While the sudden changes that real estate investors have seen thanks to COVID have presented challenges, investing in real estate right now is still a sound decision for many reasons. It was great to get Danny Randazzo back on the show again where we discuss business as usual for him, thanks to the fact that he knows what questions to ask when it comes to managing his current assets and vetting new deals.
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Before all the restrictions of the pandemic set in, Danny and his team were in the middle of acquiring a new deal, and we talk to him about how he took everything in his stride and continued with the closing process. He gives a whole bunch of tips to listeners about how to manage current investments, underwrite an active deal, or vet a potential one in such a way that even if a crisis of this scale hits unexpectedly, you’ll have the right kind of risk-resistant systems in place to get you through it. He talks about reluctant private lenders versus well-funded agency loans, why multifamily is crisis-resistant, how to assess whether tenants will be paying rent, how to buy in COVID-resistant neighborhoods, and a whole lot more! Make sure you tune in and hear how you could be benefitting from passive or active investing right now by being more like Danny!
Key Points From This Episode:
- Danny’s experiences managing properties and underwriting deals in the post-COVID climate.
- Challenges Danny had getting the underwriting completed in the wake of new restrictions.
- The different parts of the underwriting process: lender and environmental assessments, etc.
- How valuable it was that Danny was organized and ready to do the underwriting quickly.
- Challenges in the debt market: reluctant private lenders vs well-funded agency ones.
- The fortune that Danny had to get an agency loan for his recent acquisition.
- Judging a positive future for investors based on metrics about well-funded agency loans.
- Getting last-minute bridge loans approved thanks to being ahead with due diligence.
- Conversations Danny’s team had when COVID struck during their acquisition process.
- How Danny and his team felt safe to invest during ups and downs in March and April 2020.
- Real estate as a safe place to invest money in contrast to stocks during uncertain times.
- Why investing in multifamily is still wise: families still pay their rent during hard times.
- The golden rule of the time value of money and compound interest.
- Assessing rentals by reaching out to managers for resident employer demographics.
- High rentals Danny received for April and his thoughts for what May will bring.
- Informing investors on the KPIs for the percentage of residents who have not paid rent.
- Questions for active or passive investors to consider before investing.
- Preparations Danny made that he is happy he made in hindsight.
[bctt tweet=”Even through this COVID, we’ve learned that residents still prioritize paying rent and when rent is paid, that is cash flow that is then returned to investors. — Danny Randazzo” username=”whitney_sewell”]
Links Mentioned in Today’s Episode:
About Danny Randazzo
Danny Randazzo is head of acquisitions at Randazzo Capital and controls over $8,000,000 in commercial and residential real estate. In the summer of 2016, Danny and his wife sold everything they owned and moved to Charleston, South Carolina to build a real estate portfolio. Randazzo Capital made its first investment purchase in the winter of 2016, buying two commercial buildings for $1,000,000. Since then, the firm has utilized strong investor and lender relationships to purchase another $1,000,000 commercial building, a short sale renovation project, a four-unit residential rental, a two-unit residential rental, and two beachfront foreclosures. Danny has been a speaker at The Best Ever Real Estate Conference in Denver, and a guest on many real estate podcasts released worldwide. He is the host of a local real estate meet-up in Charleston that helps local investors build networks and improve their business. Danny also volunteers with The First Tee of Greater Charleston, where he teaches kids about honesty, integrity, respect, and life on and off the golf course.
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