Mistakes I Have Made (That You Don’t Have To)

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By Mr. Land Trust

As a young man, I never believed I would see 2025. I purchased my first rental house at age 19. While I had very little money to invest in real estate, I did have one very valuable asset…time. I majored in business administration and marketing in college. But I did not really learn anything of value until I met my mentor, Jack Miller. Driving down to St. Louis for a half-day seminar with two friends, my life was about to change forever (and my kids and grandchildren’s lives).

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My mentor taught me the value of time. He said, “If you want to become a millionaire, borrow a million dollars and have someone else pay the debt back.” He also taught me how to buy houses with little or no money down. This was a huge change in my conventional thinking. I was taught in college that you always needed 20% down payment and this frustrated my desire to buy many houses (I knew that I would never earn enough money to pay my living expenses AND buy many houses with 20% down). I did not have a lot of money, but I did have a lot of time. Things were looking up!

With my new-found knowledge, I began buying houses as fast as I could. It was the 70’s and houses were increasing in value 1% per month in my town. I could not buy them fast enough. Then came the 80’s and 90’s and I began to invest in other assets besides more houses. I bought partnership shares in a chain of catfish restaurants, apartment buildings, bank stock, network marketing company stock and commercial property. I soon found out that partnerships don’t work and don’t last (at least that was my experience). I made a little money with the apartment buildings but lost money on everything else (who loses money investing in bank stocks? Me!). Eventually, I got out of all other investments other than houses and one commercial property. It cost me a fortune to learn the lesson to stick with single family homes as my long-term investment strategy.

My mentor was THE first person to teach a seminar on buying houses as an investment. Even though Fannie Mae was formed in 1938 and could make 30-year loans, today’s most popular tool for home financing, the 30-year mortgage, wasn’t even approved by Congress until 1948 for new construction homes and even later — 1954 — for existing homes.

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Well into the 50’s and 60’s lenders were still making home loans with 5-year amortizations. This meant much higher monthly payments and very few people could afford to buy houses to rent out as an investment. Once the 30-year loan became popular, the value of homes began to rise.

By the 1970’s (when I graduated from college) inflation was in high gear and house prices began to rise significantly. You might remember the author, Robert Allen, and his book, “Nothing Down.” It was a best-selling book that made him famous (he learned his techniques from my mentor, Jack Miller, and wrote his book using those same concepts).

What is the moral of this story? Invest in what fits your personality. I like tenants who live in houses as opposed to apartments. I like long-term tenants that pay my house loans off for me. I like tenants with toolboxes that can fix things that break. I like tenants with families as they are more stable. I like houses because when I sell them the buyer doesn’t ask, “how much does this place rent for?” Instead, they pay full retail and do not determine value with rent multipliers.

Choose the investment vehicle that fits YOUR personality but stay away from partnerships. Be in control one hundred percent! You will be glad you did.

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