I Owned Six Homes and Lost It All With Real Estate Investing

Today’s guest post is courtesy of Joseph Hogue, a man who once dreamed of becoming a real estate mogul and fell flat on his face.

Joseph previously worked as an equity analyst and an economist before realizing being rich is no substitute for being happy. He now runs My Stock Market Basics and four additional websites in the personal finance and crowdfunding niche, making more money than he ever did at a 9-to-5 job, and loves building his work from home business.

Let’s hear what he did and how we did it, and let’s try our best not to follow in his footsteps!

I Owned Six Homes and Lost It All With Real Estate Investing

 

Avoid my real estate investing mistakes to build your own portfolio of rental properties for long-term returns

 

I started my professional career in real estate and dreamed of one day being the next Sam Zell or Donald Trump. I’ve managed my own portfolio of rental properties and have worked as an analyst on real estate investment trusts (REITs).

So real estate has always held a special place in my portfolio, but not always in a good way.

That’s why reading the four rules WCI followed to get wealthy brought back some painful memories.

Real estate is the perfect example of ‘owning stuff’. It’s one of those hard assets that keeps its value well against inflation and there is a limited supply. They’re not making much more land these days.

But real estate investing isn’t all it’s cracked up to be. It’s not the passive income miracle you hear about on 3 am infomercials and it’s not the get-rich-quick strategy many thought it to be before the housing bubble burst.

My experience with real estate investing includes some of the biggest mistakes you can make but also a lot of lessons learned.

 

lower ninth ward

 

Getting Started in Real Estate Investing

 

I landed an internship as a commercial real estate agent during my third year of college. I worked 15 hours a week writing up investment prospectus for properties and finding investors for a new business park the company was developing.

I loved the idea of developing a raw piece of land or an under-used building into a money-making asset. Real estate seemed like a cash machine, the perfect mix of near-term cash flow and long-term wealth through property appreciation.

It was 2003 and the residential market was just starting to heat up so I switched to the rental market after my internship. I was starting on less than $30,000 I had saved while in the Marine Corps and through college so the lower price of properties in the single-family market was a big attraction.

I was able to buy two houses almost immediately. I bought a couple of foreclosures on the cheap in a neighborhood that most investors were avoiding. It would be one of my many mistakes, but I was only thinking about how fast I could build my portfolio.

It took less than six months to remodel the houses and refinance them to cash out and buy another property. Within a couple of years, I built my portfolio up to five rental properties plus my own home.

Property prices were booming and nothing, nothing could go wrong with my real estate strategy.

My Biggest Real Estate Mistakes

 

My biggest real estate mistake is a trap many fall into and one created by the get-rich books and promoters. These books present real estate as a passive income source where all you do is finance a portfolio of rental properties and wait for the tenants to pay off your mortgage.

The truth is that renting single-family houses is about as far from passive income as you can get.

I had five properties at the peak of my real estate empire, four single-family houses and one duplex. From finding tenants to maintenance and management, I was working at least 20 hours a week on top of my full-time job.

The problem is that unless you live in a larger city, it’s difficult finding property management for small, single-family portfolios. Most professional managers don’t want the hassle of single-family rentals but will make a concession if you’ve got a larger portfolio. I found a couple of managers that would consider my rentals but only at a fee of 15% on gross rents, well over what I could afford given the properties’ cash flow.

Contract DiagnosticsSpending so much time between managing my properties and my day job, it didn’t take long to burn out. I started avoiding tenants and didn’t start eviction proceedings as soon as I should have after non-payment. Even after a tenant moved out, it would be a month or two before I spent the week necessary to clean up the house and get it back on the market.

When you plan your real estate empire, it’s a good idea to estimate a vacancy rate of at least 10% or more depending on your region. That gives you some financial flexibility and helps you understand if the cash flow will be enough to cover expenses.

As I started neglecting my rentals, my vacancy rate increased well beyond what I had estimated. With six rentals, I almost always had at least one vacant in any given month. That meant pulling money out of savings and other investments to keep up the mortgages.

I started selling my properties in 2006 but the damage was already done. I had spent through most of my savings and could only sell a few properties for the mortgage value when the housing bubble burst.

I was broke and my dream of being the next real estate mogul was being foreclosed.

 

 

How to Invest in Real Estate without Going Broke

 

I still own rental properties and love real estate as a long-term investment but there are a lot of traps you have to avoid if you’re going to make real estate work for you.

