Building Wealth Through Real Estate with Andy Teasley | Part 1 #911

Narrator Welcome to The Norris Group Real Estate Podcast, a show committed to bringing you insights from thought leaders shaping the real estate industry. In each episode, we’ll dive into conversations with industry experts and local insiders, all aimed at helping you thrive in an ever changing real estate market. Continuing the legacy that Bruce Norris created, sharing valuable knowledge and empowering you on your real estate journey. Whether you’re a seasoned pro or a newcomer, this is your go to source for insider tips, market trends, and success strategies. Here’s your host, Craig Evans.

Joey Romero Hey, everyone. Welcome to The Norris Group real Estate podcast. Our special guest this week is Andy Teasley. Andy Teasley is a self-described entrepreneur, serial entrepreneur. He has built and many small to medium sized businesses in the last 40 years. Along the way, he has always had an interest in real estate investing as the best way to build long lasting wealth. Raised by a teacher and a CPA, he has always felt the need to pay forward the learning that he received in his life. Being a seminar junkie, he has had lots of training instructors. He took his first “guru” Real Estate seminar in 1980 with Lone Young Grey and uses his experience at these seminars to hone his teaching skills and to try to divert new investors into local REIA instead of the high price guru system. He has invested in many, many areas of real estate as the titles have changed and at the peak of the past buying frenzy, he had an interest in over 50 doors as a buy and hold investor. He publishes a free once a week newsletter called the Weekly What-If, which contains calculator, practice problems and upcoming vetted education. He has flipped dozens of mobile homes to create discounted notes, and is currently focused on his single spaced mobile home parts. He occasionally offers classes on operating the Hhp ten by financial calculator and on flipping mobile homes. He lives near Palm Springs and is a California native. Let’s welcome Andy Teasley to our show. All right. Welcome, everyone, to the Norris Group Real Estate Podcast. We have a special guest today. We have Andy Teasley. Now, I’ve known Andy as, a lot of different things in the real estate world. So I can’t wait to dig in to see what he’s doing, what he’s up to now, and and who he’s, whose classes he’s attending and what classes he’s running and what groups he’s part of. So let’s get into it. Andy, thank you so much. First of all, for jumping on with us. I really appreciate it.

Andy Teasley Oh, happy to do it.

Joey Romero I love the opportunity to spread the word and preach to you youngsters. Youngsters. I’m 50. You’re a youngster. Yeah. All right, well, I’ll take it. So, Andy, let let let. Well, you know, there’s a lot of questions I have, but the first one I want to ask is, the Christmas guy still on your email? How did that come about?

Andy Teasley Well, I never changed emails. I never changed phone numbers. And actually, the phone number that that I used, that there on my name comes up. It was originally for my, like, carnival company back in the day. But, so I really started to stick with things. So I hate people that change phone numbers. You lose them, you lose friends that way. So, I used to own a company that manufactured and rented holiday decorations. You know, the things you see on street light poles, like, stockings and candy canes at Christmas time. Yeah, sure. Remy Riverside’s got them all over the place. One of my ex competitors does. I think he’s got about 500 units hanging down there. Anyway. We used to manufacture those, and we rented them, and we used to hang 5000 every year in four states. It was 18 hours a day, seven days a week. October, November and January. So that’s why Mandy, the Christmas guy, it’s. I suck at Santa. My my wife. When we were first married, had a very nice, professionally tailored Santa suit made for me, and I did 2 or 3 Santa gigs and hated every bit of it. I didn’t know what to say to those brats and that was the end of it. So, I don’t do Santa, all right?

Joey Romero  So. So where are you originally from?

Andy Teasley  I’m sixth generation Inland Empire. My mom’s ancestors were part of the Mormon army.

Joey Romero Well, back. Back when I was actually the Inland Empire. Not, you know, everybody calls now, but. Wow. The old 909.

Andy Teasley Oh, yeah. Oh, yeah. The old 714. Come on.

Joey Romero Oh, that. Wow. That deep. So, so growing up, like what? What is it? What is the kid growing up in the in the what? Not not what the Inland Empire looks like now, but what what did you think you were going to do growing up?

