Taylor Avakian
what do Easy E Dr Dre will am and LA's hottest real estate market have in
December 3, 2024 · 1 hr 3 min
From Music Moguls to Real Estate Wins: Terry Heller’s Blueprint for Wealth Creation
With Terry Heller — Real Estate Investor
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What this conversation gets into
From the glitz of the music industry to the grit of real estate investing, Terry Heller’s story is one of resilience, vision, and unexpected opportunity.
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Episode show notes
From the glitz of the music industry to the grit of real estate investing, Terry Heller’s story is one of resilience, vision, and unexpected opportunity. In this episode of No Vacancy, we explore how Terry transitioned from working with music legends like Eazy E, Dr. Dre, and Will.i.am to becoming a successful real estate investor in Los Angeles—one of the toughest markets in the world. Terry shares how skyrocketing construction costs, complex zoning regulations, and ever-changing market dynamics have reshaped the real estate landscape in LA. He opens up about his biggest mistakes, why he regrets selling properties, and what today’s challenges mean for apartment building owners and investors. Discover how Terry turned undervalued properties into high-yield investments, why he believes real estate isn’t the best career path anymore, and the innovative ways he’s adapting to stay ahead—like launching a recession-proof roofing business. What Terry learned from icons like Eazy E and Dr. Dre—and how it shaped his business instincts. Why LA real estate is harder than ever for new investors—and where opportunities still exist. How condo conversions in Long Beach became Terry’s secret weapon for success. Why Terry believes selling properties is the biggest regret for most real estate investors. How Terry’s new roofing company capitalizes on gaps in the market. LA’s real estate market is a challenge, but for those who think differently, it’s still full of opportunity. This episode is packed with lessons for apartment owners, investors, and anyone navigating the complexities of the market today. #LosAngelesRealEstate #CommercialRealEstate #MultifamilyInvesting #RealEstatePodcast #RealEstateMistakes #HousingMarket #PassiveIncome #NoVacancyPodcast
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Episode transcript
This 11,526-word transcript is matched to English (Original) automatic captions. Timestamps seek the episode player to the matching passage.
0:00–10:00
Terry Heller
common so it was me and Jerry lived in one house easy lived two doors down on Wellsley and Dre lived on Newcastle Jerry needs you to go over to Dre's house there's a problem so I drive up there somebody lets me in I start walking through and I'm thinking like this is going to be the end of me a lot of people are wondering what's going on with the market right now so I think if you're to invest in real estate today I think you need a day job and I think investing needs to be your that your side hus here's one thing I will tell you my biggest mistake and regret is selling everything I sold I regret there's not one thing I don't regret not
Taylor Avakian
[Music] one welcome to No Vacancy where I share conversations with LA's top multif family owners investors and Visionaries I'm your host Taylor Vin the founder of the group s and I specialize in the sale of apartment buildings in Los Angeles on this show we cut straight to what matters Market insights and real world strategies straight from LA's multif family icons to help you navigate one of the most complex real estate markets in the world Southern California [Music] enjoy Terry your story is anything but conventional can you give us a glimpse onto how the journey began in the music industry and how that led you into
Terry Heller
real estate um let me see where do I start I was fortunate enough to have an uncle that was in the music business and his name was Jerry heler and anybody out there that's a fan of Hip Hop has heard of him and uh he had a very illustrious career in rock and roll fell in some hard times went through a divorce had maybe uh little substance abuse issues so my uncle found himself on my grandmother's couch unfortunately and uh you know we were always super close we never had kids he was married a couple times but was my father's brother 9 years older and literally from the time I was basically out of diapers because he didn't want to change any diapers we were attached to the hip yeah so I
Terry Heller
was able I mean he would take me you know the movie There Will Be Blood yeah you know when the Daniel de Lewis character would bring the kid in and say oh this is my partner like that's how I felt he'd walk me into these crazy meetings uh with guys like Tommy Mata uh major major music people and I would either wait in the lobby or uh go to dinners with him must have been crazy it was crazy and he was a wild dude very wild dude uh certainly didn't portray him accurately in straight out of con yeah did did Paul Gatti do him Justice no not at all no wrong guy really yeah wrong guy to play that guy uh wrong guy to play my uncle who do you think would have been been better that's a good question you know my uncle was
Terry Heller
tall slick mhm had this white hair he was the first guy I think in La that really rocked the Porsche sunglasses the ones with the yellow lenses he was kind of famous for that and he was just he was just cool he walked into a room and it's funny when we'd walk into like Monty which is still there in wooden Hills that was one of our go-to cuz you know we all lived right right next door in Mount View yeah so it was me and Jerry lived in one house easy lived two doors down on Wellsley and Dre lived on Newcastle so when those guys started making money everybody moved out here the first thing they did uh but we could we could go back to that but um you know Jerry walk into a room and easy walk in the room and just as many people
Terry Heller
were looking at Jerry even though they may not know he was he just he had that something yeah he just had this chasma like he was he was a special dude uh loud guy interesting guy but um you know looking back on all that stuff the N NWA and and the start of Ruthless records there was not one man on the planet equipped to uh bring that whole movement to life to life or to light um I remember Jerry coming home one day and this is before we lived there because yeah at this point he started making a few bucks prior to meeting easy and repping Dre was in a group called world world class wrecking crew before NWA okay so
Terry Heller
Jerry actually knew Dre before easy and he had another group called uh LA Dream Team which had a local hit record and he also repped a guy named Egyptian lover so Jerry started making money again bought a place in SEI Valley and you know like I said I was always with Jerry I mean we traveled together traveled the world together I was always with him how old were you started you know as as an infant and by this point mid 80s I was like 11 12 sort of when the hip-hop thing start of you're 12 years old hanging out with Dre easy and these yeah Superstars if you go to my Instagram you can see pictures of me and Dre my high school graduation crazy you know you know back then you just said we didn't have cameras in our our pocket right
Terry Heller
