The Ramsey Show - App - Can I Sell My House by Owner in This Market?

Episode Date: May 17, 2022

Dave Ramsey & George Kamel discuss: Do you need a real estate agent or should you sell by owner? Handling an inherited rental property, The best way to tackle $900k in debt. Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. George Campbell, Ramsey personality, is my co-host today. Open phones as we take it all is about your building wealth, about doing work that you love, and about creating actual amazing relationships. The phone number is 888-825-5225. You jump in. We'll talk about your life and your money.

Sergi is with us to start off this hour in New York. Hi, Sergi. What's up? Hey, how are you, Dave? Great, man. How can I help? Got a question for you about selling the house. We've never done it before.

We purchased the house. Now we are looking to purchase another house, planning on. And obviously, a question came up to sell our house that we have right now. And when we go through realtor, there's 7%. We have to pay for selling our house. Uh, and since, you know, I'm starting to started to listen to the show and working on, uh, eliminating our own debt and we've done it. Uh, we finished the step two. Uh, so now we, I always constantly, me and my wife, we're always saying about, you know, everything reasonably when we plan things and everything. So now we plan about this and there's 7% and it bugs me.

I don't have peace in my heart to sell the house. You ever had a toothache? Have you ever had a toothache? Yes, I did before, absolutely. Did you use pliers or a dentist? Dentist. Okay. There's some things you don't do yourself because you don't know what you're doing.

You told me you didn't know what you're doing. Right. Yeah. I've had friends. And this is your most expensive asset. It's hundreds of, when you make a mistake selling a piece of real estate, it ain't $10, dude. I mean, when you make a mistake selling a piece of real estate, ain't ten dollars dude i mean when you make a mistake selling a piece of real estate it's tens of thousands of dollars and you're in a wackadoodle

world right now for real estate it's cray cray out there the list ain't amateur hour man you definitely want a pro in your corner it's going to save you more than seven percent oh and by the way let me help you with this it's not seven percent it's three and a half because some duper realtor will bring you an offer if you'll agree to pay them for their buyer's portion of 3.5%, and you're only going to end up saving the seller's portion, which is 3.5%. And now we're really down into you're going to lose it. A monkey can sell a house right now, but will they sell it for the right price and without a bunch of errors that cost you tens of thousands of dollars? I wouldn't sell my own house right now,

and I've had a real estate license since 1978. You're going to make more, and you're going to have a lot less hassle, and, you know, I don't even work on my own cars anymore. I used to open the hood and get a 916 and adjust the... I could watch this on youtube and fix it myself well i mean there wasn't youtube then but i mean i could set the timing on the monte carlo 350 right i mean i i could do all that i open the hood now and it looks like a freaking spaceship under there i can't even touch that stuff i don't fix every time i try to fix my car now it costs me more than

it would have cost me to have somebody fix my car because i break something. And that's what you're going to do, Sergi. Don't do it. I've had a family member who did for sale by owner, and it was the worst nightmare. And I had tried to warn them to stay away from that. But there are such costly mistakes you make. You're not reaching the bigger market because realtors have access to the MLS. They take better photos. They understand strategy and staging and what is going to cause someone to pay more money.

And so in the long run, you're going to make more on that purchase by going to a realtor. Well, and here's the thing. Okay, let's pretend you get one of these houses that people are going bananas, okay, where you get like 60 offers or 40 offers or something. The seller, it's almost impossible emotionally for the seller to manage that process and and clean through that and get the best possible deal and deal professionally with the other 39 who don't get the house i mean you've got to have some communication lines open you have to have a process basically you're conducting a freaking auction in a lot of these situations and you've

got to know how to manage that logistically and and what the law says about it you get yourself in a pinch man i wouldn't do it i mean you can do what you want to do but i think you're getting a bargain at seven percent uh if you get a good real estate agent i mean you've got uncle charlie who got his license three weeks ago and he wants you to do it because he's family no charlie's dumb as you are don't do it that you know he doesn't know what he's doing either no you get a high octane high quality real estate agent that knows what they're doing does a couple hundred transactions a year when they step in i mean you're not you're never gonna feel the tooth when it comes out that's true and everyone who's worked with one of those amazing realtors goes that was worth every single penny i paid them and i don't have to get a good

