Commercial realtor Fred Crouch breaks down how beginners can take their first smart step into real estate — without getting burned. Built for SMB owners and first-time investors ready to build long-term wealth.
GROWTH PILLAR: Real Estate
WHO THIS IS FOR: SMB owners, solopreneurs, corporate escapees, and leaders ready to put their money to work in real estate.
WHAT THEY'LL GAIN: Actionable strategies for starting in real estate, hard-won lessons on avoiding common scams, and real frameworks for building a property portfolio over time.
Most people overcomplicate real estate. Fred Crouch keeps it simple.
Fred is a commercial realtor and the founder of Gentry Real Estate Services and Gentry Learning. He works with first-time investors and seasoned buyers to help them make smarter property decisions. On this episode of Knack 4 Business, Fred sits down with hosts Bernie Franzgrote and Wayne Pratt to talk about what it actually takes to start investing in real estate — and what to watch out for.
What they cover:
Fred starts with the oldest rule in investing: if it sounds too good to be true, it probably is. He talks about why chasing high returns often leads to loss — and how too many first-time investors end up holding a sixth or seventh mortgage on a project gone sideways.
He breaks down the difference between passive investing — think REITs and real estate shares — and active investing, where you own and manage tangible property. For most beginners, Fred recommends starting with something you can drive past. Something real.
Fred also unpacks co-tenancy agreements — one of the most practical tools for building a portfolio faster without going it alone. Pooling resources with like-minded investors lets you get into the market now instead of spending years playing catch-up with rising prices.
The long game is the point. Fred uses a simple example: buy one property at 25 or 30 years old, hold it, rent it out, and let natural appreciation do the work. By retirement, that single investment could be worth double — paid for largely by your tenants.
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K4B ACKNOWLEDGEMENTS
A big thank you to the people who make Knack 4 Business possible:
Carl Richards — Podcast Solutions Made Simple
Fred Crouch — Property Wizard
Jovan Strika — @Hive
Melanie Webber — Business Partner
Bernie (00:05)
Fred is part of Gentry Learning, Gentry Real Estate, Gentrification in a Good Way.
He does things with the real estate and investing that make you proud to be part of that community. And Fred, welcome to the show, this is a really a live conversation about what's going on in the real estate market.
Fred. ⁓
Fred (00:28)
Thank
you so much for having me on Bernie really and Wayne great to sit down and converse with the 2 of you again what an awesome do you are and thank you for what it is you do and thank you for having me on the show you know when it comes to real estate. I probably talk your ear off but at the end of the day I'm very happy to be here with you and to offer this service to your listeners.
Bernie (00:53)
So Fred, you've got a couple things on the go. You have a podcast, you have a course, and ⁓ the purpose behind all that is to offer people to understand the opportunities that are available to them that you can provide. Or if they're halfway around the globe, what to look for. So tell us about the podcast and the course. What's the scoop on that?
Fred (01:17)
Well, thanks for bringing that up. ⁓ First of all, I have to acknowledge that Bernie is my co-host on the Property Wizard podcast. And on that podcast, we talk about all things real estate related. And ⁓ as a supplementary to that is the Nack for Business podcast. And I guess this is my third or fourth time. And the two of you have been awesome.
helping me promote both my podcast and our learning platform, Gentry Learning. The entire podcast and Gentry Learning are geared towards and offer courses and advice for those of you that have an interest in real estate investing and even those that have a vast amount of experience, but it's primarily geared for those who have little to no real estate investing.
experience. So this is a great platform to promote that we have a number of courses, they're available online. You can listen to our podcasts, they're available all over the place. But at the end of the day, we talk real estate, and this isn't like high fluten, you know, type of real estate investing.
If you have a curiosity or if you have a desire to learn more about real estate investing, if you would like to take those first steps, then you have to listen to the Property Wizard because between that and the accompanying course, you'll learn everything you need to do to take that first step. And it's that first step that is so very, important.
Bernie (03:06)
So Fred, I'm going to have a few quick fire questions coming at you. Just like it'll help the audience understand the purpose of the whole thing. A lot of times people will see stuff on social media and say, hey, quick, easy money. Or perhaps they'll have someone come knocking on their door and say, hey, I've got a deal. It's basically all open and opening up the trench coat saying you want to buy a cheap watch back in the day.
