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Retirement with SD-IRA Investing Feat. Andy Teasley
Episode 178th March 2022 • Real Estate Marketing Implementation Podcast (The REmarketing Podcast) • Jerome Lewis
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Retirement with SD-IRA Investing Feat. Andy Teasley


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All right. All right. Hey, what's up guys. Welcome to another episode of the remarketing podcast, where we talk all things about business and real estate. I'm your host, Carl Otero, uh, from the Oterro real estate group, where we buy and sell on terms. And today we are coming at you with another awesome video.

We have the legendary Andy Teasley who loves to invest in real estate and help others invest in their retire. Okay. I went through his financial calculator course and it was a doozy. Okay. So Andy, how are you today? I'm doing great. I don't have to be up at 5:00 AM on, on, uh, Mondays. It's one of my good days.

unfortunately, I'm so active in, in, uh, east coast events that I'm, I'm up, off and up at the ridiculous hours. It's nice to get able to sleep in a little bit after Sunday. So yeah, that's good to hear, hear, hear, to hear myself described as a legend. I'm just a young P in this industry. I've only been at it for 30 years, young P indeed, with, with the, uh, with the veteran beard as well, right?

Oh, that's that's my COVID protest. Yes. Oh, is that what it is? awesome. Awesome. So Amy, that's what it started out as, but I got used to not shaving us kind of nice. Not to think. Dragging that razor across my face anymore. So yeah, I was, I was wondering how people with beard handle the, um, the whole mask thing.

I was always, you know, wondering that, but it works just as well for us as it does for anybody else, you know? Awesome. Awesome. Awesome. It's sail right past my nose and BOS my glasses. Exactly. Just same as yours does glasses problems. Alright. So says how effective those damn things are. Exactly. . Okay. So, um, why don't you tell our lovely Watchers and guests a little bit about yourself and, um, yeah, just a little bit about yourself.

Well, I took my guru in about:

nd, and was very satisfied in:

I said, there's no way that this is gonna keep going. Their banks are lending. I just borrowed $200,000 with. Ridiculously bad credit . Um, and, and there was no reason for them to give me that loan. And of course I've been paying on it for years and years and years and years now. Cause I won't give up that cheap 6% loan.

Anyway, I bailed out everything I owned that I wasn't willing to take through the dip. Lord knows. I didn't expect the dip was gonna be as bad as it was, but it was pretty healthy. Mm. Uh, around me. Well, we'll get there anyways. So I switched and I started buying land from people who didn't appreciate the land that they own.

Mm-hmm and I sold it with a reasonable down payment and a note, you know, selling things on terms mm-hmm um, because I really, really at, at heart prefer paper. I mean, there's advantages to rentals and there's advantages to paper and they both have wonderful advantages. Paper is more. Up here and less work with these things going out and dealing with tenants and toilets and, and all those other nasty parts of being a landlord.

nyway, I, I did that and then:

You know, you, you've got that piece of land that's in the path of progress that you sure is gonna be worth something. And now that the, the real estate market is completely collapsed, or you're gonna build that. That cabin or that escape house or whatever it was, you bought this, this cheap land for, um, if you're not gonna pay something, it's not gonna be the home mortgage it's gonna be Andy.

hern California. Wow. In two,:

Hmm. And of course, all of my relatives were telling me I was an idiot because everybody lost plenty on unreal estate. And I sat there and I, and I explained it to my family. I said, I bought a four bedroom, two bathhouse in Southern California for $14,000. The lot under that house with the water meter and the gas and the sewer hookups was worth $25,000.

I put another 20 into fixing the house up and rented it, and it never rented for less than a thousand dollars a month. I didn't understand how I could possibly go wrong with, uh, $34,000 investment that kicks out a thousand bucks, less expenses every month. So quite frankly, my relatives were all wrong.

And, and I've learned over the years that when my relatives tell me I'm investing stupidly, it usually means I'm doing the right thing.

so, so what are they saying now? What, what, what are, what would the, they still say I'm nuts. Oh, okay. You absolutely S so you're doing the right thing, basically. I'm doing, I'm doing investments in with the self-directed IRAs that are making. Well average last year of the three I shepherd was 45% whoa, 45.

And I can't get my, my relatives to get out of their money market, their, uh, their mutual funds and all these other silly things they're in and res and, and they just invest silly and, and their answer always is the same thing, but Andy, nobody can do what you do. And when you. We won't be able to do that anymore.

And, and it makes absolutely no sense because just because they can't do what I do cuz they're, they're too lazy to learn. Right. Doesn't mean they can't switch back to their stupid little non-earning investments when I get run over by that proverbial plus. Right. Right. But somehow my relatives don't understand that.