Andy Teasley  Oh, I was always an entrepreneur. I had I had a little storage in the garage. I sold stuff to the neighbor kids. We lived in a little. See, things have changed so much. We lived in a 16 unit subdivision in the middle of orange groves on all four sides. And the first thing that that first chink in that was they built University Heights Middle School on the other side of Iowa, and they took down an orange grove to put that in. But back when I was a kid, you left in the morning, you ate lunch in somebody’s house. Your parents weren’t worried because there was no work. You mean 16 houses in orange groves to go play in? And that was it. And I think I rode the bus to school, kindergarten in first grade. And after that I walked, which meant going from, I presume you know, where University Heights Middle School is. But we walk through the groves across the canal, down through the wash behind the, alphabeta over the railroad tracks and in the back gate at Highland Elementary School, back and forth every, every day for class. I mean, nowadays, if you sent your kid to walk that path, they would arrest you for child endangerment.

Joey Romero  Yeah.

Andy Teasley  But we do put pennies on the railroad tracks. We did all that stuff as kids, and, it was a great life. And you’d left in the morning and if you. If it got dark before we had street lights, you were in trouble. Or they just stick there. They walk out the front door and bellow your name, and you better find your way home quick. Then we got street lights when I was about, oh, I don’t know, 4 or 5. And then you had to get in before the street lights went on. Yeah. So Riverside was a really small town back then.

Joey Romero  Well, even even Aaron growing up, he would tell stories of him and his brother, like going in the manholes and, like, just going all over site in the sewers. That those were his adventures.

Andy Teasley  But, you know, there were some fun times in the catacombs under the mission in back before Duane fixed it up.

Joey Romero  Yeah, well, they they stopped doing those tours. Hopefully they’ll bring those back. It’s funny, when I wasn’t a tour guide, I worked for Glass Ranch for a little bit. So, you know, I spent some times in those orange groves and, out in Coachella, too. It’s just it’s so it’s so peaceful to be around just the oranges.  And you get you get all the snacks you can eat, you know, just just peel an orange, and there you go. Whoo! Who had the biggest impact on you growing up? Was mom, dad. You know, brother sister.

Andy Teasley Oh. Good question. Dad was a repressed entrepreneur, when he met my mom, when he was in the Air Force and in his last year, because he got transferred to March. He had already purchased a lot. A couple acres in Porterville, up in Northern California, because he was going to build a miniature golf course. Oh, you always wanted to be an entrepreneur. Unfortunately, my mom was a very powerful woman, and those of you that know her from her and her business is one of the best CPAs in Riverside, knows she was a formidable person, and she declared that no, they were going to go get a college education on the GI Bill. So they got married and went up to Humboldt State. Okay. Got a degree in education, and she got a degree in accounting. And he went to work teaching elementary school and and worked doing that until he was 62. Hated the last ten years of it. So he really inspired me with his entrepreneurial bent. And and he set me up with a gentleman named Bob Clark for a job when I was 14. And all of our riverside people in the room, the ones that are the, you know, generation, boomers like me, we all knew Bob Clark. A lot of kids worked for him. Shamil Park, Darren Hunt and and the one out on, Jackson. Anyway, playing at running the snack bars, at the swimming pools, running the snack bars at Ramona Stadium and at RCC for the high school games.

Joey Romero That was that was a great job. When you were a kid. Was your for what was your first career job? Career job?

Andy Teasley  I got out of Cal Poly. They claim I’m a civil engineer. I, made the mistake of buying the pellet chicken on university right after I got out, and my partner and I ran that for two years, lost $70,000, and I called up my MBA because it cost about the same as going to USC for for an MBA. And yeah, I think I got just as good an education and how business works. Then we morphed into, we built a carnival traveling show, 12 rides, 40 weeks a year, all in Southern California. A few sojourns out of state, but mostly just Southern Cal. That was good. Good business. Then I got married, and then my wife said, if you want to have kids, you’re getting out of that crazy business, and you can be a cardinal or. No, no. So sold that and built the holiday decorating company. Okay, so  I’m, I’m a serial entrepreneur. I get bored easily. All right. Well, let’s let’s talk about the real estate investment world. So how did how did you get into real estate and what what were you doing? What was the early strategies for Andy? So I know you’ve never heard this story before, but I was up late at night watching infomercials on television, and I got sucked into the I own young, great guru seminar, 3000 bucks for a weekend education that was probably worth about 250 back then, but it was a great basic education in real estate. And and I’m amazed that these youngsters nowadays, they have so much available at their fingertips, they just don’t understand what we used to go through back then. I mean, I remember one of the strategies that came away from that class was, was we would go dumpster dive behind real estate offices trying to find MLS books, because one of the strategies was to get an old MLS book and call all the listings in the old MLS book.

