After the Exit: Turning a Business Sale Into Passive Cash Flow for Generations | Ep. 38

Episode Summary

Travis Wallace’s investing journey shows how the priorities of a successful business owner can change after an exit. After decades of building a recurring-revenue janitorial company and investing excess cash into real estate, Travis recently sold the business and lost the operating income stream that had fueled his wealth creation. His focus is now shifting from chasing high IRRs toward generating dependable cash flow, preserving capital, and choosing a smaller set of investments and operators he understands.

The episode traces that shift back to Travis’s childhood, when family wealth disappeared after his grandfather left his estate to a fourth wife. That experience shaped Travis’s drive to build wealth, keep it in the family, and educate his children openly about money. He also shares lessons from passive syndications that struggled, including self-storage investments hurt by floating-rate debt and multifamily investments where operators moved beyond their core specialty.

For Travis, sponsor selection now depends heavily on research, references, operational competence, and especially communication when a deal is under pressure. Brian and Travis also discuss narrowing exposure to proven sponsors, prioritizing investments that produce yield, planning for purpose after a business sale, and using estate planning to transfer both wealth and financial knowledge. The episode closes with Travis’s Sage principle: prudent leverage can be a powerful tool for scaling wealth when it is used carefully.

Key Takeaways

* After selling a cash-flowing business, portfolio priorities may need to shift from maximizing IRR toward replacing operating income with dependable investment yield.

* Vet passive investment sponsors through references, operating history, and how they communicate when a property or market is under pressure—not simply by how past deals performed during favorable conditions.

* A good operator can still face a bad investment environment. Distinguish between market-driven problems and warning signs such as excessive debt, poor operations, silence, or drifting outside an operator’s core expertise.

* Passive investing can become surprisingly active when capital is scattered across too many sponsors. Experience may justify concentrating future allocations among a smaller group of proven operators and sectors you understand.

* Legacy planning involves more than transferring assets. Travis emphasizes discussing wins, losses, investments, and estate decisions with his children so financial knowledge can travel with the family wealth.

Key Topics Covered

* Transitioning from business ownership to passive investing

* Passive income and cash-flow investing

* Business exits and replacing operating income

* Sponsor due diligence

* Syndication risk and operator selection

* Floating-rate debt risk

* Self-storage and multifamily investing

* Capital preservation

* Communication and transparency from sponsors

* Recurring-revenue businesses

* Concentrating capital with proven operators

* Estate planning and generational wealth

* Financial education for heirs

* Purpose after selling a business

* Prudent leverage

Episode Chapters

00:00 Intro

Brian introduces the shift that can occur after an investor has created meaningful wealth: the objective increasingly becomes protecting capital and generating dependable cash flow rather than simply accumulating more assets.

01:00 Cash (Flow) Is King

After recently selling his operating company, Travis explains why reliable cash-on-cash returns and investment yield now matter more to him than chasing high IRRs or home-run outcomes.

02:16 Family Wealth Vanishes

Travis recounts how his grandfather built and sold a major insurance business but ultimately left his estate to his fourth wife. Watching family wealth disappear became a lasting influence on Travis’s approach to wealth creation and legacy.

05:36 Investing Every Leftover Dollar

Travis describes building his janitorial and hospital environmental-services business from two early contracts into a multistate company with recurring revenue. A minimalist lifestyle allowed him to consistently direct excess cash toward investments.

09:53 You Cannot Fear Failure

Years of entrepreneurship taught Travis to accept failure, take initiative, and continue moving forward. Brian and Travis discuss how those traits can support investing while also creating a need for greater attention to downside protection once wealth has been accumulated.

12:04 A Sponsor Must Do This

Travis explains how he researches passive investment sponsors, including making calls to other investors before committing capital. He also discusses painful self-storage and multifamily investments and the lessons those experiences created.

16:08 A Silent Sponsor Is Dangerous

Difficult investments reveal how operators behave when plans go wrong. Travis emphasizes proactive communication, operational competence, and transparency as important signals of sponsor quality, even when distributions decline or markets create problems.

20:53 Pivoting From Owner to Passive Investor

With his business sold, Travis is still determining how to redeploy his capital and replace former operating income. He discusses his focus on cash-producing investments, narrowing his preferred sectors and sponsors, and finding purpose and structure in the next phase of life.

32:47 Keeping Wealth (& Knowledge) in the Family

Travis explains how losing access to his grandfather’s wealth shaped his estate-planning philosophy. He and Brian discuss sharing financial information with children, preparing heirs for responsibility, and balancing family wealth with the opportunity for children to build lives of their own.

40:45 Travis’s Sage Principle

Travis leaves listeners with his central investing principle: do not automatically fear borrowed money. Prudent leverage can help scale wealth, but like any powerful tool, it must be used carefully.

