Most folks get introduced to real estate when they buy their first home…
They’re called “starter homes” for a reason. But for me, it started with surfing trips in the early 1990s.
I didn’t set out looking for deals on property.
But against all odds, I realized something that planted the seed. And by 1999, I was having an awkward conversation with my wife…
“I need to buy a beachfront lot in Nicaragua,” I told her…
We hadn’t even bought our first home yet. She wasn’t amused. But I’d thought it through…
Today, I’ll share the story… and the lesson I learned along the way.
I had been taking surfing trips to Nicaragua since 1993. And I found a wave that I believed would someday be one of the hottest destinations in the world. It was that good.
That’s why at 28 years old, I thought I’d unlocked the code. I was going to buy a lot right by that wave… and build a house on it. I was sure that location would be a big deal in the coming years.
Amazingly enough, my wife agreed.
We closed on a strip of dirt in a foreign country for $15,000. That was more money back then than it is today… And for us at the time, it was a LOT of money.
To the best of my knowledge, I was the first person to build a home at Rancho Santana, Nicaragua. I was right about the wave, too… The hot spot, Playa Popoyo, has since hosted the International Surfing Association world championships multiple times.
My plan for the Nicaraguan property was simple…
I’d rent the house out, just like an Airbnb. The property would pay for itself… And I would have access to one of the best surfing locations in the world.
Over the years that I held the property, lots of friends and acquaintances stayed there…
They were having a blast. And the once-secret surfing spots were becoming popular destinations. My roadmap was playing out just as I thought it would. But there was one major problem…
Not a single penny of the rent money ever made it back to me…
I had someone taking care of the property locally. And by the time they got paid… plus cleanings, upkeep, and fees… I made no money at all.
To this day, I don’t know exactly where the hole in the bucket was. My house was the surf destination. Folks paid to be there. But between fees, maintenance, cleaning, and who knows what else, none of it ended up in my pocket.
I wish I was able to stop the hole in the bucket. I couldn’t seem to, though. So after a few years, I sold the house for about three times what it had cost me. It was a major win, even after the rent issues.
More than that, it was a big learning experience…
I learned that managing property thousands of miles away comes with unique challenges – and that to succeed in real estate, you really need to know what’s going on.
Since then, I’ve done a lot more real estate investing. But it has never been in far-away places. Every major investment I’ve made has been in the county I live in. I can visit any property I own, any day.
That gives me a lot of peace of mind. And I believe it’s a real reason I’ve had success in my real estate investments.
So if you’re thinking about putting money to work in real estate, either make sure it’s a truly hands-off investment… or make sure it’s close enough to home that you don’t end up with a hole in the bucket.
Good investing,
Steve
This Stock Could Go Up 66% or More [sponsor]Marc Chaikin built the system that isolated NVDA before it became the best-performing stock of 2023. Click here to get his latest buy. More here.
Source: Daily Wealth