959: The Rainmaker Model: How to Scale as a Solo Agent – Spencer Hsu

Aaron Amuchastegui 

Real Estate Rockstars, we’re here for another episode of Real Estate Rockstar radio. Today I get to interview Spencer Hsu. Spencer’s an agent from the Bay Area. He’s been an avid listener of Real Estate Rockstars for a long time. And these are some of my favorite people to be able to interview. And Spencer’s crushing it now. It’s a great time for him to be able to come on and share how he got there. Spencer, thanks for joining the show.

Spencer Hsu 

Yeah, thank you so much for the opportunity. And I hope all the listeners will be able to learn a few nuggets from our call today.

Aaron Amuchastegui 

I’m sure they will, man. I’m sure they will. So where do you live right now?

Spencer Hsu 

I am in the bay, San Francisco Bay area for those that are familiar closer to San Jose. So the South parts of the Bay Area.

Aaron Amuchastegui 

So there’s been so much news lately, like San Francisco and New York like, like it’s a danger zone like that no one’s buying houses, the real estate’s gonna be hurting. Is it like that in real life?

Spencer Hsu 

So I would say there’s two sides of the story. So a lot of people may assume San Francisco is all of the Bay Area, which it isn’t, right, San Francisco relative the Bay Area’s about 10% of the population. So it is true that a lot of San Francisco having challenges, especially like condos, but then where are they going? Now, they may leave to other parts of the country. But they just also are just leaving to other counties that are just 15 minutes away. So it is it is true for some parts that San Francisco is doing very poorly relative to everywhere else. But they’re just moving 15 minutes out. And those markets are doing very well.

Aaron Amuchastegui 

Yeah, I’m even I’m from Northern California. I know that area where well. And it’s funny to think about the Bay Area, as we’ve talked a lot about people are leaving the cities and go into the suburbs. So people say Bay Area and they think San Francisco, but the reality is you’re saying like San Francisco is a very small part and it’s a big city. But like the suburbs is still the Bay Area, like people are moving from the city to the burbs, or to the normal locations where they can now live in a much bigger house, you know, like San Jose, and stuff like that. So those markets are strong, that makes a lot of sense. What’s the average sales price of the houses you’re working on right now?

Spencer Hsu 

For me, I would say my average would be probably closer to $1 to $3 million, I would say just give you an idea of the range that I’ve worked with. I mean, I just recently yesterday got in contract for first time buyer, a one bed, one bath condo for about 370,000, which is considered pretty low end relative for the Bay Area. And then maybe my highest so far is over three and a half million. But the average I would say is closer to the kind of the mid ones depending on which cities you’re looking at.

Aaron Amuchastegui 

What’s your city where you do most your business out there.

Spencer Hsu 

I would say for those who are familiar San Mateo County and Santa Clara County, they by nature of the location tends to be a higher price point. And they also are closer to a lot of the big tech companies as to where most my clients will work. So those are the two corridors I do most of my business. But given the shelter in place, a lot more have considered the East Bay, which is generally a lower price point and also a bigger home. So that’s also a consideration that a lot of people have never thought of before.

Aaron Amuchastegui 

Yeah. So what’s 1.2 million get you? I remember years ago, we were building houses in Morgan Hill. And that was like some of our highest price point stuff. We were you know, builders from Sacramento and we had houses down in like, you know, the Central Coast to north to Santa Barbara but it was the lower priced ones Morgan Hill was your Bay Area by you and and most expensive. And they were like a million dollars, maybe high sevens or high eights at the time. But what’s 1.2 million get you in your areas?

Spencer Hsu 

It certainly depends on the area but I would say on general you’d be looking at maybe a single family home probably 1200 1300 square feet around there.

Aaron Amuchastegui 

And that’s really like people moving from the city into the burbs because they’re going, Hey, instead of that downtown condo, you know, they’re getting to they’re going out somewhere where now they have a home and some people go and then they go to East Bay. So they’re getting they get a little bit more home for their buck out there.

Spencer Hsu 

Exactly. Then, what’s interesting about the Bay Area is the price points are all somewhat comparable. It’s just the price per square foot is different, right. So they’ll be paying the same as the exact amount, but the house is just much bigger or there may be a bigger yard, right? So the actual relative price ends up to be somewhat comparable. It’s just a price per square foot tends to drop the further you are away from the major job hubs.

Aaron Amuchastegui 

Yeah, so it’s like average sales price everywhere in the bay is around 1.2 is just each city gets you a lot more that makes a lot of sense. So Spencer, how’d you get into real estate?

