This week our special guest is the coveted underwriter Danny Randazzo! Join us as we discuss how to increase your returns with great underwriting. Danny is a real estate investor, author, entrepreneur, mastermind host, national speaker, podcast host, volunteer with The First Tee and world traveler. He retired from corporate America at age 30 after working as a financial consultant for over half a decade and building a real estate portfolio that generates monthly income to achieve financial freedom. Today his company controls over $220,000,000 in real estate assets. When Danny is not investing in real estate you can find him walking with his wife Caitlin and dog George or playing competitive golf. Understanding the underwriting and analyzing of multifamily apartment deals is vital to a successful return on your investment. If you're a seasoned pro or just getting into investing, then this is a topic you simply can't ignore or ever have enough knowledge on. So join the conversation as we dive deep into this complex topic and provide you with free professional knowledge that you can use to nail this subject and become a successful investor.
This week our special guest is the coveted underwriter Danny Randazzo! Join us as we discuss how to increase your returns with great underwriting.
Danny is a real estate investor, author, entrepreneur, mastermind host, national speaker, podcast host, volunteer with The First Tee and world traveler.
He retired from corporate America at age 30 after working as a financial consultant for over half a decade and building a real estate portfolio that generates monthly income to achieve financial freedom.
Today his company controls over $220,000,000 in real estate assets. When Danny is not investing in real estate you can find him walking with his wife Caitlin and dog George or playing competitive golf.
Understanding the underwriting and analyzing of multifamily apartment deals is vital to a successful return on your investment. If you're a seasoned pro or just getting into investing, then this is a topic you simply can't ignore or ever have enough knowledge on.
So join the conversation as we dive deep into this complex topic and provide you with free professional knowledge that you can use to nail this subject and become a successful investor.
KEY TAKEAWAYS
1. The basic philosophy of investing: 1. Preserve capital and 2. Buy cash flow producing assets for long term gain.
2. When finding a deal look at the market itself and identify the fundamentals that you want from that specific market.
3. Some key fundamentals to look for in a good deal are: 1. Location 2. The business plan 3. The economic growth of the investment area 4. Seller performance 5. Occupancy 6. Income 7. Expenses
4. At this moment in time be conversative with your cost reduction estimates and general underwriting
5. How to judge a market´s future performance: Look at market rent performance and sub market fundamentals reports that are available via brokers. This can tell you what rents will be like and what rental increases there are.
6. Always have an underwriter on your team who can verify all the data and financials when analyzing a market or property.
7. Stress test the deal. Look at return metrics like: vacancy & occupancy numbers, interest rate, expenses and exit cap.
8. You could be saving money on the performance of your property by reducing costs on administrative expenses such as internet, cable and phone packages.
9. You don't have to know a mentor to benefit from their teachings or knowledge. Take and create your own inspiration.
BOOKS
First a Dream - Jim Clayton
https://www.amazon.com/First-Dream-Jim-Clayton/dp/0972638903
LINKS
https://www.instagram.com/danny.randazzo/
https://www.facebook.com/dannyrandazzo/
https://twitter.com/dannyrandazzo
https://www.linkedin.com/in/danny-randazzo-61126449/
Title: E136: The Secrets to Successful Underwriting - Danny Randazzo
Host: Steven Pesavento
Interviewee: Danny Rendazo
Duration: 41:44
Steven (00:00):
When it comes to underwriting and analyzing multifamily apartment deals, there's some key things that go into understanding what makes a great deal. And today's guest Danny Rendazo is a phenomenal expert at underwriting and asset management and going out and buying big multifamily apartments. So in today's episode, we're going to dive deep into the topic of underwriting; some of the key assumptions you're going to want to understand, some of the key data points that you're going to want to learn. And if you're thinking about getting into multifamily, this is a must listen episode so you're not going to want to miss it. Let's get to it.
Narrator (00:40):
This is the investor mindset podcast and I'm Steven Pesavento. For as long as I can remember, I've been obsessed with understanding how we can think better, how we can be better and how we can do better. And each episode, we explore lessons on motivation and mindset for the most successful real estate investors and entrepreneurs in the nation.
