Bankrupt by 28: Why Dave Ramsey lost MILLIONS in Real Estate

[@thatflywelshguy9662]

The best advice I’ve ever heard is listen to Dave Ramsey for getting out of debt. Once out of debt, don’t ever listen to him again.

[@GrahamStephan]

🙌🏼

[@Kharmatos13]

it's great for pre-debt (don't get into it to begin with) while in debt and how to get out of it because you didn't listen to begin with Also your average everyday person isn't trying to be a billionaire they want to be stable and comfortable and want to work and dave ramsey is great for that he's the anti-get rich quick scheme guy enjoy being broke like he was when running these scam's

[@dwightk.schruteiii8454]

Agreed.

[@rifter6176]

This is correct. He gives good BASIC advice for getting out of debt. I'll tell you though that half the time I hear him give advice on the radio I cringe. If he were a licensed fiduciary, he'd be fined or lose or license all together. Much of his advice is extremely flawed. He takes advantage of consumer biases to sell a product - himself.

[@izcanordaz2766]

Rifter6 Out of curiosity, what advice does he give that sucks so bad? It’s obvious he recycles the same material, but he’s dealt with loans from experience.

[@InvestingBookSummaries]

Learning from other people's mistakes saves so much time, effort, and money.

[@GrahamStephan]

I agree!

[@Rensoku611]

Didnnt you used to have videos?

[@keyshawnpaul9392]

Very true, learning from your own the first time also does wonders

[@rbrucerye]

And tears

[@justinc2633]

@@keyshawnpaul9392 i just potentially saved myself years and tens/hundreds of thousands of dollars from a youtube video, sure real life experience is good too though, but not for the same reason

[@Hawxxfan]

as a listener of both you and dave ramsey and i am glad you did this video. you did a good job of explaining the tax reform in his era and i thought your views were fair

[@GrahamStephan]

Thank you so much!!

[@readysetgrow511]

I second this!

[@otk88403]

No wonder Ramsey is so anti-debt. Poor guy must be traumatized.

[@GrahamStephan]

Yeah I can’t imagine what it’d be like to go through that!

[@jalabi99]

Yes. I don't blame him at all for preaching what he preaches. If I went through what he did as young as he did I'd probably be that way too!

[@deadmanfighting7009]

Scary Bankers got him....

[@aceofspades1217]

We all learn from our mistakes.

[@sarahann530]

Graham Stephan Bollocks ! I know lots of people that walked away in 2008 and the banks are handing them out loans again . Traumatized my ass

[@devereauxjnr]

My portfoliio of $750k is down to $492k, How can I profit from the present market" , I mean I've heard of people making upto $250k in couple weeks during this crash and I'd like to know how.

[@MrGravity304]

@@NotyourBusiness-urto6 It's a delicate season now, so you can do little or nothing on your own. Hence I’ll suggest you get yourself a financial expert that can provide you with valuable financial information and assistance

[@devereauxjnr]

@@MrGravity304 How do I Meet this Lady?

[@MrGravity304]

@@devereauxjnr credits to NICOLE DESIREE SIMON, one of the best portfolio manager;s out there. she;s well known, you should look her up

[@devereauxjnr]

@@MrGravity304 Thanks for the info, i found her website and sent a message hopefully she replies soon.

[@MeetKevin]

Dave Ramsey EXPOSED

[@GrahamStephan]

WHAT HE ISNT TELLING YOU 😱

[@Re3iRtH]

Kevin, you've been on somewhat of an EXPOSURE binge lately. Have you packed your sunscreen? ;)

[@ozzy032]

Except, this is exactly what Dave says happened to him....apparently, Dave exposed himself, like 25 years ago. And no, not like that. Get your mind out of the gutter.

[@BrentInvesting]

Dave Ramsey - Next Time On Dave Ram Z Exposed ( *I didn't comment in the wrong area, you read this in the wrong spot.* )

[@lacyrussell2116]

Dave talks about this all the time... And talks about how stupid it was...

