Brian Buffini, a professional trainer and coach of real estate agents, braced himself for a real estate crash —- but he nearly got bowled over anyway.
The problem for Buffini, an Irish immigrant, and his team of coaches at Buffini Co. in Carlsbad, was that they didn’t actually buy and sell houses —- they taught real estate agents how to more effectively get other people to buy and sell houses. But when the real estate market shut down in 2006, real estate agents suddenly ran out of money to pay him, and his company went into a nose dive it needed three years to pull out of.
“I’m not in the real estate business, I’m in the real estate agent business, and we battle for disposable real estate income,” Buffini said.
Buffini said that between the real estate peak in 2006 and a trough in 2009, real estate agent income dropped 83 percent.
Buffini immigrated to California in 1986 on a green card he secured thanks to his American-born father. After a summer spent in Pacific Beach selling T-shirts from a cart for his brother, Buffini got into a nasty motorcycle accident driving down Mt. Soledad Road in San Diego. He needed multiple surgeries, and he spent two years recovering.
According to the origin story Buffini tells on stage, he fell into real estate thanks to an agent he met at a bar. The agent showed him a business card stamped, “Millionaires Club,” and Buffini, convinced he’d found a shortcut to wealth, dove into a new career.
Before long, he found that he could outsell his colleagues by focusing on long-term relationships with clients.
“Some Realtors selling a $300,000 house, all they see is a $9,000 check,” he said.
To highlight how that contrasts with his own technique, Buffini told a story of an open house he held early in his career attended by, among others, a poorly dressed, older Latino woman with a stain on her blouse.
Afterward, Buffini sent her a follow-up card, thanking her for her visit. A week after that, she invited him to her house. She turned out to be a millionaire who bought 10 houses from him over the years.
Buffini did very well as an agent, and he was soon asked to give seminars to Realtor Associations and other groups around the country, he said.
He decided to make a business out of teaching people his way of selling houses, and founded Buffini Co. on Feb. 14, 1996, naming the company after the house painting decorating business his family ran in Ireland for five generations.
Buffini promoted his business by offering free seminars, and thanks to his natural stage presence —- Buffini shifts from standup comedian to teacher to motivational speaker with ease —- he was soon addressing hundreds of people at each session, and often in exotic locations such as Bermuda or Hawaii.
Some percentage of those people signed up for his coaching course, which entitled clients to talk to coaches at least twice a month for guidance on implementing Buffini’s system.
At its peak, Buffini Co. had 33,000 members in its coaching and training program, each paying $429 a month (or $5,000 a year) to work with his staff of 370. Buffini gave seminars all over the country and overseas, traveling so frequently the company bought a private plane.
Buffini owned the building where his company is located, and he equipped it with a gym and a yoga room and, during the boom, he employed a pair of personal trainers. Pictures of Buffini addressing auditoriums filled with thousands of people adorn the walls, along with posters with motivational sayings.
Buffini said he saw the recession coming, largely by watching how fast Americans were refinancing their homes and taking out hundreds of thousands of dollars. The coaching program began including financial planning, and he began piling up his own reserves.
The reserves couldn’t save everything.
In 2006, house prices stopped rising, and a wave of foreclosures began. House sales froze and prices began to plummet. In North San Diego County alone, real estate transaction volume fell from $29.7 billion in 2005 to $9.7 billion in 2008, according to a North County Times analysis of county assessor records.
On June 22, 2007, Buffini prepared a list of 47 workers he would lay off. It was his birthday, a deliberate choice so that he’d always remember the feeling of letting go of so many people. He thought it was only the beginning.
Instead, the company’s problems compounded: Each coach had his or her own relationships to clients, and when that coach was laid off, Buffini would lose three-quarters of the coach’s remaining clients.
As revenue dwindled, Buffini turned to access his credit lines from U.S. Bank. He’d been a client of the bank for years, taking out mortgages, giving them his accounts, and letting them process his credit card transactions. Although Buffini Co. was still profitable, they closed the lines.
“I had to open the Bank of Brian,” he said.
Buffini owned substantial real estate investments debt-free, and he started selling them to keep the company afloat, eventually writing checks for more than $1 million.
At the lowest point, in March 2009, Buffini’s staff dropped to 110 people. On the membership side, his memory is a little hazy: In an interview Buffini said membership dropped to 7,500, but in a follow-up email, his director of marketing, Terri King, said the company hit 18,000 members at its lowest point.
Either way, it was a tough time.
In October 2009, Buffini gathered his remaining staff and held a retreat to figure out how to get leaner and remain effective. They created new training programs and began selling them harder. The training programs use a train-the-trainer technique: Clients get trained by Buffini staffers, and then these newly minted facilitators guide their colleagues through a 12-week course of Brian Buffini DVDs and training materials. Both facilitators and those they train pay Buffini Co. for materials. The company also added two cheaper coaching programs.
The moves paid off. By the end of 2010, Buffini was able to pay himself a salary. As of last month, he’d hired back 30 of his former staffers, and he’d recently sold the building. Soon Buffini Co. will move to a new Carlsbad location that is about one-third the square footage. The company has clearly turned around.
“This year we will equal our highest profitable year since we’ve been in business,” Buffini said, “but with half the revenue.”