In this episode of Whiteboard Wednesday, host Cody and guest Christian Osgood answer viewer questions about real‑estate investing. They explain how to separate the roles of real‑estate agent and multifamily investor, emphasizing the need to wear distinct “hats” and to use commissions earned from agency work to fund investment deals. They discuss structuring partnerships when one party provides capital and the other provides sweat equity, covering manager‑run LLCs, equity splits (e.g., 70/30, 50/50), buyout provisions, and the importance of clear objectives and legal documentation. The duo outlines practical ways to locate hard‑money lenders—online searches, local real‑estate meetups, and platforms like BiggerPockets. They address when it makes sense to give up equity versus using debt, noting that debt is cheaper long‑term but requires sufficient cash flow. Finally, they compare investing in politically red versus blue states, advising investors to focus on fundamental market metrics such as population and income growth, rent‑control risk, eviction timelines, and overall demand rather than party affiliation. Throughout, the tone is conversational, instructional, and cautionary, aimed at aspiring and early‑stage real‑estate investors.
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Hey YouTube, Cody, and I've got Christian here today for this week's Whiteboard Wednesday where we answer all of your questions that you throw in the comment section below. To jump right into it, we've got question number 1 from—
this is from Eric Daniel. Hey Cody, I have a question. My name is Eric, I just turned 20 with a real estate license and am moving back home from college to do real estate.
Okay.
I was wondering how you pair or if you're still practicing, being a real estate agent alongside investing in multifamily. So he's just looking for the balance of how do you manage being an agent and an investor at the same time.
Okay, well, you need to put on your different hats when you want to be in those roles. When you're looking to be an investor, you're calling to invest in real estate, you're meeting with investors, you're meeting with property owners. When you want to earn money Turns out earning money actually helps grow a business. A lot. A lot. You can't just do this thing all on debt. It's very difficult. You need to go meet with clients. And when those clients, when you're making those phone calls for them, if you find a stellar deal, you don't just go buy that deal. You are helping out a client. You're representing them. You have the realtor or the broker or the real estate agent hat on. Some of those are synonymous depending on where you're at. You have to have that role for that period of time. If you say you're going to help them buy a 12-plex and you find a great seller-financed 12-plex, help them buy it. And then when you earn your commission, now you can put on the investor hat and go reinvest that commission. But separate the two. I've seen too many people go out there and then they're making those cold calls as an investor. And when it doesn't quite meet their investor metrics, they try and list it. Don't be that person.
I've seen them take it a step further and go, hey, I want to wholesale it. And they talk about, oh, is there enough on the deal? Well, by the way, I'm also an investor. This is what I'm looking to do. Oh, and I can broker the deal. And it just makes a messy call and kills your relationship.
And above and beyond all else, that's a rookie mistake. Don't be that person.
Have a clear objective going into every meeting and a clear takeaway going out. Don't compromise on your objective. Second question. This is from— sorry, from Zoe. Hey guys, I got another question. Wondering if you could help me out. I have someone who wants to invest in real estate with me. They have $200K to invest. This will be their first rental. So Zoe sees himself doing most of the work, finding the property, managing the deal.
Okay.
Getting going. The question is, how would you structure a deal like this where someone else is bringing in the capital, they're doing the work? It looks like they also need Zoe's lendability right now.
Awesome. Well, you've got something that I don't. You're lendable. Congratulations. I'm working on that piece. You've got someone with money, you've known them probably for a little bit, and you're willing to put in the work. That's a great place to be because when you don't have the capital, work for it, right? It's like a different form of a job. Well, it depends how you want to structure it. Who wants to be in control? You need to lay out what the partnership wants to look like and then get some legal docs prepped by an attorney. That will illustrate that. I've been in positions where I needed money and I was willing to put in the work, and I've structured some of those deals where I kept almost up to 70% and they fronted all the money. I've had deals where I've kept 50% and they fronted the money, and I have buyouts to get rid of them because I don't want to be partnered with a whole bunch of people forever. I want it to just be me or Christian and I, and that's it. And so I structure buyouts if I'm willing to give that up. But depending on who it is to you, what you're looking to accomplish. Just lay out what you're looking for. Who wants to be in control? There's these things called manager-run LLCs where one person can be on the bank accounts. They can be running everything. Not everybody has to see all the bank statements, but there has to be a level of trust. So I would do a self-audit of where you two are at today, what you're looking to accomplish, decide whether it's going to be a long-term or short-term play. And then sit down with an attorney to structure out whatever you want. Because at the end of the day, if you can think it, you can do it.
Excellent insight, Cody.
We've got 2 questions from Kyle Hensley. Number 1, where do you meet hard money lenders?
Hard money lenders. So like most relationships, you can find them online. They tend to advertise. So if you are looking for hard money lenders, a good way to start is type in your zip code, look for someone local. They're also at a lot of real estate events. You'll have brokers, owners, lenders are your main players when you're out in the market. They are trying to place capital. So they're going to be pretty easy to find. They're usually pretty vocal on what they're trying to do. I would recommend starting by doing a Google search and then just show up at your local real estate investors meetings. There's a lot of them out there. You can also Google for those. There's meetups. BiggerPockets does stuff. But find where investors collect, money collects there too.
Another question from Kyle. Do you ever give up equity to make a deal work?
