Episode 82: I Sold My First Rental Property… And It Changed Everything

In this episode of The Ricky Ricardo Show, I talk about officially selling my very first rental property and why this deal completely changed the way I look at real estate investing.

A couple years ago, I thought buying as many rental properties as possible was the path to freedom. But after going through vacancies, repairs, management headaches, tied-up capital, and low cash flow, I started questioning whether this strategy was actually creating the life I wanted.

This episode is a real conversation about:

• the reality of low cash flow rentals
• why my mindset around investing has changed
• the dangers of getting stuck in “door count” thinking
• why I’m now chasing stronger cash flow and business-style investments
• learning when to evolve instead of forcing a strategy that no longer fits your goals

I also break down the numbers, lessons, mistakes, and mindset shifts that came from completing my first full real estate cycle from purchase to sale.

This isn’t guru talk. This is the real journey of figuring it out in real time.

Welcome back to The Ricky Ricardo Show.

🎥 Watch the full video episode on YouTube:
 youtube.com/@therickyricardoshow

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 @rickyricardoshow

About the show:
The Ricky Ricardo Show documents the real journey of building financial freedom through leverage, better decision-making, and real-world lessons — in real time.
Real estate is the current vehicle, but the principles apply far beyond it.

Transcript

SPEAKER_00 0:00

Last week I officially sold my very first rental property and honestly it's a weird feeling because when I bought that property I really thought buy and hold rentals were the roadmap to freedom for me. But after actually going through the full cycle, vacancies, repairs, management issues, tied up capital, all of it, I realized my perspective on investing has changed a lot. Welcome back to the Ricky Ricardo show. It's your boy Ricky Ricardo, and we're gonna be talking about the very first property I purchased a couple years ago that got me started into real estate investing and how I no longer have ownership of that property. The deals done on my birthday was actually kind of cool last week. Your boy just turned 40, and on the day of my birthday, I got the wire. So that is written off, it's in the books, it's sealed, closed, and we're moving on. But we're gonna be moving on with a lot of education, information, experience, and just total mindset shift on how it is now versus how it was then when I was stuck in analysis paralysis for five years, six years plus. I've told you guys this before, but I've constantly talked about it. I think there's a lot of us, I know because myself was part of it, we're just stuck in learning every investment strategy for real estate possible. And I listened to podcasts over and over and over on the job site, on road trips, anywhere. I listened to things and I was like, cool, these people are making changes to their life, they're making some money. One day I want to do this. Well, two years ago, I finally said, I'm gonna do this, and I bought a property. The mindset then was just to grab rental properties. If I had a bunch of doors, I was gonna be rich and free, and I was able to walk away from my job. That's what I thought back then, but that's not the reality of it, right? So completely different mindset now, but that was just the thoughts of a rookie. I'm still a rookie, but I've done quite a bit, to be honest. I've done a lot of things that I was hearing other people uh have done. So let's say I bought this property, it was turnkey. There was a tenant in place already. Not much was needed to be done to it other than you know, put money down and take on this property. I did nothing cool, nothing fun, no strategy other than here's some money and it's mine. Um I've done a burr. My second property was a was was almost a full burr. So I did that. I've done a flip. That was exciting. That actually gave me some momentum and some and some money to actually try and keep doing this thing. And now I'm gonna be trying a midterm rental. So I've done those four things, and now I've literally saw a property that was not performing in the way I needed it to, in the way I wanted it to, and I sold that off. So I've done five things that are pretty major. I'm I'm pretty excited about it, you know. I'm confident in that I'm learning. I'm learning that this is gonna going to take some risk, it's gonna take some creativity, and it's gonna have a different mindset to win. And I wanted to talk about that on this episode. Again, I bought the property, it was cash flowing about $135 a month, nothing crazy. And you always hear people talk about if the AC goes bad, if this or that goes bad. And I had a sinkhole, it was 10 foot deep. I had some other issues. I had um rats, mice, roaches. I mean, I had all of that. Um I had city issues, fines, tickets, unpaid utilities. In these two years, I had to pay those. So that ate into my cash flow. And mind you, I put money away, so that was on top of the reserves uh that they suggest or that is recommended put away for those rainy days. Most of those uh fees and repairs and things, I did have money from rents to cover, um, but it wasn't doing anything for my future long-term goal. And I sat down back then two years ago, and I did a vision board. And I and I talked about or I wrote down and thought, what do I want to do? Where do I want to be in X amount of years? And then I was excited. I was like, you know, I got one, I'm gonna get a hundred. If I get a hundred plus homes, I'm gonna be rich. I can quit my job, I can have so much freedoms, I can travel the world with my son and just live it up. And yeah, not so much. Not so much. I'm in my fourth deal, and I'm far from that. Let's let's be honest. I had some success on my flip, you guys are fully aware, but in terms of the freedoms and everything on that vision board, not in two years, two and a half years, not even close. But that's why I say the mindset shift is changing. Then I was excited just to get a rental property, right? Now I'm excited to get a performing business. I want a lot of cash flow, right? That's at least what I'm trying to achieve. You know, there's a lot of midterm rentals out there that have business names, and you know, they may call their midterm rental the blue room, the green room, the executive suite, whatever name you want to put on it. And it that certain property for certain people is making quite a bit of money. And they they treat it as a single business. That's what I'm gonna hopefully do with this one in the market that I'm currently in and see if we can get there. We're getting closer to getting that renovated, so I'll be excited to share if the midterm rental is gonna be a success or not. If it's not, I'm gonna share with you guys that exactly. But, you know, this property got me started. I'm thankful for that. I had no emotional attachment to this first property. That's another thing. Because you own it and you're scared to lose, we hold on to properties a lot longer than we probably should. Then our gut is telling us to, I should say. In my case, that's what it was. So I wanted to get rid of the property