All Forum Posts by: Crystal Smith

Quote from @Brie Schmidt:

@James Wise - We criticize you because you don't get it.  Chicago is the size of Cleveland + Dayton + Cincinnati with some left over.  And that is just the city.  Chicago makes up just 25% of Cook County which is bigger than the state of Rhode Island.  So when some outsider sits on his computer and quote stats about the entire market it makes them look stupid.  Everyone here knows better.

@Brie Schmidt , the biggest problem with this gentleman's analysis is that it's too simplistic. A macro analysis that compares a huge complex market to smaller markets.  There are over 78 submarkets in Chicago alone, and when you include the surrounding areas, the total number of submarkets exceeds 200.  There is population growth in some of the submarkets and decreases in others.  Property values have risen in some submarkets and decreased in others. 

For those who are reading my response, analysis of population trends, job trends, rent growth, value growth ...are extremely important, when the analysis is complete, non-biased and includes all of the submarkets & is done by someone with real knowledge of the market. Take advice from Mr. Wise with regards to investing in Cleveland, Dayton, Cincinnati, Toledo, Columbus or Akron.  Ignore whatever he has to say about any other market.

Quote from @Calvin Stewart:

Hey BP,

I’m 17, turning 18 in 40 days. I’ve been studying real estate actively for a year now reading books, listening to podcasts, etc. I’m wondering: what is the best way to build wealth within this niche? What strategy is best to start off with?

I've heard about house hacking, which seems promising as a first investment. But how can you scale up quickly? Would it be through creative financing or the BRRRR strategy?

Let me know your thoughts, thanks in advance!

House hacking is a great starting point, but it's not the path to rapid growth.

To scale quickly in real estate, you need to leverage OPM—Other People’s Money. That kind of capital doesn’t become accessible overnight. You have to gain experience, build credibility, and earn trust within a strong network. Only then can you confidently move from smaller deals to larger, more scalable opportunities.

Quote from @Will Riley Moseley:

I've spent the past few years immersing myself in books and podcasts, learning as much as I can about the industry. Now, I'm at a point where I’m ready to take the next step—fully commit to understanding this business from the inside out. I currently work at an accounting office, but I’ve always dreamed of one day building my own real estate business. 

What I feel I’ve been missing is a sense of community—people who are on the same journey or who have already walked the path I hope to take. I'm looking for guidance, perhaps from a mentor who can help show me the ropes, or even just someone willing to let me tag along while they visit properties.

I’m genuinely excited to be here and to connect with like-minded individuals. This platform feels a bit overwhelming at first, but I’m eager to learn, build relationships, and grow along the way. I look forward to meeting you all and becoming a part of this community.

Cheers!

Will Moseley

 Welcome to BP.  I recommend you research joining a Mastermind.  BP has a few.  You'll be able to learn, build relationships and when you have an issue or problem lay it out for the mastermind to see if you can get some help.

Quote from @Cameron Porter:

@Crystal Smith  this just gave me a lot. I appreciate this. I'm new too real estate with 10 months in as a agent. I'm learning a lot and just now realizing I can help my investors out using wholesalers. 

how do you verify how the wholesaler controls the property? 

 We do not do this for every wholesaler.  Only those we have not worked with before.  We request a copy of the contract they want us or our client to sign.  This includes the original contract that is being assigned.  The reason for requesting the original contract is to review & make sure we agree with the terms of the assigned contract.  Then we check public records to see if the name on the assigned contract matches.  

Quote from @Ethan Price:

Hey all, 

As I learn about real estate investing, I am personally leaning towards focusing on the rent by the room strategy. I like the pros and cons of this strategy and believe it would work well for me personally. Are there any specific books, forums, podcasts, or any other good sources that one would recommend to continue learning about this strategy? I only have a surface level understanding and am looking at making this my focused strategy. 

Thank you! 

 I don't subscribe to any content that focuses on rent by the room, but I can provide some advice/feedback on where I see the strategy working. We've put 5 kids through college.  They lived on campus the first year, and in subsequent years, they lived in homes owned by investors that were rented by the room.  Not all of the renters were students, but the majority are. So we decided to invest in student housing ourselves. And as a realtor, we now have clients that we are assisting who are doing the same things. The key is to be close to a university and provide free internet, along with a common laundry and basic furnishings. Some even turn the place into an Airbnb when school is out

Good luck

Quote from @Cameron Porter:

So a wholesaler presented a deal for my buyer. This wouldn't be a traditional transaction. How would I facilitate this kind of deal if the wholesaler just wants to assign my buyer the contract. This cuts me out the deal. Why would my buyer sign contract without it going through title

One of the gaps in traditional real estate training is the limited exposure agents get to transactions outside of the Multiple Listing Service (MLS). Little emphasis is placed on off-market deals or alternative acquisition strategies like contract assignments. Yet, in reality, assignment of contracts is a common and legitimate transaction method—hundreds occur each month in many markets.

