Hitting "Reset" on a Real Estate Investment That Missed Its Mark

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.

00:00 Intro
03:03 Income, Expenses, Assets, and Liabilities
06:59 Financial Goals
09:18 Crushing Consumer Debt
13:57 The Short-Term Rental Investment
18:44 Cash Flow Problems
25:30 Sacrificing Subscriptions and Cutting Out Expenses
35:29 Resetting Your Financial Position
51:47 Action Items for Shane

Show Notes at:
https://www.biggerpockets.com/blog/money-354?utm_source=youtube&utm_medium=description&utm_campaign=none
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Past Episodes Mentioned in Today’s Show:
Liz Frugalwoods: https://www.biggerpockets.com/blog/biggerpockets-money-podcast-10-designing-a-frugal-but-luxurious-fi-life-age-32-with-liz-thames?utm_source=youtube&utm_medium=description&utm_campaign=none
Budget Bytes: https://www.biggerpockets.com/blog/money-299?utm_source=youtube&utm_medium=description&utm_campaign=none
Money Date: https://www.biggerpockets.com/blog/biggerpockets-money-podcast-157-scott-mindy?utm_source=youtube&utm_medium=description&utm_campaign=none
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How to Eliminate Your Debt and Start Building Wealth in Two Simple Steps:
https://www.biggerpockets.com/blog/how-to-eliminate-your-debt-and-start-building-wealth-in-two-simple-steps?utm_source=youtube&utm_medium=description&utm_campaign=none
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4 Steps to Finally Tackle Your Debt—and Start Growing Real Wealth:
https://www.biggerpockets.com/blog/face-your-debt?utm_source=youtube&utm_medium=description&utm_campaign=none
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Want to Be a Guest on the BiggerPockets Money Show? Apply Here:
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Connect with Scott and Mindy on BiggerPockets:
Scott: https://www.biggerpockets.com/users/scotttrench?utm_source=youtube&utm_medium=description&utm_campaign=none
Mindy: https://www.biggerpockets.com/users/mindyjensen?utm_source=youtube&utm_medium=description&utm_campaign=none

Episode 354

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