Opening your own RTO location w/ Leroy Steen

     You know that there is a fire in the heart of the people who work in the RTO industry. It never dies out. Well in this case it was burning enough to take Leroy Steen out of retirement to build his own RTO brand in the state of Texas. The owner and operator of Rent Buy in Texas gives us insight on what brought him back to the industry from retirement, how he opened his stores on a budget, and the differences he's had to learn about the RTO Industry during and post COVID. If you want to make your own way you wont want to miss this! And if anyone knows how to Franchise a business please let him know how.

Show Sponsors: APRO and Vox-pop-uli
www.thertoshowpodcast.com

Transcript

SPEAKER_00 0:08

Hello, welcome to the RTO show. I'm your host, Pete Chow, and today we're talking about how Rent to Own works in the huge state of Texas with our friend, somebody that we've known at the st at probably a year or so now that we've really talked to. The last time that we had an interview with Leroy, Leroy Steen, one of the best guys that I've known of has history in the Rent to Own, but not only history, decided to come back and open up Rent Buy in Texas. How are you doing today, Leroy? I'm doing great. How are you, Pete? I am having an excellent day. Probably not as good as you up to three locations now. Last we talked, the last location was just opening. Now it's been about three years with three solid locations, right?

SPEAKER_01 0:51

Yes, sir. Yes, sir. We we have three locations here in East Texas, and I'm hopefully gonna do more soon.

SPEAKER_00 0:58

I hear the secrets on the way. We're not gonna give away the secret sauce, but Leroy's got a lot going on. But Leroy, for everybody out there who doesn't know exactly who you are, why don't you give a little bit about yourself and a little bit about your backstory?

SPEAKER_01 1:08

I was born and raised in Texas. I started in the rent-to-own business as a delivery person for $5 an hour in the year 1985. I worked for Hughes Rentals and Sales in San Angelo, Texas. Did that, quickly moved up, knew that this was what I was supposed to be doing at an early time, and just went for it. And, you know, other than other than taking a couple of you know breaks from it, I've been doing it since that time.

SPEAKER_00 1:38

I can tell you, I think everybody that I know has taken a break from rent to own at some point in time. I don't know if they if they've wanted to or they had to, but uh once they decided they wanted to do it, it's it's always something that you come back to. So you've been doing this for a long time, but you weren't always an owner. I mean, you really came through the ranks when it came to rent to own. What was the first company that you worked for?

SPEAKER_01 1:59

The first company I worked for was Hughes Rentals and Sales. It was a it was an independent dealer in uh in San Angelo, Big Spring, Lubbock, that area. And and I worked for them for a few years before I went to corporate rent own. The the second company I worked for was Rentway. I was surprised when I ran into Joe Bob Ellis over there in Albuquerque. That was actually my first district manager in the corporate world.

SPEAKER_00 2:26

No kidding. Yes. So just so everybody knows, Joe Bob Ellis is actually one of the divisional managers in Buddy's Home Furnishings, the Buddy Mac Holding franchise group. And in this particular situation, being a divisional manager means that he has half of the franchise at 40 store locations. So he's one of the guys making it happen over here. He's been in the business a long time, though. I mean, he's been doing this, you guys have been rocking and rolling for a long time.

SPEAKER_01 2:52

Oh, yes, sir. Yes, sir. Like I said, this this was back in 2001 when I when I worked for Joe Bob. And then shortly after that, I actually uh moved to Florida and worked with you guys. You were in the opposite district of me, but we were neighboring districts.

SPEAKER_00 3:10

Just so just so everybody knows, we're talking about the Renaissance time frame in my career where it was it was hot and heavy, man. We were making it happen. There was a whole lot going on, and we were fighting with Leroy to make it happen because he had uh he had a really good crew out there. I mean, you guys were just making it happen and putting some numbers on the board. So how long so you I mean you went from the bottom to the top, and then you actually ran uh a district. How long were you a DM?

SPEAKER_01 3:34

I got my first DM gig in in 2008. I I had one performed a win as a manager two years in a row, and then applied for a district manager position. I I received it and and I did very well at it. Uh it was it was really good. The business was good, the uh opportunity was good, and you know, a lot of times you hear people, you know, uh leave corporate rent to own and they leave with a bad taste in their mouth. I had nothing bad to say about my corporate days with Rena Center. They they were great, they took good care of me. When I left Rena Center in 2012, I was actually the number one district manager in the company.

SPEAKER_00 4:17

Well, you got to leave on top. You gotta leave on top.

SPEAKER_01 4:20

Let me rephrase that. I was the number three district manager in the company because we didn't count Puerto Rico's two districts because nobody could touch the other.

SPEAKER_00 4:28

I know, right? They were putting up some ridiculous numbers. But one of the reasons that I wanted to talk to you, Leroy, today is because the subject of today that I wanted to bring on to a lot of our listeners is some people think, well, if I decide that I want to go into business for myself, I do have the knowledge, I have the know-how, but I don't know how to build the business myself. And one thing that I can tell you right now is you are extremely business savvy, especially when it comes to the rent-to-owned industry. And so as you got out and you decided, you know what, I'm going to try it one more time and you came back in, you didn't go the route of a franchise, you didn't go the route of something already established and you came in as a district or you came in as a GM and making your way back up to a district. You actually went out and did your own company and made your own way, and now you already have three stores. How was that ride? I mean, how is that how was that journey going from being completely out of the business to owning three locations that are under your brand name?

SPEAKER_01 5:27

Well, Pete, I'm gonna tell you, uh, in 2012, I I retired. I took it easy, and and one day I was sitting on the sofa in about 2018, and I I was talking to Miranda, my wife, and I said, I'm too young to retire. I want to go back to work, but I want to do my own thing. And so we we literally vet the farm. I have I have a little farm here in uh East Texas, and it was paid in full. We didn't owe anything on it, and we took out a loan on the farm to open our first store. This was in October of 2019, which hindsight tells you two months later, we was hit with COVID.

SPEAKER_00 6:07

Tell you right now, we're still feeling the effects of those COVID years.

