Incorporating Business Lessons Into Your Life with Zach Wiegert
This week on the podcast, Matt sits down with Zach Wiegert, Managing Principal and Founder at Goldenrod Capital Advisors. The episode begins with Matt and Zach diving into Zach’s journey from professional football player to commercial real estate to leading acquisition developments as Managing Principal and Founder at Goldenrod Capital Advisors. Zach shares how lessons from his football career have translated to business and how he helps his team solve problems on a daily basis. They then discuss some of the projects Zach has worked on over the years and what he has learned from them. The episode concludes with Zach offering advice for graduating college students.
Transcript
There's a lot of areas that you study in, in
Zach Wiegert:college that won't apply in whatever business you go into,
Zach Wiegert:but the general knowledge of business applies to everything.
Matt Waller:Excellence, professionalism, innovation, and
Matt Waller:collegiality. These are the values the Sam M. Walton College
Matt Waller:of Business explores an education, business and the
Matt Waller:lives of people we meet every day. I'm Matt Waller, Dean of
Matt Waller:the Walton College, and welcome to the Be Epic podcast. I have
Matt Waller:with me today, Zach Wiegert, Managing Principal and Founder
Matt Waller:at Goldenrod Capital Advisors. Thank you so much, Zach, for
Matt Waller:taking time to visit with me today. I really appreciate it.
Zach Wiegert:Absolutely, Matt, looking forward to it
Matt Waller:Zach, you know, your background is pretty
Matt Waller:remarkable. You formed Goldenrod back in 2005. So you've been
Matt Waller:doing this for quite a while. But I'd like to back up and
Matt Waller:start to talk a little bit about your previous experience. I
Matt Waller:know, you had been in commercial real estate investing and
Matt Waller:developing for 10 years before that. But before that you had
Matt Waller:been in the NFL for 12 years. And you had played for the Rams,
Matt Waller:the Jaguars, the Texans. I mean, just being in the NFL for 12
Matt Waller:years is something you must be tough. But you also played
Matt Waller:football at the University of Nebraska. And you were a part of
Matt Waller:the undefeated University of Nebraska national championship
Matt Waller:football team back in 1994. And I remember it well, because I
Matt Waller:went to Penn State.
Zach Wiegert:Oh, yeah. Yeah. For Kerry Collins and Kerry
Zach Wiegert:Collins, Ki-Jana Carter, I know all those guys.
Matt Waller:Yeah. But also last year, you were inducted into the
Matt Waller:College Football Hall of Fame, which less than .02% of all
Matt Waller:college football players and coaches have been inducted into.
Matt Waller:So congratulations on that.
Zach Wiegert:Thank you.
Matt Waller:And of course, now you have led the acquisition
Matt Waller:development of billions of dollars in commercial real
Matt Waller:estate. You're currently overseeing a multi billion
Matt Waller:dollar fund. So you've got you got a lot going on. And a
Matt Waller:terrific background. I'd like to start just a little bit with
Matt Waller:some very basics. I mean, you have an uncommon experience, you
Matt Waller:had an uncommon experience in college. And I should mention,
Matt Waller:you majored in economics, which, you know, that's a demanding
Matt Waller:major, especially if you're playing football. Did you find
Matt Waller:that to be demanding? And did you, you must have enjoyed it,
Matt Waller:or you wouldn't have majored in it I suppose?
Zach Wiegert:Yeah, I, you know, I think economics is something
Zach Wiegert:that it's like, you speak the language or you don't, I mean,
Zach Wiegert:it's supply and demand. And and you know, the more scarce
Zach Wiegert:something is and the more people want it, the more it costs. And
Zach Wiegert:so that's kind of how my mind went works. And kind of a
Zach Wiegert:mathematical, I can remember numbers forever, I have a hard
Zach Wiegert:time with names. It's kind of how my mind works. So it was a
Zach Wiegert:good fit for me. And I think it's done me well in my whole
Zach Wiegert:life, because it's really the basics that applies to
Zach Wiegert:everything in business so
Matt Waller:It really is, it's such an important, especially
Matt Waller:getting the basics down like microeconomics, macroeconomics,
Matt Waller:money and banking. Once you have that down, you can apply it to
Matt Waller:so many different fields.
