Landlording & Rental Properties

10 Unforgettable Lessons From My Loser Rental Property

Expertise: Real Estate Investing Basics, Personal Development, Business Management, Personal Finance
46 Articles Written

In this article, I’m going to introduce you to my loser rental property. I sold this lower-priced single family house early last year after more than seven years of frustration.

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What you will read here is the opposite of most articles. This property didn’t make me a millionaire. It didn’t put a lot of cash in my pocket. It wasn’t fun.

So, why share it? Because we learn the most from our losers. It’s like we need pain before the tough lessons really sink in (at least I do!).

You can pay money to learn at a college. But you must pay with blood and tears at the school of hard knocks. Scars and wisdom are your only diplomas from this university.

So, I’m going to share the important details of this investment property from beginning to end, and then I will share my 10 biggest lessons learned. I hope the lessons will sink in so that you can improve your own real estate investing. Some of what I learned was what not to do. But other lessons were things I did well.

Feel free to ask questions and make comments in the comments section at the bottom of the article. I’d love to hear from you.

Now, let’s move on to the story of my loser rental property!

Background on My Real Estate Business

Before I tell you about the property, I want to give you some background about myself and my investment business.

During my first three years in real estate, my business partner and I primarily flipped properties. You can find out more about my beginnings in real estate with “My Sprint to the Top of the Real Estate Mountain or BP Podcast 84: Getting Started With Creative Financing.

The year we bought this property (2007) was my fifth year as a full-time real estate investor. This was the busiest year of my real estate career. In one year, my business partner and I had 48 closings on acquisitions!

While most of these purchases either made us a lot of current income or built a lot of long-term equity, we also acquired some duds — like the one you’ll read about here.

Growing your business fast is dangerous. It’s like pushing a car to a top speed that has never been tested at that speed before. Systems can overheat, parts can fall off, and wrecks can happen.

In our ambition to grow and to do more deals, we lost sight of our investment fundamentals in several cases. Luckily, we survived this fast growth episode, and it actually inspired our current real estate philosophy that big, fast-growing businesses are not the ticket to financial freedom.  

Related: Breakdown of a $30k Rental Purchase: From Offer to Closing [With Pics & Numbers!]

Our current small and simple investment business is run virtually out of our home offices. We don’t care if we do the most deals or if we are the biggest investors in town. The goal is not to be better than the next person. The goal is to have investments that support what matters in life!  

For example, next year my family and I will be living in Ecuador in South America for a year to learn Spanish, to explore, and to have an adventure as a family. Those are what matter to me. Real estate investments are what make that possible. 

But before I could get to the good stuff, I had to get burned. So, let’s move on to the loser property!

How I Found My Loser Rental Property

The year of this acquisition, I was pouring time and money into marketing to buy properties. I shared 7 of these ways to find incredible deals in my second time as a BP Podcast guest.

My marketing campaigns that year included:

  • Several direct mail campaigns
  • Newspaper ads (when they still worked!)
  • Signs on my car
  • Radio ads
  • Birddog networks for vacant houses
  • Referral campaigns
  • Short sale campaigns
  • Signs
  • MLS properties

I had so many leads coming in that my mornings were just spent making afternoon appointments to visit a property and make an offer. This is a good thing, by the way!

Over half of the deals I bought that year were from referrals. My loser property was also one of those.

Meet the Mill House


A friend of mine referred me to a landlord who owned a 2 bedroom, 1 bath, 1,000 square foot “mill hill” house near my target area. Mill hills are clusters of houses in my area of South Carolina that were built by textile mills in the early 1900s to house their employees. Some mill hills have been rejuvenated, but many others are still run down, lower end rental neighborhoods. My loser property’s neighborhood fit into the “run down” category.

I talked to this landlord on the phone, and the excitement had run out on his adventures in landlording. He lived too far from the house, and he wanted out.  

He owned the property free and clear, and I quickly learned that he would be open to seller financing. Although I was not excited about the neighborhood because it did not show signs of improvement anytime soon, I thought I could make up for that negative with positive financing terms.