so you didn't think about it I think I have two pictures with easy and like one or two with Dre it's crazy um when Jerry passed away I you know inherited all his belongings so there were some crazy pictures in fact you could find it online there was a picture that I posted of Dr my grandmother and somebody cut her head off and put Betty White and it went crazy viral crazy viral really and I got a call I got a couple calls I forget from some yeah magazines or whatever because it was it was my picture and it was pretty funny so I have a bunch of pictures that people haven't seen yet I should have brought him with me that's amazing um but uh
Taylor Avakian
you Lear you learned a 10 from from Jerry and then you give me the the basically for a into real estate but I know in the beginning your first gig was doing
Terry Heller
music videos right well no not quite there was there was a step before that so knowing those guys I graduate high school I go to colge College I'm an ANC guy I started going to ruthless records which was right here in Willen Hills and I'm like Jerry I want a job he's like what do you want to do I'm like I I'll do anything I'll be a gopher you know like 18 19 at the time goes you got to talk to Eric easy so go to easy easy goes you go talk to Jarry this is their game man right so finally they I convince them to hire me they pay me 100 bucks a week and this is like the early 90s this isn't the early 20s yeah but I was just happy to have a job yeah so I'd go there
Terry Heller
in the mornings um get my day going go to school come back go back to school and uh in fact I could tell you a funny story my first day of working this is before we moved to Calabasas we were all in like West I was in Westlake Village Dre was in Oak Park e was in Westlake Dre uh NWA was on tour I had a call our first well my cousin once removed but my dad and my uncle's cousin cousin first cousin worked for us or worked for my uncle and he calls me says Jerry needs you to go over to Dre's house there's a problem I go what's the problem because I was already out there I don't know the Mover said there's an issue you got to go over there nobody's supervising this so I go over there and there's
Terry Heller
like eight or 10 movers and you know these guys are like all tatted up and like they look like I mean for sure you know some of these guys did some prison time I think one of them even mentioned to me and they they walked mean it was like a production trapped home nothing crazy at this time like Dre was just starting to make money easy was just starting to make money and I walk into Dre's uh they bring me up to Dre's primary and in his closet there's a moving mat and like 20 guns it literally like a scene out of a movie like Get Him to the Greek and they're like I'm like what what do you want me to do with these and they're like we're not touching them like we can't touch these man I go holy [bleep]
Terry Heller
so I call I don't even remember if we had a cell phone then but I call Gary our cousin I said what do you want me to do he goes deal with it and also Dre's Corvettes in the garage so take his Corvette take the guns and go to the new house which is the Calabasas oh my God it's first day of work so I literally I go guys you got to just help me carry these we fold them into the mat I know nothing about guns we put them from my memory if my memory Serv me right in the Corvette there's like a little niche in the back we push the guns in there I get in the vet and drive them to the house and I'm thinking like this is going to be the end of me I'm going to get pulled over I
Terry Heller
don't have registration it's not my car and I have 20 guns and there were like street sweepers and oozies and all kinds of crazy oh my gosh so anyways um that was the th day at work but uh I started off there being I guess kind of like a gopher of sorts and within a couple months I convinced him to let me try to find talent and the term for that is anr artist and repertoire and at the time I was going out all the time and there was a hip-hop club that was started by four actors one of them was David foso Bud Bundy Robert Gavin Bobby jacobe actually Five Guys one
10:00–20:00
Terry Heller
guy named Nick Adler who was not an actor his father was a guy named Lou Adler very famous music guy they own the Roxy and I believe they own a bunch of stuff and the dad did uh some major movies substantial guy and another guy named Dan eisenstein who is a Beverly Hills Local guy and while I was going there um they would have these freestyle contests one night guy gets up on stage and I just saw him dancing with a crew of guys and they were incredible their style was cool there was something like I never seen before they were like wearing knickers and almost like Thrift clothes but curated really cool and the guy freestyled and and beat this other guy and his name was Will 1X which later changed to will I am and I walked up to him and I said hey I work at
Terry Heller
ruthless records which at the time everybody knew yeah and we went outside sat on Highland Boulevard and spoke for like an hour and a half Mustang and I convinced him to let me manage him and he allowed me and he goes by the way I have a group at the time they're called atban Clan A Tribe Beyond a nation Clan k l Ann inspired by Tribe Called Quest and some of the East Coast stuff sort of what was going on the East Coast with with this whole movement called native tongue jungle Brothers De La Soul uh leaders of the new school so they were trying to do that in La which at the time was G bunch of gangster rap yeah it was something completely far-fetched and not something that was happening so certainly way ahead of of the time
Terry Heller
and signed him signed the rest of the guys to a management deal and then got him a deal ruthless records and to make a long story short they never came out which is the best thing that ever happened to them so what do you mean by that they never came out well easy died got it and you know easy went through through some I would call them like creative challenges and difficult times because Cube left mhm Dre left with the whole Su night stuff and then at the time um there was just a bunch of artists that weren't really popping and um fortunately we signed Bone Thugs which I was part of that as well Bone Thugs and armony um but uh he didn't understand those guys will was recently on The Breakfast Club yeah and pissed me off off cuz he said they
Terry Heller
easy signed him which I guess you can make an argument that he did but really at the end of the day I signed him okay look um you're the one hour and a half you found him found him but look easy had to bless it but he he just wasn't he didn't see the vision Jerry saw the vision for sure yeah um but the best thing that happened to them is they never came out they end up getting signed in scope got it and then F yeah Fergie came along and they really needed to be uh um they needed time to develop and at the time I think to inter Scopes credit Jimmy Ivan's credit whoever else was involved they saw the talent that I saw and they gave them time to develop I will tell you that we probably did 150
Terry Heller
200 songs and not one of them was a hit and you can hear the Raw Talent like the guys could wrap their asses off but there's a big difference between being a freestyle rapper and being able to rap really well and crafting a an amazing song and it took will a long time to figure that out but obviously figured
Taylor Avakian
