In October 2014, I was stationed at Camp Lejeune, North Carolina, when a text came to my phone from the guy who helped me buy my very first rental property.
He had another deal.
The catch? It was a small 795-square-foot house in the barrio near downtown Tucson, Arizona, more than 2,000 miles away from where I was standing.
Buying a rental property sight unseen is uncomfortable under any circumstances. Doing it while juggling military training, deployments, and limited free time adds another layer of stress. But I had learned something early in my investing journey: opportunities don't always show up in your backyard, and waiting for perfect conditions usually means missing good ones.
The financing wasn't pretty, but I was determined to do better than my first deal. Banks wouldn't touch mortgages under $50,000, so I used a high-interest personal loan just to get the deal done. I ended up paying the $52,000 personal loan off in about 20 months.
This deal would eventually become an infinite return, but not before teaching me painful lessons about long-distance investing, creative financing, and the true cost of bad property management.
This post is part of my First 10 Real Estate Deals series, where I break down what actually happened, not idealized success stories.
👉 First 10 Real Estate Deals -- Series Hub
Deal Snapshot
Item | Details |
|---|---|
Year / Market | 2014 -- Tucson, AZ |
Property Type | Single-family home |
Size | 795 sq ft |
Purchase Price | $49,000 |
Closing Costs | ~$1,342 |
All-In Cost | ~$50,342 |
Financing | $52,000 personal loan @ 11.49% |
Purchase Date | October 22, 2014 |
Initial Strategy | Long-term rental |
Current Rent (2026) | ~$1,100/month |
Current Market Value | ~$161,000 |
Loan Balance | ~$4,300 |
Equity (2026) | ~$156,700 |
ROI | Infinite since 2016 |
The Story
How I Found the Deal
This deal came from a relationship built during my first purchase. The hard-money lender involved in Deal #1 reached out with another opportunity that never hit the open market.
I paid attention because I had already learned that relationships create deal flow and staying top-of-mind often matters more than actively hunting listings.
It reinforced an early truth: deal flow compounds just like properties do.
Due Diligence (What I Checked and What I Missed)
Because I was stationed on the East Coast, I couldn't see the property in person. To mitigate risk, I leaned on a realtor I trusted from my time living in Tucson.
She walked the property, confirmed the condition, and validated the rental demand before I moved forward. The numbers worked, so I bought the deal.
At the time, my investment criteria weren't sophisticated or metric-driven. I saw my uncle invest in real estate, overleverage himself, and go bankrupt. I knew Robert Kiyosaki said to invest in real estate, and I knew my uncle went bankrupt, so my goal at this time was to pay off each mortgage before buying the next rental.
Simply, my plan was to buy property, pay it off aggressively, then buy the next one. That simplicity got me moving, and I perfected my processes over time.
Financing, Management, and Reality
Traditional lenders wouldn't issue a mortgage this small, so I took out a $52,000 personal loan at 11.49% interest from Navy Federal Credit Union.
The house was rented immediately. For the first 20 months, every dollar of rent went straight toward paying down the loan. There was no real cash flow because I was paying the loan off so fast.
The real problem surfaced with management. I hired a property manager I thought I could trust. I was wrong. Between slow turnovers, poorly handled evictions, and missed rent, thousands of dollars quietly disappeared. The worst part was that I didn't even know it.
Because I was long-distance and an active duty Marine, the damage compounded before I fully understood what was happening.
Wins and Losses: My Lessons Learned
Lesson 1: Creative Financing Can Work If You Have a Plan
An 11.49% interest rate scares people today, and it should. But interest rate alone doesn't determine a deal's outcome. Behavior does.
By aggressively paying down the loan and eventually refinancing, I used expensive money temporarily instead of letting it become a permanent burden.
Today, I won't move forward with a deal unless it passes my Real Estate Investing Analyzer, even when the financing is unconventional.
Lesson 2: Long-Distance Investing Magnifies Management Mistakes
Buying sight unseen wasn't the biggest risk in this deal. I trusted the person I bought the deal from. I used a real estate agent I trusted. I bought a great property.
But I used the wrong property manager. I was too busy being a Marine to know how to find a good one. Distance delayed feedback. Deployments got in the way. And the property manager's excuses lasted longer than they should have.
Lesson: Distance doesn't kill returns. Poor management and improper expectations do.
When I got married in 2016, my wife Avery saved this deal by getting rid of a bad management company and hiring a great one. (*I’ll go into how she did that in a blog and video soon.)
Lesson 3: The Right Team Changes Everything
In 2016, just three months into our marriage, my wife Avery stepped in. She identified the management issue, interviewed multiple companies, and hired competent professionals. Because of Avery's oversight, both of our rentals improved and we had the seed capital to expand our real estate portfolio.
This experience cemented my belief in professional property management, especially for long-distance investors.
Lesson 4: Time Rewards Discipline
By 2016, the property was paid off and refinanced. I pulled out 100% of my original capital, leaving $0 invested. From that point forward, every dollar of cash flow and appreciation became pure upside.
My first two deals ended up being great because I didn't pay too much for them, because I paid them off, and because the market appreciated enough to pull all my cash contributions out. That cash became the seed capital to expand my rental portfolio.
Financials (Reality Check)
Cash Flow Timeline
2014-2016: No usable cash flow (loan payoff phase)
2016: Refinance -- all original capital recovered
2016-2025: Consistent positive cash flow
As of 2026
Current fair market value: ~$171,000
Equity: ~$156,700
Net annual cash flow: ~$3,649
Lifetime cash received: ~$36,634
Cash left in the deal: $0
This deal looked okay to me in the beginning and became great with time, discipline, and better management. Today, I can't believe I own two rentals like this that are worth almost $350,000 combined with no money invested in them.
How This Deal Changed My Future Deals
I vet property managers as carefully as I vet properties.
I assume management risk increases with distance.
I inspect what I expect, and I know what to expect.
Those changes improved every out-of-state deal that followed.
Key Takeaways
Creative financing can work if you control the exit
Poor management destroys returns
The right team stabilizes both cash flow and stress
Time rewards disciplined ownership
What is Next
In Deal #3, I'll break down how I underestimated asset quality over time and how one assumption cost me $20,000.
👉 Deal #3: How Two Cash-Flowing Properties Lost Me $20,000
Looking back at the previous deal in this series: Deal #1: From Mold, Bad Financing, and Zero Cash Flow to an Infinite Return
If you want to analyze deals the way I do today, download my Real Estate Investing Analyzer + Deal Analysis Video.
Want Help Evaluating Your Next Deal?
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