Hopefully my students do cuz cuz I, I enjoy sharing what I know with people. So, so really quick, um, you spoke on something that I think people, a lot of people don't know. What the self-directed IRA is. Could you go into that a little bit? Sure. You know, some point in the, in the past, the government decided that people that, that they were tired of picking up all these, uh, pension plans from defunct companies.

because people went to work in the old days, they, they were gonna spend 40, 50 years working at the same desk for their entire career and have a pension when they retired and they were gonna get a check from the company. And that was supposed to support 'em until they, you know, passed away, went, went to heaven.

Mm-hmm uh, the government realized that the companies kept passing away, not the people. And then the government ended up sending them checks substantially smaller than what they've been promised, but check. And so because of that, my glasses are driving me nuts because of that. the, uh, they created the self-directed retirement account and in the 401k plan, in the, in the hope and expectation that people would save for their own retirements and invest it in things.

That weren't prescribed. There were some things that you couldn't invest in, in your, in your self-directed retirement plans. You know, you couldn't buy collectibles and, and you couldn't lend money to family, even though sometimes you get really good returns on that. If you ever get paid mm-hmm . So they created the, the, the IRA and the 401k plan and companies, instead of having a pension now created a 401k plan.

You, you take a percentage of your money. If you're smart, you take 15% of your money and you put it into the company, 401k plan, they match some mm-hmm and they have that plan administered by some person. And, and he collects a fee every time you buy another mutual fund in the plant. And that's a good thing, cuz people that do that have the opportunity to set themselves up for a very comfortable retirement in spite of the fact that they have very limited investment options.

At the same time in, in that government plan was the opportunity to have real self-directed IRA accounts. Mm-hmm and an IRA account is something completely separate from your company. It's an account that you. Can put $6,000 currently, if you're under $57,000, if you're over, let me shut that up. It's sitting there vibrate anyhow.

So, so that's available to you and, uh, and you can invest in anything. Now, the banks and, and certain self-directed quote unquote retirement plans have set up the same kind of system where you can. The silly mutual funds. And, and only by things that the person that runs that custodian mm-hmm , uh, gets a commission on.

That's the only thing they sh I mean, the, whatever it is, whether it's Vanguard or all those different funds, you can invest your IRA in. Um, you can only invest in those things where the guys get the commission. I mean, that's really the answer to how they choose which plans to let you. Also created were companies that were absolutely completely self-directed retirement plans.

Um, that's a retirement plan, an IRA, or a 401k plan where you can invest in anything that's legal. There is anything very what's that? Anything, anything? Yeah. There's a very short list of things you can't invest in. Hmm. You can't buy collectibles. You can invest in collector collector coins with the exception of you can invest in United States, coins as bullion, and you can invest in that.

And, and if you make out, because it, it has a higher value because it's a nicer coin when you sell it, then the government kind of wink, wink, nod, nos that . You can invest in, in the life insurance policy, that's called a viatical where you're, these were really, really popular when aids was a death sentence.

Mm. Okay. Okay. And you were, you were a gay person with no responsibilities and you had aids and you were not gonna live another two years and you had this great life insurance policy for some reason, possibly a whole life that, that you, that you had built up. And because the guy sold it to you and people would go out and they would buy those.

Life insurance policies from those people at a discount. So they've got a million dollar life insurance policy that somebody's gonna get a million dollars when they die, but they're unable to work. And they'd kind of like to have some money to spend today. And a, an investor would come in and buy that policy for say $300,000 and continue to pay the premium.

And then when that person went to heaven a couple years later, then the investor got the million bucks mm-hmm and that's called the Y Atal. And those aren't allowed in your self-directed retirement account. You also can't lend a vertical relative, but I don't want to get too deep in the weeds. I would encourage you to find a good.

IRA custodian. That's truly self-directed. I like you direct for my west coast friends. I like Advanta for my east coast friends. Mm-hmm I have accounts in both of those companies. I will tell you that up front, I, I work with several IRA companies in the, the scope of my business. And because of that, I have certain.

Negative opinions about some of them, which I will not share , um, and very positive opinions, which I'm happy to share about the ones that I use. Right. So, okay. So and so, so I know, so I know you mentioned, um, earlier about notes. What, what, what are notes and can you use those as a retirement vehicle in your self, the record IRA, like you're.