Full Transcript

[Transcript begins]

Brian Spear: If your primary source of income disappeared tomorrow, would your investments replace it? Or would you simply own a collection of assets that you’re hoping eventually pay off? There comes a point in every successful investor’s journey when the game changes. Early on, the objective is simple. Create more income, build more equity, grow your net worth. But eventually, the question isn’t how to make more money. Because once you’ve accumulated meaningful wealth, one poor investment decision can undo years of disciplined work. Today’s episode explores that transition from creating wealth to protecting it. Welcome back to the Sage Investor. I’m Brian Spear and my mission is to help you generate cash flow and build legacy wealth in a tax efficient manner because that’s what I’m trying to do for my family and I’m sharing all the secrets that I learned along the way. Our guest, Travis Wallace, is an investor and an entrepreneur who spent decades building a very successful operating business before shifting much of his focus towards passive investing. Travis, welcome to the show, bud. Very much appreciated to have you on here, buddy.

Travis Wallace: Yeah, thank you for asking me. I’m flattered. We’re looking forward to the conversation.

Brian Spear: Yeah, well, beautiful thing. Well, let’s dive right in here. Okay. So today, after building a wonderful operating company, and then owning real estate actively, and then kind of moving over to some passive investments over the last handful of years, what type of investor do you consider yourself today?

Travis Wallace: You know, since I just recently sold my company, Brian, I’ve just turned 61. It’s crazy to hit the realization at some point where the IRR, the big home run kind of yields itself to cash flow and yield. And since I sold and I’m not making all the money annually, I did, I’ve only got so much money to invest now, I’m really concerned about cash on cash and cash flow. And that’s primarily my focus going forward.

Brian Spear: Yeah, it’s a beautiful thing, right? Operating a business for a long period of time like you did, it’s the operating cash source, right? It’s where the cash flow came from. Now it’s kind of replacing it and trying to figure it out. It makes a ton of sense. So thank you very much for the color. Well, let’s run it back a little bit and kind of step back and go back a little bit through your journey in some of our prior conversations and lead up to jumping on here today. You mentioned that your grandfather was… was a major influence in your life and somebody that you described as a powerhouse. So when he passed away, unfortunately, the wealth that he had accumulated over time didn’t really come along to your family, maybe the way that you guys would have otherwise anticipated. So you saw early on that wealth could exist in one generation and then not make it to the next one. So unpack that a little bit. Tell us a little bit about your story. What happened with your grandfather and kind of how did that shape your interest in money?

Travis Wallace: Brian, my granddad was, he was a great entrepreneur. And he founded an insurance company called Great American Reserve. And he built a high rise in downtown Dallas. And it was one of the, you know, strongest, largest insurance companies in America. My father was when born with some disability. So, you know, my granddad never really brought my dad in the business. But he eventually sold to JC Penney. And JC Penney, this was years ago in the late 70s, they wanted to go into financial services. I don’t know if you remember that or not. So they bought his insurance company. But he did, he had a few wives. He had four wives and his last wife, he left his entire estate to her. And I’ve always been motivated by wealth creation. Even though I primarily cleaned hospitals, wealth creation’s always been my passion. Even as a young boy who’s mowed all the neighborhood lawns. And I was talking to my mother and she said, she thinks so much of that came from building wealth and keeping it in the family, because of the repercussions of what we had with my grandfather.

Brian Spear: It makes a ton of sense and leaves a massive impact on you. I think for everybody has some sort of story, a founding seminal story that ultimately changes the trajectory of their lives. OK, for me, it was, you know, why am I in mobile home parks? Why am I so driven to ultimately build wealth, et cetera? Because when I was 10, parents got divorced. Dad moved to Gary, Indiana when it was the murder capital of the world. Mom moved to a mobile home park on the south side of Chicago. And I’m 10 years old. I’m saying I’m never ever going to have this be my family later in life. I’ll work my fingers to the bone for decades to ensure that doesn’t happen for me. And, you know, the interesting thing is, you know, you work for a day, a week, a month, year after year, decade after decade. And then, you know, eventually you end up with a little bit of success. And folks call you, you know, an overnight success after decades of, you know, dirt under your fingernails. And then I think it really gets hard, right? After you’ve gotten to this point of building and amassing some level of quote-unquote success in the eyes of society, then you’ve got to try to figure out all the family complications, right? You saw it from the other perspective. I’m looking at it from a G1 perspective, first generation. But the other side of the house of the family complications of children, how to raise kids and pass along wealth and the taxes and the myriad of different things, it’s – it gets complicated very, very quickly in that sort of situation. But give us a little color in terms of like that fuel. So you had that fuel from a very early age. Let’s take us back to that period of your life, your background. Now you’ve got that fuel to go create wealth. Walk us through your story and ultimately how you did build your wealth over time. Was it mostly from an operating company or real estate or something else? Just walk through your story.

Travis Wallace: That’s great. That’s a great question. I… You know, I think that was my motivating factor. You know, my granddad had a beautiful ranch. He lived in a mansion. He’d have servants. And, you know, when he got divorced and left his entire wealth to her, you know, there was no more rants. There was no more private schools. So I really went from crazy wealthy to working class, which, you know, ultimately was really, really, you know, I don’t see it as a bad thing. But, you know, for wealth creation, it takes discipline. You have to have a desire for it. You have to have an appetite to learn about it. And then you got to dive in, you got to participate. You know, nothing happens when you’re on the sidelines. You got to get in the game. So I paid back in 1989. I got two contracts in the janitorial business. A Sears store is in downtown Houston and a UPS. So just over the years, I built a business from 1989. I kept selling contracts and I got into hospitals and we became more of a regional company in multiple states. But, you know, it’s a it’s a janitorial business. It’s environmental services in the hospital business. It’s a wonderful business gets its residual recurring revenue and you’re always in the black. So it’s a wonderful business because every single month your cash flow. And I always had discipline. I’m a minimalist, a simpleton. So I always had plenty of money. You know, the money came in at first, you know, first it goes to tithing. I think, you know, it’s our duty to expand God’s kingdom. But investing that money was first and foremost. And I got married to my college sweetheart, so I got her trained right out of the gate that any excessive cash would go towards investments.