it out so that's super interesting to me because obviously you being inside of there you can understand what's a hit right which I'm going to parallel that to to the real estate stuff did when you were looking at buildings to invest in right because then we didn't get to the transition but you eventually started buying some real estate when you're looking at a building can you envision like what a hit is going to be can you envision what this looks like at the end of it do you is that a skill that you picked up from what you did
Terry Heller
previously 100% I I I actually think that's a great correlation you know being able to sort of identify Talent yeah and see something because from the record company I end up directing Bone Thugs and Harmony's first video because I was involved with the signing and all that um definitely was a person that that a didn't need other people to tell me what to do or how to do it if I believed in something I went all in so that's a great correlation um I could definitely see a shitty property and have a vision for it and I didn't need a designer I didn't need a broker I didn't need a property manager I could look at something go okay I could see the vision listen when I open up plan check my first restaurant on sautel I will
Terry Heller
tell you that out of the 10 people I spoke to 10 of them told me I was an idiot out of the 10 people I spoke to them 10 of them told me you have to do Asian food on that street you can't do American food so I listened and there's there are people that have great advice but sometimes you just got to just go with your gut and you know one of sort of circling back to the music stuff what formed me and my a as a business guy I remember being in a studio with Dre and uh he used to have me come all the time I used to think he just liked hanging out with me but I figured out years later he realized I was a demographic I'm 14 15 16 at the time and he's
Terry Heller
like do you like this do you not like this and because of our relationship I was unfiltered I would say to him this is Dre this is [bleep] I can't stand this record or I say this is unbelievable and he would do that he would literally play me records we'd sit in his car I'd go to the studio in Torrance I would go to the office do
Taylor Avakian
you remember listening to do you remember a song where you thought it was a banger and ended up being a banger well
Terry Heller
the whole the whole 100 miles of running and end for Life uh I heard all that stuff and I was like this is crazy D there's another group that I was there for a lot of it called above the law mhm I was actually one of their music videos I got to see if I can see myself in it called murder rap but um yeah I mean definitely heard stuff and and had like it did something to me you I felt something but I remember being in a studio with him and I was like Dre how do you know cuz at this point he was still he was Dre like he was Untouchable he was so good man and he just had this this ability to pick hits and make hits better than other people and mind you he had a
Terry Heller
team of guys whether was somebody programming whether somebody playing guitar but the way he would pull it all together and I remember him going like this he just points here and I'm like what what's this he goes it's I feel it like what do you mean he goes I know I could just feel whether it's the [bleep] or not and that stuck with me for my whole life to this day I really try to tap into my instincts and you know we've all been there before right whether it's somebody you're dating whether it's a feeling you get when you meet somebody whether it's a deal and sometimes that little voice that you're listening to not sometime most of the time is right but you push it away you don't tap into it so I definitely tapped into it do
Taylor Avakian
you remember the first deal that you did uh give me the story of the first deal how how did it go from this in the music industry to I'm a real estate master
Terry Heller
so my first deal was in Long Beach again everybody told me my La friends who because I had a lot of buddies that were grew up in La that either came from families that own a lot of real estate or real estate guys and I remember uh one of my friends would send out mailers and at the time I still because I was a director Not only was I director had a production company so had like a dozen directors I probably had 10 employees this point it's 2005 I'm like early 30s and I'm just not feeling the business and um I see the digitization thing happening I'm seeing budgets drop and I just have a sinking feeling that like this shit's about to change so one of my buddies sent me a letter like a sample letter like hey
Terry Heller
you know this is my name is Terry heler uh I'm looking to buy properties and your whatever the BS was and I sent out I had an intern sent out a couple thousand letters and I don't know why I sent them to Long Beach but I did and my first deal was on six Street do do you know Long Beach yeah yeah I think I might be wrong about the address but it's 421 West 6 Street it was 16 units wow the guy calls me goes hey I own the building I'm a pastor however there's a broker that it's not listed but I trust call this guy his name is Ryan selli is he still around I don't know the name he he he was uh he was he was around then yeah so I called him up I said hey I forget
Terry Heller
the gentleman's name I'm interested in a deal I go down there I put it under contract I have no clue what I'm doing so immediately I start calling people and that's something I think from being a director and being somebody that didn't really have any kind of noral training
20:00–30:00
Terry Heller
um I just started Dialing for knowledge and dollars and and I I wasn't raising money but I did have two buddies one was both of them were kind of seasoned real estate guys but they committed to putting in a third a third and I was going to put in a third I raised I think it was 450 bucks 450 bucks 450,000 got it uh Found A lender and started you know Finding property managers and and and I met this Astro guy named Mark Brooks who's still around today who is a giant influence for me I think he's at a company called maybe it's called esve of the West okay but this guy Mark Brooks is is the [bleep] so I started talking to him and different people in the process of the due diligence I noticed something that referenced condominium so I was buying an
Terry Heller
apartment building built in the late 80s but there was is a reference of sorts to a condominium so I call up Mark Brooks I said can you look at the title for me he goes you're buying a condominium that's functioning as an apartment building I go what do you mean so he explains that I go so somebody built this as a condo and the market was shitty at the time and they had to wreck them he goes yeah you could sell them it's all you have to do is go to the it already he he phrased it this way the brain surgery of getting the entitle from the city as a condominium is done it was condom mapped it was condom mapped yeah all you have to do is go to the department real estate and within 90 days or so you can get what they call the white paper
Terry Heller
and you could individually sell these and I was like wow so this is a condo conversion because technically yes I mean you're not really converting yeah you're just perfecting what was already there yeah so I go back to my partners I go listen I think that we could do this conversion they go great do it so I did it the day I Clos one of the guys who was like my age the other guy's a little more senior than us was going to meet me there I don't want to say his name because he's an apartment guy out there yeah he didn't show up he had a contractor for us remember I've never done any construction I've never built anything I've have zero experience the first day we close I'm like ready to go you know I'm impatient like let you know I'm 20 minutes early to this thing