What is the way to figure out, I'm dealing with someone who's authentic and we're talking about real estate? What's the big first clue? Or red flag.
Fred (03:40)
Well, the very first thing, and this is an old andage that holds true for so many different things. If it sounds too good to be true, then it probably is. There are certain things that I always tell my neophyte investor clients and my listeners. And there's nothing wrong with investing in arms like.
property. And by that, mean, maybe getting involved with a real estate investment trust, or you're buying a share or you're buying shares in a company that invests in several different entities. There's nothing wrong with that. Unfortunately, most of our listeners either don't have the ability or just aren't interested in that type of investment. And you and I had spoken about this before, about being
passive investor, or being an active investor. And it's one of the first lessons and things we talk about during our education program. You know, if you want to be a passive investor, then maybe that's the way you should go buy shares of a company that invests in real estate. There's nothing wrong with that.
You're leaving all the decisions completely in the hands of the directors and the people that operate that company. But you want to invest in those companies that have proven track records. Or maybe you want to invest in those companies that hold a special interest to you. You know, there are companies out there that trade only in industrial condominiums. Others that trade in residential apartments. You know, others that trade in just land, land holdings.
So there are as many different and varied investment mechanisms if you want a passive investment as you can imagine. Now, that isn't for everybody. Some people want to roll up their sleeves. They want to get involved. They want to be the people making that type of investment. So the first thing you need to do is, again, keeping in mind, if it sounds too good to be true, it probably is.
You need to surround yourself with good, qualified people. And there's a list of people you should get. You should seek legal advice, not just when or when you're submitting an offer or even to close it. But mean, speak to somebody about what it is you want to do. A lawyer is a good start. Your accountant is another good start. There may be certain tax advantages that you can take advantage of. ⁓
given your current situation. And I don't like generalizing, but at the end of the day, everybody's financial situation is different. And there may be an advantage to holding or buying a company personally versus, and we talk about this a great deal, rather than maybe incorporating that holding. So there could be tax advantages for you too. So surround yourself by a good group of people and also get yourself a good realtor.
I'm talking about an investment realtor. I'm talking about somebody that knows the market you want to invest in and is willing to work with you. And a lot of realtors don't necessarily have the patience, you know, but find someone that's willing to grow with you or someone who understands or has empathy for your situation and is willing to answer the questions for you that are inevitably going to come up. No one is born with, you know,
ultimate knowledge of investing in real estate. This isn't so many other things. You know, I'm very fond of saying experience is your best teacher. And I'm here today to share my experiences to help you along so that maybe your journey's a little shorter. You can get to the point where maybe, you know, I am or a seasoned investor is maybe a little faster. So at the end of the day, surround yourself with people that have the experience.
A good place to start with that are referrals. If you know somebody that owns or somebody that actually has a portfolio already, then talk to them. Who do you use as a lawyer? Who's your realtor? Because referrals can save you not just a lot of time, but it kind skips over the possibility that you're getting involved with something that maybe isn't exactly kosher.
maybe isn't as legit as it should be because these people have been referred to you because of their past experience with working with those people. And obviously they're not going to refer somebody to you where the experience is being less than satisfactory. So surround yourself by good people. I definitely would not subscribe to anything online. And one of the key points, and I'm a big advocate of this, particularly when you're first starting, I like
tactile or tangible real estate investments. I tell my investors, I say, okay, you know, what you want to do is you want to be able to drive past 123 Main Street and have and feel the sense of ownership that goes with that. You want to be able to get out of your car, now put your hand on the building and say, this is my property. This is something I've invested in. Whether it's with you,
or a group, it doesn't matter. I don't believe for the neophyte investor anyways, in spending an incredible amount of money or investing, particularly if it's your first property in some concept. So many people in so many situations have got burned because they've been promised outrageous returns. And this goes back to our first point. If it sounds too good to be true, chances are
I'd suggest 99 % of the time it is. So when somebody comes to your door, as Bernie, you pointed out, or you hear that someone is offering, geez, a 25 % return in three months, you know what? Chances are you're investing in air. Now, we don't have to get into the technicalities of that because
We can start talking about condominium apartments and that's technically what you're doing. You're investing in air and a piece of air, but that's neither here or there. And I don't want to convolute the issue. The point that I, yeah. Well, I did. It's just a point worth mentioning because it, it, it's a point of that's how condominiums were created. That's how the statute, you know, to create condominiums was created. It allowed people to own a piece of air because usually it was
Bernie (09:39)
though, Fred.
