‘Understand How Much Risk You Can Stomach,’ Warns A Failed Real Estate Investor. ‘You Don’t Want Your Investment Keeping You Up At Night’

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After years of trying to build a real estate portfolio in the Midwest while living in a high-cost city, one investor called it quits and shared everything that went wrong—and what he wished he had done differently.

In a Reddit post that hit home for many, the self-described failed investor said they bought two duplexes out of state after researching “hundreds” of spreadsheets and running the numbers over and over. “The rents were almost double the payments. What could go wrong?”

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Plenty, it turns out. Maintenance was constant. The property manager charged $200 to $300 for almost every call. Evictions were costly, and unit turnovers ran up to $10,000 each. “Good months, I got 80% of the rent I had been counting on,” he said. “There were a lot of months where there was nothing coming in.”

Eventually, he realized he couldn’t tolerate the unpredictability and financial pressure. “Understand how much risk you can stomach. I have a [large] amount of savings in cash because I’m just inherently not a very risk-taking person,” he wrote. “You don’t want your investment to keep you up at night.”

Commenters flooded the thread with similar experiences and advice. Several people noted that managing rentals remotely added significant risk, especially without experience or trusted contacts on the ground.

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Others repeated the importance of personal involvement. “Margins are too thin to use a property manager,” one landlord said. Apparently, you have to like “hauling people’s crap to the dump,” painting, dealing with raw sewage and writing checks yourself. “If you like those things, it’s a great hobby,” someone shared.

The original poster stressed the danger of using a property manager and a realtor who are business partners. “Get a separate property manager, realtor, and attorney with no connections to each other. You need checks and balances.”

For those who want to keep their financial lives private, he added a tip: “If you’re trying to keep your investment a secret from family, put it in an LLC.”