The Ramsey Show - App - Real Estate Investing Is Hard Work, Not “Passive Income” (Hour 2)

Episode Date: May 2, 2023

Rachel Cruze and her husband, Real Estate expert Winston Cruze answer your questions and discuss: How real estate investing is awesome but it's not "passive" income, from the blog: How to Invest in Real Estate, "Are quadplexes a good investment?" "I have $250k to invest; should I buy real estate or other investments?" The riskiness of multi-family investment groups, "How do I best invest the profits of a house sale?" Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Join a Personality-led FPU class. Click here! Enter The Ramsey Cash Giveaway for a chance at $3,000! https://bit.ly/TRSgvwy Shop our bestsellers during the $10 Sale! https://bit.ly/TRS10Sale Enter The Ramsey Cash Giveaway for a chance at $3,000! https://bit.ly/TRSgvwy Shop our bestsellers during the $10 Sale! https://bit.ly/TRS10Sale Want a plan for your money? Find out where to start: https://bit.ly/3cEP4n6 Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Interested in advertising on The Ramsey Show? https://ter.li/s64ye3 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the pods, moving and storage studio, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. So I am Rachel Cruz, hosting this show solo, because most of our team is out in California at the Building Wealth live events that they are doing tonight. And so as we were, James and I, the producer, were talking about segments of the show and how to make the show fun. We had a lot of real estate calls yesterday that were coming in with Jade, our Ramsey

personality, and I were hosting. And James was like, man, it'd be cool, Rachel, if your husband came in and answered some of these real estate questions. And I thought, well, I don't know. Maybe I'll text and ask him. So I was like, babe, would you come in and do an hour of the show and talk about real estate on The Ramsey Show? And you said? Sure. Oh, no. I said, let me think about it. Let me think about it. So we talked last night. So I roped him in, you guys. This is a first. This is a first. But I really did want to have this discussion because we talk about building wealth a lot on this show. And for a lot of people, especially our age and things I see on social media, Instagram,

TikTok, all the stuff, investment real estate is something that people really are interested in. And they think it's kind of this get rich quick. And you see these numbers of these Instagram influencer financial people like, oh, yeah, just go and borrow a bunch here and get some rental houses and get some tenants in. And it's passive income. It's like the easiest thing ever i make so much money every month doing that and i'm sitting there always

listening knowing what you go through when it comes to rentals and real estate because you have your license you're you have a brokerage you've been doing real estate for how long 10 12 years 10 12 years yeah development and having tenants and all of that. So I kind of want to- Actually, I actually used to interrupt this show while Dave was doing it and I'd run downstairs and pitch him a deal while he was on air back in 2012 days.

Yeah. So it's full circle now. Now I get to deliver all of the mistakes and wisdom that you want to know. That's it. That's it. Okay. But just to bunk the high level myth that like, it's just so easy. All you do is just have a renter and have passive income and that's it. That's it. It's just, it's mailbox money. No, I think the dream is easy and that's what everybody gets sold on. Everybody gets sold on

this lifestyle that they see or could imagine without having to necessarily work. Yes. And I think there's a correlation between COVID and the kind of passive income, quick money flip phase in culture, because I think it's kind of fed this, we can make life whatever we want it to be and there doesn't have to be any pain associated with it. Yes. And as with most things in life, especially with money, there's nothing like that that exists

unless you win the lottery and that's a lot of gas station pain. So it is a, I think the dream is easy, but actually getting to this point where you've got passive income takes a long time and a lot of work and a lot of headache and you're going to have gray hairs and, um, you're going to go through a lot of crap to get there. And, um, so it's, it's just not what you see on Instagram.

