My $500,000 mistake in real estate investing wasn’t losing money on a duplex due to improper due diligence—that was only a $10,000 loss. It wasn’t even when I blindly trusted a property manager who ended up stealing about $30,000 from my partners and me. My biggest mistake? Not listening to my wife.
Eight years ago, we started what would become an annual trip to Pigeon Forge, Tennessee. At the time, Airbnb reported around 29 million U.S. users, a number that would grow to 45 million by the end of 2023. Whether the Airbnb gold rush is over is a topic for another time, but it’s central to my story.
During our first trip, we stayed at a cabin for sale: a two-bedroom, two-bath with a loft, hot tub, and pool table, located at the top of a hill with a view of Douglas Lake. The asking price? $130,000. If you know the Pigeon Forge market today, that figure might make you drop to the floor. Cassie fell in love with the cabin and urged me to buy it. I was interested but cautious.
Instead of considering the potential of the short-term rental market, I underwrote the cabin with a long-term rental mindset. The BRRRR method didn’t even cross my mind back then, and I wasn’t willing to take the risk on an unfamiliar market. I calculated that holding the cabin would cost us $2,000 a year. What I didn’t realize was that we would end up spending that amount annually just vacationing there over the next eight years, not to mention how Airbnb nightly rates would skyrocket.
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Fast forward six years from that initial stay. The property value increase…well, it just makes me break out in a cold sweat. The cabin we could have purchased for $130,000 sold for $637,000. It’s tough to take a $500,000 “I told you so” slap on the chin. Fortunately, Cassie doesn’t remind me of this mistake as much as I remind myself.
This has been one of the most costly lessons: not being willing to take action and embrace calculated risk. Back then, the BRRRR method wasn’t on my radar, and the W2 Capitalist community didn’t exist. Had I been part of a mastermind or real estate investing community, I could have leveraged their insights. They, along with Cassie, would have pushed me to see the opportunity and take action—perhaps even using the BRRRR method to maximize the cabin’s potential.
Common FAQs using the BRRRR Investing Strategy:
I use and highly recommend DealCheck.io.
With none of your own money, yes. Partnerships are the best way to grow your portfolio without using your own money. Utilizing creative strategies like Hard Money (via W2 Cap Capital LLC) will allow you to fund the purchase and rehab with only 10% down (sometimes 0% down given the opportunity).
Off market. If you don’t know how to pull an off-market list or the mailers you’re sending aren’t producing the results you want, watch the free video at https://FindYourNextBRRRR.com to see exactly how I’m finding our most profitable properties.