Danny Randazzo and his partners have acquired over $8 million worth of real estate since just 2013 and he joins us to share how he has been able to scale so quickly in just a few years. Danny blows away any myths about needing to start small in real estate as he walks through his first deal that was a $1 million dollar commercial building, then explains how he has continued to build his portfolio. Danny now invests in commercial and multifamily real estate and has scaled significantly by partnering wisely and using solid fundamentals to find deals that provide solid, long-term cash flow for everyone involved.

14: Building a Multi-Million Dollar Portfolio in Under 5 Years with Danny Randazzo

The Millennial Real Estate Investor Podcast was started because we love awesome stories of Millennials taking big action in real estate and taking control of their financial future. We interview guests who have taken the leap into the game of real estate and prove that you can do it at any age. Whether you want to earn a little extra money on the side or make investing your full time career, we bring you guests who will show you the road map to your goals.

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Where Have We Been - Quick Update

Love is a funny thing sometimes. Kevin Galang discovered the wealth-generating power of real estate investing thanks to his girlfriend. Growing up, Kevin was brought up with the mindset of growing your income, while his girlfriend believed in growing your income stream. Kevin believed in investing in a 401(k) for retirement, and his girlfriend believed in investing in real estate for cash flow. They set aside their differences and Kevin figured he’d give real estate an open consideration and look into it. Can you guess how he thought about finances afterwards?   After months of learning and networking, Kevin jumped into note investing, doing three deals right off the bat. And while at the time it felt as if investing in notes was going against the current, Kevin knew his strengths as well as the benefits to know that he was going in the right direction. He stuck with it and the results speak for themselves.   Up to date, Kevin educates others about the nitty-gritty of real estate note investing, as well as other types of investments, in his podcasts Tech Guys Who Invest and Note Nuggets.   Takeaways from our conversation with Kevin: 1) What is a real estate note? In essence, it is a promissory note in which the borrower promises to pay back a specified loan to the lender (in this case being a mortgage on a property). In other words, when you invest in a note, you are acquiring existing debt and acting as the bank, using the property (or otherwise) as collateral should the lending terms be broken or become non-performing. 2) Why invest in notes? As Kevin explains, the largest (and most obvious) benefit is the ability to essentially own real estate without being the attached landlord to any given property. That means that you still earn a return (through cash flow and/or recapitalization), but don’t necessarily have to handle the day-to-day operations like renovations, evictions, or leasing. 3) What are the advantages in notes? For one thing, you can get really creative with how you invest in notes. For example, you can buy in bulk or you can buy in shares. The other thing, Kevin mentions, are the multitude of exit strategies available at your disposal should a note become void or non-performing. You have the choice to create a solution with the borrower directly, you can eliminate the borrower from the investment, or you can part ways with the investment yourself, all of which could be winning solutions if done properly.  4) How do I get started? Kevin talks about how note investing is generally thought of as an “old person’s game.” He explains while it may be true to an extent, you don’t have to invest in notes the traditional way. So while it may carry more risk, with only a few thousand dollars, you can gain a secondary or (even) tertiary position, or even become a partial note holder. Or say you have more capital available in an IRA, that can also be a source of income to then originate or purchase a primary-position note. Either way, as per Kevin, go learn and network as you get started.   If Kevin could go back and talk to his 16 year old self, he’d tell him, “Read Rich Dad Poor Dad sooner because it would challenge the way [you think] about creating financial success.” An unexpected benefit of real estate investing, Kevin said, is the ability to endlessly learn new things and learn with a purpose simultaneously. A piece of advice Kevin would tell his friends looking to get started in real estate would be to know what you want to do, know how much you’re willing to dedicate, and double down on what you’re good at. Kevin recommends using a HP 10bII Financial Calculator to help you analyze deals on the fly, as well as Google Drive to have a centralized place to store important business information. Kevin recommends reading How To Win Friends and Influence People by Dale Carnegie to learn the foundation of talking to people and how to build better relationships with others.   If you’d like to get in touch with Kevin, visit: tgwipodcast.com and info.notenuggets.com/home

