The 40 Things I Wish I Had Known About Real Estate Before I Started

📝 This Week’s Real-Life Lesson:

Where I Was

When I bought my first property, I was a full-time rural family physician balancing diapers, debt, and dreams. I had just started learning about building wealth through real estate and was inspired by my childhood best friend and investors who made it sound deceptively simple: Buy a property. Flip it or Rent it. Repeat.

So, I did what many do—I dove in fast.

What Happened

Partnering with a friend to venture into the property business seemed like a promising opportunity, but it's crucial to tread carefully. My partner was an honest and hardworking individual, familiar with local properties due to his family's excavation business. While I had the financial resources, he contributed time and effort through sweat equity.

Our initial house flipping project went reasonably well, prompting us to try again. However, unexpected costs and slower sales due to location caught us off guard. We ended up using much of our seed money on this project, resulting in significant financing charges for our next rental property—a decision that heavily impacted our cash flow and future asset purchases.

At that time, I lacked knowledge about cost segregation studies and other financial strategies, which left us struggling with negative cash flow and high bank charges. When my partner's father sold him the family business, he no longer had extra time for our venture. This led me (or rather my wife) to buy out his shares.

Despite these challenges, I didn't give up; instead, I learned from them. With insights from my former partner, we identified a promising medical office building opportunity. Taking a calculated risk by securing a business loan with personal guarantees paid off when we negotiated a lease agreement with the local hospital.

This strategic move transformed into owning a seven-figure medical office building that continues generating substantial income even after retirement—thanks in part to understanding cost segregation benefits later on.

The journey taught me valuable lessons about cautious planning and informed decision-making in real estate investments while highlighting the importance of adapting when circumstances change unexpectedly.

What I Learned

Real estate isn’t passive—it’s a micro-business. And just like in medicine, your success depends on systems, insights, and the right partnerships.

In hindsight, there are 40 things I wish I had known—and today I’m sharing all of them with you. You can download this checklist here.

🏠 The 40 Things I Wish I Had Known About Real Estate Before I Started Investing

🧠 Mindset & Strategy

1. Real estate is not passive income. It’s a part-time business. I learned this the hard way after a pipe burst during a family vacation—I spent three days managing the fallout from 400 miles away. Passive? Not quite.

2. Your first deal isn’t supposed to be perfect. Just start. My first property had peeling paint, no AC, and dated carpet—but it taught me more than any book ever could.

3. Cash flow beats appreciation—until it doesn’t. I bought a “cash cow” that barely appreciated and later wished I had picked a better market for long-term growth.

4. Know your “why” before you buy. Once I realized I was chasing someone else’s goals, not mine, I started investing with more clarity and confidence.

5. Start small and local to minimize risk. Buying a duplex down the road helped me stay hands-on and made every mistake easier to correct.

6. Treat every property like a business unit. When I began tracking income and expenses like a business owner—not a landlord—my portfolio finally became profitable.

7. Get educated before you get emotional. I once made an offer based on a “gut feeling” and later found a bad roof, an old furnace, and zero cash flow.

8. Patience in acquisition saves money in operation. Waiting an extra month helped me land a property $25K below asking—money I later used for upgrades and reserves.

9. Your returns are made on the buy, not the sale. A property I snagged under market value during the off-season turned into my highest cash-on-cash return to date.

10. A mentor is worth more than a mortgage broker. A seasoned investor saved me from buying a lake cabin with septic issues. I bought him dinner, and it was the best ROI I ever got.

💵 Financial Lessons

11. Overestimate expenses. Underestimate income. My Excel sheet lied to me because I was too optimistic—then reality (and roof repairs) set in.

12. Vacancy is inevitable—budget for it. I had a three-month winter stretch without STR bookings and still had to cover all expenses—lesson learned.

13. Don’t ignore property taxes and insurance. I bought a short-term rental near the water and didn’t realize the property taxes would eat 30% of my profit.

14. Use cost segregation early if you're eligible for REPS. Doing this saved me thousands in taxes one year—it’s a game changer if you qualify. Read how I did this here

15. Have a war chest for CapEx. The furnace, roof, and deck all gave out in one 6-month span—I was glad I had $15K stashed for capital expenses.

16. Leverage wisely—it amplifies both gains and losses. I once got overleveraged on a residential housing development and had to pivot fast to avoid being underwater during an economic dip.

17. Track every expense—yes, even that late-night Home Depot run. The IRS doesn’t care if you forgot a receipt—and I missed out on hundreds in deductions before I started tracking everything.

18. Hire a CPA who understands real estate investing. My first CPA didn’t know what a 1031 exchange was—I switched, and my tax strategy went from amateur to optimized.