Steven (01:02):
Before we jump into the episode today, I wanted to remind you guys to go grab your copy of the passive investor playbook, The Ultimate Guide to Passive Real Estate Investing and you can grab that at theinvestormindset.com/passive. The passive investor playbook is full of all the foundational information you're going to need to start learning, how do you go and make those smart decisions as a passive investor? How do you go about vetting sponsors? How do you go about deciding what your investment goals are, whether you want to be active or passive? And of course, what type of investment opportunities are you looking for? We dive really deep into some great topics - we've covered a lot of these in some short podcasts episodes - but you can grab the full guide full of graphs, pictures, and plenty of information, right over theinvestormindset.com/passive. I look forward to having you enjoy that and let's get right back to it.
Hey guys, welcome back to the investor mindset podcast. I am excited today. I have Danny Rendazo in the studio. How are you doing?
Danny (02:17):
Stephen, I am doing great. Thank you for having me, I’m grateful to be here after a long-holiday weekend. So we're back at it.
Steven (02:24):
Well, I am glad to have you here as well. And as you guys may know, Danny is an author, entrepreneur and an active multifamily investor. He has over a decade of professional experience working as a financial consultant and even worked with one of the second largest sovereign wealth funds in the world. His group, passiveinvesting.com has invested in thousands of multifamily units. And he's an absolute expert when it comes to asset management, building relationships, investment analysis, planning, and all things finance related. So today, we're going to be talking, specifically, diving deep into investment analysis. How do you analyze a multifamily deal? How do you make sure that those numbers pencil so that once you buy it, you can operate that business well and return good income for your investors? So are you ready to get it?
Danny (03:12):
I am ready. Steven. Let's rock and roll.
Steven (03:15):
Well, that's what I like to hear. So why don't we start out by taking a look back, what events or influences from your childhood shaped, who you are today?
Danny (03:24):
The first event that really shaped who I am today was an event that happened when I was five years old, I lost my entire net worth. I had a birthday party and I received some money that I put into a Detroit Redwings tri-fold Velcro wallet, and I went out to a dinner with my mom and grandma, and somehow the wallet was lost and never recovered. So my net worth went from like a hundred dollars to zero and it was a traumatic experience and from that moment forward in my life, I took responsibility for my money and I was in charge of it - I kept it, I stored it and I used it wisely. So I've written a couple of children's books and have a few more in the queue to get written about these valuable life lessons that really change a person's mindset. But, you know, looking back from today, all the way to that event, you know, I've realized that regardless of age, where you're at in life, where you live, ultimately financial success is each individual's own duty, responsibility and obligation. And so no matter what situation you are in, if you can take control of your finances, you can get yourself into whatever position you want to be in, whatever your goal is for that. So, you know, I learned that lesson, the hard way of losing that money and not being accountable and responsible for it, and it taught me a tremendously valuable lesson. That's really why I wrote that first book, the boy who lost his wallet, because I've heard so many people, you know, whether they're in their sixties or thirties, who said, man, I wish I would've learned that same lesson you did. So I said, well, we need to share this lesson with the world and write a book so parents can have fun or adults and young people can have fun together and talk about money because it shouldn't be a taboo conversation that isn't talked about at the dinner table. And, you know, it's a hush hush secret about how you make money, how you have income and you have expenses and so I'm really to help people break down those barriers and have some of those uncomfortable conversations so we can get more comfortable being uncomfortable.
Steven (06:07):
I love it because when you're five years old, this is a time in your life where things are very impactful, small things can have huge impacts on your mind and the way you think, and whether you were coming from a loss or an everything's abundant type of mindset and capacity. And it's incredible how you can actually remember back to that moment when you lost that money - and so many of us have lost much more than a hundred dollars in our lifetime as adults - but it's no matter what the amount was, it ends up making a big impact on the decisions you make. And how do you think that changes the way that you invest today?,
Danny (06:57):
Because having losses early in life, it really forces you to invest number one on the preservation of capital. The other important lesson that I learned from a young age is how hard every single person works for a dollar and I learned this the hard way through manual labor. My brother and I, I was probably about eight years old to 10 years old and he was four years older than me, so 12 to 14, and we would shovel wheelbarrows full of sand and push them a couple of hundred yards to a beach, dump it and spread it. And one shovel full of sand is pretty darn heavy, but then when you couple it with many shovel loads into a wheel barrel, I was pushing more sand than I feasibly weighed at any point in my life, in this one, wheelbarrow. And that's tough work, going through the mud, going uphill, going downhill. So that taught me of the valuable lesson of how hard everyone works for a dollar then, you lose that and it's very frustrating.
