Our first rental property

Many years ago, if someone would have told me I would become a full time real estate investor, I would have said they were wrong! However, while I was in the Army, I heard about a Command Sergeant Major who owned 15 free and clear single family homes. Since the government cannot be depended on for your retirement, I thought this would be a great retirement plan. I never did like the idea of retirement plans as you have to depend on someone else managing your money and investments for you. The temptation to move money from your pocket to their pocket is too much. Social Security funds were moved to the General Fund so Congress could have a 20% pay raise while complaining that the 3% pay raise to the military was “too much”. With military retirement – the money may someday be taken away from you like other benefits that were promised when joining the military. However, investing in real estate as a retirement plan puts you in control of your own outcome. Should you need some money, you just sell one home and pay for whatever you needed and still have 14 free and clear houses on hand.

So, in January 1982 we got our first rental house paying cash for it. The realtor looked at us like we were a little crazy as we were living in a 2-bedroom apartment and renting out a house. We later wished we had invested in 4 4-plexes instead of just one house. Hindsight is always 20-20 so we will not kick ourselves too much for that mistake. Being in the military and with my wife working, we did not want to be involved in the property management side so hired a real estate company to do it for us. They received 15% of the first month’s rent supposedly to pay for advertising costs. Then the rest of the months were to be 10% of the rental amount. The realtor put homeless people in and after one month had to evict them. This ate up quite a lot of the rent money. Then of course they get a higher percentage for the first month. They also were paying their father-in-law for repairs. I was charged three times for a hole in the back screen door. After the second tenant, they tried to charge the 15% plus the 10% or 25% of the rent for their management fee. I went down to the realtor’s office and picked up the keys, the deposit, the lease and took over the management after them only being onboard for about 6 months. Doing an inspection of the property, I found the screen door I had paid to have repaired three times still had the same hole in it as when we bought the property! Over the next 10 years with us in charge of the management, we had a total of 5 tenants in the property