Real Estate the Ramsey Way - Why Real Estate Can Be a Blessing or a Curse

Episode Date: March 24, 2025

Your home should be a blessing, not a burden—but unfortunately, some people learn that the hard way. Get the answers you need with Real Estate The Ramsey Way, and learn what to avoid and how to do real estate the right way.   Next steps: 🏠Have questions about how real estate can help you reach your financial goals? Check out our ⁠⁠⁠⁠Real Estate Home Base⁠⁠⁠⁠ for free tools and resources to guide your next steps.   🏠And if you’re ready to buy or sell your home, ⁠⁠⁠⁠connect with a RamseyTrusted®real estate agent⁠⁠⁠⁠. They’re experts who’ll help you confidently navigate homeownership the way we teach. Listen to more from Ramsey Network 🎙️ ⁠⁠⁠⁠The Ramsey Show⁠⁠⁠⁠  🧠 ⁠⁠⁠⁠The Dr. John Delony Show⁠⁠⁠⁠ 🍸 ⁠⁠⁠⁠Smart Money Happy Hour⁠⁠⁠⁠ 💡 ⁠⁠⁠⁠The Rachel Cruze Show⁠⁠⁠⁠ 💰 ⁠⁠⁠⁠George Kamel⁠⁠⁠⁠ 🪑 ⁠⁠⁠⁠Front Row Seat with Ken Coleman⁠⁠⁠⁠ 📈 ⁠⁠⁠⁠EntreLeadership⁠⁠⁠⁠ 💸 ⁠⁠⁠⁠The Ramsey Show Highlights⁠⁠⁠⁠   ⁠⁠Learn more about your ad choices.⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠Ramsey Solutions Privacy Policy⁠

Dave Ramsey here and welcome to another episode of Real Estate, the Ramsey Way, where you'll learn how to make smart home decisions, avoid costly mistakes, and navigate homeownership with confidence. Jason was in Raleigh, North Carolina. Hi, Jason. How are you? Hey, guys. How are you all? Can you hear me okay? Yes. What's up? Hey, I just got a quick question for you.

I'll give you a quick rundown on the situation. I'm trying to decide if I should sell my house. I live about an hour outside of the Carolina Metro is right now. I'm planning to make a move this summer. I'm self-employed at sell real estate, and so in my new market, I'm going to have to kind of start from the ground up. I'm near the end of the baby step two. If this move wasn't happening, I'd be done probably by June or July, maybe August.

The flip side, so the question is basically... Where are you going to live when you move? I'm going to rent. Okay. And so your question is whether to keep your house or not? Yeah. Oh, sell it. No, just sell.

Yeah, I bought. You don't need to be a renter and be a landlord. That's bass backwards. That was risky, Dave. That was very risky. That's what I needed to know. Yeah, I mean, really, think about it. That's backwards.

You don't want to do that. So, no, you need to get, you're in the real estate business. You're going to get plenty of opportunities to own a property and live in a house that you pay cash for or buy it and then get it paid off as quick as you can, hanging on to this boat anchor that represents your former life out in the burbs when you're moving into the metro and having a deal with that while you're trying to learn to sell real estate and trying to get your business moving. Nah. Yeah. That's where my mind was and I thought that was right. I just wanted to make sure.

Yeah, you're right on track, man. You're right on track. So there you go. Here's the thing. It's interesting. Real estate is such an emotional topic because it has these two strange elements to it. Strange element number one is it is an excellent way to build wealth when you do it right as a part of your long-term plan. Right. That then gets confused with it's always smart no matter what. That's a good point, Dave. And it's not. Sometimes real estate, doing a real estate deal in the wrong situation in your life could be not, you know, in Jason's it's just a bad idea.

But in other people's it's even way over into the stupid zone. Yeah, for sure. And so real estate is, it's weird. It is, because it's a blessing when you do it right, that gives everybody permission to do it even wrong, and it becomes a curse. Yeah. And I think also the other thing that I think we're fighting now is so many people had properties that they locked in at a better interest rate. And so then when life moves them, they feel like, yeah, it's a good deal. Maybe I shouldn't get rid of it, even though I'm moving, I should keep it.

