I didnt agree to this [bleep]. And i back them up with my own cash. If youre not gonna put your pride away, well, then im not gonna do the deal. Its not always pretty. Are you okay . End it. But this is business. You gotta trust the process. I do it to save jobs, and i do it to make money. Thats all you. Yeah, buddy. This the profit. [hiphop music] 10 miles outside of my hometown of chicago, located in morton grove, illinois, is the home of athans motors. In 2009, pete athans, a car enthusiast and successful real estate investor, who made millions flipping houses, sunk his entire life savings into building his first car dealership. I created a place where you want to hang out, buy a car, sell your car. Cars worth 30 all day, wholesale. Service your car, or just come by and have a cup of coffee. The project took 18 months and cost more than 4 million to complete. Ive spent all my cash building this place and trying to keep it open. Come on. 1,300 in one month . And its hard to get more money to buy vehicles. Were scarce on cars. Pete hired his cousin tony to be general manager. Hey, mike, make sure you check that all the tires match. Okay. Im here every day to make sure everything is perfect. And working together has strained their relationship. Tony, come into my office, please. And tony has been talking about leaving athans. I cant work in an environment where the owner questions every single thing you do. I repeated myself three times. You didnt fix the problem. With no cars on the lot, and no process in place, athans motors has been losing over 1. 8 million a year. If help doesnt arrive within days, athans motors will be forced to close its doors forever, and pete will lose his entire life savings. If i close this place down, it would be catastrophic. Im so mad at myself. Ive just arrived at athans motors, and i cant figure out if this place is even open. Where are all the cars . What they do have is all super highend. In a good used car dealership you have to have affordable cars. Theyre not even close to what the market really calls for. They could be 30,000 over, per car, what they actually should be carrying. Wow. Look at this place. The first thing i noticed in the showroom is i feel like ive just entered caesars palace. Clouds painted on the ceiling, i see murals all over the place. Im waiting for zeus to pop out. There are no customers around, and much like the lot outside, the only thing i see are a few vintage luxury vehicles in the showroom. How you doing . Im marcus. Larry. Nice to meet you. Pleasure. Nice to meet you, larry. Pleasure. Is this car for sale . Yes, it is. How many miles on this . 2,400. It was restored. Uhhuh. How many total cars on the lot . Probably 20. Total . Total. 20 cars . 20 cars is more like a private collection than a used car dealership. A successful used car dealership is one that is built on having something for everyone. You have to have a wide array of price points, and a wide array of selection. Is pete here . Yeah, hes in his office. Ill take you. Okay. Pete. Marcus. How you doing, buddy . Pleasure. Thank you for taking the time. Absolutely. What did you think of the place when you first walked in . Itsitsyeah. Its built out, thats for sure. This is my soul, i design, i architect. Have you been in the car business a long time . No, i was only five years in the car business before i opened. I put everything i have in here in my soul and my bank account. Can i give you a tour of the place . All right, lets do it. Im the one who did everything, so im ready to be one of the best independent stores of the united states. You gotta get some cars first. Whatd you spend on these walls . Close to 100,000. 80,000. [chuckles] okay. I try to do something right once so i dont have to touch it ever again. You put in how much in renovating the place . 1 million . Over 2 million. Wow. The ceiling alone probably was about 15,000. So one used car. Correct. Okay. I created a stateoftheart customer lounge. What didwhat did it cost to build out this whole room . Close to 1 2 million. Come on. So like that granite, how much does that cost . Theyre about 25,000, the four. And all this movie stuff, how much is that . Tvs are about 15,000, the seats are 25,000, 30,000. Pete, why . How does any of this help you sell cars . I made this store to be the place where you want to hang out to have the best Customer Experience anywhere in the united states. Pete, look, customers dont want to hang out. They want to buy cars at a fair price and then they want to go home. Well, im telling you what i see. So let me tell you what i see. This could be a car. That could be a car. Those could be a car. If you look at it your way, a lot of things could have been cars. Do you ever look at it that way . Um. Pete spent 100,000 on wall plaster, 15,000 in murals, and 500,000 in his customer lounge. Look, you dont have to have a College Degree to know that to spend over 600,000 on just those items, i mean, its just irresponsible. Think about it like this. The average price of a used car sold in this market is 15,000. That means pete could have used that money to buy and sell 40 cars. At an average margin of 2,000 per car, he wouldve made 80,000 more in a given month. Whatd you pay for the building . 