[@waltermercado9152]

Oh man thanks for this video graham. I was just about to sign a $500,000 30 day fixed rate loan at 25% interest with my local mafia Don. You just saved me minus a pinky finger which I owe for not agreeing to take the loan. ;)

[@GrahamStephan]

I wouldn’t pay a penny more than 24% interest

[@josemigueljr]

@@GrahamStephan 😂

[@rocknvidz1402]

@@GrahamStephan 😂😂🤣

[@miguelhernandez7170]

Lmaol

[@Falcodrin]

@@GrahamStephan So you saying I shouldn't go for this 28% credit card? lol

[@KingYang05]

All of Dave’s notes were called within 2 years, all $3,000,000.00. Marriage hung by a thread. Collectors literally questioning his manhood and his ability to provide for his family. Yeah, I’d be scared and angry af too. No wonder the guy has ZERO risk-tolerance. Dave’s path towards wealth may be slower, but nobody has ever gone broke with his teachings. I don’t agree with the way he invests but I have HUGE respect for the man.

[@GrahamStephan]

Same. I have nothing against him, and his advice works well for the vast majority of people!

[@jorge_cajamarca_rei]

King Yang his advice on investing 25% in international doesn't make sense to me

[@Furyyuriy]

@@jorge_cajamarca_rei when all domestic will go down international will go back up. And offer your entire portfolio from drowning.

[@jorge_cajamarca_rei]

Yuriy thanks I see what you mean

[@TechieTard]

The way he invest he has TRUE cash flow! The way Graham invest (nearly every other mofo) is staggered debt. the banks own him, he owns the renters, the economic system owns the renters. The banks are the economic system, debt = slavery, just different levels of it. Ramsey is the only guy who doesn't have to worry about a recession!

[@Phoenix11720]

But now he took is failure and turned it into a massive business

[@GrahamStephan]

He definitely turned it around for the best!

[@NickMcGowan]

His net worth is around $55M.. Imagine what it would be like if he used his platform to raise private money and leverage into real estate deals intelligently.

[@jjgems5909]

Nick McGowan maybe he’s ok with 55 million though. 🤷🏻‍♀️

[@TruththeRealist]

And has helped a lot of traditional income families in America out from under the thumb of debt!!!

[@_baller]

Where when just criticizes ppl with common sense

[@timothyherrera8674]

WHATS UP YOU GUYS ITS GRAHAM HERE! I say it every time i see you vids in the opening! Great stuff Graham! 😎

[@WeddingVideographyTips]

Correction "GRAM"

[@frankxu4795]

When you think about someone's decision back then, you always need to consider the context. Your strategy is basically impossible under the context of 1980s when the interest rate was way-yyyy higher than what is is now. I am not saying that he made smart decision by betting his life on the existence of a tax loophole. But at least you need to see the rationale behind his decision. It worked while it lasted. There is simply no best strategy in all time. The fact that you made a fortune on Real Estate does not mean that your strategy is any better than his by itself. It is only because this is the right thing to do at the right time due to the quantitative easing by the Fed.

[@avarice5071]

I feel like half of what you said is absolutely true, however I think doing a 30 year loan back then still would have been a more sensible decision despite the interest rate, Being higher, like you said it would have been applicable to that time period and he probably might have not gone as crazy as he did with the mortgage after mortgage. People still had 30 year loans despite the interate rates of that era.

[@NateOBrien]

Oh dang!!! Shots fired!!!

[@GrahamStephan]

🔥🔥

[@beastyboy86]

Nerf gun fired...

[@insanity6379]

@@beastyboy86 😐

[@christinefindorff5328]

Hi Nate ☺️

[@fandangosan]

bro im 24 and i just found this channel. I wish i had this knowledge back in high school. Sweet baby jesus.

[@averagejoe9249]

Dave Ramseys advice, in my opinion focuses on people who have absolutely no clue on how to manage money, even so much as buying toilet paper. I don't get much investment advice from him.

[@GrahamStephan]

Agreed.