Some of these traps can be avoided with a little planning, others will take more diligence. All will help you produce a consistent and mostly hassle-free return for decades.

 

  • Consider joining or starting a real estate investment group of investors, contractors, property managers and real estate lawyers. It’s important to get people from different fields to get that breadth of experience. Some groups pool their money formally, but the easiest route is just to exchange ideas and help each other out with services.
  • Start slow with your real estate empire. Buy no more than a couple of properties your first couple of years to ease yourself into the time required to manage rentals. Consider buying a tri-plex or four-plex instead of single-family properties.
  • Be extremely conservative when estimating your costs before you buy a property. Research vacancy and rental rates for the neighborhood. Talk to other investors about costs for hiring out maintenance and management. It’s ok to manage your own properties and do the maintenance yourself but consider estimating these costs into your initial plan just in case you need to pay them out.
  • Only buy houses and in neighborhoods in which you would want to live. If things don’t go as planned, you may need to live in one of your rentals.
  • Financing can be your friend in real estate investing and help boost returns but it will also increase your monthly expenses and leave you scrambling to make payments. Try paying at least 20% of the purchase in cash to give yourself some financial flexibility and lower your mortgage payments.

 

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These aren’t the only rules you’ll need to follow to be successful in real estate investing but they’re the biggest traps I’ve seen investors make. Understand that you don’t need a massive portfolio of houses to enjoy great long-term returns. Buy a couple of rentals, enjoy the tax benefits of depreciation, and count on long-term equity as the biggest chunk of your return.

I hope learning from my real estate investing mistakes can help you be a better investor. Real estate can be an excellent diversifier for a stock-bond portfolio and one of the best wealth creators around but it can also be a constant headache. Following a few simple rules and avoiding the biggest traps will help you enjoy the long-term returns from appreciation and protect you from short-term risks. Few assets have created as much generational wealth as real estate and it can be a key component of your portfolio.

 

[PoF: To me, the lesson here is not that real estate investing is a mistake, although Joseph’s haphazard approach and poor timing made it difficult for him. Rather, the lesson is to do your homework before making any investment or beginning any type of side gig that requires your money and time.

I don’t have that kind of time, so my real estate investments have been in an REIT fund and Crowdfunded Real Estate.]

 

Have you had success or failure with real estate? How did you learn what you needed to know before you got started? Any additional tips to add?

 

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35 comments

  • Great advice.

    I particularly like the one that says: Buy something where you would want to live. If it makes financial sense, and it’s a place where you want to live, you increase the possibility of success.

    Thanks for the post.

    • Better2bWise

      My father owned a great number of sheriff sale/foreclosures in the 80s attached to tax credits for rehab in the inner city. Over 20 years I learned life lessons of “real” living with real estate as a landlord that some called slum lords.

      I have concluded that you must consider the social aspect of renters and their financial life as a big aspect of your risk to make any money at all. The same homes went to sheriff sale/foreclosure 30 years later. I have wondered many years the causes.

      These causes are linked to:

      1. You don’t buy the house, you are buying the class of renters and their value set. MIDDLE CLASS jobs are held mostly buy middle class value sets. If they don’t do well at the job, they probably don’t have that value set or can’t learn to adapt. The renter will care for your home with the values that they hold. Damage and social problems are handled with judgements based on values of who you are. We don’t change because of a lease/rules.

      2. Some neighborhoods don’t encounter gentrification in low income areas soon enough. With gentrification is an influx of renters with successful values. Again, society is held together by values.

      3. I agree with your mantra, if you don’t want to live there, don’t buy it. If you need to sell as a plan B before foreclosure or duress someone else has to want to buy it to save you. The property must have some worth to someone else. Low demand causes prices to sink and takes time to sell.

      4. Biggest barriers of success in low income housing are damage. Instead of cleaning, some people move to a nicer cleaner home even when it is their filth making them move. The mismanagement of leaks by plumbing or roofing and electrical leading to fire can be very costly. Lack of notification of need for maintenance causes exponentially increased cost. Kicking down doors, bullets and swat raids make damage too.

      I am interested in real estate but they won’t be my father’s homes.

      • Better2bWise

        5. Lack of payment leading to increased cost of legal fees and time for eviction process and possible damage in backlash for eviction.

        6. Payer mix exists in low income housing. Don’t rely on large market share for section 8 ever. Inspectors will treat landlords badly because they really believe the profit margin is high and they don’t like to fix cracks in the sidewalk because they are horrible human beings.

