Bruce Wuollet is the founder, visionary, and the current owner of Bakerson. Growing up in the bakery business in the Twin Cities, Minnesota, Bruce wanted to pay homage to his late father.
After trying his hand in a few different ventures in Minnesota, Chicago, and Phoenix, he finally found his real estate passion. He’s brewed a track record of success throughout Bakerson’s 18 years in the business.
[00:01 – 11:42] From Bakery to Real Estate
- Bruce Wuollet talks about his background and how he started his journey in real estate investing
- Trying different paths and actually giving the time and effort to see if you really like it
- When’s the best time to do something?
- It should be done when you’re most likely to do it
[11:43 – 23:35] Generating and Closing More Deals
- Bruce Wuollet shares tips and tricks on how he can generate and close a lot of deals
- Know your numbers
- Bruce talks about his habits and routines
- MVP – Most Valuable Priorities
[23:36 – 28:06] Bakerson’ Focus
- Bakerson’s current focus
- Permanent tenants
- Create a legacy of ownership
- Buying without the intent of selling
[28:07 – 34:50] Passion for Serving Others
- Bruce Wuollet talks about his passion for serving the residents
- Providing one of the basic human needs – shelter
- Treat the residents with respect and dignity
[34:50 – 40:01] Closing Segment
- The worst investing advice Bruce has ever heard
- Invest in mutual funds, and it will compound over time
- Bruce’s book recommendation:
- Final thoughts
- Connect with Bruce online! See the links below.
Tweetable Quotes:
“If you don’t love what you do – you should make a change. There’s no reason why you shouldn’t love what you do.” – Bruce Wuollet
“If you take care of the residents, they take care of the property. The property takes care of us and our investors.” – Bruce Wuollet
Resources Mentioned:
You can connect with Bruce Wuollet by sending him an email at bruce@bakerson.com or give him a call at 520 808 9111. Visit the Bakerson website to know more about real estate investing opportunities.
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Dan Krueger (00:15):
Welcome to multi-family investing made simple, or we take the complexity out of investing in real estate so that you guys can get started to date. I am Dan Krueger and I’m joined as always by my co-host, Anthony, how are we doing today, Anthony?
Anthony Vicino (00:31):
I’m doing good. Doing fantastic. Still struggling with the technology. Can’t get my camera working, but this is a podcast. So it doesn’t matter.
Dan Krueger (00:38):
That’s okay. We’re doing our best. We’re here. We’ve got audio. That’s what matters. And we have something other than audio. We have a guest today. We’ve got Bruce, Bruce let to be specific. So quick little background on Bruce. Bruce is the founder and visionary and current owner of Baker son growing up in the bakery business in the twin cities in Minnesota, Bruce wanted to pay homage to his now late father, hence the name Baker, which is pretty cool. After trying his hands in a few different ventures in Minnesota, Chicago and Phoenix, he finally found his passion. Real estate is proven track record of success throughout Baker sins, nearly 18 years in business. The thousands of individual units bought repositioned and sold. Bruce’s overseeing all aspects of the business, including operations, acquisitions, project leadership, equity fund management, property specific syndications, legal finance, and more. His focus is finding good deals. All his passionate serving the residents by providing them with one of their basic human needs shelter prior to launching bakers. Then in 2002, he served on the acquisition team at a Phoenix based real estate investment company. And now he is here with us today. Welcome Bruce. How are you, man?
Bruce Wuollet (01:51):
Thanks for having me on. It’s good to be here.
Anthony Vicino (01:53):
Yeah. Good to talk to you. You’ve got a very interesting backgrounds and anyone growing up in, well, I’ll let you get into it. If you want to divulge the specific business you had up here, anyone in our area is probably going to be familiar with it. But given your background, how you ended up to where you’re at now, I mean, it’s fascinating.
Bruce Wuollet (02:10):
Well, it started back in the end of the last day of 1968, 90 that’s birthday, but in all serious grew up in a, in a family business. My father was the owner of a will at bakeries and his grandfather was the founder. You know, being the son of the owner. I thought, well, that’s where I’m going to end up. So I got into the bakery business and tried my hand in everything I could, there did everything from what we call the dish dog or doing the dishes to baking cake department and decorating cakes and wedding cakes and working in the retail in the store. And then the last four years I was there, I was all the deliveries, internal and external. And I feel like it was really a great business. I loved much of it, but I didn’t feel like what really, what I wanted to do and my father told me when we were young, that, you know, if you don’t love what you do every day for work in this country, you should make change. There’s no reason why you shouldn’t love what you do. So the day came that I didn’t love what I did anymore. I just told him, daddy, you know, I’ve tried everything here, but I just don’t love what I do and businesses, great people are great, but it’s just not my passion. And I’m going to pursue some other, some other directions. So I actually got into first executive recruiting, head hunting and did really well on that for four years, both in Minneapolis and Chicago, but found it was gruelling and it was mind numbing and it was 200 phone calls a day and just pounding the phones. And you know, this inside sales really not what I wanted.