SPEAKER_01 6:12

Absolutely. We we s got started, we we found our building, we did a lot of a lot of sweat equity went into it. If you're going to, and anybody that wants to open a rent-to-owned store on their own, the possibility is there. If if you have a dream, you can make it happen, but you you have to be ready to grind and you have to be ready to put some sweat equity into it. We didn't go out and borrow a million dollars to open our first store. Uh, as a matter of fact, we borrowed, I'll tell you, $250,000.

SPEAKER_00 6:45

Now I'm gonna say when you when you told me that, when you first told me that, I was in complete awe and shock because to me, what from everything that I've heard up until now, and even till now, that that's 50% of the budget that you need to really get a store off the ground. And with that half budget, you went in and not only established a rent buy, but you flourished and opened more. How in how did you do that?

SPEAKER_01 7:11

Once again, a lot of sweat equity. The remodel had to do a remodel. I did the remodel myself. I have a little bit of background in construction, so I went in and I built the store out myself. Uh, we didn't go out and buy brand new trucks. We went out and we found used box trucks and we bought used box trucks. I ran the store myself for the first six months and um did it without a paycheck. We just got in there and got after it. Used we grew organically, I would say. We didn't go in there and we didn't throw out 500 rental agreements right off the bat. We grew slow, but we grew we grew smart. You know, I I recall the day, I recall the days of free till and you could, you know, you could go out and throw out uh a hundred rental agreements in a month. We did not do that. We went in and we grew the store slowly. I believe the first three months into the business, we had 150 rental agreements, but already we were starting to bring in income, and then we just continued to grow it uh and and just made it happen.

SPEAKER_00 8:19

I mean, you you have the track record. You definitely know how to make rent-to-own work. But when you're when you're going to it, because what usually happens is you go to a franchise, you go to a partner, and you do a lot of background, and and there that's where some of the capital goes to. But if you're doing it on your own, how did you guys decide where you were going to be? That first location is is absolutely critical to be the anchor point to give you the funds, the revenues, the outline to put the rest of them where they need to be. How did you choose that location? How did you come up with that when it was just you and Miranda?

SPEAKER_01 8:52

Well, let me tell you, when when I became a district manager, the first district that that I ran, that district was ranked 376 out of 425 districts, I believe, at the very bottom. The bottom 5% is what Rental Center called it. I went in and I turned that around, and these were stores that were broken, and I went in and I and I fixed them and I got and and I made them profitable. Well, when I started looking for a building, one of the first locations that I found was a Rental Center store that had Rental Center had moved out of. And so I went in and I talked and I found the the employees that had worked there before, and I spoke to the employees that worked there before. And at one time, this was a 500 agreement store. So I knew right then that this location had promise. So I I leased the building, and um, and I guess you would say the rest is history. We we started we started with you know putting in the fundamentals. One thing about this game, if you're gonna do it, you have to understand the fundamentals, the gears that make this business drive. Once you get the fundamentals in place, then you can make some great things happen in this business.

SPEAKER_00 10:06

Well, you know, I was watching one of the videos that came out recently because I try to watch as many videos as I can that that pertain to rent-owned industry. And Phil Hamer was uh he still is, uh somebody that I've known a long time in the rent-owned industry, and he was uh he's always been at buddies that I know of. But he was talking about how important it is to understand that this is a relationship business. And I don't think there's anybody that I've ever really talked to that's been in this business for a long time that really has done the grind of it, really has grown it, understand it, and taught it that they don't understand. I mean, it's a it's a relationship business. And whether you have a name brand that's known all over the place or whether you're starting off fresh and new, you have to be able to establish those relationships and make it happen. But one of the things that I've always heard though is the reason that you need so much capital is because you have to buy the the merchandise, right? So as you come in, you have a showroom full of merchandise, as you sell that, you have to go out and buy more. And if you bottleneck that with uh the revenues that aren't as as much as they could be, then you might cause yourself some stagnancy. How did you get around that, building on that first one?

SPEAKER_01 11:15

You know, we like I said, the the first thing we didn't do is is we didn't go out and just throw out a bunch of uh a bunch of merchandise with free time. When we did these rental agreements, we set them up properly, we did everything right, we started generating income. Like I said, we had $250,000 to work with. I'll be honest with you, we were a hundred and about a hundred and seventy thousand into it when we stopped using the loan money and started functioning off of the income from the rent owned store. So you you had cash flow really quick. Yes. We we paid off our initial loan in the second, actually, we started paying it off in the first year that we were open. And by uh before we opened our second location, we had our loan paid in full. Now once once again once again, I will tell you, you know, I I didn't have a hundred thousand dollar a year salary coming off of that. We were putting in a lot of sweat equity. My wife was teaching, I was working, and we were just making it happen.

SPEAKER_00 12:19

And so now for for anybody who doesn't understand uh what I'm saying there, just just to break it down, to start paying that back, you've got to have a cash flow that incorporates the ability to start making those payments. Now, when we're talking about good cash flow, good cash flow is being able to get paid and paying it back. Great cash flow is saying that I paid a $250,000 loan within two to three years. That's that's an amazing way to do it. So you get the one store because you really you kind of did your homework. You found the rent a center that's sitting there uh unused, you take over the lease of the building, you make it happen. So then how did this transition to the second one? So you had a loan, you've already paid it back. How did it work going into the second store then?

SPEAKER_01 13:04

The second store was was very much the same thing, but believe it or not, we actually went into an old color time building. Now, now one thing you have to one thing you have to realize is going into these in into these stores that were already rent-to-owned stores in the past, then most of the build-out was still there. They were set up for rent-to-owned stores. So I didn't have to go in and do huge remodels on them. I went in and and I put carpet in and I put some paint up and and and we we designed our brand early. We got our signs put up and uh and we just started, you know, started putting in merchandise and just started uh once again going with it. We, you know, we ran we each store that we started with, uh, we would start with three employees. And then as the store, as the store progressed, then we would bring in the extra employees needed to run the store.