Spencer Hsu 

I did it actually initially as an investor. In my life prior to real estate, I was in tech, I was a software sales manager for over a decade. And eventually, I got kind of tired of that grind. And I want to do something else initially on the side. And I started by flipping a few homes on the side as a kind of a side hustle. And as I went through that experience, I got to learn a lot more about the industry. That’s actually when I started listening to a bunch of podcasts, whether it’s you guys or like bigger pockets, especially when it comes to investing. And then, so I think this is really interesting. So started spend more time and kind of got hooked and saw ultimate, also a big opportunity for myself with my skill sets and my knowledge to be able to help a lot of people, but it was really through investing, through flips, that got me started into the realm of real estate, at least residential real estate.

Aaron Amuchastegui 

Alright, so you were in software, and then you got and you were making good money, because that’s what software guys in the Bay Area make good money, then you decided that you wanted to try investing in real estate and then somewhere along there, you said, Hey, I should be an agent. Do you still invest in real estate now?

Spencer Hsu 

Not on flips, it’s a combination, the way that I looked at it was, quite frankly, you can make a lot of money on either side, flipping homes as an investor, or as an agent. But it honestly is about the same amount of time that you will have to commit to each of them to be to do well. And when I looked at that, I looked at the two and I was like, Okay, well, you have the opportunity to be an investor, you may have the opportunity to make a lot of a large sum of money if you’re able to find them or have projects. But those relationships are very different if you think about the end user kind of clients that you’re working with. And then when I looked at the real estate side, what I liked about it was I’m helping them with a very big financial decision for their usually their selves, their primary homes or investment properties. And there may be a lot of opportunities to do other projects together, whenever I have other things in mind. So I looked at it from a relationship perspective, like one is more of a kind of reoccurring one potentially, with referrals and things like that, versus the investing side is, is certainly very different. And if I say look, I’m gonna spend the same amount of time for each to either find deals or find clients, I think this route is just better for what I’m interested in.

Aaron Amuchastegui 

Because I’ve never heard that perspective. But you’re you’re right, like we make, especially most people getting into investing or like they have if they’re gonna go flip a house, they say you put up the money, I flipped the house, we’re gonna split the profit 5050. So they’re gonna make like 5% on the deal. If they do a good job, it’s a whole lot of work your commission, you’re going to get two and a half, right or two, or whichever it is. But the but there’s a lot more risk on the investment side. As an agent, you could work really hard for somebody and never get paid, you can never get an offer. You can never get the deal like that can happen. But the the downside on a bad investment is you could work really hard and lose 20,000 30,000 50,000. And you don’t see that I haven’t I haven’t heard people can kind of compare that before.

Aaron Amuchastegui 

Oh, I love being in real estate. And I can make about as much as an agent as I can as an investor. And I’m gonna choose to go the agent side. That’s a really interesting perspective. I love hearing that. So then did you start in January 2019?

Spencer Hsu 

I actually got the license December of 2018. But I was still working my full time software sales job, because I knew from experience like like anything, it takes time to get ramped up. So what I did was I worked at a company and got paid my salary, but I focused as much as I could on building the real estate business. So I was still working full time getting paid a salary on my previous tech job up until about mid of 2019 but I was technically licensed in December 2018.

Aaron Amuchastegui 

Okay, so 2019 you started how’d you do your first year?

Spencer Hsu 

First year was interesting. The first six months I did not close a single deal and at the end of the year I did about eight. I did eight deals for about nine and a half million.

Aaron Amuchastegui 

How’d you get your first deal?

Spencer Hsu 

The first deal is interesting. Initially I did a cold message of a connection that I had when we went to Previous MBA program together. And then I haven’t talked to that individual a long time, and I reached out. And they happened to be concerned to sell their home at the time. And it was like a Redfin agent and they weren’t happy with the Redfin agent, and then they were going to give me a shot. What was interesting is nothing ever is smooth. So they, we initially were preparing to get the property going market, and then they change their mind. They didn’t want to sell the home anymore, they want to just keep as a rental. But then they wanted to find a home to buy this another home to buy kind of add to their portfolio, but also move into that home. So we ended up how I ended up helping them buy a home, but it was through a few weeks of initially getting so excited to get your first listing as a very first possible, you know, deal to losing it. And then a few weeks later, they decided they wanted to buy. And then it was it was a journey from there.

Aaron Amuchastegui 

So these you were like, Hey, we list your house or like, yeah, and then they take that away. And then you were able to get that get that first deal. So you’ve only been doing real estate a couple years. But what do you wish that you would have known that first year before you got started? Like how to succeed as an agent, what would have been that thing you wish you knew?

Spencer Hsu 

I would say I think actually, I wouldn’t change a whole lot, the only thing I would change is hiring an assistant much earlier. And I was really slow for that. But in general, I would not change a whole lot because a lot of it is, you know, we see the successes now. But it takes a lot of work is a lot of practice. I put a lot of hours, I basically did open houses every single weekend that were not mind, just to gain exposures to gain potential new clients. So I think a lot of the things I did was correct. So I wouldn’t actually change a whole lot other than hiring assistant earlier. And being more Actually, I’ll correct. If I look back now, I would say I would be a lot more confident of sharing to everybody that I’m in real estate, I was very timid in the past for various reasons of not letting the world know repeatedly that I’m in real estate. And so I would I would do, I would have changed that if there was going to be a thing that I would tweak.