[@sheilakilby5162]

Average Joe agreed!

[@hank_Reardon]

Agreed he’s the best for stopping people from being poor and in debt.

[@pawsnotclaws2772]

Average Joe same

[@tanicwhisper0647]

Same %100

[@grannygoes7882]

Dave Ramsey is one rich dude!! He did learn from his mistakes and he makes a fortune helping others get control of their finances. I did his program and it worked! I've been debt free for almost 15 years. It is wonderful!

[@thelurkingpanda3605]

The goal of this channel is the opposite of being debt free

[@thelurkingpanda3605]

@yussof kazmi true though, I can't wait to get in debt

[@tomaricotube]

Is your only goal to be debt free?

[@juanrivera6207]

TheLurkingPanda debt itself is not bad, if debt is making you money then it’s not bad debt

[@morbotheturtle3796]

@@thelurkingpanda3605 not entirely, a lot of this channel is about being frugal and smart with the money you do have, which matches up with Dave Ramsey's ideals very well

[@AlexSanchez2254]

Mr. Graham, I've told you time after time again. It amazes me how quickly you are growing! Keep up the damn good work! We don't take your content for granted.

[@GrahamStephan]

Thanks so much!!

[@moneym3]

Omg he literally just did a video with you lol

[@MikeRosehart]

In Ramsey’s defence, 30 year fixed rate loans in the 1980s were so expensive there was no cashflow. It made no sense to fix in at those interest rates :P unless for appreciation, short term. How do you cashflow at 19% interest rates? Your mortgage payment was double or triple your rents. There was no cashflow. That’s why people sold apartment buildings for 1$ in many situations in the late 1980s. Many real estate deals were liabilities and cashflow negative, so the goal was to GIVE them away.

[@rswear]

I was just thinking the same thing, interest rates where a LOT higher in the 80's. Although a 90-day loan still doesn't sound like the best idea even at that time.

[@reptilesgamers00]

Also, Dave would have to be an oracle to know the tax reform act of 1986 was going to screw him as much as it did.

[@WTFIWFYDB]

@@reptilesgamers00 Well you don't have to be an oracle to know that asset which price is highly speculative is going to go down sooner or later. Bitcoin, 2008 real estate, and sooner or later chinese real estate. He simply played high risk - high reward game for too long.

[@WTFIWFYDB]

@Adam Wade No Adam, I don't speak with arrogance he took a lot of short term loans for house flipping where number of things that can go wrong are very high. His strategy allowed him to become rich at very early age and he filled for bankruptcy when things went wrong. And yeah obviously you cannot predict a market crash, but at certain cases you can expect it to happen or atleast understand the risks. Bitcoin is far from it's peak, a lot of people where screwed during 2008 and it took a long time for market to recover. What I'm saying is not that he suppose to be an oracle I'm saying that he picked a risky strategy and payed for it.

[@koko4kosh960]

Odd how similar this sounds the 80's yet Gram can't seem to envision how this could happen to him. I live in Denver average home price is 540k yet the median income is 70k. Something has got to give and seriously doubt it will be employers deciding to pay more. The demographics are not very good for RE babyboomer are retiring and dying not enough population to back fill the homes.

[@danielmedina4953]

Your businesses will make you rich but your investments will make you wealthy. We all deserve to be rich and have financial freedom. I pray everyone here becomes extremely successful.

[@doragary3717]

Do you wish to venture in investments?

[@doragary3717]

I will personally introduce Anna s Wilson of UCLA Anderson financial institute. She is the best when it comes to investments

[@doragary3717]

Her availability is sure on Facebook

[@doragary3717]

Anna s Wilson

[@doragary3717]

Also her tele gram

[@10xoxolove]

wow i always wondered why he was so bitter, he's traumatized.

[@GrahamStephan]

Yeah!

[@priceandpride]

He's the most salty old man

[@bubbles1978]

priceandpride he is not salty, he wants to save people the hassle

[@matthiasl4493]

Ramsey is a multi millionaire now, who successfully learned from his mistakes, why should he be bitter?

