Look Back on My First Rental Property Story 15 Years ago

[Michael Zuber]

As I shared before now that I am retired thanks to being a Long Term Buy and Hold Landlord I am taking my time to look back and share.  In this post I am going to look back on my First Rental Property Experience beginning to end. I will share all the details as it almost kicked me out of the Investing game before I even got started.  So here we go. 

After spending over a year looking for my first rental property we came across a property on Norris Drive that cost 107k and rented for $1,095.  Remember this is back around 2002.

The story starts out great and we were so excited.  We closed the house with 20% Down and a 80% Loan.  We spent about 7K in make ready and then magic happened we leased the property for $1,095 to a husband and wife.  I can't tell you how excited we were as we thought we had unlocked the key to financial wealth.

Then **** Hit the fan as it got ugly fast.

Turns out after two weeks in our first rental the couple broke up and the wife disappeared (moved out of town).  The husband did not like this one bit and turned to drinking, destroying our property and not paying rent as a form of sport.  

We never got a second month of rent and it took over 90 days to remove this individual from our house.  We had to make our mortgage payments while collecting no rent, we spent $1,000 on the eviction, we had over $10,000 in repairs and it was a horrible beginning.

As I look back on this story I know for certain that this horrible and tragic beginning could have kicked us out of the game if my wife was not 100% on board with our plan.  I can't thank her enough as I believe Real Estate Investing will TEST You and it will try and wash you out several times before you see the true fruits of your labor.

After this horrible beginning the property turned around and was actually a pretty good rental property.  After a couple of years of being a solid rental property we Refinanced the property and pulled out about 40K and bought another solid rental property.  Then after a couple of more years we actually sold the property for about 260K and we 1031 Exchanged our property into a small 5 Unit rental that we still own today.

In the end I wanted to share this story for a couple of lessons learned from this first rental.

1) Real Estate Investing will Test You and we almost never took a second step

2) Time has a sneaky way of helping you with wealth creation

3) Make sure your significant other is 100% on board with the plan

Thanks for taking the time to read this long post, I did not know how to shorten it.

Z