Brian Spear: It’s always nice when the most important decision of your life, I would say your beautiful bride, right? It was there before, you know, the success and the wealth. My personal contention, I feel like it’s a lot easier if you’ve had that scenario. At least that was my perspective, right? My beautiful bride, she was around before, you know, we were able to build and amass any sort of wealth, etc., etc. So it’s been wonderful to be along for the ride with her along the way, man. So kudos.

Travis Wallace: Yeah, I met your bride. Very delightful.

Brian Spear: Oh, it’s wonderful, man. And your father-in-law loved him. He was great. Yeah. You kind of arrive when your father-in-law says that many nice things about you. So he’ll say some nice things, but he will not tell you that I’m an exceptional handyman. He will bust my chops until the cows come home regarding my lack of ability to hammer a nail, right? So he left that part out. So just got FYI. It’s all good. You know, I’ve got a very select set of skills. I’m very good at a handful of things, and I just do that over and over and over again, man. But, yeah, handyman, that wasn’t one of them.

Travis Wallace: So, all good. We used to rely on the father-in-law to come help around the house. I’m not either, yeah.

Brian Spear: Yeah, yeah. All good, man. So beautiful. You know, after building a really successful business, growing it over time, it’s wonderful. And you get so much experience in doing that, right? That’s the unique thing about that style of business, right, janitorial services, is you can make money a gajillion ways in real estate and just, you know, this economy in general. And that’s a very simple business. I love that. Simple to understand businesses, I think, are the most wonderful way to create cash flow because it’s not complicated, right? It’s a beautiful, simple business of serving folks well over long periods of time. And if you’re growing the business to a reasonable size and scale – You’ll learn a lot about how businesses work and you being the head of that organization. What do those sorts of learnings of running and operating business, what are those sorts of learnings of experience of being at the head of a business like that teach you about investing when you’re starting to allocate capital, whether it’s active or passive? What are some of the ways that that’s benefited you along your journey?

Travis Wallace: You know, I would say overcoming fear of failure. I mean, I fail all the time as a business owner. And then I think you develop a level of risk taking. You know, you become, I became almost just a gunslinger in my investments, you know, with reasonable risk. And I’m not afraid of failure. And, you know, as an entrepreneur, you just have got, you have got to take that initiative.

Brian Spear: No, I agree.

Travis Wallace: That bone in my body of failing. I think successful people are just people that were willing to fail more than the others. Unsuccessful people are the guys that failed and then they quit. They tried once. They tried twice. Then they quit. They move on. The guy that’s successful, he failed once. He failed twice. He failed 10 times. He failed 100 times. And all of that failure is ultimately what leads you to success. It’s just keep moving forward. Entrepreneurship is just waking up in the morning, getting punched in the face and continuing to move forward.

Brian Spear: That’s all it is. That’s right. All of every day over and over and over again. So great stuff.

Travis Wallace: A lot of entrepreneurs fear of failures is better a motivator for them than the taste of success. It’s crazy.

Brian Spear: Yeah, I agree. It’s an interesting dynamic, right? Tony Robbins always talks about that. It’s like you’ve got to have these push and pull drivers. You’re yearning towards running towards something, but you’re also running away from something. And maybe that fear of failure for me personally, right, talking about my background and how I was raised when I was 10 years old, that has been the primary problem. driver for me to ultimately become successful and i think it’s also why i’m so um adamant about protecting downside risk because you know once you have a little bit of the wealth over time it’s like i’m never going back to the way that we were raised right i’m never going back there ever so once you’ve amassed a little bit of wealth over time it becomes from my perspective more ardently about capital preservation and ensuring that you’re protecting downside risk and everything you do you got a little more of that gunslinger in you than i do travis so it’s all good man well i don’t know right or wrong there As somebody who’s built a real successful operating business and now kind of pivoting over to the passive side of the house, right, when you’re allocating capital passively now, what are some of the things that you pick up when you’re looking to, you know, vet sponsors or allocate capital and passive investments that you might see that a less experienced passive investor might miss?

Travis Wallace: You know, I love people that are already in the investments. Years ago, when I first started investing, I did my own. I bought residential, commercial buildings, and, you know, in the Texas economy, they all panned out. I buy and hold. I still got them. But as I’ve aged, I’d much rather give my funds to Brian and Kevin and let them go do their thing. uh it’s to most of me going out myself i just i’m tired i don’t want to do it anymore so you know with picking an operator you know i found sunrise i made a ton of phone calls brian i called and talked to so many people i knew i wanted to get in mobile homes but i wanted to find the best operator I could put my hands on. So I put some time into it. I made a lot of phone calls and talked to investors. And that’s how I landed with Sunrise. And, you know, it’s obviously been a good run.

