LAS VEGAS - Many people come here to win money. But several dealers attended a Las Vegas conference to learn how to make money - potentially lots of it - in the sub-prime market's buy-here, pay-here financing.

Touted as sub-prime's could-be jackpot, buy-here, pay-here is where dealers, rather than third-party lenders, bankroll their own lending to customers with spotty credit.

It's a gamble but with better odds and pay-offs than Las Vegas tends to offer. Yet buy-here, pay-here is not for dealers without guts, know-how and plenty of start-up money.

So say participants in NCM Associates' third annual special finance conference. This year's conference spotlighted buy-here, pay-here.

That's because of its growing presence in auto lending, says conference chairman Chris Leedom.

"It's the fastest-growing segment of the business," he says. "A lot of dealers are investigating it. This conference is their foray into it."

One practitioner is James DeVoe, CEO of J.D. Byrider Systems Inc., the largest chain of pre-owed auto dealerships in the U.S. He's also president of DeVoe Cadillac in Marion, IN.

He says that, as a new-car dealer, he needs third-party sub-prime lenders, who are profitable if they get 8 percentage points of a 19% loan rate.

"I hope sub-prime companies live forever," he says. "They are good for financing cars which are newer than five years old. But buy-here, pay-here is great for financing cars older than five years."

His nine stores sell more than 5,000 cars a year. His firm started buy-here, pay-here at one store with $300,000 in 1995. It now holds $6.4 million in equity, 22.7 times the initial investment, he says.

He tells conference participants, "All you need to do to make a lot of money with buy-here, pay-here is get your act together. You can crank on the compound interest, with equity going up and borrowing debt going down."

But, he adds, it's essential to track the numbers carefully on a strong balance sheet, set reasonable goals and focus on a clear picture of what to do - or else.

"Buy-here, pay-here has a high failure rate if people don't know what they are doing," says Mr. DeVoe.

Adds Mr. Leedom, "A lot of dealers commit the fatal error of not figuring out how much capitalization they need, how much they should bite off.

"Remember that with buy-here, pay-here, every time you sell a car you are putting your money out on the street."

Mr. DeVoe says it's worth it to sell such cars in good working order. That cuts down on first-time defaults from owners who are disgruntled if their cars break down soon after the purchases.

Another reason for stocking quality used cars: "If there's a repo, you end up with a car of higher value," he says.

Dealer John Linnehan Jr. got involved in buy-here, pay-here four years ago after divesting himself of four new-car dealerships and switching to used-car sales in Maine.

He now oversees eight stores and is on pace for $30 million in sales "and most importantly, $6 million in pre-tax net profit," he says.

He says he's seen a 170% return on his buy-here, pay-here investment which now has $20 million in assets and no debt.

Nevertheless, he warns that buy-here, pay-here is a tough business.

"You have to have an entrepreneurial spirit and you have to be 100% committed to the program or it's Titanic time," he tells conference attendees.

He holds weekly two-hour meetings with his managers to discuss business affairs and to emphasize what he calls "The Five Cs." He says those are:

* Capital. "It takes a lot of money to operate buy-here, pay-here. I sold my new-car franchises and real estate to avoid going into debt. Negative cash flow can be high in this business."

* Collections. "You can sell all the cars you want, but can you collect? Repos are a last resort; they cost money. Our rate is 14%. I try to look at each customer individually. Ninety percent of them are good people. Five percent are out to cheat us. But if a guy defaulted on his loan because he lost his job, we'll try to help him by extending the loan if he's honestly looking for work."

* Car sales. "The goal is selling cars to people who are going to pay you. That means selling the best value and setting up a reconditioning center and a warranty program."

* Computers. "Get on the Internet. With the computer I can control multi-location branches."

* Common stock. "I not only want customers for life, I want employees for life because I spend a lot of money on training. I don't keep secrets from my employees. They know how much money I'm making; what's a good day and what's a bad day."

Mr. Linnehan acknowledges he wants "to make a profit on people." But he adds that as a devout Christian, "I want to help people. I don't want to take advantage of them."

He jokes that it's taken him nine years to be an overnight success.

"We're in Las Vegas, a gambling town, but it's choices you make, not chances you take which will make you money," he says.

The prospects of buy-here, pay-here are alluring to conference attendee Wallace Westfall, vice president of a family dealership, Autobility, in Fredericksburg, VA.

But doubts linger for him.

"My older brother runs the dealership, and he sees buy-here, pay-here as the way to go," says Mr. Westfall. "I wasn't a real believer in it before this conference, but I'm starting to believe.

"The biggest hold up is capitalization. It takes real money - $500,000 to $1 million - to get started."