Terry Heller
right I'm like let's [bleep] go he didn't show I call go oh you know uh so and so can't make it and I got tied up and I'm like what the [bleep] are you talking about so my personality I realized okay I can't rely on this guy which is the best thing that ever happened to me yeah start finding you know calling real TS I find a contractor who end up after that doing like 30 deals with me wow and I figured it out and like you're saying you know wasn't horrible I think people look at it today and go oh this is a really clean apartment wasn't it was a clean apartment wasn't great for condo so I went in there at the time my uh well now my ex-wife had great taste so
Terry Heller
I brought her along she gave me some ideas and we did them and made a lot of money was very successful wow but what I realized in that process was there's a little niche market there there's a bunch of these 80 80s condos all over Long Beach that so I started I figured out a how I how to identify them through a title company so I got a list and started targeting them and I end up doing like 10 deals out there oh so you're doing all these cono conversions and I got to tell you I made more money doing that than probably anything else I've ever done in real estate really yeah I was super successful what was great is again every guy in La is like [bleep] Long Beach I think Snoop ruined it for anything like [bleep] Long Beach it's it's dangerous it's not safe what
Terry Heller
they don't know is Long Beach a half million plus people 52 square miles mil yeah but back then people were like well yeah long be La guys were were cocky like we're not going to [bleep] we're not going there yeah so again kind of like sautel with plan check I was like okay everybody's telling me it's bad it must not be because I gotta tell you something I Le really on in real estate when there's a consensus it's usually wrong right when there's a consensus because all real estate guys do is say what the other real estate guy does there's no there's not a lot of creative thinkers you know for every Sam or Richard zyon or uh you know um Donald Bren there's 7,000 guys and girls that just listen to what the other person's saying when I ask people like oh what
Terry Heller
do you think about the ray cut like every single comment is the same and I'm not saying it's wrong I'm not saying it's right it's just what real estate
Taylor Avakian
people do interesting so you learn and can see and have this from your background the creative space which is music you were able to find that you looked where other people were not right and found an opportunity basically you created a blue ocean is what they they call it nowadays you go where other people are not and you take on challenges that other people don't see because they're just not willing to do it but okay talk to me about PL cheack so you're doing the real estate stuff how does plant Che come
Terry Heller
be well so I got in real estate about 05 did a ton of deals how many deals
Terry Heller
probably 30 all in Long Beach no all over everywhere I I was doing Apartments yeah doing some homes but this conversion thing I kind of so I did deals in the valley I did a dealing Palisades so I found this little niche that at the time conversion thing you nobody was talking about it it was kind of under the radar by the time we got close to ' 08 now you got Marcus guys tying them up themselves and trying to flip them or or Syndicate them so at that moment in time I knew the game was over and fortunately when the market corrected I didn't lose one cent all my deals my worst performing deal was a break even because I was a little ahead of it yeah you know I had a very simple metric very simple metric if I paid
Terry Heller
100 Grand a door if I couldn't sell for at least 200 Grand I wasn't going to do the deal nothing super intelligent yeah you know I did not I did not need to go to Wharton to figure that out so what I started so every one of my deals met that what I started seeing was guys buying deals when it started becoming a thing now guys are buying deals for 130 and trying to sell them for 225 and so pretty soon I noticed the margin's going smaller and smaller and I'm like these guys are going to get their if the market corrects just a little bit they're toast and that's exactly what happened got it okay and
Taylor Avakian
so in that point when the market 08091 happened is that when the plan
Terry Heller
check so here's here's the beauty the beautiful thing for me about the correction because I had One banking relationship and there was no I don't remember if there was like the bridge lending game then I had a banking relationship doing five six% loans and these Bankers were in Chicago um if you wanted to from my understanding I think it's a FDIC is it FDIC yeah FDIC uh rule if you want to lend in a market you had to have a branch so they had a branch here in centry city but like two people worked out of there and their main branch is in Chicago they raise funds by you know if they needed to raise money if the money market uh if if other Banks were paying 3 and half% for money market they' pay 25 or 50 bips more and get as much money as
Terry Heller
they needed they put the money out they they would land on the money right so uh really got along with them well unfortunately these gentlemen these brothers who were also developers and were doing conversions all over passed away in a plane crash and this is months before the crash and I get a call from the owner of the bank who's also the CEO said hey you know about these guys um I have a project in Santa Barbara can you do me cuz I was living West EG Village can you do me a huge can you do me a huge favor go up there can you snap some pictures it's 98% complete maybe you can help me find a you know broker or or get some uh proposals we're going to list them and sell them they also had two other projects in the valley but
Terry Heller
this one was quote unquote completed so I drive up there somebody lets me in I start walking through and it's a disaster it's 11 units on uh Lower State Street mhm no excuse me upper straight State Street so great neighborhood yeah beautiful Spanish but the cabinets are all jacked these guys were you're too young but there were guys bringing in like materials from overseas and I believe they brought in bad drywall so I could see like black mold on the drywall the cabinets were all jacked they just to finish it they weren't done there were no appliances not 98% done I would say from like just looking at it and not realizing how many problems there were 70% so I call my
Terry Heller
friend and I said listen you got a problem you're not 98% the guy L start screaming at me I'm like I don't know why you're screaming at me he goes you don't know what you're talking about he goes meet my president of the bank he's going to meet you over there so so the president of the bank meets me over there
30:00–40:00
Terry Heller
and he's like he calls Mitchell was his name and goes yeah there's an issue here not only that I think they use a shitty drywall and the floors look crummy and the cabinets are cheap looking and if we want to get seven figures for these I forget what the numbers were but the time like low 1.2 1.4 million which doesn't sound crazy today but then it was definitely premium yeah this is before the market start of like there was a shakeup in the market so they all right Terry can you put a budget together I've never done this for anybody can you put a budget together and can you just finish it for us so I started doing that for them and then they had me do it for the other two deals that were further behind so