Bruce Wuollet (03:30):
So I tried medical device sales did that for a year. And that was like, no, I don’t like dealing with the tangible that’s boring company I worked for is great. And there’s, they really need things, but it wasn’t for me that actual sales position. So I said, I know I’m going to get into drug education with my friend is a detective in the city of Phoenix police department. We broke even after year one and said, no, that’s not going to work. And then I read rich dad, poor dad and said, Hey, that’s kind of neat. I’ve been, I could do something with that. Well, my friend Gary was doing tax lien, foreclosures. He was getting these properties for two, three, four, $5,000 for properties are probably worth 30 or 25. You know, this is in the rough parts of Phoenix in 2000, 2001.
Bruce Wuollet (04:16):
It was to get property that cheap was not unheard of. And so I got into that and I noticed that he had left a lot of money on the table. I said, Gary, you could buy this. There’s people that’ll take $10,000 for this house. You don’t have to wait for it to go through foreclosures to buy it for two, or they might read it in their taxes. He says, yeah, it does. It doesn’t fit. Nope, there’s too much money. I’ll give them a thousand bucks. They don’t want that. I’ll just wait and take my chances because he was investing in the tax lien, foreclosures with hopes that they get to redeem them or he gets the property. So I started making offers to these people and buying properties that way. And that’s really how I got started into real estate. And then when I read rich dad, poor dad, I realized you could use other people’s money to buy properties.
Bruce Wuollet (04:56):
And I started to buy single family homes. Duplex of tribe talks to me said we had three houses, a duplex and a triplex all in Phoenix. And I wanted to go into a full-time my business partners at the time were wanting to be part-time and I see no, there’s, I’m going to, I’m going to pursue it. Full-Time and that’s when I met up with my friend, Jack Martin and his dad worked with my dad in the sixties, in the bakery business. And we say, Hey, we’re both SOVs, we’re both sons of acres. And so that’s, that’s where Baker son comes from. And I told Jack, you know, Jack and I visited him on a napkin, which I still have in my office. We brought out a business plan and it’s in a zip lock and it’s sitting in a folder on my desk, but it’s pretty funny.
Bruce Wuollet (05:36):
Oh, you got to frame our business plan. Yeah, someday I should. So then we did that for they were started by finding properties and he was a general contractor. I was finding the deals of putting the plan together and I was finding way more properties that we could ever fix itself. And I said, no, we’ve got to do something here and couldn’t figure out what to do. And I got introduced to wholesaling. And while I was in doing wholesale boot camp in Seattle, a man from Arlington, Texas helped me flip a house in Phoenix. And I thought, man, if he give a guy from Arlington and me from Phoenix can meet in Seattle and flip a house in Phoenix while we’re doing this boot camp, I’m sold. I’m all in. And that year we flipped around 60 properties and 47 to one buyer. And it was just a phenomenal machine and our business was born.
Bruce Wuollet (06:24):
And then fast track. We did over 2000 transactions, maybe 2200 in the housing and maybe a dozen, 12 to 15. We at full retail all the rest where we’d take them down, clean them up and sell. We call it a hoteling between wholesale and retail. But as the market shifted, we didn’t. And then we got into multifamily, we did 25, 26 properties flipping multifamily in the same manner. And then I said, you know, Jack and I said, we could fix these up. You know, we could do this too. So then we did six properties in Phoenix in multi-family from six years up to 120 and then Jack and I went different ways. Four or five years ago still best friends. So it’s really, really lucky that we’re still great friends. And then not. I’d started buying properties in Tucson and we’ve done 11 projects down at Tucson from 12 units to 107. So that’s really fast getting from when I was baking until where I am today. And is there anything in between you on a slice and dice? Let me know and I can expound on it
Speaker 1 (07:26):
Much. Yeah. It was a really cool story. I mean, I love that you actually tried your hand at everything and it sounds like one thing that I noticed is that you gave everything a decent amount of time. Like you actually saw things through for a decent amount of time. Whereas a lot of people, I think, seem to get the shiny object syndrome and then they start doing one thing, but they don’t really do it fully because they get distracted by something else and they go to the next thing. But I mean, it sounds like you gave everything, you know, at least a good year or two years, or for you moved onto something else. Right?
Bruce Wuollet (07:55):
10 years ago, 12 years ago, I got into biking and this last year I got it more serious, but you notice there’s like a compound effect that you need to really give a time. But if you study those curves, most people will try something like a diet. They’ll start a diet on January 1st. But February 15th is, you know what, I’m doing this diet, I’m doing this exercise. I haven’t noticed a change now. You’re not going to see it in, in six weeks. You know, you’re going to see it in six months. You’ll start seeing a difference. And after one year you’d be like, wow, looking back. What did I do? So that’s the same thing in this. So you do have to give it a long enough effort, but you also have to know when you back off, that’s where I’ve had a little more struggle.
