The Ramsey Show - App - Your Husband Is a "Playa", and You Don’t Play Around With Your Home! (Hour 1)

Episode Date: April 4, 2023

Dave Ramsey & Dr. John Delony answer your questions and discuss: Helping a loved one who is dealing with addiction and dysfunction,  "My husband and I disagree on what to do with our house", "Should we pay off solar panels?" Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET 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 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

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The call is free and some say the advice is worth exactly what you paid for it. Brayden's going to start us off in Denver, Colorado this hour. Hey, Brayden, what's up? Hey, guys. Well, long-time listener, and thank you for taking my call. My pleasure. How can we help? My question is, it's a very long story, but basically, my mom has no money um and she's uh 62 and i'm wondering how i can protect

myself or prepare to um i guess just help her in retirement um so that's it and i'll let you guys maybe ask the questions okay uh financially and legally you don't have anything to protect yourself from so there's no hurt if she has debt it doesn't leap over to you upon her death it just goes away with her so that there's no issue there but the only issues then you're sounds like you're wanting to help her in this situation and and then that's a whole nother barrel of fish hooks right yeah yeah basically i feel like i'm cornered a little bit in the sense of I either take relatively full responsibility of taking care of her or she she kind of ends up on the street um is what I feel like I'm I'm facing do it again she's what happened to your dad um he was tired of supporting her

they got in a divorce about five years ago and, um, she's pretty dependent on depression and anxiety pills and basically went numb. Um, and she's been numb for about seven years. And, um, I would say she's addicted. I'm not sure if that's a, if that's a real thing or not. Basically. Okay. So basically, um, she's really dependent on those and um is very very depressed and um basically my dad said i can't support her lifestyle because legally he was supposed to be doing that um and so he fled the country and um he's i don't know i think he's in thailand right now basically it was a hard decision for him to make, but he said, hey, I love you, but I've got to go because the court system is making me give her money, and I can't continue to let her do that to herself. Oh, you're talking about alimony?

Yeah, basically, when it all happened, my brother was 16, and he's 18 now. Yeah, well, you know know and i don't know exactly what it is dave but who took care of your brother my mom took care of your brother well my mom was your dad didn't feel an obligation to take care of his kid no well well my brother is addicted to marijuana and what my dad was doing was he was giving them thousands of dollars a month and realized that he was supporting two drug addicts. And my brother was stealing money from my mom to buy his marijuana, and he just said, I can't do it anymore. Is he out of her house now?

Yes. He left. He dropped out of high school, and he's living with his girlfriend and their family, apparently. What's your setup, Brayden? Are you married? How old are you? Yeah, I'm 29, married. Follow you guys a lot.

Death-free, baby steps four, five, and six. Awesome. Just had our first baby, and we live in Wyoming. Household income? About $100, $120. Okay. first baby um and we live in Wyoming household income um about 100 120 okay Dave I've got an opinion but you've seen this way more than me you dive in brother my because I got I got a feeling I'm gonna be right on your coattails Braden I here's the thing I it's easy for me to sit up here and say I wouldn wouldn't do anything. Like, you don't have to do this, and she gets to choose, whatever. I also know, like, my mom is in her 70s.

I wouldn't be able to sleep at night if I didn't sit down and at least say, here's the best way I can love you, and here's the skin in the game you've got to have to make this thing happen. And so a couple of things at play here. One, you've got to sit down with your wife and decide as a couple, how far are we willing to go? Is that move mom in? Is that send some money somewhere? How far and how able are we to go?