It's not what you see on LinkedIn. Um, it's, it takes a, it takes a lot of work and a lot of time. Sometimes your lifestyle may not be set up that way. And honestly, I don't know if that should be a part of your immediate goal. It's all dependent on your total financial picture. But it's not really an immediate goal that you need to just have this income coming in the mailbox where you don't have to do anything because it is way harder than that. And the hard comes from you doing it all these years. Is it from finding the deal? Because that's one of the best ways to do that. If you get into real estate investing, once you have paid off your home, you have no debt, you have savings, retirement, you do all

the baby steps. The pain, is it more on the front end of finding a good deal? Because you talk about that, buying a good deal on the front end. Or is it the pain of actually having the tenants and having to manage maintenance, the people, the rent? I mean, all of that. Yeah. No, unless you're renting to a robot, it's all of it. So when we were buying things things it was every 30 offers you would get one contract um and of those 30 offers most of them weren't great deals um and this was

back in the recession in 2012 when people were begging for they were begging for deals they were begging for a cash offer and it still took one out of every 30 so uh it takes a ton of time you got to be in the newspapers looking for foreclosures. You've got to be getting into the marketplace, making relationships with brokers that will send you deals. You've got to be making relationships with title companies to make sure that you know and are aware of clear title when you're looking into something that could be very risky.

So it's not a simple game, and it's not a risk-free game that could be very risky. So it's not a simple game and it's not a risk-free game. It's very risky. It is a huge financial decision, but it should be a part of your overall financial picture, not the one thing, the silver bullet that allows you to not have to work. Yes, because I think that's it. I think that's the lie that we constantly try to debunk on this show because again we get these calls all the time of like well i saw this and this and i want to you know get have some rental properties and all that but i'm like the amount of work the amount of efforts to even find the deal like you're saying it's a whole other set of knowledge right that you can learn i mean not that no one is that you're not capable of it, but it's not this shoe-in, easy access,

you know, idea of investing. It really does. It takes so much work on the front end. And then once you do it, again, we encourage all cash. So you're going to start small, move at the speed of cash. But then also too, the person in the house

or in the condo or in the townhome that's renting, that's where, that's another risk that if you go and take on debt and get a bunch of rental properties, those people that you're depending on to pay the mortgage, plus maybe some more, that may not always happen. Yeah. So I will say the other side of the coin is it's amazing. So I'm not saying, oh, this is all pain and terrible it's amazing but and it is doable so your and I's first rental property was a was a condo for $42,000 and we saved up $42,000

and bought this one-bedroom condo and I was not nice oh it's gross it was awful you know you put ten thousand dollars into it and rented it out and I thought I had made it like I thought this is it and then you start cashing the checks and you're like oh there's seven hundred dollars oh that's pretty cool that's pretty good seven hundred dollars next month seven hundred dollars next month, the $700 came in, but the water heater broke. That's right. And then you start running that out, you know, over, you know, every 12 months, how much, how much rental income comes in and then the actual expenses that it takes to run that thing, plus the amount of people you have to deal with, and all of that headache, chasing rent, you're basically netting...

It's tough. A thousand bucks. Yeah, it's tough. It's tough. The amount of work. Now we did sell that condo four years ago for $125,000, and that's the beauty of it. Right, right. But again, it's long-term, and it's difficult. Yeah. So we are for real estate. That's my dad's whole story, obviously, that helped with Ramsey Solutions. It's like was in real estate. He loves real estate, married a guy who loves real estate. So we are all for it, but doing it the smart way,

the right way. And just to debunk that it's not this like just easy shoe in passive income that it's made to be on social media. So we're gonna talk more about that and take your calls here on The Ramsey Show. Welcome back to The Ramsey Show. I'm Rachel Cruz hosting this hour. And while most Ramsey personalities are out of town, which caused me to do a solo show. We thought it'd be fun to do a real estate hour and bring on my husband, Winston Cruz, talk about real estate. Yeah, good. I thought it was because Dave was out of town and y'all were doing the show solo. So we thought we'd just hijack it, but that's good to know. Just, you know, it's our own rules.

When he's gone, when he's not in the state, we get to do what we want. I parked in a debt-free spot, if that's okay. Oh gosh, for a family. I'm sure that's okay. I think you can get away with that. All right, so again, we're taking your calls when it comes to real estate, real estate investing, and all the things. Okay, up first we have Andres in Canada.

Hey Andres, welcome to the show. Hello, thanks so much for taking my call. I appreciate what you guys do so much. I live the Ramsey way, so thank you so much for what you do. Amazing. Well, thanks for calling. How can we help? Yeah, so I just want to hear your feedback on investing in a quadplex.