Brian Spear: I agree and very much appreciate it. Of course, it’s been a wonderful ride for us, and I’m appreciative of you being willing to join the team over time. But I know not every single investment that we’ve ever made here has panned out, right? Not everything is sunshine and rainbows. From your side of the house, I know that you’ve allocated some capital passively and a myriad of different stuff over time, right? I know you got burned in a little bit of self-storage stuff and a little bit of multifamily over time. I’d love to understand and unpack that a little bit for the benefit of the listener out there. What went wrong and maybe what, what, what do you wish you would have known prior to sending that money out the door that you, you now know? And how has that maybe changed your perspective?

Travis Wallace: Wow. You’re a good listener. It’s exactly right. I’ve gone heavy in syndications the last 10, 12 years. And I’ve taken, I’ve taken a beating. And I’ll tell you what, I kind of knew in my gut, just a gut feel that some of the things I was getting in might or might not pan out. And I took a beating in storage. You know, if you invested any time, 22, 23, uh, floating rates, you, you, you took a beating. They got overbuilt. It was supposed to be a defensive industry. Right. In recession-proof storage, I took a beating. I have gotten clobbered in storage. But I’m with three different syndicators. And one of the three has just absolutely faltered. We’re gonna have to have huge losses. They’re trying to unload them now. The debt got so heavy, they couldn’t, the actual operations were doing well. The occupancy was strong. They couldn’t, the floating debt rates killed them. They couldn’t make the debt payments. Same thing in multifamily. I’ve taken a little bit in multifamily and, The company I invested in in Austin, Texas, they got outside and started doing memory care, even though they specialized in multifamily. I knew it wasn’t a good move for me there. So, yeah, I’ve gotten beat up with some syndicators.

Brian Spear: It’s tough, right, if you’re investing and everybody’s just, you know, a lot of syndicators were only involved in, like, the run-up where it’s decreasing cap rates and everybody, you know, it’s sunshine and rainbows and everybody could do exceptionally well. Nobody could do any wrong until the interest rates ran up, obviously. Then it became a precarious situation for a lot of guys. And that’s really when you tell the difference between a skilled investor, right, and a lucky idiot, guys that had just bought at the right time and really didn’t know what was going on. So you’ve learned along the way. You’ve seen a lot of things. You’ve got a ton of experience now actively, passively running businesses. How has all of that experience changed your process? Help us understand how your process now works in practice. When you’re evaluating a passive investment today, what is your actual process before you write the first check? You talked about making a ton of calls. What else does it look like?

Travis Wallace: Well, like I said, I’ve got three syndicators. I invest in storage. And two of the three really one in particular Spartan, you know, Ryan and Scott, I mean, when they’ve got a, a, a difficult property, you find out when you’re in the trenches, you know, how they’re going to respond. And, you know, we got in a bad timing, but I still invest with Spartan. I hadn’t killed it because, you know, the floating rates. But I’m going to tell you what, when they’ve got problem problems, they are all over it. They can’t communicate with you enough. And it just gives me the warm, fuzzy feelings. I just so I’m still investing with them and I’ve got some some tough investments and I’ve had no capital calls and those, you know, and but, you know, distributions are down or ceased. But that’s the sign of the times. But they’re a really good syndicator. You know, the other group. You know, you go to the facilities and they’ve had huge turnover and they’re just not, they’re not good operators. So, you know, you could have a great operator and they’re still going to run into challenges. But, you know, if you’re invested with, you know, you get a feel for how they’re going to respond when the tough times come, which is inevitable.

Brian Spear: The communication is obviously paramount, right? Through good times and bad. Always just keeping an open line of communication, constant communication. It’s a heck of a lot easier when deals are going wonderfully well. The best news always is, hey, no new news. We’re just still humming along, throwing out cash flow, and life is good. But, you know, when… Operators go silent. I’ve heard this consistently from LPs with whom we’built relationships that over the last handful of years when deals have gone south or there’s some trouble on the horizon, right? The guys that get the news out and are just completely transparent, open, forthright, and do so immediately as quickly as humanly possible ultimately retain the trust for the people. from both sides of the house. Because again, business is difficult, right? Life is tough. Not every single deal is gonna be a grand slam, but just having that open, honest conversation is the way to do it. I’m always enamored by Buffett, man. If you read his annual letters, it’s, you know, if you read them over time, One would assume, given his unbelievable background of 20% average annual return over 60 years, just unbelievable track record, right? Best track record ever in history without accounting for Henry Singleton as well. But you would think that with all that success that every single annual letter would just be like – Home run after home run after home run, grand slam after grand slam. If you read his annual letters, the vast majority of it, he’s just talking about all the mistakes he’s made, how dumb he is, the acts of omission and commission and things that he’s done wrong. That’s all he’s talking about, all the bad stuff. He doesn’t even talk about all the grand slams that he’s knocking out of the park. He’s just only talking about things that he’s ultimately – learned by the mistakes that he’s made over time. So anyway, I think that it breeds more trust over time to share all those learnings because that’s what you’re doing, right? The problems that arise and the scar tissue that you get after being through multiple cycles should be considered badges of honor as opposed to viewed negatively.