Bruce Wuollet (08:30):
We get like two to two and half years of just solid growth. And then six months of catch-up trying to figure out where’s the market going and then go through that cycle again. So I’m trying to flatten that curve of the peaks and valleys, trying to flatten that a little bit for more consistency. Like you were an economic change right now. We don’t know where it’s going to go and I want to be prepared for it. But I also don’t, I’m not going to shut down and wait. So I think it’s always good to give something along enough effort to sure that it’s something you have exhausted the opportunity or find out if you like it cause things you like, like you move somewhere. People that go on vacation somewhere, they move there. And after three months, like, man, it’s a lot colder here than it was when I was on vacation. I don’t know if I like it here or whatever the case may be. You got to give it some time. Yeah.
Speaker 1 (09:13):
I think that’s really important too, that you mentioned that you actually like it because, you know, I kind of, I get this questions a lot. And I I’ve got a nutrition background as well. So I get these same types of questions from two different parties from the real estate crowd and the, you know, I’m trying to lose weight crowd, you know, what’s the best diet or what’s the best way to invest in real estate? Well, it’s like, there’s a ton of different ways and you know, a lot of them work really well. It’s just a matter of trying to find something that you actually enjoy so that you can do it for a long period of time, right? Cause you know, you can make money flipping houses, you can make money flipping multi-family, you can make money buying a rehabbing and just refinancing and holding or you can just buy and hold it.
Anthony Vicino (09:51):
Not refi. There’s tons of different ways to do it. But finding a way that actually fits with your personality that you actually enjoy, I think is really important. I think that’s part of that shiny object syndrome. People get as well as like there’s, there’s tons of different ways to do this. Like it’s not like one’s necessarily better than the other. It’s like what matches your long-term goals and your personality. And it sounds like you’ve landed after a long journey of trying to bunch of different things. You’ve, you’ve kind of settled on something that really kind of fits with your lifestyle and aligns with your long-term goals now.
Bruce Wuollet (10:24):
Yeah. And the thing about follow through, you know, the people that do teach a lot about nutrition or health, and they said it wasn’t the best time to exercise. There’s people that argue that first thing in the is the best time. And there was a guy that I read a book on that said exercise after dinner, before you wind down for the evening or after work before dinner, that’s when you should do it. And so somebody asks, when is the best time to work on cold calling? Just some people say, well, your cognitive capacity is the highest in the morning, so you should do it. Then I think cold calling should be done when you’re most likely to do it. Like if you’re going to call it could call investors, you have a list of, or even warm call do it when you’re most likely to do it. Because if you do it at a time of day that like after lunch it’s after lunch, you have a certain mind-set and it derails that mind-set. You’re not going to be effective. You’re not going to build to do what you want to do or the outcome that you want the outcome based. And it’s very important to do it when you are most likely to do it, regardless of what the experts say. That’s my feeling. Yeah.
Speaker 2 (11:19):
I agree with that fully. There’s an interesting book that’s on dieting and nutrition and trying to convince people to go onto a plant-based diet. And there’s a line from there that I thought was really interesting, which is the question is what’s the best vegetable to eat. And the answer is whichever one you’re most likely to eat. And so don’t force yourself to eat the vegetable that you’re not psyched to eat, focus on the ones that you do and just enjoy that. So the thing that I’m really interested here from your perspective is like you left the family business and you went these different tracks and I can see how some of the skills you learned as a head Hunter or as a cold caller, probably paid massive dividends. When you got into real estate specifically, like you mentioned, you were finding more deals than you could even do anything with. Right. So how, how were you generating so many deals? What was your approach to that?
Bruce Wuollet (12:12):
It’s actually quite funny how we did it, Jack and I developed this, put together a sheet of paper. And on there, there was 17 lines where you could write in. And we had these, these codes like V as vacant, D as distressed B as board. It’s a VDB was the, that was the best leader at bacon distressed and boarded. And we had these codes that we’ve put in and we’d write them in to the list. And there’s 17 on the list. And we found out that we would get one house per 17 per page. And so then Jack said, we got to get some more inventory here and I’d go drive neighbourhoods. And I’d wait till I fill up three sheets because I wanted three properties to get under contract in the next month. So I would drive well, pretty soon we were getting three a day at times, but then these numbers make sense tracking your numbers to me is very, very valuable.
Bruce Wuollet (12:57):
So that’s how I did it. That’s what transferred to me is I knew that when I was head on to you, if I called, you know, 200 people a day, I would have 12 really good conversations, probably four resumes and one good job order for a client looking for somebody. And so then I knew my numbers and I think it’s very important when you know your numbers, how many offers you have to make to get an acceptance? How many acceptances do you have to get to close and how many closes you need to make a deal? Same thing in multi-family, but I break it down to units. How many units do you need to pay our monthly bills? How many units do we need to get ahead? And how many units do we need to create our legacy investing, which we’re working on right now?
Bruce Wuollet (13:32):
So that’s probably the biggest skillset I learned from head hunting was know your numbers. And if you want to double your production, if you’ve got a double your results, you double your production, but there’s magic because when you double something, you actually get more than double return. It’s it’s the magic of compound mind-set that when I, when I would do like three full sheets, oftentimes we would get four or even five leads instead of three. So it’s interesting how that compound continues. When you, if you give double the effort, you actually get more than double the results.