[@kimberlyl3727]

@@bubbles1978 He does come across bitter.

[@likapo868]

I've been bing watching Dave Ramsey videos and it's so nice seeing the other side of the coin.

[@GrahamStephan]

🙌🏼

[@shannonsage4486]

He’s not that much different than Dave. They both talk about budgeting and paying off debt.

[@Mr.Quinlan888]

I learned real estate investing from watching my parents go through these same exact growing pains in the 80's.

[@TheLifeFormulaa]

Great well researched video!

[@GrahamStephan]

Thank you so much!

[@ryanhuddleston5364]

Dave is the man, great solid advice to set your life up.

[@nickbehrooz596]

I have been using Ramsey’s principles for about a decade now, I wouldn’t have it any other way. I will say in Dave Ramsey’s defense, he has a net worth of over $200 Million bucks and has 3 million sq ft of real estate paid for now. That’s why he doesn’t care what people think about him

[@James-yi1vk]

Dave Ramsey's advice isnt terrible. But he gives cafeteria financial advice. Everyone has different situations and are in different phases of their life. This is why you need to strategize according to your situation. Dave's advice is for the financially illiterate. His advice totally works and is certainly better than being an idiot about finances. But his advice is provably not the best. Dave's advice is better for older people or people that have absolutely no self control.

[@overtheclouds9]

There’s better strategies that will get you better results and keep out of debt and having passive income. Please Dave go away! Use your own head and think things through. I cannot tell you how much money I would of lost listening to that miserable guy. He’s making most of his money off of guys like you buying his books and seminars. Hello??

[@arleneaugustahair8393]

Nick Behrooz Everything is not for everybody. What may have worked for you may not work for someone else. People have different situations going on from marriage, kids, age, income, debt and family situations. His advice is really not cookie cutter for everyone. I don’t completely disagree with his methods but they are not completely for me because I can easily cut out most of the 7 Baby Steps. Plus my financial situation is completely different from a lot of other people. My mindset is also completely different than most people, especially women.

[@KnockoutInvesting]

Dave's networth is $55 million, don't make up fake numbers.

[@nickbehrooz596]

Berkeclor92 you got that net worth off google man. That’s 10 years old. Check with Forbes and do your research through Stanford financials market watch

[@spiritdude2828]

What you explained, Dave himself is saying all the time since ever. He lost it all because of stupid, dumb decisions. Nothing is exposed here. The guy is an open book about this subject.

[@jordankelley6005]

My thought's exactly!

[@waynemiller6070]

Yes, Dave admits to making mistakes with zeros on them, but I never understood how the banks called his loans due. I had never seen a loan structured that way. So I was enlightened in this video of types of loans Dave was using, as I was previously unaware.

[@marshall.houston]

wayne miller a lot of commercial loans can be called at any time

[@treyj4007]

Lol explaining Dave Ramsay's already told story and making $$$ got to hand it to him.

[@tuscanollie1242]

This video was made so graham could explain to people that he isn’t at the same risk as Dave was when he was young

[@hunterwirth8535]

And that's why he's help millions of people avoid the same mistakes.

[@PositiveInvesting]

There's always a smart way to invest. Whether thats in real estate or stocks... Stay smart people!

[@GrahamStephan]

🙌🏼

[@Pokarface7]

Crypto too

[@daytonwintle6051]

Pokarface7 no

[@sudhanvakashyap297]

@@Pokarface7 heck no

[@josephhsu3221]

I love watching both Dave Ramsey Graham Stephan Meet Kevin and Gary Vee. We need financial education in school. I only learned this from KZbin.

[@mindsetwithmarie676]

I am huge Dave fan, and always will be, but I appreciate you clarifying this part of his story. I really would like to start investing in real estate once I am done paying off debt. My monthly payments are choking any potential to save for investment right now. Could you make more videos on getting started as a real estate agent? I would like to get my license and get started in this field. Thank you so much! Keep crushing it Graham!! 🙌

[@treesmoke]

By the way this is also the reason why there are so many malls build in 1980s

[@GrahamStephan]

I didn't know that, makes sense!