Travis Wallace: I agree.

Brian Spear: From an LP perspective, it’s like you want to be with the guy that’s got – he’s got one ear missing, five scars, and just a ridiculous amount of stuff going on that he’s seen it all, as opposed to the guy that’s coming in fresh baby that’s never really been through anything in their lives just yet. So that’s my personal contention. So no right or wrong, just a good experience and great feedback there.

Travis Wallace: And nobody’s going to meet their pro formaa every time, Brian. I mean –

Brian Spear: you know but you learn their character when they don’t a phrase i’m fond of saying is that whenever we send a pro formaa out to a partner i can only guarantee you one thing i guarantee you that this pro forma is going to be wrong i guarantee it it’s either going to be better or worse it’s never going to be right i mean it’s just never accurate right you’re projecting out cash flows down to the dollar like 10 years into the future it’s impossible it’s never going to be perfect um but we’re going to do our best to try to underwrite conservatively and all the myriad of things that folks are should be trying to do in their respective investments. But yeah, we’re predicting the future years down the road. My crystal ball is broken, right? Everybody’s is. So give us a little bit of color of where you’re at on that journey, talking about kind of transitioning away from being active on a day-to-day basis, running the company over to now being passive, looking to replace that income, create more cash flow. Have you been able to create enough cash flow from investments to kind of offset the income that you had been earning previously? Or where are you at on that journey?

Travis Wallace: You know, I’m still in the early stages since I just recently sold. I really, really want to help the company that bought us in the transition and participate with them as much as possible. But I’m still kind of at the early stages. I have narrowed down a few industries that I really want to invest in, just like I told you was on the panel. Florida. I want to do more oil and gas. I want to invest a lot heavier with Sunrise and then do a few more real estate deals. But I’m still early in the process of discovering what’s next for me and what that’s going to look like.

Brian Spear: Have you thought through what level of passive income you might be seeking? Or is it always going to be more and more and more cash flow? Or is there a certain kind of goal in terms of cash flow that would have enough cash flow to live life on your own terms for lifestyle expenses, enjoy the fruits of your labor along the way, and then maybe over and above that, just focusing on growth or whatever it might be. Is there a number that you have in mind in terms of the cash flow that you’re looking to throw off from the portfolio?

Travis Wallace: I think, you know, if I could get to 7% or 8%, Brian, I think that would be wonderful. I think that’s excellent. You know, on the back end, your IRR is considerably higher. But I’m going to continue just to focus on, you know, it’s got to have a yield. I don’t really want anything that doesn’t have any, doesn’t throw, you know, cash flow, you know, almost day one. So I’m still really just focused on a few of those industries going forward.

Brian Spear: As a business owner, a guy with their hands on the wheel controlling the ship for many, many, many years, what do successful business owners that have built some wealth that are now looking to transition and ultimately create that cash flow that we talked about, what do they often misunderstand when they move from actively managing everything, running the day-to-day, over to passively sitting in the limited partner seat and allocating capital on that side of the house? What do folks miss?

Travis Wallace: Um, you know, I think they don’t do the research. I think, you know, they’ve got so much money and so much money coming in that they I think they probably speculated too much. You know, if you’re if you’re leveraging property, and you’re going to keep at least on your own. You know, time heals all wounds. You’re going to probably survive. You know, the syndicators are probably using a little bit more debt. But I think it’s really screening what syndicators you want to use and exactly what industry you want to go into. And stay away from, you know, the speculatives. You know, multifamily fluctuates a lot, you know, the floating rates, the occupancy, there’s a gazillion different factors in that industry.

Brian Spear: Agreed, right? There’s the way that I’ve always thought about it is when guys are doing all active stuff, whether they’re investing in stocks and bonds or just active real estate, and then they’re moving over to passive or alternative investments, let’s say. It’s understanding, you know, you want to take this alternative investment path or allocate at least a portion there. Then it’s trying to figure out amongst the gajillion different alternative investments, whether it’s oil and gas or Bitcoin or mobile home parks or real estate or whatever, which area within that domain you want to invest. And then if you choose real estate or at least for a portion, then it’s which, you know, niche within real estate do you want to go into finding the right guy in that niche? Yeah. then it’s, again, then it’s the niche, then it’s the sponsor within the niche, then it’s the actual deal that that sponsor has coming across the desk. There’s a lot of different things to ultimately go through to ultimately find the right opportunities.

Travis Wallace: Well, Dino, through my casualties, I really learned Don’t just throw the mud up against the wall. You know, choose the right syndicators and run with them. You know, if you can go with three proven syndicators that you’re with, as opposed to 10, and just do it. Stick with the ones that you know are tried and true. And just… More funds.