The last week I've heard a couple different comments from your personalities kind of poking fun at the quadplex kind of investment. And you guys haven't really explained why. And I'm in the middle of kind of purchasing a quadplex and I'm paying all cash. I am completely debt free. So I just wanted to kind of check in and see if there's any kind of red flags or anything that I need to be aware of. I have experience with a rental property, which I've sold, and I want to do a better investment with a quadplex. Okay. And is this your only investment property? You had one that you sold, and you're going to take the profits of that. Is it to upgrade, just have more units? Yeah. So I sold that one, paid off the way I went on

the mortgage, and I've made a good amount of money and then there's a quadplex that I can buy out in cash and it has tenants already with a lease ready to go and it brings in about $4,000 a month of income. That's great. I'm curious with

the other, because you said the other Ramsey personalities on the show this week or last week were kind of, was it negative because single family home was just traditionally a better investment when it comes to real estate? Is that what they were saying? I was trying to think of exactly their concerns

to help you. That was sort of Dave's kind of point of view, and I just love that, but then Jade was kind of poking fun at people just acquiring I don't know if it's the investment itself or how they're acquiring the investment. So I just kind of wanted to get some feedback if there's anything I need

to be aware of on a quadplex investment specifically or if you guys kind of give me your blessing and if it was just more of just people doing crazy things to get into the rental market. Andres, I'm your biggest fan, and I'm not a personality,

so I think I can say whatever I want. But what's your long-term goal with this property? You know, I don't have a long-term goal right now. It just seemed like I was so, I love being debt-free and I wanted to get rid of the mortgage on that rental property, which is all the debt I had left.

And I had a ton of equity in it. So I did want to sell it and move it to an investment just based on cash. And this amazing deal just kind of came up. And I don't think you know i don't have any plans of buying and selling it you know uh it's not my goal my goal just to get kind of more uh monthly income yeah um well i i love the idea of obviously i i love

that you would own it uh debt free so that 4k goes in your pocket every month other than taxes and insurance and whatever problems you're gonna have I like the quadplex because it's efficient you have is it local the property is it local you can go see it I mean, I live in the middle of nowhere in the country. It's just the next town over kind of thing. And the property does have a husband and wife who do. One of them is a handyman in case there's any emergency. Hey, Andres, can you talk directly into your phone? We're having a little trouble hearing you.

Yes. Can you hear me there? There, that's much better. Thank you. Okay. Yeah, the property has already connections of a husband and wife. One of them is the handyman who's just in case there's any emergencies, he's there to fix stuff if needed. And then there's a lady as well, his wife, who does the cleaning and does any showings if needed, because the current owner of that property lives out of town. So it's kind of this well-packaged

deal that all these connections are there in place already. So. Yeah. Yeah. I mean, you're a smart guy. You've been in the, you've been in this deal before with the property you just sold. You know, you're running a mini HOA with four people living right next door and sharing a wall. So that would be one of the downsides. There's more potential for problems there. Yeah. It sounds like you've even gone and met the tenants, and you can feel in your gut what you're getting into, and when you try it on, it either fits or it doesn't.

So I feel like your experience, you're checking all the boxes, and then the numbers on your return is just your offer is whatever you want to make on it. I would typically recommend no less than 10% after you run that $48,000 a year and then minus your operating expenses. Gives you your net operating income. And I would try to go for 10% off of that number. How much is it? How much is it, Andres? It's $160,000.

Okay. I'm going to move to Canada. Yeah, it's small-town Canada right now. They're booming. And yeah, to me, there's absolutely no red flags on the investment. My only red flag was kind of you guys, I follow

everything you guys do carefully. I have for quite a few years now, and it was just little comments here and there kind of poking fun at it but i've never had heard the official kind of why yeah and i assume they're just people doing crazy things getting in debt and stuff right no and i think that's probably an element of it uh kind of like get rich quick stuff we were talking about the segment before but i mean winston have you found like when you do duplexes quadplexes all that is there potential for for more issues more problems

versus just a single family home no dealing with one not necessarily you you do um you do kind of narrow your exit strategy a little bit with a quad or duplex because you're not necessarily going to get a single family but i when you sell it down the road, that's why I asked, what's your long-term plan? If you're going to buy and hold and you're going to make your money back in two and a half years on this thing, it doesn't matter what kind of structure it is. You can sell it for whatever you want to later on, and it will go up in value. You just narrow the market that you're going to market to in a seller down the road.

