Episode 234: Incorporating Business Lessons Into Your Life with Zach Wiegert

July 5 , 2023  |  By Matt Waller

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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. 

Episode Transcript

Zach Wiegert  0:00  
There's a lot of areas that you study in, in college that won't apply in whatever business you go into, but the general knowledge of business applies to everything.

Matt Waller  0:12  
Excellence, professionalism, innovation, and collegiality. These are the values the Sam M. Walton College of Business explores an education, business and the lives of people we meet every day. I'm Matt Waller, Dean of the Walton College, and welcome to the Be Epic podcast. I have with me today, Zach Wiegert, Managing Principal and Founder at Goldenrod Capital Advisors. Thank you so much, Zach, for taking time to visit with me today. I really appreciate it.

Zach Wiegert  0:47  
Absolutely, Matt, looking forward to it

Matt Waller  0:49  
Zach, you know, your background is pretty remarkable. You formed Goldenrod back in 2005. So you've been doing this for quite a while. But I'd like to back up and start to talk a little bit about your previous experience. I know, you had been in commercial real estate investing and developing for 10 years before that. But before that you had been in the NFL for 12 years. And you had played for the Rams, the Jaguars, the Texans. I mean, just being in the NFL for 12 years is something you must be tough. But you also played football at the University of Nebraska. And you were a part of the undefeated University of Nebraska national championship football team back in 1994. And I remember it well, because I went to Penn State.

Zach Wiegert  1:45  
Oh, yeah. Yeah. For Kerry Collins and Kerry Collins, Ki-Jana Carter, I know all those guys.

Matt Waller  1:51  
Yeah. But also last year, you were inducted into the College Football Hall of Fame, which less than .02% of all college football players and coaches have been inducted into. So congratulations on that. 

Zach Wiegert  2:07  
Thank you.

Matt Waller  2:07  
And of course, now you have led the acquisition development of billions of dollars in commercial real estate. You're currently overseeing a multi billion dollar fund. So you've got you got a lot going on. And a terrific background. I'd like to start just a little bit with some very basics. I mean, you have an uncommon experience, you had an uncommon experience in college. And I should mention, you majored in economics, which, you know, that's a demanding major, especially if you're playing football. Did you find that to be demanding? And did you, you must have enjoyed it, or you wouldn't have majored in it I suppose?

Zach Wiegert  2:47  
Yeah, I, you know, I think economics is something that it's like, you speak the language or you don't, I mean, it's supply and demand. And and you know, the more scarce something is and the more people want it, the more it costs. And so that's kind of how my mind went works. And kind of a mathematical, I can remember numbers forever, I have a hard time with names. It's kind of how my mind works. So it was a good fit for me. And I think it's done me well in my whole life, because it's really the basics that applies to everything in business so

Matt Waller  3:20  
It really is, it's such an important, especially getting the basics down like microeconomics, macroeconomics, money and banking. Once you have that down, you can apply it to so many different fields.

Zach Wiegert  3:33  
It's really human nature, it applies to everything really not just in business. I mean it, you know, like it, you see people waiting in line for an iPhone, it's, it's always what it is they charge what they want, because that many people want it, they only make so many at a time. So it applies to more in real life than people think.

Matt Waller  3:51  
Absolutely. You worked for 10 years in commercial real estate before you started your current company. 

Zach Wiegert  3:58  
Sure

Matt Waller  3:59  
Did that experience in college of having a lot going on help you learn how to manage a lot of different kinds of activities?

Zach Wiegert  4:08  
Oh, absolutely. I mean, it's, I guess a big thing I try to get across especially our younger employees is you just, you know, you you make a schedule and you set your schedule and when you have free time, get it done procrastinating, it'll be there waiting for you at some point. So you might as well just get it done. And what I found as as, as as you set your schedule, if you just do it, attack the problems and get them fixed and done, the more free time you have. So sitting around knowing that homeworks waiting for you or knowing you have to go to practice you just do it and do your best and move on. And I think that applies and everything in business, you know, now we have projects in 13 different states and you know, so what I do on a regular basis as the general partners, a little bit different idea as when I first started when I was managing all portions of a project. And now I'm just in on the major decisions. You know, structuring deals, things like that, because there's so many so many hours in the day. So, it it really gets into time management.