one you get a bad one it's like anything else but i mean and it's the same thing i mean i don't i don't i don't do my own taxes i don't do i don't write my own will i don't work on my own car and i don't pull my own teeth you know it's it's there's some things and you got all your teeth that tells me you've done well this was working out but the the diy thing um i mean there's some things you feel that way about and you're wrong and this is one of them it's the actual normal market data and I can't really talk about it in this market but the normal market data is that a realtor sold house with a high quality real estate agent will sell for more than seven percent more than the non-real estate agent sold house that's normal in this world who the crud knows i mean because you don't even know what they're going to sell for an asking price is

now suggesting starting point you know it doesn't even mean anything anymore asking price used to be suggested starting point i'm going to offer less you offer less you're not getting the house you forget it now in most of these markets that's where we are and you're relying on a sign in the house you can forget it now in most of these markets that's where we are and you're relying on a sign in the yard and then uploading to whatever site will allow you to upload your iphone photos that were crappily taken and so when you work with a realtor they know the professional photographers they understand how to stage it they understand how to market it well they understand every strategy around contingencies and this is the kind of market we're in. You're hiring a marketing professional for 7%. I mean, and if you were doing something else that was a $700,000 transaction and it was a complicated transaction,

you wouldn't think anything about paying the attorney that did the transaction or whoever, whatever. It's part of the process and a complicated thing. And I just highly recommend it. All the data that's out there in a normal market says that they're worth it. In this market, they're probably more than worth it. And those of you thinking about buying a house, same deal. Get you a good buyer's agent.

Because, I mean, if you go on RamseySolutions.com and click on ELP for real estate, endorsed local provider, Ramsey Trusted Real Estate Agents that we trust, they're all high octane. We've vetted all of them. They know what they're doing. And if you're going to buy a house in this world, you've got to get some advice. You've got to have somebody go, no, those people have gone crazy. Walk away from that deal. It's a bad deal.

Yeah, you get too emotional when it's just you. And you get bought in on this one house and you start to make stupid decisions yeah good agent makes all the difference and when you deal you know man it's it's it's definitely not amateur hour right now um i would feel better about you being a fizz bow and i think you'd have less damage in a normal world but right now good gracious absolutely not this is the ramsey show People all over the country are discovering a faith-based and budget-friendly way of meeting health care costs through Christian Health Care Ministries. Christian Health Care Ministries, or CHM, is a non-profit organization that helps members carry one another's burdens with health care expenses, and they have successfully shared each other's medical bills for nearly 40 years.

See if CHM is right for you by visiting chministries.org. CHM is a proud sponsor by visiting chministries.org. CHM is a proud sponsor of Dave Ramsey personality is my co-host today. I've laughed over the years at how many people have tried to call me an overnight success. You work your butt off for 30 years and now you're an overnight success. Well, on the surface, it makes for a much more exciting story, but I know that overnight success is not really what happens. You really have to create momentum.

You have to create meaning. And a few years ago, we developed a way of thinking around here at Ramsey. We call it the momentum theorem. And it's a math formula. Focused intensity, F-I, over T, over time, F-I over T, multiplied by a large G, God. Focused intensity over time multiplied by God equals unstoppable momentum. And we've taught this lesson in detail on how to create focused intensity over time multiplied by God to create unstoppable momentum to leadership all over America.

I teach this to our team. I've taught it in Entree Leadership for years, and the team decided that it's a great idea to turn it into one of our little Ramsey quick reads. The only problem, George, is it's not much. That's my kind of book. It's like 60 pages, 70 pages? Oh, you wish. 43 much. That's my kind of book. It's like... 60 pages? 70 pages?

Oh, you wish. 43 pages. It's a pamphlet. It's not even a book. It's just... It's so thin. I mean, we can make a paper airplane out of it. But it's 10 bucks is all.