Terry Heller
now I'm doing three Deals and they're paying me fairly well and I'm not marking up the budgets but they're giving me like I think at one time they proposed hey do you want a piece of the deal cuz the borrow is debt mhm go I didn't like their bases and I just said just pay me like a monthly uh fee yeah so I think they're paying me like five grand a month for this and um you know I probably technically could have marked up but I'm not a contractor I'm not super deals over the finish line and I didn't even think of it as a business for me I just trying to help them out because they're good guys yeah so I doing Santa Barbara I'm doing two in the valley and then the market goes to [bleep] and I start getting calls now
Terry Heller
from them hey we have this deal in Korea Town can you go over there we have a problem I go over to Korea Town I'm like guys it's not Korea Town like you may say it's Korea Town but it's not really this Pico Union or West Lake it's more like I think it was more like West Lake yeah yeah okay building but the crazy thing is I went in there and literally there was one tenant the borrower rented it out without them knowing to a tenant but it was a brothel I'm just remembering this now and it was this like You' see dudes coming in and out of there who and they had like they they had like I'm trying to remember how many units it was it was like cuz I did a lot of these I'll get into this there's like 20 units and
Terry Heller
they had like 10 of them eight of them and then they were living in a couple of them but we'd walk in and there was all these rooms with like massage tables oh my God it was wild the good news is they were shady and I got them out no problem but again I had to go in there there were some things that weren't finished they never finaled they didn't have their CF like some weird stuff yeah maybe they had their CVO so before I know it I have like 17 of their projects because they were they were landing at high loan to cost MH like 85% loan of wow so little little little adjustment in the market I did a deal for them in Malibu they had some good assets so fortunately I got really lucky while everybody was getting their
Terry Heller
assets handed to them I had this little business so now I've got an in-house GC and we're doing these and my wife at the Times helped me with design and uh so we're just doing this and I knew it was going to come to an end took me about two and a half years wow and and never going through a recession and having three small children I was like how am I going to make a living now at this point the music business is decimated right Napster all that nonsense so I had the stupid idea of doing a restaurant which every [bleep] has that idea everybody shows you don't do a restaurant says don't do a restaurant right I'm sure you have an idea right have you ever thought about it seriously no okay yeah most people now it's common to say don't do restaurant but at
Terry Heller
one point everybody has a hotel idea and everybody has a restaurant idea yeah so open up plan cheack in February 2012 and unfortunately it was really successful and I'm not saying that to be a smart yes yeah yeah because I should have went right back to real estate instead I opened up an 1800 foot restaurant that was crushing the numbers I mean how did it why why you know again just trusting my instincts I took the chef from Umami Burger and I had this vision of doing comfort food what I called remixed so when I met with him I said listen everything we do I want it to be like if we do a burger I want I want there to be something that is just completely unique but it's not a huge departure it's still a burger so we came up with ketchup leather
Terry Heller
dehydrated ketchup um we had a very very very robust Japanese whiskey program paying homage to the neighborhood we used a lot of Japanese ingredients which Umami was already doing but we took it to another level because they were just like a burger concept yeah so we had you know short rib and all kinds of other things and it was super successful and you know my personality is okay I'm going to go do 99 more MH the problem is uh as I started opening these minimum wage went up started filling those headwinds started getting very crowded this space and uh they were all pretty successful but nothing ever topped sautel which is still there today MH um and about four years
Terry Heller
ago well right before covid I got bought out and and um went back to real estate
Taylor Avakian
but um yeah would you have done so what you're saying is it went well and you probably learned a lot would you have rather have just kept buying and doing the real estate stuff yeah really kept the one yeah and then manageable and then just gone and done the real
Terry Heller
estate stuff but it's hard because you know I had all these people approaching me like you have no idea the biggest of the biggest Like Richard Melman calls me one day I didn't even know who he was and that's like one of the biggest restaurant tour restaurant tours in the planet what is he what is his b out of Chicago Lettuce Entertain You I gotta think I mean maybe you know Jamie at The Joe Rogan is he like our Jamie can you look do you have Wi-Fi yeah can you look up Richard Melman how many restaurants this guy owns I mean it's going to be like Joe stonecrab he doesn't he didn't start it but he licensed it in Vegas this guy's a major deal yeah so I get a call from this guy to meet with me cuz like we were super special for a
Terry Heller
moment uh but I think some of the success was getting very lucky because that street exploded right when we went in also I started doing really cool collaborations that people just weren't doing I did a deal with Stuy because I was friends with those guys 110 okay 110 restaurants and when I say like 110 restaurants we're talking about like you know some of them doing 20 25 oh my gosh so it's a major guy yeah but you know when we open this again my Approach I had no background never worked in a restaurant so I did a deal with Stuy I did deal with San Rio who owns the licensing for Hello Kitty and had all these characters so we were doing all dude that's
Taylor Avakian
so before your time because now everything's collaborations everything's collaborations you know McDonald's and Oreo or Oreos Coke and Oreos Doritos
Terry Heller
and Taco Bell yeah right so I was looking just because I come from that world that like Street Wear world where like I knew the undefeated guys and the Stuy guys and the Supreme guys and they were just cool yeah and I like their [bleep] and I wore their clothes so I I mean these shoes are from undefeated like I still wear them yeah so I reached out to my buddy Adam Weissman was it Adam no Adam Weiss some dude I knew I didn't go to Beverly but he went to Beverly and I said hey I'm opening up this restaurant do you want to do a collab of some sort and they were doing stuff with Roy Choy MH but like like giving him clothes and stuff to wear and I was like let's do a collaboration let's have all my staff wear your
Terry Heller