Aaron Amuchastegui 

You’d let more people know, hey, I’m in real estate. That is a tip that a lot of agents talk about now. And some people especially when they first start, they’re apprehensive for all sorts of reasons. They don’t know if they’re gonna succeed yet, or they don’t want to feel like they’re selling to their friends or everything else. So I like it. So you did have something that you’d look back now and go, I should have done that sooner because I do that now. And it obviously has some benefits for you.

Aaron Amuchastegui 

So how many transactions you in 2020?

Aaron Amuchastegui 

35 transactions for 43 million.

Aaron Amuchastegui 

So how was was that all through the year? Like how did your year start, how was your year pre COVID, and then post COVID?

Spencer Hsu 

So pre COVID. And in general for I think, for most places, the market was very intense, we would have expected some crazy numbers that year just from production, from what sales prices, so might, the beginning of the year was very strong. And then as soon as COVID hit, especially in the Bay Area, which is one of the most locked down places in the entire country, you know, things slowed down tremendously for really a couple of weeks, I would say kind of mid March timeframe when the country was on lockdown. And then things continue to kind of pick up and just kind of continue to ramp up as the year went on. I think there’s a combination of reasons, right? Number one, they’re just more options, because a lot of people may have canceled their listings altogether. So there’s no homes to buy. But also, in general, people have a little bit more idea of like, what’s going on with their jobs, what’s going on with where they want to live. Their overall confidence has increased throughout the year.

Aaron Amuchastegui 

Yeah. So what was your number one secret of still getting deals closed in 2020? Like, how did you survive 2020? It was your second year and you’re in the most one of those lockdown places in the country. What was your secret to just survive real estate?

Spencer Hsu 

So I thought about like, everybody has different ways to generate business and to grow their business. And there’s so many ways to for Google to dominate, right? It could be digital ads, it could be video, it could be social media. It could be mailers, there’s so many pillars. I knew one of my pillars, which for me from a was a lead acquisition perspective was open houses, that’s dead, right? It’s still dead. It’s still not backup and has no I’ve no idea when it will be even possibly backup. So I was like, Okay, well, I usually spend at the very least, you know, three, four hours each day at the open house. So that’s like eight hours, at least on the weekend. So I have all this time now that at then reallocate to another area, it could be existing areas to double down, or also other areas that I knew was important, but I didn’t do. And that area was a combination of my YouTube channel, and also my podcast. And so especially in the beginning, when shelter in place first happened, literally nothing. You couldn’t you couldn’t leave your house. Yeah, like, right. So I was like, Okay, well, I can either have, I can’t go on vacation, or you can’t leave, you can’t even go on vacation. So you can either just binge watch a bunch of shows, or you can start doing your own show. And because I knew at that time, there was so much commotion about Oh, is the world ending and all these things, which is maybe the case, but then a lot of people were making these inaccurate assumptions about what was going on with real estate. And I knew because I was still active like, this is not actually what’s really happening when it comes to real estate. So I bet if people are only hearing about all these different clickbait articles, I think people need to understand the truth. And so I created my own show and started revealing the market data every week, because I want people to fully see for themselves. This is actually what’s happening. Now you may have your own prediction and your thesis that you think the world will end and real estate will tank like 2008. But this is what’s really happening, whether you want to believe it or not. And so I started doing that video, I started adding to that and it got better and better. And eventually, over time, I got to know the market a whole lot more to but at the same time, a lot of people started to value that. And so I then posted those that video content on my own social media on YouTube podcast. So I got a lot of wonderful clients I never have met before, through YouTube and my podcast, and also within my own social media sphere. You know, I think I was able to position myself as like, this guy is still rolling. At this time. I think he’s legit, let me send him some people that I know that might be considering. So it was really the strategy and the adaptation to video was a huge driver and, and that’s what I’m continuing to improve on. Even at this time.