      • Claytonia A. Garrett

        Great read!

    • Thanks GrowtoRetire. Yeah, buying where I wouldn’t want to live was one of the biggest mistakes. Even if you buy several houses (obviously you couldn’t live in them all), it’s still best to buy in quality neighborhoods.

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  • My biggest real estate mistake is a trap many fall into and one created by the get-rich books and promoters.

    Back in the 1990’s I came soooo close to buying the Carleton Sheets program after watching it on TV (also likely after too many beers). I can’t remember what stopped me but I’m extremely glad I didn’t! Great post.

  • This is why real-estate scares me. The only real option I’ve ever considered is renting the house we currently live in (for the past 10 years) when we buy the bigger house following student loans being gone. We live near a big academic hospital where I work and so we have a massive influx of various trainees every July. Seems like it would be easy to rent, but stories like this one always scare me. If I get my toes wet, this is how I would do it, though.

    Otherwise, it’ll be REITs and crowd-funding for me, too!

    • There are a lot of traps but I think starting slow can help avoid most of them. I love rehabbing a run-down place. That’s a pride you don’t get with other investments.

  • That’s quite a story Joseph. I’m sorry you had such a difficult time. It’s true though they yesterday’s lessons tend to lead to tomorrow’s successes. Glad to see you have it all figured out today.

    I’ve also given real estate investing a small shot but decided it was not for me. I held my own “cash flow wise” with it. As you mention though, the effort was not passive and not at all worth the small ROI achieved.

  • Larry

    I would like to offer a more positive spin for the POF readers who might consider direct real estate investments: with due diligence it can be rewarding. First, ignore the hucksters. There is care and feeding required. After all, even one single family home is in the $100k plus range. You should expect to pay attention even if the money is borrowed. But the work is all completely within the skill set of anyone who ever bought or rented for him or herself. Second, however, the rewards are also high for prudent investors.

    My own experience was to buy five and eventually keep two rentals. Made money selling the other three but not enough to matter except that I learned from the experience my own risk tolerance. This led to my view that flips are a difficult way to make money, and long term rentals are the way to go. So, I now have one paid off property and one down to $20K or so on the mortgage. Free cash flow is now 10% of my FI number, and soon the second payoff will take me up to 20%.

    One bit of disclosure: my wife actually did virtually all the actual management over the years. She is tired of it, but I plan to pick up the responsibility from her when I retire. I guess my only point here is that these are family decisions.

    All that said, direct real estate investment on a modest scale has worked well for us.

  • Joe,
    I could have sworn I was reading my very own experience I had with real estate. When I finished Rich Dad, Poor Dad, I was pumped to be a real estate mogul. It was a good read, but a rah-rah book more than anything as it never went into the bad and the ugly. For example, it never noted that by purchasing multiple homes via a residential mortgage that I would be denied a home depot credit card because I was completely leveraged (even though the cash flow from the properties was there).

    At one point, I was in a hazmat suit cleaning out a basement full of sewage because the line backed up. It’s those precious moments in life when one finds God.

    I was stretched too thin. So I decided to sell in 2006. Like you, I am still a HUGE fan of real estate, but take a more passive approach with PeerStreet real estate crowd funding. Short-term, reasonable LTVs and 7%-8% yields. I prefer the analytical management style vs. the manual efforts these days.

    Thank you for sharing, Joe. It was a great read, all around!

  • I feel too often people highlight the successes of real estate and shove the bad under the bed, never to be spoken about. To a person that may be looking into getting started with RE, it makes it seem like it is easy and that money will just rain down once they buy a property. While I understand that real estate can be a great way for people to make some passive income, it takes a lot of sweat equity and research/ set-up to ensure the financial stability of the properties later. Thanks for being honest about the difficulties of real estate and shedding some light on what can actually go wrong.

    • Mrs. Wow, it’s like you read my mind. I think every edition of Rich Dad, Poor Dad should be accompanied by this post.

      Joseph, you did a phenomenal job being open and honest about your experience. I have made all the same mistakes and it can be difficult coming to terms. When I first lost money in real estate all I wanted to do was to point the finger of blame at someone or something else. It wasn’t until I looked internally that I was able to learn from my mistake and truly learn how to be sucessful in real estate.

      What I love about your story is that you were able to internalize and pull out the real reasons why your investments didn’t succed. You could have easily published a conclusion that real estate is too risky and that nobody should invest but you didn’t and I have a lot of respect for that. Every sucessful real estate investor I know has gone through the growing pains you did and the wisdom you put into bullet points at the end of the article is worth its weight in gold.