So, this burned out landlord and I worked out the following deal for my company to purchase the house:

$30,000 = Purchase Price

  • $1,000 = Down Payment
  • $29,000 = Seller Financing Mortgage
    • 4% interest
    • $180 per month principal & interest payments
    • ~ 231 months to fully amortize

We also had $950 in closing costs and less than $1,000 in clean-up preparations before renting. The seller was willing to pay for the replacement of the old central heat and air system.

Our plan at the time was not to keep this property forever as a rental. Instead, we hoped to sell the house for $60,000 or more to our tenant, either with a new bank loan or with seller financing from us. Helping tenants become owners was a fun and profitable strategy we’d used extensively. 

We also preferred to work with private lenders instead of banks on our acquisitions (there are at least 6 reasons for this). In this case, the burned out landlord was a good candidate to do more private lending for us. If we paid him on time and kept him happy, there was a good chance he would do more deals with us as a lender in the future. There was more value in the relationship than just this deal.

Related: 7 Life-Changing Lessons I Wish I Knew as a Real Estate Newbie

So, for both of those reasons, we moved ahead with the purchase.

Phase 1: Preparing a Renter to Become an Owner

Within two months of our purchase, we found a renter for $395/month. We had tried to screen for someone who was interested in saving extra money to eventually own the home.

As I look back at the original application for this tenant, I can see all sorts of red flags that we would not accept today. Their credit was below 600. They had a large dog. Their reason for moving was “the landlord won’t fix things.” These were all BAD signs.  

But they had $600 for a security/pet deposit and steady jobs. They were also eager to work with a mortgage broker to improve their credit. So, we moved them in.

Here were the actual financials of our income property during this rental phase:


Those numbers are not very impressive, are they? Fifty dollars per month net income is not nearly enough for the trouble. And today, I would not get near an 8.6% cap rate for a lower-end rental property. Also, the 19.93% cash on cash return is deceiving because I had such a small down payment.

Plus, the tiny monthly income and down payment do not even take into account capital expense reserves for things like the wooden siding, the roof, the gravel driveway, the septic tank, the old electrical wiring, and the huge oak tree looming over the house. The ratios would look much worse if proper reserves were included.   

Intellectually, I might have known those were issues at the time, but I was caught up in our own recent success of selling similar imperfect houses. I felt confident that we could sell the property for $60,000 as is, and I probably assumed we would not own it by the time those problems arose (uh oh).  

This was NOT a solid, conservative, “worst case” investment philosophy that wealthy investors like Warren Buffett would follow.

In many ways, we got caught up with the times. We didn’t take into account that the time period of our recent success — 2005/2006 — was a bubble. Loans were easy, and buyers were less picky.

Soon, of course, that would all drastically change.

Phase 2: My Renter Becomes an Owner

Our tenants were not perfect. They fell behind several times, but they always caught back up. They also took care of the house reasonably well.

In 2010 after about three years, we found ourselves in the middle of a real estate downturn where bank credit was EXTREMELY tight. Our tenants still wanted to purchase the property, but even with improved scores, they could not get a loan.

Plan A — cashing out with a bank loan — was off the table. So, we began looking at alternative plans.

About this time, the $787 billion Federal Stimulus package was in the news. We learned that a first-time homebuyer could earn a tax credit of up to $8,000.

So, we decided to sell the property to our tenants, use the tax credit for most of their down payment, and finance the balance. We gave them 5.3% interest and 30-year owner financing. We were willing to wait until they got their tax credit to pay us the down payment. This was VERY generous. They could not have bought a house this way anywhere else.

But the deal was also good for us. The finances of the property after this sale looked like this:


On the surface, we were doing much better than the prior three years as a rental. The $3,900 per year from our buyer was better than the $2,748 net operating income from a rental. And we received $6,500 for a down payment, which recouped all of our small initial investment of $2,950 and put some excess cash in the bank.

The promissory note with our original landlord-seller allowed us to do this type of arrangement, commonly called a wrap around mortgage (or all inclusive trust deed in other states). And because there were no short-term balloons and he was receiving his payments, there were no problems on his end.

Everything seemed to be OK for about two years — until it wasn’t.

