Episode 171: How Eric Brewer Has Closed 3000+ Real Estate Transactions
The Profit First REI Podcast
April 10, 2023
David Richter
Welcome to the Profit First for REI Podcast! Our guest for this episode is Eric Brewer, a seasoned professional in the real estate industry who has completed over 3000 deals. Eric is the President of Integrity First Homebuyers, co-owner of CR Property Group, and owner of Hillside Financial.
Eric joins us today to share his sales methodology and how he has achieved profitability despite having no accounting background. He also discusses how the Profit First method has helped him keep his finances organized and resulted in the biggest write-off in his business’s history.
Tune in to learn from Eric Brewer’s valuable insights on innovation, sales, and the Profit First method. Gain actionable knowledge to help you make more money or keep more of it in your real estate business.
Key Takeaways:
[00:46] Introducing Eric Brewer and His Real Estate Journey
[07:06] Eric and His Experience During the 2008 Crisis
[11:55] Eric on Finances and Cash Flow
[18:37] Why People Live Deal-to-Deal: The Lack of Formal Education
[21:58] What are Novations?
[28:12] Eric’s Sales Methodology
[32:12] Connect With Eric
Quotes:
[19:12] “All of the education and infrastructure and advice stops at the moment you start making money…I learned how to make money long before I learned how to keep it.”
[20:19] “If you don’t sell, the accountant has nothing to count…And if you don’t account for your money, you’re gonna [have to] sell 10 times more just to keep your head above water.”
[30:06] “When I got into real estate… I realized that…[there are] certain fundamentals of sales that are not changed, like building trust with the person [and] asking good questions.”
Connect with Eric:
Website With Links: https://brewermethod.com/home
Tired of living deal to deal?
If you are a real estate investor or business owner who is tired of living deal to deal, and want to double your profits, head over here to book your no-obligation discovery call with me. Either myself or someone from my team will hop on a short call with you to get clear on your business goals, remove any obstacles holding you back, and map out a game plan to help you finally start keeping more of the money you work so hard to make. – David
Transcription:
Eric Brewer:
I was literally, I was like, you gotta take and go and get this book. You have to look at Profit first. You should be pulling out a portion of your proceeds. You can allocate it, name the account, rental savings. Nice. And you’ll be able to start buying. If he did what you suggest in three months, he’d be able to start buying one rental a month.
Outro:
If you’re a real estate investor who’s sick and tired of living deal to deal, then welcome home. Hear from everyday real estate investors just like you, and discover how they’ve completely transformed their business by taking a profit First approach. This is the profit first for re e i podcast, where we believe revenue is vanity. Profit is sanity. It’s time to start making profit a habit in your business. So here’s your host, David Richter.
David Richter:
We have the Eric Brewer on the podcast today, and he is gonna tell you how to do innovation. He tells you about his sales methodology, so you’re gonna get value no matter what from this podcast. But then he also talks about profit First in his business. Where he, when he first started was like, most investors don’t have any accounting background, don’t have any business acumen, don’t even know what, how to keep the money at all and how that profit versus helped with a lot of that, but also given him one of the biggest write-offs that he’s ever gotten in the history of his business while still being profitable as well too. So listen to this episode. You’re gonna get something from it, either to make more money or to keep more. Thank you for listen. Please enjoy the episode with Eric Brewer. This is your host, David Richter here again on the Profit first.
R i podcast. Have Eric Brewer, the Eric Brewer here on the show because man, I got his bio and I know he is done a lot of stuff, but like 3000 deals, that’s, that’s insane. You know, 350 a year. And then he’s also the owner of the Brewer Method. I mean, he’s got a bunch of stuff going on. Integrity first home buyers like this is, this is someone that if you haven’t heard of, I’m, you’re probably living under Rock at the real estate world. I, I feel like, so Eric, really glad to have you on the show.
Eric Brewer:
What’s up David? Good to see you. My man.
David Richter:
Yeah, well thanks for being on and I wanna talk about that. Let’s, okay, you’ve done a lot in the real estate world. Why did you even get into real estate? Like, was there a big reason? Was it financial freedom, money houses? What?
Eric Brewer:
Um, you know, at the time, um, so there was a reason why I got in and then a reason why I stated, and I think they might be two different things, but
David Richter:
Yeah. Um, my first sort of real job, um, after high school and then the military was in the car business.
