April 2025
MESSAGE FROM THE BOARD
My Journey in Real Estate Investing: Lessons, Wins, and Challenges
Real estate investing has been one of the most rewarding and educational experiences of my life. What started as an interest in building passive income quickly turned into a journey filled with opportunities, challenges, and valuable lessons. Whether you’re just starting or looking to expand your portfolio, I hope my experiences can offer insights to help you on your own path.
How I Got Started
Like many new investors, I was drawn to real estate because of its potential for financial freedom. My first investment was a two-flat property, where my family and I lived in the upstairs unit while renting out the first-floor apartment. This setup significantly reduced our living expenses, as the rental income covered a large portion of our housing costs.
As we continued to save, we eventually purchased a single-family home. Instead of selling the two-flat, we held onto it as an investment. The rental income covered its own mortgage and even helped pay half of our mortgage on the new home. That decision was a turning point—it showed me firsthand how real estate could generate long-term financial security and passive income.
Key Lessons Learned
1. Due Diligence is Everything
Early on, I underestimated how important it was to thoroughly vet a property before purchasing. Unexpected repair costs, bad tenants, and misjudged rental demand can quickly eat into profits. Now, I conduct extensive research on every potential investment, including property inspections, rental market trends, and neighborhood development plans.
2. The Right Financing Can Make or Break a Deal
One of the best financial moves we made was working with a small credit union in a smaller town. Unlike big banks, they took the time to get to know us and understand our long-term investment strategy. Because we built strong relationships with them, securing additional construction loans was easier. They even used our land as collateral, which made the loan approval process much smoother. This taught me the value of working with local lenders who see you as more than just a number.
3. Property Management Can Transform Cash Flow
At first, I managed my rental property myself to save money. I handled tenant issues, maintenance, and rent collection on my own. However, I quickly realized that while I was breaking even, I wasn’t actually making much profit. The stress and time commitment also made it difficult to focus on expanding my portfolio.
After hiring a professional property manager, everything changed. Not only did they handle all the day-to-day tasks, but they also optimized rental pricing, improved tenant retention, and reduced vacancy rates. As a result, my cash flow went from just breaking even to over $1,000 per month. That experience taught me that sometimes, trying to save money can actually cost you in the long run.
4. The Costly Mistake of Selling Without a 1031 Exchange
One of my biggest financial mistakes was selling a property without using a 1031 exchange. I thought I’d just take my profits and move on to another investment—until tax season came, and I was hit with a massive capital gains tax bill.
That’s when I discovered the reverse 1031 exchange, which allows investors to identify and purchase a replacement property before selling their existing investment. Even if you can’t find another property right away, there are creative ways to take advantage of a 1031 exchange. In one case, we purchased a piece of hunting land as part of an exchange. While we didn’t need to rent it out immediately, it gave us the flexibility to generate income from it in the future if needed. This experience taught me that real estate investing isn’t just about buildings—land can be a powerful asset, too.
5. The Challenge of Budget Renovations in a Short-Term Rental Market
My latest challenge has been finding a small three-bedroom, one-bath home in a small town that attracts weekend adventurers, creating strong demand for short-term rentals. The numbers made sense, and we saw a great opportunity to turn it into a profitable rental. However, since we didn’t have a big budget, we did some of the renovation work ourselves—something that, in hindsight, wasn’t cost-effective.
The delay in getting the property fully ready for rental meant we missed out on valuable income. Not getting it rented as fast definitely kept us from making the money we could have been making. This is a hard lesson for both new and experienced investors: sometimes, paying more upfront to get a project done quickly is the better financial move. The longer a property sits vacant, the more potential revenue you lose.
My Biggest Wins and Challenges
One of my most rewarding investments was a four-unit rental property I purchased below market value. With some strategic renovations and improved management, I was able to increase its value significantly and boost rental income. This experience reinforced the importance of buying properties with potential for forced appreciation.
Of course, not every deal has been a success. I’ve faced unexpected market downturns, problematic tenants, and renovation setbacks. However, these challenges have only made me a more strategic and resilient investor.
Advice for Aspiring Investors
If you’re considering real estate investing, my biggest advice is to start small but take action. The learning curve can be steep, but the rewards are worth it. Educate yourself, network with experienced investors, and don’t let fear hold you back. Every deal—good or bad—is a learning experience that brings you closer to financial freedom.
PK Kleinert
Chicago Area Real Estate Investors Association - Programming Director
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| Upcoming Events |
CAREIA
Board of Directors
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Cash Flow Game Night (Members Only Event )
Wednesday, April 2, 2025 @ 7:00 p.m.