Zach Wiegert:It's really human nature, it applies to everything
Zach Wiegert:really not just in business. I mean it, you know, like it, you
Zach Wiegert:see people waiting in line for an iPhone, it's, it's always
Zach Wiegert:what it is they charge what they want, because that many people
Zach Wiegert:want it, they only make so many at a time. So it applies to more
Zach Wiegert:in real life than people think.
Matt Waller:Absolutely. You worked for 10 years in
Matt Waller:commercial real estate before you started your current
Matt Waller:company.
Zach Wiegert:Sure
Matt Waller:Did that experience in college of having a lot going
Matt Waller:on help you learn how to manage a lot of different kinds of
Matt Waller:activities?
Zach Wiegert:Oh, absolutely. I mean, it's, I guess a big thing
Zach Wiegert:It's so true, having a schedule is so helpful. And then
Zach Wiegert:I try to get across especially our younger employees is you
Zach Wiegert:just, you know, you you make a schedule and you set your
Zach Wiegert:schedule and when you have free time, get it done
Zach Wiegert:procrastinating, it'll be there waiting for you at some point.
Zach Wiegert:So you might as well just get it done. And what I found as as, as
Zach Wiegert:as you set your schedule, if you just do it, attack the problems
Zach Wiegert:and get them fixed and done, the more free time you have. So
Zach Wiegert:sitting around knowing that homeworks waiting for you or
Zach Wiegert:knowing you have to go to practice you just do it and do
Zach Wiegert:your best and move on. And I think that applies and
Zach Wiegert:everything in business, you know, now we have projects in 13
Zach Wiegert:different states and you know, so what I do on a regular basis
Zach Wiegert:as the general partners, a little bit different idea as
Zach Wiegert:when I first started when I was managing all portions of a
Zach Wiegert:project. And now I'm just in on the major decisions. You know,
Zach Wiegert:structuring deals, things like that, because there's so many so
Zach Wiegert:many hours in the day. So, it it really gets into time management.
Zach Wiegert:addressing problems, as you said, as they come up, rather
Zach Wiegert:than just sitting on them and hoping they disappear.
Zach Wiegert:Yeah, they found they just don't go away. They just actually
Zach Wiegert:usually the longer you let them sit, the worse they get. And so
Zach Wiegert:we know our big thing with our meetings now and and in football
Zach Wiegert:too when you have great coaches is the same thing. And I use a
Zach Wiegert:lot of those lessons I learned playing sports to business is
Zach Wiegert:you know, you fix the problems, if things are going well. That's
Zach Wiegert:what you expect to happen. You look at film to fix the problems
Zach Wiegert:you look at, and you go to meetings with your your people
Zach Wiegert:in your company and say like no, no tell me the bad stuff. If you
Zach Wiegert:don't tell me I assume it's good. So and you know, people
Zach Wiegert:always laugh, they say, well, what's your job on a daily
Zach Wiegert:basis, I go problem solving. That's what I do on a daily
Zach Wiegert:basis is fix problems. So that's the best way to describe it is
Zach Wiegert:that you know. And that applies to anything in life for your
Zach Wiegert:listeners, there's an issue, the best thing you can do is, is
Zach Wiegert:solve it as quickly as possible, because they most often just
Zach Wiegert:disappear.
Matt Waller:You know, this idea of the film's you look at in
Matt Waller:football to see where the problems occurred. And in
Matt Waller:meetings, your your metaphor to using a meeting to review what
Matt Waller:were the problems? You know, some people are more inclined to
Matt Waller:share those kinds of things than others. How do you get your team
Matt Waller:to, to really get into that groove of sharing the problems?
Zach Wiegert:Yeah, it's interesting, it's kind of a
Zach Wiegert:learning process. You know, we'll have people managing
Zach Wiegert:specific parts of the business or specific projects, and
Zach Wiegert:something will come up, there'll be a change order in
Zach Wiegert:construction or something will come up. And the more
Zach Wiegert:inexperienced people, at least in our company will say, Well,
Zach Wiegert:I've got contingency money, I'll make it up somewhere else, or I
Zach Wiegert:can fix this on my own, or this and that. And obviously, you
Zach Wiegert:want self starters that are willing to go attack the
Zach Wiegert:problems themselves and fix them, but we kind of have a
Zach Wiegert:rule, like if you don't bring it to the to the meeting, you own
Zach Wiegert:it. So it's your problem until you share it with the meeting.