Okay.
Eric Brewer:
And, um, very thankful for my experience in the car business. Spent about eight years there. I started at an entry level job, parking cars for, I don’t know, seven bucks an hour or something.
David Richter:
Yeah.
Eric Brewer:
And was given opportunity after opportunity to work my way up. And after eight years of being in the car business, I was the general sales manager. The dealership at the time had about 200 employees. And, uh, I was making really good money. I learned so much about sales and marketing and customer service and management and finance. And, um, I got burned out the car business. Okay. Back then was very demanding as far as the amount of hours you had to work. You always physically had to be at the dealership in order to, to have an impact. And, uh, I was working probably 75, 80 hours a week, uh, just kind of got burned out and had just had my first child and I knew I could either be a good dad or I could be a good car guy. And being a good dad was non-negotiable for me. So made the decision to hang up my car selling spikes and, uh, didn’t know quite what I was gonna do and just did some soul searching for a little bit and said, you know, I think I’m good at sales. I kind of have an understanding of finance and, um, a good place for me to move to might be real estate. So I started just talking to people. I had sold a bunch of cars to realtors and mortgage brokers and, um, a bunch of my buddies that I was pretty close with were making a killing, um, in the mortgage business. This is like oh five. And, um, so I was like, man, if I do real estate, um, I think one of the advantages I had in the car business was we were really good at finance, special finance, buy here, pay here.
David Richter:
Okay.
Eric Brewer:
We were like one of the innovators,
David Richter:
Yeah.
Eric Brewer:
20 years ago in leasing where you could get like a $50,000 car for three 50 a month. Right. So people would drive from hours away because we had these lease programs. And I said, I think if I’m gonna get into real estate, I should start in finance. So I got a job at like a mortgage broker, cold calling refi leads.
David Richter:
Huh.
Eric Brewer:
And, uh, turns out I was good at it. I sold a bunch of loans, uh, which in oh five and oh six was, turns out, wasn’t really hard to do
David Richter:
<laugh>.
Eric Brewer:
And, uh, so I’d like, I had the, I was in, man, I was like, this is it. I’m just, of course I’m talking to some real estate agents and now I’m learning how the mortgage business works and how deals get done. And, uh, after about six months of doing that, my mentor from the car business who now owned the dealership and was retiring from the car business, called me and was like, Hey, I’m getting into real estate. Um, I heard this radio commercial about flipping houses and I went to this sort of open house seminar and I’m gonna do it. And I thought you might want to work with me. And I had him lunch with him the next day and two days later, him and I started a house buying business in 2006.
David Richter:
Nice. So what kept you in real estate? So why have you stayed in it for so long?
Eric Brewer:
I would say the ceiling. Um,
David Richter:
Okay.
Eric Brewer:
It’s limitless, right? Like we generally function, or I function in a segment of real estate that’s like single family, small multi-unit. But, um, I was at breakfast today talking with someone and there was a guy that walked in this diner that I’m in, like the local guy who builds malls and strip malls and
David Richter:
Okay.
Eric Brewer:
He’s got 30 Starbucks locations and he is done land development. It’s real estate, right?
David Richter:
Yeah.
Eric Brewer:
So like who’s the, say over the next five or 10 years, I couldn’t move into land entitlement, multi-family, commercial, office industrial. Um, the ceiling for real estate is what has kept me intrigued. And then I think the other parts, the human aspect, like real estate in our homes specifically, always generally hold a very special place in people’s hearts. So when you’re able to sell somebody a property that they’re super excited about moving into, I just, I really love that, um, sort of interaction and, and watching how happy a new home can make people. And then, you know, a lot of what we do is solving problems for people that are looking to get out of a property. And sometimes that relief is 10 times better than the joy they had when they bought it in the first place. So, um, those two things I think are what really is intriguing to me a about real estate and what continues to keep me very active in it today.
David Richter:
Okay. No, I love that. The limitless ceiling, the human aspect of it, getting to really help people make an impact. So then you were in real estate during the downturn as well too. So like 2008, nine had, so how did that, how did you fare during that time, especially being, were you in the mortgage business still?
Eric Brewer:
No. So
David Richter:
where were you out?
Eric Brewer:
Oh six. We started, um, buying homes. Um, I think our first full year we did maybe 70 deals.
David Richter:
Okay.