That's the good news. And you'll read it in about, what, 20 minutes or 30 minutes or something. You're a speed reader. But the cool thing is, hey, if you look back over the past year, what parts of your life are stuck? What needs a little mojo? What muddy trench are you slogging in? Where do you need something to break open, like your marriage, your parenting,

your mental health, your career, your money, your business? Guess what? Momentum has to do with all of those things and momentum is not accidental it is created and this theory this theorem shows you how uh so i'm going to promise you you're going to feel like you didn't get much for 10 bucks but here's the other thing if you get one idea for 10 bucks it's probably worth 10 bucks yeah and what i love about the momentum theorem is that when you multiply it by that big g by god that's infinite yeah and you talk about this in the book but when you multiply something by the infinite it's an infinite result the answer on the other

side of the equation equation math equation is always infinite it's a calculus thing right so uh to infinity and beyond right but i mean it's infinite that's what it is so yeah it's uh you want unstoppable momentum this is how it works and we lay it all out for you so that's kind of fun i haven't done a quick read so i thought we needed one and they thought we needed one so sat down and uh typed it out and uh then they edited it which was a lot harder than typing it and um again there's just there's not much to it but the idea and the concept is worth a bazillion dollars and it's what this place was built on it's how we whether you're getting out of debt or building a business this book

is for all areas of life and so i'd pick a copy up and read it an hour check it out or less joe's in phoenix hi joe how are you-oh. I think I did something wrong. Did we lose him? I think Joe went just as I got to him. He got tired of me hearing him, but he lost his momentum. Scott's in Atlanta. Hey, Scott, how are you? I'm good, Dave.

How are you? Better than I deserve. What's up? Well, I got a question for you. Last year or the year before, my mom got diagnosed with dementia. I got three older brothers, and we wound up having to put her in a nursing home. I'm sorry. She has two properties, one that she lived in on nine acres in North Carolina,

and then a rental property a mile up the road that's on two acres. The rental property has not been rented in over 15 years need some work done to it and it's uh it's an area that's kind of sketchy not sketchy but it's an older area but all around it seven hundred thousand dollar homes are going up so mom owns the last two big swaths of land in new County, basically. And so I have gone in and shipped it to this state. I'm trying to figure out whether or not to sell it or pay to have it renovated and then sell it. I had one contractor come out and look at it, and he basically said

the house was built in 83. I mean, it's really dated. It has some water damage. But he made an offer to renovate it from $130,000 to $150,000, but that didn't include anything structural that we might have found on the renovation. What will it sell for? What can you sell it for as is and not touch it? The realtor said she could probably get $300 for it, but then I said put the fillers out there and see what happens,

and one guy came back $180. He offered $180 for it. And she said, well, fixed up, I could probably get you $400 for it, but that's going to probably take $100,000. Well, then she brings me a contractor, he wants 130 150 just basic reno and then goes in the caveat that if there's structural damage is going to be more yeah well he knew i'm not i'm not doing a renovation i'm not doing a renovation in an estate renovations are a pain in the butt you don't need a new hobby well i'm not going to do it i would just pay to do it. You're going to deal with all the freaking hassle.

Okay. You're going to be dealing with a mess. You're going to be dealing with the hassle, the stress, the process, the delays, the increases in materials, the, oh, there is structural damage, all this crap. Just sell it as is and be done with it. Turn it into money. Okay.

And then with this market the way it is because i used to be a millionaire until biden got in office yeah but i'm mad i was over over a million dollars when he came in office i'm sitting at a hundred thousand now a two hundred fifty thousand dollar loss what? On my 401k. Oh, it hadn't gone. You're okay. It's going to be right back. Don't worry about that. Oh, my gosh.

This sounds like a money pit, though. Yeah. Get a different realtor. I don't care for the way this one's transacting here. Jump online at RamseySolutions.com and find one of our ELPs and just put it on the market as is, where it is, and sell it. It sounds like it might be a teardown. It sounds like it might be the dirt is what it's worth. But that dirt might be worth $300 also, the way you're talking here.