SPEAKER_00 14:00

I'm gonna tell you right now, Leroy, that's an amazing, amazing situation. But if you guys don't know how serious that I'm I'm saying this, and I mean this wholeheartedly, that Leroy understands this business. We have talked previously, and uh we've talked about some heavy hitters in this industry that have really changed the lives of a lot of people. And I remember one of the names that came up was Todd Humber. You had mentioned it to me, and I was like, man, I remember Todd. That was such a long time ago. And you have a lot more interaction, or you had a lot more interaction with him than I did. And uh how did he affect you when you were when you were a DM? Todd was great.

SPEAKER_01 14:38

And and Todd was actually he was the regional director for rentway when uh Joe Ellis was was my district manager. So that's that was my first, that was my first run-in with Todd, and he's a great guy, a great teacher, really probably one of the the most influential rent-owned people that I've worked for. And and uh, you know, he was very real about it. He was down to earth. He wasn't, you know, he he wanted to find uh where your strengths are, and then he wanted to build upon those strengths, and and he did. Todd, I tell you, when when I went to Florida in I don't in 2002, when I went to Florida, I worked for Rena Center there for a few years. Rentway in Rena Center, you know, the merge was happening. Todd was actually a rentway guy. Well, when I came back to Texas, the the full merge had taken place, and Todd all of a sudden was my regional director again with Renna Center. And so we had that chemistry with each other. It was kind of neat because you know, I always looked up to him like he's a great guy. And it was cool because we were in one of the stores and and Todd was, you know, Rena Center had a different point of sale. So he he called me over and he's he's like, uh, what is this? What is this? What is this? I was actually getting to go over there and and and teach with him and and help him out. So that was really cool.

SPEAKER_00 15:59

Uh Todd was a great guy. If you had to say, right, after all these years, because I've mentioned it, his name comes up in several circles, believe it or not. But if you had to say one takeaway that Todd gave you, some information that he gave you that you say you still use to this day, what would that be?

SPEAKER_01 16:17

That would be to let the horses run. Basically, you know, you simply set the the game plan in motion, then you trust your managers to do that game plan. You trust your managers to take that ball and run with it. Uh, Todd was very good about that. Todd was not a micromanager whatsoever. He would put a plan in action and then he would say, okay, now go do it and show me the results. And so that was that was the one thing that I took a uh that I took from Todd uh was you know, trust in the system, the the fundamentals, trust in, you know, the the the fundamental game plan, but then also trust your managers, you know. But on the on the flip side of that, also accountability. I didn't get that so much from Todd because Todd was more easygoing, but one of the one of the huge reasons that I was so successful at at Rena Center was because I understood the importance of accountability and holding your employees accountable to what you what they were required to do without being a micromanager.

SPEAKER_00 17:23

How big is accountability? Let's say that you're building your brand like you did. You're starting from the ground up. You're not taking big handouts, you literally put put the farm on the line. How how big is accountability in what you do?

SPEAKER_01 17:35

Well, I'm gonna tell you something, uh, Pete. Uh accountability has changed. First, let me go back to my days with the Renaissance, uh, when I was when I was at the top with them guys. Accountability then was it was it was a game changer for me because one of the things, you know, we we've talked about names from the past. One of the names I'll mention from the past is Chuck Sanders. Chuck Sanders taught me the importance of reading reports, of managing from paper. I could I could manage these stores from paper. And what I mean from paper, I mean going to your transaction audit trails, your receipt audit trails, and reviewing yesterday's results and then and then calling your people and saying, let's talk about this. Let's talk about what happened here. Why why did we do this? So I had such a relationship with my managers that they knew that number one, they knew every day the first thing I was going to do is I was gonna uh look at my transaction audit trails and my receipt audit trails. So so it helped because they knew what I expected. Uh as a multi-unit manager, one of the things you can't be in every store every day. So you you have got to trust these reports, and you can't trust them if you don't read them. You've got to read these reports and you have to know what you're looking for, and then you have to call your managers and say, hey, let's talk about this. If you're talking about it with your managers, that's where the accountability comes in. That's where your manager says, okay, let me tell you this. Or we correct an issue if an issue needs to correct it. That was a lot of words to say accountability is really important.

SPEAKER_00 19:16

But no, I mean, we need to break it down. I mean, the truth is that sometimes we say the word accountability, and I don't know if a lot of people really know the fundamentals of it, except for you didn't do this, and now you're in trouble. But that's not really all of what accountability is. Sometimes it's it's like you said, I need to call you. We're gonna discuss the transaction that happened, we're gonna discuss why you thought that that was the best reason to handle that transaction, and then I'm gonna tell you what the implications were of that and why I want it done this way or why it should be done this way to get the desired outcome. And then we're gonna go over it again, and we're gonna go over it again until you get it right, and that I see that you understand where we're coming from. We understand what the goal is and how to achieve that goal, not just you're in trouble, do it the way I want you to, because if you don't, you're gonna you're gonna get it. It's really important, and it's something that you've been able to build a brand on. Now, where are your locations? Where are these rent by locations in Texas? Because you got a lot of ground to cover. Texas is pretty big. Where are they at?

SPEAKER_01 20:12

So I'm in a 30-mile, uh, each one of my stores is exactly 30 miles from the other. I'm in Nacados, Texas. My first store was in Henderson, Texas. Okay, we're in Henderson, Texas, we're in Nacados, Texas, and we're in Jacksonville, Texas. Smaller markets. Henderson, 13,000 people, Jacksonville, 13,000 people, Nacados, 32,000 people.

SPEAKER_00 20:37

There's smaller markets, but there's they're good markets. So, in your opinion, I'm going for a store that I want to bait some roots on, right? And I know that I need to get this done because of course everybody wants a huge store. But I have tried rural, I've tried urban, city-like. I I'm gonna tell you right now, I I think uh where it's at is the smaller towns. Not only do you build better relationships, you really know the people a lot closer because you're gonna see them at the Walmarts, you're gonna see them at the supermarkets, you know, we have publics here and and and such, so but you go to these places and you see them at the ball games. You see them at the football games, you see at the baseball games, you see them at the Little League, you see them when you go shopping, you see them when you're buying your cars. And so you foster these relationships a lot easier. Now, I'm not gonna say that city uh rent-to-own is not is not good because it's it's definitely profitable. But I've always found that in those small towns, that's where it's at. Is that the same for you or do you like the bigger city?

