$10M Listing or Bust: Breaking into Luxury Real Estate without Being Rich

http://www.bespokerealestate.com/property-details/?innum=11937#20,-24,-26-west-end-road,-east-hampton-east-hampton

Zach and Cody Vichinsky see themselves as disrupters in the way that high-end real estate is analyzed, marketed and sold

  • You don’t have to come from money to understand and serve the wealthiest real estate consumers.
You could say that Zach and Cody Vichinsky, the brothers behind the Hamptons-based boutique firm Bespoke Real Estate, won’t get out of bed for less than $10 million.

While the young luxury brokerage has only been around for two and a half years, their average listing comes in at $27 million.

Although the Vichinskys had their training at a traditional high-end brokerage, they went in a new direction with their own company in an effort to better serve their rarified clients, namely by setting up a corporate structure so that they, as owners, could remain focused on servicing clients.

Both in their early 30s, the Vichinsky brothers have tapped into the art of understanding and attracting luxury real estate consumers with a multifaceted approach — a combination of creative marketing, savvy business and relationship-building — that led the firm to $400 million in sales volume last year and the freedom to ignore anything under that $10 million mark.

Empathy, intelligence, energy

Cody and Zach do not come from money themselves, though they enjoy the trappings of being successful, and both are passionate about high-end cars. Born in Massachusetts, they grew up in Stony Brook, west of the Hamptons.

The brothers say when their father gave them Robert Kiyosaki’s book, Rich Dad, Poor Dad as teenagers, it was a catalyst for their future. From it, they absorbed the wisdom of Kiyosaki’s “two dads” — his father and the wealthy father of his best friend.

How did they ultimately infiltrate the high-end market? The Vichinskys say that 95 percent of their interactions and transactions are the result of consistent dialogue.

According to Cody, it boils down to three things — empathy, intelligence and energy: “When you are in sync with that individual on those three levels, you can find common ground in a business setting,” he said.

It’s also about being in the clients’ shoes, understanding what their purpose is and having a fundamental skill set, adds Zach: “The real estate game is knowing what you are selling and articulating what the value is.”

The brothers are also active in an area close to the heart of the wealthy: philanthropy. They don’t simply hang around the fundraising circuit — they run events from the high-quality homes they market.

As Zach puts it: “We have fantastic venues and good relationships with people. You put all of that in a room and great things can happen.”

In addition, the brokerage has a strong social media presence, particularly on the most visual platform on the internet, Instagram, which lends itself to real estate eye candy.

“We have several hundred thousand followers across all of our Instagram platforms,” Cody said.

This includes three of the brokerage’s corporately owned and managed pages — @bespoke.realestate, @bespoke.marketing and @bespoke.magazine — which shows that a strong brand can milk more than one account out of a single platform.

Development

Cody and Zach’s father Steven was a project manager and builder from whom they gained a good understanding of how to build a house. He is the firm’s “quality controller,” they say.

“Our father provides us with leveling logic because he knows us on a personal level,” Cody said.

This knowledge has contributed to another important side of their model — housing development, which Cody calls their bread and butter.

Bespoke is set up to handle large scale projects, from site procurement, market analysis, syndication of financing, design input and introduction, and marketing and sales.

The brothers have sold more than 100 development sites through their careers so far, from standalone lots to major subdivisions.

“The Hamptons, for the past many years, has been a modern day gold rush for real estate developers, but unless you have a firm understanding of the micro markets, it’s one that eats you,” said Zach.

When working on a development, they typically get involved completely, said Cody. With their client database, they have useful buyer information for developers.

“They really want to know what our clients’ perspectives are from a design and amenity standpoint,” he added.

Moreover, the brothers designed their own seven-figure offices in Water Mill.

“We designed it with the same taste level that our clients are accustomed to, but also created a blended work environment that we felt our staff and agents would feel happy and motivated in,” Cody said.

Deciding on a corporate structure

In addition to the strategy that shapes the Vichinskys’ communication and marketing, there’s the thought that went into business side of things, which was the foundation on which the duo launched their own venture.

The Vichinskys set up their business in the form of a private equity firm, or a REIT (real estate investment trust), to function more as a corporate structure.

The brokerage staff easily outnumbers the agents, which means the company owners can prioritize the service side of the business.

Fourteen agents (including Cody and Zach) and 18 staff members make up the 32 people who work out of the headquarters in Water Mill, New York.

The staff includes dedicated marketing specialists, graphic designers, project managers, a listing management team, a CMO studio manager, a social marketing media manager and a full-time research team. These individuals provide business knowledge and market intelligence, and they operate different departments that manage clients and property.

“It really runs the gamut in order for us to provide dedicated focus and expertise that spans every element of the service spectrum,” Cody said.

The staff are well-incentivized, say the co-founders, and agents have a range of commission splits that the brothers won’t disclose. They vary depending on experience and their tier, which is based on GCI (gross commission income).

The businessmen also have a separate marketing company, Bespoke Marketing, a multi-tier platform, which they say gives them the ability to provide access to a concentrated network of the world’s ultra-high-net-worth individuals.

“We are educated by clients, who have a perspective that is truly rare,” Cody said. “They are often part of the news that people are reading. Ultimately, we only want to be true to who we are; build a unique firm that provides unique added-value to a unique group of people.”

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