Are there any TRUE BHPH (carry paper)dealers out there ?

[combs.3602]

Are most dealers today handing off their contracts to finance companies ? I have kept every contract since the beginning.It is very difficult to make the two ends meet and the tax consequences are dire.I still believe it is the TRUE BHPH and ofcourse we finance whomever we please.I am curious though -are you a true BHPH-raise your hand if you are ? Dennis Combs over 30 years in business.

[superior.10531]

We still wright our own contracts.
No special financing. That is not really buy here pay here.
Straight contract no interest.

[dodgeman48741.10689]

We currently carry our own paper and have done so for about 5 years. I am looking into an outside source this week. I would like to expand that part of our business.

[combs.3602]

Yes,it is difficult to sustain the volume of sales and the necessary cash flow to operate as a true BHPH.The other issue is the accrual tax method;very cash consuming.We are trying on for size an RFC(related finance company).So far it has been very expensive and time consuming.Dennis Combs Car Corral

[rgdottree.10766]

I am not sure why your RFC is expensive and time consuming? I have had 2 and neither seemed to be an issue. My last operation (8 years) had a portfolio of 5.5M and about 700 loans. The primary thing is to set your discount correctly and follow IRS rules so you can feel comfortable taking the writeoffs. Have you ever been part of a 20 group? That is the best way to learn consistantly, from your peers. Check out www.ncm20.com.

[transome.3739]

Yes there are, and they are the most profitable BHPH operations out there.

I have been in the BHPH business for 11 yrs. My first year, I sold 40 accounts. I have never seen those customers again.

Anyone that tells you you don't need repeat customers in our business is a short timer, or using other peoples money.

Of all the great customers/deals I have had over the years, those 40 accounts still bother me.

Best of luck to which ever path you chose.

Tim
irelandcc@yahoo.com

[combs.3602]

Hi guys - If you are truly operating your RFC within IRS guidelines and trying to separate yourself from scutiny and possible repercussion;then to me there is alot of work to set it up and many hoops to continue to jump through(but thats just me,I am lazy ha! ) If I have this right? Once said by the NABD leader,Ken Shilson 'The RFC is not for the faint of heart',I do agree with him.Ofcourse that being said ? I would rather go to the auction, buy cars and have a fine cigar on the patio,ha! On to Tim - I agree with you on the accounts.Many times in a tight spot I contemplated selling some accounts and never did for fearing what you experienced.Good job on the continued effort to keep your accounts. Great feed back guys - Thanks - Dennis Combs

[patton2131.10855]

Looking at getting started in BHPH - and the tax situation is of great concern... is anyone doing the RENT to OWN programs?

My understanding is that you:

~take a healthy deposit that "can" be applied to their ultimate purchase of vehicle
~collect a substantial rental fee on a weekly or monthly basis
~apply a portion of the regular payment towards ultimate purchase price

Any thoughts?

[Brownings.5298]

We started in 1991 and have not sold a note to this day. Our phones ring weekly from companies wanting to buy our paper. I have recently considered signing up for some third party financing to move a few more numbers but that's it. I will do my best to keep the notes I sell in house.

[markgallaher449.4224]

we are carrying over 2000 accounts with RFC. discount at 8%. repo reserve 12%
very profitable.