As Doug Brien and Colin Wiel were embarking on a journey that would upend the housing market in the wake of the crash in 2009, one question gnawed at them:
“What are we missing?”
This question stood out to Jason Feifer, editor in chief of Entrepreneur Magazine, who played host to a virtual event to discuss the book Brien and Wiel are coming out with this month, “The Big Long: How Going Big on an Outrageous Idea Transformed the Real Estate Industry.”
The two co-founded Waypoint Homes in 2009 and started buying up houses in Bay Area cities like Antioch and Vallejo, homes that had lost up to 70 percent in value in the wreckage of the housing market crash, planning not to flip them but to renovate them and rent them out.
They were convinced that home prices would recover, but in those early days, as they went about buying and renovating properties to rent out, they looked around and did not see any competition.
“I finally figured out what we’re missing,” Wiel told Brien back then. “We are missing out on the opportunity of a lifetime.”
Different backgrounds, but a shared vision
Brien and Wiel came from very different backgrounds, but came together over their shared interest in real estate, which ultimately ended up transforming the single family residential real estate sector.
Brien was a kicker in the NFL for 12 years and started buying homes in his off season; Wiel was an engineer who had worked in artificial intelligence and did a stint with Boeing.
At the outset, “we knew just enough to be dangerous,” Brien said. Other investors might have been scared off by the scale of the collapse in the housing market, but these two were convinced that the data they crunched showed the homes they were buying would be profitable once they were rented.
“This is why you do the due diligence, whether it’s real estate or a different business,” Brien said. He and Wiel “were both drinking the same Kool-Aid,” so they did not have any doubts they were on the right track, but a lot of other smart folks in the real estate game were staying on the sidelines.
'Feifer said the fact that they were not experts might have worked in their favor. (He has his own book, Build for Tomorrow, coming out this fall.)
“Oftentimes it’s someone from outside who can come in and see a new opportunity,” he said.
The title “The Big Long” was consciously chosen to contrast with “The Big Short,” the book (and later film) that chronicled the 2007-08 housing crash and a small group of investors who bet against the market, or “shorted” housing stocks, and made tens of millions in profits while many Americans lost their homes.
“That’s a financial bet that people made, but it did not serve society well,” Wiel said. “We wanted to take advantage of a financial opportunity, but also have it be good for society.”
Kirkus Reviews calls their book “an engaging story of entrepreneurial passion and business success.”
Success fueled by a desire to “grow exponentially”
Waypoint started buying homes in 2009, and kept buying. A lot of homes. First the partners asked themselves what it would take to buy 25 homes a month, then 200 homes a month, then 400 homes a month. And so on.
“It was always thinking about how to grow exponentially,” Wiel said.
Brien said one of the keys to their success was the advent of mobile computing and the cloud; they had their team outfitted with iPads to input data when they went on site visits.
By the time they were finished, they had some 17,000 homes and $3.5 billion in assets under management. Waypoint merged with Starwood, debuting under the symbol SWAY on the New York Stock Exchange on Feb. 3, 2014.
Brien stayed on as CEO for a year, and then the two launched Mynd in 2016, employing the underlying technology they had developed to manage the rental properties to develop a new fee-for-service business model. Mynd’s platform allows investors to find, finance, lease, manage and sell properties 100 percent remotely.
They see the single-family residential real estate sector, which has a market value of some $4.5 trillion in the U.S. and is still largely the purview of smaller property managers and investors, as ripe for disruption.
Brien offered some advice to others thinking about going into business: “Don’t be afraid to think big.”