Brian Spear: Yeah, we’ve heard of LPs doing that where they get an exorbitant amount of experience, right? They get 10, 20, 25 different syndicators that they’ve worked with over time. And it becomes more difficult to manage all of that. You get out of actively investing to become a passive investor. But now you’re managing a gajillion different sponsors and so much different stuff over time. It becomes more difficult. more difficult. It’s kind of like active, passive investing, whatever the terminology would be to try to juggle all that stuff going on. And then I’ve heard a lot of guys try to consolidate after understanding and seeing all these different guys. Now the cream rises to the top, selecting your top five guys or whatever, and, and allocating a little bit more to, to those individuals over time. We’ve seen that kind of play out with guys that have a broader range of experience over time. It’s just kind of tough to do that from the outset, but that’s kind of the, the trajectory that we’ve seen with LPs that have been in the game, uh, uh you know over longer periods of time and dance with the one who brung you the guys that are tried and true that have staying power you know they’re consistent

Travis Wallace: Stay with them.

Brian Spear: So let’s dig into kind of the next chapter for you, buddy. You just mentioned the disposition of your operating business. That’s a real thing, right? So after decades of building a company, right, and being busy in the operator seat, doing the deed every single day, how are you thinking about the next phase of life and kind of what deserves your time now?

Travis Wallace: Yeah. You know, I’m going to get more active in, you know, my faith, my church. I volunteer more. You know, Jesus Christ, my Lord and Savior. I’m very blessed in that regard. So I’ll put more time in trying to expand God’s kingdom. But now I do have a pot of money, but I don’t have the cash flow I do. So where I invested going forward is huge. Yeah. But it’s a lot of fun. You know, it’s a joy to be able to be in this position. I’m still working with the current company, helping them in the transition, and probably going to stay on for a while. So it gives me structure and gives me something to do. I can’t go and play golf five, six days a week. That’s not who I am. So I’m really looking forward to investing the money and what I, you know, what I do going forward. I think I’ve kind of narrowed the industries and what I, you know, where I’d like to go.

Brian Spear: Yeah, hopefully you figure out that next phase of life and ultimately find a passion. Like I said, something to do, right? I read some words from a philosopher many, many moons ago, and this has stuck with me because I think the guys that… ultimately have become successful in the eyes of society and make a little bit of money. People believe that money buys happiness, right? If they don’t have any capital, oftentimes that’s kind of the feeling. I wish I had a little bit more money because then I’d be happy. And that’s really just not how life works. Guys that have been across that and have experienced it understand, as the old great American philosopher Kanye West once stated, having money is not everything, but… but not having it is. Having a little bit more money, it’ll provide you with a little more freedom, right? It’ll give you freedom of time, freedom of money, freedom of relationship, freedom of purpose. But the truth is it won’t give you absolute happiness. There are certain things you have to do to ensure that you can actually live life to the fullest and actually just be happy. throughout the course of your journey. What I read from this philosopher a couple hundred years ago that stuck with me, simple truths about the rules to happiness. One, and this is what jogged my memory on it, he said you gotta have something to do. These were the three things that ultimately led to happiness. One, you gotta have something to do. Two, you gotta have someone to love. And three, you got to have something to hope for. It’s very simple framework, but it’s easy to think through because it’s like the first thing is activity and purpose, something to do with your time. Right. The second one, somebody to love because we’re social beings. We you got to have relationships that are meaningful. And the third one’s like future focus. Right. Something to hope for a goal, an expectation, something that you got on the calendar that you’re looking forward to. And that dynamic, I just live by that in an effort to try to create as much happiness as I can in my world. But I think that that’s proven true, at least in my experience so far, man. So anyway, for what it’s worth, hope that helps.

Travis Wallace: I know so many friends of mine, they never really find what the release is, what really, truly makes them happy. And they search. Right. They get a pool. They get they get a Harley Davidson. They buy a ranch. They buy an RV. Pickleball. They go for one and they never really, truly find what makes them happy. And so, you know, I really think you just have to really talk to people and figure out what that is and just dive into it going forward.

Brian Spear: talking about trying to find meaning right the old was it victor frankel the old uh man’s search for meaning right uh the ebbs and downs and ebbs and flows of life and trying to figure out what the hell are we doing this for what’s it all about and and and try to make the most of it the truth is nobody’s getting out of this thing alive and trying to optimize and have the most fun and have the most amount of happiness that you possibly can and figure out your purpose. For me, this activity, having something to do. Once you’ve crossed the chasm, right, of being successful in the eyes of society and having a certain amount of cash and cash flow to be able to do what you want with your family, you know, have freedom of time, freedom of money, freedom of relationship, freedom of purpose. That freedom helps, undoubtedly. You want to be able to have that, but it still doesn’t make you happy. You’ve got to figure it out. And from my perspective, I’m going to be able to do that. I feel like I’m fortunate to have something that I do on a day-to-day basis that feels like a purpose that I could do until the day that I die. Given my background, given my history of growing up in a mobile home when I was 10 and being driven to never have to have that financial difficulty when I was older, now in the business that I’m in, it’s like – What is better than this? We are able to, I like to say, help as many people as possible live their version of the American dream, whether it’s the residents or the teammates that are here at Sunrise or our LPs, our partners. It’s just, for me, it’s wonderful. So I feel fortunate. I wake up every day and pinch myself. And you’ve got to have, I think those three things are, at least they’ve been for me paramount to try to ensure that you can enjoy life to the fullest. Because damn, life is too short if you’re not enjoying it, man. If you go to bed too many times in a row, I think this was a Steve Jobs quote. If he’s going to bed too many times in a row and not having fun that day, if I didn’t have fun, if I didn’t have fun, you’ve got to change it up. You’ve got to do something else.