      Thank you!

  • lisa

    I’ve had nothing but great experiences with real estate. And I’ve never attempted to do anything like this before.
    First, I buy small condos. No larger than 400 sq ft. Second, it has to be in a decent area with a university nearby. Third, the demand must be high.
    All of that said, I have 2 condos with tenants that were there when I started and they wanted to stay. I pay an HOA fee that covers damage to the building, keeps the grounds landscaped, and pays for water/heat/sewer and trash. I pass that savings on to the tenants.
    The value of the condos has increased 65% on one in 18 mths and the second has increased by 10% in 9 mths.
    No paper cuts here . The tenants love their homes and take great care of them. I couldn’t ask for better folks.

  • Thanks for sharing your story, Joseph. It’s not easy to share the bad stories, but they’re usually more informative. And like others have said – no strategy is all roses and rainbows, including real estate.

    I’ve been investing in real estate for 15+ years full time, and I began about the same time (2003). I made some very similar mistakes (10 Unforgettable Lessons From My Loser Rental Property), and these mistakes were exposed in 2007-2010 during the downturn. The only saving grace for me was ALSO making enough positive moves to cancel out the negative ones.

    For those who want to avoid the negative sides of real estate, here are some of the biggest lessons I’ve learned:

    Pick the right location both on a macro level (region with jobs and population growth) and on a micro level (neighborhoods). There is a rough rating system of properties into A, B, C, D. The A properties are usually newer and in high-demand areas. D properties are in tough neighborhoods with crime, drugs, and difficult situations. B and C tend to have your most opportunities, especially if they’re trending up.
    Study the fundamentals of the business. Joseph alluded to this. So many people haphazardly get into real estate. Would you haphazardly get into medicine? Bad things happen without learning the fundamentals. And late-night gurus gloss over the basics in order to sell you latest and greatest techniques. Fundamentals in our trade includes market knowledge (see above), financial analysis, legal/contracts, financing, and property management. You don’t have to DO all those, but you need to understand them.
    Realize that real estate is 50% investment, 50% business. I see this as a positive. There are more opportunities to make a lot of money in entrepreneurship than pure investing. And I like the influence I have over my financial destiny. But if you want to passive behind a computer, find another avenue. There are plenty out there.
    Focus on risk mitigation. Benjamin Graham solved this with margins of safety. So, always buy at a low price and/or a positive cashflow to give yourself buffer when things don’t go as expected.

    So as not to end on a totally negative note, there are lost of positive stories in real estate. If you’re on the fence about it, read both about the highs and lows and just started with open eyes.

  • Owning real estate is as passive or as active as you want it to be. It’s your choice. I keep hearing people say it’s not passive. It’s only not passive if you plan it that way. I started out very active. I did everything the first year, so I knew what was going on. After that I began farming out the stuff to others. Now, it is completely passive and managed by a property management company while I travel all over the world. Those who think it is not passive, are the ones who try to do it all themselves and are not willing to pay for management. As in this article, when it was stated “can’t afford management.”

    I can imagine what it would be like if I tried to have a surgical practice and answer the phones myself, make the appointments myself, schedule the surgery myself, fill out the insurance papers myself, open the mail myself……… People who have a successful medical practice don’t do everything themselves. Don’t try and do the real estate that way either.

    You must pencil in the cost of management when you are buying if you want it to be passive. Go into the deal with the right plan. If you decide to do everything yourself, don’t gripe that is is not passive. If you decide to make it a passive investment, do gripe about the cost of management. Pick a plan a run with it. You must buy the property with the right management plan in place. It must pencil at a profit with what ever you chose.

    I have found that working in a group on property ownership is a way bigger pain than owning it myself.

    Dr. Cory S. Fawcett
    Prescription for Financial Success

    • I agree with Cory.
      I am currently invested in a REIT, real estate syndicate, Condo complex, apartment complex, a senior living facility, a medical office building, a surgery center, and a rental house. It took some time upfront to find the property and close on it and set up the management team, but then it is hands off. I don’t think I have spent more than a few minutes on any of these properties over the last month or two.

  • Great article! I’ve owned my first rental for a year already (In fact, I just renewed my first tenants lease yesterday into 2019) and it has been a great experience so far. But the reason it has been a great experience, is that I researched how to succeed with investing in real estate a TON before I jumped into it so I was prepared to avoid a lot of the common mistakes new investors make that the author of this article perfectly pointed out above.