Eric Brewer:
Um, second full year we were, uh, doing a hundred. And when the crash happened, um, we had a fair amount of inventory. Um, I think one of the things that was super beneficial about where I am, which um, is not the most exciting location in the country, right. I’m in,
David Richter:
Yeah.
Eric Brewer:
Um, Southern Pennsylvania. So it’s a relatively rural location. I’m like two hours from Philly, an hour from Baltimore, Maryland, um, an hour from Harrisburg and four hours from Pittsburgh. So
David Richter:
Okay.
Eric Brewer:
I’m like close enough where I can get to, you know, these bigger places.
David Richter:
Yeah.
Eric Brewer:
Um, but generally the price of our real estate is historically well below, uh, the national medium. So when the market crashed here and we strategically bought homes that were at that first time home buyer level, um, most of our properties were all below 150. Half of ’em were probably below a hundred. And so when we saw the market pivot, it had less of an impact on that segment, um, than it did like the three, four, $500,000 homes in our area, which were decimated.
David Richter:
Okay.
Eric Brewer:
Like literally a $500,000 house overnight became a two 50 house.
David Richter:
Oh wow.
Eric Brewer:
Um, in some markets. But the $150,000 house might only be worth one 40, but I could sell my way out of it.
David Richter:
Yeah.
Eric Brewer:
So, um, we started doing a lot of installment sales agreements because one of the harder things to do, um, when the market pivoted was to get a mortgage, uh, it went from being like the easiest thing to do in 2006. You can get a mortgage without a job, which was probably one of the bigger problems that led to the crash. But like, you didn’t have to have a job and if you had a job but no income documentation or tax returns, there was a loan product for nearly anybody that had a credit score and a pulse over five 50.
David Richter:
Yeah.
Eric Brewer:
Um, then it got really hard. So we would’ve a lot of people that would come and wanna buy our properties, um, and had like 6 40, 6 50 credit scores and $15,000 down, they couldn’t get a conventional mortgage. So we started doing installment sales agreements.
David Richter:
Okay.
Eric Brewer:
Um, we grew that to about 150, um, installment sales agreements over three to four years, um, still while doing some, you know, typical flips. Um, so that was really what I think for us got us through, um, you know, the immediate correction that took place.
David Richter:
Yeah
Eric Brewer:
We were able to offer install, which I was very fortunate because my partner, um, had plenty of assets. Right?
David Richter:
Okay
Eric Brewer:
Because if it got really hard for investors to borrow money.
David Richter:
Yeah.
Eric Brewer:
Um, he was able to, we did business with his own money. Um, we didn’t have to borrow money from banks by everybody else that was an investor got their lines of credit shut down, hard money vanished. There was they got real hard. Right. It went from hard money to really hard money so hard you couldn’t even find it. Um, so yeah, that was my experience. It’s funny cause when people ask me that, I’m like, I don’t really know. I was just so busy trying to like pivot and survive. I didn’t pay attention to what was going on around me. I was just living day to day trying to figure out how do I get better. And actually that’s why I discovered notations was in that period of time.
David Richter:
Yeah.
Eric Brewer:
Because when I was flipping homes prior to 2008, nobody used FHA financing. Post 2008, every single person
David Richter:
<laugh>
Eric Brewer:
Was using FHA and I had this deed seasoning problem that kept popping up on all of my flips. So I started looking for a solution and that’s when I discovered novations.
David Richter:
So. Okay. Cuz that’s what I was gonna ask. Was there anything that you either discovered or figured out during that time when you were pivoting that is now helping you in 2023? You know, so it sounds like novations is a big thing. Is there anything else like during that time or
Eric Brewer:
Short sales.
David Richter:
Short Sales. Okay.
Eric Brewer:
I started doing short sales then because I’d get leads that in 2006 or seven they had equity in 2008 they were upside down.
David Richter:
Okay.
Eric Brewer:
So, um, I started doing short sales and still to this day we do, we probably originate about a hundred of them.
David Richter:
Yeah.
Eric Brewer:
And we buy 35 to 40 and about 80% of the ones that we originate go to settlement. I can, I just only buy 35 of them that are, you know, able to be bought at a discounted price. The other 80 or so out of the a hundred that we originate end up selling to retail buyers.