We were about to learn that being a lender can get just as ugly (or worse) than being a landlord.

Phase #3: Back in the Rental Game

I have a love-hate relationship with lower end rentals. On the one hand, there are many good people who need a clean, safe, affordable place to live. I love that I can help them rent or own a house using my entrepreneurial skills.

But on the other hand, drama is the name of the game with these customers. Their financial margins in life are very thin, and any little or big hiccup can turn their life upside down.

In my case, the buyers had a separation/divorce. One of them tried to remain in the house, but she could not afford it. After several months of non-payment and chasing our money, she moved out and deeded the house back to us.

It could have been worse. We didn’t have to foreclose, thanks to my proactive efforts to meet with the buyers. But here we were again with the house. Not only was it a mess from hard living by the buyers, but some of the deferred capital expense items were becoming more obvious.

This was not a happy reunion!

On top of everything with the house, the neighborhood seemed to be getting worse. The teenage kids of a neighbor two houses down were definitely doing something illegal. And the junk from their house often spilled out onto the street. Maybe it was the dark cloud following me around every time I visited this property, but it was depressing!

But my business partner and I are fighters. We decide to attack the problem, and we prepared to spend some money and fix up the house to see if we could start over, find a renter, and turn them into a homeowner.

We spent about $8,500 doing repairs, such as:

  • Scraping, prepping, and painting the wood siding
  • Cutting some dangerous, dead limbs from the oak tree
  • Fixing moisture issues in the crawl space
  • Replacing the carpeting
  • Painting the interior
  • Replacing the hot water heater

Before the work was finished, we had some of our existing tenants at an apartment tell us they wanted to move into the house and to eventually buy it. They had paid us on time for several years, but they had a few issues to fix on their credit. So we rented it to this couple immediately after finishing our remodel!

Here were the new financials during the phase 3 rental:


This happy new period lasted for about a year and a half. Then, like our first customers, life happened for our tenants. And our rental property went back into loser status again!

Related: How to Exit a Real Estate Deal Gone Bad

Phase #4: Sell and Get Out!

A domestic split once again led to our renters’ demise. We had to file an eviction because of non-payment, and we took the house back. I NEVER watch reality TV shows. Maybe it’s because I get enough drama in real life as a landlord!

After we took the property back this time, we were not enthusiastic about trying to rent again. The year was 2014, and the overall real estate market had recovered from the downturn. We decided to liquidate, cut our losses of money and time, and move on.

Once again, the house needed painting, cleaning, and repairs. The repairs included addressing electrical issues, rotten wood, and the driveway that had washed out. This cost us another approximately $5,000 out-of-pocket.

Then we hired our real estate agent to stage and sell the house.

We priced the house at $40,000. It looked as good as we could afford to make it.

Millhouse for sale - 1 Millhouse for sale - 2 Millhouse for sale - 3 Millhouse for sale - 4

And then we waited.


We dropped the price. And we waited again.

Still nothing!

We waited some more, and then dropped the price below $30,000.

We finally got some interest from potential buyers, and we decided to take an investor cash offer at $22,000!

It was time to lick our wounds, learn from our expensive seminar, and move on with life.

The 10 Lessons Learned From Our Loser Rental Property

In the end, this rental house odyssey took over $16,000 from our bank account!  

We had basically broken even operating the property as a rental and an owner financing contract. And our final loan balance to the seller was about the same as our sales price to our final buyer. But the repairs, capital improvements, and closing costs we spent each time the property turned over amounted to our total negative cash flow.

What can we do on a loser property but learn from it? We call it a VERY expensive seminar. And you’re getting it for free!

Here are the 10 most important lessons I’ve taken from the experience. The first seven lessons are negative. The final three are positive. And I’ve thrown in a bonus lesson for fun.

Negative Lessons

  1. Old rental properties and their deferred capital expenses WILL cost you — now or later.
  2. The negative cost of bad neighborhoods is hard to quantify. Buy at your own peril.
  3. Qualify, qualify, qualify before putting tenants into a house!
  4. The margins on low rent properties are difficult to justify when also calculating return on time.
  5. Two bedroom houses are more difficult to sell (in my market).
  6. Gravel driveways on a slope are a bad idea!
  7. Carrying a note for your buyer requires large cash reserves for worst case scenarios.