And borrowing money and making this whole thing mess bigger generationally is not an option, right? So what are we willing to do? And if nothing is on the table, then nothing's on the table, but y'all need to have that conversation together. The second thing is, you know, this, that, um, whatever narrative you have from your dad, from your mom, it's, it's way more complex and way more of a mess than that. And so I think you need to keep all eyes moving forward, not trying to untangle the past. It's too messy. You don't know all the things. It sounds like one of those, if your dad's willing to walk out on your brother, willing to walk out

on his responsibilities, then it may be one of those situations that her over the years, her addiction was to cover up a whole bunch of other mess in the house. All that to say is this, you get to say, hey, mom, here's what I'm gonna require of you to participate in some sort of support or help if you choose to do that. And the hardest thing in the world, I can't think of another harder thing than to watch someone you love make choices,

not accept care, not accept responsibility, not accept help, and you watch them fade away. It's one of the most difficult challenges. I think it's the most difficult thing we can do is to watch loved ones fade away. Braden, I had a good friend who drank himself to death. He drank until he died, and he killed him. His liver went bad, and he kept drinking. The doctor said, you've got three months to live if you quit drinking. And a month later, he was gone because he didn't.

And I sat with him. I'm like, dude, you might as well just put a gun to your head. It's the exact same thing. Put the bottle to your head. I mean, it's just the same thing. And there's nothing I can do. Nothing. There's no word to say. I mean, he do what he was gonna do i couldn't like stop him and like john said it

just tears the heart out of your chest somebody you love you know running running the car in the ditch and you're sitting here going hey just turn you know just keep it in the road you know and um it's very very difficult to watch. So the first thing you have to do is you have to protect your wife and your child and your future. That's your primary obligation. Beyond any obligation you could have to your mom, anything you do for your mom that interferes with your wife, your home, and your child, and the future of your family is an improper level of care. No matter what, no matter what she does, okay, she does not get the right with the life she

has lived to interfere with your future to the point that it destroys your child's future. You have a baby that you are the father of. That's your primary goal. Having said that, then, if you want to love her well, then you need to require some things of her that are good for her. She needs to be seeing her therapist. She needs to be monitoring her meds. She needs to be.

She's going to rehab. She needs to go to rehab. She needs to get a job. She needs to be on a budget that you look over her shoulder and make sure she's managing the money that she has well. She can get on Social Security and it'll go a long way towards keeping her from being hungry. Do not give her cash. Give her groceries. Pay her rent directly.

But only if she's doing steps that are going to facilitate her having a that's going to facilitate her having a dignity of agency again, standing on her own two feet again. I'm sorry, man. I hate that for you, man. Hey, you guys. Health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough,

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You tell other people, and that's about the only thing we got. We don't have any stadiums named after us like SoFi. Excuse me, I'm sneezing. But, yeah, we don't do any of that kind of stuff. And so if you want to help us, subscribe to the show. anything but the um but yeah i don't i don't we don't do any of that kind of stuff um and so if you can you want to help us subscribe to the show if you're a podcast or youtube uh consumer we appreciate that you can leave a five-star review one stars don't help mama said if you ain't got nothing nice to say don't say anything at all five stars all we need thank you very much

move on if you don't like it it's okay and uh what's the other thing you can do oh you can uh share the show and that means you tell people some method or another how you're consuming the show we're watching it on tbn we're uh listening on our local radio station there's 680 of them that carry us in the nation by the way uh there's uh we you know you got an actual share button on podcasts and on youtube so share it it, subscribe, and leave a review. You'll help us out a bunch. John, the questions for human cards are officially a mega hit. They're part of the Ramsey lexicon now, man.

Oh, yeah, that was a goal. I had to look that up. Okay, so wow wow it's a big deal yeah so you know those moments when you're sitting next to someone and you feel a thousand miles apart um you're staring at your kids uh i my son turns 13 today so happy birthday to him but we were sitting across from each other at waffle house this morning happy birthday big hank we have uh breakfast together every t. There's been some of those breakfasts I'm staring across

from my 12, 13-year-old son. I don't know what to say. I don't know how to say it. Or he says things like, fine, good, good, fine, fine, good. Some 13-year-olds are aliens.

Most of them. Most of them are. But these cards have been amazing. And so, listen, you can put your phones down and we've substituted deep and meaningful

conversations for binge-watching Netflix, scrolling social media. You deserve better relationships. Your kids do your spouse to your grandparents to everybody does. It's why we created questions for humans, conversation starters that will help you disconnect from your screens and actually connect with real human beings. We have a deck for everyone, dating couples, girls, night guys, night parents, kids, friends, everybody work. And, uh, as we've talked about over and night, parents, kids, friends, everybody. Work. And as we've talked about over and over, it's been hard to keep them in stock. We've got them.