[@Exachad]

Dave Ramsay wanted to get rich extremely quickly, failed and now advocates for the slowest way to get rich.

[@EugeneTChu]

It is not about slowest way to get rich, but about how to avoid common practices that keep people poor

[@alexlewis8143]

Debt keeps poor people poor. Payday loans are scum of the earth.

[@justinbratton1235]

says a broke person, in all likelyhood.

[@Exachad]

@@justinbratton1235 No, my diamond balls have made me extremely rich. I put insane amounts of money into profitable Amazon calls, Tesla calls, and now GME calls. Balls = money. It's simple. You wanna be poor, follow Dave Ramsey.

[@js8430]

Conservative way to get rich. Getting rich fast some of the time has lots of risks

[@andyfam5613]

He actually talks about it a lot. What's to not like about the guy. He's making money doing something positive. Getting people out of debt and prepared for retirement. I don't get why people bash someone that's doing something good in the world. At the end of the day people have a choice. Listen to people who sell them get rich quick gimmick or listen to someone who's actually telling them what they're doing wrong.

[@arleneaugustahair8393]

Andy Fam you are correct, he’s doing good for those who have no control over their finances and spending. Dave would be very good for my husband because he’s irresponsible with money. He wouldn’t benefit me because I know exactly what I’m doing. I know how to micromanage my money. I’m also very familiar with the Debt Snowball Method. He’s not bashing him, he’s actually explaining what happened to him and why he is the way he is about money. Dave’s way is not the only way to handle money. Plus people have different situations. I’m not one to tell women they don’t have to work and have their husbands out their slaving away working 2-3 jobs. I believe if someone creates their own debt they need to man up or woman up & handle their business. Why put the financial burden on other people? There are just so many ways nowadays to make money at home.

[@drunclecookie216]

my only problem with Ramsey is he paints a broad stroke to make everyone's situations the same. His main audience is people who are in dire financial straits. The rest of us who are in debt, but not in serious trouble who just want some pointers here and there, and take some of his ideas and change them a little to suit our own situations, we get chewed out by him and his followers for not following his plan to the T. Sorry, I'm going to take 2-3 years to pay off $34k of debt rather than live like a pauper and make unnecessary lifestyle changes just to pay it off 1 year sooner.

[@nocoolname32]

@@drunclecookie216 im dave ish. i have zero consumer debt, none, but i love my american airlines credit card that i pay off each month. what kind of debt to income ratio would you say qualifies someone as being in "serious trouble"? what would make someone normal and what would make someone a candidate for daves plan?

[@drunclecookie216]

@@nocoolname32 for serious trouble I'd say someone who's living paycheck to paycheck with nothing in savings and more debt than their yearly household income or net worth. "normal" would be someone who has a 3 to 6 month emergency fund with a little debt but nothing that outweighs their networth or yearly household income. I have two credit cards myself and pay them off every month. they are used primarily for gas and groceries and a few bills or if we need to order anything online or get a hotel somewhere. my only debt is $17k on my house and I have a little over 4 months saved up

[@misspriss2482]

@@drunclecookie216 I would say that you don't have anything to learn from Dave then. Dave is for people who are deep in debt, don't know how to manage their money, and have no financial goals. Once you get there (which is where I am because I have the discipline now), you have to look to other people for investing advice.

[@Whooshta]

I always wondered how the bank could call his notes on a 15 or 30 year fixed. That story always made absolutely no sense to me and thank you for explaining what actually happened. That was a terrible investment strategy and way too risky for my taste. :/

[@GrahamStephan]

Agreed!

[@newbrood87]

I appreciate you put a summary of what you talk about in the video description. Liked!

[@majidqayyum9613]

This is the reason, why I like Graham. The way he explained Dave's mistakes without criticizing him.