Speaker 2 (14:02):
Yeah. It’s a geometric growth is a really hard thing for humans to conceptualize because these numbers, they just get so out of control so quickly we underestimate like just how quickly to X-ing every, I dunno, every X period of time, how powerful and big that grows over a relatively short period of time. I’m curious, Bruce, you strike me as a guy who is very regimented and about your habits, your routines, or who has a process that they follow. Is that fairly accurate?
Bruce Wuollet (14:37):
Yeah, that’s very accurate and it wasn’t always that way, but it’s been off and on, but lately this year has been that way and I am very structured at least to tell about 11 o’clock and then the wheels kind of come off in the day, but up until 11:00 AM, I’ve got my day scheduled every day, starting at four 30 in the morning. So I still work Baker’s hours.
Speaker 1 (14:57):
Very cool. Yeah. That seems like it’s in the genetics, right?
Speaker 2 (15:01):
Is that where that started in from that kind of Baker lifestyle? Or how did you develop this, this morning routine? That, that seems to keep things rolling?
Bruce Wuollet (15:09):
No, it’s evolved, but lately what it is is I get up very early. So like, you know, anywhere from four to four 30, no alarm just when I wake up and then I read for anywhere from 20 to 40 minutes, depending on the morning, how much time I have I read and I read books that are business books. I know we’re going to talk about what book I recommend. So I’ll share the one I’m reading right now later. But then, then after that, then I, during that time I drink two cups of coffee and then I hop in the truck and I’d go mountain biking. And I do 60 to 90 minutes and mountain biking at sunrise. And Phoenix is summertime. It gets light at five 15, five 30. So once it gets into fall, after I have to switch it up off to do biking in the afternoon instead of the mornings, because you know, we don’t daylight savings and it’s the days are obviously shorter than the winter than the summer, but for now, that’s what I do.
Bruce Wuollet (15:53):
And then I go home, take a shower and then eat breakfast with my wife. I take off to the office, I’m there between seven 45 and eight 15. And then I worked there for the next three hours or so. And that’s what is really the core is there. And then the afternoon things change as these come in and people have certain needs. And then I try to get to bed. Now I used to stay up till midnight and, you know, try to get up early when it’s tough, start to the squares, you got to get your rest. So then I’d be very, it’s very important. I tried to get to bed between nine, nine, 30 and 10 every day, which is unusual for me because I’m such a social guy. I didn’t like that, but I’m so structured now creating these habits because I want this compound effect to happen in business and life.
Speaker 1 (16:33):
Yeah. It sounds like you get pretty much full day done before most people even get up, which is amazing and kind of to tie it back to a point you made before you probably just organically notice that this was the time of day when you’re most productive. So that’s when you’re doing the stuff that matters the most would be my guests. Is that safe to say that you’re naturally just more focused and more motivated early in the morning than you are in the afternoon?
Bruce Wuollet (16:55):
I’ve got to add if I was in school, people always tell me, like I got squirrels all over the place and I’m always changing the topic and you got to reign me in and I’m very high energy. So in the morning, I’m much more willing to sit down and read and study. My mind is, is slowed down where I can focus on that by the afternoon. My mind is all over the place and that’s what I do my creative thinking. That’s what I want to say. Okay. How can we do something different? How can we take this property? How can we do this capital stack? How can we sell this property to this buyer when he’s got these challenges much more creative in the afternoon, much less receptive to things in the morning. The other thing I did is I cancelled all of my social media besides LinkedIn and group me in WhatsApp for other things. But as far as Facebook deleted, Instagram, deleted Twitter gone. And I just, I’m not going to be on it. We have our business accounts for personal accounts, not interested.
Speaker 1 (17:43):
That’s fascinating. I’ve never actually thought about breaking up the types of things I’m working on based on time day, you know, the, you
Bruce Wuollet (17:50):
Mentioned like the early morning stuff is for like the maybe quantitative or analytical type work. And then the last part of the day is more of the creative stuff. That’s fast. I never thought about that. This Anthony, this might kind of align with you because I know you’re both, you have both types and you’ve got a similar a morning routine too.
Speaker 2 (18:07):
It’s really interesting because we hear so often from people that say, you need to wake up earlier and give yourself that time. But I think what Bruce is pointing out here is you need to understand your unique cycles and when you work best and you need to figure that out because it’s different for everybody. And what’s interesting about this is hearing Bruce’s story for me, I’m the reverse. Like I wake up early and I have to get my creative work done in the morning because by the afternoon I’m mentally exhausted. And then I can sit down and do the analytical stuff because it’s a little bit more rote. It’s a little bit easier just to kind of like put in the paces. Whereas it’s really hard for me to be creative at night-time. So like Bruce and I are kind of inverted in that way. But if we were both trying to like fit through the Groo’s advice of wake up early and then do this and do this and do this without really understanding our unique cycles, one of us would be very unhappy.
Bruce Wuollet (18:57):
Yeah. Fascinating. Well, the analytical doesn’t come naturally to me, it’s been something I’m good at, but it’s because by force and by studying, but the creative side, I didn’t realize this til after when Jack and I departed ways a few years ago that I am really actually quite clever and creative. And I said, boy, I should start monopolizing on that. And then that’s when I realized in the last year that the afternoons is really good for that. You know how I figured that? I don’t know. It just happened over time. You just trial and error, oftentimes more error than trial, but you know what I’m saying? Yeah.
