You could say Anthony Hsieh left troubled seas for calmer waters.
A year ago, he was dealing in mortgages as president of the loans unit of IAC/InterActiveCorp.’s online mortgage broker LendingTree LLC.
Hsieh started Irvine’s HomeLoanCenter.com and sold it to LendingTree in 2004. After running LendingTree’s mortgage lending arm for three years, he left in 2007.
Since then, LendingTree has seen layoffs and now is set to be spun off by IAC/InterActive.
Hsieh, 42, left behind a career in mortgages for his passion: yachts and sport fishing.
In July, he bought Newport Beach’s Crow’s Nest Yachts, a yacht dealer. When longtime owner Gordon Barienbrock was looking to retire, Hsieh (pronounced shay) jumped at the chance to indulge in his hobby.
“I figured it would be fun to keep myself busy and work with boats, sell boats, play with boats and talk to boat people,” Hsieh said.
He’d bought and sold about 30 of his own yachts, many from Crow’s Nest, Hsieh said. But this marks his first time running a boating business.
“I’m here everyday,” he said.
Crow’s Nest employs 85 people and has about $30 million in yachts on hand,boats ranging in price from $80,000 to $4 million. Crow’s Nest has offices in Cabo San Lucas, Hawaii, San Diego and Seattle.
The larger yachts start at 36 feet and go for $400,000 and up. Once yachts get to 50 feet or more, owners hire crews, he said.
Boating in California is a $10 billion a year business, according to the Orange-based Southern California Marine Association. The association has about 500 members, including about 100 of the state’s boat sellers.
In Orange County, there are about 90,000 registered boats, said David Geoffroy, executive director of the association. The Lido Boat Show in Newport Beach and next month’s Los Angeles Boat Show are two of the biggest on the West Coast.
Bracing for Tough Year
Hsieh may have dodged the worst of the mortgage mess, but he said he’s bracing for what could be a tough year at Crow’s Nest. The economy will affect his business, he said, as yachts are investments.
“Wealthy individuals don’t make their spending decisions on affordability, they make their decisions on timing,” he said. “Smart people don’t want to buy a dollar bill today that’s going to be worth 90 cents tomorrow.”
On the upside, Crow’s Nest competes in the upper end of the market, which hasn’t been hit as hard as sales of smaller boats, like those you might see on trailers in people’s driveways.
Luxury yacht sales are the bright spot in the industry, according to the association’s Geoffroy.
Hsieh is projecting $80 million in sales this year, $30 million from new boats and $50 million in used boats.
Most dealers have just a few boats on hand ready to sell, according to Hsieh. That’s where Crow’s Nest has an edge,it’s more like an auto dealer, according to Hsieh.
“When you want to go to a yacht dealer, you want to see yachts,” he said. “They don’t have to wait for a boat show to look at boats.”
About 24 of the yachts are docked in Newport Bay outside Hsieh’s corner office window.
Yacht buyers typically are families, Hsieh said. People often buy yachts as a second or vacation home, he said. Sometimes owners can deduct the mortgage interest from their taxes.
Owners typically get their yachts delivered offshore to avoid sales tax, he said. Some people have out-of-state residences and register their boats in states where the sales tax is cheaper, he said. About half of buyers come from land-locked states such as Arizona and Nevada.
Yachting Lifestyle
Once an owner gets into the yachting lifestyle, he or she tends to trade up every year or so, Hsieh said.
Crow’s Nest is the exclusive seller of Viking, Tiara, Parker and Contender sport fishing boats and yachts. Parker came by way of Hsieh’s October acquisition of Sundance Marine in San Diego’s Mission Bay.
Hsieh’s umbrella company, Granders Inc., is named for a 1,000-pound Marlin.
The boats he sells are made on the East Coast for the Pacific Ocean. If a boat isn’t made for the Pacific, it can take about six months and half a million dollars to modify it, Hsieh said.
Crow’s Nest’s smaller boats, less than 35 feet, are stored at a building Hsieh owns at the Irvine Auto Center, where he also has 11 service bays.
Hsieh has three boats of his own docked in Hawaii, Cabo San Lucas and San Diego. He’s a passionate sport fisherman.
Bad Company, the fishing team he’s owned for 13 years, competes in tournaments that begin in May and are shown on ESPN2. Hsieh fishes in all the tournaments,he’s won $4 million for catching two fish in a tournament.
Crow’s Nest and Viking Yachts sponsor the team.
“It’s kind of like an automaker’s racing team,” Hsieh said.
He said he spends about $1.2 million each year on Bad Company. He’s got 10 people on the payroll and three boats.
“Every year, smart or not, I write a check to feed that team,” he said.
Entrepreneur
Hsieh, who came from Taiwan with his family when he was 8, cut his teeth as an entrepreneur. He was founder and chief executive of Huntington Beach-based LoansDirect.com, which he sold for an undisclosed sum to ETrade Financial Corp. in 2001.
He took a year and a half off and then started building his second company, HomeLoanCenter.com, an online lender that had $500 million in yearly sales when it was acquired by Charlotte, N.C.-based LendingTree.
Hsieh’s timing seems impeccable,selling one company at the start of the mortgage boom, selling another at the peak and walking away from the business before its implosion last year.
“My timing was a luck of the draw, it was simply the right time for me to hand over the leadership to better and smarter people,” he said.
Taking risks has been key to his success, Hsieh said.
“You try to calculate those risks to see if it pencils out or not and you keep running your plays,” he said. “I don’t like to lose.”