So the investor mindset of today, number one is the preservation of capital number two is about buying high quality assets that produce cash flow and cash flow is vitally important to one of the most fundamental lessons of investing and that's compound interest. So if you have a hundred thousand dollars today and it earns nothing over this next year or period or whenever you're listening to this, if it earns nothing, that has cost you thousands and thousands and thousands of dollars into the future, because you've lost the opportunity to compound that money. It's the basic fundamental that Benjamin Graham taught Warren Buffet about buying deals of value that will be around for a long period of time and having that money work for you on that return and then reinvesting it. And so, you know, that's the basic philosophy. Number one, preserve capital number two, buy cash flow producing assets so we can compound that money and slowly build it. It's not a get rich tomorrow kind of idea. It's an investment plan where you invest today and over the course of the next few years, you're going to have a nice return.
Steven (09:37):
Big, big concepts. They are worth relistening to again. So, you know, our friend Danny here, he is a phenomenal investor, but Danny tell us, what type of investment are you doing and where are you primarily focusing 90% of your time in the investment world these days?
Danny (09:54):
Yeah, we focus on one type of investment opportunity, multifamily real estate, and as we continue this conversation, think about it like a tunnel that's getting smaller at the end because we're very strict in our criteria. And so I first say multifamily investing, but then I'm going to say in the Southeast US and then I'm going to say in the Carolinas specifically in a few select markets, Greenville, Charlotte, and Raleigh, and we primarily focus there because of the job growth, the population growth and the basic fundamental microeconomic principles that occur in those three markets. And when we look for deals, we're looking for large institutional quality investments, 150 units plus typically greater than a $30 million acquisition price. And again, the reason that our criteria is so specific is because we're not trying to buy a hundred deals a year, or we're trying to buy two or three, maybe five really good deals in a year. And so having strict criteria allows us to go through a lot of volume of deals for the ones that we want to pursue and ultimately close and purchase. And again, we're looking at deals that are cash flow producing assets, so it's even stricter in the end of that tunnel, as we're saying, what is a deal that fits our investment goal? Because again, cash flow is important, a great market is important for preservation of capital. And so all of those items combined, that's what we focus on looking back, you know, today we're recording and kind of the M Q2 late Q two of 2020. And looking back, going through the pandemic, I think all of us multifamily investors are grateful to be invested into this asset class because it's more of a necessity of life than a want in life. So if you compare multifamily investing to hotel investors, you know, multifamily has performed exceptionally better over this COVID pandemic because it's a need, people need to have a place to live.
We have a country that is more driven for renter demand than it is for home ownership demand. And going through the COVID pandemic, lenders have now increased a lot of their lending requirements for primary residential mortgages, which just prevents people from breaking into that home ownership space. And they're going to be renting for a longer period of time. So, you know, we're grateful looking back where we have invested in great locations, great properties where people want to live and continue to live. And number three, we have great renters and great property management to manage these assets through uncertain times where we're able to produce cash flow.
Steven (13:09):
Big takeaways there, guys. I hope that you relisten to that to learn a little bit more about coming up with the right criteria and the right reasons to be investing in an asset class. But we're going to dive deep into the analysis portion of understanding what makes a great deal so that when you actually do buy it, you start getting those really great returns that you promised your investors, and that frankly you need, if you're an operator in order to run a good business. Because most of the income that an operator makes is based on the success of that deal. So where do you start when it comes to analyzing a deal? You know, if a new deal is coming into your inbox, where do you start when analyzing a deal?
Danny (13:51):
Well, the first piece that you have to look at is the market itself. So location is a huge component, and it's why we focus on so few locations. If you send the greatest deal in the world from Phoenix, Arizona, we are not going to look at it, we're going to look at the markets that we know. And so I would say that the fundamental first step is to know what fundamentals you want in a market and select the markets where you want to invest.