Speaker 2 (19:29):
Do you find that you block off that time to be creative where you’re like, Hey, nobody bothered me during this period of time, or do you kind of have more of a free form creativity period where you’re like, bring as much stimulus at me as you can?
Bruce Wuollet (19:41):
Yeah, no, if it depends on what it is, if I’m working on something specific, I’ll shut my door and it’ll be, I call it 90 minutes where we really focus on everybody has a right during the day at any time to shut their door, their office and shut their phones off and everything for 90 minutes. And it’s the time to work on something to be extremely productive throughout the day without interruptions. And so sometimes I’ll try and reach somebody and I’ll find out they’re on their 90 minutes. That’s fine. You got 90 minutes in a day, roughly in the morning, but any time to shut the door and work on something that you need to get done. And it’s an MVP most valuable priority for the day. That’s what we call it, the sacred 90. So they work on the sacred 90 and that’s totally excusable time to not be reachable by anybody else on the team.
Speaker 2 (20:21):
I love that. That reminds me a lot of Cal Newport’s concept in deep work, which is really blocking off those periods of time where you need to dive in deep preferably for like 60 to 90 minutes so that you can get your hands really into the subject that you’re working on. And then grinding out that time. Because quite often, if You have really important work that you do and say trying to write a book, or you’re trying to write a report, or you’re trying to think creatively about a solution, that’ll work For you in a buyer like somebody coming in, interrupting you every 20 minutes, isn’t enough time to dive as deeply as you need to. So I love that you guys have kind of formalized that in your business. That’s amazing. Yep. Second thing we’re just adopting is do a little bit every day. Like if somebody has got a checklist of a hundred things, they need to get done on a project. Sometimes they want to wait until they can do all a hundred. We’ll check off number one, two and three, you know, do do a little bit every day and eventually you’ll get it done, but don’t put these off or have blocks of time that are so big, that you’re neglecting other things that needed to get done. Like if you’re in marketing, you got to create an email marketing campaign. Don’t wait until the 11th hour and do it all at once.
Bruce Wuollet (21:25):
It’s like trying to exercise. Do you know, I’m not going to exercise every day. If I’m going to, I’m going to exercise six hours on Sunday. No, the rest of the week, you’re going to fall right off of that. And I’ll never stick to it. But if you exercise 30 minutes a day, all of a sudden you’re in much better. Long-Term safety with your tasks at your desk, do a little bit every day and block it out and make sure it’s checked something off of everything on your list every day. So that at least you have the momentum carry you forward.
Speaker 1 (21:48):
Yeah. That little stuff adds up. It’s all little things. Yeah. I’ve had that conversation before with people in the nutrition and fitness side of things like saying, Oh, I don’t have time to work out and work it all the time. It’s like, well just go for, you know, two little mini five minute walks throughout the day, every day, by the end of the day, you’ve accumulated an entire cardio session that you apparently didn’t have time for. It’s like the times there, you just have to kind of, you know, maybe break it down into smaller things or whatever. But that, that stuff is so important. I think
Bruce Wuollet (22:17):
This is something that I’ve had to be really cognizant of in my life because I’m prone to throwing a hundred to do’s on the list and then nothing gets done. And so about for a long time now I’ve just sat down in the mornings and I read out the top three things that I need to get done that day. And that’s my to-do list. Just those three things. And then once I get those three things done, I can add three more in there. But I find that getting three things done per day is actually a lot. It can actually move the needle forward.
Speaker 1 (22:49):
There are three really important things, you know, I think you referred to those as you call them your MVP’s right, Bruce.
Bruce Wuollet (22:55):
Yeah. Yep. Most valuable priorities. NEC I borrowed that from Darren Hardy and his, his
Speaker 1 (23:02):
Okay. Very cool.
Bruce Wuollet (23:03):
Yeah. A lot of this is reminiscent of Darren Hardy. He wrote compound effect, right? Yes. And that, that book to me is it’s, that’s not the one I was thinking of, but that one is very powerful. If anybody hasn’t read it, it’s almost read, I’ve read it twice and listened to it three times. And I’m just going to
Speaker 1 (23:20):
That one is a good audio book because it’s something that’s I think you can consume it pretty easily. It’s not super dense. And it kind of speaks to that point. We just made a little bit about those little things that add up over time. It’s like people dismiss those, those things and think that they’re not gonna really move the needle. But I was going to ask a little bit more about bakers and in particular, because I’m curious after that long journey that you’ve gone through from your past, all the way, all these different aspects of real estate, what is it that you guys have really honed in on today that you’re focusing on at Baker centre?
