384: Losing $60k on His First 2 Flips so You Won't Have To with Spencer Cornelia
You can put a dollar number on the losses Spencer Cornelia took on his first two long-distance flips... but it's hard to quantify the value of the lessons he learned and is now passing on to you.
We noticed Spencer's thread detailing his struggles in the BiggerPockets forums and invited him on the show; he bravely accepted.
In this episode, you'll learn the pitfalls to watch out for when taking on heavy renovations (anywhere, but especially long-distance), how to ensure quality work is getting done, and the dangers of letting projects drag on when you're locked into expensive short-term financing.
Plus, it's not a total downer... because Spencer's seeing a bunch of success with his new Youtube venture, and plans to continue investing in (less aggressively leveraged) real estate projects.
Brandon and David add their own perspectives having made some similar errors in their careers, and tomorrow in Part 2 they'll break down the 10 Deadliest Mistakes Investors Make.
New investors: heed the advice in these two shows! And as always: run your numbers conservatively, know your own risk tolerance, and run deals by trusted advisors before jumping in.
In This Episode We Cover:
- What went wrong with Spencer's rehabs
- How to ensure contractors are doing quality work
- Incentivizing team members and keeping them accountable
- How much money he paid in interest and fees to his hard money lenders
- Functional obsolescence and complications with older homes
- Why you can't always trust an appraisal
- "Home buyer turnoffs" and why it's easy to miss them
- Why Spencer sold and took a loss rather than choosing another exit strategy
- Why he's not giving up on real estate
- How you can "go broke buying good deals"
- And SO much more!
Links from the Show
- BiggerPockets Forums
- BiggerPockets Bookstore
- BiggerPockets Podcast
- BiggerPockets Calculators
- Famous Four Analysis
- BiggerPockets Podcast 125: The Key to Business Success with Bestselling Author of The E-Myth Michael Gerber
- Pace Morby's Youtube Channel
- BiggerPockets Pro Replay
- BiggerPockets Webinars
- BiggerPockets Pro
Check the full show notes here: http://biggerpockets.com/show384