It's like this weird attachment to it. It's like because real estate is good, I can't, everything I do with it is going to be smart. Right. It just falls in line. And it's like, no, it's not going to be smart. You know, it's not smart. The only way that, you know, no, there's a good time to cut real estate loose. There's a good time for it to not be there.

And buying real estate you can't afford. Buying a house you can't afford. We had that earlier in the hour. That's right. So we've got to sell the house. As mom wants to come home and not be a teacher and be a full-time mom. That's cool. But we've got to sell the house.

We bought a house we can't afford. See, it's not a blessing anymore. That's right. It's a curse. It's a problem. Yes. So doing it wrong or keeping it wrong or because real estate's good, it's not always good. Yeah.

And it's not that real estate is, actually real estate is always good. It's the life situation you're in doesn't match up with owning real estate right then. And so it's not always good to keep your old house and rent it. As a matter of fact, it seldom is. Yeah. Very seldom. Let's go out to Omaha and talk to Ashley. What's up, Ashley?

Hey, going good, but thanks for your time. Excellent. Thanks for calling in. What's going on? My question is basically how to save up a down payment for a home when you have a low income without pushing off investing in kids college for too long. That's a really good question. Great question. So tell us how low is a low income. Well, this year, just like her tax season, it's about $36,000. but the previous years before that it was like 27,000 and 24,000. Okay.

How old are you guys? We're 27. Okay. And what kind of work do you do? My spouse is in the military and I stay home with the kiddos. Okay. So what I wanted to... Oh, sorry.

No, go ahead. I just wanted to preface this. We thought we were ready to buy a home. We were super excited because we've been saving up basically since we've been together. Mm-hmm. And then we realized a reality might not be what we thought. We have a 30% down payment for a $250,000 home, but the monthly payments were still pretty high.

And so we just got kind of discouraged. We're like, maybe we're doing something. Like, we don't want to keep saving and saving and saving and then we're out of time. How long did it take you to save the 30% down payment? I would say like five to six years. Okay. How many kids do you have? Three.

Okay. So I'm going to say something and it's going to sound harsh, but it's all love, I promise you. Okay. Okay. Everything that you do is a decision, right? If you get married, that's a decision. And it translates to a financial decision is what I'm getting at. You say, we're going to have one kid, financial decision.

We're going to have another and another financial decision. And I'm going to stay at home and be a stay-at-home mom. financial decision. And my husband's going to be in the military and work this job for X amount of dollars, financial decision. And what's great is when you can get ahead of that and make those decisions on purpose because you know where you're trying to get to. What happens many times is it's just life and we're just, you know, living life and you make these decisions. And then after the fact you realize how it's affecting you financially. But it doesn't change the fact, whether you figure it out in the beginning or after it's all happened, it doesn't change the fact that it has and is

affecting your financial situation. That being said, you're a stay-at-home mom with three kids on 36,000 a year before taxes. It's going to be tight. So that's just a realization. So which string can we pull to make this happen faster? Because to your own volitioner, like, listen, it took us five years to save up what we have to get it more. It's going to take another five years. Is that, it's a is that a road I want to walk down. So you've got to figure out what levers you can pull to make this thing go faster. And if you're willing to pull those levers, does that make sense? Yeah, definitely.

There's part of this that I guess what I'm getting at is there's not an easy button, right? John, that goes and push this and you'll be right where you want to be. No, I love what you said. It's just a series of choices. And every choice we make has tradeoffs. It has tradeoffs. And so right now the tradeoff for you is if you want to do this thing and do it right, which I value and I love that the fact that you're wanting to do this the right way,

it's going to take time. Like there's no getting around that. There's a time factor when it comes to reaching our money goals that we can't get around unless we say I'm either going to work more or sacrifice more. And with the boat that you're in right now, you probably have limited areas at this point because you can't go back in time. You can't put the baby back in the basket, right? So they're out now and you're taking care of them.

So, you know, maybe, you know, maybe there's a transition point. They go to kindergarten. You're able to pick up more hours. There's probably something that you can do now to start making some money. But just putting this in its right framework and going, okay, here's the reality of the situation. This is what I can do to earn money. It might not be much. It'll make us go a little bit faster.