shirts that you design um so we took the planche logo and the sty logo and it fit perfectly the SS and the plan check and we didn't even sell the shirts and we we did a menu inspired by Stuy and their legacy wow so you know when you're when you find kind of that cool inspiration my chef was inspired cuz he was a skater Surfer guy like me you know I grew up playing water polo surfing I wasn't a big skater but I was around it MH um you're around culture yeah so I understood that and I did not have Big Marketing budgets and I knew how remember I come from the world of hip-hop so Street marketing was invented from that world so the concepts and the ideas that we did were for
Terry Heller
a lack of I mean they were we had to be creative because we didn't have the
Taylor Avakian
cash you didn't have the budget you were Gorilla Marketing you had to figure out okay how can we create bu around our restaurant how can we get people in the door how can we do all that stuff to grow it and you took the lessons from the hip-hop world and added them to
Terry Heller
a restaurant I remember with the bone thug stuff I mean you know I was dealing with all their marketing I directed thuggish ruggish bone For the Love of Money their first two videos we had no money so I was always trying to think of ways to just like get a leg up so when we shot the video we're like let's go to Cleveland you know my dad and my uncle really and the hel side originally from Cleveland I've never been so I was like let's go to Cleveland
40:00–50:00
Terry Heller
and just shoot this really raw video yeah at the time will I am introduced me to some SC film students um I shot this little promo with them for Bone Thugs where they're around an oil drum and they're doing their little they had this uh the first day I met them they came in and they did this you know there was they had like 12 guys with them but like five were in the group and they did I can't can't sing but it is like east9 is where your farmo and they're they're like singing but talk about dealing drugs I was like this is [bleep] and they weren rapping they were just harmonizing for me that's the first time I met them at ruthless before anybody met them that's a whole other story too so I had them doing that around an oil drum that I lit on
Terry Heller
fire EAS loved it he's like okay I need you to pick a director because we're going to go shoot this video and so they gave me some reals and I was honestly I was looking at the reals going this [bleep] is garbage you know I was [bleep] I wouldn't say I was cocky but I I was like I could do better yeah so I go to easy I'm like let me do it he goes what do you know I go I did the promo even though I didn't quote sure directed it I go what's the budget and I want to say he said the budget was 100 Grand I go I'll do it for 50 he goes done my God so but this whole idea of being resourceful you know we didn't use words like viral back then or maybe I don't even know if we even said words
Terry Heller
like Street marketing yeah but we knew to get the word out you had to do something because we're not going to buy radio time we're not going to buy Air Time on commercials we're probably not g to get on MTV you know NWA they couldn't play our [bleep] on so I'll never forget they sold like two or three million records and literally like Jerry was shown me video plays zero even though we shot a video whoa so we understood the power of of of the street so I've always had that embedded in everything I do including my new roofing company I'm do now yeah so um it's just Again part of my DNA
Taylor Avakian
geez and so you took obviously for the real estate stuff too because I know we we worked on a couple stuff in Koreatown that's how we initially connected because that was my that's my hood still my hood um and you've been able to to bring that inspiration not only from the real music to the restaurant but to the real estate too then now to your roofing company um this is a newer thing that
Terry Heller
we talked about I closed escrow 13 weeks ago um again why Roofing you know it's one of the trades I've always had problems with that in milor cabinets and what I love about Roofing is you're not going inside people's homes or properties most most of the time yeah so I'm staring at a roof right right there um I look at roof we'll get you the number now I know it's like I look at roofs so different now and rain a lot different too um just something that I thought a I can control labor easier like I've done so many I have a project I'm about to take the market that I built in Beverly Hills and just the delays the delays with the cabinet guy the you know but the roof is much more manageable mhm so I made
Terry Heller
the decision about 6 months ago that I need to buy a roofing company uh I saw the writing on the wall of real estate I think right now um if you're a young person and you come to me and said I want a career in real estate in La I would tell you not to I would tell you not to get into real estate why 100% why that's probably not great for your no no no no I'm I'm I'm curious to know why I think I think I think the game's over on some levels I think that you know you could there's always there's always I think Jim Kramer always says Jim crer says on CNBC there's always money to be made in the market I believe in that but if you want to get into lending or brokerage or construction I just think between you know why all the
Terry Heller
headwinds permitting the cost to run these buildings um you're constantly fighting uh you know what what's the new thing prop 33 you just always [bleep] have headwinds yeah covid headwin prop 33 headwin rank control um Ula so what's the next thing that we can't see coming around the corner I got tired of it I mean I had the Beverly Hills project I have projects in Phoenix I'm doing right now but I wanted something that for once in my career was on the right side of recessions and so I I I saw where the market was going I called a buddy who owns service type businesses I said do you have like a mergers and Acquisitions attorney I
Terry Heller
need to find a good business broker which are very difficult to find and I I got a name of an attorney who's a local guy and he gave me a broke a business broker's name and in two weeks I had a existing roofing company guy retiring mhm under a contract took us quite some time to close because of him mhm and close this thing and in the first seven weeks we beat all of his Sals in 23 and that was one of his best shares how did you how I just I know a lot
Taylor Avakian
of guys like you yeah because you're in the real estate business so it made sense too because you it's like me being a broker right people I know a bunch of Real Estate Investors who are very wealthy so people come to me and they say help me raise money and I'm like okay yeah like I don't really do that but I know this guy who's really wealthy and invest in real estate so you knew and you had a base of clientele per
Terry Heller
se and it's an adjacent business right very adjacent so again there's scarcity and quality in traits and especially Roofing and I can't tell you it's it's so interesting if you and I went to if we walked into a bar and we were sitting in a bar and you tell somebody I'm a commercial broker and I tell somebody I'm a roofer n out of 10 time maybe 19 out of 20 times someone says to me I don't have a good roofer but how many people know a realtor and I'm not making light of it I'm saying no it's true so you know the way I approach the roofing is the way I approach PL Jack and it's the way I approach real estate um you know it's not a very complicated business but my branding is on point our website's