1. 875 million. So you have a little under 4 million in the facility. Yes. How much debt do you have on the business . About 6. 9 million. Im sorry, how much . 6. 9 million. 5. 3 million is myself, my money, and the rest is just friends and family. Wheres the money . Holding the losses. Keep this place going. Im losing over 100,000 a month for almost 2 1 2 years. This is a bad scenario. It sounds like pete has been financing his failed business out of his pocket for the last 2 1 2 years, and its been operating in the red the entire time. I need to take a closer look at these financials. Heres erika. Hi. Hi. Im marcus. Im erika. How are you . Good. Nice to meet you. Are you accounting . Im the Operations Manager here, so i do all the accounting, all the finance. Do you have a Financial Statement for last month . Um, the books are in your office. Sure. Ill get it. I could print you one, i think. You do the books but youre not allowed to keep em. Everything stays in petes office. But not because she cant get it, it just stays in my office. I dont think ive ever seen a business where the accountant doesnt have control of the books. Pete needs to give erika the tools to do her job and not hide them in his office. Right now youre losing 150,000 a month, youre selling ten cars. Youre 50 cars short from breaking even. In order to make up for the 150,000 in monthly losses, athans would have to sell 60 cars at 2,500 profit per car. In order to sell 60 cars, you need at least 120 on the ground. Today you have 20. Youre 100 cars short. Since the average used car sold in this area is around 15,000, buying the necessary inventory is gonna cost athans around 1. 5 million. You need 1 1 2 million of working capital just to have enough cars to be able to sell cars to break even. I mean, itsits a real challenge. How much money do you have in the account today . Pete . Why do youwhy are you looking at him . Because he wants to handle everything in the end anyway, so its kindagoes back to him. Between 20,000 and 30,000. Thanks, erika. Youre welcome. Petes cousin tony has been the general manager of athans since they opened, and i want to get his perspective on the business. Are you tony . Yes, i am. How you doing . Im marcus. Its a pleasure. Nice to meet you. Very nice to meet you too. So youre the manager. I wear all the hats. You wear all the hats. Okay. I have been in the car business about 18 years. Excuse me, marcus. Hi. Hi, how are you . What can we do for you today . I am actually in the market for an suv. Like a bmw, mercedes, porsche . What are you looking for . Im kind of looking for something a little bit more modest. Okay. Ford, chevy, maybe. The first potential buyer ive seen since ive been here walks in and hes looking to buy an suv. He seems motivated, excited, ready to buy. The problem is we dont have what he wants. I wish we could help you. No, its all right. Dont worry about it. Maybe next time. Take care. He wants to be in an affordable car like everybody else in america, and every suv we have on the lot is priced over 40,000. Thats the frustrating thing that you deal with. How many customers a day do you get that you cant sell stuff to . Oh, weits not just the walkin customers, its the phone calls. Yeah. Its the internet. Seems busy. Service seems busy. Yeah, service does, like, 100,000 per month. Sometimes we do a little bit more. So in your role as general manager, how much time do you spend out here . Im back here quite often. Those guys all reporting to you . Yes and no, okay. I talk to them about daily operations, but technically i dont really have authority over any department. Pete wants his finger on every single thing in the store. He micromanages. Hes a very proud guy, and hes a good guy. We just dont agree on a lot of things, even the buying of the cars. We have x amount of money to spend, he wants to spend money on a 100,000 porsche. And im like, it doesnt make any sense. When you have 100,000 to spend, it makes more sense to buy 10,000, 15,000 cars that the average working class is looking for. Tony seems to be on the ball. He seems to know what hes doing. And if pete would let tony do his jobthis guys got tons of car experiencethey may not be in this mess. He says, im writing the checks, im writing the money, this is what were gonna buy. Thats what he does. And look whats outside. No cars. Youre not selling anything. Theres no cars. And the relationship is very strained. Athans motors is in a lot of trouble. Theyre