Fred (09:57)
You know, the old you'd have a survey and apply to land, but I'm getting away from the from the topic. So I've heard so many stories about people being offered incredible rates of return and saying it's fully secure. We're going to have a mortgage on this piece of development property. It's OK, all right, well, great. So the investor is left with the feeling that all right, yeah, I'm taking and I'm going to invest it with this group or this.
you know, on with this property. And there may be naysayers and there may be people that question it. And it says, no, no, no, it's secure. It's secure by a mortgage on this property. Wow. Great. You think right in downtown Toronto or downtown Washington or downtown, it doesn't matter, Orlando can be anywhere. So you hear these stories, incredible rates of return. But then what happens in so many of these cases, the project
goes south. But the investor says, I'm secure. I have a mortgage on that property. But what they don't realize is that, yeah, you have a mortgage. But it's not a first mortgage, a second mortgage, third mortgage, or fourth mortgage. It's like a sixth, seventh, eighth mortgage. And what people just so it's as clear as mud, what distinguishes a first from a second, second from a third, and on and
when it comes to mortgages is nothing more than the time sequence. That's all it is. It's the time sequence. It's the first charge to be registered on title is the first mortgage. The second one is the second mortgage. And it goes on and on and on and on. So it could be that that project was oversubscribed or they're trying to raise money. And it's next to a
It's comparable to, in my opinion, to like a Ponzi scheme. Now, maybe that wasn't the intent. Maybe at the end of the day, you know, everything will hold true and everybody will be paid. But don't get yourself in that situation. Don't. You don't need to. And if you want to invest in real estate, invest in bricks and mortar real estate. That is the I think the one of the
strongest pieces of advice that I can give. So you don't have to worry. You don't have to be scared about taking that first step that, know, you know, I'm going to lose my shirt. If you have the right group around you, if you have the right support and you buy the right property,
Chances are that real estate investment will do you like will return in spades what it was you originally invested in. And just let's look at a very, simple, simple scenario.
Let's say you're a 25 or 30 year old investor and you're listening to this podcast right now. And you're thinking, boy, I'd really like to become a real estate magnate. I really want to invest in real estate. But let's say a triplex, maybe a six unit or a small strip mall are just, it's just not possible. And let's say you want to buy it yourself because there are all sorts of different ways that we can put these things together so that you can.
own a small strip plaza or a large apartment building. that's a topic for another day. But let's say you're always dreaming about buying a piece of real estate, but all you have is X number of dollars. Let's say you just don't quite have enough. All you can afford is maybe a row unit or a townhouse or an apartment condominium. And that's not suggesting that they're all priced
in an affordable range, but it's a good entry point. So earlier, Wayne, you and I were talking about, you know, relative issues about how much people used to get paid and what real estate was worth. We don't have to repeat that portion of the conversation, but at the end of the day, let's say you buy a piece of property for. Doesn't matter, 350, 400 thousand dollars, you have 10 percent down.
Maybe you buy something a little less and there's opportunities to invest at all levels. And maybe that's all you ever do. Maybe as a young man, you buy this one property. Well, you know what I know from experience that what ends up happening is that time catches up to you really quickly. You know, before you know it, you know, you're 40, then you're 50.
And then 16, now maybe you're looking forward to retirement. Well, that single piece of property that you bought probably isn't worth the $300,000 you paid for it anymore. By this time, it's paid for because you've been successful in finding a tenant for it.
The market, what we call natural appreciation, is appreciated to the point where that $300,000 property might be worth, let's be really conservative and save $550,000 or $600,000. When it's time to retire, that will make a monumental difference in your retirement plans. And that's one property bought at one point in time 30 or 40 years previous. That's the magic of real estate.
That's all you have to do. And the best part about it is that someone else paid for it. You rented it. So these are all things to kind of keep in mind. And I mean, we could go on and on and on about, you know, like just investing in real estate, but it's in its simplest terms. That's all it takes. So yes, it's great to dream and have plans and you want to buy this and you want to buy that and how you can you can
take what money you have and really diversify. ⁓ You know, there are so many things that we can talk about. ⁓ Again, is very much I think, ⁓ you know, it's a topic that we can continually talk about, but that's the magic of it. So avoid to go back to question, avoid, you know, fly by night any type of real estate scheme.
