November 10, 2020

JF2261: “Passive” Income With Chris Hsu


Chris Hsu is the co-founder and CEO of Zibo, a venture-backed financial services company for independent landlords. Chris invested in real estate for over 20 years while pursuing a corporate career and learned that investing in real estate is anything but a “passive” income. He founded Zibo to help independent landlords save time and increase cash flow in their rental businesses.

Chris Hsu Real Estate Background:

  • Co-founder and CEO of Zibo (zee-bo), a venture-backed financial services company for independent landlords
  • U.S. Army Armor Officer
  • Has been investing in real estate for over 20 years
  • Based in Redwood City, CA
  • Say hi to him at: 


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Best Ever Tweet:

“Talk to your customers, understand their pain points and how they are currently addressing those points today” – Chris Hsu


Theo Hicks: Hello, listeners and welcome to the Best Real Estate Investing Advice Ever show. I’m Theo Hicks and today we are speaking with Chris Hsu.

Chris, how’s it going?

Chris Hsu: I’m doing great, Theo. It’s great to be here with you.

Theo Hicks: That’s good to hear. Thanks for joining us. A little bit about Chris. He is the co-founder and CEO of Zibo as you can see by his beautiful attire, which is a venture-backed financial services company for independent landlords. He’s also a US Army Armor Officer. He’s been investing in real estate for over 20 years. His company is based in Redwood City, California, and you can say hi to him and learn more about his company at If you’re watching this, you can see Z-I-B-O.

So Chris, do you mind telling us a little bit more about your background and then what you’re focused on today?

Chris Hsu: Sure. A little bit about my background. I grew up in Louisiana and decided I wanted to go to the army. So I went to West Point, joined the army. As you mentioned, I was a tank officer stationed predominantly in Germany; left the army and that’s when I started becoming a real estate investor. I was doing it on the side, it was like most mom and pop real estate investors. I didn’t have a lot of money when I got out of the army, I didn’t have any equity and I wanted to build some wealth and equity for me and my family, so we started investing in real estate, just really learning from friends and borrowing tools and just kind of building your own online/offline, Excel spreadsheet, paper-based system… And I worked at various different companies all throughout that to really culminate in being a public company CEO of a tech company, of a software company.

And I took a little bit of time off, stepped back and thought about what the heck do I want to do with the rest of my life, and I’ve just always found, I would say, real estate investing a hobby, something I really loved… And with some guys who had been really successful real estate entrepreneurs, we got together and we started Zibo.

Our mission in life is to fundamentally change the experience that small independent mom and pop landlords have with financial services. And that’s people that own anywhere from one single-family rental home to 100 units, and a mix of multifamily, single-family, mobile homes, you name it… Because they all have a very similar problem and a very similar stresses. In almost all cases, they’re really focused on trying to get to that elusive passive income, where they’re just cashing a check. And we just thought that there’s a better way to bring financial services to that independent, underserved mom and pop landlord, which is the vast majority of the landlords in the United States.

Theo Hicks: Thanks for sharing that. So the goal of your company is to transition people from more actively investing, being involved in their business, to as you mentioned, just collecting the check. So what would you say is the number one thing that is keeping people from being completely passive or at least more passive? And then how does your company address that problem?

Chris Hsu: There’s two aspects to passive income. One is the passive part and the other is the income part. I think on the passive part, we’ve spent time with thousands of landlords and independent mom and pop landlords, and what you hear from them is just a ton of stress and worry and time spent on simple things like collecting payments. Am I getting paid on time? Am I going to be able to get my bills paid? Is the timing of when I get paid correspond with when I have to get bills paid? If I’ve got 20 properties or 20 units and I’ve got rent collections checks and all kinds of forms of payment coming in, it takes me three weeks to pay me on time and to get those checks deposited in the bank.  Well, what Zibo is doing is trying to automate that process, so that landlords have one integrated dashboard that they can see exactly—if you’re a tenant and a landlord on Zibo, as soon as the tenant hits a button to send a payment, whether it’s credit card, debit card, check, money order – as soon as that’s sent, the landlord is going to see a status. So they’ll know within a couple of days who’s paid the right amount on time, etc, because they’ll have a dashboard. They can set up automated payments.

In today’s day and age 80% of tenants want to pay electronically, either bank transfer, credit card. 42% of tenants want to pay by credit card, debit card, any form of electronic payment. But yet today, 80% of payments are still cheque, cash, money or cashier’s check. There’s a huge mismatch. And part of that is because the banking system which is the main system which landlords use to manage their account, they use basically their bank or a whole series of banks, Excel, paper and maybe QuickBooks. But that bank account is not set up to be able to take the forms of payment that make it easy for them to accept credit card, debit card, even from two different banks are very difficult to do.