Aaron Amuchastegui 

There’s so many great pivots that you talked about there. Open houses get shut down. And instead of saying like, okay, I can’t do open houses anymore. I mean, you said that but I’m not gonna just gonna sit and watch Netflix all weekend. The time I was spending at open houses What can I do to build my brand? So it would have been very easy for you to give up being a year into being an agent when you think you would have had every excuse in the book to be able to go “Alright, this isn’t for me right now” and blame the world, right? Just blame the world that it got shut down and no one would have blamed you. You had a rough year and you said you can’t do open house. So first you pivoted and said alright, I’m going to work really hard instead. So listeners when you’re pivoting because there may be some 2021 pivots happening, there may be some need to change. Again, there may be, you know, a whole lot more of the same or there may be other stuff. But if you’ve been somebody that used to spend, you know, eight hours on a weekend doing open houses, and now you don’t, maybe try to look at that time and say, Hey, I can’t do this anymore. But now I can spend that time to do this instead, what other options are there, so then you went to video, and you’re just kind of just doing a great job, but looking at the news going, Hey, I should do this. Instead, we love and, you know, almost once a week we do one of our shows is the state of the market where we get to talk about what’s really going on out there. And we get to look at the real estate news and take it and try to give people kind of some actionable data for it. And people, people do love hearing about the world and what’s going to happen, and especially in that Bay Area, so they got to see you as, hey, as an agent still going. And you went all in on video, and now your YouTube pages it’s on, you’ve gotten tons of views. Now you’re starting to get a lot of subscribers and specifically, on the Bay Area, we’ve interviewed a few people that said, a YouTube is the thing to do. And over time it builds and you’re already probably around the same time you started that YouTube channel, we had interviewed a few guys on here that were really crushing it when you’re by building up their YouTube pages. So now you now you’re going into you know, getting people through that. But so how often are you doing that show.

Spencer Hsu 

So I do kind of two videos. One is a weekly Friday market update and is a live stream. So I use tools to be able to stream to my social media to just stream all together. And people can tune in and ask questions that way. So it’s every Friday at 12 o’clock pacific time. And then I also release like a video that I want to release, whether it’s a new construction walkthrough, maybe a new listing, it could be a what’s changing in the city. general questions I get. So it just be more of a random kind of video on a Tuesday. So I have two videos a week is what I used to do these days.

Aaron Amuchastegui 

Yeah. So you go two videos a week. And what’s the what’s kind of the latest news out there? What were your most recent topics?

Spencer Hsu 

I think a lot of people, as I mentioned, a lot of news and a lot of information is a laggard, right. So people may have this stigma of like you mentioned all the a lot of the articles about the Bay Area is people leaving the Bay Area. Yeah, more. So is people leaving, like I said, San Francisco, not the Bay Area. They’re just moving to the Bay Area, in a sense within other parts of the bay. Yeah,

Aaron Amuchastegui 

they’re actually moving. They’re not leaving the Bay Area, they’re moving to the Bay Area from the city.

Spencer Hsu 

Exactly. Right. So a lot of people don’t understand that even the people that live here because of all the press articles. And so the reality is the last two months have been incredible. It’s been a record year. And now that’s even overflowing two types of properties are not as popular like condos and townhomes. So now they’re, they’re getting a lot more popular. But as of right now we’re seeing a pretty big spike, we’re talking about about 5% spike over what everything else has sold for in the past. And so people that are buying need to understand like this is the market that we’re in right now, there is always an appraisal risk when it comes to these things, be ready for that. But this is what it’s required to win. And people will learn from themselves as they do one or two bids to understand that. But that’s the latest state of the market. I think we’re gonna have a record year here. And we’re gonna continue to record your bid is going to be a record increase.

Aaron Amuchastegui 

So Curtis said in your pre interviews, and one of the things you’d be great at talking about is considering being a solo agent versus leading a team. So what version do you do and why?

Spencer Hsu 

So how I look at the successes is there’s two types of models. So give everybody an idea, the production that I’ve done, I don’t have a buyer’s agent. I have an assistant and I have a marketing manager. That’s my current kind of company and my stack. I am trying to hire a showing assistant to help with that. But then I will continue to be the Rainmaker, at least for some time, I think it can be very scalable, even if I just have maybe two showing assistants, because I will take up, you know, the weekends entirely that I do showings right now. So I prefer that model for now. And we’ll see how it goes in. And I also get inspiration because there are many huge hitters in the Bay Area that run that same kind of lean model. It’s a it’s a very profitable model, right, if you think about just from a pure split perspective, and I think it’s still very manageable, and it still allows me to have the brand new control that I want for people to continue to trust me as an individual. So I just liked that approach. Because the the downside of the team aspect is like anything, you have to have the systems in place for that. You know, we all know the stats of agents surviving in this business. And the question is, do I spend that time finding new clients Growing data or do I spend the time allocating to hire a team who has, in that case a 90% fail rate? So I think that’s just a plan for now. I think it’s very doable, though. Like I said, there’s many models that have been successful in the Bay Area of this Rainmaker model that can go up to hundreds of million a year, in a very lean four or five showing agent assistance. So it’s very doable.

Aaron Amuchastegui 

So 43 million in sales, what was your gross commission income?