116: Understanding Real Estate Note Investing with Kevin Galang

As a Canadian native, Avery Heilbron immigrated to America to pursue soccer at the collegiate level. He found himself working a W2 job in Boston, Massachusetts. Through various books (not Rich Dad Poor Dad for once!) and BiggerPockets, he discovered real estate investing. He also began networking with other local real estate investors and closed on his first property in early 2019.   Avery attributes his rather quick (and successful) start in real estate to his learn-and-take-action personality. He genuinely enjoys learning and is not one to sit around waiting for things to happen.    Up to date, Avery is House Hacking and owns two multi-family properties. He coaches other individuals looking to get started investing in real estate, as well as prospects for other larger-scaled real estate investors with the intention to find deals for them and continue his own education with their help.    Takeaways from our conversation with Avery: 1) Finding the right agent. This was a vital part of Avery’s success in securing his first deal. While taken aback at first at the thought of seeing properties not long after meeting his agent, this agent was willing to take the time to educate Avery every step of the way and move at a pace Avery was comfortable going in. So while you don’t necessarily need an agent who invests nor should you exploit one without compensation, take the time to find an agent who is a good fit or ask around for someone who can help you get the job done. 2) Section 8 comparables. While many may suggest you stray away from this demographic of renters, the truth is these individuals in this tenant pool exist. As Avery notes, one thing to keep in mind when figuring rents for these units is how the Housing Authority determines what is “fair.” Their criteria is different from traditional means of finding comparable units. There’s less emphasis on the glitz and glamour and more focus on the amount of bedrooms and zip code. This can be beneficial to know when it comes time to increasing rent or putting in new Section 8 tenants.  3) Don’t get too friendly with your tenants and screen prospects thoroughly. Especially when House Hacking, you carry the title of landlord, property manager, and next-door neighbor. While you want to maintain a good and professional business relationship with your tenants, Avery suggests not turning your renters into friends. Avery would decline social invitations from his tenants and eventually they caught on. This is done not only to protect your emotions, but also your investment. 4) “Due” your diligence. As Avery explains, when purchasing multi-family properties with (or without) inherited tenants, you have to be thorough in your research about the property. While not encouraged, it’s not uncommon for sellers to lie about rents, expenses, and condition. The seller’s motive is to unload their property so it’s your responsibility to know what you’re buying.   If Avery could go back and talk to his 16 year old self, he’d tell him, “Two things… The first would be to just enjoy school and learning and all the experiences because it doesn't last forever. The second would be to stretch more…” Two unexpected benefits of real estate investing, Avery said, is the fact that his girlfriend is all-in about real estate and personal finance like himself, as well as the opportunity to grow wealth at a higher scale since he invests in a more expensive market. A piece of advice Avery would tell his friends looking to get started in real estate would be to make sure to take focused action while you learn and not get swayed in all the different directions you can go in real estate. Avery recommends using Cozy to help you with your rent collections and other property management needs. Avery recommends reading Set For Life: Dominate Life, Money and the American Dream by Scott Trench as its message resonates a lot with Avery’s philosophy and the same could be set for you! Honorable mention: Retire on Real Estate: Building Rental Income for a Safe and Secure Retirement by Kai Anderson. If you’d like to get in touch with Avery, find him on LinkedIn and BiggerPockets, follow him on Instagram @_averyheilbron, or visit: realworldfaf.com/contact

115: House Hacking in an Expensive Market with Avery Heilbron

Sometimes all we need is a little push in a different direction for it to have the biggest ripple effect in our lives. In the case of Adam Ulery, this metaphorical push came in the form of a book recommendation over a coffee break at work. Adam figured it couldn’t hurt so he gave Rich Dad Poor Dad a shot and, as he put it, “became a fiend for information.”   Like many others, he gobbled up as much knowledge he could about finance and investing and ultimately fell into real estate and stuck with it. While those initial stages were tough for him due to his mental roadblocks, with the right guidance and action, he was able to preserve and open up his life to abundance.   Up to date, Adam is the Head of Investor Relations for Dreamstone (a real estate syndication company) and hosts the Tech Guys Who Invest Podcast all while still working a full time W-2 IT job. Collectively, Dreamstone has a goal of owning 5,000 units by the end of 2021. Adam plans on continuing his stride towards wealth to be able to help more people along the way.    Takeaways from our conversation with Adam: 1) Listen to competent advice. While it might be more expensive in cash value up front to pay for the opinion of an expert, you’ll be rewarded tenfold later down the road. In other words, it’s cheaper to do something correctly the first time than to do it the inexpensive way and have to do it again. So when it comes to legal, financial, mental, or structural advice, this is capital well invested. And keep in mind, sometimes you’re going to need the same advice from different people depending on your level and goals. 2) Overcome your limiting beliefs. It all begins with mindset. Adam can vouch this was true for him. Even with his excitement and eagerness to do his first deal, those raw emotions alone weren’t enough for him to overcome his negative attitude. He first had to address his doubts and adjust his thinking about his ability to succeed. Once he was able to do that, he was no longer his own biggest hindrance, but rather his own biggest advocate. He went from fearing a single family property to purchasing over a hundred units at once. 3) The process remains consistent. Adam was a bit taken aback when he first decided to venture into apartment syndications. He was overwhelmed by the work needed to be able to scale at the level he desired. But then he realized something. Even though there were more moving pieces, the end product remains wholly the same. Adam realized that he still needed to learn about the investment type, he needed to pool together enough capital, he needed to find the right deal, and he needed to manage his investment. A duplex is not that different from a 10-unit building. And a 10-unit building isn’t that much different than a 100-unit apartment. It’s a larger scale, sure, but the process remains consistent. 4) Select a property manager with experience in your specific asset class. Similar to point #1 above, you also need competent people to do work on your deals. Competent advice is only half of the battle. The other half involves actually finding the correct employees or partners to fulfill your needs. Not any property manager can manage any type/class of property. Find a specific property (or project) manager that fits your means and can accomplish your needs.    If Adam could go back and talk to his 16 year old self, he’d tell him, “Don’t limit yourself… Choose what you love to do and focus on that. Take action, move forward.” An unexpected benefit of real estate investing, Adam said, is his growth thus far as a person, all things mentally, emotionally, and otherwise. A piece of advice Adam would tell his friends looking to get started in real estate would be to get educated. Start listening to podcasts, read books, and start talking to people who are already doing what you want to do. Adam recommends using Waze to help you navigate your way around town to be more efficient and save time (to do more deals!). Adam recommends reading Killing Sacred Cows: Overcoming the Financial Myths that are Destroying Your Prosperity by Garrett B. Gunderson and Stephen Palmer to help you break free from traditional financial principles imposed by the working class and on the fast track to financial freedom.   If you’d like to get in touch with Adam, find him on LinkedIn, email him at adam@dreamstoneinvest.com, or visit: www.tgwipodcast.com.