That's exactly it, yeah. Those are my thoughts is that whoever's going to buy this from me is going to be an investor, right? Just trying to get a deal. Yep, and by that time, you're going to have taken care of it so well that your rent's going to go up, and they're going to make a different percentage on it that is going to be higher than what you bought it for. Exactly. Awesome. Well, thank you guys for your feedback. I appreciate it. For sure. Absolutely. Thanks for calling us, Andres. We are taking your real estate calls this hour at 888-825-5225. So, you know, when we talk about investing in real estate again just to be over communicate

here on the show it's after you're it's like an andres right you are completely debt-free including your home you've maxed out retirement uh because so many of our everyday millionaires we talk to i mean so much of it is in their primary home the equity there that is part of their net worth and their investments you know you look at 401ks, Roth IRAs, these have great track records. They're from a tax perspective are fantastic. And so being able to do that and go down those lanes first and foremost is what we recommend. And then after that is where you can look

to diversify your wealth building. And for a lot of people that is real estate when they get to that point. And so when you and Dave, dad, went through all that, I mean, it was a lot during the recession. So again, this was 10 years ago when you guys did a lot of your purchasing. For people today that may be in that position of baby step seven, they have some cash and like, yeah, we want to get into it and pay cash for real estate. I mean, people are having a tough time buying a home for their primary family right now. Do you find that this, would you hold right now and wait for the market? I would. If you have cash in your pocket and you're looking to get into real estate,

I would be kind of foaming at the mouth because it's happening. The correction's happening. I hope for everybody that it's not like it was in 08. And I don't think it will be. Yeah. But things will go on sale. And that's the best time to buy. I'd be waiting it out. So good. All right. Again, 888-825-5225 at Taking Your Real Estate Calls. I'm Rachel Cruz, co-hosting this hour for the first time ever with my husband, Winston Cruz, talking real estate. This is The Ramsey Show. Welcome back to The Ramsey Show. I am Rachel Cruz hosting this hour with my husband, first time ever, Winston Cruz. And real estate has been part of my family for ever and ever and ever. And then married a guy who loved real estate and does it for a living as well. So we thought it would be fun while all the Ramsey personalities were gone to kind of hijack the show and have a discussion around investment real estate.

Because it's a hot topic for a lot of people and all over social media. It's just kind of the new, it feels like the thing, not new thing, but it's the thing people want to get into to build wealth. So we're taking your calls this hour at 888-825-5225. So up next, we have Kyle in Atlanta, Georgia. Hey, Kyle, welcome to the show. How's it going? How's it going? Thanks for having me. Yep, absolutely. How can we help? Yeah, I was just curious, kind of really straightforward here is whether it's a larger sum of money, like if somebody right now in this market had somewhere between $200,000, $250,000 to potentially play with, would it make sense to be investing in the real estate space right now or to stay in more of your traditional

investments or stocks? Yeah, that's a great question. So Kyle, I'm assuming you're asking for yourself, right? These numbers and everything is kind of where you're at. So if that's the case, where are you financially overall? Do you have consumer debt? Do you have other savings besides this $275,000? Yes. So there's savings, not a lot of consumer debt, debt on a current house that we're in right now or just like owing on a mortgage. How much do you have left on that? Yeah. So we have about $400,000 left on that. So that's going to be kind of my follow-up is would it make sense to invest in the current or just to contribute to the current space we're in or to