Zach Wiegert:And so I think I have found that when you're in a room of other
Zach Wiegert:smart people, if if the problem was brought up in a setting like
Zach Wiegert:that, there may be as someone who has experience with that
Zach Wiegert:specific type of an issue before they can comment on it, that can
Zach Wiegert:really help you solve your problem. So yeah, absolutely.
Zach Wiegert:You know, a lot of people, you don't want to come to the
Zach Wiegert:meeting and admit you have an issue with something. But, you
Zach Wiegert:know, the best we can we try to get people is like it's your
Zach Wiegert:issue until you bring it up. And so the sooner you bring it up,
Zach Wiegert:the sooner we get it solved and move on. I mean, there's always
Zach Wiegert:going to be problems that come up in any business, it's just,
Zach Wiegert:the sooner you can fix it the better, it's just like football,
Zach Wiegert:do you have on film, if you have a weak part on your offense or
Zach Wiegert:defense, the other team's gonna watch film and expose it until
Zach Wiegert:you fix it.
Matt Waller:This idea of exposing problems when they
Matt Waller:occur, and then trying to solve them as a group. It's like, as
Matt Waller:an individual, you can use your knowledge and your capabilities,
Matt Waller:or you can use your network, your teammates. And if you as
Matt Waller:you expand, even if you're have a very high IQ and very
Matt Waller:competent, you get a few other people involved, you've already
Matt Waller:exceeded that easily.
Zach Wiegert:Right, right, especially when your team has
Zach Wiegert:people with other core competencies. You know, we have
Zach Wiegert:in house legal, in house accounting, tax. So there's no
Zach Wiegert:one can be a master of all those things, design, construction. I
Zach Wiegert:meean we we have all these people that's specifically what
Zach Wiegert:they do all day. And a lot of times it's just you know,
Zach Wiegert:they're on another project and experience something similar,
Zach Wiegert:they were in a meeting heard how someone else fix that problem
Zach Wiegert:before. So a lot of is just experience and you can read all
Zach Wiegert:the books and be the smartest person in the world and they
Zach Wiegert:don't know how to fix it because you've never experienced it.
Matt Waller:So you you you had been doing some of your own
Matt Waller:investing and developing for 10 years, and then you started
Matt Waller:Goldenrod Capital Advisors. How is Goldenrod set up? Do you have
Matt Waller:limited partners as investors? And are you set up like a
Matt Waller:regular fund? Alternative Investment Fund?
Zach Wiegert:Yeah, so we're a registered investment advisor
Zach Wiegert:SEC registered investment advisor, which only like 3% of
Zach Wiegert:real estate funds are because you don't have to technically
Zach Wiegert:register but all of our numbers are audited. And we want to do
Zach Wiegert:that just kind of separate ourselves from our competition.
Zach Wiegert:You know, our all of our returns are audited. And so you can rely
Zach Wiegert:on our numbers when we give them to people. And then yeah, we're
Zach Wiegert:just a limited partnership. I'm the general partner of the fund.
Zach Wiegert:And they're all the investors are limited partners. You know,
Zach Wiegert:everyone gets their pro rata share of depreciation. Everyone
Zach Wiegert:gets their pro rata share of returns, distributions, all
Zach Wiegert:that. And it's really a central US focused fund. We've always
Zach Wiegert:kind of done business from Salt Lake to Atlanta, Omaha to
Zach Wiegert:Dallas, we have offices in Omaha, Dallas and Atlanta. And
Zach Wiegert:in house, we have about 52 people that work in house and I
Zach Wiegert:say in house, because if you counted all the people at the
Zach Wiegert:property management level at the different properties, you'd be
Zach Wiegert:in hundreds. But but that's, that's and we've we kicked off
Zach Wiegert:our first fund in 2017. And now we're actually going to have our
Zach Wiegert:first opening on our fourth fund here in July.