    For example, I focused on finding real estate in neighborhoods that good renters would WANT to live. (Elite school district, low crime area, close freeway access, 15 minutes from downtown metro areas, parks and trails near by) Just buying in the right area probably saved me tons of headaches.
    So when I list it for rent, there is a lot of natural demand because people WANT to live there.

    I also made sure it was going to MAKE me money, because if it’s not making me money, why deal with the headaches of having renters as business partners? After owning my 2nd home as a rental for a year now, I’ve learned having a successful rental, at least for me, is all about strong cash flow. I’ll even put more money down to lower my mortage, and increase my monthly cash flow. There’s not many better feelings than making hundreds of dollars in cash at the end of each month without having to go to a job to get it. My rental cash flows me $600 a month, and pays off $200 of my mortgage balance per month. That’s an extra $800 a month without having to go to a job. That extra $800 is worth the occasional headache renters will naturally cause me. After all, what fun would I have in life if there wasn’t occasional unexpected scenarios to figure out? That’s why I’ve fallen in love with real-estate investing, but a lot of the reasons why I am having so much fun with it, is because I avoided the pitfalls listed above.

  • Brant Robinette

    You never bought the homes, the bank owned them. You weren’t really a real estate investor, you were a debt leverager.

    I buy properties in cash. My NOI is huge. My risk and workload is tiny for the income because one paid off property gives me an NOI of 8 debt leveraged properties.

    Don’t listen to the “smart” advice of book writers who worked out how to leverage debt for income, those of us who last in this industry know those people and they go broke every decade.

  • Wow Joseph. Thank you for sharing your wisdom.

    I am guessing we can all agree that Real Estate investing is one of the great vehicles to create financial freedom. I do believe that at the end of the day it is “People Business” – it does not matter what you know but who you know. Your team members will make all the difference in your journey. I too got the bug after I read “reach dad, poor dad”. I have decided to Lean, Earn, and Share my experience and knowledge on how to create passive income by blogging. My 2 biggest challenges where how to over come the fear and where to get the money in order to invest in real estate. I have found that over all people are eager to help and share their experiences – just like you did Joseph.

    Thank you very much!

    Regards,
    Levi

  • Love Chad Carson’s comment. Awesome

    Brant’s situation is similar to mine.

    Your story is a great one, and it’s a message that doesn’t get out there enough. It always concerns me how stories like this have a rough time getting read or heard, because success is usually what sells. This creates an unrealistic expectation from new real estate investors of what they might see if they try what you did. There are so many examples of successful high leverage investors in books, on podcasts, and on (gross) infomercials, that many are fooled. These stories are absent from most media. I believe that’s called selection bias. Only the stories of the successful are being represented.

    I went the cash route on my single family homes, so it simplified some of this. Less risk, but also less large reward in a huge up market. I control less real estate and my equity isn’t “working for me” However, I’d say it’s worked out well in my case.

    I found a management company that handled 20 homes for me for 10% fee, but doesn’t charge anything for placing tenants, which is golden!

  • From what I have seen there are two situations that cause the trouble. It is a choice, not the investment class.
    Make mistakes and you will get in trouble. Here are the mistakes, in my opinion:

    1. Debt. A property decline or vacancy is fine if you don’t have mortgage payments to make. I prefer to buy with cash. If that isn’t an option, at least keep debt to the lowest possible level.

    2. Lake of Good Management. Trying to do everything yourself is a ticket to disaster for most physicians (we don’t have the time).

  • Finally an honest post about real estate. There are precious few…..
    I especially like that you put your time commitment, on this site most of us arent looking to become full time RE investors, were mostly physicians.

    Like mutual funds, there is a survivor bias to real estate posting/advice. Those who fail dont really post much. Also, I cant recall seeing a book called “How I Failed at Real Estate and Never Recovered”. Which I’m sure could have been written thousands of times over. Those are the main reasons I don’t invest in RE and also like PoF says above, I don’t have the time. So far its REITs for me but I may consider crowdfunding soon although I dont like the tax drag or research required.

  • Side Hustle Landlords

    Yes, I agree, RE can be passive if you plan it out that way. We have been landlords for more than a decade. Our RE investments are side hustles for us, we have our full time jobs besides the RE. With our two rental condos we spend 5-20 hours on them per year per rental. We manage them ourselves. They honestly are passive investments for us. Lots of people say they don’t want to be landlords cause they “don’t want to be called in the middle of the night to go fix a toilet”. We have never had to fix a toilet ourselves. We have never been called in the middle of the night either. In fact, we don’t get tenant calls, they only email us once in a blue moon, usually regarding lease renewals. If anything breaks (rarely) we hire someone to fix it and the bill can be expensed in our rental tax forms.