Positive Lessons

  1. Buying with seller financing and flexible terms give you multiple exit strategies.
  2. Treating your private lenders well, even if deals are bad, earns credibility and trust.
  3. Saving cash for a rainy day helps you during… a rainy day!

Bonus Lesson

  1. We can survive, learn, and get better from negative situations. You can, too!

I’m happy to say that this isn’t the only deal we’ve done in our real estate career. Many deals both before and after turned out much better. And we’re beginning to reap the fruits today from our good deals in the past.

But despite all of this, you still never forget your losers!

[Editor’s Note: We are republishing this article to help out our newer members.]

What did you learn from my loser rental property? What could I have done differently (other than not do it)? Have you had a bad deal similar to mine?

I’d love to hear from you in the comments section below!

Chad Carson is an entrepreneur, writer, and teacher who used real estate investing to reach financial independence before the age of 37. He wrote an Amazon bestselling book Retire Early With Real Estate, and his story has been a featured on Forbes, Yahoo Finance, Business Insider,, the BiggerPockets Podcast, How to Money, ChooseFI, and more. Chad and his business partner currently focus on long-term rental properties and private lending in and around the college town of Clemson, South Carolina. Their portfolio of 90+ units includes houses, small multi-unit apartments, and mobile homes. In 2003, Chad and his business partner began real estate investing from scratch. They started by wholesaling and fixing-and-flipping properties. They also learned to rely on non-conventional financing sources like private lending, seller financing, and lease options, which remains their expertise today. After surviving the 2007 to 2009 real estate downturn (with scars to prove it!), they transitioned to more of a focus on student rentals. You can find more of Chad's writing (as well as podcast episodes) at