All the decks will get you spending time laughing together, learning something unexpected, and building deeper and stronger relationships. Pick up one, two, five, ten, all kind of packs. Find them at RamseySolutions.com slash humans. So if you guys don't know what he's talking about, it's like a deck of cards, and you just draw one out, and it's got like a question, like the funniest thing happened to you in college or something like that, and it starts a conversation. And when my daughter finds out that I went on,

my daughter's favorite thing, she's seven, is she asked, one of the questions is, what's an old date that went horrible? And I told her that I went on a date with somebody. She's still to this day, she's like, what does she think about? No matter what we're doing, she thinks it's the funniest thing ever, but we've been able to. You actually had a date before her mom. Right.

Yeah. And oh my goodness, well, what does she think about the house? She's shocked that you had a date before your mom. Everybody was shocked. Yes. Every friend I had was shocked. But it just it just created a whole new um interaction point and and again i'm embarrassed to say that uh i found myself like i'm gonna grab these cards because i'm starting to get disconnected from my own kids they're great and you wrote them yeah yeah i wrote

them yeah but they're great man and they've they've flying off the shelves flying a massive massive success all right patricia is with us in Fort Lauderdale. Hi, Patricia. How are you? I'm doing well. Hi, Dave. Hi, John. Hey, how can we help?

Okay, so I'm hoping you can help me solve a debate with my husband. Okay. We both have really good incomes. Between us both, there's like $220K. We have some savings, $160,000. We are debt-free. We're doing 15% of growth into investment, stock investment. And we're at this point now looking for a home.

You don't own a home? No, we don't. We live in a one-bedroom apartment right now. Okay. So the house that I would like to move into is about $400 to $450. And the house my husband would like to move into is about $250K. We see some in this area. They're really small.

They're really ugly. Your phone's breaking up. You're going to have to speak directly into it. You saw some in this area they're really small they're really ugly okay your phone's breaking up you're gonna speak directly into it you saw some in this area that what we saw some in the area that are 250k this is my husband's range yeah and they're you make 225 000 a year you have 150 000 in savings yes what do you guys do for a living oh so, so I work as a software developer, and he works as a stock trader. He works as a what? A stock trader. A stock trader.

I bet he does. Okay. And, yeah, how long have y'all been married? Three years. Okay. All right. And so he's, what,'s what 26 no he's 47 47 i'll miss that one why does he want to buy a 250 000 house because he's a cheapskate and he's a player into a multi-family home yeah

he's a player he's a stock trader yeah he a stock trader. Yeah, he's got a, does he always have a scheme on top of a scheme? Absolutely he does. Okay, here's the thing. My advice to your husband is that you separate being a player from where you live.

Okay? P-L-A-Y-A. Yeah. From where you need to-Y-A. Yeah. From where you need to separate it from where you live. Because you don't play with your home. This is where you live with your animals, your future children, and God help you, your wife. Okay? This is where you live. You don't play high- high risk maximize investment games with your home it's a safe haven

it's a place it happens to be a good investment but it is not a speculative we're going to make a bunch of money investment in the short term and that's how his brain works so i know this guy because i used to be him that's why i said 26 because when i was 26 i did the same thing we moved so much our furniture was trained to jump on the truck because i was a player i was always wanting to do some deal and i pulled my poor wife around by the hair on her head and she went along with it and we've been married 40 years and she tell 40 years she now tells people we've had 33 good years of marriage she doesn't count the first seven right and that's because of stuff like this right here so i can speak directly to him i was him when i had hair okay that's it so the uh the

best thing he can do is separate relationally psychologically investment philosophy, separate your home from your investment mentality. It happens to also be a good investment, by the way, but you need to separate it out. That's my advice to him, and my advice to him also is happy wife, happy life. You guys can afford a $450,000 house. He needs to go get a $450,000 house, and then he needs to do his other stuff after he gets that house paid for. You win the argument hey Patricia are you is he always running a scam does he always have a thing going there's always something I think you've been married three years at some point you need to have that conversation because this will keep coming up and it'll come up in all sorts of different areas when your parents start aging when you've got to think about retirement facilities,