SPEAKER_01 21:38

It's you know, so so the bigger cities is easier to grow. I'm I'm not gonna say it's not. The bigger city, you know, more people, there's there's more opportunities. Uh but just like you said, the the smaller communities, there's more camaraderie, there's more, you know, you know your customers. Uh one thing That people may not understand is I don't care if you're in if you're in Arlington, Texas. I've been there. I don't care if you're in Fort Myers, Florida, I've been there, or if you're in Henderson, Texas. Your your area, your store that you're you're located at, you probably, you know, have access to up to 1,500, 2,000 customers. That nucleus doesn't grow too much, okay? We have to recycle. Don't like to use that word, but that's what we do. We have to recycle those customers. So whether you're in a 13,000 uh population or 80,000 population, you still just have that area, you know, within 20 miles of your store, we'll say, that you have to deal with.

SPEAKER_00 22:48

You really got to treat them right. You really got to take care of those customers.

SPEAKER_01 22:52

No, no doubt. Uh, you have to take care of the customers. And once again, let's talk about all the things that have changed in the rent-to-own world. You know, from the time I left in 2012 to the time I came back in 2019, a lot changed in the rent-to-owned world, but a lot remains the same. So advertising definitely changed in those seven years. That's something that I had to relearn, and I'm still learning, and I'm still working, and I'm still trying to uh figure that part out. But the things that have not changed is the fundamentals of a rent-to-own agreement. The things that have not changed is how to set that customer up, not only for your success, but also for the customer's success. From the order form to the verification to the delivery to getting that first payment set up on their proper due date. It hasn't changed since 1985.

SPEAKER_00 23:52

You know, what's what's funny is the other day, uh, and when I say the other day, it could be within the last six months. So don't hold me to this. But the other day I was talking to uh Paul Mativia, and I can't remember when it was that he said it. I believe it was in one of the uh breakout sessions that we had. Actually, it could have been uh a year ago, but he said something that stood out to me, and not because I haven't heard it before, not because it wasn't it was true at this point in time and not true at another, but the way he said it and in the context that he said it, we were talking about uh different things that happened in rent to own and some of the changes, and one of the things that he said was just never deviate from the terms of your rental agreement. Don't make exceptions. This is the terms of the rental agreement, and as long as you stick to that, you will have a functional, proper, profitable store. And it is, it's just like you just said, it is so true. There are certain things that have changed. The way we market, it's changed. The age of the customers might have changed a little bit. What we have in the store might have changed a little bit. The way that we have our outreach, whether we do it through mailer, the way that we do it emails, whether we do it through text or whether we do it through calls, whether we do it through CRM systems that are trying to get people off the internet or whether they're walking in the door, those are changeable things. What's never changed is that you have to have a great relationship with the customer and you've got to have a good rental order, verify it, a good solid rental agreement, and make sure that you talk the fundamentals with the customer so that they don't mess up. We don't make the problem of not taking care of them in their first set of payments and setting them up for success. And you're right, that hasn't changed. But there is so much that has. And that was gonna actually be my next question is now that you have rent buy and you're starting to make this happen, you have three locations. What are some of the differences that you notice besides just the marketing that 2012, now you come in, it's a whole different story. Like you did say this was the first time that you went to meeting of the mines uh in Albuquerque, correct? That is correct, yes. So, what did you think of it? What did you think of the TRIB meeting?

SPEAKER_01 25:48

It was great. I I had been a part of nationwide in the past, and uh I had never, you know, this was my first time to TRIB, and uh I just thought it was wonderful. I'm really excited about the the future meetings after getting to go into there. You know, one thing about being in in corporate world, you don't I never heard about TRIB until I became an independent dealer. To be able to go in there and and have all these like-minded people just caters to the rent-to-owned world. So it was really, it was really awesome. Everywhere, everything from the vendors to the breakout sessions, everything about it was just, in my opinion, fantastic.

SPEAKER_00 26:27

One of the things I enjoy about having the breakout sessions and meeting the minds or the RTO world is that when people are sitting there and they're sitting in front of you and you guys are having this discussion, or I'm having a discussion with the people in front of me, it's a great feeling to know that not one of those people have come from a different situation other than rent to own. Now, it's not to say they haven't been in other businesses, but they're not there for anything else. It's a rent-to-own-based idea system that has its own roots in rent to own. So you don't have bankers there, and you don't have politicians there, and you don't have other people with different agendas there. It is all rent to own, for rent to own, by rent to own. It's probably one of the most unique situations and one of the most unique industries I've ever seen in my entire life. And I come back to it again and again and again. Now you said that you took a hiatus, you took some time off, you come back, you come out guns ablazing, you open up three stores. Like, how is the you know, one of the things that has changed uh in the last few years, and I get a lot of this from a lot of people, is employment has changed. The type of employees that we have and the way that we address them has changed. Have you noticed that as well? Absolutely.

SPEAKER_01 27:40

Um, and and I'm gonna tell you, in my part of the world, it's getting better. One of the things that that when I was at nationwide over in was in Nashville, I was at Nationwide, and and I I went to a breakout session over there, and I don't know if you if you've heard this or if you saw it, but they were talking about Bucky's. Do you know what Bucky's is? I realize you're not from Texas.

SPEAKER_00 28:03

No, I I have never seen one, but I have heard the famous Bucky's gas stations. I want to visit one just to say that I went. I I've never been to one though.

