384: Losing $60k on His First 2 Flips so You Won't Have To with Spencer Cornelia

Episode • May 28, 2020 • 1h 17m

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

Check the full show notes here: http://biggerpockets.com/show384

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