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Drowning In Real Estate Debt

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I’m really feeling the pressure right now—I’m drowning in real estate debt, and none of my properties are selling fast enough. 

It’s killing our cash flow, and it’s made me realize where I could’ve done better in setting up systems and processes to protect my business in tough markets like this.

One thing that’s really standing out to me is how I’ve handled agreements with contractors. 

You know, we do a lot of renovations, so I usually have some leverage. 

I tell my contractors, “Hey, I’m going to keep you busy, but I need you to start projects with little to no deposit.” 

That approach has helped my company a lot because it means we can raise less money and still make strong returns for our investors. 

But here’s the catch—everything in real estate is connected.

When the market slows down and I’m struggling, it affects the contractors too. 

Even though I’m still giving them work, some of their other clients aren’t, and they start needing more money from me upfront. 

Suddenly, I’m stuck in agreements where they’re asking for deposits that I don’t have because, well, my last house didn’t sell. It’s a vicious cycle.

Looking back, this could have been avoided if I’d set more realistic expectations with my partners and raised a little more money to keep projects going, no matter the market. 

But instead, I tried to grow too fast and offer super profitable deals, and now it’s biting me in the butt. 

So, I’m in the awkward position of going back to my partners and asking for more money while explaining why my cash flow is a mess.

This whole situation is a perfect example of how something like interest rates can send ripples through the entire real estate industry, leaving everyone in a panic. 

But here’s the thing—there’s always a solution in real estate. 

My plan right now is to ride it out. 

We’re cutting back on construction costs, turning some properties into rentals to generate income in the meantime, and then we’ll reassess selling next year or even leave them on the market with tenants in place. 

Investors like me are still buying, even in this market.

That’s one of the things I love about real estate—no deal has to go bad. 

There’s always a way out, as long as you keep learning and stay adaptable.

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