    Nathan Richmond Rental Property Investor from Visalia, CA
    Replied over 3 years ago
    Here in California, we don’t have too many properties at this price point, but it’s still relative. The profit margins the low income areas can be some of the best, but the headaches that come with them just don’t seem to make enough sense for me to buy one. I’ve only been investing for the last few years, but I like and feel comfortable purchasing B/C properties. Every article I read about 30k properties leads me to believe to stay clear of them. There is a 4plex for sale for only 199k in my area. It seems to cash flow well, but it is in gang land. So the turnover is high and with the cost associated with that, I feel that it will eat up everything I take in. Maybe after a little more experience, but I think the best advice for newer investors is to not get sucked in by the “30k” house and the potential cash flow.
    Chad Carson Investor from Clemson, SC
    Replied over 3 years ago
    Yeah, everything in California you can just multiply by 5x or more. But it is the same principle. I do not necessarily want to dissuade everyone from buying C properties. If you do, just go on with your eyes completely open to the hassles and potential costs. For example, I could have offered $7,000 for this house. There have been sales that low before in the area. I would have been better off on my numbers, but i still would have had a lot of hassle for the return. So, it is a question 1) of the numbers and calculating them correctly up front and 2) your temperament and desired business model. If you can’t feel good about both, just pass. Thanks for commenting!
    Michael Trizzino from Long Island, New York
    Replied over 3 years ago
    Very interesting story, Chad, thanks for sharing. That first lesson is a whopper- I bet CapEx is missing from many an operating statement.
    Chad Carson Investor from Clemson, SC
    Replied over 3 years ago
    Thanks, Michael. Yeah, capital expenses are definitely missing from the spreadsheets of many investors. It takes a long time horizon to really realize their impact. And they have the pleasant habit of making themselves known to you all at once!
    Randy E. Rental Property Investor from Durham, NC
    Replied over 3 years ago
    Hi Chad, I have MUCH less experience in REI tha you, but I spotted a few things A) You definitely overpaid for the property, as was proven when you sold for such a loss in the end AFTER making improvements. That was the first and biggest mistake, from which the other mistakes were born. B) I think the key to making low-priced older homes profitable, is to immediately address CAPEX issues and account for it before purchasing the property. Being all in on the property at $30K with new electrical, new plumbing, exterior and interior paint, new carpet, etc, might have made a big difference in coming out on top on this one. Sorry, can’t help with that sloping gravel driveway. C) As you said, failing to put good tenants in place is another big mistake. Even in low-income neighborhoods, there are usually good tenants to be found. Of course, the condition of the house helps in attracting the better tenants to your property. Maybe fixing up the house a little more at the beginning might have led to better tenants the first (and second) time at bat. All your lessons might have been eliminated if those three things been done. Glad you had the flexibility to absorb this loss without taking a significant hit to your business. -Randy
    Chad Carson Investor from Clemson, SC
    Replied over 3 years ago
    Randy, I think you made a good assessment. A lower price + doing all capex up front gives us a much better chance at success. Perhaps we could have sold at 50-60,000 upfront and moved on. But I will say it is very possible we would have still floundered, made a little money on renting, and sold for no profit (instead of a loss) in the end. Break even is much better than a loss, but is then worth all the time and trouble? Not for me. The best thing I could have done on this deal, looking back, is to buy it for $10,000 and wholesale it to some other adventurer for $15,000?. Thanks for the comment!
    Randy E. Rental Property Investor from Durham, NC
    Replied over 3 years ago
    And thank you, Chad, for sharing that story. It will help keep me on my toes. I can see how being too eager for the next deal could lead me to overlook a flaw in my planning. Your tale with this Mill House is a good reminder against that.
    Patrick Buttermark from Staten Island, NY
    Replied over 3 years ago
    Good story, don’t get me wrong- I hate to see anyone in a bad deal but it’s good to share so others can learn from you. Too many people on the internet make it sound like real estate ( or any investments for that matter) is all sunshine and rainbows and sooo easy. Stories like this are what people can actually learn from, unfortunately it’s our mistakes that teach us the most. -Patrick
    Chad Carson Investor from Clemson, SC
    Replied over 3 years ago
    Sunshine and rainbows … ahhh, that would be wonderful. I am still more positive on real estate than ever. It is that bad deals that make the good deals seem even sweeter;) Thanks for commenting!
    Dennys Passeto Investor from Gaithersburg, Maryland
    Replied over 3 years ago