But no, this is not, you don't need to get in the renovation business. You weren't signed up for that. And she should have, I mean, how do things sit dormant for 15 years it should have been so long time ago that's no investment yeah but uh yeah i'd get rid of it and turn it into money and then it's the money's laying there for your mom and that's your job is to do this on behalf of your mom and then if she doesn't need the money and there's it turns into an inheritance then it's easier to split up money than it is an old ragged house so yeah get rid of it and you probably need to go and get her house sold too. She's probably not coming back home. And just turn everything into money. And that's pretty cold and unemotional to

just throw that around. But all I'm doing is simplifying your life because I'm telling you to do what you're going to end up doing anyway. It's just a matter of when how do you help people process through the sentimental value of property and this was mom's property how do you navigate that you don't want to hang on to things i think you just have to kind of have a dr john deloney moment and just say it out loud you know this is sad i mean like uh my grandma passed away many years ago, and my uncle's aunt's parents decided they weren't keeping that farm. It was a small farm by then. They sold off a lot of it and subdivided it. But the old house had been in the family three generations,

and I played in the backyard, and everybody else played in the backyard, you know, and it's kind of sad. And when I'm in that little town I visit, I drive by, you know, and just have a little moment, right? But that didn't mean we need to keep that house because nobody in the family was around to mess with it. And what was it? You know, it's not – it was time.

You know, it was a season, and the season's over, and stuff is stuff. But it's, you know, big things like cars and houses and that kind of stuff, it's very difficult to let your sentimentality override good wisdom. And yet you still just have to say out loud, this sucks. You've got to separate the emotion from the facts and the logic and the financial pieces. I don't know if you separate it. I think you just admit it. You say it's there.

Even though this makes me sad, it's still the right thing to do. Even though we could get a little bit more for this house if we put $100,000 into it, it's not worth the hassle. It's not going to change her situation, and he's the guardian doing this representing for her. So even though her home and you start selling the stuff out of the house, you have an estate sale, and then you sell the house itself, and that's painful while she's alive and in the nursing home. She's got dementia.

She's not coming home. It's sad. It's just, I mean, you just process it. You say out loud, this just sucks. This is The Ramsey Show. Thank you. George Camel Ramsey personality is my co-host. Quincy and Portia are with us in Coral Springs, Florida. It says on my screen you guys are debt-free. Congratulations. How are you guys are debt-free. Congratulations.

How you guys doing? We are amazing, and so are you. How much have you paid off? $73,000. Love it. How long did this take? Three years. All right.

And your range of income during that time? So we were still dating at the time. We got married 2020, but we were dating at the time. I was making $6,000 a year, and she made $26,000 a year. This past year, we made our first $100,000. Whoa! Well, I got to tell you, Quincy, you've improved. Quincy, I was worried about you at first, but you've improved quite a bit.

What were you doing for $6,000 a year? I was worried about you at first but you've improved quite a bit what were you doing for six thousand a year i was worried about me too but porsche still thought he thought you were worthy so she brought you onto the game thank you dave i like it i like it so what was the 73 000 in debt uh so we had a couple credit cards banana republic best buy uh porsche had a car loan 12 000 and then the rest was student loans 60 000 worth of student loans wow so what do you guys do for a living i am a choreographer and a dance studio owner and i am a vocal director and a contracted uh singer here in south florida okay because i, because they just showed your picture up on YouTube and you look like a couple of freaking models. That's what I thought too, Dave.

I knew the clamor shot that you were somewhere in the business. So you're beautiful. We have to give y'all something nice, you know? Yeah, you guys are beautiful, man. I mean, it's amazing. Thank you. So cool, very cool. Congratulations.

All right, what got you started on this whole Ramsey kick? Well, our church was offering it at Church by the Glades, and our friends Sam and Jade Warshaw took us under their wings, saw that we were dating and wanted to fix our money, and just helped us when we were 21 and helped us get on track, and we just started doing it. Now, wait a minute. Who did you say took you under the wing?

Sam and Jade Warshaw. Jade? Jade. Same Jade. We know her. Oh, my gosh. Okay. And I know your church.