be looking outwardly? Yeah. Well, it's a great question. And so one of the things we talk about, because I know you said you have some consumer debt, so I would encourage you to take some of this cash and throw it at that and just become debt free from consumer debt, whether that's student loans or credit cards, personal loans, and then take some of that 275 and put it in a high yield savings account or a money market account for three to six months of expenses for an emergency fund. And so once you kind of clear all of that, then I would first and foremost, go through and max out what you can when it comes to your 401k a Roth IRA how much do you guys make a year uh together combined uh we're about 600,000 650,000 say one more time you you you cut out sorry about that together combined my wife and I about 600 to 650,000 okay so okay

um well you guys make a great income Kyle Kyle. So if I were in your shoes, I mean, I would go ahead and limit some lifestyle and knock out this mortgage. And then it sets you up at that point to max out all retirement and then look at other options, which would be real estate. So I would use that 250 to throw at your mortgage and the income you have. And then if we look forward, Kyle, three years from now, just to throw a timeline out there where everything is paid off, you guys have a great income, you have cash that you're just saving, saving, saving, and you get back to this point of having maybe $250,000, $300,000 in the bank, then that's when I feel like real estate investing could come into play where you can start thinking about that. Great. Hey, great. Kyle, this is Winston. I want you to have real estate. I love your question.

And if I were you, I'd be thinking, I've got $250 to play with, and I would love to have some fun with it in real estate. At the same time, you really don't need income at this point in your all's financial journey. So my thought would be similar to Rachel's. We're married, so we've gone through some of this before. Shared the same wavelength. But I would get some of that debt off your back. And then later on start to think, okay, you know, that 250 is going to turn into something bigger in the future when passive income can allow you to do certain things with your life that you may not be able to do now from a time perspective. But the reason you would be putting 250 somewhere would not be for your income.

You'd be doing it just so you can start to build equity in a in a secondary home or a rental property but you don't really need to you've got great income you you've got a giant shovel to pay off that debt it will it would be fun today to do real estate it will be so much better later when you can do it without that debt um taking away some of that income. Yeah, that's great advice. Awesome. Great. Thanks, Kyle. Thank you. Yeah. So I think that's one of the big things is getting everything in your life, right? So your primary home, again, going back to investing in those just traditional retirement vehicles that we talk about all the time

and doing all of that. And then when it's freed up, so in his case, has a great income when you're making 600 grand a year, he doesn't need the $700 mailbox money coming from a condo. So if it's in that case, do you then look at like, yeah, if you get into real estate at that point, it's so long-term thinking that it's all about the equity at that point, then the quote unquote passive income coming in because you're not in need of that. Like, do you know what I'm saying? Like, is the mindset difference when you're trying to do it for income versus just long-term investing, maybe even generationally? Yeah. It's a risk game. So you're moving the risk. Even if you could pay, he could pay cash for a property today with that 250, but he's still got this debt, $400,000 of debt.

So you still got risk there. But if you go leverage a piece of property and you pay off your house or whatever the 400,000 is, then you've got risk on the property. So it's like, if you have 600,000 coming in every year, go pay off your debt and then build up a big old fund and go buy a piece of real estate that's actually going to, you're going to feel it every month. Because if you go

buy a $250,000 piece of real estate, unless you're Andres up in Canada, making $48,000 a year on $160,000, then you're just, you're not, it's not going to change your life. It's not going to change your life. And that's the other lie is that if I go buy a house, it's going gonna change your life and that's that's the other that's the other lie is that if i go buy a house it's gonna change my life no it's not it's gonna be a thousand dollars a month and then the hvac is gonna go out and then you're gonna net zero the first year after your operating expenses and uh you're gonna ask yourself oh this isn't as fun as i thought it was because they got a cat and i said no pets and now I have to deal with the cat lady has that happened Winston tell us about the cats I have said no to a thousand four-legged animals and they all act like it's a personal family member I would say for a lot of

people it is oh they're all mad at me and i'm like well it says no pets no smoking and they they say it's the only dog in the world that doesn't poop anywhere or like it is the only cat that doesn't shed and i'm like even if it's a skinless or a furless cat they're so ugly that you can't have one in my property so no they're uh yeah it happens all the time people go around the system and go get a go get an animal and then you got to go in there and bust the thing up like you're doing a drug deal is that your number one piece of advice for land if you're a landlord if you are buying an investment property you are on drace having the quadplex up in canada is no animals like is that your number one i think it's a personal decision because people would pay $10,000 for their personal family member, four-legged family member on a security deposit. So it's up to you, the investor.