Oh, absolutely. So, so let's talk about a note on its most basic level mm-hmm . So let's say that you and I are sitting in a bar and joining a, a few adult beverages and, and I reach in my wallet and I expect to pull out a hundred dollars bill to pay my tab and I'm short. Mm. And, and I say, Carlos, I, I don't know where the heck I had a hundred dollars bill.

It it's gone. I don't remember using. It's supposed to be folded in the back of my wallet to use, to buy real estate with, but occasionally it gets used to buy adult beverages. And right now it's not there. I'm, I'm really embarrassed. I could, I borrow a hundred dollars bill or a hundred dollars so I can settle my tab.

And, and Carlos says, sure, just write me an IOU. So I take out a piece of paper and I write, and I, Andy Teasley, O Carlos, a hundred dollars. That's a. It could be Carlos says, yeah, but I want some, I want some points and interest on that. So I owe, uh, Carlos a hundred dollars plus two points in 10% interest until I pay him.

Mm-hmm , that's also a note it's slightly more complicated than the simple I owe you. Mm-hmm but not much. And people tend to overcomplicate things when the fact of the matter is that's an oath. It's a promise to perform, to do something. I'm going to pay you this much. I'm going to pay you this much. How I'm going to pay you this much with this interest on top of it at, at this scheduled payment, I'm gonna pay this much at this interest.

In regular payments until it's paid to zero. I mean, those, you can keep expanding the stuff in the note, but the note is a promise to pay a certain thing. It's a promise to do something. Mm. I could trade for that a hundred dollars. I could say, Carlos, I know that you really, really like silver dollars and I'm going to give you three silver dollars sometime in the next 60 days for that a hundred dollars.

So I didn't promise you money. I promised you something. Um, you could need a, a, I want credit for a handyman and I go out and do handyman work to justify my solo. K. So I could trade you that hundred dollars bill for one and a half hours of my handyman services at your local Airbnb. Hmm. Airbnb. That would also be a note notes.

Don't always involve cash, but notes involve postpone. Rewards. And, and when you postpone you have a, somebody, I think I heard you want, I heard you say once that you have a right to a premium, because you're given that person an extended, uh, payment, correct. You don't have a right, but you can certainly reasonably expect it.

I mean, I'm not, you're not entitled to have a return. I mean, if, if I lend a hundred dollars to my daughter, I don't expect to make interest on that. Quite frankly, with family rule, as I expect are not ever to pay me back to use that money to help the next generation. That's that's what you'll lend family money for.

Right. Okay. Awesome. Awesome. Awesome. So, so what, what would you say are. Underrated or indispensable tools to do some of this note investing in retirement work. Okay. Number one, uhoh here, it comes. Your phone should look like that. What, what are we looking at here? I see a bunch of numbers and IRS. And like, what is this?

Could you describe it to our 10 B I, I, financial calculator mimicking program that you put on your smartphone? It's available from in day I presume Carlos will stick the link in that for all these, these organizations into show notes somewhere. Yes, I will. Um, at, in day, it's a rip rowing $5 and 99 cents.

And speaking is a guy who breaks his cell phone about every other month. Uh, it just keeps moving from cell phone to cell phone. So you don't have to keep buying it over and over and over again. Mm. Um, and it's an indispensable. Um, like I cannot thank bill tan enough. Cuz I spent the first 20 plus years of my investment career doing math like this like I could figure out good enough.

Right. Uh, I, I had memorized that, that, uh, a 6%, 30 year note on a hundred thousand dollars was gonna cost me six, $600 a month. Um, and if you remember some little things and I, and of course the seven, the, the seven year. Which is that if you can invest at 10% in 7.2 years, you've doubled your money and vice versa.

So if you only make 7.2% on your money, it'll take you 10 years to double. If you can remember those basic things, you can stumble through a successful investment career. Mm. Mm. You can also find your way around the dark house with a single candle stick held in front of you. Or you can get a, an L E D flashlight that runs off your 18 volt Royal battery pack.

And, and you can not stumble through the house. You can run through the house cuz you can see exactly what's in front of you. That's the best analogy I know to, to talk about somebody that knows the rule of 72 and, and, and a handful of formulas memorized in their head. Negotiating on notes and somebody that actually notes how to use the tool.

Nice. Nice. Nice. Nice. So, so you mentioned someone, uh, named bill tan. Does he have a book? And I was gonna ask you what a three book, you recommend three books you recommend to the audience and why? Oh, three books. Mm-hmm so first book, I actually happen to have some here they're handy by me. this book is how to finance real estate.

Any place, any time by James MIS. This is a great formula book. It tells you lots of different ways to structure deals, to acquire real estate. Um, it's to me it's very inspirational. The ugly cover is actually one of the originals, uh, the, the vanity press books, but it is being published now regularly. And it's available on Amazon.