    Great post Chad. I’ve almost gotten caught up in the same principle that got you in trouble here – growing too fast. I’ve had to remind myself that I am in this for the long-haul and don’t need to be The investor with the most deals or compare myself to others and their success, just like you said. Stick to your principles. If you were to add up your time invested into this deal it would be even a greater loser. Great job keeping a positive attitude. Thank you for sharing!
    Chad Carson Investor from Clemson, SC
    Replied over 3 years ago
    Denny, That’s awesome that you’re aware of going too fast while you’re doing it. That lets you make adjustments in real time. Hope that works out well for you! Yeah, return on time was awful. That was my point to an earlier comment that I might’ve passed on the deal even if I got it for $10-15,000. This is especially true because I’ve had plenty of other deals that are as good financially and also much better for my personal time. Thanks for reading and commenting!
    Pete Shelton Investor from Woodworth, Louisiana
    Replied over 3 years ago
    Chad what would your numbers have looked like with cap ex up front. I have tons of similar properties in my area.
    Chad Carson Investor from Clemson, SC
    Replied over 3 years ago
    Pete, I could’ve received better rent at the time – maybe $450-$500/month. But because I overpaid, it still would have not worked out great for rental income. The only improvement would have been I could have rented to better tenants and perhaps gotten it sold sooner and for more than I ultimately did. I know do most of my capex up front or set aside the reserves. That is a big lessons.
    Susan Maneck Investor from Jackson, Mississippi
    Replied over 3 years ago
    We have those mill houses here in Jackson, MS as well. I call them shot-gun houses but they were built by the textile mills. I can’t imagine paying more than 10-15K for one even in good condition. And I doubt if I would do that because I have this thing about not buying houses where I wouldn’t live. Besides reselling one for 60K would have been out of the question. Right now someone could buy all but one of the three bedroom two bath houses I own for 60K in much better neighborhoods and I would come out way ahead. And those houses average $850 a month. I’m surprised that Mississippi is that different from South Carolina when it comes to rent ratio to property values. The area around Mill St. here is really scary. I do have one 2bdrm 1ba house in a rather poor neighborhood which I bought for 16K, but it is close to the university where I teach and I get $600-700 rent for it. I put 4K into rehabbing it, then after i rented it i realized it had aluminum wiring, and had to spend another 4K putting in copper wiring. There were babies in the house and I couldn’t take a chance. Still, it is a good little piggy although I don’t really have an exit strategy for it. But at that return on my investment, maybe I don’t need one?
    Chad Carson Investor from Clemson, SC
    Replied over 3 years ago
    Susan, I rented the house a little low, and it was also 2007. Rents have gone up a bit since then. I agree … paying more than 10-15k for this type of house is too much. I also would only buy 3 bedroom houses in this neighborhood if I had it to do over. It would allow me to pull from a wider pull of renters and buyers. Fixed up, I think I could have sold this house for $50,000 or more with 3 bedrooms. It would have still taken some effort. If I am going to buy a pig, I’d rather buy a mobile home in many cases. If you’re going to go low, go really low (like $5-10,000 all-in), and rent for similar numbers ($400-500/month). But mill houses are still appealing, especially in up and coming areas (not the one I did).
    Pete Shelton Investor from Woodworth, Louisiana
    Replied over 3 years ago
    Chad, The houses that I’ve looked at for $ 30K will rent for only $ 500 and do not really appreciate .
    Chad Carson Investor from Clemson, SC
    Replied over 3 years ago
    Sounds about right, Pete.
    Chris T. Investor from Downers Grove, Illinois
    Replied over 3 years ago
    Thanks for sharing your story Chad. I am too in the process of selling 1 at a loss right now. Something I learn from an experienced salesperson. Fail fast but get back up faster.
    Chad Carson Investor from Clemson, SC
    Replied over 3 years ago
    Fail fast but get back up faster … love it! That’s a good mantra. Good luck with your property. Have you learned any good lessons from yours? Or is it still too fresh?
    Brian Moore from Raleigh, North Carolina
    Replied over 3 years ago
    Hey I like your post im trying the buy and hold strategy with multifamily properties also. It can seen overwhelming at times. Any other advice you can give would be appreciated.
    Chad Carson Investor from Clemson, SC
    Replied over 3 years ago
    Hey Brian. Thanks for comment. With anything overwhelming, including buying multis, I say break into a small enough piece you can handle. I love the idea of moving into a small multi and doing a house-hack. You can learn to manage while you’re there, get owner occupant financing, and then later on move on to bigger things. That’s what I did!
    Anthony Black from Great Falls, Virginia
    Replied over 3 years ago