Joey Romero Because it was still available. It was probably an opportunity. Yeah. So was interesting. Like I said, good basic education class. And I’ve always just sort of dinked around with real estate ever since. So I’ve owned a lot of rentals. I peaked at 51 doors drop down to a dozen, nine back up to 32. Okay. Which is more than I should have.

Andy Teasley  And when I hit 22, I said I wasn’t going to buy another one, but they just keep falling in my lap and I can’t stop helping people solve problems. So that’s that’s what that’s what real estate investors are. Really, truly. I was talking to to the guys last week, you know, Rich was on, with Christine Souter and, Mitch from up north, and I said, we’re in the starting over business for people.

Joey Romero That’s what we that’s what we offer, you know, because we never know when the money that that we buy their home, what, what start that’s going to offer that family or that person. So it’s it’s, it’s a, it’s really fulfilling, especially if you’re truly in it to, to help people. Like a lot of the great entrepreneurs and real estate investors that we have, one of the things that, you know, I ask everybody is, what did you do during the crash?

Joey Romero So can you tell us what you were doing prior to the crash and then what you did afterwards? Okay, so 2005, I was looking at these McMansions with five foot offsets on either side of the house so you could reach over for sugar for your neighbors. High five, your neighbor in Winchester. Now, where is the nearest decent employment to Winchester, California?

Andy Teasley It’s like at least 60 90 minutes away. We’re going to go downtown San Diego to work when you live. And so and they were getting a half million bucks for these houses. There’s no excuse for that. And I said, this is at some point the little kid that’s pump on the bicycle pump is going to get tired and stop.

Joey Romero And this has been a crash. So in 2005, I looked at my inventory and I sold every house that I didn’t want to keep through the crash that I knew was imminent. So when the crash finally got around to happening in 2006, what was. And I didn’t mean to interrupt, but what was telling you that? Like what? You know, it was it data?

Andy Teasley Was it just that feeling or just your experience? What was it just good? I looked at what was happening and said, this does not make sense. I was on my fifth barber because they kept stopping barbering and going to go be a house flipper. You know what a liar loan was? I mean, when when I got my my last bank loan on my personal residence, I’m sitting there going through the small phone books of paperwork you sign when you’re doing your mortgage and escrow.

Joey Romero And I hit the income statement, I, I looked up at the guy, the mortgage broker, and I said, damn, I had a better year than I thought last year. And he slammed the book on my hand and I looked at him and he says, can you afford this payment? I said, well, hell yes, it’s 700 bucks a month less than I’m paying now.

Andy Teasley  He says, shut up. Sign where it says sign. Initial word says initial. And I said, yes, sir. It was a liar. Loan. And that’s what was happening. The all that just made my gut go, this is going to crash. So I bailed and I bailed too soon. I grimaced every time I listened to Tony talk about how Bruce convinced him to wait.

Joey Romero Oh, another couple of years and he made several million dollars extra because he listened to Bruce, I had that I didn’t know about. Respect that. So what did you do after once? Once the crash came and now the opportunities are starting to be abundant. What did you do? Well, so when I sold, I started doing land so I would find people that weren’t paying the taxes on their land.

Andy Teasley I would make an offer, a written off, read, send out a cover letter and a quitclaim deed and a return envelope. Basically telling people, you know, having unpaid taxes might negatively affect your Fico score. It appears you don’t want this piece of property in Riverside County. If you sign the enclosed quitclaim deed with the notary and mail it back to me when I record the need help you 500 bucks or a thousand bucks or something.

Joey Romero So. And that worked great. And then I’d sell it and carry papers. So that’s when I became a paper guy. And in 2008, I learned that it’s really easy to walk away from that piece of land you bought because you’re going to build a cabin someday, or it’s in the path of progress or so I got back 300 acres of Riverside County back then.