It's so true, having a schedule is so helpful. And then addressing problems, as you said, as they come up, rather than just sitting on them and hoping they disappear.

Yeah, they found they just don't go away. They just actually usually the longer you let them sit, the worse they get. And so we know our big thing with our meetings now and and in football too when you have great coaches is the same thing. And I use a lot of those lessons I learned playing sports to business is you know, you fix the problems, if things are going well. That's what you expect to happen. You look at film to fix the problems you look at, and you go to meetings with your your people in your company and say like no, no tell me the bad stuff. If you don't tell me I assume it's good. So and you know, people always laugh, they say, well, what's your job on a daily basis, I go problem solving. That's what I do on a daily basis is fix problems. So that's the best way to describe it is that you know. And that applies to anything in life for your listeners, there's an issue, the best thing you can do is, is solve it as quickly as possible, because they most often just disappear.

Matt Waller  6:23  
You know, this idea of the film's you look at in football to see where the problems occurred. And in meetings, your your metaphor to using a meeting to review what were the problems? You know, some people are more inclined to share those kinds of things than others. How do you get your team to, to really get into that groove of sharing the problems?

Zach Wiegert  6:46  
Yeah, it's interesting, it's kind of a learning process. You know, we'll have people managing specific parts of the business or specific projects, and something will come up, there'll be a change order in construction or something will come up. And the more inexperienced people, at least in our company will say, Well, I've got contingency money, I'll make it up somewhere else, or I can fix this on my own, or this and that. And obviously, you want self starters that are willing to go attack the problems themselves and fix them, but we kind of have a rule, like if you don't bring it to the to the meeting, you own it. So it's your problem until you share it with the meeting. And so I think I have found that when you're in a room of other smart people, if if the problem was brought up in a setting like that, there may be as someone who has experience with that specific type of an issue before they can comment on it, that can really help you solve your problem. So yeah, absolutely. You know, a lot of people, you don't want to come to the meeting and admit you have an issue with something. But, you know, the best we can we try to get people is like it's your issue until you bring it up. And so the sooner you bring it up, the sooner we get it solved and move on. I mean, there's always going to be problems that come up in any business, it's just, the sooner you can fix it the better, it's just like football, do you have on film, if you have a weak part on your offense or defense, the other team's gonna watch film and expose it until you fix it.

Matt Waller  8:10  
This idea of exposing problems when they occur, and then trying to solve them as a group. It's like, as an individual, you can use your knowledge and your capabilities, or you can use your network, your teammates. And if you as you expand, even if you're have a very high IQ and very competent, you get a few other people involved, you've already exceeded that easily.

Zach Wiegert  8:35  
Right, right, especially when your team has people with other core competencies. You know, we have in house legal, in house accounting, tax. So there's no one can be a master of all those things, design, construction. I meean we we have all these people that's specifically what they do all day. And a lot of times it's just you know, they're on another project and experience something similar, they were in a meeting heard how someone else fix that problem before. So a lot of is just experience and you can read all the books and be the smartest person in the world and they don't know how to fix it because you've never experienced it.

Matt Waller  9:05  
So you you you had been doing some of your own investing and developing for 10 years, and then you started Goldenrod Capital Advisors. How is Goldenrod set up? Do you have limited partners as investors? And are you set up like a regular fund? Alternative Investment Fund?

Zach Wiegert  9:24  
Yeah, so we're a registered investment advisor SEC registered investment advisor, which only like 3% of real estate funds are because you don't have to technically register but all of our numbers are audited. And we want to do that just kind of separate ourselves from our competition. You know, our all of our returns are audited. And so you can rely on our numbers when we give them to people. And then yeah, we're just a limited partnership. I'm the general partner of the fund. And they're all the investors are limited partners. You know, everyone gets their pro rata share of depreciation. Everyone gets their pro rata share of returns, distributions, all that. And it's really a central US focused fund. We've always kind of done business from Salt Lake to Atlanta, Omaha to Dallas, we have offices in Omaha, Dallas and Atlanta. And in house, we have about 52 people that work in house and I say in house, because if you counted all the people at the property management level at the different properties, you'd be in hundreds. But but that's, that's and we've we kicked off our first fund in 2017. And now we're actually going to have our first opening on our fourth fund here in July.