last year, but I was I was holding on because I was like, if I get through this flip, I'll be good. Mind you, this was vacant. I didn't have a tenant in there since I think September. And it was gonna take about twenty to twenty-five thousand dollars to rehab the property. I already put twenty thousand dollars down, it's only a ninety thousand dollar home. I did not feel comfortable with putting close to fifty grand down on a ninety thousand dollar home, and the property wasn't gonna be half that price. Now, if I was gonna put fifty grand down and now I only owe forty, well, whole different ball game. Um, but that's that's not what it was. So then it had vacancy. That sucked. Now that it's sold, I saved myself six hundred dollars, five, six hundred dollars, because I was just paying that out of pocket every month. It was slow growth. It wasn't, you know, going to increase in cash flow much. Even if I put the twenty-25,000 down, I was gonna go from a hundred, let's just round up to $150 to $250. Is that gonna make sense? It's not bad. I'm not saying long-term rentals are bad, it's just you know, I have a different vision board, I guess you can say, and I didn't realize then what I think of and how I look at things now, is what I want to say. It's not a lot of money that was tied up in the property, so holding on to it, it's not like, you know, like I said, I put 20,000 down, so being able to get that back. I mean, it doesn't put me into higher price markets or higher price homes, I should say, but it wasn't doing much for me. So I'd rather take that money and see if I can put it in newer markets and and see what happens. And that's just because it's not it wasn't life-changing cash flow. It wasn't at all. And there's a thing too, when when people think of cash flow, I put twenty thousand dollars down, right? In the beginning, I thought, well, this thing's making me $150 a month or $200, let's say. What's your break even? I don't think people talk about that enough. When I put $20,000 down, how long is it gonna take for me to recoup that $20,000 and actually become net positive? So for a while, I was telling people I'm making a couple hundred bucks a month off this property when I was in the hole. I was in the hole to $20,000. That's why I say I'm not a big fan of turnkey homes with tenants in place where you can't do any value add because I would love to do renovations on the property with the bank's money. Loans were scary in the beginning, but now that you know some of the products, it's like I'll use their money to do most of this, and I'll only put my down payment. And possibly if it's a if it's a value add, burr it and get most of my money back and then go from there. But I think I got caught up in the idea of owning rentals before really asking, really asking what kind of life single family home rentals were actually creating for me. I think that's deep. I think a lot of us can talk to ourselves with that line, and it might change things for us. I know it is for me. I want faster freedom, I want cash flow, cash flows that actually help me. I want to be able to scale and I want to try different strategies that can, you know, threaten other strategies in a good way. So if I'm getting appreciation on a property, that's cool. But it I also want to get higher cash flow, and if I have to pay a little bit more to go into a market that costs more, that's fine now because I learned quite a bit going into a you know a lower, cheaper market. So it's just slowing down and actually having that deep conversation within yourself to say, what am I doing? What do I want from this? And how can not so much what do I want from this, how can I get to what I want in what I am actually doing? What am I pursuing? There's other investment models, there's other investment strategies that actually can help you get closer to where you want to be. I truly believe so. It's just a lot of information that we don't know. We get scared because we don't know. And trying these different strategies, I haven't locked anything in yet, right? I've done a multitude of things, but just trying multiple strategies, I'm gonna find something. I have to. Otherwise, it's just not gonna work. But I really believe it will. Something's gonna work. This experience, this this low cash flow, you know, identifying it's not what I want, leaving a market, uh, potentially. We'll talk about that in a future episode, um, because my second property, though I did want to sell real quick, I have a different strategy for that one. I'll keep you guys posted on that. But it will depend on comps and and what the home could potentially sell for. But if I'm not excited, I'll do a whole episode on possibly why I might keep that deal. But anyway, small businesses, hotels, higher cash flow models. Um, that's what I'm looking for. Not because I figured it all out at all, but I'm learning and I'm figuring out there's multiple ways to build freedoms. I don't regret buying this rental at all. It taught me a lot. I was able to meet some friends, some people that I still talk to today in this market. I'm excited it got me started. It got me out of the chair into the driver's seat to actually feel and take a look at what is possible. It's it's hard and scary to think that investors are these certain type of people. Well, we all can be an investor, right? You just have to be savvy a little bit, be creative. You know, there's a lot of tools that we have at our hands that we can use to actually make an investment. I won't say that you know, you can come in here and do this with no money, uh, with no credit. There's a whole method of earning your money first with like wholesaling and you know things like that. But I don't know anything about wholesaling, so I'm not the one to talk to. I just see and hear others that make a decent amount of money doing that. And so if you need to get some money, look into that. But I can say that this property, uh, this market changed the trajectory and how I'm looking at things and how I'm attacking life and this investment thing mentally. But I also think real growth comes from being willing to evolve, take risk, instead of forcing yourself to stick it out in a strategy that you're not excited with forever. It's okay to stop. And you probably should pause every now and then. Uh, we get so stuck on a subscription to Netflix, for example, or to any of these monthly subscriptions, even the gym. Let's talk about the gym, or whatever it can be. And most of us just keep paying and not use the service. You know exactly what I'm talking about. That's what I was not willing to let happen in this portfolio of mine, in this freedom chase, and I felt like this was my building block, and I'm super appreciative of it, but I needed to knock this one down to tell myself there's more and there's better. That's that's all I got to say on this one. Full cycle, full circle moment. The property's gone. Um, I bought it, you know, two years ago, and we're moving on to the next exciting part of my investing career, and we'll just see where it goes from here. Thank you for your time as always. I appreciate the support. Subscribe, leave a review if you haven't. As always, have a great rest of your week, and I will catch you on the next episode. Take care, guys. Goodbye.