McDonald's off Highland Avenue
1 Yorktown Shopping Center, Lombard
https://www.careia.org/event-6028906
CAREIA Monthly General Meeting
Monday, April 14, 2025 @ 7:00 p.m.
Networking starts at 6:45 p.m.
Hyatt of Lisle • 1400 Corporetum Drive, Lisle
Topic: Raising Private Money from Self-Directed IRAs
Key Note Speaker: Mary Ann Skweres https://www.careia.org/event-5971527
Short Term Rental Sub Group Meeting
Monday, April 21, 2025 @ 7 p.m.
Portillo's Hot Dogs, 531 N. Randall Rd., Batavia, IL 60510 https://www.careia.org/event-6028911
Anyone who has an interest in investing in short or mid-term rentals are invited to attend our monthly STR sub group meeting. Each month we will have an open forum to discuss all things short term rentals.
Real Estate Networking Night
Monday, April 28, 2025 @ 6:30 p.m.
Portillo's Hot Dogs, 235 E. North Avenue, Glendale Heights, IL 60139
https://www.careia.org/event-6028912
A FREE Member & Non-member Event
Cash Flow Game Night (Members Only Event )
Wednesday, May 7, 2025 @ 7:00 p.m.
McDonald's off Highland Avenue
1 Yorktown Shopping Center, Lombard
CAREIA Monthly General Meeting
Monday, May 12, 2025 @ 7:00 p.m.
Networking starts at 6:45 p.m.
Hyatt of Lisle • 1400 Corporetum Drive, Lisle
Topic: Housing Choice Vouchers (Section 8) and Chicago Rental Market
Key Note Speaker: Asher Tanveer
Short Term Rental Sub Group Meeting
Monday, May 19, 2025 @ 7 p.m.
Portillo's Hot Dogs, 531 N. Randall Rd., Batavia, IL 60510
Anyone who has an interest in investing in short or mid-term rentals are invited to attend our monthly STR sub group meeting. Each month we will have an open forum to discuss all things short term rentals.
Real Estate Networking Night
Monday, May 26, 2025 @ 6:30 p.m.
Portillo's Hot Dogs, 235 E. North Avenue, Glendale Heights, IL 60139
A FREE Member & Non-member Event
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President: Pete Gordon
Vice President: Steven Bell
Secretary: Rob Hayes
Treasurer: Vanessa Krynen
Librarian: Dwayne Denzinger
Programing: PK Kleinert
Vendor: Iva Norris
Newsletter: Belinda Moore
Publicity: Mary Ann Skweres
Membership: Danny Galvez
Tech Support: Keith Jablonowski
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Our mission
To support and
promote local real estate investors
though networking, education, support, leadership on
legislative issues,
and promoting professionalism
and standards of excellence in the
real estate
investing industry.
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WORDS OF WISDOM
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“The way we see it, real wealth means having the money and the freedom to live life on your own terms." – Rich Fettke
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Library Book of the Month
Work Just Gets In The Way Of Making Money: Simple Prosperity Through Real Estate Investing
Do you feel stuck in a dead-end career? Would you rather work part-time, cash $25,000 checks regularly, and make $100,000 in just your first year? There’s more to life than what you are doing now. You have the ability to become self-sufficient and make serious money. The only thing holding you back is yourself.
Expert real estate investor Scott Jelinek understands how to achieve entrepreneurial success, and in Work Just Gets in the Way of Making Money, he shares strategies you can use to find, negotiate, and sell real estate. You’ll discover how to:
This isn’t a get-rich-quick scheme―you’ll still have to work hard and study. But by following Jelinek’s step-by-step action plan, you can gain the confidence and knowledge needed to become a successful real estate investor with a predictable income.
Did you Know?
We have: Books, CD's, and even Movies!
Have you ever wanted to read a book or listen to a course but didn't want
to spend the money knowing if it was what you really wanted?
Well, that's what our Library is here for. It's for you to read, listen or even watch some great things on real estate without having to dish out the bucks!
Sometimes you will find you may want to purchase the book or program after you borrow it. Great, but aren't you glad you didn't pay for all the ones that just weren't right for you?
To check out materials:
- Only members can borrow materials
- Review inventory here: https://www.careia.org/LibaryList
- Fill out CAREIA Library request form
- Receive materials at the next General Meeting
- Materials are due back in one month
- Note. If materials are not returned, member is responsible for paying cost of materials for replacement.