Matt Waller:What is your waterfall structure in terms of
Matt Waller:like 2%. And then
Zach Wiegert:Yeah, it's pretty typical, I would tell people and
Zach Wiegert:I was just meeting with some potential investors. So it's
Zach Wiegert:basically return 100% return on capital of the investors, and
Zach Wiegert:they get a 7% preferred return on their money that the entire
Zach Wiegert:time until they get it all back. And then after that, it's 80% to
Zach Wiegert:them, 20% to us. But the difference between us and a lot
Zach Wiegert:of funds is our waterfall structures on the whole
Zach Wiegert:portfolio. So in any given fund, we could have 12 to 20
Zach Wiegert:properties. And all those properties have to perform above
Zach Wiegert:that preferred return on the entire portfolio, a lot of funds
Zach Wiegert:are set up where they do a waterfall per project. And I
Zach Wiegert:tell investors to be careful of that because obviously the real
Zach Wiegert:profitable stuff will sell early. And then they have what's
Zach Wiegert:called a catch up, where on the back end, there supposed to be a
Zach Wiegert:clawback monies they paid prefer if the other properties don't
Zach Wiegert:perform. And you see a time and time again, you have a fund with
Zach Wiegert:20 properties, they sell off the first 10 make a bunch of carried
Zach Wiegert:interest or in the waterfall and then the other properties don't
Zach Wiegert:perform and sit there and drag down the returns. And then they
Zach Wiegert:have to go back after it and get there to get the waterfall back.
Zach Wiegert:So ours is very investor friendly. And I'm a large
Zach Wiegert:investor in my own funds as well. So I'm as motivated for
Zach Wiegert:returns as our investors and anyone.
Matt Waller:That's great. You know, after you had been
Matt Waller:investing, doing your own investing for 10 years, your own
Matt Waller:development, to create a fund like this, you had to learn a
Matt Waller:lot, I would think you'd have to learn about private placement
Matt Waller:memorandum and the limited partner agreements and all of
Matt Waller:this kind of thing.
Zach Wiegert:Subscription agreements? Yeah.
Matt Waller:How did you learn that?
Zach Wiegert:Yeah so, I'll give you just a little bit of
Zach Wiegert:history. So I so I got drafted in 1995, in 1996, I started
Zach Wiegert:doing real estate, I liked the idea of physical assets,
Zach Wiegert:something tangible. And because I always said, well, even if
Zach Wiegert:existing company in there, you still have a physical asset that
Zach Wiegert:has value. I mean, there's only so much land, there's only so
Zach Wiegert:many great locations. So I always kind of liked the idea,
Zach Wiegert:there was something there were like a stock to me was air. And
Zach Wiegert:so that's why I originally got into investing. And then when I
Zach Wiegert:retired in '07, I had already acquired a pretty good portfolio
Zach Wiegert:of assets over the time I played. And then from 2007, till
Zach Wiegert:our first fund kicked off in 17, we did, I don't know about a
Zach Wiegert:billion for real estate projects before we got in the funds. So
Zach Wiegert:in 2015, I had a conversation with my partner and and he was
Zach Wiegert:he had said, you know, they have a family office, it's large, and
Zach Wiegert:they would like to put money into invest with me as a fund
Zach Wiegert:because they're not really active business investors any
Zach Wiegert:longer. And so I spent two years going to New York, San
Zach Wiegert:Francisco, all over and looking at different types of funds and
Zach Wiegert:structures. And like you said, you know, limited partner
Zach Wiegert:agreement, draft subscription agreements, all the things you
Zach Wiegert:had to do to do that. And you know, just kind of found like, I
Zach Wiegert:didn't like funds that only focused in a single asset class.
Zach Wiegert:So you'll see a lot of funds that only acquire apartments.
Zach Wiegert:Well, in the last five years, it's really hard to acquire
Zach Wiegert:apartments and make any kind of return. So that that didn't make
Zach Wiegert:sense to me. I looked at funds that only did development,
Zach Wiegert:ground up development, which prior prior to when I retired
Zach Wiegert:until 2017, we primarily did ground up development work. And
Zach Wiegert:we just found that was the highest return on investment.
