared to a tesla it's like looking like at a kia and a ferrari it's the build quality is completely different i know these people in tesla are going to be like oh my god no it's the best car take the time look at like the technology is there their autopilot is much further ahead chevy and hyundai are gonna be the first to catch up with it but when it comes to build quality they make better uh products like uh ford honda chevy toyota because just the build quality is much better parts um being able to fix your car they have that leaps and bounds ahead of them tesla is highly profitable because they're building something that's very niche they got the apple effect you know this phone costs a few bucks to make but it's got the brand behind it and it's got the fans the loyal fans behind it so yeah they are first to market and they're first to sell direct to consumers but right now they're constrained they can't grow any faster unless they physically start buying franchise stores so and plus too like a lot of the other manufacturers their battery life is better than tesla's you know so when all these cheaper cars cost half the price and a kia can go twice the distance as your tesla and on top of that it costs half as much to fix and they have more battery battery technology where they can repair cells instead of replacing a whole twenty thousand dollar battery which the new ones don't have that they tesla fixed that but you know i that's what i believe is everybody's going to catch up to tesla tesla was just first to market give it about five years and the market share is going to change because already right now believe it or not volkswagen has more ev vehicles than anybody else coming out next year i think they have 14 or 15 models so you know like i said everyone's playing catch up and so now that they know that the market's there and they're building that infrastructure which was a charge america which is volkswagen they're building all these systems everybody's just waiting and they're going to unveil their stuff and it's going to be very very surprising all right are there any other random things of knowledge or a crazy story or something you would hope we had asked something you wanted to share oh geez um i guess i can tell you really quick before we get off um some of my amazing down payments so in the car business we take pretty much everything we're always talking about cars whatever else and i used to run these ads we'll take anything down you know and we had one lady she brought in like a uh this puppy i think it was called a frenchie and i didn't realize there were like three thousand dollar dogs and so she brought it in we gave her like 500 bucks as a trade return on sold the dog for two grand which was hilarious so we started doing these like traded anything special we had people bringing in motorized scooters uh fake legs we had one guy fake length a fake leg and they brought it in as collateral for yeah he's like he's like what will you get me down i was like i'll give you a dollar for it and just he left it there you're taking everything we've got what did you do with the fake leg we actually left it we sold it for 500 bucks the person bought the dog no that was that was the award for the salesman that sold the most cars that month so i told you we have a special we have a very special award and i stuck like like 300 inside the leg and then i gave it to him and said this is your championship cup don't lose it so but that was one of the things we did but we've had i've had people show up at gold bars i've had people show up with guns um i've had these like strippers one time like they showed up because my first dealership was right next door to treasures and so we used to get the dancers coming by all the time and they would ask people hey i need i want to get a car i need to get a car oh yeah three four thousand dollars down that's all you need you can roll with this car oh was there anything we could work out and i'm like yeah just work out payments give him you know give me the money and i'll i'll get you the car well is there anything you can do that maybe you like or something that turns you on and i'm like yeah you know what turns me on what money pay me and so we used to i loved it every week they would try to come in like sweet talk and i'm like no and then that same girl i won't mention her name because i'm still friends with her on facebook she came in one day and we had this i think it was like a 2014 lexus is uh 300 and it was pearl white with like this pink christian viewer interior total stripper car and so she came in and i was like you need six grand down to get this car she's like well i got 1500 bucks is it great all you need is a few bucks more and you can drive it away hour later she shows up with this older gentleman gives me 1500 bucks oh yeah i'm here for well i'm gonna said her name i'm here for so-and-so we'll call her misty i'm here for misty let's uh um this is her down payment oh okay cool yeah i i was like are you her dad or no i'm her boyfriend hour later another guy comes in same thing oh hey i'm misty's boyfriend she told me that um leave like 500 bucks a thousand he's like i got like 1800 bucks sure and literally within a day she had like several men show up and just give me money and then she drove away the car so that's some of the the crazy stuff that like we would deal with all the time strippers pimps um i mean like like i said i've had people trade in a helicopter i got a bell helicopter out of somebody's backyard they didn't know what it was their friend left it there they were supposed to use it for an event yeah and so we took it in on trade we actually sold it for i think it was like 180k you sold a helicopter they gave you that as a down payment for what car um it was a 20 2010 escalade how many sell that for no but think about it it's like how do you sell a helicopter what is it worth it i don't know no that's what we did we looked on craigslist and we're like does it run he's like i don't know and i was like well how did you guys get it there he's like oh we brought it in here well on a truck and i'm like so you just brought it in the truck and stuck it in your backyard he's like yeah so we were actually because my my dealership was by the freeway so we were going to like stick it on the side of my sign and buy the freeway we're like we'll just use it as a big sign as a joke and i think we gave them like 5 000 in trade and then once we found out how much this thing was worth they it was 180k but i think we had to spend about 30 thousand dollars because i guess the blades are time related they have to be a certain year's amount of old they have to be installed so the guy ended up bringing it together is at the north las vegas airport but we got it fixed up we paid him the money and he found a guy that bought it and uh i thought there would be like a title or some sort of paperwork no just give him a helicopter yeah and i was like i was like okay but i mean like yeah we've we've gotten all kinds of crazy stuff so i've had that stolen cars um i don't know if you saw some of my instagram stories like people offering us drugs all the time i got you know i got coke i got hookers i got weed plumbers offering hail fix your pipes never if i can use something like that like hey man i'll work off like i had one guy that didn't have any money but he was in construction but he needed to make need to do something i had to remodel our office just for a down payment because it was like he's got a skill yeah that he can help me with i was like can i need a landscaper same thing i had to redo my parents house so stuff like that i actually looked for but i never got like that that often it was always something crazy like bro i got a fur coat i'm like what am i gonna do with a fur coat it's las vegas it's a twelve thousand dollar four coat well good sell it for six and give me the money you know wow just take it for trade and so it's just like i literally became a pawn shop we had tvs like my whole shop was full of it looked like you're would you sell this stuff out of the pond like people would get buying for my sales and they'd see like all year yeah my sales guys were being lazy and they were sitting there not doing anything i would say hey post this stuff up for sale so they'd post cars for sale on facebook and then they'd post all of our crap that we took in on trades and then i would split the money with them so whatever we sold it for so if we had like this microphone and we sold it for 50 bucks they would keep 25 i get 25 and we just kept doing that on all the items we get and it was crazy i couldn't believe it this guy these people would show up 10 20 30 tvs one time um i guess he bought them from some auction and showed up with all and they all worked and we sold each one for 100 bucks wow so it's it's crazy but yeah that's that's pretty much some of the the pg stuff the other stuff i'll tell you offline but that's some of the weird stuff that we've gotten in as far as trades and everything else that's crazy well thank you so much for coming on man thank you for sharing these stories is amazing yeah thank you guys so much for having me and it's been uh yeah it's one one year of uh friendship and one uh iced coffee hour it's really great well happy to celebrate that i'll link to your information down below in the description as well as a purple flare wraps if you guys are looking for a good wrap company they wrap the lotus you'll see some pictures of it very shortly actually you know what i'll throw up a picture of it right here they did such a good job as with you lucky trying to get that car up and running so thank you guys so much also oh lucky did you get your free stock down below in the description be on instagram wow i never closed that out that was funny you