Property: 331 East Rodeo Drive, Tucson, AZ 85719
Size: 795 sq. ft., located in the Barrio near downtown Tucson
Purchase Date: October 22, 2014
Financing Structure
- Loan Type: Personal loan from Navy Federal Credit Union
- Amount: $52,000
- Term: 60 months
- Interest Rate: 11.49%
- Payoff: Paid off in just 20 months
- Refinance (2016): Pulled out all original capital, leaving $0 invested
Due Diligence
As an active-duty Marine at Camp Lejeune, I was buying sight unseen. To mitigate risk, I:
- Hired a trusted Tucson realtor to inspect and report back.
- Verified rental potential before closing.
- The property met my investment criteria even with the high interest rates.
- FYI: Back then, my investment criteria were not metric based. My goal was to buy property, pay them completely off, and then buy another.
Result: The home rented immediately after purchase.
Management Lessons
- First Mistake: Hired an incompetent property manager → cost thousands in missed rent due to slow turnovers and mishandled evictions.
- Correction: In 2016, my wife Avery took over the management process, interviewed several companies, and hired new, competent management. Returns improved immediately.
Before & After Snapshot
2014 (Purchase)
- Purchase Price: $49,000
- All-In Cost: $50,342
- Financing: $52,000 personal loan at 11.49% (*I could not get a mortgage for this amount but could get a personal loan)
- Equity: $0 (fully leveraged)
- Annual Cashflow: ~$0 for the first 20 months.
2025 (Today)
- Current Value: ~$161,000
- Loan Balance: ~$4,300
- Equity: ~$156,700
- Net Annual Cashflow: ~$3,649
- Lifetime Cash Received: ~$36,634
- Money Left in the Deal: $0 (after refinance in 2016)
Investor Takeaways
- Creative Financing Can Work: When banks say no, find another path. Just make sure the numbers still make sense.
- Time Turns Deals Around: What starts as a high-interest, risky loan can, with discipline and patience, become an infinite return. People today say deals don’t make sense at 6 or 7 or 8 percent interest rates, but this deal is a great one and the interest rate was initially 11%!!!
- Management Drives Returns: Poor management can destroy returns. Good management can restore and grow it.
- Real Estate Is a Team Sport: From trusted realtors to competent managers to supportive partners, your team makes or breaks the deal.