Zach Wiegert:And that didn't work because people like to get a
Zach Wiegert:distribution. And so there's such a lag from the time you
Zach Wiegert:start construction, complete construction stabilized and then
Zach Wiegert:put on any cash flows. It's a long leg so basically got in a
Zach Wiegert:fund that made sense. If you're going to build a diversified
Zach Wiegert:portfolio for someone you do a mix of development and
Zach Wiegert:acquisition. And then you know, you'd be diversified in
Zach Wiegert:different product types, so office, multifamily, industrial,
Zach Wiegert:medical, all those which we've done all those assets prior. And
Zach Wiegert:then that gives you the ability to diversify portfolio in
Zach Wiegert:different markets. different product types and the
Zach Wiegert:acquisition which creates cash flow and development, which
Zach Wiegert:creates growth of value. So basically, any one of our funds
Zach Wiegert:is its own diversified portfolio of different asset classes,
Zach Wiegert:different locations, construction, you know, ground
Zach Wiegert:up construction and acquisition.
Matt Waller:A lot of NFL players, I'm told, I don't know
Matt Waller:this firsthand, a lot of times they don't necessarily use their
Matt Waller:income as wisely as you did.
Zach Wiegert:Yeah, I like to think I've done a good job
Zach Wiegert:managing my income I, I wish where I got drafted and how long
Zach Wiegert:I played and how many games I started. I make what they make
Zach Wiegert:now. But I can't complain. It was a lot back then. So. But
Zach Wiegert:yeah, I'd like to think I've done a good job growing, growing
Zach Wiegert:my, my assets since I retired, I had one of the smartest real
Zach Wiegert:estate gentleman I've ever done business with said, you'll make
Zach Wiegert:way more doing real estate, you're going to just have a real
Zach Wiegert:knack for now. So I was like, yeah, he must not know what my
Zach Wiegert:salary is playing football. And he's right. And it's been it's
Zach Wiegert:been good. And it's just, you know, it's so compounding with
Zach Wiegert:real estate. And it's such a great after tax asset to be in.
Zach Wiegert:So,
Matt Waller:So Zach, what are some examples of projects you've
Matt Waller:learned a lot from?
Zach Wiegert:I have to say, I probably learn something on
Zach Wiegert:every project. You know, as time has gone on, I went from when I
Zach Wiegert:first retired to, you know, doing the architect contract
Zach Wiegert:construction, contract financing, oversaw the
Zach Wiegert:construction management of it myself, did the draws, you know,
Zach Wiegert:every single phase of projects, when you're managing two or
Zach Wiegert:three investments at a time, you can do that. To be more on the
Zach Wiegert:structuring finance. The big you know big picture wise, I always
Zach Wiegert:had a real and really liked getting into design, I always
Zach Wiegert:thought I was I should have been architect at some point in my
Zach Wiegert:life, I kind of see things in 3d. And so of getting into the
Zach Wiegert:design construction piece is still really fun for me. I don't
Zach Wiegert:get as much time doing it as I used to, but I still weigh on
Zach Wiegert:every design and construction of our any projects we do quite a
Zach Wiegert:bit. But yeah, you know, a sec we talked about earlier, you
Zach Wiegert:learn from from failures, I found what we're good at. And,
Zach Wiegert:you know, we need to stay focused on that, I'd say my
Zach Wiegert:biggest, you know, bad investments, and these are my
Zach Wiegert:own investments before I had a fund. You know, everyone was
Zach Wiegert:building houses in Scottsdale, Phoenix area, and we thought
Zach Wiegert:we'd get into do a single family development and build. So you
Zach Wiegert:know, buy buy a, an area put in all the improvements and sell
Zach Wiegert:lots off. And, you know, over a 10 year period, we got all our
Zach Wiegert:money back, but it wasn't I would not call that a win by any
Zach Wiegert:means. Another big retail development, we thought they'd
Zach Wiegert:let us build basically, to what our plans were we submitted to
Zach Wiegert:the city, and then they came back, and said we don't want
Zach Wiegert:apartments, we want this, we want this want this. That was
Zach Wiegert:you know, hey, when you're doing your due diligence on a