[@Monsiemage]

I always wondered what a 3/1 ARM or a 5/1 ARM was for... This video made it so clear.. house flipping.

[@ResourceTalks]

*I really can't have it that people would go outside and say things like "THROW AWAY YOUR CREDIT CARDS" when the reason they feel this way is because they never managed to work with it. Debt has been making me money since I was 18 years old and it doesn't look like it's going to stop now.*

[@GrahamStephan]

🙌🏼

[@Lambdamale.]

Agreed. I once thought I would save up the cash to buy a house until it was explained to me that while I was saving, there was a good likely hood I was losing on appreciation.

[@kentrobinson7479]

@@Lambdamale. I would have lost over $200,000 had I waited to buy our house without a mortgage

[@kentrobinson7479]

Don't forget renting = *PAYING THE LANDLORDS MORTGAGE*

[@Lambdamale.]

@@kentrobinson7479 exactly. Theres always risk.

[@clallen2000]

The real reason for the due on sale clause is that banks used to keep their mortgage loans on their books before securitization happened. Banks practice borrow short and lend long. This is where banks borrow funds from depositors for 1-5 years but lend that money out for 30 years. When the Interest rates for savings is low and you can lend the money out at a higher rate everything works. In the 1980 to 1990 the savings interest rate went as high as 16% but the banks had already loaned out their depositors money for 30 years at around 6% interest. Each month the Savings and Loans we're losing money. Nobody wanted to borrow money to buy real estate at 18% or higher so home sellers would let buyers pay them for their equity and take over the payments on the mortgages. Banks didn't want these low interest loans to remain and wanted them paid off whenever a house was sold or transferred. Today mortgages are securitized and sold off to pension funds, hedge funds, insurance companies that want to hold the debt for a long time.

[@richsmith4363]

I do agree with your approach to real estate. The one big risk you didn’t talk about is long periods where you are unable to find stable renters. OR, having renters that refuse to pay their rent and you are forced to go through the eviction process. That was especially problematic during the pandemic. It was impossible to get deadbeats out of your rental. While no rent came in, mortgage companies still wanted to be paid. After going through such a nightmare, I’ve given up being a landlord. To me, the benefits no longer out weigh the risk.

[@DoodleOnAMotorcycle]

first channel i've EVER HIT THE BELL in my long wise life

[@tonyoliver2330]

Protip: recessions favor landlords, less people have properties forcing more into the rental market. This happened here in Miami and rents went way up.

[@GrahamStephan]

Agreed! In LA, rentals did really well from 2009-2013!

[@tommybrown8775]

Yes and some parts of Dade County still way up

[@Supertzar999]

Rents in LA were way cheaper than buying (2002-2007). And at the time everyone was screaming to buy real estate.

[@nocoolname32]

markets vary. my market right now has a rental glut. it seems like anyone and everyone with a $100K income has rental properties. we are barely breaking even on our twinhomes. we had a hot market that eventually got over built. i would welcome a mild recession just to slow down real estate investing.

[@mle1872]

The price you pay is nothing compared to the terms you agreed or negotiated on. A fixed interest rate that guarantees a positive cash flow forever is the goal every Real Estate investor should aim for.

[@GrahamStephan]

I totally agree!!

[@mannyc45]

that sounds like an NFL contract

[@DonteeWeaver]

Perfect Timing with the Ad Placements🤓

[@anirudhtyagi]

Hey Graham, just finished your course and it was amazing :) Look forward to using this knowledge and hopefully meeting some day!!

[@GrahamStephan]

I’m so glad you enjoyed it!! Thank you so much, please make sure to keep me posted and hit me up if you have any questions!

[@daveswcsful]

Great video. Thank you for taking the time to make it.

[@markw5805]

You over simplified he should have just gotten 30 yr fixed. Interest rates were 10-16% during those years. The other is a Dave Ramsey thing..in order to have cash flow you have to have a renter...that is not always the case so how do you pay a second mortgage with no flow and cover repairs if you only cover mortgage with rent? Real questions, real risk. May not be a loan call, but still risk.