I think it's like 20 bucks. It's certainly affordable. Nice. Um, easy read three page chapters are great. Great. Really like that one. That is good. Um, this book, Jimmy APIs invest in debt, which has the ugliest cover of any investment book. It looks like the cat in the hat but I will tell you that, that don't, don't bother getting Jimmy's book until you learn how to use a financial calculator.

Cause everybody raved about this book and I, and I bought it and read. Because I, I really loved Jimmy and, and I really loved the way he, he taught and the things he he spoke about. But if you don't know how to use the tool, you read the book and you go, oh, that's okay. Mm, interesting. If you learn how to use the financial calculator and read the book again, you go.

Oh, , that's a great book. So, so don't bother with that until you learn how to use it. And I will tell you that this book you wanna get from Gary Johnston with a If you don't add the T you're gonna get the guy who should have been president last time. Um, And it's a lot cheaper buying from Gary than it is buying from Amazon or eBay or any of those places, cuz they're sold at a premium.

ie scrub. Hm. And back around:

Mm-hmm . So I was looking for something to do and whining at one of the meetups I, I was attending and somebody said, well, you really need to go talk to Tim king and learn about Lonnie deals. He's doing Lonnie deals in orange county, and I said, what's a Lonnie deal. And I called Tim. We had a nice chat on the phone and he said, you gotta go buy this book.

m I was doing on land back in:

When I got scared of my houses. And it is it's the same, buy cheap, sell it for substantially more and carry the paper that that's the system in a nutshell. And, but what I decided, and the reason I didn't go back to land is I think when the, when the market constriction happens again, Mmm, because it's gonna happen again.

It's not, it's not, if it's gonna happen, it's when it's gonna happen. It's a cycle. It all real estate goes up and down overall. Eventually it goes up but up and down is consistent. I think that people will fight to keep their mobile home, that houses their family. Unlike fighting to keep the, the piece of land you bought, cuz someday it might be worth something or because someday you might build something there.

So that's why I haven't gotten back into land. And the, the returns on this investment class are spectacular. Hmm. So those are the three books that I would recommend to anybody start now. Awesome. Awesome. Awesome. So, so would you say, um, are any of those people, one of the most influential people, um, in your life, or would you say someone else?

I would, well, boy, most influe I'd have to start with the guy that I went to work for when I was 14, who ran the snack bars, uh, at the swimming pools and, and the high school football games in Riverside. His name was Robert Clark. Mm. And Robert Clark was a died in the wool. Hardcore John Birch conservative.

Mm. And the, he, he constantly tried to teach me things that, that I just was too young to understand at the time I needed to get smacked upside the head a few times to get it. and the one main lesson I learned from him was that ownership is irrelevant. Control is everything. Mm. And he tried so hard to teach me that lesson.

And I, I didn't really learn that lesson until well, after he had passed away, but he was really influential in my life. Um, I have to mention bill tan because bill tan opened my eyes to the financial. And as I said, that's the difference between stumbling through a house with a candle and having one of those giant L E D flashlights that just lights, it, lights it up like the sun shining in the house.

So that's built hand. He's still with us. He's still teaching. He, he runs the LA R group on meetup. Uh, a phenomenal, phenomenal, great hearted man. Awesome. Next person. Next person I have to, to put up theirs is gonna be Jimmy Naper. Um, dearly missed Jimmy. We lost him last year, the year before. Uh, I was very blessed that I got to go spend about four hours on his carport with, with he and, and cricket, just sitting in and talking and talking about family and real estate and investing and really, really a phenomenal, phenomenal investigator there, uh, investor negotiator.

There are very few people who I. Be scared to negotiate with and Jimmy is absolutely at the top of that list. And, and if you were to sit down across the table from Jimmy and try to negotiate something, As you left thinking you had done a really, really great transaction and come out on top of it. I tell you, you should unzip your fly and reach in and make sure you still have underwear.

Cause you probably got traded out of and you didn't notice it when he was that good? A negotiator. Good. Oh boy. You know, there's a, there's a country in Western song about, uh, some spurs and, and he, the, the guy's the guy's father or grand or grandfather. Been given these spurs from this famous gun fighter that, that had called him out and, and the line that's the end of the, somewhere towards the end of the song, the, the dying gun fighter said, how is I to know you could shoot that, that fast when you talk so Golder slow

he could talk really slow, but he could sure, sure. Structure deals just an amazing, amazing. And of course the one that's available to us still is Peter Fornado. Um, Peter is the most creative real estate. In existence in the United States today. And I dare anybody to put up anyone who's as, as creative as he is at deal structuring and negotiating and teaching the important lessons of, to succeed in this business, learn to care about people.