Number two, when a deal first comes out, you're going to look at the business plan. So are you doing some sort of value add strategy? Are you doing a buy and hold strategy? Are you looking to exit in two years, five, seven? What's the hold period as well? So when, when we look for deals today, we are looking for cash flow producing assets and so, we don't want to have a lot of deals that have a heavy value add component. As of today, lenders are pretty tight on doing value add deals, just given the uncertainty in the market and where rents may be going. We're looking for stabilized deals that have the ability to produce cash flow, you're going to get tired of me saying the word cash flow, but that's really what we look for today. And so what we'll do is, we'll analyze the historical trailing, twelve months of the income and expenses that the seller has, and see how effectively they operate, not only from a gross income perspective, but also from a net income perspective, to see what we may be able to do. Since we look at institutional quality assets, the people that own the deals, the sellers that are looking to sell us a deal are professionals. They know how to run a deal effectively, they know how to manage it and so there's not a ton of opportunity to really push income or decrease expenses because you don't have mismanagement. You don't really have mom and pop owners. So what we look for is what type of area it’s in, is it in an area that's going to see some population growth, some job growth, some positive economic factors? Or do we have the opportunity in the future to add some value once we stabilize from the pandemic in order to increase the gross income, but also increase the net income that that property is traded at? And that's ultimately what we try to do with every deal we go after is, how can we increase the bottom line, that net operating income? Because that's ultimately what adds value in the future because multifamily assets are valued based on their NOI and the market cap rate that properties are trading at. And so we do everything we can to increase that NOI number.
Steven (17:04):
Yeah and for all the listeners out there, in case you haven't been participating or playing in the commercial space, what he's talking about here is that, NOI is income minus expenses equals NOI. And so if we're buying a property, that's at a five cap rate, which means the amount of return we're going to get. If we bought it with a hundred percent cash at a five cap, for every dollar that we save or dollar that we earn, new adds $20 to the bottom line. So when we're talking about saving an extra thousand dollars a month, you can see that ends up adding up to quite a big return on the actual value of that property. So these are some really, really great things.
So you're looking at first the location, you're considering your strategy, you're kind of running it through this initial underwriting process. Well, before you get into the numbers, to make sure that the deal fits your primary criteria is there anything else that goes into that criteria or would it make sense to look at what kind of information is going into your analyzer, your analysis to understand, is this something that we want to look for?
Danny (18:13):
You know, the other major factor that goes into it, before kind of your underwriting, is what our market comps are doing. So again, it's really fact checking what the sellers trailing twelve months of income is telling you, you know, they'll probably also provide a rent roll. And so you just want to verify that, are they keeping up with market rents or are they maybe trailing market rents by ten, fifteen or a hundred dollars on a monthly basis? Because that may be a value add component, you know? Sometimes owners will maintain higher occupancy and they'll give up a few dollars in rent because they're probably holding for cash flow as well. And so that's something to evaluate. Then once you have a comfortable understanding of the market of the seller's performance, that's where you move into your own underwriting to really evaluate, how is this property going to perform in the future once you acquire it. And the number one thing that is important during this time period is to be conservative and how you underwrite a deal. You never want to be overly aggressive in projecting income increases, reducing expenses, or, you know, doing anything drastically different at the property.
One thing that we've implemented just on a couple of the most recent deals we've looked at during this COVID pandemic, is a greater spread or a greater increase in vacancy. So, number one, going into the future, no one knows what's going to happen to multifamily housing. I think we can predict that people are still going to need a place to live therefore, occupancy should be maintained, but in order to be conservative, we've projected an increase or even a doubling of the vacancy. So historically if you underwrite for a 5% vacancy, you know, maybe for the next 12 months, plan for a 10% vacancy, just to be conservative in your approach. And so that's really the most important piece that we do is having a conservative approach to underwriting. Because as you know, multifamily is just like any other business, there's going to be good months, there's going to be bad months. Not every month is going to go perfect, according to your Excel business proforma, but you need to have the ability to be flexible. And so if you are behind, maybe in your vacancy, you can make up for it in reducing some of your expenses. So you just need to monitor that business plan and monitor the assets performance to ensure that over time you stay on the business plan,
Steven (21:12):
That makes a lot of sense. So what we're really thinking here is, how is it going to perform in the future? How else can we understand or predict what something might do in the future? It sounds like you want to be conservative on that vacancy number. Is there any other things that you're trying to be conservative about or picture what that future might look like?