it's always going to be another thing. You have to sit down and like Dave said, you've got to be really clear and intentional about boundaries. We joke about it now at our house, Patricia, but when I'll start working on something, if Sharon smells that, she looks at me and she says you're scheming and scamming and meaning i'm trying to i'm trying to use my intellect my mathematical skills to out finagle reality and that's what she's telling me you hear me in other words i'm violating common sense here because i'm starting to just go off in some little corner of something with some math riddle and figure out a way that i can maximize something that wasn't intended to be maximized, like the place you live. Or to get what you want, right?

Yeah. Yeah. So if he wants to do fixes and flips, he should do that with cash after your personal residence is paid for and is a sufficient resident. You've been living three years in a one-bedroom apartment. You make a quarter of a million dollars a year. You've already sacrificed. Time to get a nice house. 15-year fixed, where the payment's no more than a fourth of your take-home pay. This is The Ramsey Show. Dr. John Deloney, Ramsey Personality, is my co-host today in the lobby of Ramsey Solutions on the debt-free stage.

Eric and Stacey are with us. Hey, guys, how are you? Doing great. Thank you. Cool. Where do you all live? Colorado Springs, Colorado. Oh, very nice.

Very nice. Welcome to Nashville. And how much debt have you paid off? $140,000. Cool. How long did that take? 43 months. Good for you. And Cool. How long did that take? 43 months. Good for you.

And your range of income during that time? Started off at 60, and then it went up to about 160, 165. Nice jump in three and a half years. What do you guys do for a living? I'm a police officer. I'm a client sales manager. Okay. So, sounds like you sales managed a bunch.

Yes, sir. Your income went way up sales managed a bunch. Yes, sir. Your income went way up. Good job. Well done, Eric. Well done. Yes. Because police officers don't usually get a $100,000 raise in three years. Well, the 60 was starting off with just my income.

And then when she got her job and then another job, that's when it kind of built into that extra $100,000. And your income did go up during that time. Yeah. Absolutely. Okay during that time yeah absolutely okay good what kind of debt was the 140 our house talking to weird people that's right how old are you two weirdos i'm 34 i'm 35 and you have paid for a house in colorado freaking springs that's correct oh my goodness what's that house worth a little over 400 i love it How much you guys got in retirement? Around $350,000. Wow.

So by the time you're 40, you're going to be worth about a million and a half. That's the goal. Way to go, you two. She says that like an assassin. Just, that's the goal. That's the goal. That's so great. You get in the way.

I love it. All right, so what happened? What happened? How'd you get on this crazy adventure? So we took Financial Peace University like two years into our marriage. And then life, kids, we're in our third house. And then we took a class at our church. And then I started working part-time

doing financial advising. And I was like like we can do this then first we were like let's do it before we turn 40 and then I started working more and more and more and I'm like on 2021 the very beginning we set a resolution let's do it before 2023 and then we did it right before we did it in end of september and then 2022 yeah and then nicole was born a couple weeks later yeah so covid was behind you when you got real serious and leaned in did it motivate you that all that garbage you've just been through especially well yeah for me it didn't really change anything yeah you're pretty much essential yeah yeah yeah but i'm saying but looking at that

going oh man this life can happen we better be more prepared did that enter into the decision or what caused you to all of a sudden flip the switch and go game on desire just wanting to be debt-free okay yeah you looked down saw the numbers and saw you could is that what you said there i think it was more like we i started working with other people with their finances and seeing like this is all about behavior you know and we started working i you're not allowed to say that you're not allowed to say that it's not behavior it's just uh it's the math problem right um and so we were like we just have to do the right thing and so i started working more and more and we put all of my income into just additional principal payments and we just kept living off of eric's income which we started this journey with and we just pushed and pushed and pushed wow

so if you continue to work yeah yeah so how uh how does it feel to be completely free awesome yeah just like a total weight off your shoulders not your shoulders my shoulders true yeah but i mean you don't have a payment in the world no no what's the first cars are all paid off for and everything what's the first big thing you do after you pay off your house i bought a motorcycle there you go of course you did what'd you get uh indian chieftain oh nice beautiful sweet good for you well you should you should and it's paid for and of course it's paid for stacy what'd you get besides a third human well here we went here oh the trip to nashville that's right there we go very good very cool we're proud of you guys you're. 34 freaking years, all your house is paid for. That's impressive.