Matt Waller  10:38  
What is your waterfall structure in terms of like 2%. And then

Zach Wiegert  10:43  
Yeah, it's pretty typical, I would tell people and I was just meeting with some potential investors. So it's basically return 100% return on capital of the investors, and they get a 7% preferred return on their money that the entire time until they get it all back. And then after that, it's 80% to them, 20% to us. But the difference between us and a lot of funds is our waterfall structures on the whole portfolio. So in any given fund, we could have 12 to 20 properties. And all those properties have to perform above that preferred return on the entire portfolio, a lot of funds are set up where they do a waterfall per project. And I tell investors to be careful of that because obviously the real profitable stuff will sell early. And then they have what's called a catch up, where on the back end, there supposed to be a clawback monies they paid prefer if the other properties don't perform. And you see a time and time again, you have a fund with 20 properties, they sell off the first 10 make a bunch of carried interest or in the waterfall and then the other properties don't perform and sit there and drag down the returns. And then they have to go back after it and get there to get the waterfall back. So ours is very investor friendly. And I'm a large investor in my own funds as well. So I'm as motivated for returns as our investors and anyone.

Matt Waller  12:05  
That's great. You know, after you had been investing, doing your own investing for 10 years, your own development, to create a fund like this, you had to learn a lot, I would think you'd have to learn about private placement memorandum and the limited partner agreements and all of this kind of thing.

Zach Wiegert  12:24  
Subscription agreements? Yeah.

Matt Waller  12:26  
How did you learn that?

Zach Wiegert  12:27  
Yeah so, I'll give you just a little bit of history. So I so I got drafted in 1995, in 1996, I started doing real estate, I liked the idea of physical assets, something tangible. And because I always said, well, even if existing company in there, you still have a physical asset that has value. I mean, there's only so much land, there's only so many great locations. So I always kind of liked the idea, there was something there were like a stock to me was air. And so that's why I originally got into investing. And then when I retired in '07, I had already acquired a pretty good portfolio of assets over the time I played. And then from 2007, till our first fund kicked off in 17, we did, I don't know about a billion for real estate projects before we got in the funds. So in 2015, I had a conversation with my partner and and he was he had said, you know, they have a family office, it's large, and they would like to put money into invest with me as a fund because they're not really active business investors any longer. And so I spent two years going to New York, San Francisco, all over and looking at different types of funds and structures. And like you said, you know, limited partner agreement, draft subscription agreements, all the things you had to do to do that. And you know, just kind of found like, I didn't like funds that only focused in a single asset class. So you'll see a lot of funds that only acquire apartments. Well, in the last five years, it's really hard to acquire apartments and make any kind of return. So that that didn't make sense to me. I looked at funds that only did development, ground up development, which prior prior to when I retired until 2017, we primarily did ground up development work. And we just found that was the highest return on investment. And that didn't work because people like to get a distribution. And so there's such a lag from the time you start construction, complete construction stabilized and then put on any cash flows. It's a long leg so basically got in a fund that made sense. If you're going to build a diversified portfolio for someone you do a mix of development and acquisition. And then you know, you'd be diversified in different product types, so office, multifamily, industrial, medical, all those which we've done all those assets prior. And then that gives you the ability to diversify portfolio in different markets. different product types and the acquisition which creates cash flow and development, which creates growth of value. So basically, any one of our funds is its own diversified portfolio of different asset classes, different locations, construction, you know, ground up construction and acquisition.

Matt Waller  15:20  
A lot of NFL players, I'm told, I don't know this firsthand, a lot of times they don't necessarily use their income as wisely as you did.

Zach Wiegert  15:34  
Yeah, I like to think I've done a good job managing my income I, I wish where I got drafted and how long I played and how many games I started. I make what they make now. But I can't complain. It was a lot back then. So. But yeah, I'd like to think I've done a good job growing, growing my, my assets since I retired, I had one of the smartest real estate gentleman I've ever done business with said, you'll make way more doing real estate, you're going to just have a real knack for now. So I was like, yeah, he must not know what my salary is playing football. And he's right. And it's been it's been good. And it's just, you know, it's so compounding with real estate. And it's such a great after tax asset to be in. So,

Matt Waller  16:16  
So Zach, what are some examples of projects you've learned a lot from?