David Richter:
Yeah. Man, you’ve got so much experience. You’ve got the brewer method, which is like the ovations and like the, you’ve got the short sales, you’ve got the sales training, like I to talk about some of that. But on your real estate journey, since it is the profit first for real estate investors show, like talk about the actual financial side of the company. Did you, uh, and on your journey, cuz today, do you have that same partner from back then? Or is it just you, you run the show, right? It’s your
Eric Brewer:
Yeah, I bought him out. So he was from, and I’m building a business. He had already sold a huge business. Right. Oh,
David Richter:
Okay.
Eric Brewer:
So it’s like we were in just two different,
David Richter:
wow.
Eric Brewer:
He’s only, I think he’s Craig’s only eight years older than me.
David Richter:
Okay.
Eric Brewer:
Um, the dude was an absolute assassin. Right. Like he, I think he bought a Toyota franchise selling 300 cars a month at the age of 30.
David Richter:
Oh wow.
Eric Brewer:
Sold it before he turned 40. And I mean this dealership was extremely profitable. Um, so he kind of started there as like a sales guy, then a sales manager, then a general manager, and then an owner. Um, so after him and I did this for maybe five years, he’s like, dude, I don’t want to, he lived in Baltimore so he’d commute two hours round trip every day.
David Richter:
Yeah.
Eric Brewer:
He’s like, this is cool and all bro, but like I don’t wanna drive to York Pennsylvania anymore and it’s really hard for me, uh, to manage and own something that I’m not
David Richter:
Yeah.
Eric Brewer:
Overly active in. So if I stop, come into the office, I’d either want you to buy the business or I would just stop. Um, and I was like, well we can’t stop. Like this is my living
David Richter:
Right. <laugh>.
Eric Brewer:
Um, so we worked out a deal and I, you know, we struck a deal for me to buy the business from him. And um, I think we had like a five year agreement. I was able to pay ’em off in three.
David Richter:
Okay.
Eric Brewer:
I mean that was maybe six, seven years ago now.
David Richter:
Okay. That’s awesome. So, okay then this just gives you more ammo for all of this. So during your whole time from 2006 till now, have you seen, you said that it got difficult sometimes or like during the pivot and all that, you know, trying to keep your head above water. You were lucky in that he had <laugh> sounds like a lot of those assets that he sold from his first business that he sold. But what about the financial sigh? Like were you ever in cash flow crunches in the business? Like were you all flipping too much and it’s like, oh my gosh, are we gonna hit payroll? You know, and like, have you gone through that journey? Are you still in it? So just to give people on the, you know, from the the profit first side of things. Do you have anything on that side where it was like.
Eric Brewer:
Yeah. It’s funny. Oddly enough, at breakfast this morning there was a, I had breakfast with a 31 year old guy. It’s been in business about three or four years. Flips about a hundred homes a year. Um, he was talking a little bit about cash crunches, he was talking a little bit about buying rentals and I was literally, I was like, you gotta take and go and get this book. You have to look at profit first. You should be pulling out a portion of your proceeds. You can allocate it, name the account rental savings. Nice. And you’ll be able to start buying. And if he did what you suggest in three months, he’d be able to start buying one rental a month.
David Richter:
Okay.
Eric Brewer:
Right. So, and then we looked at, if you did one rental a month for five years based on 3% appreciation, normal principle pay down, I think it was like 2.4 million in equity you’d have in five years by literally doing what you’re teaching investors
David Richter:
Yeah
Eric Brewer:
How to do. Right. So, um, I tried to do my best of explain it to him. I was like, dude, you just gotta look ’em up and and go figure it out. That’s, I he was extremely grateful for the advice. But
David Richter:
yeah.
Eric Brewer:
Um, yeah, I mean, you know, we’re flipping 250, 300 homes a year for a large portion of my career. Most of those deals required construction.
David Richter:
Yeah.
Eric Brewer:
Um, I didn’t really start wholesaling until I was uh, 20 15, 20 16. Um, so almost every deal I touched was either innovation or the only way for me to monetize it was to do 50, 60, $70,000 construction. And that’s where a lot of capital and cash can get chewed up. You can either lose it by mismanaging construction, that’s a very bad thing.
David Richter:
Yeah.
Eric Brewer:
Um, or it’s just, you know what, you spend money every single week, like today’s Friday, there’ll be about $170,000 of my cash that walks out this door today in contractor payments.
David Richter:
Yep.
Eric Brewer:
So, and I won’t recoup that until that home sells, which could be six to 10 weeks down the road.