What’s Zibo has done is create an automated platform that allows landlords to collect rent the way that tenants want to pay it; free of charge to the landlord, all in an integrated system. If they have 20 bank accounts, they can bring all those bank accounts into one environment with one log on, they can see all those bank accounts and they can transact from Zibo across all those bank accounts. They can move money back and forth, they can collect rent, they can pay bills. And the really interesting thing is that all of that we’ve used medical algorithms to essentially help landlords classify and organize all the rent and expenses to specific properties and specific schedule, i.e. tax buckets, which allows them to stay organized. They can have one bank account for their operating account, 10 properties in it, and they can keep everything organized and we pay 3.75 times the national average interest on checking accounts.

We have tools for keeping your security deposit straight. So your security is deposit probably is spread all over lots of different accounts. If they’re commingled, you shouldn’t be commingling them, meaning if they’re in your operating account, they should be separated. Well, we’ve created tools on top of our Zibo bank account that you can use with your current bank accounts or on Zibo, that allow you to keep all that straight. What tenant belongs to what security deposit? Do I owe them interest? When does their lease become due? Lease document, checking document, all in one place.

So we tried to really become the one-stop shop for end to end cash management for that independent landlord.

Theo Hicks: And then you said the other aspect of it was the income aspect. Do you cover that as well or is that something separate than what you just mentioned?

Chris Hsu: You’re absolutely right. So there’s a couple different ways that Zibo can help impact income. Number one is, if you’re paying somebody to do all that rent collection for you, Zibo can do that for you for free. So you can save up. actually. We have lots of landlords out there that are spending anywhere from 5% to 10% of their income, where you get a free tool. We have landlords coming to us and telling us, “Look, we’re tired of paying a monthly fee and then having our tenants have to pay a big fee just to pay by cheque.” Zibo solves that problem.

The other thing is, landlords have tons of cash, it’s idle cash. Think about all the cash just sitting in security deposit accounts that you can’t touch, or all the cash that’s sitting in your excess operating account. And in most cases, you’re getting no interest on that. And in fact, if you have a business checking account, if you have an LLC or any form of business checking account, you’re paying 29 bucks a month just to have that account. We charge you nothing and we give you interest on top of that. So that’s for idle cash working for you to generate returns for you.

And the other thing we do is we offer competitive loans and insurance. So if you think about the independent mom and pop on insurance — I’ll just use an example insurance. Independent mom and pop pays, on average, 50% to two times what an institutional investor who has thousands of properties and has a master insurance policy with one of the biggest insurance brokers or carriers in the country. The independent landlord, even those that are being managed by property managers, don’t have access to that same insurance policy.

So what Zibo is doing is we’re aggregating all of that demand of independents and we’re creating master insurance policies, so you can get lower cost insurance, you can better protect your asset at lower costs.

Then the final thing I would tell you that we’re doing is, with all the expense classification I talked about and how you can basically classify every single expense to a property, every piece of revenue to a property, and to schedule a tax bucket, we create the ability for you to benchmark your own properties and then also to look at how your properties are performing vis-a-vis other properties.

Now, if you do that, then that basically highlights areas where your properties are underperforming. You’re spending too much on utilities, you’re not getting enough rent per square foot, whatever those metrics are. And if that’s the case, then there are a simple set of things that you can do to increase that income. So lots of different ways. Again, we think the independent landlord is very focused on passive income, we’re trying to help them on both sides of that equation.

Theo Hicks: That last point about comparing the P&L I think is [unintelligible [00:12:53].23] where you’re underperforming. How does Zibo get paid?

Chris Hsu: We make money by essentially negotiating deals with insurance companies, negotiating deals with the mortgage companies, and by taking a portion of the transaction fees associated with various different forms of payments, negotiating with the payment providers. But if you think about it, what a lot of folks are selling is SaaS platforms; we’re providing essentially a SaaS software platform that includes banking, payments, insurance and lending. That core platform is free and all transactions from the landlord perspective are free, minus things like if you want to do a wire. We have a standard fee for that. But everything else is free. If you want to do  ACH transfers, if you want to move money, if you want to accept cheques from your tenants. By the way, we’re the only platform that does online and offline payment methods.

So in other words, if you’re still one of those landlords that’s accepting physical checks, we’ve created a remote deposit capture, so you can actually take a picture from your phone of that check and deposit into your bank account, and it goes right to your Zibo dashboard for all those properties. So as I mentioned before, having one place to view by property, by tenant who’s paid, who’s paid the right amount, who’s paid on time, and have a 12-month rolling history on that. No one’s doing that.

Theo Hicks: As the CEO of a tech company, how do you spend the majority of your time? I’m just curious to see, you have a business about being passive… So how passive are you?

Chris Hsu: Oh, wow. Let’s just say there’s nothing passive about being the CEO of a tech startup. I will say that if you just think about what my job is, my job is to, number one, set the vision and strategy of the company. So there’s a lot of customer research, industry research, economic research, really understanding the trends of what’s in real estate investing, in financial services and in the technology that powers financials. So I spend a good deal of my time on that.