Andy Teasley Wow. 2009 and ten. I bought 51 doors because houses were free. You could open the MLS. My my search parameters were single families under 40,000 and investment under 125, and there were about 60 of each of those any day of the week in the desert MLS. I bought 51 doors. I was very pleased with myself and happy then I had I learned about partners because I had partners in those deals that didn’t have the same goals I had.

Joey Romero They did. They didn’t have the same stick to Itiveness, and they wanted quick, quick cash. And I was I’ve always been a long term investor, not a quick cash investor. So we the more split up some things part down. You know, I we divide it into two piles. And the one that did the dividing did the dividing. And the other one got to decide what they wanted.

Andy TeasleySo we were left as friends. But we won’t do business together again. And I’ve been just chugging along. And it’s funny, I used to think I was really a genius, having bailed on those houses in 2005, and a good friend of mine about 2012 says, you know, Andy, you keep crying about how you did good selling those houses.

Joey Romero You said out of the 51 doors that you bought, nine and ten, how many of those would you be unable to have acquired if you hadn’t sold those houses in 2005? And I said, well, I could have bought all of them, but not sold those houses. They said, how much more would you be worth today if you just kept those houses and drug them through the debt?

Andy Teasley And I said about $2 million, I think. And he said, yeah. So, I’ve rethought I don’t think I was quite as smart as I should have been. I should have just stuck, stuck through them. They were good rental houses. I never should have sold them. Well, that’s true. You hear from a lot of investors, right? I should have bought more.

Joey Romero I should have kept more. I should, you know, it’s it’s it’s one of the things that we talked about last week was, one of the, like the biggest thing of the most successful investors is that they don’t give up. They don’t leave the game. They they stay in it. They find a way. Right? Yeah. So when did you start investing in the, the manufactured space?

Andy Teasley So 20 1314 things dried up. I couldn’t open the MLS and pick from 60 houses anymore. Is that dumpster dumpster diving? Not that 40 years ago. You don’t have to dumpster dive. It’s all on your fricking computer now. On your phone now, I. Yeah. So I was whining at the local Reia and somebody said, well, you got to go call Tim King.

Joey Romero He’s doing warranty deals in Orange County. And I said, What’s the Loni deal? So I called Tim. He’s a he’s a buddy. I’ve known him many years. And I said, Tim, what’s a Loni deal? They tell me you’re doing Loni deals in Orange County. He says, you gotta go buy this book and read it. So I got deals on wheels from Loni Scruggs.

Andy Teasley And when I read it, I looked at the business system and said, gee, that’s the land flipping business I was doing back before the crash. The only difference is, I believe that when the next dip happens, people will fight to keep their mobile homes where they didn’t fight to keep their land. It’s a lot easier to to put back land and say, okay, you can have it than it is to, to, put back the house you’re living in.

Joey Romero Usually it pisses the wife off when you give her house away. Yeah, yeah, that might be a problem. So, I flip, I switch, and I started flipping mobiles, and it’s just a great way to generate paper. I’ve made a lot of good income flipping paper. And it’s been wonderful to me since then. So, you know, even you call them wobbly boxes, like, what do you think that space gets such a bad rap?

Andy Teasley We liked it. It gets a bad rap. People that need a place to live don’t give it a bad rap. The other investors give it a bad rap, and we just smile and tell them you’re right. Their job. You want to move along or go flip $1 million house and make a $50,000 profit and tell me how good that is.

Joey Romero So I don’t know. I mean, they’re not your grandmother’s mobile home, you know, they’re they’re well built nowadays and and when my crew goes in and goes through a mobile home, we we make it pretty darn nice. But walk us through the process. Like how, how does one go from land, space, whatever it is, all the way to creating the know?

Andy Teasley Walk us through that. Okay, so so we start by acquiring some project. We’re solving someone’s problem when they inherit mom’s house and they’ve got space rent, and they’re in Michigan and we’re in California because mom moved out here because it’s warm or they got transferred back there on a job. They’ve got space, rent. They have no way to deal with that thing.