[@Tigrou7777]

Back in the days, interest rates were quite high, I confirm. My parents had to pay so much interests for the house they bought in the 70's. On the other hand, if you had lot of cash you could just leave it on a savings account and get a nice interest rate (now you got something like 0.1%). In the mid 60's, you could even loan money to the government and get interest incomes higher than 10% (yes, sounds crazy). Different times.

[@wallihaley5194]

Tigrou7777, yup. My parents were terrified of debt as they lived through the Great Depression and WWII. But the loved the high interest rates of the ‘80s because they literally saved 1/3 of their income and regular bank CDs were paying something like 15% interest - totally risk-free.

[@xxxBradTxxx]

@@wallihaley5194 Someone reincarnate Paul Volcker please!

[@PeterTamura]

Around 2005, I sat through a Northpoint Investment seminar, they were recommending five year hold, buy properties with neg am loans. Worst advice ever, thankfully I never did this but I knew a neighbor that made a $100,000 investing in AZ real estate, and then bought five more houses and went broke. I did buy a lot in San Felipe, MX with a friend for $50,000 or so that is absolutely worthless. Be careful with doing long distance real estate, it's hard to know what's going on and there's not always a good secondary market to sell when you need to.

[@Silbaugh4liberty]

Real estate and lending in the 80's, sounds like the stock market in the 20's (borrow cheap money for 90 days, bank recalled loans, sucked the market dry, and wiped out those who engaged in risky lending to gamble on wall street).

[@davidrpriest]

Mr. Ramsey has been very transparent about his mistakes. You can make money flipping properties but it is not a long term wealth building strategy. Using the money from flipping to buy rental real estate is a great long term strategy. Unfortunately, most flippers never use the money to buy rental homes so they are dependent on finding more homes to flip. Flipping is more of small business than it is passive income.

[@haleybain8915]

I really love how you said you would start as soon as we liked the video! It lined up perfectly

[@GarminPro]

Hahaha this guy is completely leaving out that Dave Ramsey was dealing with 30 year interest rates greater than 12 percent. There is no cash flow at that rate. 🙄

[@asoldierstwocentsrawuncut9611]

Put the property in a Trust so it doesn’t trigger the “due on sale” clause..👍

[@Danbach90]

"The debtor is slave to the lender." This is what Dave figured out when he went broke. That's what I figured out when I went broke. That's what a lot of these KZbin millionaire types don't want to take seriously. At the end of the day when you take a loan from one of these Banks they own you. You no longer own yourself and the freedom to do as you please is greatly reduced. When it's going well you're essentially managing the bank's property and earning a commission. When it's going badly you absorb all of the risk and have to spend all of your time trying to appease the bank before they take everything you own. That's exactly what happened in 2008-2009. The average American got screwed and the banks got bailouts and golden parachutes. Yes, you can hypothetically make more money by using debt as leverage but no matter how much leverage you use the bank can still come after you because you work for them. If you're fine with working for a crook like Jamie Dimon for 30 years then by all means take on all the debt you think you can manage. Anybody who watches this and finds them nodding along to the parts about taking on debt as being beneficial should read The Creature From Jekyll Island. That said the advice in this video about having properties that cash flow is pretty good as long as you avoid debt.

[@TsGhosty]

The people who got screwed in 08-09 are idiots

[@jeanlenor1858]

You have no clue.

[@TechieTard]

Dan, you have got to be the only person with 100% logic here. I've never seen someone actually understand the system with all these moronic comments about "lets get paid"! The math has been and always will be the same! Slavery. Debt is literally modern day slavery! In these times, there is a virtual slavery meter. The more debt you have, the more enslaved you are. If you're going to invest and incur some debt, at least make sure that ratio is above and beyond in your favor!

[@IvanAkinfiev]

Time to open a bank

[@MR..181]

Danlovesmakinvids .and while taking on debt you destroy the value of my savings...my life..? sure take all you can..