In a culture that's completely lost its mind. I mean, you guys in both of your worlds, you see it every day. Everybody's a victim, and you're not. You're not a victim of nothing. You're just a victor. Yeah. Eric, do you have hard conversations with some of the folks you work with? I spent my whole life growing up around police officers, and everybody's got to have a Jeep or a big truck or a thing.

And I can imagine you had some hard conversations telling your buddies or your coworkers, I'm doing something a little bit different. Definitely being content with what I have. There's definitely desires to go out and buy everything that I could. But looking back at home and having to bring a brand new bring a brand new truck home would not you know be a good thing to live with so um you know the desires were there but you just have to have the the the drive to not do it yeah live like no one else so later you can buy a chieftain yeah i mean yeah there we go yeah i like it it's awesome good job you guys hey we've we've got the Live and Give Bundle for you, a copy of the Baby Steps Millionaires book. You're going to be that very soon, as we said.

And the Total Money Makeover book to give away, get somebody started on their journey and in your world. Stacey, you'll be able to do that pretty quick. And a membership to Financial Peace University, another probable giveaway for you guys. But it's all for you to Live and Give Bundle. And bring the kiddos up. Let's introduce them and find out their ages and names what are their names and ages so this one here is kimber she's five this one here is mckenzie she's seven and this is our newborn nicole she's five months go nicole i love love it. Yeah, very cool. House full of girls. There's a lot of women in that house.

I'm telling you, that's good. That's a good girl power. I love it. Very, very cool. What do you tell people the key to getting out of debt is? I think it's discipline and living below your means. We could have easily just increased our lifestyle when I started working, and instead we had discipline to keep our lifestyle the same and just pushed it

yeah and i'm looking at three little people whose lives are changed and their whole family tree has changed because of 43 months of you guys being in control way to go very proud of you all right eric stacy mckenzie kimber and nicole colorado springs 140 000 paid off house and everything that's right bunch of weirdos. Did that in 43 months, making $60,000 to $160,000. Count it down. Let's hear a debt-free scream. Three, two, one.

We are debt-free! Yeah! Woo! Woo-hoo-hoo-hoo-hoo! Wow! Very, very, very cool so a financial advisor and a policeman are going to be millionaires about the time they're 38 they'll be out about a million and a half by the time they're 40 um don't tell me it can't be done geez and they'll have three kids that aren't teenagers yet it's just amazing yeah and they're you know and we call them weirdos you guys don't understand

78 of americans live paycheck to paycheck that means if you drive down your street you count 10 houses eight of them have too much month left at the end of the money to have a paid for house is statistically highly unusual especially at 34 years old so that's weird normal sucks normal is broke normal is out of control normal is spending like you're in congress and you have and sally may's been with you so long she's got her own bedroom in your house normal as you live from master card to master card bill how they name that anyway oh they knew exactly what they were doing yeah man i mean that's normal you don't be normal people and those guys right there are weird no kidding and to think of the as as they mentioned they both had their unique cultures

that you got to go into every day it It's tough going into the police culture. Those guys work really hard. They've got a lot of stress. They don't make a ton of money. The incentive to buy something cool is heavy. It's just a culture. Stacey going in to work sales every day, man, that's going to be hard because she's making good money and it's hard not to be like, I'm just going to get a new car.

Just to continue to see that prize. Keep your eye on it, man. It's tough. It's tough, tough, tough, tough. Paid off their house. Paid off their house. And you know what? If you drive like no one else, later you can drive anything you want. Whatever you want, yeah.

