If you've followed investing gurus on social media, you know that their post feeds are full of "wins." It seems like 99% of the stories and claims you find online are about entrepreneurs who built a business bringing in $100,000 per month, or whatever figure they choose.

It's good to learn from the success stories. But it's also good to learn from the "failures." Especially because failures are far more common, and by learning from someone else, you can avoid learning your own lessons the hard way, which costs time and money.

So, I want to share one of those lessons with you.

I almost bought this self-storage facility:

In 2019, I was on the prowl for passive income. I was reading popular books on real estate investing and following the BiggerPockets podcast. It seemed like real estate was the BEST way to go. And self-storage seemed like the most passive form of passive income. How much can it really involve? People drop off their stuff and pay you every month. No toilets, or appliances, nothing.

I had $30,000 of investable capital, and I was looking for a property. I looked at houses, and the rent-to-price ratios were too high; they wouldn't cash flow. That means at the end of each month, the rent wouldn't cover the mortgage, and I would have to pay out of pocket. I didn't want that.

I looked at several commercial properties before finding this one. It was a 19-unit self-storage facility in a small town with a population of 133. It was listed for $180,000. My broker contacted the listing agent, and we started the negotiation process.

I started looking into the local self-storage market. I found this was the only facility in town. I conducted market research and found that, across the city and its surrounding rural areas, the density of self-storage units was below the market average. Still, it made me nervous that the total addressable market was so limited. If something were to go wrong, such as a customer mistake that led to negative word of mouth, I could be without any customers in a hurry. I determined that the closest large market was a town of 16,000, 30 miles away. I guessed that was too far for customers to travel unless they were getting a great deal on the unit.

I found the nearest self-storage facilities and called them to see how full they were and what their prices were. Then I called the self-storage facility about the sale. They didn't know I was the prospective buyer when I asked if they had any units available. The owner seemed unsure whether units were available and didn't give me a clear answer. I knew, from inspecting the property, that half of the units were vacant at the time.

"Management is ineffective." I thought. "That can be fixed."

The building itself was OK. There were concrete cracks that needed repair, and exterior paint and trim that needed maintenance. The property had very few security measures, and I figured I would need to install cameras and other infrastructure.

The bank, however, wasn't as impressed as I was. After the loan agent looked at the current rent rolls, they said I would need to bring a 35% down payment to the loan, instead of the typical 25%. That was stretching my budget. We tried negotiating with the seller. The seller's agent said they already received an all-cash offer for slightly less than asking, and they were firm on price.

I talked to a property management company to see if they would manage the facility for me. I didn't want to end up spending time working it myself; I lived over 30 minutes away. They confirmed they would manage it at 8% of gross rent.

It was decision time.

I thought the market could support the facility. I thought the vacancy was due to poor management. But if I couldn't get 80%+ occupancy, I wouldn't make any money. I would need at least $10,000 for repairs and upgrades. And I only had one viable property management option.

It was a tough decision, but my wife and I decided not to buy the property. The risks were too significant for a growing, young family with limited savings. There were too many unknowns that would sink the deal for us.

Someone else bought the property, and before long, I saw that all the units were rented. I was right about the market and demand. They even raised prices, as I expected, because the rents were under market.

Sometimes I wish I had bought the property. Hindsight stings like that. But we ended up moving a few years later, and it would have been impossible to self-manage the property. For the quality of our lives, it was better that we invested the capital in other investments (which I will discuss later).

The lesson is this: your portfolio decisions are not simply about dollars and cents. Your investment portfolio impacts your life. It's OK to walk away from deals. In fact, most deals should be passed on.

Warren Buffett, the ultra-famous billionaire investor, has this advice about buying business assets:

"The stock market is a no-called-strike game. You don’t have to swing at everything – you can wait for your pitch."

Translation: I didn't get a "strike" by passing on that storage unit. I let the pitch go and focused on the next one. It's a strategy that needs to be discussed more often.

We are busy building the tools that you need to take your swing at the right pitch for your portfolio on our website, starting with the portfolio builder hub.

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