David Richter:
Right.
Eric Brewer:
Um, so it’s a constant focus of ours. We talk about deals and leads and contracts and profit, but probably more important that every single week as we talk about cash reserves. Um, so yeah. It’s you know, the one thing was I had the luxury of working with my partner for all those years and I was able to just be a sales guy. Really.
David Richter:
Okay.
Eric Brewer:
Even though I was a co-owner and a partner, he handled all of the cash management. And I remember there’d be certain times like, dude, we can’t buy any more properties. I just had to put another half million bucks in the company. And that was stressful cause I knew he was like, Hey, like
David Richter:
Right.
Eric Brewer:
Not as stressful as me having to put, I’ve had to put $500,000 wires I’ve had to transfer into the business account because three or four flips didn’t close and we were counting on the cash
David Richter:
Right
Eric Brewer:
And then it got extended and it didn’t sell for another 60 days. Or you know, we had a property that we had issues with with permits and my loan was only a six month loan and now I gotta pay off the bank. And that’s stressful. And then what would happen is it would restrict my willingness to go out and do more business cuz I was just focused on the preservation of cash or I wasn’t thinking about growing marketing, I wasn’t thinking about buying. We would actually say stop buying homes. It’s the worst possible advice you can give to a home buying company.
David Richter:
Right.
Eric Brewer:
And it wasn’t cuz we didn’t want to, we were frustrated by all the profit, it’s because cash became an issue and when cash is low, everything else shuts down.
David Richter:
Yeah.
Eric Brewer:
Um, so yeah, I’ve dealt with that. But we implemented Profit First, I don’t know, two years ago or so.
David Richter:
Yeah.
Eric Brewer:
Three years ago. And now generally it’s not an issue. We have it’s now become, what do we do with the cash that we used to have somewhere in our company. I had no idea where it was <laugh>. And now that it’s visible when it’s available, uh, last year I was able to invest, uh, $300,000 in other ventures, uh
David Richter:
Okay.
Eric Brewer:
Ventures, it was an apartment syndication deal in CG where I got that particular deal. I got a three x, um, tax deduction on the amount of money because of the accelerated depreciation that Apartment Syn Indicator was offering. So because of Profit First, we took $300,000 from our proceeds last year, knew that it was there, it was excess, knew that I didn’t need it to put back into the company at some point because I poorly managed our reserves and then got a $900,000 tax deduction because I had that three and that saved me 300 and I spent 300 and saved 360 on my tax bill. Hmm.
David Richter:
That’s awesome. Yeah. That’s good stuff that there’s a, there’s a good plug for that. But then also for you seeing that and being able to actually take advantage of it, of using the system and being a part of that for, you know, a few years now,
Eric Brewer:
Yup
David Richter:
Why do you think a lot of investors either listening to this get stuck in that cash flow crunch or like live deal to deal? Or like what do you think is the reason that a lot of people live in their own rat race still even as a real estate investor?
Eric Brewer:
Well, cuz I think, you know, when if you were, let’s say an aspiring investor and you went out and you gathered all the information that’s out there through different educators and influencers and podcasts and YouTube, they talk about how to hire a cold caller and generate leads and how to build a list and how to door knock and drive ’em for dollars and all of their education and infrastructure and advice stops at the moment you start making money
David Richter:
<laugh>.That’s right.
Eric Brewer:
Right, so like, and you’re like, oh I’m doing good at making money, but what? But where is it? What did you do with it? How much of it did you give back? When can you actually so profit? The first thing I learned is profit and cash are two different things. I was literally like, oh, I made $200,000 last month. I must have 200 cash.
David Richter:
Right.
Eric Brewer:
No, you don’t.
David Richter:
No, no.<laugh>.
Eric Brewer:
So I think that’s generally where, because I mean, again, I didn’t have a formal education. I graduated high school, went in the military, learned how to sell cars. I didn’t have any formal accounting or even just business acumen.
David Richter:
Yeah.
Eric Brewer:
So I learned how to make money long before I learned how to keep it.
David Richter:
No, that’s good. And I do think that a lot of people just miss that skill cuz it’s not tough.
Eric Brewer:
Yeah. So it’s not fun for a guy that’s a sales guy, accounting is super undesirable.
David Richter:
Sure.
Eric Brewer:
And it goes the other way. Right. Like the accounting guy probably wants nothing to do with selling.