I'm just trying to reduce headache and turnover cost and the drama of it. But people are getting ESA, emotional support animals now. Yeah. As a way to get around it. Yes. Let me just say this. It is legit. Yeah.

Like there are people that have the papers that need to do it. But there's also strategies that have popped up now because of all the animal policies and people have a guinea pig that they pet when they start to have an increased heart rate. And it's like, that doesn't qualify in my house but no guinea pigs even in it no even in it no no but that's a personal decision for the investor uh george camel was on here a few months ago and said something about a horse and all of it and he got some hate on youtube so i will be curious about the comments i felt like guinea pig was a safe play. That was probably the safest you could have done. Well done. You're a pro.

Thanks for having me. Go safe. All right. Again, taking your questions when it comes to real estate and specifically investment real estate here on The Ramsey Show, 888-85-225. Well, if you haven't heard, we're doing something around here that we've actually never done before. Two things. Actually, this hour of The Ramsey Show, co-hosting with my husband, Winston, talking about real estate. But also, all of the Ramsey personalities are leading a Financial Peace University class, including myself. And I want you to join my virtual class.

So we're really excited about this. You're going to learn everything you need to know when it comes to handling your money, how to pay off debt, how to build wealth, all of it. And I'm going to be your personal cheerleader through that class. Plus, you are going to be part of a community of thousands of other people in each class so again this is one of the best ways to learn how to handle your money is through financial peace university so there are a few days left for my class my class starts uh next monday and mondays and wednesdays during the lunch hour from 1 p.m eastern time to 2 p.m eastern time will be my class jade warshaw starts an evening class in that same time.

And it's about four and a half weeks to go through all nine lessons. And then all the other Ramsey personalities will be doing a class later this summer. So to find out more and to sign up for my class, because we're gonna have a lot of fun, I promise, go to fpu.com to sign up today. Again, that's fpu.com.

And my class starts on Monday. All right, our question of the day is brought to you by Neighborly, your hub for home services. Neighborly.com is the place to find reliable help for your home from locally owned businesses like AirServe, DryerVent, Wizard, PrecisionGuard for your garage door, window genie, and more.

For expert help with everything you need to know, go to neighborly.com. Today's question comes from Daniel in New Jersey. I see many multifamily real estate investment groups on LinkedIn and other platforms. What are your thoughts on investing with these groups? Many of them require a minimum investment of $35,000. It is my understanding that this investment is to grow capital needed to construct or purchase an apartment complex or condo-type housing.

The payouts come at an undetermined point in the future. Am I missing the mark? Or am I, or I'm sorry, am I on mark? Or am I missing the target or am i or i'm sorry am i on mark or am i missing the target is this a risky investment oh man daniel daniel daniel just keep scrolling down then there is no way i would ever do 35 000 of something based on something on linkedin um, especially in real estate investment. Yeah. Yeah, they're probably funding something that is a big crowdfunded thing to get a project done.

And there's going to be a lot of small print. It's going to be not guaranteed. You're going to have to have an attorney look over the documents. If I have $35,000, there's no way I'm doing anything with anybody that big where I just put it into a bucket of the abyss and hopefully there's a predetermined payout in the future. If you're going to do something that boring,

you should check with your financial advisor because most of the time they're going to have a certain amount of funds that you've given them to work with that will be in a real estate investment trust or a REIT. So you could be effectively doing that and not even know it yet. I would check with your advisor on that, but you probably, you could ask them how much of your investment is in a REIT along with your mutual funds and things like that. Because that's how boring it is. I would rather do something on my own where I control everything and I can go see and touch and feel the house or the investment property

as opposed to finding something on LinkedIn and just writing a blind check to it. No, Daniel. No. The answer is no. But there are these groups, though, again, not 35,000, but, and I feel like we even had a family friend talk about this, where it's like you kind of, you do,