buried in debt, they dont have any cars on the ground, and there are no customers. But i know the car business, and this is a good location. The facility, while overbuilt, could be perfect with some renovations. Its important that you understand that i take relationships and business very seriously. Youre almost 7 million in debt, youre losing 150,000 a month. Thats a lot of money, pete. And you have almost no cash. What do you stand to lose if this business closes . I would lose my house, my dream, it would be catastrophic. Stakes are huge. 24 7, i thought about, every second, of fixing this problem. Because if it doesnt work. Not just the employees here and everybody else, my wife didnt sign up for that. Thats not fair. But. Right. So. Well, the stakes are big for me too. I take money very seriously. My offer is very simple. Its 3 1 2 million to help clear the debt, bring in new cars for inventory, and essentially change athans motors into a brandnew business that makes money. And you share in the economics. And well be 50 50 partners, but im 100 in charge. cause i know this business better than you do. Theres not even a question about it. So all the work that i do and all the inventory and the process that i put in, youll share in it. I get my 3 1 2 million back first, and well stay 50 50 once its paid back. While 3. 5 million is a lot of money, one way that i protect myself is by owning all of the new inventory. And so my risk is minimized. Its minimized because i can liquidate the cars and get my money back. Im justim a little concerned when you say 100 you run the business, because i believe i have Something Special here. Whats special about it . You have a used car lot with no inventory. Thats your opinion. But, pete, its notits not my opinion that youre in trouble, its the facts. Well, thatsbut thats stop saying opinion, its were here. In the four years youve been open, youve lost 4 million. Theres 20 employees that work here. Theyre gonna be out of jobs. But what i have set up is infrastructure but it isnt just that, itstheres no process in place. I dont care how much money you have, you cant have the right resources to actually run the business the right way overnight. I dont agree with you. I. Theres nothing magical about this business. Sorry. Ii believe i the numbers dont lie. You spend 4 million, its gone. Theres nothing magical about it. Youre look you have no inventory. Its gone. And will i be able to keep the name . Keep what name . Athans motors. Is the name important to you . Yes. I thought keeping the place open was important to you. Its my name. I mean, that means a lot. Its about marketing and getting customers through the front door. Its not about putting your name on the building. You gotta put your pride away for a minute. Youre looking at it only on your end as an investor, as a partner the only way this business works is if somebody that knows the business better than you is driving the process. Doesnt work any other way. I think im unstoppable. Pete, if youre not gonna put your pride away, then im not gonna do the deal. You dont need to raise your voice at me. Well, im raising my voice because you keep repeating the same thing and you dont seem to understand what im telling you. Are you okay . End it. Coming up. Do you trust tony . No. This is my money. Youre damn right im gonna micromanage everybody. Im not changing. And later. Pete, whats your problem . You know what . I didnt agree to all these changes. Now youre just gonna change everything. This is gonna be a dictatorship, this aint gonna be no partnership. I didnt agree to this [bleep]. The deals off. Your bank can be virtually any place you are. You can deposit checks from here. And you can see your transactions and check your balance from here. And pay bills from here. Because your bank isnt just one place. Its virtually any place you are. Just download and use the chase mobile app. Visit chase. Com mobile. They will, but with accident forgiveness allstate wont raise your rates just because of an accident. Cut is that good . No you were talking about allstate and. I just. When i. Accident forgiveness from allstate. Click or call for a quote today. To visit all the places we didnt know meant so much. S to get out and go again. Accident forgiveness from allstate. But were all going at our own speed. At enterprise, peaceofmind starts with our complete clean pledge, curbside rentals and lowtouch transactions. With so many vehicles of so many kinds, you can count on us to help you get everywhere you want to go. Again. Whenever youre ready, were ready for you. Enterprise. Guys guys safe drivers save 40 safe drivers save 40 safe drivers save 40 thats safe drivers save 40 . It is, thats safe drivers save 40 . Hes right there. Its him safe drivers do save 40 . Click or call for a quote today. Save without even safe dleaving your house. Just keep your phone and switch to xfinity mobile. You can get it by ordering a free sim card online. Once you activate, you only have to pay for the data you need, starting at just 15 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. 