I've spoken there. They're wonderful. Yes, I was there. I was there. We were both there. We lead worship there, so you probably know. Oh, my God. Man, that's some of the best worship anywhere. guys are incredible thank you so much it's it's it's miami vibe man

it's awesome i love it it has to be it has to be you guys are getting it it's great yeah so fun well i didn't know where well we've got good we've got good common friends then so yeah so that guy they got you they got you started because jada lights you up now i mean she'll light you up and get you going right oh she they lit us up and we've been going ever since even after the pandemic we we actually paid off all of our student loans in one year um in eight months actually wow in 2021 so we were a bit afraid to pay it off because everything that that happened but man like they just made sure that we understood our goals and we just said you know what let's just pay it off and in eight months we paid it off and now we're free i love it i love it you guys

are incredible so no more falling for the banana republic uh in-store credit card offer, apparently. No. To save 10%. That was a long time ago, and I worked for a company that needed certain uniforms, but no more, no more, absolutely not. I don't even dress like that at all. You're over it. Well, you guys are very impressive. So what do you tell another young couple? They've got a normal life like you had, credit cards, student loan debt, and they go, Well, Biden's going to forgive it, and the credit card gives me rewards. What do you say to people

like that? As tempting as it may sound, like, man, you just got to take it into your own hands. Like, you have the power to change your situation. And we had a big hole to shovel, but we just made our shovel bigger the best way that we could. And here we are today. So just taking a step at a time. So it sounds like life was happening to you. It works. Yeah. Life was just kind of happening to you and you decided to happen to it. Absolutely. And we're contractors, so we don't even have like a steady income. So we had like, we really had everything stacked up, but we made a choice, and we stuck to it. Very cool. You guys are awesome.

Absolutely incredible. Thank you so much. So proud of you guys. Very, very neat. The plan is awesome, and it works. It works, it works, it works, it works. It's not a magic trick. Just do the work, and it works.

Yeah, so you just buckle down, live on nothing, and get it done. And you know what's weird is God will provide. When you start working a plan, God will provide the work. Amen. You got lots of work, didn't you? Oh, we got so much work that I was like, where is this coming from? We didn't even submit for this. How did we get this job?

You know, like that's what was happening. That's very cool. Good for you guys well done well done well give pastor david a hug for me he's a great guy yes he is we will yeah very good stuff all right we got a copy of baby steps millionaires for you how ordinary people built extraordinary wealth how you can too that's the next chapter in your story without a doubt you two are on the business for that. It's good. Very good stuff.

And a copy of Total Money Makeover for you to give away to someone. And we're going to give you access to Financial Peace University and every dollar premium Ramsey Plus membership for a year. And you can either use that yourself or you can give it away to somebody. Maybe you'll be jade to somebody else, right? Man, that's awesome. Thank you guys so much you guys are incredible very fun talking to you good stuff and we're proud for you all right

73 000 paid off quincy and portia in coral springs florida making uh did that in three years making 6k 26k up to 100k count it down let's hear a debt-free scream. 3, 2, 1, we're debt-free! Yeah! Yeah! That'll put some pep in your step right there. I love it. I love their energy.

Man. That is a great church. The church is full of energy, for one thing place that that that is a great church the church is full of energy for one thing but yeah and uh certainly jade is there's no question about that they're good people and uh good good stuff fun amazing you put yourself around good people who are wanting to grow and you all of a sudden you know what you grow you got to be careful because you become who you hang around with and you know you need to be hanging around with people that are knocking stuff down, you know, picking it up and knocking it down.

You've got to, this sitting around waiting on somebody else to fix your life, if that's who you're hanging around with, you're going to have a long life. Well, most people are surrounded by a bunch of Eeyores who are going, well, little man can't get ahead, always have a car payment, Biden's going to forgive it one of these days. And all of a sudden, there you are, and you're Eeyore. And you entertain a clown, you join the circus so be careful be careful people entertain a clown and join a circus don't do it george i don't entertain clowns that's good i like that i mean i might

actually hang out with dave ramsey i'm trying to build wealth expect me to steal that line okay because that's a really i don't think i invented it it's you know it's public domain yeah okay then i can steal it and i'll just say i and say i said it right yeah you don't have to give me credit it's fine i will i've stolen enough airlines over the years fair trade yeah fair trade all right open phones at 888-825-52, we're glad you're here. No, man, be not deceived. Evil company corrupts good habits. You do become who you hang around with. That's why we don't let our children run around with juvenile delinquents, because your child will become a juvenile delinquent, okay?