Travis Wallace: And you’re in a position, too, where you’re in industry. You can scale, which is great. You just keep on going. You love what you’re doing, and the sky’s the limit. You’re in a scalable industry.

Brian Spear: Yeah, if it ain’broke, don’t fix it. I would say the same for you in the janitorial side of the house. You said you had a couple of contracts. Look, there’s a lot of buildings out there that need to get cleaned. It’s a very simple business, but golly. If you do the right things for a lot of people over a long period of time, you could scale that to the moon. So kudos. Obviously, you’ve done exceptionally well with that over time.

Travis Wallace: Yeah, I don’t know how those guys do it, but they kill. You know, they sell something and now they made a bunch of them, but now they got to go do it again and repeat. You know, I love the residual recurring revenue. For me, I sell a hospital and I clean it every month. They’re paying me every month. Now, go get another one. So, you know, that residual revenue is beautiful.

Brian Spear: I’m wondering if the experience that you had with your grandfather has changed and impacted your perspective in terms of your planning, in terms of like estate planning and what you’re looking to do for your pseudo family office for the kids and the grandkids and everything moving forward. Has that, you know, have you thought through that and what are your what are your plans given the experience you had with your grandpa?

Travis Wallace: That’s a great question. It’s almost an obsession with me, Brian. You know, since I had all of our family wealth taken away, I give my kids as much as allowed. And, you know, going to change our estate when, you know, when I pass, my half of the estate, half goes to, of course, my wife, Leslie. But the other half goes directly to my kids. You know, I can control that one half. Yeah. You know, so, you know, I think it’s family money and I got stung by it. I think, you know, all the money and the assets we have are also my kids as well.

Brian Spear: Yeah, that’s beautiful.

Travis Wallace: You know, I’ve never, never been private. I’ve told my kids all along, you know, distributions I take, my wins, my losses, how much I made. I just never, never lived in privacy. I know a lot of parents do, but I always shared all that with my kids.

Brian Spear: It’s so wonderful to discuss and have those conversations, right? When you dig into family offices, G1, G2, G3, how these guys are doing it. Everybody has massively different perspectives on how to handle it. I don’t think there’s a right or wrong. You’re just trying to find the best thing for you and your family. But, you know, we’ve seen, unfortunately, over and over, it’s played out, right, where capital and wealth is lost. you know, boots to bootstraps in three generations. You’ve heard it. Everybody’s heard it. And I just, you know, that’s one of my biggest fears in life. I likewise intend to be pretty open and forthright with my family as we progress. Also just trying to ensure that I don’t spoil the kiddos along the way, right? I got young kids and I want to be able to provide for them, but also allow them to, I don’t want to rob them of, of their ability to make their own way and become self-made over time. So I think that I’ve seen some mistakes made over time, and I think that you probably have as well when you run in circles. But sometimes folks that are successful become a little bit more domineering and try to lay out the path, you know, the golden brick road for their kids or their grandkids and try to lay out that path of ultimately what that looks like, focusing on the kid and improving their character so that they can go forge their own path over time. It gets very complicated with money in terms of how to pass it along, when to pass it along, the conversations to have. But my contention would be to be as open as possible once they become adolescents. I think when they’re really, really young, it’s difficult. You could teach them the basics of financial education. But once they become adolescents and early adults, Getting them more proactively involved inside of the conversations regarding the family wealth is my preference. And inform them that they’re not going to be getting a sorts of gigantic windfall when they’re 20 years old or 22 years old along the way, right? This is something that… is a heavy responsibility, in my humble opinion. And the goal would be to pass along to the second generation and the third, et cetera, et cetera, et cetera. So it’s wonderful to hear that you’ve already had some of those conversations. Do you keep all those conversations in house with yourself and your family? Do you bring in any sort of outside counsel, whether it’s estate planning folks or financial advisors and the like?

Travis Wallace: We do. We have some some financial advisors we’re working with and an estate attorney to change our estate. But I’m always including my kids. I’m blessed that they’re both go getters. And they you know, I don’t think money really changes them. I think it makes them hungrier. You know, you see so many people like Warren Buffett, who are not going to leave their estate to their kids, you know, for that very reason, don’t want to spoil them. But I’m kind of a blessed position. My kids, you know, don’t seem to be really affected by that.

Brian Spear: It’s very interesting. I’ve read some stuff about Warren Buffett. I’ve read a lot of biographies over time. And Buffett had this one thing that was written about him that he never really talked to his kids about money. He never really did. He would write his annual letters and he would speak about it openly. And it was his entire life. And it was just out there in the public. So his kind of assumption was that his kids would, like, figure it out. If you want to go figure it out, you go figure it out. But he never, like, actually taught them. the basics and what a massive advantage to actually be in the room all the time. And, but he never really did. And so a lot of them ultimately ended up taking the shares that were kind of gifted to them a little bit earlier on and then sold all their Berkshire shares a hell of a lot earlier upstream. I’m sure it’d be exorbitant amounts, right? Like right now, but he never really talked to them. It’s an odd dynamic, right? It’s a lot of these guys that are unbelievably well renowned internationally and historically, right? you know, in their personal lives have made some mistakes. I think that that’s why we read biographies and try to learn from the mistakes that folks have been made. Peel back the onions and the golden nuggets and all the wisdom, but ultimately try to also understand the mistakes they made and the regrets that they’ve had and try to avoid stepping into those landmines yourself along the way, you know.