    Thank you for sharing your experience with this property. I’ve been craving some real world stories like this to help me understand potential pitfalls. Knowing what you know now, would you do it over again if you could purchased the house for 15K in the beginning? Glad to see you came out of it relatively undamaged and still enthusiastic!
    Chad Carson Investor from Clemson, SC
    Replied over 3 years ago
    Hey Anthony! Glad the story was helpful. I would not do the deal again, even for $15,000. I would put it under option for $8-10,000 and perhaps sell it for $12-15,000 to make some quick cash. But I’ve personally got better properties and more fun stuff to occupy my time than managing this rental. But for someone it could still be an ok (not a homerun) deal.
    Sam Shueh Real Estate Agent from Cupertino, California
    Replied over 3 years ago
    One needs to factor in the amount of time spent managing , showing. I will not put $1K down hoping leverage will build my equity. That is why west coast people go to the best neighborhood like Palo Alto, CA buy a older home. Spend $400K on rebuild a larger home. Sell $ 4,000,000 Rebuilt $400,000 old purchase: $1,500.000 Net P/L: $2,100,000 The realtor fee etc is negligible as the investors all have esq, broker license. Got paid when purchase, listing is nothing. Many of these flip is HELOC @ 2.75% interest Most have $1-2M HELOC rest is cash. Often 2 families to share the profit if not loss. On rentals the location matters got to be close to major job centers like NYC, SF etc. Sam Shueh Silicon Valley, CA
    Andrew Syrios Residential Real Estate Investor from Kansas City, Missouri
    Replied over 3 years ago
    I’ve often found the worst deals bring about the best lessons
    Chad Carson Investor from Clemson, SC
    Replied over 3 years ago
    Joseph Amuaku from Brooklyn, New York
    Replied over 3 years ago
    Great Read
    Chad Carson Investor from Clemson, SC
    Replied over 3 years ago
    Thanks Joseph!
    Replied over 3 years ago
    Hi Chad carson, I have read your post and I’ve almost gotten caught up in the same principle that got you in trouble here – growing too fast. I’ve had to remind myself that I am in this for the long-haul and don’t need to be The investor with the most deals or compare myself to others and their success, just like you said. Stick to your principles. Reply Report comment
    Replied over 3 years ago
    Hi Chad carson, I have read your post and I’ve almost gotten caught up in the same principle that got you in trouble here – growing too fast. I’ve had to remind myself that I am in this for the long-haul and don’t need to be The investor with the most deals or compare myself to others and their success, just like you said. Stick to your principles.
    Chad Carson Investor from Clemson, SC
    Replied over 3 years ago
    Awesome, Priya! Good for you figuring that out while you’re in the process. Staying true to a pace and a type of business that works for your life is challenging. It’s challenging because everyone else seems to be going faster and harder. Good luck finding your own sweet spot. Thanks for commenting!
    Karl B. Rental Property Investor from Los Angeles, CA
    Replied over 3 years ago
    Thank you for sharing your experience.
    Replied about 3 years ago
    Thanks for the story. We just got back from a year in South America with our 11 and 13 year old children. Spent most the time in Cuenca, Ecuador. Great county. After 6 months felt our kids weren’t getting much out of the schools and traveled in Peru, Bolivia, Argentina and Chile. Wow. Upon returning we moved from CA to Charleston. I am looking for rentals in Mt Pleasant as we speak ,.. but the prices are a bit higher here. On the other hand good schools and newer homes. Would appreciate any opinions of this area.
    Chad Carson Investor from Clemson, SC
    Replied about 3 years ago
    Wow, Bill. What a coincidence about Cuenca and South Carolina. We’re headed to Cuenca in 2017. I’d love to reach out to you to connect on that. I don’t have any rental connections in Mount Pleasant, unfortunately. I recommend posting here on the BiggerPockets forums to look for other landlords and realtors in the area who can connect you. There is a big South Carolina contingent on here. Best of luck!
    Replied about 3 years ago
    Thanks for a real story, I am an old geezer and have been a Landlord and flipper for 36 years. I laugh at some of the stories I read on some of the Internet sites where newbies want to buy 100 units in the first year. Its best to learn to walk before you run. I am a cheap person by nature and love a good deal and have bought my share of b and c properties. When you have a number of them they are like vampires, sucking the life out of you (time and energy) even if they make good $$. The older I get the less time and energy I have to donate, so now I pay up for quality locations, WOW what a difference. I can manage 2x the properties with the same time investment and from the long term view, price appreciates faster when recovering from economic cycles. About 5 years ago I had a far amount of rainy day $$ in CD’s that was paying me almost nothing , so I took it and found the most desirable AAA neighborhood I could find in a 15 year old subdivision and bought 5 homes. As the market recovered I sold off my C properties and now I wonder why I let the vampires take so much out of me. Slow to learn I guess.
    Chad Carson Investor from Clemson, SC