Danny (21:32):
Yeah. Another big one is the market rent itself. And so we utilize a couple of different sources of information. A lot of the brokers have annual or quarterly reports that talk about sub market fundamentals as far as where rent prices are going to. So if today, two bedrooms rent for a thousand bucks, is there going to be a 5% increase for that unit to rent for ten, fifty next year? And so we'll utilize some of the broker reports. Wells Fargo CVRE also has a great quarterly and annual report. And CoStar is another great source of information because they actually correlate real time rental data at properties that use a CoStar product in order to project what rents will be like and what rental increases there are. So, you know, for instance, in the Raleigh sub-market of North Carolina, rents are projected to increase at about a 5% year over year rate. Well, in order for us to underwrite it, we typically are conservative. And we'll say, you know, expenses may increase three or three and a quarter percent year over year. And so those kind of market fundamentals, there's a lot of great sources of information out there. You can certainly overwhelm yourself with a bunch of information. So I would say pick two or three credible sources and use that data. And it's always good to compare against others in the market. So that's where we fact check people against each other. So if CoStar is saying that rents are a thousand dollars in the area, we'll go to our property manager and we'll say, hey, what are your two bedroom rents for the three properties you manage in this neighborhood? And so if they say, hey, they're a thousand bucks and we feel very confident that we're going to be able to rent for a thousand. And so, you know, multifamily is not complicated, rocket science, there's not a physics formula or chemistry formula that you need to know. It's very basic and so I would say, to the investors out there, think about the basic fundamentals, rental rate, occupancy income expenses, and you'll have a good business plan going in to make your investment decision from those basic fundamentals.
Steven (24:17):
So these are core, right? Make sure we're looking for the information from the right sources. And it's one of the main reasons why it's worth it to pay for mentorship and why it's worth it to pay for data. It’s so that you're not searching the internet to try to find what's the right thing to believe, you choose a trusted source. You probably have to pay for it and you follow the direction that you have there, but you always trust. But verify.
Danny (24:41):
Yeah, we're a believer in that. We put our money where our mouth is, we pay for CoStar and it's one of the best sources of information that we have right at our fingertips. I can pull up any property in the country, specifically the markets that we care about and tell you what their occupancy is right now, what they're charging for rent, what the historical occupancy has been, where they're projected to go. So it's very robust and it's one of the best sources that we use and we pay for it.
Steven (25:16):
It is worth paying for once you're at that level. I've spent some time in CoStar, it's amazing the information that's available to you and if the information is not up to date, you just hit a little button and some researcher goes out and finds the information. It's absolutely incredible. So now that we've got all of our assumptions, or we've got a lot of this information together, how are you just entering this information into your analysis or what actually happens when you sit down in front of that spreadsheet for all of us, non data nerds out there, for all of us salespeople who aren't spending all of our time in those spreadsheets analyzing, what actually goes into that process for an underwriter?
Danny (25:55):
Well, once you have your data and let me just preface this by saying, any investor out there, if you are the sales person of the team, you need to have an underwriter on your team who can verify all of the financials and all of the data that goes into the spreadsheet, because that's ultimately how you're analyzing these properties. And so having a mistake or an error could be very costly if it's the wrong thing that got entered.
Steven (26:26):
And I think it's so critical. Even if you're the sales person to also be analyzing these deals, but you just might not go as deep as your analyst is going to be going, right? So I might know, and run the numbers and say, this looks great, but somebody else is going to dig through it really deep and get much deeper than I would want to on every single property so that I'm only spending that time getting deep on the ones that we're moving forward with. And it's worth it for me to know every little detail in and out but so specifically, like what goes into that whole process of figuring out all of the little intricate details that are kind of below the surface of those?
Danny (27:03):
Yeah. It's a lot more legwork to get the numbers, to get the data. Then once you have it and you have verified and you trust it, then it's just a matter of entering it and seeing what the output is. And so when we are kind of stress testing the deal, we may be looking at a handful of levers to change what the return metrics look like. A big one in particular is that vacancy numbers, so what vacancy or what occupancy are you expecting to have when you purchase the property? And so when we look at that one, we'll say, okay, what do we think the impact of COVID could be? And what assumptions do we need to make to be conservative?