Terry Heller
on point our marketing is on point my crews are like dialed the way they look our vehicles are wrapped and I'm you know our culture our ethos is we're customer obsessed if there's you know now we've done I don't know how many roofs in in 13 weeks in 13 weeks we probably done 30 roofs oh my gosh cuz you know there's jobs on the board maybe more stuff in the pipeline too so I'm sure there's a lot we've done about two and a half roofs a week on the resi side and we've probably done a half a dozen commercial roof so we've done a lot and we've had a couple issues right you're going to have issues yeah uh couple of them on the resi side and teaching my guys because some of these are Legacy guys the roofers my production manager we got to fix this problem
Terry Heller
and you got to look at a problem as an opportunity to be a superstar mhm cuz you could take a problem solve that problem and then become come great even greater MH I used to see this a lot with high-powered music managers they would literally create problems and they would create a problem and solve their own problem and look like Superstars are their clients so I've always kind of said hey it's not that I want to create a so you know we're customer obsessed I hired a head of sales came from another roofing company as a number one guy and there's a lot of money in Roofing I mean you could be A salesperson you can make anywhere from 150 to 500 Grand a year wow yeah so what's the plan with the do you have a plan is this like a I want to build
Terry Heller
it up to let's say it's no no interest in selling this is a keep forever cash flow business it's it's a it's so hard to to it'll be so hard to replicate what I'm going to be able to do with this Cashwise uh B I like to have something for my kids and I truly love it I absolutely love it I mean before here I was meeting with somebody about you know 11 roofs they need to do so I love it we're great at it um we're able to offer warranties that other people can't I'm licensed I got my license congrats this thank you this seller works for me um I just got this wealth of uh I've got all these people behind us that are super knowledgeable and I'm still learning mhm but I know enough about what it
Terry Heller
takes takes to get a roof you know done properly how are you going to grow
Taylor Avakian
it what's the strategy because I so on a different note and kind of very parallel I have a lot of real estate operators and owners who also didn't do a lot of deals last year and they're coming to me and they say hey what's this thing about these boring businesses and I'm like what do you mean boring businesses they're like you know like plumbing and Roofing and all these cash flow because all of a sudden it's a trend now's talking about right right and so because you can buy them on two three four at Max multiples and you can get seller financing
50:00–1:00:00
Taylor Avakian
in some circumstances and it's like it's like buying a four grm right again you're running a business it's different than apartment but when these guys are buying 10 12 13 grms and you're getting a four grm you know it's just and you can take it from revenues that's say from a million to 5 million that that takes it from a 2X multiple to a 7x or something like that it's just private Equity is a is a crazy kind of business and values and business and the way they partial these things together but as we get bigger a multiple will grow yeah exactly not not necessarily grow
Terry Heller
because 3x is to sell there's much bigger you're casting a net of big money out there so like you say you're right like these smaller mom and pop guys the big money is not looking at them usually somebody doing two three million a years not they're not interested in that are you going to roll are you planning to buy other roofing companies and then roll them into yours yes yeah it's already in but but again I don't have part I don't have Equity yeah investors mhm that's something with the restaurant I did have investors even though the first one I was the largest investor so I'm not doing that anymore um because frankly it didn't take a lot to buy this and I just even looking back if I would have given away 20% it would have made no if if I
Terry Heller
would have taken the cost it was to buy the deal we've already made our money back in first quarter so I'm glad I didn't take investors but not just for that purpose that I just want to be in in full control of
Taylor Avakian
this thing so actually I want to ask you because I'm curious as someone who wants to get let's say they want to invest in real estate right or Roofing or whatever it is a lot of times you don't have a lot of money starting out right and so if you want to go and grow faster you other people's money would you suggest that it's better to save and be the equity holder not have partners and start small a duplex a Triplex whatever or do you think it's better to raise money and buy a 10 unit 12 Unit 16 unit building and have Partners in it and you can grow faster that way what do you think knowing what you
Terry Heller
know now you'd suggest yeah you know it's they're they're they're totally different paths and I've seen guys come out the last five years there's one group that bought five billion young guys MH and they're turning stuff back in the bank right now yeah and you know I don't know if I have the right answer my answer would be this if you're going to get in the business of investing I'm not saying real estate's a bad investment I think it's a bad choice for a career okay if you're a young person that needs to make money to pay their rent to put kids in school whatever it is it's very difficult so if you're a syndicator and you're raising capital and every two or three years there's there's some event and you you've done great for 24 36 months but then for
Terry Heller
18 to 36 months you're sucking wind it's just a hard way to live it's really really hard way to live so I think if you're going to invest in real estate today unless you come from a family that could support that or you're a nepo baby or you have a portfolio I think you need a day job and I think investing needs to be your that's your side hustl um cuz you know anything you buy right it's going to be worth more in the future it's not the greatest business strategy when people tell me it's going to be worth more in the future I look at them like yeah pretty much everything's going to be worth more in the future and cost more and all that stuff too you know I invested in a bunch of deals with some of these guy some guys and if
Terry Heller
I would have just put the money in the stock market would have crushed yeah crushed what I'm doing now yeah um I just think that LA's reached a maturation in the market a maturity in the marketplace where what guys did 20 30 40 years ago it's going to be very hard to replicate yeah so now you got to find opportunity and how do you find opportunity you start going into fringer areas you start looking at riskier deals you start looking at deals that are not really they're apartment plays but there's a development component now you're in the development game now you're subject to permits you're subject to all kinds of nonsense and that's what happened to me like I have a project in Phoenix right now and it was a small deal but it became a development deal and because even though it's a
Terry Heller