David Richter:
Sure.
Eric Brewer:
But they both have to be done. If you don’t sell, the accountant has nothing to count.
David Richter:
Right.
Eric Brewer:
And if you don’t account for your money, you’re gonna need to sell 10 times more just to keep your head above water. Ah, that’s so we both, they both have to happen.
David Richter:
Yeah.
Eric Brewer:
But generally when we’re starting a business, you know, most entrepreneurs do everything and the thing that uh, happens last is they’ll scale marketing, they’ll scale acquisitions, they’ll scale dispo, they’ll scale everything before they scale accounting.
David Richter:
Yeah.
Eric Brewer:
Um, and generally don’t think about it until it’s tax time.
David Richter:
<laugh>. Yeah. There you go. You hear from Eric. This is someone who touches many businesses and has seen, you know, millions of deals up to this point it seems like. But that’s where I wholeheartedly agree with you. No and uh, like you said too, you mentioned that you don’t have a formal education or background or even the business, you know, like whether it’s accounting or just business, you know, like being taught like that grow up growing up or in college or whatever. I think a lot of people don’t have that. So it’s like
Eric Brewer:
No,
David Richter:
Gotta learn that at some point or at least have someone that’s there for you. So I think that holds a lot of people back too. Like you said that the lack of that education, cuz I love that you even mentioned it, everyone’s out there teaching, here’s how to make the money, but then it stops once the deal actually closes and like, okay, what the heck do I do with it now?
Eric Brewer:
Yeah.
David Richter:
You know, and that’s uh,
Eric Brewer:
Hundred percent
David Richter:
That’s really good. Well no and speaking of which I love the stuff that you put out there. I love the brewer method. Like I love different types of deals in these in all markets. So that way people have different exit strategies because you’re not, it’s like the wholesale hammer is not gonna, you can’t beat them over the head with that all the time. So you need different exit strategies. So I love what you’re doing there. Can you, I don’t know, I think I wanna focus on that next ovations. Can you just talk about that a little bit? How, so it came out of, it sounds like when you were in the downturn you’re like this is something that came out of that and now you’re helping people do it, but then you’re also still doing ovation. So can you briefly describe what innovation is? Because I get that asked a lot and then if someone’s on this podcast and they’re like, I’ve heard of ovations, I also want to just plug you as well too, like if you are looking to do innovations, like look up Eric and his company cuz like he’s the king of innovation. So Eric can you talk about what innovation is?
Eric Brewer:
Yeah. Um, so I here’s what, I’ll tell you what it’s not because most of the time when people go, yeah, I’ve heard of innovations, they go, it’s when you partner with the seller and you renovate it and then when you sell it you split. No, that’s not, that is a innovation. Um, I think it’s um, something that’s been taught for maybe 10 or 15 years, but it involves partnering with a seller, which sounds like a horrible idea.
David Richter:
Yeah.
Eric Brewer:
And renovations, which are hard. Woosh. So my style of the, so it’s not what I’m gonna teach you or what I teach and what I share is not renovating and it’s not partnering with a seller. So that’s step one. Step two is what does innovation mean? The word itself simply means replacement. Right. So like okay so it means replacement. Got it. What’s next? Generally wholesale real estate is done by the assignment. You get a property under contract for a hundred, you assign your interest for one 10 to a cash buyer investor that’s gonna fix it up and sell it, fix it up and rent it, um, whatever. Right. You’re selling to a cash buyer, investor that’s got hard money or lines of credit or their cash. So generally doing that, we go and look for fixer upper and super distressed sellers because they’ll sell it at a discount and then I can sell it at another discount to my investor. That’s general wholesale assignment language and process innovation because it means replacement changes the whole game because a replacement or notation agreement can be financed and purchased by a retail FHA va, U S D A Fannie Mae buyer.
David Richter:
Hmm.
Eric Brewer:
Okay. Well Eric, what’s that mean? Well if you could sell your deals for retail, does that change the people that you talk to?
David Richter:
Yeah.
Eric Brewer:
Does it change the amount you can pay for a property? Does it change? It literally changes everything. Like the model of normal wholesale is what I call finding a needle in a haystack. I need a distress seller pulling their hair out, stressed out that has a house that needs a bunch of work. By the way, those two generally go together. Someone with a messed up house has a messed up mindset and they’ll sell it to me for 50 cents on the dollar.