Spencer Hsu 

I mean, that’s probably over a million, it’s over a million,

Aaron Amuchastegui 

So it’s over 1,000,000 and two full time employees. And that’s it, and then you would hustle. But that is the solo model, when my wife was an agent in Sacramento, and selling our flips, and she would do a couple, you know, a couple 100 million in volume a year, she had three full time employees. Right. And that, but that was it, it was the three full time employees, they were licensed agents, and the other was a transaction coordinator. It was somebody to go do the pictures instead of the listings and, you know, kind of organize offers as they would come in. But it’s three employees on a bunch of oil. Yeah, and you’re right, the there may be different places in the US that lends to that model more than others. But it’s probably just type of personality too, right? Like being the Rainmaker like being the guy like, like, some people want to have, you know, the team picture and they’re growing the team. And they do very well. And it’s a great model, I think you’re right, the the net profit of the of what you do is going to be much higher on an employee solo agent level, as long as you get the volume, I don’t know how many deals you need to really make that model where it’s kind of like, if you’re under maybe seven or eight deals a year, then then the solo agent might not be the right model. Because I guess that you can’t afford it. You can’t afford an assistant at that. So if you’re doing seven or eight deals a year, just do all your own stuff. When you’re getting to that higher stuff. Have those assistants say like you’re doing really, really well, man. So tell us about the employee that you have and what does your assistant do?

Spencer Hsu 

So I have two employees and they’re amazing people that I have, they’re not local to the Bay Area, so they have the flexibility to work anywhere. And they’re basically in the East Coast. So my assistant helps with just the stuff that I need help with all the scheduling, all the planning all that, especially right now, there’s a lot of document signing that needs to happen. There’s any sort of just things that are not really me engaging with clients, but then needs to get done, whether it’s ordering things, giving me updates on things, it’s just really that’s not you know, I think a lot of people, when I hear on the show is just really breaking down your your dollar per hour kind of items, is you can do a quick math on my and my dollar per hour is probably, let’s say three $400 an hour, quite frankly, yeah, it’s not of that then teach my assistant to do it. So that’s, that’s a majority of what the assistant does, which is plenty of time, she also will help with all the scripts that I write. So a lot of it, I need to be prepared. So I write scripts for the videos that I do, right. So that doesn’t take that takes a while could be the blog post that I need. So there’s a lot of just back end stuff that people kind of take for granted of actually how much time people may actually spend. So there’s that one component. And the other component is on the marketing manager side. So it’s all my social media posts, she’ll write the copy, I will review all the copy, she will do all the video kind of planning and editing and the content writing. There’s all sorts of different things from a sequence perspective of my website, but also what kind of drip campaigns come from whichever topic I’m talking about. There’s a there’s endless things to do. So I’m very, very lucky that they’re on the team. And but even then again, those wonderful ladies only joined two months ago so this has been lean for a long time longer than it probably needed to be but it was only two months ago that that this was so it’s been even more lean than you may think.

Aaron Amuchastegui 

Yeah, that’s crazy. So last year when you were doing all the volume yourself you’re like yeah, you’re you’re hustling out there run around and maybe you weren’t sleeping very much but the but you know but we were but you are on lockdown. You’re not allowed to go eat anywhere. You’re not allowed to go hang out, hang out at night and go do anything fun. So you might as well just crush it in real estate instead. So the you’re talking to Curtis about a showing assistant. So the is that you have someone on your team that does that. Are you trying to hire for that or what what is the showing assistant do?

Spencer Hsu 

I’m still trying to hire for that. So part of the show as well. If anyone’s in the Bay Area, if you have even people that are interested in in the bay or you’re not doing well or you’re just a new college grad, let’s talk I need to hire someone ASAP for that I can’t keep doing what I’m doing but it still has to be the right person. Right? I’m not going to at the end of the day. This is a representation of myself, for my clients. So I may still need the right person. But the idea because right now is I need somebody to drive around with just what I’m doing right now to go show homes for my clients. You know, there is no open houses. So everything requires the agent to, to open the door for them. It was really that as a que response key role in giving, you know, thoughts of the general area and the general home itself. But it’s really that all that driving that’s happening, which I’m doing still every weekend right now.

Aaron Amuchastegui 

Alright, so someone to go kind of show your clients how to get in and out, maybe help organize it, maybe you can now do two clients at the same time, because you get to do a client and they do, they’ll get to kind of learn from the person that’s running this. Yeah, that’s running the team, they’d be able to learn from you. And then eventually a showing agent because they kind of become their own successful agent, right?

Spencer Hsu 

It’s up to them, right? I mean, some people like we all know, and a realtor life is not easy. And it’s very hard. So you may may be comfortable with just being a showing assistant, because you do get to see a whole bunch of houses every every weekend. But if they wanted to kind of progress and have that that’s maybe the option where I grow into kind of a mini team for that where they’re also just producing on their own. Yeah, so we’ll see how that progresses. But they need to first do the showing assistant job first.