great area because the market was so frothy you start kind of letting your guard down and taking bigger risks like the units and the Tenant mix were awful great area like you look all around midrise high-rise all brand new class A but just a really bad group yeah and I mean I closed escrow the first month no one paid no one no one 15 units second month no one paid no one's goingon to pay me in Phoenix and you don't hear that very often people always talk about La you know rank control but you don't hear that much in Phoenix so yeah it's not rank control but it still took me six months yeah to get rid of people geez and everything was stripped out of there I mean it's been a nightmare it's still ongoing yeah so my point is I don't
Terry Heller
know what the right path is I think that if you have a day job working for preferred Roofing as a salesperson making two 300 Grand a year yeah and you're taking some of that money and you're buying you you you start off with the duplex and you live in one unit you build that up and here's one thing I will tell you and we've all heard this my biggest mistake and regret is properties yeah everything I've sold I regret there's not one thing I don't regret not one really yeah yeah so buy properties that you could hold on to and keep and the way you sort of manipulate that asset is by refining when it's time don't [bleep] sell it don't sell it yes SK major
Terry Heller
real estate guy they wish lot more yeah right yeah or they had or they didn't sell that one the guy the other day in his in his early to mid 70s 90% of our conversation is telling me all the [bleep] he sold that guy's very successful but but that's like regrets a tough pill to swallow man yeah so um I don't know the right path I think if I were giving advice to my 22-year-old son I would say start with a duplex fix it up get to a point where you can move out refy pull that money go buy a Triplex or a fourplex or a six unit um but I do think that real estate investing in La is a very tough proposition right now we haven't even talked about the crime I mean you
Terry Heller
want to talk about Kat town it's scary now man I had a deal on San Marino and I saw it in front of my eyes like I did a beautiful a remember that girl 2757 I think it was yeah did a beautiful remodel 12 uh 12 or8 something like that more than eight yeah yeah I forget it was beautiful it's like an old uh it almost looked like something You' see Miami yeah yeah I had the little vision for it old ass building and I would get these sort of you know uh young urban professionals and they'd go in there and they'd last two months and they were scared wow and there was a lot of crime and guys would tag up the building I didn't even talk to like the little dudes in the neighborhood like leave my building alone I brought somebody
Terry Heller
with me once to like talk to them like and like hey chill yeah like these Ms guys like guys stop stop tagging my building go go [bleep] with somebody else and they'd see that and they were scared yeah and this was four years ago five years ago I don't think it's any better today so I don't know I think La is a tough proposition I always think that you could succeed again in any kind of environment but you need to be a special you need to be very special what
Taylor Avakian
you do and so next for you build this roofing company to be the biggest badass roofing company in existence or however big you want to build it and continue to to move into this cash flow boring business and just take your talents in everything that you've done and find a unique aspect and crank it
Terry Heller
up to 20 yeah I mean look it I definitely learned a lot from the restaurant business and growth is great um and I do think Roofing is so special because here's the thing when the materials go up they go up for all of us okay not all restaurants are created equal so my friend owns boa right he could Char or south fa Grill they say you could charge 27 bucks 28 29 bucks for a burger 32 whatever because you have a $90 steak and it's not a gastro pub it's a you know South Beverly girl's South Beverly Grill is gastro pub is but it toes the line of like I would call like you know light fine Diamond Hill Hillstone it's like you know little up upper class right so you can get a piece of salmon there you can get a steak you can get
Terry Heller
a fried chicken sandwich so not all restaurants are created equal so when the price of beef
1:00:00–1:10:00
Terry Heller
goes up or the price price of gas or labor it's easier for those guys to pass it off to the consumer than other restaurants right that's why the Smash Burger exploded cheap to make 2 O whatever 3 oz Burger I don't know what they're 2 O burgers and even though that the Smash Burger really to me was the answer to the thick plan Che burger and the Umami of the world okay that was just kind of the answer you know um all these artisanal coffee shops like blue bottle at one time or lay colom or even um Alfred's is the answer to Starbucks right Starbucks is really they're all pretty pricey now so the answer to the plan checks of the world what the Smash Burger because you go in there and get a burger for 9 10 11 12 bucks it's a great experience
Terry Heller
it's still a burger MH the problem in that industry again to sort of emphasize what I'm about to get to is you could pass with certain types of platforms the cost in Roofing if shingles are 8% higher higher for me they are for all my competitors and that's all going to filter through to the the consumer unfortunately or fortunately if you're on that side yeah yeah so and the fact is we are the Hillstone of roofing in my mind right so you know we come super professional you need to get a hold of us 3 years we're going to be in business you call us on a Sunday at 300 a.m. someone's going to reach out fairly quickly I mean we have a AI answering service it's it's Ai and human but it's super super Next Level yeah yeah so um you're we're not
Terry Heller
missing a call so all the technology that we have at our roofing company you know whether it's our CRM uh the way we interact with people the way we're looking at jobs and you know our marketing is all like modern right so you know I think for once maybe in my career uh whether I think we're going to go into a recession of some sort I think we're in one right now I think we're definitely in a local recession I mean how would you like to be in Hollywood the business of making film right now I will tell you all the restaurants that I frequent um that were busy a couple years ago are wide open wide open so you know where're this this Market's affected by real estate a lot of people work in real estate Finance entertainment so I think with
Terry Heller
the roofing thing um we're I'm going to be able to capitalize on when the market does kind of slow down MH keep other startups from happening capitalize on the momentum that we have you know
Taylor Avakian
that kind of thing I love it Terry thank you so much that's it we're done we're being here that's it damn you crushed it
Terry Heller
hour was it hour and a half about hour and four hour and four thanks man you're the best you're better thank
Taylor Avakian
you for listening to this episode if you enjoyed the podcast it would mean the world to me if you could rate US five stars on YouTube Spotify and apple podcast it really helps us get our name out there and helps us get fantastic people like our guests to share their insights and knowledge with you again my name is Taylor ven I specialize in the sale of apartment buildings in Los Angeles and Southern California and I look forward to sharing more of these conversations with you see you in the next one