Bruce Wuollet (23:52):
Okay. Our focus is right now, the permanent resident, they may never own a home, but they’d like to live in one. And so they’re permanent renters, but they’re not subsidized necessarily, but their self-residents. So class C workforce is what I focused on. I feel as the most underserved residents or tenants, people call them tenants, we call them residents of any type. And then our goal is to create the legacy ownership where we would buy and never have the intent to sell. And I’m creating some compound formulas for investing we’re over a 10-year period investor. You could, you could have the same dollar invested in three to four different properties and still stay in the game. So we’ll refinance the investors out, but keep them in as an equity owner, as an LP. And it’s not new that other people that do it, but I may call it the compound investor so that you can reinvest the same dollar and still you get an additional return after you get it back, could still be an ownership. So that’s where we’re going with our legacy in the focusing on the permanent resident class seat, primarily in Phoenix and Tucson right now. I will pursue other areas, but there’s so much opportunity. I think, in the coming years in those two markets that will that’s what will be our primary focus.
Speaker 1 (25:03):
Yeah. So not to get too much into the weeds here, but his legacy is that, is that a fund? Cause it sounds like with that kind of reinvesting of capital, that’s probably not property specific syndications or they maybe I’m wrong.
Bruce Wuollet (25:15):
There could be like an investor. What we’ll do is we’ll have investors that commit for the longterm. And then when they put the money in, in three years, we’ll get a minimum. I’m thinking 80, but maybe even a hundred percent of the money out. And then by year five, they’ll have all their money back. But yet it was still the owners in the deal, let’s say 80% back in year, three days, state owners. Now they want to get out, you know, we could have a buy, sell agreement with them, but if you’ve got no money in it, why would you want out? Because you know, the waterfall would fall. So that they’d be still a percentage owner in the deal after they get their capital back in our ambition is to create that so that they bring it back to us again in the next deal. But if they decide they want to take that money out and invest it in something else that maybe they don’t want to do real estate that’s okay, too. Yeah.
Speaker 1 (25:59):
So are you guys structuring all your deals so that there is no anticipated sale? There? Is it just kind of like a buy and hold indefinitely across the border? Is that specific to the the legacy approach that you said you were taking?
Bruce Wuollet (26:13):
No, it’ll be on a case by case I’d like to have all of them or we buy and never sell. I hate, that’s not a bad way to go in a Warren. Buffett’s various, you know, in their stocks, stock world. He’s been now we know he has sold, but his, he doesn’t know when. And I think that’s healthy in a sense that we don’t know when the market’s going to shift. If we’re on a 10 year cycle, we may have the market shifting in year three and maybe the best time to sell. But if you have a five-year plan or three-year plan and year three year at the bottom and investors, we got to get out, we got to get our money out because it’s a bad time to on you make some tough decisions where it might’ve been better to wait till you’re five. When the markets come back up on a 10 year cycle, you’re going to be able to be on either side of a bottom and make some good decisions based on that property in the market conditions. That’s our, that’s our, that’s our ambition anyway.
Speaker 1 (26:58):
And that, that aligns pretty well with the, the response I get from, you know, anytime I come across somebody in the business, who’s had a long career and they’re a little older. I always ask them, you know, what would you change? What would you do if you were me, all this stuff and something that’s consistent from every older individual has been the business for a long time is, is they, they typically regret selling stuff. They always say, Oh, I wish I hadn’t sold X, Y, and Z. You know? And it’s, it’s consistent. I’m not sure if it’s to say that they never wished they would have sold anything, but it’s the regrets they have in their careers that they should have held on to stuff for longer. They shouldn’t have been eager to sell it in the past. So that’s kind of worked its way into our philosophy as well.
Speaker 1 (27:42):
You know, if we are doing a syndication, we’ll usually have a projected five-year hold on it just so we can get an IRR calculation. But realistically, you know, the types of investors that are our deals are kind of have that same mind-set. If it’s spinning off cash flow and you’ve already got most of your money back or all of it, you know, what’s the point. There’s no risk left at that point. You know, if you’re getting paid every week, just keep it if it’s a low maintenance deal. So I like that a lot. Yeah. One of the things
Speaker 2 (28:08):
Bruce you’ve, you’ve mentioned a couple of times, it’s in your bio and you, you, you even mentioned it before we went on the air, I think in the bio, something to the effect of like serving the residents to provide them one of their basic human needs in the form of shelter. And even before we went on the air, you mentioned this idea of like social responsibility. I’m really curious. What does it mean to you to serve that population? And what’s it mean to do it well?
Bruce Wuollet (28:32):
Well, to listen to the residents and be willing to talk to them when you go there, like, one of the examples is we had a 64 unit in Phoenix and I was on the property. We were visiting with a group of our team there and just making the plans and strategies for the repositioning of that property. And there was an elderly woman was carrying her small, big up the steps and she was struggling. And so then I ran over there and brought it up the steps and I said, Oh, I said, Oh, do you live here? And she goes, yes, I do. And I say, well, you like it here. And she says, yeah, but I wished he had put me on first floor. She said, I asked for that. And I’m on the second floor. And it’s just a lot of work. And she’s 80, 87 years old or 80 something years old widow and tiny lady.