Aaron Amuchastegui 

I guess the benefit, too, is you’re on it’s like salary instead. So it’s for real. I know a lot of real estate agents that love doing real estate, but they didn’t like the ups and downs of commission is the instability instead. And so switching to a base salary and said that the systems that my wife had everybody was they were all on salary. And they were all on salary, their job, and they loved that because that was nice and stable. And that was nice and predictable. And the this crazy entrepreneur life isn’t for everybody. And being a real estate agent is really the entrepreneur because of the up and down because you have months at work and not so yeah, if you’re somebody in the Bay Area, and maybe the up and down isn’t quite as fun, you know, something more stable, you’ll definitely be able to reach out for the show. So you do your YouTube stuff, you’re doing a couple a week, you’ve got a bunch of subscribers right now a bunch of downloads. Is that what your marketing assistants do? Or what are your marketing managers doing?

Spencer Hsu 

So as mentioned, it’s it’s combination of the videos, the video editing, as well as the scripting for that. Alright, so the publishing of it. And I’m also just, I am, I’ve just started rolling out like basically flyers for trying to get more listings. So I’ve a farming strategy that’s getting implemented as well. So she’ll help with those designs help with my listings as well. So there’s a lot of things that a marketing person will do, including managing my social media page.

Aaron Amuchastegui 

So right now, are you doing more listings or more buyer’s agent activities?

Spencer Hsu 

It’s honestly been a lot of buyers, like of the 35. Last year 33, were buyers,

Aaron Amuchastegui 

what is your number one secret to get your offer accepted as a buyer’s agent right now?

Spencer Hsu 

The number one secret in this hyper competitive market is setting the right expectations. At the end of the day, it’s not uncommon for, let’s say five plus offers, some will go for 20 plus offers. But it’s all fairly predictable of where these will go if you did the right due diligence. And so it’s also getting on the same page with the clients of like this is the state of the market. It’s all about the right framework and the right expectations. So combination of what others have sold for in terms of a data driven approach, looking at the disclosures, anything negative, and then understanding the competition, trying to find out from the other side, are we competing against five people we’re competing, it’s 15 people will give you an idea of where your spectrum of how aggressive you are for that particular house. Those are the disciplines that need to happen for every offer that we make. And with that, you know, they’re always gonna be outliers, right? You can’t predict outliers. If somebody really loves them, and over bids like crazy. You can’t predict those things. But you can pretty easily predict how to be in the top few each time. And if you’re in the top few each time, you have a very good chance of getting in contract.

Aaron Amuchastegui 

Yeah so that data driven approach that we’re getting out and people are getting offers like two 300,000 over asking. Yeah, all over northern California. Do you even look at what the list prices are? Would you pay attention to like what it’s listed for or are you like, No, I know it’s a I know it’s a $1.2 million house, even if it’s listed at 900?

Spencer Hsu 

Exactly. I tell all my clients list prices are an artificial fake number. And people need to understand that especially in a lot of markets right now. Yeah, it’s right now, right? It’s a fake number. What’s the only metric that’s important is what others have sold for in the past, in the last the last three months. I mean, this is all very recent, that’s a true number if the market was flat, and then you need to understand where is the market going? Is it going up the ad, you know, 2%, or whatever it is, in terms of what it has been increasing by, that’s how you actually determine the fair market of a home. Right, so the list price is an artificial number, and I tell people that up front, and I will show them look, this other home sold for this amount, this will sell for this. Now, I tell all my clients this as well, I’m happy to do whatever you want for the first one or two offers, we look at the same data, you can come up with your price, because I want them to understand and learn and not be me just you know, shoving something down their throat, you can go with whatever you bid. But if we do not win, we need to be on the same page of like, this is why you did not win. This is why I went for my my calculation was pretty spot on for this. So it’s learning as you go through it. If we’re making the same mistake over and over again, then it’s it’s the fault of the realtor, you’re not doing a good job of educating the client, but also not doing good job on the process altogether.

Aaron Amuchastegui 

I really like that process, you’re gonna take your clients and say, Hey, we’re gonna go make this offer. And you know, we’re gonna have to go 200,000 over asking; it’s actually worth 1.2. And if they say, Well, no, it’s listed at 900, I want to offer a million, you go, okay, and you set clear expectations, and you say, so I think it’s gonna sell for 1.2. And I will be happy to write your offer for a million, you do a couple more of that. And lo and behold, they sell for 1.2. And after that, you’re like, Okay, I did it your way a couple times. You’ve kind of you’ve kind of proven to them, you’ve let them take the reins, you let them kind of build their trust with you. And then by being right, then they say, Okay, if we really want this next house, we got to take it serious.

Spencer Hsu 

Exactly. Yeah

Aaron Amuchastegui 

Well, I guess that’s also having the expectation too, that if you get a new client and you’re writing an offer, as an agent, you can’t expect your first couple offers are going to get accepted. Because your client needs to learn about the process and what’s going on. Like you need to train them and teach them like we’re in this every day, we see it every day. They don’t they’re buying one house. And so it might take them a few offers to realize how crazy it is out there.