If little Johnny down the street's got a trash mouth, expect your kid to come home with a trash mouth, right? And don't be shocked all right your little angel's not going to survive this in this uh this exposure and and guess what you won't either and it's not to say we have to snub somebody or be mean to somebody i'm not ever unkind to someone i'm talking about who your closest friends were see that couple they had another couple come alongside them that we happen to know they're really sharp and put their arms around and walk with them you know hover over them encourage them push them the opposite of someone that's holding you back and going well you know you just you know you crazy do that and you know you put all your money in bitcoin and

you know and all these dumb butt things that people you run around with say and then all of a sudden you're just another dumb butt because you run around with them you got to create boundaries and go hey we can i can see you once a year but you're not going to be one of my close people who i let into my life your income studies have shown over a 10-year period of time will be within 10 to 15 percent of the average of your 10 closest friends some of you're going i need some new friends. I need Dave Ramsey to be my friend. Let's up this. Let's go.

This is The Ramsey Show. We'll be right back. George Campbell, Ramsey Personality, is my co-host. Alan is with us. Alan is in New Jersey, Newark to be precise. Hi, Alan. How are you? How are you doing, Ramsey? Just trying to put this all together, and I hope to see how we can best unpack this. Now, I have about, me and my wife have about like $900,000 in debt,

but it's not all crazy debt. It's investment debt. So just to give you a runabout, just from what we make, my wife, she works at the port. She's a longshoreman, and she makes about $160,000. I work in the IT field and the data field, and I make about $115,000. So let's put that there. I have a nice little nest egg of about $60,000. Let's put aside. And I'm 33. She's 32. We're married with four kids that's under 10. So it's been another year. So that's one thing.

Um, about the debt portion, I have about 166,000 in my primary home. I bought a house that I renovated and you know, I just renovated as a two family home and that's probably ARV is probably worth about 400 right now. And I don't have no debt on that, but however, I had toated it as a two-family home, and that's probably ARVs probably worth about $400 right now. I don't have no debt on that. However, I had to take out about $100,000 to put into the property to renovate it. So you do have debt on it or you don't? I don't have debt on that property, no. I don't have debt on it. But you got $100,000 unsecured.

Unsecured, that's right. That you used on that property okay correct i got 20 and a lot of well it's less than 100 but it's like 20 in the line of credit yeah and about you know 50 about 50 from your favorite place so far so yeah i got i got that one and then we bought another house a four family for about four for half a million but we got it down to like 450 we put some money into it we put about 40 into it what's it worth today about like 650 and what do you owe on it total what i owe on it right now 450 okay so i got 850 okay there it is. All right. And then we have about, my wife, she got a car, $23,000 in car, and about $6,000 on credit cards.

No student loans. We paid all that off. And, yeah. Okay. Why are you calling us? How can we help? Now, here's the thing. The property that doesn't have any debt on it, right,

I need to pull money out of that property to get rid of the interest rate on the debt that I took out to renovate it, right? Yeah, why are you calling us? What do you want to do? How could you, what's the best way to structure it and to see what your recommendation is? Okay. I started buying real estate when I was 22.

By the time I was 26, I owned $4 million worth, and I had about a $3 million debt on it. So I had $1 million worth of equity in the real estate, starting from nothing. What you're doing sounds very stressful to me. It does not sound like there's any peace in your voice. Yeah, we try to figure it out. We try to structure everything. Yeah, I think you play the edges on everything, don't you? No, not really.

Yeah, you do. you do every time i hold i have 170 000 miles on it i went to a dealership to buy a car you've moved the p three or four times on the shelf still trying to hide it just in this conversation yeah you're you're and um we're not in the debt restructuring business we're in the debt payoff business and it doesn't sound like you're at a point where you want to become completely debt-free or that you're willing to do what it takes to get there. The question you're asking and the answers we're going to give are all around the same issue. The issue is, okay, you're 33.

When you're 43, what moves are going to make you the best off? Okay? The best off financially and have the best quality of life with four little kids and both of you working big high-stress jobs and everything. So I'm going to get rid of one of these properties and a whole bunch of, if not all of this debt in the process. Okay. Because I think that's going to add an amazing amount of peace to your life.

