This is the first post in my series breaking down my first ten real estate deals. The goal isn’t to show you perfect investments — it’s to show you how real estate builds wealth over time, even when the first deal looks like a mess.
Property Overview
- Location: Tucson, AZ
- Size: 805 sq ft, 2-bedroom, 1-bathroom
- Purchase Date: May 2011
- Condition at Purchase:
- Gutted of wiring, plumbing, fixtures, and appliances
- Mold in the walls
- Floors that smelled of urine
- Initial Plan: Fix-and-flip
- Pivot: Rented out when rehab costs ran higher than expected
Financing Structure
Because I was just out of college with little savings, I pieced the financing together with multiple personal loans:
- One loan carried a steep 12.75% interest rate
- Another charged a $7,000 flat fee on just $16,500 borrowed
- In total, my all-in cost was about $48,500
I knew the financing was rough — which is why I made the decision to pay the loans down as quickly as possible. For the first two years, every dollar of rent went toward debt. There was no cash flow.
The lesson? Bad financing can crush a deal in the short term. But with a plan, persistence, and time in the market, even a shaky start can be turned around.
Rehab and Management Challenges
- Hired a general contractor through a mentor. Quickly realized I was paying too much.
- My gut and my spreadsheets told me something was wrong, but I ignored them because my “mentor” said it was fine.
- Cash ran out. My mentor’s life fell apart.
- I finished the rehab myself.
Key Lesson: Always trust the numbers. If your projections say something doesn’t add up, listen.
Cash Flow History
- 2011–2013: No cash flow (all rent applied to loan repayment)
- 2013–2015: Stabilized into modest positive cash flow
- 2015: Refinanced and pulled out all original cash → ROI became infinite
- 2015–2025: Every dollar of cash flow and appreciation has been pure profit
Final Numbers (2025 Snapshot)
- Purchase Price (2011): $18,000
- Initial Rehab: $22,000
- Closing Costs: $8,500
- All-In Cost: $48,500
- Current Market Value: ~$167,000
- Current Loan Balance: ~$54,000
- Equity Today: ~$113,000
- Monthly Rent: $1,100
- Net Annual Cash Flow (2025): ~$2,100
- Cumulative Cash Flow Collected: ~$26,000
- ROI: Infinite since 2015
Key Takeaways for Investors
- Starting matters more than perfection. My first deal had terrible financing and a messy rehab, but it still became a winner because I took action.
- Time and good management turn deals around. What begins as a burden can become a long-term wealth builder if you stick with it.
- Financing strategy is critical. Poor loan terms can cause short-term pain — but a plan to stabilize and refinance can still create great results.
P.S. You might be thinking, “That was 2011 — deals like this don’t exist anymore.” And yes, prices are higher today. But the principle hasn’t changed: start where you are, manage well, and give your investments time to work. Stay tuned, because over the next 10 weeks I’ll break down each of my first ten deals — all of them now generating wealth in the same way.