Equity to make a deal work? Absolutely. Absolutely. So especially when we're raising a down payment, some of the deals that we do, we have no money of our own in. We find the deal and that deal is how we negotiate our equity. We're going to run the whole property. We're going to manage it. We're going to find the deal. We're going to put everything together. We're doing all the work. But if we're not putting in the starting capital, that needs to be backed by something. That can be backed by equity in the LLC, equity in the property. It can be secured by a mortgage. There's lots of ways to do it.
But I mean, you got to figure out the first thing first is you have a deal. Then you need to go get the debt. And if you can't get the debt, you don't need the equity. The piece you got to juggle in real estate is if a deal doesn't cash flow a lot, you can't just stack it with a ton of debt. So you couldn't just structure all the money that you're bringing in for the down payment as debt because you'd be negative cash flow. If there's no cash flow, you still have to make your debt payments. If it's structured as equity, I mean, a partner can't just make you pay them money from an investment that they're like, if there's no money, there's no money, right? Elon Musk said, in order to have stuff, you have to make stuff. If there's no money, there's no money to give out to the partners. So debt costs you more today and equity typically costs you more in the future in the form of a buyout. So we have structured some of the money in as equity, but that's the main piece.
You do debt first when you can, typically, because it's going to cost you a lot less in the future.
But you still gotta be able to make that mortgage payment or what's it for? Because you lose the property.
Exactly. So structure it how you see fit. But in answer to your question, absolutely, that is something that we are willing to give up to do a deal. I'm gonna add one piece to that.
Okay.
Cody and I don't syndicate. A lot of syndicators will take a 15-20% ownership stake in a deal. You do want as much equity as you can get. So if you're structuring a deal and you're gonna be doing most of the work, make sure there is enough equity available for you to do the deal. Don't give away all of the equity in your deal.
And what's unit count, right? I mean, if you have 1,000 units and you own 10% of it, that's great. But if I have 100 units and I own 100%, it's relatively the same thing except for I have a lot less work to manage all said assets and I don't have to pay as much people. I mean, if you just want to scale to the moon, that's the way you do it. But if you just want to build a solid business that takes care of your why, which could be your family, it could be your friends' families, Could be the community you grew up in. You don't just have to go syndicate. You can do this thing on your own or with 1 or 2 people. So we've got one last question from Gigi. I just moved to a blue state. I hear some investors say be careful, only invest in red states. My single-family homes are in red states and that's where I used to live, but now I'm in the state of Illinois. So with that said, What's your recommendation as far as investing in blue states for multifamily?
I do have thoughts on this. However, the punchline is there's property everywhere and someone has to own that property. And a good deal is a good deal. You do have to factor for different risk factors. A lot of the blue states were hit heavier in COVID. There's more non-pays, there's more legal to go through to try to get a tenant out, to try to raise rents. Places with rent control are typically blue states. There are ways to be really profitable with rent control, but it has to be factored for. So really, it just needs to be accounted for in your analysis. As long as you analyze for it, someone has to own that real estate. A great deal is a great deal everywhere. It just has to be a little bit better if you're competing with more factors. If it's harder to raise rent, you have to add time to raise rent.
And The beauty of this, I mean, if you're just looking at apples to apples, right, everybody's playing with the same goalposts. It's not like your neighbor is going to be investing with different goalposts than you are. They may find a better deal, but at the end of the day, if you're buying in a specific location, everybody has the same set of rules. And with that comes levels of opportunity and difficulty. Everybody's playing with it, though, and you can't just go around the goalposts. If you want to score, you have to shoot in between. So you're thinking about this like a game, which real estate is, everybody has the same rules as far as legal. When you're looking at this from a small investor standpoint, if the eviction process is 6 months, it's 6 months. That's going to have a hindrance on certain prices going above other places. So you're going to get benefits, but you got to consider, you know, you could see difficulty with every opportunity or you could see opportunity and every difficulty, and you have to pick which type of person you want to be.
Cody, we have people who invest in red and blue states, and that is a factor that you look at. But if we're looking at locations, what are the main things that we're going to consider before we worry if it's politically red or blue?
Well, I mean, I don't really buy based on color. You know, I put on those 3D glasses where it's red and blue, so you see everything. But when I'm looking at an investment market, I'm looking for, number one, it needs to have positive growth, not just in population. Population, but in income. I want to see that people are making money because the reality is if people aren't happy where they live, then they're probably not going to live there forever. And if they don't have a lot of extra money at the end of every month, you know, they have too much month at the end of their money, that gets pretty brutal. And then they're not happy, they're not inclined to live there anymore. So I want to look where people are happy to live, they're making more money than they used to, The populations are going up. That— those are my main metrics. Yeah.
And there's a lot of ways to overanalyze it. I mean, you can add a lot of factors in and you should be aware of a lot of factors in your market. However, those are the main things. If you keep it really simple, you rent to people who need a place to live. If people want to live there and people are moving there, you're probably looking at a pretty good market. And there's a lot of blue states. And to answer your question, There's blue areas, Seattle, California, Oregon. They're tougher to invest in, sure, politically, but people want to live there and rent has gone up and up and up and up and values have gone up and up and up and up. So if you can find a great deal in those markets, the politics don't matter. There's money to be made there.
Yeah. So that's it for today's 5 Whiteboard Wednesday questions. If you want to see something next week, put them in the comments below. And as always, we're one text message away. If you watch some of those other videos, we'll see you guys next time.
