The Toughest Lesson: My first $10M loss
Total loss: $10 million. On one deal.
In Episode 2 of Lessons the Hard Way, Brian Sutton sits down with co-host Sam Chillingworth and does something most operators will never do. He walks through every decision, every missed signal, and every moment he should have cut and didn't. From buying the property in 2020 just as Covid hit, to the eviction moratorium that froze their repositioning plan, to the Fed hiking rates 11 times in 12 months while they were sitting on a floating rate bridge loan. He kept putting his own money in. Until there was nothing left.
This episode is for every operator sitting on a deal right now that isn't the same deal they bought. And for every investor trying to understand how a deal like this actually happens.
In this episode:
• How a $2M Covid discount seduced them into a deal they had already walked away from
• The eviction moratorium that killed their repositioning plan before it started
• What a floating rate bridge loan does to your P&L when the Fed raises rates 11 times
• The moment Brian knew he couldn't operate his way out of it
• Why he kept putting in his own money instead of telling investors the truth sooner
• "Survive till 25" — and why it didn't work
• Your first loss is your least loss — and what that means for deals right now
• How to reevaluate a deal honestly when the market you bought in no longer exists
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🔗 Two Waters Capital: 2waterscapital.com
0:00 Cold open — "I've been nervous about this one"
0:46 Show intro — hard lessons most people keep private
1:29 The setup — $8M investor equity lost, $2M personal loss, $10M total
2:10 Why Brian almost didn't do this episode
3:36 The deal — purchased in 2020, a stagnant market they weren't sure about
4:58 Covid hits — they walk away, then the seller drops the price $2M
6:02 The internal story — past success breeding overconfidence
7:16 First headwind — the eviction moratorium kills their repositioning plan
8:34 The shipping crisis — rehab materials delayed, plan falls further behind
9:16 The Fed raises rates 11 times — the floating rate loan becomes a problem
10:30 Brian starts putting his own money in to cover the mortgage
11:18 The mistake — staying locked to the original plan as the world changed
12:01 The hard truth he couldn't tell himself — this deal no longer exists
13:16 Why he didn't sell early — protecting investors over his own capital
14:00 "Survive till 25" — and why it failed
14:51 What the $10M loss did to his confidence and self-esteem
15:49 Throwing good money after bad — the personal capital mistake
16:29 Finding the lesson — you learn more from losses than wins
17:18 Lesson 1 — your first loss is your least loss. Reevaluate honestly.
19:14 Lesson 2 — diversify. Never concentrate wealth in one asset.
20:15 The two equally bad options operators face when a deal turns
21:16 Don't evaluate on hope — evaluate on numbers and reality
22:07 "You misjudged once — what stops you from misjudging again?"
23:33 A message for every operator holding a bad deal right now
25:32 The real lesson — be transparent with investors, be honest with yourself
27:19 What Brian is optimistic about moving forward
real estate investing podcast | real estate deal gone wrong | multifamily investing mistakes | floating rate loan risk | real estate syndication | accredited investor | deal autopsy | commercial real estate podcast | lessons learned investing | real estate market cycle 2025
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