Bruce Wuollet (29:09):
And she says, just so tiring. So I went down and talked after that, helped her out. I went over to the property manager and when raped by my meeting, I had there one of the property managers and Alex, we’ve got to get Dottie she’s on the second floor. We’ve got to get him to the first floor. She’s elderly. And we just bought the property. So I see that she really wants to be on first floor. And then I went back to our meeting and then later I was there and she came up and she’s excuse me, or a tiny little voice. And so I walked over there and she says, thank you so much. She says that they put me in this new unit downstairs and it’s right here. And she’s all excited if got this new unit. And I see, Oh no, no problem.
Bruce Wuollet (29:43):
She said, I’m so happy that you, you listen to me. And that, so that feeling was okay, that was pervasive. That was our, one of our first deals in multifamily. And I said, okay, this is what this is about. This is really bigger than me. It’s bigger than you. This is about people’s lives and elderly woman who wanted a first floor, very simple to do. She wanted a studio or wanted to, I want to end up with a studio instead of a one bedroom. She went to the downsizer unit, which versus brand new. She said, and it’s just do, I just love it because by herself. So it was just great. I thought, well, that’s a simple thing that we did, but yet to her, it was everything because her life was simpler. And that’s what that means to me. And the other thing is that these are our customers.
Bruce Wuollet (30:25):
People forget that the resident is our customer and $700 a year or something. A dollar a month resident is $42,000 in five years. And I share that because you can get a $700 rental for a one bedroom in Tucson. If they lived there five years, they spent $42,000 with you. That’s a, that’s a lot of money. That’s a lot for people to think, think about that. And they’re treated with so much disrespect, even if they don’t stay there, long-term, we should treat them all with respect, but that just hit home and look at these can be long-term customers. Let’s treat them with dignity and it brightens me when you buy a property and you see how previous owners have treated the residents.
Speaker 1 (31:02):
Yeah. And that’s something that really resonates with us as well, because I’ve noticed the same thing in our market when we go and buy properties, because we’re looking at the same asset class, kind of the workforce housing kind of C class stuff that it’s a really underserved demographic. And it’s, you know, the, the status quo is kind of the, the slumlord mentality. That’s what people are used to that’s, what’s expected from most owners by the residents, because that’s what that’s just, what’s out there. And any time you just provide adequate or above adequate service, it’s looked at as amazing. And it’s something that’s, you know, kind of, I’ve had similar experiences where you, you just take five minutes to listen to somebody and meet their needs, like really basic customer service stuff. And it’s just, it’s amazing. There’s a gap in the market there for really good quality customer service in this asset class. So that’s a good,
Speaker 3 (31:53):
Yeah. Favorited question. When I see residents that stopped to visit us, do you like it here? And that’s a dangerous question. It could be if you’re mismanaging your property, if you’re scared and you’re, you’re treating people bad, you don’t want to hear that answer. I can get a leaky faucets. That’s been leaking in my tub for six months. You guys want to fix it. If I hear that we’re going to talk to the property management company, third party, property manager, but we don’t hear that much when we go there. And so I always ask, do you like it here? And they’ll share what they like or what they see about the crime or whatever else. So to me, that’s a very good question. It’s very simple. And it’s very telling with what they tell you.
Speaker 1 (32:28):
Yeah. That’s powerful because you have to be ready
Speaker 3 (32:30):
To hear some answers that you might not like to hear, but that gives you then the opportunity to fix those things.
Speaker 1 (32:34):
I think in this space, in particular, the class C workforce housing, it’s very easy
Speaker 2 (32:40):
To just look at tenants and see dollar bills and say, how am I going to maximize every dollar that I get increase the income, drive down the expenses. And we forget like these are people and these are their homes. And for us, you know, it’s a business, but for them, it’s like, as Bruce was pointing out, it’s their life. And so you can make a really positive impact by just taking a couple minutes, letting them know that they’re heard. And then, you know, not just paying lip service to that, but then actually trying to affect meaningful change. That’s going to improve the quality of their lives. So
Speaker 1 (33:10):
Yeah. And it’ll come back and pay for itself tenfold every time, sometimes it might not sound like it’s the most efficient way to make money in real estate. But I mean, I can guarantee you in my experience, I’ve seen it’s when you provide that level of service to someone who’s not used to it, they are going to be your, a resident for life. You’re going to really maximize your, your retention and decrease your turnover just by doing all the stuff that Bruce just mentioned, giving people the time.
Speaker 3 (33:38):
Yes, it does make it a safer community. My philosophy is you take care of the residents. They take care of the property, the properties, care of us and our investors. And if you go on that order is very safe. If you go, you’re only focused on yourself, the investors are going to pay for it. And so are the residents. If you only focus on the investors, then you and your residents, I mean, you got to focus on the resident. First. They take care of the community, which takes care of your investment. And it may not show dividends right away, but over time. And that’s what I want to squish to legacy because we do buy, fix and sell. We have no control
Speaker 1 (34:13):
Doubts that logic and business Jeff Bezos has had that exact same philosophy from day one, with Amazon and proofs in the pudding. Okay. You put the customer first and it pays off in the long run. No, yeah, he wasn’t profitable for the first few years, but he’s killing it now. Okay. And it’s all, because day one, it’s been all about the customer. How can we make their experience better? How can we put them first? The investors, you know, they’ll get paid later if we do this. Right. And it works.