As for concerns about being cut out of the deal, if your client brought the opportunity to you, you're still very much in the picture. Your value now lies in helping them navigate the transaction, particularly if they’re a new investor with limited experience.

For example, assignment deals don’t bypass the normal closing process—they still go through title. When our clients bring us wholesale deals, here’s how we help protect their interests:

1. Deal Analysis – We evaluate the numbers to ensure the property aligns with the client’s investment goals.

2. Secure EMD Handling – We require the earnest money deposit (EMD) be held by an attorney or title company—never the wholesaler.

3. Renovation Support – If the property needs work and our client lacks a general contractor, we refer one from our vetted network.

4. Wholesaler Due Diligence – We verify how the wholesaler controls the property, especially if we haven’t worked with them before.

5. Transparent Fee Structure – Once the contract is finalized, we include a line item for our fee so everything is clear and documented.

This approach ensures our clients are protected and positioned for success, even in non-traditional transactions.

Quote from @Andrew Pierce:

I'm new to real estate and I don't have too high of an income but I have no debts. I currently live in California and I know that it's not in my buy box to afford anything here. I have been looking into other states to see what I can afford and different lending options and I came across the fha multi family, hud incentive programs, and hop loans which help you as long as you live in the property. Anywho my question is would it be too ambitious for me to move to another state for a year to buy a multi family home as my first real estate property and rent out the other units? Also with all the incentives for renting to low income and section 8 tenants would the benefits outweigh the risk of getting a bad tenant? 

It's only a dumb idea if you move and don't have a job or income to qualify for the Multifamily owner-occupied loan.  If you have a job or know you can get a job quickly, then no it's not too ambitious.  

Regarding renting to low-income and Section 8 tenants- In my opinion, your objective should be to get market rate rents so your property has a positive cashflow or at least breaks even while you reside in the property. If you can do that with low income and Section 8, then great.  If you cannot make $ with that strategy, then drop it.

Quote from @Mitch Messer:

Quote from @Crystal Smith:

Quote from @Mitch Messer:

We've got an interesting private lending situation:

- Husband and wife, each with their own checkbook SDIRAs, want to lend on the same real estate deal.

- Borrower needs $100K.

- Each spouse can lend $50K.

First question: Is this even allowed?

Second question: If allowed, what's the best structure? A first and a second lien? A single shared co-loan? Something else?

I'm asking because the guidance we're getting from their IRA custodian sounds questionable. We'd like a second opinion.

Has anyone here done something like this?

Any advice and/or insight would be greatly appreciated!

Thanks in advance!

 We have borrowed from SDIRA and been lenders from our SDIRAs. The husband's and wife's SDRIAs are separate entities and can participate in the same project as lenders.

We have structured our deals using SDIRA with one promissory note in a first position & multiple SDIRAs as part of the note. No need for a 2nd position. 

If you want guidance from an IRA custodian independent of your potential lender's custodian then I recommend reaching out to @Dmitriy Fomichenko.   I see he has commented on this thread.

Thank you, Crystal, I'm grateful for your insight!

Out of curiosity, in which states have you used the fractionalized first-position mortgage? Did the husband and wife IRAs each take an equal percentage of the note?

I'll reach out, but on LinkedIn, since I'm there more regularly.

 Illinois, Indiana, Texas, Missouri, South Carolina & Florida.  I may be missing a few states.  The fractionalized mortgage as you call it, involved more than 2 parties in most cases.  We tried to make the percentages equal or equal to the percentage that a party contributed.  But there were some cases during negotation where we had to give one party more than equal shares.

Quote from @Mitch Messer:

We've got an interesting private lending situation:

- Husband and wife, each with their own checkbook SDIRAs, want to lend on the same real estate deal.

- Borrower needs $100K.

- Each spouse can lend $50K.

First question: Is this even allowed?

Second question: If allowed, what's the best structure? A first and a second lien? A single shared co-loan? Something else?

I'm asking because the guidance we're getting from their IRA custodian sounds questionable. We'd like a second opinion.

Has anyone here done something like this?

Any advice and/or insight would be greatly appreciated!

Thanks in advance!

 We have borrowed from SDIRA and been lenders from our SDIRAs. The husband's and wife's SDRIAs are separate entities and can participate in the same project as lenders.

We have structured our deals using SDIRA with one promissory note in a first position & multiple SDIRAs as part of the note. No need for a 2nd position. 

If you want guidance from an IRA custodian independent of your potential lender's custodian then I recommend reaching out to @Dmitriy Fomichenko.   I see he has commented on this thread.

Quote from @Keegan Mraz:

What's a good amount of expected cash flow to look for, for a first time investor looking to house hacking a 2-4 Multi-Family Unit?

 Evaluate the annual returns you are getting on your current investments.  Then set your target for house hacking to match or exceed those investments.  Preferably exceed.