you pull your money together, a bunch of investors, and they go buy something in Phoenix or whatever, right? And they have investments other places and they get a portion, a percentage of the equity payout or whatever it is. So like, even though shared, you have a lot of caution around those. It can work, but I would check with that company and

make them show you a track record of everything that they've ever done in the past. Because there is nothing guaranteed. It's highly risky. They could go fund, do a capital raise for an investment across the country that you've never seen before. And then that company goes up or the economy continues to slow down, like you talked about earlier this show. And then the thing just gets put on hold or even worse, you just lose all your money. I'd rather do it through real estate investment trusts that's just stable, steady. If you're going to do something like that, again, there's no big payout scenario that's worth the risk. Yeah. And that's good. All right. We're going to the phones this hour and Leland is in Olympia, Washington. Hey, Leland, welcome to the show.

Hi, Rachel. Hi, Winston. My question was, I have bought a property last year in the spring for $60,000, and I just met the realtor a couple days ago out there, and he says he could get $135,000 for it. During the course of the summer, me and my wife bought a property in Romania, and we plan to move there as missionaries. I am, so now my thought is, should I take that $100,000, the property's paid off, so should I take that $100,000, $120,000, whatever it is, and buy another property that I could rent out close to my in-laws in New York where I can afford it? That's a great question. How are you paying for the home in romania cash it's a cheap house like okay yeah yeah that's terrible over there okay okay yeah um

that's awesome okay and and your hope is to take this you do you guys need any amount of cash you have enough savings for you guys when you live over there as missionaries to be able to sustain the lifestyle that you guys want yeah we do um we have enough cash to or we will have enough cash to live my goal is to live there for at least a year have enough to live there for at least a year before i start seeing what i can do to make money around there and support myself. So kind of the idea with this property is, I can't buy a property around here in Washington because land is so expensive. But back in upstate New York, where my wife's from, the land is really cheap and I could buy like $100,000 property and rent on it is like $1,250 a month. So is it stupid to do that so far

away? I mean, being a long-distance landlord, I'll have Winston kind of speak into that. My other question before we get into it, Leland, I just want to make sure. Do you guys have any other retirement investments anywhere else? Do you have any other money saved? No, I have a very small 401k. Okay, okay. Yeah, Leland, I wouldn't rush to do anything. If your furthest projection for Romania is one year, that money is not going to go anywhere. It's not going to burn a hole in your pocket and fall out. I would keep it just in the bank until you figure out something

that's a little more long-term than 12 months. So is there, is there a bigger reason why you're wanting to rush into getting something and renting it out? Well, I might've said that wrong. We're not, we're planning to be over there indefinitely in Romania. But we might, you know, things could fall apart. Something could happen 10 years from now, 20 years from now. Okay. I'm sorry. I heard you. Yeah. Yeah. And then also we'll probably come home every year. Well, not every year, but like every several years because the hospitals over there are so bad. So we come home from a life to have a baby, whatever. And this would be a place I could stay, not a place I could stay, but I could stay with her folks and, you know, fix up the property in the meantime. It feels a little bit out of balance to, based on the financial picture you've given us,

to put that amount of money into real estate compared to your cash on hand, your 401k, and what you're going to be doing overseas. I feel like that's just stress and headache you don't want. I would let Rachel take over and tell you what she would do with the cash. But I think real estate would be a hold on for now. Yeah. I mean, Leland, if I were your wife, even if we're going to be moving across the globe and knowing, yeah, things like health care aren't great, like even the economic state of it, like you're saying, even that feels unstable. There's not a ton in a 401k, all of that. Having more cash on hand that you can get to, I think, is going to give you guys a peace

of mind that a rental property just won't. And again, we understand the math and how exciting it is to get in it and get that rent every month. But like we were saying earlier earlier it's just a lot of work and doing that as a long distant landlord i i probably would not in your situation but you guys are incredible uh you and your wife so thanks for everything that you're doing and um just absolutely giving your life up to service it's absolutely incredible so uh winston thanks for being a guest on this hour thank you love you Love you too. Love all the wisdom and appreciate that.

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