The more you care about people, the more you serve people, the more successful you'll be. There's a reason that McDonald's makes more hamburgers than anybody else it's because they serve more. The more, the more you're willing to serve, the more successful you will be. Whew. Appreciate the gospel right there.

Awesome. Awesome. Awesome. Okay. So we're alright. Let, how pass the play

I gotta get my financial calculator, man. I gotta, uh, put in know how much I'm gonna put in. So, so here we are now we're at the, uh, the closing table, which is our last three questions and we are just, that's what we like to call at the closing table. And okay. Here is one of the questions. What is the most important lesson that you've learned over your career of investing?

Oh, the most important lesson that I've learned is that price is irrelevant and that's a really, really hard lesson to learn. It's a hard lesson to teach. And you've taken my class. So we talk about the million dollar house mm-hmm and, and, and I teach the million dollar house because that is such a great lesson going forth on what the realities are.

I mean, what you can create, what, what you can do if you learn that prices irrelevant. If you're gonna own a house for a long time prices irrelevant. I, I hear people saying, oh, there's no way to buy a good rental house. Because prices are obscene and prices are obscene, but you can still buy a good rental house.

If you can solve somebody's problem mm-hmm and get terms that your tenants can afford. So that's the most important lesson I've learned over the years. Awesome. Awesome. Awesome. And here's our last question. Before we ask you to close out, close this out, what is one question you wished I've asked that you wished that you would've, you could have answer.

Oh, what should you do going forward to, to be successful in our current, in our current economic reality? Well, , what can we, what can we do to be successful? number one thing. And by the way, we should do another one of these just on the, this how to build yourself directed IRA account. Okay. Um, fully fund your retirement accounts.

We're all gonna be old someday. Hmm. If, if you're in your twenties and. And you do what it takes. You limit your expenses or increase your income to where you can put $500 a month into your Roth. IRA, do that. And if you can invest and make 15%, which is easy to do, don't believe what these, these mutual fund people tell you.

Mm-hmm . If you just bought tax lie certificates in Arizona and Florida, you're gonna make 15% consistently 15%. What's that 15%, absolutely. To some people that's outrageous. Yeah. It's the government. They're always outrageous. 15% easy money. If you do that for 50 years, you will have 69 million when you're, when you're 50 years older than you are today.

And that's not 70, 75 is not old. Trust me. That's not. It's not old. I have too many friends that are 90 and still running around playing pickle ball. if you wait one year to start, it costs you 10 million. Hmm. How important is the first year of your investing? And if you haven't filed your taxes yet, you can still fund 20, 20 ones IRA, right up to a few extend October while you're trying to save up that $6,000.

You can put it in and until you file your taxes. So it youngsters out there fund your IRAs. Awesome. Awesome. The legendary Andy Teasley, where can our listener listeners find out more about you online? I have a, well, I have a website, but it's the redheaded stepchild that I I've got a, a man who's taking over web manage web master duties.

Routinely busted my chops cuz he needs pictures, right. And information. And one thing Andy really sucks at is before and after pictures. So, uh, we'll get it going at some point. So the, the best way right now is to shoot me an email mm-hmm at Andy, the and ask for my free weekly newsletter.

You will get three calculator questions. The answer to the last week's three calculator questions. Upcoming vetted education. That's good classes by good instructors. They don't have a table at the back of the room to run you back to there's no upsell, no $50,000 mentoring programs, none of that garbage, just good solid information and it's affordable and high value.

And you will have a list of all the exchange meetings I attend. I attend several every week, uh, sometime, but something between three and six meetings a week doing exchanges because there's so. Knowledge to be gained by attending, uh, exchange meetings on a regular basis. Awesome. The legendary once again, the legendary Andy Teasley.

Thank you for coming. Uh, we'd love to have you back and tell us how we're not retiring correctly because I'm eager to hear more about that. Uh, I mean, I, I know enough about it, but I, I want to, I want the audience to know what I know, because once I heard it, once I heard what you can do with your self-directed IRA.

Yeah, possibilities are limitless, especially retirement. I've I O goodness gracious. So that being said's thank you's. It's nice to not have to get outta bed in the morning. If you don't feel like Andy, we want have you back. We wanna have anytime, Carlos, you know, that just gimme a call. Absolutely. All right.

We're signing out. Thank you. Bye bye. All right, guys, that was the remarketing podcast. Thank you for watching another episode and we'll see you in the next one.



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