HOW HE GOT IT
Ernest Garcia's a convicted felon who made a ton of money as a straw borrower in Charles Keating's savings & loan mortgage fraud scheme. After his three years on probation Garcia bought a rental car company and turned it into an enterprise that sold used cars to buyers with poor credit. Buyers would put money down and agree to high interest rates (their average is around 18%!!) and inevitably default on the loan. Then the company would repossess the car and start the whole process over, exploiting a new poor person.
Garcia's kid, Ernest Garcia the Third, had an idea to do this business through an app instead. So, Garcia the Third started Carvana, and Garcia the Second invested in it. The company went public in 2017 and turned in its first profitable quarter in August of 2021, mostly because the value of used cars has skyrocketed during the computer chip shortage. Thanks to the glitzy marketing and the car vending machines and idiot investors looking for the next "Amazon but for ____________", Carvana has a $6 billion valuation and continues to bring in big investments. It's a giant scam, it sucks and it's why the father and son are worth a combined $24.8 billion dollars and could race each other to work, each in a different $500,000 Ferrari, every single day for the next 68 years.
WHAT HE DOES WITH IT
Eat the Rich Ep 095: Carvana 9/29/21