Another big area in your underwriting that you'll probably tweak once your data is in, is your interest rate. So having good communication with your lender on, what is the rate that you're going to close with, what are rates doing today? Is there volatility in the market? That's another big component to it, you know? Your expenses, you should have those pretty well set by the time you go to underwrite the deal. And so, you know, expenses that function is really, it should be from the manager of the property. So we use third party management and we'll get a proforma of the expenses, and so we'll just input payroll. What is marketing? What is the administrative expense? What kind of contract services do we need to have? What's the real estate taxes, what's your insurance? So these are fixed expenses that you typically have at a property and we'll get those inputted. And, you know, it's very rare that we would change it. But if there's an instance to, you know, reduce payroll by a person or increase payroll by a person we'll make those adjustments kind of at the end to ensure that our underwriting is sound.
Then the other big component is your exit cap. I would say those are kind of your top four that you'll play with as you're underwriting the deal to have a conservative exit cap. And what I mean by that is, let's just say, for instance, you're buying a five cap market, you may want to exit at a 50 basis point higher spread than you entered that. So what you're trying to do is think about, is the market going to be in five years. And you know when I talk about our markets, there's job growth, there's population growth. So we're expecting the market to be, as it is today and ideally stronger. But with that, we are always conservative and underwriting with a fifty basis point increase. So typically if we buy at a five cap, we're expecting to exit in five or seven years at a 5.5 cap. So every deal is its own and it's different, but that's the basic fundamental principle to think about when you're finalizing your underwriting. So those four categories; number one, it's your vacancy, number two, it's your interest rate, number three, your expenses, and number four, your exit cap.
Steven (30:31):
Huge. That is such a good reminder about the key things you need to be focusing on. We go get all that data from all these places about the property, and then when we're actually working through it within our analysis, we're able to understand, okay, what's the impact of all four of these key categories on the actual returns for our investors at the end of the day? What else would you want to share with folks as far as related to the investment analysis portion, the underwriting that could really help them move the needle before we move on to the next part of our interview session here?
Danny (31:07):
Well a couple areas where we have found value, depending on the seller's performance of the property, one area that we're always conservative on is some of our administrative expenses, a simple fix for people to save money. And you can do this today, even if you own the asset for several years, or if you just bought it yesterday, call your cable and telephone company and try to get your services reduced. So, one asset that we recently bought had a grandfathered in 25 megabit internet speed for the leasing office, which is slow as snails. We were able to get the, the internet speed increased to a gigabyte, and we got the price reduced. I think it was like a hundred dollars. We got it down to 20 because the internet has drastically reduced in cost compared to where it once was with this grandfathered in 25 megabits speed. And so that's an area where we continually see opportunities to save money and add value to your telephone services for your leasing office, your cable for the property. And I'm thinking of another scenario where we've also saved money. You know, one other thing that we've done to add income is evaluated valet trash. So it's not the best for every property around the country, but in our markets having valet trash is one thing that a new owner could implement. And it's basically a $5 or $10 service fee to the resident, or excuse me, that you pay to the valet company and you would charge the resident, you know, 15 or 20 bucks. So there's a little bit of income increase that you can generate by implementing one of those services. And if folks are more interested in some of these strategic value add opportunities, my business partner, Dan Hanford, and I have done a couple of webinars and it's available on my website, just go to dannyrendazo.com, check out the blog posts, and they're all there. You can go into as much detail as you want. I think we've done two or three hours worth of content on underwriting specifics, and ways to increase NOI. So, you know, be sure to check those out. I don't want to take us too off track here, Steven, on the business plan.
Steven (33:51):
We'll link to that in the show notes here for everybody to go dive in deeper on your own, and maybe we'll have a round two to dive into some of the business opportunity is, but we've made it to the growth rapid fire round, where the questions are quick, but your answers don't need to be. So tell us, how would you define success and what is success?
Danny (34:10):
Success to me means living a life that you are fulfilled by and success or fulfillment are individually defined by every single person in the world. And so, you know, the things that get me excited make me feel fulfilled are probably different than the listeners, but that's what gets me going in the morning. So, you know, writing children's books, I was so grateful. I saw a post that one of my friend's daughters took the book and read it at school. This is way pre COVID, but she read the book at school and I was so grateful that, you know, 30 kids got to hear about that book. So that was a success to me.
