Brian Peavey is the CEO of ProfitShare, a Boise-based real estate company that buys, renovates, and resells homes...and then shares the profit with owners. Brian grew up in Boise, Idaho since 1976 and has over 22 years in real estate, first as a Realtor and then transitioning to work in development, remodeling and property management. He holds a B.S. in Business Economics from Willamette University and an M.B.A. in Project Management from Keller Graduate School of Management. His daily responsibilities are to track real estate trends in the industry as well as local market activity, identify viable market opportunities, analyze project projections, track remodel progress, market properties for sale, negotiate contracts, safeguard expedited and cost effective closings, and ensure partner satisfaction. Brian and his wife Elisa live in Bend, Oregon now and he enjoys rafting, skiing, hiking, playing basketball and watching his three little girls grow up.
How did you get into the industry?
I first became interested in real estate by watching my Mother as a child. She was a Realtor and I enjoyed the thought that she got to help people find their dream home. I started out as a Leasing Agent for a property management company, became a Realtor myself and then branched out to real estate investments and property development. I have enjoyed creating homes where people can raise families and live out their dreams.
Any emerging industry trends?
Trends in real estate are quite area specific but in our area, I think people are gravitating toward smaller, more upscale homes. They want to spend more time outdoors with less maintenance to worry about. They enjoy nice finishes, functionality and eco friendly materials/systems. Anything that can save time and money while making life a little more enjoyable are good selling points.
Any industry opportunities or challenges?
Quality trades. Expanding markets always draw sub-contractors of all kinds...some that are qualified and skilled, others that simply aren't. Finding quality individuals that have the requisite skills to complete a task well are quite valuable in my industry. As far as opportunities go, I think increasing density in urban areas is critical to stop urban sprawl and stretching city services to the point that increased taxation/fees are the only solution.
Inspiration for the business idea, and your vision for the Business?
Like others that are faced with a challenge, the inspiration came out of necessity. We were struggling to find economically viable projects and we were searching for a way to connect with property sellers so that they might choose us instead of our competitors. We realized that the property sellers likely realized that the property buyers that were approaching them would likely make money by remodeling and improving the property value. We also realized that the sellers didn't want to be taken advantage of but didn't have a way to do the repairs themselves for a multitude of reasons (financial, skills, time, etc.). We wanted to find a cooperative way to work with these people and ProfitShare was born. We buy, remodel and resell homes and then share our profits with the people we bought the house from originally.
What's next for the Business in the near future?
We started quite small...one project at a time. We are now doing four simultaneously, sometimes five. In the near future, we would like to bring on some contractors as employees so that we can shorten our project time lines and increase the number of projects we can complete. We are also looking into several C+/B- multi-family assets to round out our portfolio.
Your key initiatives for the success of the Business?
Being honest and genuinely caring about others. Doing the right thing and standing by our word. Rest assured, whether you are a Joint Venture Partner or selling your home that needs remodeling, if we say we are going to do something, we will stand by our word.
Your most difficult moment at the Business? (and what did you learn?)
We had one sale on a house that we had finished remodeling and the Buyer's lender told our Buyer that he had to put down an additional $25K days before closing. In order to maximize profits, we try to line up purchases within days of our sales so we had another project waiting in the wings when the Buyer told us he didn't have the extra money his lender was requiring. We sourced another lender for him that wasn't going to require the additional down payment but it would take an additional four weeks to close. We had to source additional funds quickly to execute on the purchase we had committed to because we wouldn't have the proceeds from the sale in time for next purchase. We made it all come together on time and as agreed but what we learned was that we had to increase our reserves even more than our already conservative numbers indicated. Expect the unexpected...hope for the best but plan for the worst.
Ideal experience for a customer/client?
Our ideal customer understands our margins and wants to utilize our services so that can maximize their return on their home. We want them to understand that we are being forthright and doing our utmost to be upstanding in our actions. We want them to make more on their home by selling to us than they would by selling to anyone else.
How do you motivate others?
I actually don't think I can motivate other people. What I can do is discover what motivates people and provide it to them. For example, if people are driven by money then I can withhold money until they finish a task appropriately or provide them an incentive for efficiency or quality. If they are motivated by praise or outside referrals for more work, then I can provide that to them. Ultimately, everyone is unique and motivation comes from within.
Career advice for those in your industry?
Be ethical. Strive to find win-win scenarios. Share and play nice. Have fun! We all have the opportunity to do the right thing and by doing so you will make more money in the long run and feel good having helped others along the way.