The second is finding the team. So first of all, figuring out what change do you need to execute on a strategy and finding the key leaders that I’ve got confidence in their capabilities to bring us to that strategy, and ultimately that vision, to fundamentally transform the experience that independent mom and pop landlords have with financial services. And then helping those teams allocate resources and hire people.

So when I started this, I was the first employee; I had no people. And we’re now 34 people globally, with lots of other external marketing consultants and PR and all these other things. But we had to build every aspect of that and that’s time-consuming; making sure that you hire the right people with the right skills to deliver on the strategy. And then I spent a lot of time making sure that those people now are working as a team.

As you’re building a new innovative product, you’re scaling the team, you’re scaling the product and you’re building the processes as well, and keeping all that aligned is just a heavy lift. And then I spend probably 20% of my time, in addition to that, talking to customers… Because I just think that — I’ve got a lot of my team whose job it is to interview customers, to get their insights, to do user testing with them… But if I get disconnected with customers, I can’t do the first part of my job, which is strategy.

And then I spend the remainder of my time, which kind of overlaps with the customer time, on making sure that we’re creating awareness for Zibo; because we can build the best product in the world, but if those independent mom and pop landlords aren’t aware of it and don’t know that what we’re doing is providing them an automated end to end cash management platform that gives them access to competitive loans and insurance, then we built a great thing that’s not going to be successful.

So I have a specific percentage for all those things, but that’s really the job of a startup CEO. It is anything but passive.

Theo Hicks: Yes… Alright, Chris, are you ready for the best ever lightning round?

Chris Hsu: I’m ready for whatever you’ve got.

Theo Hicks: Alright. First, a quick word from our Best Ever partners.

Break: [00:17:28]

Theo Hicks: Okay. Chris, you mentioned that a lot of your job is doing research. So what is the best ever resource you use to perform your research?

Chris Hsu: Well, number one is I actually talk to customers. I truly believe that that’s the number one form of research, and we’ve done a bunch of professionally facilitated research. We’ve spent a decent amount of our funding early days on just talking to customers in a structured way with professionals to really understand what are their pain points and how are they currently addressing those pain points today. And I think we read lots of stuff on the internet, we talk to lot of experts, but there’s no substitute from hearing first-hand how customers are dealing with these problems. And then because we have these technology tools today, we can do a video like you and I are doing and they can actually walk us through their portfolio and how they’re managing things and how they’re doing their banking. There’s no substitute for that.

And then we have lots of public data sources like census information, and we’ve just pulled lots of data together to try and triangulate who is that mom and pop landlord? What software and organization tools are they using? And where is there an opportunity for Zibo to come in and fundamentally transform their experience?

So that’s really the main sources.

Theo Hicks: What is the best ever way you like to give back?

Chris Hsu: As I mentioned before, I served in the military, and the reason I served in the military was because my father grew up in China during the Japanese occupation and communist revolution. And he spent the vast majority of his life trying to escape that and get to the United States. He ended up spending several years in Formosa Island, which is now Taiwan, and then eventually, in his mid-30s, made it to the United States. And he raised four children, all of us with the perspective that we had to serve our country, because freedom wasn’t free.

So for me, service was a huge component. My brother and I both went to West Point and both served in the military, and all of my volunteer hours, time and money goes to somehow serving veterans, whether it’s veteran homelessness or helping veterans transition from the military to a fulfilling career. I’m the senior advisor at a company called COMMIT that really dedicates full purpose to helping that. And then my family, we funded the Hsu Freedom Scholarship at West Point, which is designed to provide one to two cadets every year a scholarship in the summer to go around the world and study and write about oppression and the fight for freedom. So the theme for me is all about service and really veterans and serving this great country.

Theo Hicks: And then lastly, what is the best ever place to reach you and to learn more about your company?

Chris Hsu: You can reach us at It’s not .com, it’s .co. You can learn about all the products and services that we provide, you can learn about our team, and if you want to reach out to me directly, I love talking to customers and interested folks. My email is very simple. It’s So email me. Also, look for me on LinkedIn. I’m very active on LinkedIn. So Chris Hsu, and look for that, Zibo Inc. But follow us, like us and please try our products. It’s been great, Theo, connecting with you.

Theo Hicks: Yeah, absolutely. And thanks for joining us, Chris, and telling us about the advantage of technology and how we can use technology to go from spending lots of time in our business to automating it as much as possible. So we talked about the two ways that technology can help you. It can help you become more passive, but it can also help you increase your income as well.

You mentioned how you as a company get paid and we also talked about what it’s like being the CEO of a startup, for people who might not know what it’s like. It’s not as passive as your business can be if you use a technology service like Zibo. So make sure you check that out. Again, that’s

Chris, again, thanks for joining us. Best Ever listeners, as always, thank you for listening. Have a best ever day and we’ll talk to you tomorrow.

Chris Hsu: Thanks, Theo.

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