Deal #1:
My First Real Estate Deal: From Mold, Mistakes, and No Cash Flow to Infinite Return
In 2011, I was 21 years old, fresh out of college, and about to report for active duty in the United States Marine Corps. I didn’t have much money, but I had a lot of drive and the determination to start investing in real estate.
That’s how I found myself buying a 805-square-foot, 2-bedroom 1-bath house in Tucson, Arizona.
It wasn’t pretty. In fact, it was gutted — stripped of wiring, plumbing, fixtures, and appliances. The walls had mold. The floors smelled like urine. Most people would have walked away. But I had decided years earlier, after reading Rich Dad Poor Dad, that real estate would be my wealth-building path. So I jumped in.
Financing a Messy Start
I didn’t have savings, so I pieced together financing with multiple personal loans — including one with a steep 12.75% interest rate and another with a $7,000 flat fee just to borrow $16,500. I knew it wasn’t ideal, but it was the only way I could start.
Because the financing was so rough, I made the decision to attack the debt aggressively. That meant that for the first two years, I didn’t put a single dollar of rent in my pocket. Every payment went toward paying off loans as fast as possible.
Lessons From a Rocky Rehab
To tackle the rehab, I leaned on a mentor — a former high school coach who had flipped houses himself. I hired his friend as my general contractor.
Within weeks, my gut told me I was paying too much. My spreadsheets confirmed it. But I ignored both because my “mentor” said we were fine.
Cash ran out. My mentor’s life fell apart. I ended up finishing the rehab myself.
That experience taught me two lessons that I carry with me to this day:
- Trust your gut, but verify with numbers. If the math says something’s off, don’t ignore it.
- Be deliberate with financing. The cost of money can be as big a factor as the cost of materials.
The Turning Point
By 2015, four years after purchase, I had refinanced the property and pulled out every dollar of my original investment. From that point forward, the deal became an infinite return — no cash left in the deal, only upside.
What started as a risky, debt-heavy, mold-infested house had become a self-sustaining asset. And the reason was simple: I had started, I held on, and I managed the property through the challenges.
Where It Stands Today (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
Final Reflection
Looking back, my first deal was messy, stressful, and full of mistakes. But it taught me the most important lesson of all: just start.
Real estate isn’t about perfection. It’s about persistence. With time in the market and good management, even a deal that begins with mold and bad financing can become an infinite return.