    Replied about 3 years ago
    What a great story, JL! I feel your pain on the idea of these properties being vampires. Lol. I have known other experienced investors have done what you did by trading up to better properties. Once your cash flow needs are taken care of, it sure makes sense to free up your time, benefit from more appreciation, and not have all the hassles. Thank you for posting and sharing your perspective. It’s very helpful!
    Marcia Dabrowski Investor from Naperville, Illinois
    Replied almost 3 years ago
    Hi Chad, Thanks for sharing a real life story! We’ve also learned a lot from a “bargain” investment. Last year our evicted tenant “gifted” us with trashing the house by scraping metal items including most of the duct work, floor grates, light fixtures, electric wires, plus 2 whole windows and their metal frames. She also helped herself to the AC unit, washer/dryer and stove…. I learned a new simple phrase this year from another investor… “Challenging people live in challenging areas”.
    Chad carson
    Replied almost 3 years ago
    Wow, that I tough. I am amazed what some people think they can do. But I think you are right – you can avoid that to an extent by avoiding the locations. Thanks for sharing,
    Federico L. Investor from Orlando, Florida
    Replied over 2 years ago
    Great post Chad I enjoyed, glad to hear you moved on, thanks for the lessons
    Alden Simpson Wholesaler from Greenville, South Carolina
    Replied over 2 years ago
    Great story such a hard lesson learned.
    Kerri Thewlis from San Rafael, California
    Replied over 2 years ago
    I’m a new investor and have invested in the $30,000 market for 3 properties. Two of the properties have been going well. The third one was just evicted and totally trashed the place. I’m wondering what the wisest thing to do is? We were just about to buy a new property in a few months after saving, but now we might have to put thousands into a trashed house. Wondering if it would be better just to sell the house as is and start again, or hold on to the property and fix it up. We have a rental manager who is offering for handymen to go in and fix, still waiting to hear the estimated cost to clean up and fix the place. Bummer to start real estate investing on this foot, but as you said, good lessons to learn early on. Even thinking this cheaper market may not be for me, maybe save more and get a house in a bit nicer area where I can not only rent the house out but also hopefully have the house increase in value (unlike my present properties).
    Austin Hughes Rental Property Investor from Lubbock, TX
    Replied over 2 years ago
    It’s interesting…this describes a house I have very similarly. 😀
    Ed Perez from Cleveland, Ohio
    Replied over 2 years ago
    Chad, great article! Most articles I’ve read are just your “bragging” stories, showing other readers how smart they are than the rest because they accumulated multiple properties at the right price, cash flowing right, and how they made millions… So they claim. But your article was enlighting to read because you showed the ugly side of owning rental properties. Your story has more credibility than the ones I read, I think.
    Katherine Umstetter Investor from Greenville, South Carolina
    Replied over 2 years ago
    Chad, I enjoyed reading this article and am also in upstate SC. I am curious about the $40,000 price point when you guys tried to sell this house the last time. Who was the target buyer? I ask because in my limited experience, it seems difficult to find a bank to give a mortgage under $50,000 (so factoring in a necessary down payment, the price of the house often needs to be closer to $60,000 to be traditionally financed). I see mill houses languishing in this price range in Greenville and always wonder if they are too expensive for cash buyers yet not expensive enough for traditional buyers. Maybe it’s easier for owner occupants to get mortgages at lower amounts- I don’t know. Thoughts?
    Yanis P. from Steger, IL
    Replied over 2 years ago
    @CHAD CARSON Thank you for a great story:) I see that after repairs your : Property Tax go’s DOWN ( how did you do that?:) insurance go’s UP ( why?) maintenance go’s up ( underestimated?)
    Yanis P. from Steger, IL
    Replied over 2 years ago
    @CHAD CARSON Thank you for a great story:) I see that after repairs your : Property Tax go’s DOWN ( how did you do that?:) insurance go’s UP ( why?) maintenance go’s up ( underestimated?)
    Josh Stack Investor from Cramerton, NC
    Replied over 1 year ago
    Hey Chad, I’m glad I stumbled upon this post from you, it’s a super one giving a good real life example of what being a landlord is like. I notice you paid for property management in your calcs but was that just pro forma and you were actually managing yourself? Or did you still have all these headaches after having a property manager doing the front end tenant stuff for you? Do you think there is a sustainable strategy in building out a large portfolio (30+) units of quality mill houses if the investor has a property manager doing all the grunt work and they take a back seat portfolio management roll? For anyone else who stumbles across this article, I’ve started an Ultimate Mill House thread on the forums. If you have success stories in this asset class, please share your experience….