A, you cut your number of tenants in half. B, you got rid of almost, if not all, of your debt. So $400,000 and $166,000 pays off. You get rid of everything but the debt on the rental. You pay off your mortgage, your car, your credit cards, and the $100,000 that's owed, and you sell the $400,000 property. That's probably what I'm going gonna do because that will take me because the peace and the calm steady movement rather than the flailing about will cause you to build more wealth

over time and you you've been you've been just kind of pushing the edges on this maybe you don't realize you are but it um and if you don't realize you are, and if you don't realize you are, that's even more of a problem. Because I know this guy because I was him. I mean, something about the real estate business, they take the risk meter out of your heart, and they put it on a table and hit it with a hammer and break it, so you no longer can measure risk. And you don't perceive that all of this is risk. You just see returns. You get a little starry-eyed.

It's just like, well, the renters are paying it off. No, they're not. The renters don't pay their bill half the time. You've got a problem all of this is risk. You just see returns. You get a little starry-eyed. It's just like, well, the renters are paying it off. No, they're not. The renters don't pay their bill half the time. You've got a problem all the time with that. And so it's just an issue. So, no, I'm going to move you backward, what feels like backward to you, but sets you into a real calm place. Let's visit where you are at that point, okay?

Probably the $650 with the $450 $450,000 loan is cash flowing. It's probably cash flowing a little, not a lot. But you got zero debt then. No house payment, no car payment, no $100,000 unsecured hanging out there at a high interest rate. And you only got a couple tenants. And you make $275,000 a year. And you're 33 years old. That's a much better place than where you are today brother to be that's a much more solid platform to launch into the future we don't find alan very many people in our millionaire study that borrowed their way into

becoming millionaires using the system you're using or that I used when I went broke. Most people, the vast majority of millionaires do not do that to become millionaires. And so that data is real. It's not a theory and it's not a, well, what about the there's no arguing with the actual data. Most people, Dave, especially young guys, they want to get into real estate investing. And our advice is to have a paid for property for yourself first, then do all of your real estate investing in cash. To them, it sounds insane. Why do we say that? Because the shortest distance to wealth is always no debt. It's the fastest route and it's not just i made that up i mean it's in the bible borrower slave to the lender oh also all the data with the 10 000

millionaires that we've studied oh also if you just walk around and talk to rich people they're not going to tell you you know i did it with bitcoin you know i did i got this big hit i bought llamas. I opened a llama farm. They were big one time. There was a big get-rich-quick thing on llama farms. Llama farms, wow. And I bought beanie babies. They don't tell you that.

And they don't say I did nothing down real estate. Because I got to tell you, man, I knew probably 100 people doing nothing down real estate in the 80s. 100% of them are out of the business or they paid off everything and got out of the debt business one of the two i actually know one guy that he cashed out of about three quarters of his portfolio ended up with 25 as many properties and they were all debt free that changes everything he got tired of he got tired of living on the edge most people go well, well, that's stupid, Dave.

You're losing out on all the cash flow of the properties. Well, the thing is, when they're leveraged, they don't cash flow that much. You know, that $450,000 over $650,000, he's not making much money. Your margins on that. After you have vacancy, you have loss, you know, credit loss, meaning they don't pay their bill, they're going to bankruptcy. You have a heat and air unit go out. You have a roof leak.

You know, you pay your taxes you pay you know and by the time you finish all that he's not making much cash flow on that he's not getting rich off that house now the value may be shooting up but the actual cash on cash there's not much there so this idea that somehow you're going to like just buy a house and the money just starts coming in. No, it really doesn't if you leverage it up to your eyeballs. So it's all about delayed gratification. Yeah. It's go a little slower or go a lot slower, which in the end of the story ends up being faster. He who hastens to be rich will not go unpunished.

There it is again. Boom. George Camel, Ramsey personality. In the booth is Austin, Ben, Zach, Andrew, and, of course, James. I am Dave Ramsey, and we'll be back. Dave here. You can find all of our shows with the Ramsey Network app on your smartphone. It's the only place to listen to the entire back catalog of episodes. Download the Ramsey Network app in your favorite app store today.