Spencer Hsu 

Yeah, and some will trust the individual right away. Like for example, referrals are much more likely to trust because they know their friend went through, you know, a great process, and they knew it was very taking walk well care of. But at the same time, if it’s a brand new person that you’ve met, then they don’t need to trust you, right. So, but trust can be earned over time, by being transparent by being just being honest with the whole approach. But also the data driven approach makes it where this is a numbers, you can believe what you want, but this is exactly what’s happening. And that at least makes things kind of even where they know, I’m not just making stuff up just to close a deal.

Aaron Amuchastegui 

I love being able to say it’s about the numbers, not the people, right? So you’re like, Hey, you don’t have to get mad at anybody it’s not about this, it’s not about that. it’s simply a number like the number part doesn’t lie. It really is going to end up there if there’s two offers or 20 offers, because the people will usually get the market will bear what the market will bear. It’s a really interesting time. And every people are asking it all the time, like how do we get our offers accepted, there’s so many things coming in. It’s the most common thing happening right now, especially on the buyer side, the you know, for listings that to their toughest part now is now people are less likely to list because they’re worried about where they’re gonna move next. They’re like, well, I want to sell my house, but I don’t want to, but then I’m gonna have to rent for a year. And is the is the market going to keep going up? Like how am I going to do this? So this has been really great for our listeners, I think there’s so much value for people out there of just stuff that you’ve talked about today, you got me you got to talk about your pivot of 2020. And how instead of like, when you couldn’t do open houses anymore, you said Alright, I’m gonna do this. Instead, you’ve built up like this, this this great video, the great video channel on YouTube. Now you’re actually getting listings from that you’re working hard and you’re growing and you’ve taken that like solo agent approach. And honestly, you’ve done really, really good in your first couple years of real estate, especially considering that one of those years was was crazy. And I’ve said it 100 times on the show. We’ve had a lot of people that crushed it this year, but a lot of people that haven’t. And most of the people that are new agents are having a really rough year in 2020. Because it’s tough to get that acceptance. I think your advice can be great for them. What are your future plans out there? What are you hoping to accomplish do this next year when it when it comes to that?

Spencer Hsu 

You know, a big part of what everybody needs to understand is the finance stack, right? I mean, we go through all this stuff about numbers and some top team makes hundreds of transactions a year or whatever it may be and makes x dollar amount. But at the end of the day, it’s about profit because you can do whatever you want with that. And I actually the reason why I went even the solo route was, if I’m making this case, you know quite a bit of money as net profit, I can do whatever I want with that money I can save, I can use it for marketing, to keep bolstering the brand, I can invest in other things, again, invest in real estate, I can invest in the stock market, you can do whatever you want with it. So people need to understand they’re the finance health of a business. Right, that’s number one, they also need to understand at the end of the day, the marketing is from the individual people trust the individual, not the brand, you can be a compass you can be a Sotheby’s you can be an eXp. At the end of the day, they trust the individual, and you would hope they would trust the individual, because that’s the person that they’re going to battle with. And so I chose eXp because I was initially with Keller Williams and both had a similar model, where they did kind of promote and allow flexibility of someone branding in the individual. Of course, you have to do with the proper guidelines, but with way more flexibility than a traditional brokerage, like a, like a compass, right? And so you know, my brand, in my case is the tech realtor of the Bay Area. That’s who I want to target. That’s my focus. And I can have my marketing all kind of geared towards that. And so I think people need to understand from their own business perspective, take a look at your own model. How much are you paying for commissions? How much are you paying for? And how much value are you getting truly getting back? Like, take the brand out of it, because the brand is yourself. Understand that right? In my model, my cap is like $16,000, you heard how much I made last year. Like Imagine if there was no cap, like God, that’s a lot of money that I’m just dumping away. And understand that because there’s a cap, and then you do whatever you want. With that remaining amount, you think it’s better to pay that difference to the broker, or you think that’s better just to even dump it blindly into marketing yourself. Or you probably get way better ROI, quite frankly, it just dumping it to whatever you want, you can either just give out money, and they’ll probably be better than the broker brokerage itself. So you know, people need to understand your financial position, whether you’re a newer agent, whether you’re an experienced agent, because it was easy a lot. Like even when I first made that transition from the year one, which I mentioned was nine and a half million. If you think about GCI, what is that? Let’s say two and a half percent, I think, was that almost 20 50,000 example, right? But the cap that’d be at the time was about 40,000 total. Even if my business was fly, I will save $24,000 a year by literally just changing the name of a brokerage, right? So then I can do whatever I want with a 24,000. I can just throw massive parties or whatever it is, yeah, it doesn’t matter. And that’s the idea. So I think people need to understand that like, understand your business, understand the finance side, and then make the decision that’s right for you. And hence why eXp has done very well. So just that fundamental structure, I think people need to seriously understand, and then be more open to it because the finance side of your business. And the other side is the marketing side of your business, which I think quite frankly exp allows a lot of flexibility that a lot of brokerages don’t. And that’s very helpful as you continue to grow your brand. So I would say those are the main things. And then of course, the way that eXp is done is very different than traditional comp, like companies. We’re all almost individual mini offices. That’s why people may have been pitched up over and over again, from different people. So it is very important to understand who is actually the one that you’re going to be kind of joining and wanting to learn from. You know, I think mentorship is a huge part of whether an agent’s can be successful or not. Because anyone joining in just because you got your license means nothing, you’re not going on, you’re not even on the starting line, you don’t even know what you’re doing yet. And so being able to have a mentorship, a mentor is very important. And that’s the same idea is like, who you join at eXp is also very important. So I think those hopefully are helpful, you know, in that case, I would be aligned with you as well. Obviously, I would want you to be successful, especially if you’re in this case under myself, because we’re all on the same team and even financially on the same team. So I think that’s helpful. It’s not a pitch of eXp, but as a pitch of understanding your business. What makes sense for your business, both financing and marketing side. And hopefully you make the right decision from there.

