354: Frank Advice on What to Do When a Real Estate Investment Goes Wrong
BiggerPockets Money Podcast
The Bigger Pockets Money Podcast - Mindy and Scott
Shane, welcome to the Bigger Pockets Money podcast. What is your biggest pain point? Tell us on Twitter @CNNMoney and @cnnmoney.
You’re one bad real estate investment away from being cash flow-poor and debt-rich. That’s right, not every investment property works out, and when leveraged the wrong way, a single property could put your financial future on the wrong track. While it’s easy to watch social media real estate investors flaunt their infinite cash flow and no money down tricks, buying profitable real estate is a little harder than it seems. Today’s guest, Shane, finds himself in this position, as an over-leveraged investment is causing him to hemorrhage cash.
Welcome back to another episode of Finance Friday, where hosts Mindy and Scott bring financial suggestions, no matter how extreme, to guests in many different situations. This week, Shane walks through his numbers, and from the start, Scott picks up on a big problem. Shane and his partner bring in a solid amount of income, but it’s slowly slipping out of their accounts every month as an overleveraged short-term rental property and high consumer debt eats away at their respectable income.
This isn’t an easy position to dig yourself out of, and Scott has some serious suggestions for Shane that could flip his financial position 180 degrees. But, doing so will require Shane to make drastic moves that will force him to reevaluate his relationships with spending and debt. While this “rip off the band-aid” type approach can be painful at first, it could save Shane years' worth of time on his path to real estate riches.
In This Episode We Cover
Staying away from consumer debt and how it can destroy your financial position
Real estate leverage and why too much of it can cause you to have negative cash flow
Sacrificing subscriptions, eating out, and other spending categories that may be tanking your budget
Having a money date with your partner or spouse to get on the same financial footing
The biggest moves to make if you’re serious about getting out of debt and on the path to financial freedom
Budget busters and how to build a more sustainable pattern of spending
And So Much More!
Links from the Show
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Check Out Mindy’s 2022 Live Spending Tracker and Budget
Designing a Frugal But Luxurious FI Life by Age 32
Food Spending Eating Away at Your FI Plans? Here’s How to Eat for Cheap
The Money Date: What You Should (And Definitely Should Not) Do to Align Your Finances as a Couple
Click here to check the full show notes: https://www.biggerpockets.com/blog/money-354
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