In real estate investing, having a proper deal structure is important as it is the organizational process of acquiring, funding, managing, and holding a specific property. It also determines how profits are divided among investors, and how cash flows are allocated. In this Highlights episode, we look back at our conversations with real estate entrepreneurs Danny Randazzo of Randazzo Capital and Jeff Greenberg of Synergetic Investment Group, LLC.
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Danny is an author, entrepreneur, and a host of a real estate mastermind, Danny breaks down the four areas that one needs to point out in an agreement. Meanwhile, Jeff shares the core of structuring deals and the important elements associated with them. He emphasizes that the main concern that people should think about when structuring deals is that both sides should be benefiting from it. Listen now and find out how you can effectively structure your real estate deals!
Key Points From This Episode:
- Danny elaborates the components of a deal structure – loan, equity, asset management, and other general buckets.
- Jeff shares his take on deal structure.
- How are both sides going to be benefiting from a deal structure?
“If you’ve never raised for a syndication deal before, raising money is a lot harder than you may think. You may want to bring in a couple of partners to help raise money who have done it before.” – Danny Randazzo
“It’s a misconception that you can go out and syndicate a deal. It takes a lot of work to do it at a high level where you’re buying 150 units, a $10 million-plus deal. You need to go through the steps and get there.” – Danny Randazzo
“The main concern that people should think about the deal structure is that both sides are going to be benefiting from it.” – Jeff Greenberg
“When we look at a structure, we want the investor to be protected on the downside if the numbers don’t come in. The sponsor should also be protected on the upside but they gained benefits from a great performance.” – Jeffrey Greenberg
Links Mentioned in Today’s Episode:
About Danny Randazzo
Danny and his wife sold everything they owned in the summer of 2016 and relocated to Charleston, South Carolina to build a real estate portfolio. Randazzo Capital made its first investment purchase in the winter of 2016, buying 2 commercial buildings for $1,000,000. Since then, Randazzo Capital has utilized strong investor and lender relationships to purchase another $1,000,000 commercial building, a short sale renovation project, a 4 unit residential rental, a 2 unit residential rental, and 2 beachfront foreclosures. The company controls over $8,000,000 in commercial and residential real estate.
About Jeff Greenburg
Jeff Greenberg, MBA has over forty years of experience in management, staff supervision, development, and training. Jeff is the CEO of Synergetic Investment Group, LLC (SIG). Since 2007 he has been investing in multi-family and student housing assets in emerging markets. Jeff focuses on all aspects of projects including; investor relationships, staff development, business systems development, and asset management.
Jeff has been an investor with $30 million multi-property projects consisting of over 800 units. SIG currently controls 317 student housing beds in properties in Georgia, Arizona, and Ohio. SIG is currently under contract on two properties in Texas and Kentucky, totaling 292 units. SIG focus’ on value add Student Housing, Market Rate MF, and Senior Living MF properties.
Jeff has run 2 REI clubs over the past 13 years and is active on Biggerpockets and other forums. In his spare time, he road cycles 100 miles a week and spends time with his grandchildren.
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