If it sounds too good to be true, it probably is. Invest in tactile and real investments.
Bernie (15:54)
So I'm taking it from this conversation ⁓ that one, ⁓ it's a long-term goal. You can move the chess pieces around and can build from each of them. It's a long-term goal. If it's a high rate of return, there's probably a high rate of risk. Either it's not true and someone's taking your money and leaving.
or there's a higher transaction happening itself because then there's a lot of volatility. Usually that's where you see a high rate of return or it's part of a Ponzi scheme, which case you're back to the first ⁓ point. A lot of people have, there's a strategy in approaching real estate. Some people have purchased a house and rented it out and that's kind of, or
a split, a duplex or triplex and something like that. It's helping offset. So it's a small strategy. That's residential. Is there a strategy then for, say you want to grow and assuming things are all positive that your business operation is running smooth, you have your accountant, you have your lawyer that's helping support you.
Is there a way to kind of build leapfrog and is that also exponential in growth? If you're looking to do more real estate, not necessarily, you don't want to be handling the mops and maybe managing the property management. You know, that's where they come maybe to a person like yourself, but is that a strategy to envision and grow with and what would the kind of growth time cycle would be? that every five, every 10 years or what?
Fred (17:32)
Well, thank you for the question. I think there are a couple of different points that need to be made here. It all depends on what your investment strategy is. If you are truly a solo investor, then at the end of the day, it'll be a situation where you invest in your first property.
Once you built up enough equity that you may or may not be able to withdraw a certain amount of your growth under that initial property to buy another and add that to your future savings, that's one strategy, but it does take time. So the point that I was trying to make earlier is that it's wonderful to have the aspirations to own
multiple properties. It doesn't have to be that way. And you can have a successful real estate investment by just buying one. If you want to buy another one, well, it's very much the same as how you bought your first. What you do is you save up enough money so that you've got enough of a down payment so that you can buy another property, add to what you're able to save. And if you're in a position and your property is appreciated,
even if it's just appreciated because you've paid down the principal on your mortgage, you may be able to draw some of that money back out and add it to what you've been able to save. That investment strategy takes time. It takes time. It's a buy and hold strategy, which, that is bottom line, that is a long term investment strategy. So when you're doing something like that, you may be on a three to five year cycle.
It may take you three to five years to build up enough of a down payment and for the property that you initially bought to increase in value enough through natural appreciation so that you can draw some money out, use that money to buy something else. So that is probably the longest when it comes to investment strategies are concerned. That's the timeline. So if you want to buy a property completely on your own,
You can do it that way. The other strategy and one thing that I have to add to that is whether we're talking about natural appreciation or otherwise. And again, we, you know, without really getting into the dynamics about it, I'm referencing natural appreciation as opposed to forced appreciation. Forced appreciation is what you do to improve the property to make the property become more valued.
more valuable. What I'm suggesting through natural appreciation, that is, it ebbs and flows according to the market conditions. So that's why I keep on emphasizing natural ⁓ appreciation. So the other strategy that you can do is, let's say you've got X number of dollars. we again, we were speaking earlier with Wayne about how it's difficult.
for young persons to save money. It's not that they can't, you that you have to prioritize and you may not be able to save money at a rate that actually catches up with what it is you need to put down on the property. And by that, mean, you want to buy a $400,000 property, you need $40,000 down.
You're able to save at a very aggressive rate of $20,000 a year. It may take you two years to save up the $40,000. And that's without borrowing it from friends, family, that type of thing. During that same two year period of time, that $400,000 may very much become $500,000. So all of a sudden you need to come up with another like 20%. I mean, it's, it's a sizable amount of money. So you're playing catch up all throughout that.
So having said that, one of the things to do and what we've done very successfully is we've put together co-tenancy ⁓ agreements or partnerships. Now co-tenancy is not what it sounds like. When you use the term co-tenancy, immediately people think of shared accommodation, your co-tenants in an apartment.
Cotentancy refers to a legal, it's a legal term. And it's cotentancy versus tenants in common. It's again, and this is not the show for talking about the different types of ownership. But in this particular case, what you're doing is you're essentially putting together, you may know someone, you may be part of an investment club or investors club, you may have a group of friends and all of you have 20 or $30,000.
and you put it together and you buy a property.