SPEAKER_01 28:13

People go there as an event because they're they're huge. I know this isn't a Bucky's commercial, but Bucky's has the cleanest restrooms in the world. They're in the Guinness Book of Records for clean restrooms. But also, one of the things, when you walk into a Bucky's and and they have a big sign hanging up, and their associates start, I think it's at $21 an hour, and their managers are up there at uh $250,000 a year. Wow. I can't pay that. You can't pay that. You're right, I can't. But the point, the point that they were making at this breakout session that I was in was the thing about working at Bucky's is is people are looking for the opportunity to work there. They take applications one day a week. And when they take applications on that one day a week, there'll be 20, 30, 40 people there to fill out an application. They hold their employees accountable because they pay their employees the that kind of money and they hold their employees accountable. The employees know when they come to work that they better be there to work because there's 50 people waiting for their job to open up. And so I said that, I said that to say this. There was a time, and and you know, it's still part of it going on. I don't remember what they the great resignation or whatever they called it. The turnover rate in my stores was just unbelievable. I think, I don't know, three or four hundred percent. It was, it was, it was crazy. And I thought, well, that's just me. And then I go to I go to some of these meetings, and it's everybody. The turnover rate in rent to own was was just astronomical. It was crazy high. And nobody had the answer. I sat there with the uh CEO of Buddies, they said, What's the answer? And he says, I don't know. You know, we're trying different things, but but I don't know the answer. So it's getting better. It's getting better. You know, used to, when I was at Rental Center, when I when I was a district manager at Rental Center and accountability, I would walk in, you know, if I needed to let go of an employee, if I needed to let go of a manager, it was easy to do because I had once again 20 people lined up ready for that job. Now to get, if you have 10 applications, you better find position for them. Accountability has changed the account. Well, let me let me rephrase that. People are afraid to hold their employees accountable today because they're afraid they can't replace them.

SPEAKER_00 30:54

How much is that affecting the industry?

SPEAKER_01 30:57

A lot. Back in my Renaissance days, when I took that, when I took that district was that was at the bottom 5% of the company, it had been a perennial bottom 5% year after year after year. And I I was in the same district as the uh district manager that I replaced. So I knew him. His words were, well, I'm afraid to hold him accountable because uh in we was in West Texas, so we were we were competing with the oil field. So I get the district and I knew right away that we had problems. I came in, we were ranked 300, I don't know, something like 346, uh, somewhere around there. And I came in in July. I had nine stores before December 31st. I had replaced seven managers and moved up to number 16 in the company by saying, we're going to do this the right way, or you're not going to work for me, period. And I'm gonna tell you, Pete, to do that, there was times that uh I was in that store and I was running that store, and I was the one that uh I replaced, he didn't want to do that. And so I was I said, you know what? If you don't do it, I'll come in and do it myself. I couldn't do all my stores that way. But the point is when I set that that line up for the accountability, then people saw it. There was people that wanted to be successful, they moved into those manager positions and they became successful. If they didn't want to do their job, if they were uh if they could not, uh if they just refused, thought that they were irreplaceable, I'd replace them.

SPEAKER_00 32:37

I think you need to have one of those breakout sessions in the next meeting of the minds, and you can sit down and tell us how to make it happen. Well, what do you say, what do you say?

SPEAKER_01 32:43

I'm I'm open for it, but but I'm gonna I'm gonna tell you, I'm gonna tell you, to run a district like that or to run to run a business like that, you really have to have nerves of steel. You really have to say, okay, look, what are you costing me by me keeping you in this position? What is the cost of me keeping you in this position and allowing this store to fail? Because because that's what you're doing. If you have dead weight, especially in a manager position, you're allowing that store to fail. And so so we just have to, you know, we just have to do it. One of the things, let's talk a little bit about recruiting, because if you're gonna hold your employees accountable, you better have someone on the back burner. And so one of the things that I train my employees and I train my managers, and I and I and I train every employee I've got, you're always recruiting, even if you're fully staffed. And some of the best recruits that we have is our best customers. I would never hire a bad customer.

SPEAKER_00 33:45

I agree. And you know what? I always tell I've always said it when it comes down to the conversation. I know that my GMs can do every position. They just can't do every position at the same time. And that is something that you always need to realize. You've got to be recruiting because otherwise you're gonna find yourself the only one doing it. And you know, those two-man deliveries after you close is getting pretty difficult. You've got to be reaching out, you've got to be looking for that new talent, and you've always got to be ready for that unknown situation. I mean, that happens a lot. That's had had to have happened a lot to you as you have these new locations, as you're opening up in a different era. What were some of the things that you had to overcome in these new locations that you started up?

SPEAKER_01 34:25

Wow. Employment-wise was exactly that. And and like I said, I'm I'm I've never been afraid to hold anybody accountable, but I told you uh 300% turnover. They would just walk off the job. Part of it was no, the the majority of it was because there was so much free money out there, they didn't have to work. That was one of the things with COVID that hurt businesses, that hurt economy. I guess it helped the economy, but it definitely hurt people trying to run a business was so much money out there. I'll give you, for instance, I knew a kid that was working, I think it's Bed Bath and Beyond during COVID, his part-time his working, his making ten dollars an hour working 20 hours a week, and they laid him off. But when they laid him off, the government started paying him, I think it was $1,400 a week. What? Why would you go? Why would you go back to work?

SPEAKER_00 35:21

Well, I you know, the fundamental economics will tell you if you give somebody more money for not working, they're not going to go back to work. But the idea always was take this money, you know, use it for your family, use it to get ahead, because not everybody was able to go back to work. Some people, you know, because they had children, they had extra partners that couldn't go anywhere. So they were trying to overcompensate certain people so that if they did have those situations where let's say they had a wife or a partner or a husband who didn't work and they didn't qualify, that you know, you would make enough for the both of you. But in a lot of situations, I agree, they were making more uh than we were really affording to pay. That puts you in a bad situation. I mean, 400% turnaround, that's that's a lot. Did you have a lot of uh problems with merchandise at that point in time? Because going to the meeting of minds, I can tell you you've probably seen every vendor that you can probably shake a stick at. But at that point in time, was it hard to get merchandise? Was it hard to really set these stores up?

SPEAKER_01 36:18

You know what? We had to uh retrain ourselves on we and we just had this conversation after Albuquerque, we had to retrain ourselves on ordering merchandise because during COVID, merchandise was so hard to get. You know, you you might you might place an order for appliances and you might get it in six months and you might not. So we we have a we have a big, a big warehouse. Our Henderson store is big. We have we have you probably don't want to hear this, but we have about 3,500 square feet of warehouse there. Oh wow. Plus, plus our showroom. So yeah, I I know how small the Florida stores are.