David Richter:
Yep.
Eric Brewer:
Right. And then if I find that needle in a haystack, I gotta go sell it to another needle and a different haystack. That’s a cash buyer that’s crazy enough to think they can fix it up and make money.
David Richter:
Yep.
Eric Brewer:
Once you do notations you can buy nice homes. And when I say bye, innovations do not require lines of credit. You don’t have to have cash, you never close on the deal. You don’t have to physically acquire and fund the transaction. So innovation is a wholesale style transaction on a property that’s generally in wholesale condition being sold to a retail buyer. So you’re like okay Eric, that sounds good. What does that mean? Generally we’ve taught this now to over 350 investors nationwide and they see a 40% increase in the volume of deals and they go from averaging around $17,000 of transaction to $26,000 of transaction. So imagine what a 40% increase in volume would do to your business and if your profit per transaction went up by $10,000, how much would that impact your business? And whether you do two deals a year or 200 deals a year, the numbers are the same. Right. It’s 40% on any of those, those models. Um, so that’s what it is. Right. So what I find is most people, they look for that needle in the haystack and they disregard every other lead that they get. If you’re listening to this, and I would ask you this, if someone called into your operation right now and said, yeah, I got a really nice house, it’s been renovated about three or four years ago and I went 90% of its current condition retail value, you’re gonna go, sorry sir, I can’t help you. That’s a phenomenal innovation deal. You can make 30 grand on that deal if it’s a $350,000 house and they’ll take 85%, what’s 15% of 350 grand? It’s like $52,000 even after realtor commissions. Cuz we sell all of our innovations on the mls, which is by the way, the best buyer’s list on the planet.
David Richter:
Right.
Eric Brewer:
The majority of the time and energy that the wholesalers spend is trying to find off market buyers. They, and by the way, off market buyers pay less.
David Richter:
Mm-hmm <affirmative>
Eric Brewer:
Right on market buyers pay more.
David Richter:
Yeah.
Eric Brewer:
So when you do innovations you can dispo all of your deals on the mls, which is where the highest volume of buyers are, which are first, second time investors and they also happen to pay the most money. Um, and you also have access to retail buyers. So that’s the sort of innovation in a nutshell.
David Richter:
Awesome. And I like that because that provide a lot of value. Cuz if you were wondering as a listener what innovation is and like what Eric teaches, he just gave you the nuts and bolts and like, like he said, he has trained over 350, you know, investors or companies on this method and I see this all the time. Like I even see cuz we have clients as well too that use innovation method and we see, okay, they’re actually, they’re getting the deals done, they’re following the methods and it’s actually working. It’s giving them another exit strategy other than just the typical wholesale or flip or just gives them another option. Which is a really good option because of your pool as a, you know, buyers and sellers are different and it’s a much easier conversation I believe as well too. Then you also teach the sales methodology and the sales system. I love what you put out there cuz sometimes if you follow Eric like on Facebook he’ll put out there some of the times when he has a conversation or someone on his team or whatever. This is how you handle this. And so you also teach the sales process. Correct. And is that just because you, <laugh> you started out in car sales, you said that heard helped you a lot with sales, but then you’ve just been in the real estate game these whole, you know, now it’s just like, hey I’ve learned this, I know how to talk to sellers like this is the methodology that we use. So do you give scripts and stuff and you know, train sales teams? Like what does that side look like too?
Eric Brewer:
Yeah, so, well one of the, I would say, um, things that I learned over sales is that, you know, especially coming from the car business, it’s a very direct sort of high pressure environment.
David Richter:
Yeah.
Eric Brewer:
And um, what I came to know about myself and I think part of the reason I got burned out when some of the guys I work with have been there 25, 30 years now and they love it. I did not like high pressure sales.
David Richter:
Yeah.
Eric Brewer:
Um, I love talking to people. Um, I have a higher desire for social interaction. Um, but because I love people so much, the normal sort of high pressure sales environment made me feel like I had to choose between maintaining a good relationship with someone and pushing for monetary gain through a sale just because I wanted to win. So I always would push back a little bit from what my managers told me to do and as I started to have success with it, um, they started to give me more freedom and as I had more freedom and could do certain things my way and not the normal high pressure way, um, I quickly became the number one salesperson there. Like quickly. Like I started on June 17th and I worked for 13 days my first month in sales and outsold everybody else in
David Richter:
Nice
Eric Brewer:
13 days and then I was salesman of the month every month for my entire sales career on the floor and that’s how I got promoted and all that stuff. But I wouldn’t do exactly what they told me cuz it felt wrong and I knew that had to contribute to the different results that I was getting. So then when I got into real estate and just over my career I always realized that hey I can, there’s certain fundamentals of sales that are not changed.