19. Understand the difference between depreciation and deduction. Depreciation looked like “free money” until I sold and faced depreciation recapture—no one warned me.

20. Don’t let the tax tail wag the investment dog. I once considered buying just for a write-off—then realized it wasn’t a deal, just a deduction in disguise.

🛠 Property Management

21. Self-managing is a job. Know what you’re signing up for. I once handled a guest complaint while on a date night—it was then I realized self-management requires boundaries and systems.

22. Systems matter more than square footage. I’ve had a small residential property outperform a larger house simply because it had better automation and messaging systems.

23. Tenants are customers—treat them like it. When I started treating guests like clients, my reviews skyrocketed and so did my occupancy.

24. Long-distance landlording is not for the faint of heart. Managing a Lake Michigan beach front property from Indiana required a lot more than Airbnb and hope—I now have boots-on-the-ground support.

25. Use property management software—even for one unit. Once I moved everything to a digital platform, I stopped missing bookings, overbookings, and tax deadlines.

26. Screen tenants thoroughly—credit isn’t everything. A tenant with good credit and a bad attitude cost me thousands of dollars and stress when they walked away from a land contract months behind on their payments—character references matter too.

27. Respond to maintenance fast—it saves money long-term. Ignoring a small leak in the bathroom ceiling turned into mold remediation and a $3,500 repair.

28. Get landlord insurance, not just homeowner’s insurance. My basic policy didn’t cover tenant damage—now I double-check the fine print on every policy.

29. Create standard operating procedures for turnovers. Once I built a turnover checklist, I stopped forgetting key tasks and my efficiency skyrocketed.

30. Your cleaners are your front line—pay them well. My cleaner once caught a broken pipe before check-in and saved me thousands—I made sure she got a bonus on the spot.

📍 Market, Location & Timing

31. You can fix a house—you can’t fix a neighborhood. I bought a great triplex in a sketchy part of town and spent two years dealing with police calls and scared tenants.

32. Short-term rentals are subject to fast regulation changes. Our STR town added new taxes and permit rules overnight—know the regulatory climate and have a Plan B.

33. Research HOA rules before investing in a condo. An HOA banned short-term rentals three months after I bought in—I now ask for bylaws before I even tour.

34. “Up-and-coming” neighborhoods require serious analysis. I chased a “hot” neighborhood before the basics (like streetlights and sidewalks) were even in—big mistake that cost me a lot of money!

35. Tour the area at night before buying. The cozy daytime vibe of a house changed at night—neighbors partying, street racing, and sketchy activity.

36. Look for job growth, not just population growth. I invested in a beautiful beach town with no jobs—great summer & fall traffic, but crickets the rest of the year.

37. Diversify across markets to reduce systemic risk. COVID taught me not to have all my rentals in one region—now I spread properties across states and seasons.

38. Don’t chase trends. Create value instead. I resisted the crypto-bro Airbnb décor trend and focused on guest comfort and experience—guests noticed.

39. Time in the market beats timing the market. My best property wasn’t timed perfectly, but holding it for ten years allowed the value to double organically.

40. Buy in places you’d want to stay—even if it’s vacant. When my beach house sat empty during off-season, we used it for family getaways—worst-case scenario turned into a win.

📷 “Is That Deductible?”

Yes, that beach rental of Simpli SoHa was my business development and strategy meeting. Read More: Is That Deductible? "Creating An Online Course in SoHa

Just remember, if you documented your planning, mileage, and business purpose—you may be able to deduct a portion of your short-term rental travel and expenses.

👉 Learn How To Do This With the PEA Builder Membership→

📬 Join the Movement

“Thousands of clinicians are breaking free through micro-business ownership. Ready to join them?”

👉 Join PEA Explorer Membership →

🧠 Final Thoughts: Your Life is Your Curriculum

Real estate investing isn’t just about properties—it’s about transformation.

I’ve made some brilliant moves. I’ve made some painful errors. But through it all, I’ve embraced the entrepreneurial life—learning, adapting, and becoming the kind of physician who thinks like an owner.

If you’re a healthcare professional wondering whether real estate can be part of your micro-business plan, I invite you to take a step deeper into this world. It’s not always easy—but it’s worth it.

Start with education. Lean into community. And remember—your micro-business journey is meant to be uniquely yours.

You can browse & download more of my lessons learned in real estate in these products:

• Info graphic Checklist: “40 Golden Rules of Real Estate for Physician Investors”

• E-Book “Vacation Home Investment Checklist for Physicians”

• E-Book “Your Guide to Short-Term Rentals: Physician Entrepreneur Edition”

See you on the journey.

— Tod