Travis Wallace: Well, a lot of, you know, like Jerry Jones’s kids, you know, they’re active in his business. They’re both go-getters. A lot of depends on what their DNA is. You know, a lot of them, you know, like Ken, you just bring them into the business and they’ve got that fire in their belly. That second generation, which is rare, you know, has the drive and the fire.

Brian Spear: I agree. It’s odd. I think some of that is innate. I don’t know if it’s nature versus nurture, what it is, right? Some of it, I talk about my sister. She’s got a pair of twins. She actually has two sets of twins, but the first set of twins, both fraternal boys. One of them is like A-type driven, super hardcore. And the other one is very much like… relaxed, wonderful in his own right, focuses on arts, enjoys dance and a myriad of things, but just completely different types of animals. And that’s when I realized there’s definitely some nature in there because they were taught, they were like, you know, treated exactly the same from the moment they came out the womb. So like, there’s definitely some nature and nurture there.

Travis Wallace: There’s some DNA.

Brian Spear: Yeah, man. It’s interesting. I agree. I, you know, talking about the, um, second generation, third generation, and trying to get them involved in the business, I do think that it’s prudent to share any of the insights and bits of wisdom and provide them with the opportunity to learn if they have an interest in doing so. But ultimately, you don’t want to force it upon them. You don’t want to try to create a little mini-me where you’re like forcing them to get into the business and do exactly what you’re doing along the way. If they want to come along for the ride, great, it’s wonderful, right? If they want to take over the business downstream, that’s wonderful, beautiful. We’ll help them do so. But it’s not something that will be imposed upon them. In my contention, right, as I mentioned, I don’t want to rob them of the opportunity to become self-made. My daughter, right, like she runs around the house dancing all the time, 24-7, 365. It’s all she does. I’m not sure she’s going to be sitting there wanting to drive investments. That just doesn’t seem to be the case thus far. I’m not sure. But, like, you know, it is what it is. So just let them, provide them with the opportunity to do what they want and let them succeed and thrive in their own way.

Travis Wallace: When we were selling, I used to, before we did, I went to different presentations. You know, I’ll never forget the speaker one time. He was a veteran. He said the failure rate for second generation entrepreneurs family is 70% for second generation. And it was startling. And he said, there’s one word I’m looking for. He said, can anybody tell me what that is? And one guy raised his hand and he said, passion. He said, that’s it. They don’t have the passion that their original parent had, which is interesting.

Brian Spear: So you’re right. It’s DNA. Some people have it and some people don’t with the same interest. This has been an absolutely wonderful conversation, Travis, I must admit, buddy. I always enjoy talking shop with you. And I’ll look forward to it. We got some time together in Houston next week when we, the Sunrise team, we’re flying down there and touring our property. We’re working on down there, so it’ll be exciting. I’m looking forward to spending some time with you in person. I was going to say on the way out here, I’ll ask one final question, okay? We ask this to everybody. And so it would be, if somebody could only remember one lesson from your entire life experience, one piece of sage investment advice, what would it be?

Travis Wallace: Use other people’s money. Don’t be afraid to borrow money to make money. Don’t be afraid of leverage. You can scale with leverage.

Brian Spear: Prudent leverage. Prudent leverage. It’s like a chainsaw, man. It’ll build the most beautiful house or it’ll cut your leg off if you don’t use it correctly. But it’s a wonderful tool. All right, Travis. Well, we’ll get the heck out of here, buddy. Once again, I sincerely appreciate your willingness to come on and spend some time and share some of the wisdom that you’ve learned over time, buddy. It’s very much appreciated. And I look forward to seeing you next week, man.

Travis Wallace: Yeah. Thanks for all the hard work at Sunrise. We as investors appreciate it.

Brian Spear: My pleasure. My pleasure. Until next time. Be great. Travis’s story is a reminder that the skills required to create wealth are not always the same skills required to preserve it. Early in his career, initiative and a willingness to take risks helped him build a recurring revenue business and assemble a meaningful real estate portfolio. But passive investing introduced a different challenge: deciding who actually deserved control of his capital. The lesson is not to avoid every deal that encounters difficulty. Even strong operators are gonna face some difficult markets. The better test is how they underwrite, communicate, adapt, and protect trust when the original plan stops cooperating. And that’s why experience can gradually lead an investor away from scattering money across every opportunity and ultimately towards a smaller number of industries and operators they truly understand. Leverage can help you scale wealth. And cash flow can provide patience. But neither replaces sound judgment. You can outsource execution. But you cannot outsource judgment. Until next time, invest wisely, protect the downside, and keep building a legacy that lasts. Be great.

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