I mean, I drove a really nice car to work today. I saw it. But I drove some crap in the past. So I make no apologies for what I drive now. Paid a price to win, and there you go. You always pay a price if you're going to win. There's no way around it. Those guys did powerful so proud of you guys this is the ramsey show dr john deloney ramsey personality is my co-host today colton is with us in dallas hi colton welcome to the Ramsey Show.

Hi, Dave. Hi, John. How are y'all doing today? Great, man. How can we help? So, over the last two years, I've been able to pay off $76,000 in debt. Still owe $66,000. My wife and I have been talking about downsizing our home, um, to pay off the rest of it. We owe two 25 on our home and it's worth three 45. Um, and part of that debt is we have solar panels that we own 18,000 on. So part of my question is, would it be better to transfer that $18,000 loan to the next homeowner? Or, and I forgot to mention this, we just got an inheritance of about $20,000. Should we go ahead and pay off the solar panels, or should we try to sell the home and just transfer the loan? The solar panels will have to be paid off when the house sells.

You can't transfer the loan. Okay. Because it's can't transfer the loan. Okay. Because it's a lien against the property, and so the title is clouded. And because they're attached to the house, okay? Even if they didn't file a second mortgage, it's an encumbrance on the property. And so, depending on your state, I'm not sure exactly how texas would address that they've got a little bit of unusual real estate laws but either way i it there's a lot of danger in transferring it if you didn't get your name off fully and then they didn't pay it later um

then the solar panel comes after you because your name's still under there on the paperwork you know they never get out of there or something along those lines so i what I want to do is just make sure they're paid off. Now, you can either pay them off now or you can pay them off from the sale of the house if you're selling the house. You're 100% sure you're selling the house? It's just something we've been talking about. And that's part of the question, too. Do you think that's a smart decision to downsize, you know, find a home with a mortgage of about $200,000 so we can pay off the rest of that debt?

No. No. You've already paid off $76,000. You'll be able to pay that house off if you like the house and want to stay there. Or think about the math here. You said you got $66,000 left. Is that right? No.

Oh. Yeah, $18,000 on the solar panels and then $48,000 in student loans. Okay, so you're going to sell. You got $200,000. We got $100,000-something in equity left. Have you sold your house right now? Yeah. So you're going to take $20,000 of that and put it down on the house,

which is going to lead. It's not worth the math. Why don't you take that $20, grand that you just got from the inheritance put your debt down to 40 and then y'all just hit the hammer on it in the next 12 months to get this thing paid off yeah just like you did on the 76 and knock it on out just be done i mean you're so close man yeah and just have your first mortgage solar panels are paid off student loans paid off and you're going to do that and how long did you say you took to do 76 uh it's been almost two years to the day we started april 21st y'all just tired right uh yeah it's time you've been working a lot yeah yeah you're so close man how old are you guys uh i'm we're about 27 good okay um let me tell you i think you're going to be done if you take

the 20 and throw it at the solar panel and you stay and you reset your budget tonight reset your energy tonight i think you're going to be done in about a year okay i think it's going to fool you okay and because the you know sometimes uh people get almost there, and just before they break through, they quit because they run out of steam. That's with everything, with jobs, with business. It's not unusual. So John heard it clearly.

It's not even physical fatigue. It's just emotional fatigue. Yeah. Yeah, you just get, you know, you just feel like it's a slog um i used to do half marathons and there's a point at out of the 13 miles at the nine nine and a half mile mark where you cuss yourself for running a half marathon for about a mile you think this is the dumbest thing any human has done why am i doing this again and you're so stupid you signed up again you know i mean just you this is you talking to me talking to me right but it's a slog and then there's you keep on and

about the 10th mile about when you turn 10 you go okay i got three to go and you can start to see the end and your energy level comes back up and your pace comes up but usually my slowest mile in the 13 is somewhere around that ninth mile and it's not unusual it's a fairly normal it's not but it's an emotional wall that you hit there from the slog more than a actual physical wall or in your case an actual physical wall from being so tired from actually working all the time so you're going to be there in about a year and when you're 30 and you look back uh you're you're not even going to remember how much pain this was. All you're going to remember is the victory. And you said something important just from the neuroscience world. I think it's important.

