When an investor buys a portfolio, they buy it at a "discount" (e.g., buying $1M in total debt for $700k) to account for the high risk of default.
Calculated based on the portfolio's performance, including average APR (often 20%+), payment history, and vehicle age. 📈 The Economics of BHPH Bulk Models Feature Traditional Dealership BHPH Bulk Model Profit Timing Immediate (at sale) Realized over 24–36 months Interest Rate Market rates (low) High (20% to 29%+) Inventory Source Manufacturer/New trade-ins Wholesale auctions/Bulk blocks Risk Management Third-party bank risk Dealer/Investor risk (1:4 fail) ⚠️ Core Risks in Bulk BHPH buy here pay here bulk purchase
Larger franchise dealerships often sell their "low-line" trade-ins (cars they won't sell on their own brand-name lot) in bulk to independent BHPH lots. Portfolio Sales (Bulk Note Buying) When an investor buys a portfolio, they buy