5g is now included with all new data options. Switch and save hundreds. Xfinity mobile. Pete, if youre not gonna put your pride away, then im not gonna do the deal. You dont need to raise your voice at me. Well, im raising my voice because you keep repeating the same thing and you dont seem to understand what im telling you. Are you okay . I just need a break. I came here to help you. You asked me to come help you. I gave you a very fair offer. Its 3 1 2 million from me to liquidate and clear these debts, to set up a brandnew entity, to bring in new assets and some fresh inventory. I will be working for free like i am now . Just like i will be. Its a yes or a no. Yes. Im writing a check for 3 1 2 million. Maybe for the first time ill have a good nights sleep. With this check, you know that im 100 in charge. Correct. We have a deal . We have a deal. Okay. Thank you. Everybody meet in the showroom, please. Everybody meet in the showroom. Good morning. So the reason were here today is that pete and i have made a deal. This business is in dire need of capital. Its losing 150,000 a month. We will not be losing money anymore. Pete and i are gonna be 50 50 partners. But things are gonna change dramatically. Going forward, i am 100 in charge. Gonna focus on three things people, process, and product. In terms of the product, its simple. I mean, its a car. And we dont have any. Theres 20 cars outside. And whatever cars we have outside that dont work were gonna liquidate. In the past weve made spending decisions that are not with a lot of thought. Were not gonna be buying fancy things. Video games and movie screens dont sell cars. Im gonna liquidate that stuff and transform this place so that every square inch generates revenue. Next, were gonna dramatically change the marketing plan. Because once we have cars to sell, we need to get the word out. Were gonna show this community that were no longer a highend dealership with no inventory. We will cater to everybody. Were gonna put on a grand reopening event, invite the whole city, have them come down, check us out, and hopefully theyll buy some cars. The last thing, and i think the hardest for pete, is that going forward. Tony, pete is finally going to let you do your job. Right . Absolutely. And were gonna do that. I will do everything that i can to make you successful and to help you make more money. Thats my job. [applause] all right, lets get to work. Hey, pete. Can we go walk the inventory . Sure. Lets grab erika and tony as well. Im gonna liquidate inventory of cars that arent selling. And im gonna reinvest that cash into cars that i know will sell. One of the things that i like to do in a business like this is walk the inventory every morning at the start of the day. So the average price of a used car sold around here is 15,000 to 30,000. How much is this porsche . 76,000. How much is this car . 30. How much is that car . 46. Wheres all your cars under 30 . If you took this money and didnt have 80,000 in here, how many cars can i have on the lot instead of an 80,000 porsche . Three, four, five. Erika . Six. Six . Five, six. Depends. But when the deal presents itself, the right car thats hard to find, for you to turn it downit wouldnt make sen but you sold 11 last month. In a perfect world, pete, if we had 150 cars on the ground and we were making 100,000 or 200,000 a month, i would buy this car all day long. The challenge is because the market is so narrow we gotta be very careful on the type of cars we buy and the type of cars we put our cash into. If this doesnt sell, youve lost 80,000. Whos responsible for buying cars . I am responsible to an extent. So did you buy all these cars . No. I was buying. Pete is so committed to proving that his way is the right way that hes ignoring people that know the business far better than he does. And he continues to bury himself in debt and bad decisions. If we dont understand where the market really is, and we dont price properly based on the age of the car, then everything we have on the lots gonna be full of water. And when it gets past 60 days, its just depreciating. This is cash thats justits melting down on us. They gotta go. Can you point out to me the cars that are over 60 days old . This one. [sighs] what do we own it for . 46. Oh. Great. Come on, guys. With im gonna clear the cache. Were gonna make money. I know, but youre taking a big hit. How much is this car worth . 32. 28. 5. Oh. Next car. Cant buy that at 28. 5. Its five months old. This lexus. 33 and change. How come you dont know these numbers . I could answer you. Let him answer. Whats the car worth . 48. Well, ill stop answering.