How & Why I Lost $60K On My First Duplex But Would Do It Again!

Real estate investment is generally always a great investment. However, there are instances where things can go sour and you can lose money. I lost $60,000 on my first duplex. You might be like “wow…that’s a lot of money.” Yes, it is a lot of money but the lessons I learned in the process are worth much more than the money that I lost.

Bought the Property in 2006

My first duplex was bought in Boston. As you may know, real estate is not cheap in Boston. The cost of the property was $400,000 back when it was purchased in 2006. I purchased this property when I was fresh out of college. Fast forward to 2020, the property would be worth around $800,000. I purchased it with an FHA loan, which is common for anybody starting out in real estate. I paid 3 ½% down. The financial institution I worked with classified my debt to income ratio to be high, so I had to get my mother to cosign on the loan. When all was said and done, my mortgage was $2,500.

Was it a success?

This property was not a success. As I mentioned earlier in this blog post, I lost $60,000 when I sold this property. However, I would do it all over again. This first purchase was highly educational for me. I bought it at a tough time and when the market was at its peak. Unfortunately, two years later the economy took a huge hit and my property fell in value by 20%.

Sometimes the moves you make in real estate or any business at that, may not result in an increase in net worth but may position you for greater success in the future. I did not regret a bit of the experience. I learned a lot. I learned how to be a landlord, how to manage my business like a real business, how to maintain a property, the principles of rent collection and laws pertaining to landlords and tenants. Most of all, this experience prepared me for the times when the market would take a swing in the right direction.

Final Words

I have 0 regrets to date about the experience I had with my first duplex. These experiences only serve to make you stronger. If you are currently facing a situation that seems to be a disaster, do not throw your hands in the air and give up. Instead, look for all the lessons and keep in mind that you are being set up for future success that you would not be able to handle if you did not face this current trial. Press on and never forget the lessons on your journey to financial freedom.