SPEAKER_00 36:55

So I'm telling you right now, I'm suffering sometimes. Some of those back rooms were tough. Well, I could tell you, you know what the crazy thing is, is being in the Tampa Bay area in the Hillsborough County, what I'm paying per square footage, I think I have one particular location that actually has a good lease amount. Not a good lease size, a good lease amount. All of my locations, whether they're normal size or even just a little bit bigger, they are extremely high. And I know that in the Tampa area, even in Florida, I mean, if I was going into other states like Arkansas, Missouri, uh sometimes in Texas, I can get double the amount of space that I have in one of these stores for what I'm paying for. I'm not saying, you know, you you've got to factor a couple things in. Of course, location plays a very good role in that, but I'm paying a lot for what we have. The price per square footage is an amazing amount. Out there, I know you get more bang for your buck. And I don't, I don't particularly, that's where one of the reasons I was saying is like, I think being in those areas, not only can you get more bang for your buck, not only can you create those better relationships, but you have the ability to start businesses at a rate that you just can't start here, as far as a city area. So would you say that you were able to get all three stores off the ground with the same amount of startup capital?

SPEAKER_01 38:12

Yes, I would. But I would also say that you're absolutely correct. I could not have done that in Tampa Bay, Florida. I could not have done that in Fort Myers, Florida. Probably couldn't have done it in Dallas, Texas. But because of the fact that we are in these uh smaller rural towns, leases are cheaper. You know, uh real estate's cheaper. You still have a need there, you know. Uh it's it's evident by my business there's still a need, but uh, but I'm not I'm not paying $10,000 a month for a lease.

SPEAKER_00 38:43

When you started out and when you were talking about coming down here and you ran some of these markets over here, these were city areas. So what led you to be in a non-city area? I'm a country boy at heart. So if anybody doesn't, if anybody hasn't seen Leroy, how tall are you, Leroy? Um almost 6'3. Okay, so he looks a lot more than 6'3 with his hat on. But if you ever seen Leroy, I encourage you to go on on some of the social media sites or at least go to Rent Buy. And he's 6'3, and he's he's a large man, not not round. He's just large. He's very tall, he's got his boots on, he's got his hat on. By the time you're done, you'll look easy, you'll look 6'5, easy. And uh I can tell you right now, you you definitely country. You definitely play that role very well, and I think I think you got it. I I could definitely see that. I know that I've seen some of the pictures that you go fishing, you spend a lot of time with the family. You're a very, very God-fearing man, and that's awesome to see. Well, let me ask you a question. How does the family play into these three locations? And are you the only one doing it? Or did you get anybody from the family to kind of help you out?

SPEAKER_01 39:46

Well, um, my wife was a teacher. She just retired, let's see, last year. So, so last year, uh, we we have this little farm, and you know, we have uh we have our house on it, and my uh son and his wife has a house on it. So they had a they had a baby, and so my wife wanted to uh retire and and start helping with the business and help with the baby. And I thought that's great. So recently, within the last year, she has started, she has gotten involved in the business. Now she she didn't know anything about rent to own other than hearing me come home and talk about it. But uh she she's catching on, and some of it was shocking to her, some of it was uh, you know, for me for me to get her to stay in a store by herself, she she probably won't let me tell in this, but uh she was she was a city girl, so she she was a little leery to be in the stores, but she's gotten better. She'll she'll go in the store now.

SPEAKER_00 40:43

Well, I tell you what, when I first met Miranda, this go-around at meeting of the minds in Albuquerque, the Trip Convention, let me tell you, she's smart as a whip, she's nice as anything, and I can see why you were able to get things done, because I mean she's very supportive and seems to understand what you do, but you've been doing it for such a long time that I know second-handedly she really kind of does have an understanding of what's going on. Maybe not the intricacies uh until she really got into it. But I'm sure there's a lot of rent to own that she was able to get from the conversations and those late-night dinner conversations that you guys have about the business and everything that's going on. And we kind of talked about it before, but I want to bring it to the forefront. You say I've got three. The short answer is yes.

SPEAKER_01 41:30

We are going to continue to grow. Um whether it's through acquisitions or you know, just opening new stores. Uh, we are we are looking, you know, there's there's a possibility that that we may acquire some stores here in East Texas. So yeah, I mean we could go we could go from three to twelve overnight if everything lines up properly.

SPEAKER_00 41:53

So so you've gone from corporate America, you've gone down to open your own business, you've got three successful ones. Now you're going to Meeting of the Minds. Now you're going to the Trib show. You're going to the RTO, uh RTO World in August. Yes, uh, we'll be at RTO World in August. Let me tell you, I love that event. It's my most favorite event of the year. Meeting of the Minds is second to that, but I always enjoy what Trib and what April do. I love going because I love seeing the people that are involved in this industry helping others out with either great ideas or new ways to do the same old thing and be more effective at it. But one thing I want to know is so you're in this situation where you have these three stories, you've kind of come up all the way from the bottom as far as starting them up and really kind of putting it in. Is there a time frame where you go, you know what? Maybe I want to open my own franchises. In other words, somebody might want to franchise a rent buy in the state of Texas, and I do that. Is that something that ever comes up in your mind?

SPEAKER_01 42:52

Uh yes. We have discussed it. We haven't looked into it a whole lot, but but it is something that we have discussed. It is something that we thought that would definitely be a possibility. You know, um whether whether that happens or not, I honestly don't know, but it's definitely a possibility at this point. And the reason I say that, because number one, I don't know how to do it. Before I say yes, I would do it, I'd have to learn how to do it first.

SPEAKER_00 43:20

So that's just that's just the truth. So if anybody out there in the RTO industry knows how to set up franchises so that someone can franchise their business, you let me know. I'd love to get you in contact with Leroy, but that's a good question that I have for myself because I just don't know it. Hopefully one day I'm gonna be as as uh big and strong as Leroy and I'm gonna eat all my greens and I'm gonna have some stores of my own. And then I might have that question and go, How do I how do I franchise this thing? How do I make it what it is? What made you come up with the the the the name Rent Buy? Where did that come from?