Aaron Amuchastegui 

Yeah, what an interesting perspective. I mean, you even talked about the team versus solo part or joining a team versus starting a team as you’re as you’re learning, or if you don’t have as many transactions. There’s so many different options a real estate agent, so I love what you said there Spencer of just encouraging people to to figure out what they want figure out what their model should be you know if you depending on how they want to market or what they want to market if they want to if they want to market themselves versus a company brand and there’s pros and cons to both sides of that right and being able to see it’s pretty cool yet a million in GCI and had to pay $16,000 in broker commission I’m sure somebody out there their eyes raised a little bit out there and the and yeah, being able to find you know, we interview people from every different brokerage I’ve got great friends from every different brokerage and all of them have have great reasons for that but I love the reminder to you take a look at your business plan right now. And to make sure that it’s the business plan that you want and make sure that it’s working for you and be able to make some adjustments. Spencer if somebody does want to reach out to you if they’re like if they want some advice on certain YouTube page, they want to learn more about about your brokerage or anything else they want to get get some advice, what’s the best way for them to find you?

Spencer Hsu 

The best ways would be you can simply just find me on Google just Spencer, last name is Hsu. You can find me on Instagram. I reply to all messages, so feel free to DM me there, or send me an email, I respond to everything. I really appreciate the opportunity on this show. It’s it’s always kind of surreal, because as you can imagine, it’s been a short time, I still listen to you guys, especially as I drive, I think a lot of people need to use that as an opportunity to listen in and learn things. I don’t actually have a direct mentor. But these podcasts and the different people that come on the show people should. My suggestion to everybody I know this is what I’ve done is I always listen to the shows that are relevant to me at where I’m at. I listened to it. And then I take different nuggets of how can I implement those things that they’re doing well into their business. So whoever’s listening to the show take action, because we’re not here just to watch shows, definitely, I think that’s actually a waste of time on one end, because you’re just wasting time, if you’re not actually executing, it’s all about the execution. All of these ideas have always been out there. But people are just listening and is tuning in. That’s the advantage that everyone should take is find a few nuggets of my of this particular episode or every episode, see how you can apply to your business and then execute. Do it consistently for a long time. And then I think you’ll see a lot of great results. And that’s actually how I got to this level. And one last little nugget. You asked what are my goals for this year. So as I mentioned, it was a crazy trajectory, right first year, eight deals, nine and a half million second year 35 deals 43 million this year, I want to double that. So I want to do 70 deals over 80 million. As of right now we’re kind of in first, I don’t know, maybe mid February, if I can say that. I’ve done already nine deals for I think, on a 14 million already, man. So we’re just getting started. Because the reality is a trajectory, as you can see is just getting started. So that gives you kind of a sense of where I’m coming from my approach. I work a ton. Everybody should work hard. But there needs to be a strategy and a discipline that you’re gonna you just kind of keep focusing on a few key areas. And everybody has a chance to do very, very well in this business.

Aaron Amuchastegui 

Man, Spencer, that’s great stuff. And you’ve already got on pace to hit your 70 or 80 deals this year. I can’t wait when you hit that you got to reach out to me and tell me you got that. And like I said at the beginning, I love being able to interview people that listen to our show, especially when you get to talk about the goal of Real Estate Rockstars. Yeah, when Pat Hiban started the Real Estate Rockstars podcast, it was to get the secrets from all the best agents out there and share them with everybody. And really like you’re hitting it on the head is supposed to be you have all these mentors. You’d have all these mentors sharing their secrets and bringing it all because they just want to help provide value and you’ve got to listen to these mentors and go apply it and you’ve applied just some nuggets, because now you have created your own brand and your own way and you’re just doing great. So Spencer, I really appreciate you coming on the show. Thanks so much for coming on and Real Estate Rockstars, thanks for listening.

Spencer Hsu 

Hey, thank you.