Zach Wiegert:property, better make sure that the municipality is going to
Zach Wiegert:agree with your plan before you close on the land. That's a big
Zach Wiegert:lesson but it's not nothing's done until it's done, and
Zach Wiegert:signed. So that's a big lesson to learn. People just you know,
Zach Wiegert:taking someone's word for it never seems to work. And then we
Zach Wiegert:had a unique deal, a bank actually got taken over by the
Zach Wiegert:FDIC, and as you know, as in Lincoln, or my college town, so
Zach Wiegert:I thought I knew it well. And I say like, we're buying this so
Zach Wiegert:cheap from the FDIC, there's no way it can't make money. And
Zach Wiegert:this was a lesson you learn in real estate about there's
Zach Wiegert:certain locations, certain buildings and towns that just
Zach Wiegert:have a bad reputation about them, and you can't you it's
Zach Wiegert:hard to get over that. You know, and that was one of them as I
Zach Wiegert:you know, people had a bad taste in their mouth about the bank
Zach Wiegert:going under and how that what happened and it was hard to get
Zach Wiegert:tenants to take it. And all three of my examples, we ended
Zach Wiegert:up fine but you know, an IRR on getting your money back over 10
Zach Wiegert:years isn't a very good return. So I count those as big losses
Zach Wiegert:but those were three totally different situations and you
Zach Wiegert:know, that didn't turn out the way you'd hoped. But they're all
Zach Wiegert:huge lessons as far as for future developments that and
Zach Wiegert:other projects we've done just learn your lessons on you know
Zach Wiegert:getting all your I's dotted T's crossed stay in your lane don't
Zach Wiegert:get into single family homes if you don't build single family
Zach Wiegert:homes and you know, just because it sounds like a great idea and
Zach Wiegert:they're just astigmatism is with certain areas and towns or you
Zach Wiegert:know, a lot of time the bridge is a barrier in a town and on
Zach Wiegert:this side of the bridge people just don't cross over this side
Zach Wiegert:and places like Pittsburgh, there's boroughs all over and
Zach Wiegert:people shop in that borough they don't go the other borough. It
Zach Wiegert:means you just gotta learn. And that's why real estate is such a
Zach Wiegert:local thing. You got to know the local partners to make it work.
Matt Waller:Zach to close our conversation out what message do
Matt Waller:you wish every graduating college student could hear?
Zach Wiegert:I would say and this is just kind of my
Zach Wiegert:personality. So it probably always more me is passion, have
Zach Wiegert:passion for what you do. And I say that you're you may take
Zach Wiegert:some jobs that weren't your dream job to start. But you
Zach Wiegert:never know when the opportunity is going to knock. If you have
Zach Wiegert:passion for what you do. You could be a waiter, wait tables
Zach Wiegert:in a restaurant, and you meet up, you wait on the right
Zach Wiegert:person, and you do it with a smile on your face with passion
Zach Wiegert:that could turn into something as you go through life. It's
Zach Wiegert:amazing how many times you run into people that you met before
Zach Wiegert:in a position you never thought they were going to be in. And so
Zach Wiegert:one you know, do things have a smile on our face, be truly nice
Zach Wiegert:to people, but people can tell if you're passionate about what
Zach Wiegert:you do. And to me all the people I know that are successful are
Zach Wiegert:passionate about what they do on a daily basis.
Matt Waller:Boy, that's so true. I've definitely observed
Matt Waller:that.
Zach Wiegert:You can take something that seems pretty
Zach Wiegert:simple and be very passionate about it and can turn it into
Zach Wiegert:something big.
Matt Waller:Well, Zach, thank you so much for taking time to
Matt Waller:visit with us, really appreciate it and it's a pleasure to get to
Matt Waller:know you.
Zach Wiegert:Very nice to get to know you as well and I
Zach Wiegert:appreciate it.
Matt Waller:On behalf of the Sam M. Walton College of
Matt Waller:Business. I want to thank everyone for spending time with
Matt Waller:us for another engaging conversation. You can subscribe
Matt Waller:by going to your favorite podcast service and searching Be