David Richter:
Yeah,
Eric Brewer:
Right. Like building trust with a person asking good questions. Um, but I’ve just discovered that there’s certain milestones throughout a normal sales process that buyers are kind of keen to, they know what’s going on, they anticipate when there’s gonna be pressure and there’s these walls that go up. So if I can sort of unprogram these areas where you walk up and greet somebody and say, can I help you? They immediately go, no, I’m just looking. I don’t ask that question anymore cause I don’t like the response I normally get.
David Richter:
Right.
Eric Brewer:
Um, I don’t do trial closes cuz people have come to figure out that a trial close feels like pressure and when they feel pressure their human nature is to run.
David Richter:
Yeah.
Eric Brewer:
So just over time I realized that there was a way to arrive at the finish line without being a jerk and people generally have a better experience. So maybe you and I sell differently, but at the end I think the people like me more. Um, even though they both bought it and they’re more likely to send me referrals and generally as a salesperson I enjoy it more because salespeople don’t like high pressure. They only do it because they don’t know any better. So that’s been my experience with sales. It’s like generally when most people will push, I’ll pull away and I end up getting more deals than most people.
David Richter:
Yeah. That’s good stuff. So I just have one final question before we end here because this has been really good. I love the information we’ve gotten. We’ve got ins like what that really means. We’ve gotten the sales like what are you doing there? You, we got your journey as well too in real estate, but then we also got from Profit first how it gave you basically 900 k in depreciation and you know, ride officer and all that. Then the, I love what you gave on the financial side, a lot of people don’t have the formal education, the business side. That’s what holds him back. Don’t let that hold you back. There’s a simple system like Profit First where Eric’s been using it for several years now and seeing the returns on it, but then from here, how can people actually get ahold of you? So you’ve got these different companies, you’ve got innovations, you’ve got the, you know, the sales training, you’ve got the different things. What’s the place for people to go to be able to give value back?
Eric Brewer:
Um, so you go to brewermethod.com and then there’s links to all my social on there. The best way to to connect with me is on Facebook and Instagram. Um, and you can do that through brewermethod.com. So rather than me trying to give you my Facebook handle on Instagram handle and underscore this, if you just go to brewermethod.com, you’ll see links on there to connect with me on social media and I put out two to three videos a day just talking about real estate and sales and leadership and management and everything that I sort of experienced going through life. I just kind of share all of that on social media.
David Richter:
Awesome. Well good stuff. So brewermethod.com, that’s his one stop shop it sounds like for everything. Uh, Eric Brewer and all that he’s in and everything there and follow him like you said on Facebook, Instagram. I love his posts, I see them and sometimes they’re really funny cuz it’s just off the wall. Random stuff that happens are like when he is sitting down there for breakfast with someone that, you know, has been some pretty cool characters there as well too. But then also just actual sales training that’ll just give right there. This is, you know, you’re saying this and it’s not getting the deal done here. Say this.
Eric Brewer:
Yeah.
David Richter:
So it’s been really good. I really like and enjoy that. So if you’re also, you listen to this, you’re listening to it right now and you’re like, Hey, I wanna get 900 K in depreciation, or I wanna make sure that I’m not running around like a chicken with my head cut off when it comes to my cash and finances, then go to simplecfo.com. That’s where we have our group of fractional CFOs to come in and implement Profit First and do those things to make sure that you have someone that’s not gonna be boring accounting on the other side. So that way it’s actually enjoyable to walk through this process of knowing what to keep on the other end. So if you wanna do that, it’s simplecfo.com, remember to make profit a habit in your business. Eric, thank you so much for coming on and provide a lot of value today.
Eric Brewer:
Appreciate it. My man.
Outro:
This episode of the Profit First for REI podcast is over, but there are plenty more where that came from. Are you ready to learn how David and his team can help implement the Profit First system in your business? Schedule a discovery call at simplecfo.com right now. We’ll see you next time on the Profit First for REI podcast with David Richter.
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