Now the key and the magic behind that is that it allows you to diversify your portfolio and increase your portfolio exponentially. Because while you may need X number of dollars and it's going to take you X number of years to save that amount of money, you may be able to buy something currently with the 20, 25, 30 or $40,000 you have right now. If you find like-minded
individuals who are in the same type of position but want to buy a property. So what that means is that the entire relationship is guided by what's called a co-tenancy agreement. And the co-tenancy agreement, ⁓ well-written ones, deal with a whole host of possible scenarios and situations. But anything I can almost guarantee that could happen is addressed.
in a co-tenancy agreement. And one of the key points about a co-tenancy agreement is that, well, there isn't a hard division. Let's say you buy a six unit. It's not like you're buying a apartment in that six unit building. Everyone owns the building. But your share, which is based on a percentage weighted scale, which like so many other investments, know, is the status quo.
Your share is transferable. ⁓ You can sell that share to other individuals, but should something happen to you, should you pass away, it's not like you buy a single family home with your spouse in what's called like a joint tenancy situation where immediately your share or interest in that property reverts back to the surviving.
member or partner. It's not like that at all. So what happens if you do pass away and you're part of a co-tenancy, that share is essentially transferred to the estate. So you never lose that interest in it. So that, I think, is one of the best investment strategies to increase your portfolio faster. And in that case, it may not take you that long to save the amount of money. And it doesn't.
say there's nothing written that says you may start off with $40,000, you get involved with a co-tenancy that requires a $25,000 down payment, you're able to turn around and or $25,000 contribution, not a down payment. Then it may only take you another six months or a year to take the remnant or what you have left and increase that back up to 30 or $40,000, then you can get into another.
co-tenancy situation. So it allows you to turn around and exponentially expand your portfolio. And there's a lot of benefits to that. You know, it's one of the surefire ways when you have a portfolio of real estate, by diversifying it, you really shelter yourself about or from some swings in the market. Like really.
Like, you you can just imagine if all your holdings were in commercial or office buildings and something, you know, God forbid it ever happened again. But COVID hits and the value of these commercial office buildings plummets. If you have all your holdings in several commercial office buildings, chances are you're not going to be a very happy camper. Chances are you're going to lose a sizable portion of your investment.
However, let's say you own a small office building, but you also happen to own maybe a small retail center, and you also happen to own maybe a fourplex, an individual condominium. If you have a diversified portfolio, that is the best way to turn around and protect yourself from market trends. By far easiest. It's not really rocket science, but the matter of how to get there is really the key. Does that answer your question?
Bernie (26:16)
It does. And Fred, you know what? ⁓ We're getting close to a close and I know there's
lots more to talk about and a lot of different approaches. Quick question, how to reach you and how do they find your podcast and your course?
Fred (26:33)
You can listen to the Property Wizard podcast on any of the major platforms. Just type in Property Wizard and we should come up. That's number one. ⁓ People, if you have any questions at all, feel free to email me. Fred, F-R-E-D, just like it sounds, at Gentry Res. Gentry is G-E-N-T-R-Y-R-E-S.
that short form for real estate services. So again, Fred at gentry res.com.
Bernie (27:02)
Fred, I want to say thank you so much for being a guest here today and my cohost, Wayne Pratt, and you the Knack 4 Business listeners. So folks, what does Fred do? ⁓ He can provide you, if you're looking for a place to invest in real estate, that's kind of the core of what he can do.
So Fred helps you work through what's kind of a good real estate to be in based on who you are, where you are and where it is. So he has expertise, he knows how to value the property, a lot of different elements about.
Fred (27:34)
You
Bernie (27:37)
properties and what is out there and what you need to do to be established and operating in a safe and healthy manner. Because it's an investment, it's a long-term investment, it's a long-term relationship, and you have an accountant and a lawyer as part of that whole package. And you know what? That's the goal is for success. And that's what ⁓ Fred is gunning for.
Fred (28:01)
Anytime, Bernie. Absolute pleasure to sit down and have a discussion, real estate related or otherwise, with both you and Wayne. Thanks for having me on again.
Bernie (28:10)
Our pleasure Fred, not a problem.
Fred (28:12)
And if I can leave you with this, if there are no problems, Bernie.
Bernie (28:15)
There are no opportunities.
Fred (28:17)
Well said.