Zach Wiegert  16:22  
I have to say, I probably learn something on every project. You know, as time has gone on, I went from when I first retired to, you know, doing the architect contract construction, contract financing, oversaw the construction management of it myself, did the draws, you know, every single phase of projects, when you're managing two or three investments at a time, you can do that. To be more on the structuring finance. The big you know big picture wise, I always had a real and really liked getting into design, I always thought I was I should have been architect at some point in my life, I kind of see things in 3d. And so of getting into the design construction piece is still really fun for me. I don't get as much time doing it as I used to, but I still weigh on every design and construction of our any projects we do quite a bit. But yeah, you know, a sec we talked about earlier, you learn from from failures, I found what we're good at. And, you know, we need to stay focused on that, I'd say my biggest, you know, bad investments, and these are my own investments before I had a fund. You know, everyone was building houses in Scottsdale, Phoenix area, and we thought we'd get into do a single family development and build. So you know, buy buy a, an area put in all the improvements and sell lots off. And, you know, over a 10 year period, we got all our money back, but it wasn't I would not call that a win by any means. Another big retail development, we thought they'd let us build basically, to what our plans were we submitted to the city, and then they came back, and said we don't want apartments, we want this, we want this want this. That was you know, hey, when you're doing your due diligence on a property, better make sure that the municipality is going to agree with your plan before you close on the land. That's a big lesson but it's not nothing's done until it's done, and signed. So that's a big lesson to learn. People just you know, taking someone's word for it never seems to work. And then we had a unique deal, a bank actually got taken over by the FDIC, and as you know, as in Lincoln, or my college town, so I thought I knew it well. And I say like, we're buying this so cheap from the FDIC, there's no way it can't make money. And this was a lesson you learn in real estate about there's certain locations, certain buildings and towns that just have a bad reputation about them, and you can't you it's hard to get over that. You know, and that was one of them as I you know, people had a bad taste in their mouth about the bank going under and how that what happened and it was hard to get tenants to take it. And all three of my examples, we ended up fine but you know, an IRR on getting your money back over 10 years isn't a very good return. So I count those as big losses but those were three totally different situations and you know, that didn't turn out the way you'd hoped. But they're all huge lessons as far as for future developments that and other projects we've done just learn your lessons on you know getting all your I's dotted T's crossed stay in your lane don't get into single family homes if you don't build single family homes and you know, just because it sounds like a great idea and they're just astigmatism is with certain areas and towns or you know, a lot of time the bridge is a barrier in a town and on this side of the bridge people just don't cross over this side and places like Pittsburgh, there's boroughs all over and people shop in that borough they don't go the other borough. It means you just gotta learn. And that's why real estate is such a local thing. You got to know the local partners to make it work.

Matt Waller  20:07  
Zach to close our conversation out what message do you wish every graduating college student could hear?

Zach Wiegert  20:15  
I would say and this is just kind of my personality. So it probably always more me is passion, have passion for what you do. And I say that you're you may take some jobs that weren't your dream job to start. But you never know when the opportunity is going to knock. If you have passion for what you do. You could be a waiter, wait tables in a restaurant, and you meet up, you wait on the right person, and you do it with a smile on your face with passion that could turn into something as you go through life. It's amazing how many times you run into people that you met before in a position you never thought they were going to be in. And so one you know, do things have a smile on our face, be truly nice to people, but people can tell if you're passionate about what you do. And to me all the people I know that are successful are passionate about what they do on a daily basis.

Matt Waller  21:09  
Boy, that's so true. I've definitely observed that.

Zach Wiegert  21:12  
You can take something that seems pretty simple and be very passionate about it and can turn it into something big.

Matt Waller  21:18  
Well, Zach, thank you so much for taking time to visit with us, really appreciate it and it's a pleasure to get to know you.

Zach Wiegert  21:25  
Very nice to get to know you as well and I appreciate it.

Matt Waller  21:28  
On behalf of the Sam M. Walton College of Business. I want to thank everyone for spending time with us for another engaging conversation. You can subscribe by going to your favorite podcast service and searching Be Epic. B E E P I C