    There were numerous things we wanted in our RE investments before deciding to purchase them. We stuck to our requirements so that our rentals can be as passive as possible.

    Most of the time we find that RE investments can go wrong due to not enough planning, age/state of rental, RE location, RE/landlord experience, over-leveraging and being overly aggressive in the number of units one wants to own in a short period of time. Think “house of cards”. We had no clue what we were doing when we first started out and we are continuing to learn everyday. We started out slowly and conservatively, learned a lot over time and family/friends who had the RE experience gave us very good suggestions. Things are good now.

    Not ALL REs appreciate only at the rate of inflation, this is an incorrect sweeping statement (usually made by people who have never invested in real estate). Leveraging OPM (the bank’s and tenants’ money) and equity appreciation can be powerful tools to build one’s wealth.

  • Gasem

    My foray was to buy a couple “condos on the beach” on St Pete Beach when I got out of the Navy in the early 90’s. The cash flow worked OK till the management decided to rehab the whole friggin shootin match. It was a year of down time. I think the management wanted to cash out some owners on the cheap because many sold out. I had no debt and was doing locums traveling around with my wife on long term contracts so my expenses were easy to cover and I reasoned they weren’t making any new beach and this place was gorgeous. Eventually things got rehabbed and rented. I held on for a few years and sold out in the gogo late 90’s at triple what I bought in for so I came out fine but it was a monster PITA when I was going through it. Homey decided to not play that.

    This kind of thing is what freaks me out about crowdsharing. Owning real estate is not like owning stock and I could easily see some building or debt I “owned” being rehabbed by someone’s brother in law giving a nice tax write off to the crowdshare owner. The cash flow to the brother in law would funge it’s way into the crowdshare’s pocket instead of mine and I get holding the bag funding a non performing asset. The crowdshare is in one state, the building is in another and I live in a third. I don’t even know where to file suit. Oh crap it was only $100K invested not worth pursuing. This may sound a little psycho but…

    This was an excellent article!

  • Thanks for sharing your story. The last downturn was very difficult indeed and I’m still holding One property that is about flat now after the recovery. I finally sold one property last year that I bought in 2005.

    Three rental properties was too much for me, so I simplified. What is your real estate portfolio now and what you plan to do?

    Sam

    • Thanks Sam. (big follower of the blog, btw). I still own a couple of rentals but have them managed professionally. It cuts into profitability but my wealth is in so many active investments that I have to outsource what I can and property management was the easiest to find good help. I’ve balanced my portfolio better with REITs and crowdfunding as well.

  • I plan on purchasing another multiplex in a desirable urban neighbourhood which I will hold for my daughter. I currently have 1 paid off multiplex and another paid off commercial office space for our practice. We plan to keep it simple and safe.

    I did as you suggested and bought a property that I would live in if no one rented. But since it was in such a great neighbourhood it was always rented to good tenants.

    I like real estate because I find it diversifies our investments. We really enjoy having some tangible assets.

  • Terrific story and it’s less heart breaking to read when you know it ended happy. Thanks for making my trip back from the grocery store at 10pm less lonely! (I downloaded this via screen reader haha)

  • Pat L.

    We have been heavily invested since ’81 & it has been very profitable for us. As an Engineer I can assess most of the issues & costs associated with the structure & mechanicals etc. I was able to retire at 49 & must admit I would rather spend a couple of hours rehabbing or buying property than sitting in meetings or dealing with the politics of a 9-5 JOB.
    However, we have a somewhat different strategy whereby we hold the properties contract for deed or lease to own. Multi-units & mixed use commercial being the most profitable & we have several investors that we have ‘sold’ 5-6 properties to with returns of 12-28% p.a. This relieves us of the drudgery & cost of maintenance & ‘land-lording’. Escrow accounts for all expenses are paid monthly by the investor. Over the years we have taken back a few but ‘rinse & resell’ (as our attorney calls it) & have quickly recovered any costs associated with the reassignment to another investor. One of my wife’s colleagues always admitted he got to ‘keep more’ from his real estate investments than his medical practice. My visit to our Vet is often 5 minutes on the dog & 15 talking about his commercial REI.

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