Joey Romero So we are able to buy that house at a severe discount for cash, turn around and polish it up. And then the system Lonnie told it to us is to sell it on paper for at least twice what you have invested in. So a typical transaction for me would be to buy a mobile for $3,000, be online with the repairs and space rent and ready to sell with $10,000 invested.

Andy Teasley And then I would sell that for $3,000 down in a $22,000 note, assuming that I have $500 in closing costs, that means I’m left with $7,500 invested in that $22,000 note. And if you know how to use your financial calculator and you plug all that stuff into your financial calculator, you will find out I’m making a 53% cash on cash return on my $7,500 investment.

Joey Romero Yeah, well, I was just thinking what the barrier to entry is being so high in California. This is a great way for somebody who maybe doesn’t have as much money to to get in the game. I the 90 minute class I generally teach for reals is deals you can do in your own backyard for very little cash, even in Southern California.

Joey Romero And the other part of that is, mistakes don’t hurt as much, right? Oh, that’s right. Jimmy always taught us to learn on little deals one by one. Annoyances I have not gotten. I’m toting a note on about 100 mobile homes, and I haven’t gotten one back since the since the Covid thing. Prior to to 2020, I was getting back one every other month, and getting one back is just a bonus opportunity to make more money.

Andy Teasley The second time you sell. But there’s such a shortage of housing in this state right now, and this is good affordable housing. And once they’re in, they will not walk away from it like they used to. Well, is this is this a starter strategy or is this something that’s sustainable for people like do you see do you see your students who take your class.

Joey Romero They do it. You have success and go, well, I’m gonna go start flipping big homes or or is this something that they could do forever? Well, my my little phenom Rodolfo, who? You ought to get in here and interview, if you haven’t already. At 19 years old, he took my class. He went out on Tuesday after spending a weekend getting his brain beat up by me by this first mobile home for $10,000, drug his family down and cleaned it the next weekend.

Andy Teasley The week after that, he sold it for $5,000, down on a $55,000 note. And a service I offer to my students is I will lend him half of the balance of a note that they’ve created for the first half of the payments, so he brought me that $55,000 note. I lent him $27,500 for the first seven and a half years of payments on that note.

Joey Romero So in less than 60 days, he turned 10,000 into 32. Five. In the year he turned 20, he flipped 12 mobile homes and made over $1 million in paper. Hey, yeah. That’s it. I’m sure nobody thinks like I’m going to make $1 million a year flipping, you know, manufacturing monthly boxes. Yeah. Wobbly boxes. Yeah. Wow. Is that is that.

Andy Teasley But. And he’s got a good machine. They do really nice work. And he’s flipping a couple a month right now. Unfortunately he is he is decided he’s going to he’s buying a bunch of houses in Ohio. He’s gotten hooked up with a hard money lender. Who is? He’s, it’s a hard money lender who’s giving people a shot, who are not skilled and experienced yet.

Joey Romero So they’re financing everything for him on hard money paper. And he’s getting houses for like 20, $30,000 that are almost to the finish line. But but the, the the unskilled flipper that they did the deal is not quite drag it over the line and he’s dragging it over the line and putting tenants in them. And that’s he’s building a a cash flow wealth there.

Joey Romero So, I’m hoping he won’t learn a lesson. Well, that’s that’s the thing. Like you win or you learn, right? Yeah. Is that, is that the only thing you’re doing now? What other strategies are you using right now? Well, I’ve got 32 rentals. So the mean the tenants pay the bills mostly. At this point in my life, I’m working on growing my retirement account.

Andy Teasley My great nephew’s education savings accounts. Basically, all my family brings me their IRA money to invest, and I do what I can to make it work hard. Last year, we averaged 45% cash on cash across seven accounts.

Joey Romero  That’s, that’s a that’s kind of nice. That’s going to do it for this week’s episode of the North Group Real Estate Podcast. Be sure to join us next week for part two with Andy Teasley.

Narrator For more information on hard money loans, trusted investing and upcoming events with The Norris Group, check out the Norris group.com for more information on passive investing through the DBL Capital Real Estate Investment Fund, please visit DBL capital.com.

Narrator The Norris Group originates and services loans in California and Florida under the California Dairy License. 01219911 Florida mortgage Lender License. 1577 and Anomalous License 1623669. For more information on hard money lending, go to the Norris group.com and click the hard Harmony tab.