SPEAKER_01 43:51

Well, you know, I honestly wanted to use Rentway and and someone said that uh it would probably make Renaissance or mad if I did that. So So that uh rent by, I I tell you what, when when uh I had a bet with my son, and the bet with my son was if uh he lived in Fort Stockton. At that point, I was living in Houston before I opened my store. And uh it was a bet on Rhonda Rousey, she was undefeated, MMA fighter. And if she won, he had to come to Houston to see me. If she lost, I had to go to Fort Stockton to see him. And she got her head kicked off, and I had to go to Fort Stockton. Anytime, just because I'm I'm a curious person, anytime I go in um anywhere, and if there's a uh an independent rent-to-owned store, I'm gonna walk into it. Well, I walked into one in Fort Stockton, and that honestly is what brought me out of retirement. It was a rent buy and totally different brand, totally different uh Brandon. But this this guy over there, Joe, he was he was I I walked around his store, you won't mind me telling this, for about 10 minutes and never got waited on. And so finally a lady stepped out of his office and said, Sir, can I help you? Talked to her and uh, you know, told her my told her my deal that you know I was rent on. And Joe stepped out of his office. And Joe says, Hey, I'm I'm with the banker, can I get your number? I said, Sure. So I gave her my phone number. Joe called me and uh literally he had a store that was 222 agreements with a 15 plus of 40 percent, and he was ready to close the door on it. And and we talked, I visited with him, and he said, Will you help me? Will will will you hire on as a consultant? And I said, Yes, I will. And so I went over there, I was going over to Fort Stockton about one week out of the month. I was still retired, and we we turned that store around. That store when I left, when I finished consulting with Joe, it was at 560 agreements and he was making money. And I just taught him to rent own business. Wow, and um, so we and me and Joe became really, really close. We became good friends through it all. And so I when I got ready to open my store, I I I called him and I told him, I said, you know, you already told me you're not ever gonna go expand anywhere out of Fort Stockton. He's just one store. He he's got a lot more uh business over there than that. I said, I want to use the rent by name. And he said, Okay, no problem. So I branded, I branded the rent by off of my friendship with him. Wow. What a story. You know, and and Joe has he has 228 uh rent houses, he has two R V parks, he has two loan businesses, and he just had all his hands in this and he was ready to stop the rent-to-own business. Today, Joe will tell you that his his rent-to-owned store is his number one moneymaker.

SPEAKER_00 46:59

And doesn't that go to show you how close the rent-to-owned industry can be? I mean, how many industries will you have where somebody can go into your store and say, you know what, let me help you? You know, and they come outside and say, Introduce yourselves, and before you know it, you're down this road. That's not that's not something usual. That's not something that you're gonna find everywhere. And that's one thing I really, really love about this industry. Now, talking about getting involved in some of the things that are happening, now that you're back into it, now that you've seen some of the differences, what do you think about how social media influences smaller businesses?

SPEAKER_01 47:30

Well, it's it's definitely it's definitely social media, it's the only way to advertise anymore, you know, uh other than you know, you still got you still, we still, and we do, we still do our telemarketing events, we still do our mail outs, but social media, if you're not, if you're if you don't have a social media presence, you're in trouble. Uh, that's one of the first things I learned is you have to have a social media, you know. You have to be out there. You you have to you have to build your Facebook page, you have to build your TikTok, you have to build your Instagram, and you have to get followers. Um very important. And then not only do you have to build it, but then you have to know what works and what doesn't work, and that's the tricky part.

SPEAKER_00 48:17

Are you the face of Rent Buy? Have you become the face or is it somebody else?

SPEAKER_01 48:20

Let me tell you, let me tell you something. I'm I'm glad you asked that question. So I can do I can do a reel, right? I I can go in one of my stores and I can do a reel, and uh in two or three weeks, I might have a hundred views. I can put my girls in Macados on a reel. And uh in two days, they'll have a thousand views. So no, I'm not the face.

SPEAKER_00 48:45

But I'm but I'm learning. But it's it's good to say that because you know what you want them to be able to have that success without you being there. Um not saying that they shouldn't be successful with you, but it really makes it easier for you to be able to go, you know what, you guys handle it, you take over the situation because I've got I've got other things to look after and make it happen. So what operating systems are you using right now? If if you're starting out, do you have a preference of the type of operating system that you have for smaller stores? You you're talking about our point of sale? We uh we use RTO Pro. So back in the day we used to use high touch. Is it did that ever come across your mind to go back to it?

SPEAKER_01 49:24

Oh gosh. I I fantasize about high touch, I'm not gonna lie. Um I've learned to use RTO Pro and I've I've become proficient with it. But in my opinion, and I know high touch has changed because uh uh the first thing I did was got in touch with high touch, uh called high touch, and and uh wanted to wanted to use high touch. Um but no high touch, in my opinion, was the best. Uh you do know, you do know, and and I don't know how long you've been away from Rena Center, but you do know when Rena Center uh moved away from high touch, it almost ruined them.

SPEAKER_00 50:03

I mean, everything was on high touch back then. I remember, you know, when I had changed businesses and I found out that we were using high touch, it was it was pretty simple, and I really appreciated that. But coming out of that, because I remember I love the simplicity about it. You could really teach and get down to the nitty-gritty of high touch back then. When when I'm talking about the one with the numbers, and I don't know what version that is, because I know that they have come up with newer ones, but I mean it was so easy to do a 4-2-1 or or check on different things, but uh yeah, you know it. Yeah, dude. Now the world went to Windows. And I know a big chunk of the world is when I say world, I'm saying the US, a big chunk of the US is now using Versaret. Was that ever an option?

