If you’ve spent any time in real estate investing, you’ve probably heard Warren Buffett’s golden rule:

Rule No. 1: Don’t lose money.

Rule No. 2: Don’t forget rule No. 1.

That advice sounds simple enough—until you’re staring at a property that looks like a winner on paper. The numbers check out. The area seems stable. The deal appears clean.

But experienced investors know the paper never tells the whole story.

In this week’s episode of the Heartland Multifamily Show, I share the behind-the-scenes breakdown of a deal I didn’t do—and why that decision probably saved me a massive headache and a ton of money.

Let me walk you through it.

I came across a multifamily property that, at first glance, seemed like a solid opportunity. The offering memorandum looked professional. The financials made sense. Nothing glaringly wrong to the average investor.

But I’m not the average investor. So I asked a simple due diligence question I always ask:

“How many owners has this property had in the past 10–15 years?”

The answer? Two owners in less than four years.

That was my first red flag.

You see, one of the most overlooked indicators of a problem property is high turnover in ownership. If multiple investors have owned a property in a short period of time, chances are they were trying to get out for a reason. And usually, that reason isn’t listed in the brochure.

I knew I wasn’t going to buy, but I figured I’d check it out because it was a five-minute drive from my office. I visited the property. I looked at the deferred maintenance. I ran real repair cost estimates. I asked questions the broker didn’t expect.

The more I looked, the more obvious it became: this property was a money pit in disguise. 

I tell new investors all the time: The best investors aren’t defined by the deals they do.

They’re defined by the bad deals they avoid.

Walking away from a “good-on-paper” deal is hard. Especially when you’re eager to close your next acquisition. But learning to say no can protect your capital, your sanity, and your long-term success.

In this episode, I break down:

How ownership patterns can reveal deeper problems

What I look for when evaluating previous ownership timelines

The specific red flags that should make you walk away.

And the possible exception to this rule that might present an opportunity to buy at a great deal, but it rarely happens.

If you’re in the game—or thinking about getting into it—you need to watch this.