Now we're looking at husband. Is there something that he can do? He's in the military. I don't know how, you know, what the restraints are there. Is there something more that he can do to make money on the side? Yeah, not with his schedule, no, it would be on me. And so there's part of this where you've gone, when we made these series of decisions, without realizing it, we also made the decision that we're going to be renters for a while

until we can afford this. And we, unfortunately, it's more than five years or six years. The good news is, you know, there's people who rent longer than that and they go on to be homeowners and everything's, you know, all good baby, baby. And that, you know, my husband and I did that. we were renters for 10 years until we could afford to buy a house. And, you know, no shame in that game. Ashley, do you all live by base? Yeah. And that might be another lever y'all can pull, which nobody wants to do that. But man, if we said, okay, for two and a half years, we can move on base. Kind of like my wife and I moved into a

residence hall for a year. Like, we're going to do this thing short term and we're going to pocket every penny of this money. And maybe your living stipend is far and above what you're rent. Tiz. And I missed earlier. You stay at home. Is that right? Yes. How old are your little ones?

They are five, two in a couple months. Good Lord on a stick. You got a busy house, don't you? Yeah. Yes. So this is one of those weird things where, not weird things, but just uncomfortable truths that Jade was talking about, that you and your husband go out and say, okay, is it a bigger value of ours that come what may?

we want to own a home or come what may no one else will ever, ever, ever watch our kids other than me. And if that's the case, then you all sit down and have that hard conversation and then it will give you some peace because right now you have no peace

because you all haven't had that deep values conversation. And then like, so I'm saving up for something right now. And so I'm driving a particular car right now. and a car that I really want will drive by, and I still feel it like, oh, gosh, that's so rad. But I made the choice. Me and my wife sat down and talked about our values and our plans. We made the choice to save up for some things.

So I'm not at peace with it. I can be annoyed and frustrated by it. And so you, if there was a mom on base that would watch your kids for 30 hours a week and you could go get another job and escalate this thing really fast just for three years until your kids go to school, that'd be awesome. or actually we're just going to do this until the kids start going to school and then I'll start working a little bit more and a little bit more. And that means we're going to put off buying a house for five years. You get to pick what that thing is.

But I think being super honest about values, having that values conversation. Jade, I have found most couples, myself included, have all kinds of proxy wars. It's about a car or it's about a house or it's about a daycare. It's about a job. And most of those things would be. solved and or answered if you would have the real conversations which are about values. That's right. And putting your values ahead of, how can I put this, where we think we should be by now based on cultural status, right? Because like cultural standards will say, you get married,

you get the great job, you get the car, you get the kids. And so we start making that like this checklist in our life. But, you know, when she's 27 and she's like, I got to get this house, I got to get this house. I'm like, you're in your 20s. Who cares? If you valued, if, if, you're, if, It sounds like you valued starting your family and taking care of your kids more than that. And that's okay. Of course it is. There's nothing wrong with that. Can we call this out?

Yeah. I would assume that a couple could get married and one of them could be employed full-time by the U.S. military. And they would have three young kids and they should be able to buy a house. Yes. But they can't. That's a problem. They should be able to. Yeah.

In any functioning world, they should be able to do that. And it's a math problem right now. It's not a math problem I love. It's not a math problem that I ideologically agree with. But it is. It's a math problem. Reality. And so I get Ashley sitting there going, whoa, whoa, whoa, I married somebody who dedicated

their life to this country. Yeah. He goes to work every day and he gets deployed randomly. And we can't even get a house. We can't afford a home? Yeah. A three bedroom, two bath house for our three little knuckleheaded kid. Like, seriously?

Yeah. That's the world we're in right now. That's the world. Yeah. And so there is room to be frustrated. There is room to grieve a dream. But man, the faster you can get to, okay, we are choosing reality. This is our reality. We get to choose. Do I stay home or do we not buy a house for a while?

That's right. And a dream deferred is not a dream denied. It might not happen today. That's a good one. You should write that down. Listen, I didn't say it. I think it was like Langston Hughes. That was good. I would love you some Lexington Hughes.