Speaker 2 (34:40):
I think I’ve heard this elsewhere as the ROI, the return on karma karma has a way of just coming around. So take care of the customers and they’ll take care of you. So I love that. I want to transition now to the most hotly anticipated portion of the show every week. This is really the only reason most of our audience even listens is because they want their weekly, bad investing advice. So, Bruce, I know you had a whole laundry list of tips running through your brain. When we talked about this earlier, what’s your worst investing tip that you’ve heard
Speaker 3 (35:12):
That invest in mutual funds and it’ll compound over time. That is math.
Speaker 1 (35:18):
Yeah. It’s hard to compound. If you’ve got a whole bunch of fees adding up over time, right. That kind of gets in the way of things.
Speaker 3 (35:23):
Well, and also a loss is compound faster than gains. So if your stock drops 50%, like it has a few times, at least twice in my life, I’ve seen people’s stocks get dropped 50%. You have to have a hundred percent return to get back where you worked at breakeven bad math.
Speaker 2 (35:41):
Yeah. And this is something that when, whenever you hear about the power of compounding interest and people point to like 8% compounded every year for 50 years, and you’ll be a millionaire or whatever, by whatever, there’s never any losses in there. Right. And the losses are so much harder to come back for taxes or taxes yet. They usually leave that off. Yep. Awesome. That’s a, that’s a good, that’s a good, bad piece of advice. I like it. So, Bruce, I know you’re sitting on a book over there. You mentioned it from what you’re reading in the morning and yeah. Yeah. What’s your book recommendation.
Speaker 3 (36:17):
It was riveting book. I’ve read in a very long time. It was called the secret life of real estate and banking. And it’s a by Philip Anderson and it talks about the history of baking United States from the 15 hundreds till current. And it shows cycles. And I think any investor should read this book. If they’re investing in real estate, passively, actively getting loans, buying property, this is a very, very important is very, very important.
Speaker 1 (36:46):
Let’s do we, have we got, we’ve got a forecast in the window. I like it. I love it. Love it. Dan. I read that I’ve never heard this,
Speaker 3 (36:56):
But it sounds like my dream book, honestly, real estate and banking all in one. I’m going to go get this as soon as we’re off the pot, it’s really long. But the beginning is so remedy. It reads like a novel, but it talks about facts and fie years in quotes. And you can independently verify the information I’ve been doing that to see is this real. But if it is, it’ll teach you how to properly protect yourself. It’s not doom and gloom. It’s just talks about cycles and how to protect yourself. So yeah, highly recommended.
Speaker 2 (37:22):
This is the most, like I’ve been on a book recommendation because usually we’ve heard of them or most of the time we’ve even read them, but this is the first time I’ve never heard of it, but it sounds awesome. So I’m looking forward to it. Well, Bruce, I am super thankful to have had this conversation with you. I’ve learned a lot and it’s really interesting to hear a lot of the philosophies that Dan and I try to adhere to, you know, you’re, you’re much further down the road than we are. And I would say like, we’re, we’re trying to build towards. And so it’s good to see that a lot of these fundamentals actually work.
Speaker 3 (37:53):
Yeah. I appreciate you coming on. I feel like we’re going to have at least a couple more episodes with you because I think there’s a ton more stuff we can dive into with more time. So yeah. So I’d like to share, I’d like to share sometime in the future, sometimes some of the battle wounds, people are afraid to share those. I’m very willing to share that in the future. So I love the horror stories more than the success stories. Honestly, I get it. Cause we’ve had our people say, ask me how I know we we’ve got the scars and the bruises and the bumps to prove it. So come them. And that’s, what’s more important. I personally learn a lot more from hearing about people’s struggles and mistakes than their successes. And I’m pretty sure that our listeners are probably on the same page. So that would be a very good episode. I think we should do that. Yeah. So we’re going have to get you back on here
Speaker 2 (38:36):
Shortly so we can do another follow-up episode cause that I’m psyched to hear you’ve done so many different aspects of real estate and you’ve been in the game for so long. So I’m sure you’ve got some horror stories that I’m going to send shivers up our spine. So before we let you go, Bruce, where’s a good place for people to get hold of you.
Speaker 3 (38:52):
Well, they’d go to Baker, son.com B a K E R S O n.com orBruce@bigperson.com for email. And I’m willing to give up my phone number and people do call. So give me a call at five, two zero eight zero eight nine one. Answer any questions you have and if I can’t answer them, I can certainly direct people to those who can answer them. Nice.
Speaker 2 (39:14):
That is a man who is not afraid of the phone calls. I like it. All right. So for you guys at home that are joining us, want to say a huge, thank you for lending us your ears for the last 45 minutes or so before we let you go though, do us a favour, go to iTunes, Spotify, wherever you’re listening to this and just leave a review, let us know what we’re doing. Well, what we could improve on and make sure that you hit that subscribe button. Cause that helps us grow and expand our reach. And we really appreciate that. So as always Bruce man, this was a fantastic conversation. I’m looking forward to the next one already. And for all the guys at home, we’ll look forward to chatting with you.
Speaker 3 (39:52):
Thank you so much. [inaudible].