SPEAKER_01 50:46

Um, we looked into it. We we did. Um, but uh we we started well, I I'll tell you why I chose RTO Pro. Number one, we were once again, we were operating, you know, with a uh small budget. Uh it was it was affordable. I could uh sign my stores up for $120 a month. I'll tell you what it cost to run their software. The other thing is I'd already learned the software because I had been over there uh teaching Joe in Fort Stockton. So that's what he was using.

SPEAKER_00 51:16

Now, this software, I mean, how important I guess the reason I'm asking is because I know that high touch can be scalable. I also know that VersaRent can be scalable. In other words, if you have one store, if you have 10 stores, you have 50 stores, it works for all of it. Is RTO Pro fitting that bill?

SPEAKER_01 51:32

It is. It's it's a little it's a little different. So we have our RTO Pro has a home office. We literally just signed up with that about three months ago, so we're still learning how to use it properly. The the one thing I loved about High Touch was that you could dial into stores and nobody'd ever know you're inside the the system. Correct. You could dial into any store and nobody would know. Well, with with RTO Pro, I can dial into my stores, but um did I have to do it with TeamViewer, which is okay. You know, it just but but the thing is when I when I do dial into one of my stores with TeamViewer, then I'm taking uh a computer monitor away from one of my employees.

SPEAKER_00 52:12

So I understood that at some point in time uh I ran into some people who are going through that problem, and the best way that they can come up with it was to create a dummy terminal in the back that was just a CPU with no monitor attached to it, and that would be the one that you logged into. So you couldn't see it on screen because it didn't have a monitor, and it was literally just a terminal that you dialed into so that there wasn't anybody else who would ever be using it. And I know that that was a go-around for it, but then you there was the cost of having the extra terminal. So never thought about that to kind of offset. That's a that's a great idea. That's one of the ways that one of the businesses that I work with was able to get around that because that you two sometimes you're putting in codes, or sometimes you're looking at something and you you really kind of just want it to be you and you don't want everybody staring at it. That was the best way that they could do it. Right. Never thought of that. That's a great idea. So we have the best way to open up stores on a budget, you make it happen, you literally put the farm on the line. Yes. Miranda decides that she's finally going to start helping you out. With Joe's help, he gets you back in the business after you've been gone for so many years. 2019, you decide to make it happen. You realize that some of the things that are this are different are completely different, some of the things that are the same are completely the same. And then you start branching out, you're going to Meeting of the Minds in Albuquerque, now you're going to RTO World in Orlando. What's next for Leroy?

SPEAKER_01 53:33

I just want to uh, you know, Pete, I I love the rent-town business. I I love it. Uh it gets in your blood. I mean, I'm gonna tell you something. One of the reasons that that I've been successful in this business is because I've gained the respect of my employees. Uh I've said this from the time I was a store manager up until I'm an owner, is I would never ask one of my employees to do something I wouldn't do myself. And then I'll back it up by going and doing it with them. And and I'm I'm still that way today. I will go into one of my stores and go on a delivery today with one of my employees. It just helps to garner that respect. And and when they see that, you know, that I will get down on their level and work with them, then it it just it makes everything great. What's next for me though? I'm I'm not I'm not done. Um I'm I'm 60 years old, so I've got, you know, I've got some more years left. People people are have been asking me, what is your exit plan? I don't have one right now. Um I'm I'm in growth mode right now. I I'm sure one day uh we'll we'll decide, okay, let's stop. But that day is is gonna be in the future. It's not today.

SPEAKER_00 54:49

So we're gonna keep we're gonna keep going. I'm gonna tell you right now, here at the RTO show, we wish you the best of luck because there's nothing more than I like to see is somebody with really the passion and heart to make things happen. And you go in, you put you put everything on its ear, you make it happen on a budget and grow. And not only grow, but you grow in stores. You have the possibility of actually expanding several stores, and I'd love to hear that story more when it happens. Now you're going to the meeting of the minds, now you're going to the RTO world. I've seen a lot of what you do on social media. We love to see that. You've got Rent Bike coming around the corner. Is there any words of wisdom that you want to give before we get off the line here? Is there any words of wisdom you would give to anybody who's starting out and they don't have those big pocketbooks? What would you tell them to do or say, or a bit of advice that would that you'd say, you know what, this is something that I've learned that I guarantee you is going to help you?

SPEAKER_01 55:41

Do not let fear be your determining factor. Um I should have done this 15 years ago, but I kept putting it off because of fear, kept putting it off. What if? What if I don't succeed? What if I can't do it? What if figure it out? You've got to have a plan. You've got you've got to you've got to know. Number one, the the one thing you have to know is you have to know the financials of this business. You have to understand what it takes to to get into that building, to get into I when when I before I ever opened my first store, I had a business plan all the way down to the penny. And and this is this is what I knew. Once I put that plan to paper and I and I studied it and and and I revised it, and and I would look at it and I would revise it again. And when I got it down to where, okay, yes, I can open a store with $250,000, then there was nothing left but to do it. Don't let fear be your deciding factor.

SPEAKER_00 56:44

I'm gonna tell you right now, when you say those words that I can open my own rent-to-owned brand and store with $250,000, I'm going to get phone calls. I'm going to direct them towards you, and I'm going to say he's got a lot of information to give. So they might be giving you a call and saying, hey, what is the magic sauce in that? And we really, really, really hope that you guys have, if you have any questions, please feel free to reach out to the show. Let us know what your thoughts are on this. If you want to ask a question, you're welcome to go to the website at therto showpodcast.com. And you can fill out something right there on the on the website. It'll come directly to me and we can chat, or you can hit me up directly on the email. It's Pete at the RTO Showpodcast.com. You can check us out on social media, on Facebook, Instagram, and LinkedIn. All three things we're posting all the time. We have a couple of different things coming up, and we're so happy that we're able to sit here and talk to one of the greats that has done just about everything from starting the business back in the day, come all the way up to the ranks, work for the big guys, show corporate how it's done, retire, come back from retirement, open up a store, turn it to three stores, now possibly turning it to a multi unit situation where you're going to grow even more. Congratulations on your success, Leroy. Thank you so much for being on the show. Thank you. I appreciate it. And as always, everybody, I'm going to always tell you get your collections low to get your sales high. Have a great one.