If you've got $150,000, let's say, and you pay it off $100,000, it's taking you two years. Y'all are at the end of your rope. $20,000 falls out of the sky for you. There's something powerful about taking that $100,000 off and doing a like a complete control delete reset okay we got 50 grand left we just got 20 in the mail now we got 30 we can do this and it's a it's a it it it's a re-energizing right so it's like get to the end and saying it's

got four miles left or i've been got 13 i got three miles i can do this right it's a it's a different i know i can run three miles i've done it a lot i can got three miles. I can do this, right? It's a different proposition. I know I can run three miles. I've done it a lot. I can do three miles. It has nothing to do with having already run two. No matter what, I can run three miles. That's it. There's a reset there.

But it's almost like you need to wad up your old budget and throw it away and get a clean piece of paper. That's right. Control-Alt-Delete. Yeah. Clean the whiteboard and go, okay, let's write this out as if we were just starting. Okay, we can do this. Yes yes and it gives you that it gives you that that whole thing and that's where you are dude you can do this and you're going to call us back and you're going to do your debt free

scream and we're going to brag on you we're already bragging on you you've really had good progress i'm real proud of you all right lou is in pittsburgh hey lou welcome to the ramsey show hey how you guys doing today? Great, man. How can we help? I just have a question about, I'm not sure if you're familiar, you guys are with a lease-back loan where you can buy a model home from a building company and they pay you rent until the entire development is done,

and then you have the option of moving into the home and changing the loan from a commercial loan to a conventional loan or selling the home after, which it appreciates because they're building all homes around it. I don't know what to do right now, so I'm just going to get advice. Okay. I wouldn't do that for multiple reasons let me give you the reasons okay it sounds really good on the surface um the the problem is it only works if it works and i like to have deals that are happy happy deals we call them there i'm happy

if it doesn't work and i'm happy if it does work. This one, you're only happy if it does work. So here's your number one, we tell people not to borrow on investment property to pay cash for it. So number one. Number two, you're putting commercial paper on investment property. It has a whole different set of terms. The boilerplate documents are different. The call provisions are different. It's what got me broke when I was 28. For instance, one of the call provisions in a standard commercial paper that's not in a normal residential mortgage is if they decide the quality of the collateral has gone down, they can just call the loan. They can just decide that they don't like the quality of the collateral anymore. So what could cause that? Well, the builder could get in trouble because

real estate has slowed down and interest rates have gone up. If the builder got in trouble and he doesn't finish out the whole area, guess what? All that appreciation you were thinking about is going to not be there. And guess what? Then you've got an area where there might actually be some houses that are half done that don't get completed because the builder's in trouble. Builders get in trouble all the time in economies like this by the way and that's your tenant they don't pay now you got to pay but even then the bank looks up and goes oh i know lose current but uh look at all the weeds and the half completed projects up and down this street and look at the number of foreclosures on this street we're not only not seeing appreciation

we're seeing a neighborhood deteriorating because the builder got in trouble then i mentioned that builders get in trouble sometimes and um now this is what i've i used to buy properties after the builder got in trouble so i know what it looks like i bought it i bought a whole street of properties one time i had to go in and finish everything clean up the weeds and became the guy that finished it out but i bought it for nickels on the dollar. Yeah. After this, not before this. So, yeah, don't do it. No, there's a lot of other investments that you can do. This sounds like a sure thing, but it's only a sure thing to the extent that the builder doesn't get in trouble.

And they do all the time, dude. So, especially in environments like this. Hope that helps. This is The Ramsey Show. Hey, it's Dr. John Deloney. If you love the show and want a deeper dive on your money journey, we have a weekly newsletter that gives you trending and helpful articles and tips on following the Ramsey way. Just go to ramseysolutions.com today to sign up for our newsletter. Again, that's ramseysolutions.com to sign up for our weekly newsletter.