In a little more than a year, brothers and business partners Cody and Zach Vichinsky are dominating the Hamptons real estate market. Since launching in September 2014, their firm, Bespoke Real Estate has brought in over half a billion in sales and now represents more new construction than any other firm in the Hamptons, according to the company's chief marketing officer Michael Cantwell.
Prior to founding Bespoke, Cody, 29, and Zach, 31, worked at real estate agency The Corcoran Group. They thought the firm’s high-end buyers were under-serviced, so they decided to launch their own brokerage with the kind of concierge-level benefit clients expect from a firm solely focused on marketing Hamptons properties priced at a minimum of $10 million. For instance, they give their clients personalized, engraved iPads and offer helicopter rides from Manhattan to the Hamptons.
“We saw an opportunity in our marketplace that was really under-serviced,” Cody said. “We want to make our clients feel like they’re part of something unique, almost like a club. All the touchpoints are bespoke.”
Their clients include Fortune 500 CEOs, entrepreneurs and some newly-minted Silicon Valley power players. They declined to provide names because they are bound to non-disclosure agreements with their high-profile clients.
Here’s what the duo had to say about the state of the luxury real estate market.
Why did you decide to create Bespoke Real Estate?
Cody: Bespoke is really a product of necessity. We recognized an opportunity, and we felt that we could create a product with a level of service that could fill a niche within the Hamptons. We also wanted to do something together as brothers and be part of a family business. That was really important to us.
How do you differentiate yourselves in such a crowded market?
Zach: We’ve invested heavily in people and full-time researchers within our company who help us analyze the data. You can compare it to an analyst at a hedge fund. We’re very powerful with data and analytics. The emotional side is giving a sense of comfort to what that particular buyer or seller may need. There are 700 things that go into the process of making someone comfortable from the minute you meet them to the time of the transaction. That can occur over a long period of time. We look at every single interaction that goes into the business.
Cody: If someone needs a helicopter service, we provide that. We want to create an experience that’s cutting edge, innovative and comforting. Twenty million dollars for some people is a huge amount of money, and it’s not a lot of money for others, but nonetheless, that level of service needs to ensure that we are offering a differentiated product.
Who’s buying real estate in the Hamptons right now?
Cody: Seven out of 10 of our clients are U.S. born. Nine out of 10 are based in the U.S. and 1 out of 10 are foreign coming in. The majority of folks are in the Tri-State area. We have clients who are in their mid-30s, who are heavy into finance, and a big portion of our clients are Fortune 500 CEOs. We also have a lot of newly-minted tech folks from the West coast who are looking for places here where they can entertain. Our biggest clients are self-made.
We just sold a $27-million house to a 28-year-old, and that’s his fifth home. We always have a conversation about who we think will buy the property, and we are almost always shocked. You never know who’s going to walk through the door. It’s an eclectic group of folks.
How did you establish your authority in the space?
Zach: We surveyed a lot of our clients who we were servicing previously and asked them what they thought of the concept. A lot of it rooted from anger and issues they had with their current brokers.
What were their issues?
Zach: With large companies in the real estate sector, the branding of the company is much more important to the company than the branding of the client’s property. Our 18-person company allows us to be very nimble and bespoke to that particular property. Our marketing department for our very small company is larger than most of the competing companies that service 200 or 300 agents. There are 8 people from our 18-person team who work specifically on marketing.
Heading into 2016, how do you feel about the real estate market – in particular the luxury real estate market?
Cody: Across the board, there’s 21 homes right now above $10 million that are in contract coming out of 2015 and will hopefully close in 2016. That’s a pretty sound statistic. On the high-end, there’s been a lot of great activity and some big deals happening. I think it’s going to give another spike in the market in terms of people saying the Hamptons is still a great place to buy real estate.
What’s the most over the top, outrageously expensive home you’ve sold?
Cody: We currently have a 42-plus acre oceanfront home. It is probably the most spectacular property I’ve ever graced. It is well over nine figures.
Some analysts are saying the U.S. real estate market is overvalued. Could we see another housing bubble?
Cody: With the Fed raising the rate coupled with some instability overseas, it creates this cocktail of conversation of “Are we going to plateau?” In reality, the world does need a little bit of a correction from a price perspective. Our market is relatively unique because it’s a land-driven market. I think what the market needs is people getting off the sidelines and getting back into the game.
Zach: Ninety-nine percent of our clients are wealthy enough to weather a financial storm. When the market dips, we’ll have more clients to work with.
What’s been the hardest thing about being an entrepreneur?
Cody: Dealing with people. Certain clients can be more demanding than others, but at the end of day, they’re wonderful challenges. We deal with the vendors, the land planners, the lawyers, the municipalities. It’s navigation, and only experience can help you with that. Besides being a good salesman, you also have to be a very good politician.
Zach: The hardest thing to get over is that everyone wants to take this self-pride route like, “Oh I know all the answers because I started the company, and I’m at the top so I should know this.” My advice is to surround yourself with smarter people than you. I like to be the dumb guy in the room. We’re not afraid to pick up the phone and ask people for advice. You need to be humble about where you are, what your knowledge is, and most importantly, you need to learn from your mistakes. We’ve gotten kicked in the face, and gotten up and kept going.
What kind of mistakes have you made?
Cody: We’ve made a ton of mistakes along the way. When I make a mistake, I have my brother or my advisers. A mistake in our world is misquoting information – big time. The devil’s in the details. When you have tens of millions of dollars on the line, your credibility can take a hit. Measure twice, cut once. There have been many instances across the board where you cut, and you haven’t measured, and it comes to bite you. We look at our lives and the mistakes we make, but we have to be people of our word. In this business in particular, there are so many shifty folks so your word is everything.
Zach: We’re analyzing surveys and deeds and titles, and if we misstep on information, it can cost someone millions of dollars and reflects poorly on us. That’s why we really hated the conventional business model of a real estate broker was because it was “Get as many listings as possible and then see what you end up with at the end of the year and give everyone lip service along the way.” We made that mistake early on. When I was looking at the business that way, I started losing relationships because you’re not servicing your clients properly. Out of that came Bespoke because we said, “Let’s flip this on its head and see if this could be a sustainable model.”