We recently closed an acquisition in Charlotte, North Carolina, and we've set up the deal where there's going to be just a great opportunity for investors to put their money, to work for them, get the great cash flow, get the depreciation along the way and invest right alongside of us.So I'm grateful for that very fulfilled that. We've closed another acquisition and of course expanding my network. It's on my goal board. So you saw me glance over here. I'm looking at my top things and, you know, and meeting you doing the panel a couple of weeks ago with our other guests on there. -I think we had Neal Bawa, we had Tim Bratz, we had Reed Goossens - that was just excellent. Expanding the network. That's something important that gets me fulfilled. So that is a success to me. One fun fact is I typically do kind of annual goals and so I'm just working on checking my goals off for this first half of the year, and I'll continue to work away there.
Steven (36:08):
What are some of the Keystone habits, the ones that you do on a daily or weekly basis that have led to some of your success?
Danny (36:17):
Having a routine, working out, taking a daily walk with my wife and our dog. We just love that, that's always a highlight to kind of get some fresh air, think freely reading books. I try to read a book every day, not a full book every day, I just read a little bit, but I've got two books on my nightstand. I was able to get two off of my stacks, I had four at one point. But reading, walking, thinking and networking are daily, weekly habits that you must do in order to be successful.
Steven (36:56):
And what's a book that's impacted your life the most or one you're excited about right now?
Danny (37:01):
One that I just finished that I absolutely loved was called, First A Dream by Jim Clayton of Clayton homes. It's the story of how he grew up as a sharecropper’s son and sold his company to an investor that most people have probably heard of his name's Warren buffet for a couple of billion dollars,
Steven (37:25):
Absolutely inspiring story, I would imagine. Inspiration, what impacts have mentors made on your life and how do you look at going out and finding great mentors?
Danny (37:34):
Mentors have been huge. And you know, I'm a firm believer that you don't have to meet or actually know a mentor. It is great to have an in-person mentor that you can call on the phone and chat things through with, but from an inspiration perspective, I will utilize people around me that I don't know, and haven't met but have an idea about to push me forward or pull me towards those goals that I have. And so, you know, one person in the multifamily space that you know, is all over social media, talking about deals is Grant Cardone. And so, you know, I've never met Grant in person, but I'll try to channel like my inner Grant and think, how would he evaluate this deal? Does it produce enough cash flow? So I think you need to take and create your own inspiration. Having in-person mentors is a huge way, but also, you know, make up, I'm a big fan of Thomas Edison and the creation of the light bulb. So he failed hundreds of times trying to create the light bulb, and then he finally got it to work. And so that to me is an inspiration.. That's a mentor. And so I'll think about, you know, the Thomas Edison story and just keep pushing if I have that day.
Steven (38:59):
Finishing on purpose, what drives you to live your best life every day?
Danny (39:08):
What drives me…again, a very introspective question. I am driven by the, kind of goes back to question one success and fulfillment. So in order to be driven, I need to have big goals and so I'm glancing at my goal board again, because that's what drives me. I have such passion for doing what I do. Number one, kind of teaching people about money, having those conversations, I love it. It's not a taboo thing so we need to start talking about it more. And then number two, creating these multifamily investments for everyday people like you and I, Steven, who can put their money to work in institutional quality assets that, you know, wall street, and, you know, other fiduciaries that you see on TV, don't want to tell you exist, but they do. And so it's just a way for people to actually control their financial destiny. And so that's another thing that drives me.
Steven (40:15):
This has been amazing. And thanks so much for sharing a little bit about how you think about underwriting, how you think about analysis and where can people find out more about you or get in touch?
Danny (40:25):
Yeah, the best place, if you are interested in what we do for our multifamily investing, just go to passiveinvesting.com. And then if you want to learn a little bit more about my story or some of the blog posts that I've put out there, or other podcasts that I've been on, just go to dannyrendazo.com and you can find everything you need to know there as well.
Steven(40:45):
Wonderful. We'll link both of those in the show notes. And thank you so much for being here and I'll leave you guys. As I always leave you with a reminder to live a life worth, inspiring others, to go live a life of that true freedom. And you can do that by applying some of what you learned here from Danny and going out and starting to underwrite some deals of your own. So thank you so much for joining us, Danny, and I look forward to the next time we get to hang out.
Danny (41:09):
Absolutely. Steven, thank you so much.
Narrator (41:16):
Thank you for listening to the investor mindset podcast. If you like, what you heard, make sure to rate, review, subscribe, and share with a friend, head over to theinvestormindset.com to join the insider club, where we share tools and strategies from the top investors and entrepreneurs and how to take it to the next level.