114: Apartment Syndications While Working a W-2 with Adam Ulery

Based out of Kansas City, Missouri, Logan Freeman joins us this week to share his story on how he went from owning less than 40 units after a few years, to in a span of 8 months, owning over 500 units!   Logan focuses on commercial developments and master leasing these buildings (meaning one lease for multiple units/properties between tenant and owner) to non-profit homeless organizations such as reStart. These partnerships help to rehabilitate individuals who have fallen into homelessness and get them back on their feet and a part of society once again.   Up to date, Logan’s goal is to continue to live out his passion in providing affordable housing for people who are in need, as well as continue to work to stay profitable. He wants to educate others about alternative investments within real estate, and show them the different niches available that wealthy people have been utilizing for generations now that these investments are becoming common practice and readily accessible.   Takeaways from our conversation with Logan: 1) Realize what your roadblocks are. One common problem successful investors run into is succeeding too much too soon. By all means, if you have goals to build a scalable business and want to build a large operation, do it. Along the way, just keep your attention open to weak points within the business structure. As Logan explains in his failed deal that cost him $200K, it wasn’t the deal itself that was bad. He knew that deal to be a great one! It was he, himself who was holding that deal back. He got overconfident, wore too many hats, and lacked the experience required to pull off the deal successfully. So as he notes, figure out the different jobs and roles within a deal (or business) and assign the right people to those roles. By doing so, you’ll get more done and get along further. 2) Swallow your pride. Going back to that failed deal that cost Logan $200K, he explains that he didn’t have to pay out that cash. There was nothing legally binding that required him to do that. But for Logan, it was bigger than the law and the cash. It was his reputation and moral conscience at stake. As Logan explains, when you do the wrong thing, your negative reputation spreads like wildfire. So when put in that perspective, that monetary value diminished. He fessed up to his mistake, got out of the way, and in doing so, learned a valuable lesson. Take ownership of your actions, be the buck, and move on. 3) “Doing well by doing good.” This is the mantra that Logan uses for his business. This is what led him to real estate. This is what led him to non-profit work. And this is what led him to teaching others how to succeed in business. Logans explains it well—on one hand, yes, business is business and the objective is to turn a profit. On the other hand, however, that doesn't mean you can’t make money by making the world a better place—by doing something that’s greater than profit alone. So whether you want to be a mom-and-pop landlord or a world-wide real estate corporation, don’t forget (or take for granted) the power and responsibility you hold for communities and individuals with each property.  4) Go out and play the game. The more successful you are, the easier it becomes to achieve success. Common reasons for that is because of experience, network, and opportunities. Just like physical momentum, success builds on another. The hardest part is getting that first push to move. Logan mentions that he’s had the great fortune to be able to work on his life passion and serve people through his business. And while a lot of that is attributed to connections with other people, the results are not achieved by accident. The results stem from methodical and intentional plans and action. You can either sit on the sidelines and wait for the perfect opportunity, or you can create those opportunities yourself. We suggest the latter. And combine that with persistence, magic happens.   If Logan could go back and talk to his 16 year old self, he’d tell him, “Be open to everything and attached to nothing.” An unexpected benefit of real estate investing, Logan said, is the excitement he gets that comes from making a positive impact on the world, as well as being pushed by his business to become a better and better version of himself. A piece of advice Logan would tell his friends looking to get started in real estate would be to first ask them if they want to be an “active” or “passive” investor. From there, it’s a matter of laying out the steps and groundwork to get to your goals. Logan recommends using gTasks and Monday to help you stay productive, organized, and on track. Logan recommends reading The ONE Thing by Gary Keller and Jay Papasan as it helped give him clarity in his life, and he believes it can do the same for you. Honorable mentions: The 10X Rule: The Only Difference Between Success and Failure by Grant Cardone Extreme Ownership: How U.S. Navy SEALs Lead and Win by Jocko Willink and Leif Babi Influencer: The Power to Change Anything by Joseph Grenny   If you’d like to get in touch with Logan, find him on LinkedIn, or visit: www.livefreeinvestments.com

14: Building a Multi-Million Dollar Portfolio in Under 5 Years with Danny Randazzo

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