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Today I'm really excited to talk to guest Andy McFarland. Andy has been an active real estate investor since 2002 when he purchased his first property, which he calls "the treehouse." He's purchased hundreds of properties since then, mostly from private sellers. He owns a renovation company, Quality Property Renovations, that flips ten to twelve houses a year, and a wholesaling company, Treehouse Investments, which wholesales over 100 properties per year in three different states.
When Andy was in high school and college, he had no idea what he wanted to be, but he always read a lot. In his early 20s, he read Rich Dad Poor Dad, which he describes as a great paradigm-shifting book. It made him realize that he could have passive income by working in real estate. At the time, he was working two jobs while going to college part-time. After reading the book, he decided to purchase his first property, the "treehouse": it was a bank-owned, illegal, non-conforming triplex. Andy admits that he just didn't know any better, and did this without a mentor or any kind of guidance, but he just dove in with determination. He worked on it himself, rented it out for a while, and sold it on owner financing. From that one deal, Andy learned how to be a landlord, a flipper, how to do seller financing, and so much more. I find this story incredible because Andy really got paid to get an education in real estate.
With the $40,000 net profit from this first deal, Andy put down a payment for a rental property that he stills owns and loaned the rest to someone to do a flip. He didn't consume any of the money, but instead drove it forward. He describes that as his winning mentality.
For the first few years, Andy didn't really have a strategy in his business. He was just looking for any kind of deal to grow his business. That often is a problem for new investors who lack focus and end up doing everything not well. But Andy was able to make something out of everything that came his way.
Andy was afraid to quit his job at a loading dock for a long time after starting his real estate business, until he was fired for skateboarding. He describes this as the biggest blessing in his life. His father, who was following a different paradigm, urged him to go get his job back, but Andy insisted he was going to work in real estate instead. I think a lot of people can relate to family doubts about investing in real estate. I know I can.
Fast forward to what Andy is doing now: he is primarily a wholesaler. He says he's always been a fast nickel guy versus a slow dime. He also is a people person and enjoys talking to private investors. Andy describes himself as a "real estate social worker".
He wore many hats as he scaled his business and he rose up through doing everything that needed to be done in his business. Today he has a chief operating officer working for him and he stays above the whole process, managing the managers. I like to think of this as running a business instead of having a job. In the interview, Andy talked me through how and when he started hiring people for his business in order to scale, and which tasks he decided to delegate first. He now has a whole team working for him!
I asked Andy how he would build his business if he were starting somewhere new without any contacts. He gave a great answer:
First, he would get access to the MLS and county records and start driving around to get familiar with houses and values in th...