[@CarmenO]

So happy you made this video because I have listened to his podcast many times and I just couldn't understand how that happened to him. It makes perfect sense now. You're great at explaining everything!

[@Atclav]

Dave is transparent about his bankruptcy. He is Anti-Debt which is a major problem here in the USA. Most people have zero savings, bad debt, and no skills to earn.

[@InvestingHustler]

I like dave Ramsey but I swear he preaches complete opposite advice as you . He’s completely agains credit cards and you think credit cards are good when used properly . I agree with you !

[@GrahamStephan]

His advice is good for people who have no financial self control. Much like a drug addiction where the person needs to abstain from EVERYTHING related to that, finance could be similar. Although for anyone with decent self control, you can skyrocket your income by taking on good debt, growing your credit score, etc.

[@InvestingHustler]

Graham Stephan good point

[@Re3iRtH]

Dave Ramsey is good at making tens of million of dollars selling books and courses to lower lower-middle class individuals. His advice is poor for wealth building (except HIS wealth)

[@robocop581]

How does one get rich from credit cards? I've never heard of anyone

[@robocop581]

@wnc817 Salary and downpayment are the biggest factors to getting a mortgage. Banks use a stress test to determine ability of a person to pay the mortgage if interest rates go up. Having 11 credit cards will not influence that stress test. They're just cards.

[@cookiejar1207]

Graham you forgot to say: “For the KZbin algorithm”

[@tskjesusfreak]

So, Dave Ramsey was thinking short term not long term. It has really nothing to do with real estate.

[@GrahamStephan]

Very little

[@MISHASHOOTS]

Hey Graham! Thank you for making this video! great insight.

[@JerryGonzalez]

I’ve always wondered the details of how Dave got burned. This video gives me much more confidence in my game plan going forward.

[@usonly101]

I always feel bad that I haven’t started investing earlier in my life. I’m 38 now, but better late than never

[@golalloh]

Omg Graham...I thought I was a pretty knowledgeable individual but I have SO SO much to learn still being a newer Real Estate Agent (3months)!!🤦‍♀️ That’s what I just realized! Thanks for the great info! How and where did you get all this info on Dave Ramsey? And aside from how to market and sell Real Estate and “get leads” which is what pretty much everyone on KZbin teaches, what is your best advice on educating yourself on the ins and outs of the industry, the tax-specific info etc, that can help my clients make the most informed decisions in their Real Estate transactions? As in where do you most quickly and efficiently acquire the knowledge that makes a great Realtor without “practicing on clients for 5 years”...Your course? Kevin’s Course? Specific books? Thanks so much in advance!!🙏🙏 PS: Love the content👌, the back and forth with Kevin, and the popcorn-worthy lawsuit-drama with Dave Ramsey...! 😂🤦‍♀️😜

[@jonathangatto]

Due on Sale makes no sense. Why should i not be allowed to sell my mortgage to who i want. They sell my mortgage all the time.

[@GrahamStephan]

Because that prevents someone unqualified from taking over your mortgage.

[@jonathangatto]

@@GrahamStephan Not necessarily true. What if my daughter has good credit and she wants to take over my mortgage a simple credit check should suffice

[@jonathangatto]

@@GrahamStephan Or i want to sell my house for more money and let the investor take over the payments. I don't see how that is legal that i cant let anyone take over the payments. You can do it with a car!

[@edwardrhoads7283]

With most banks you can put the house into a trust then have the buyer be the beneficiary of the trust and make the payments for you. The loan and ownership would have to stay in your name though. It is a real estate strategy some people employ.

[@Thenattynate]

Very informative ! Just the right info I needed. Thanks Graham for spreading the word

[@GrahamStephan]

🙌🏼

[@Von_RX]

Great stuff Graham, keep it coming man!

[@GrahamStephan]

Thanks!!

[@xzonia1]

90 day loans? That's as bad as buying stocks on margin. :P

[@GrahamStephan]

Basically!!

[@samanthavlogs5414]

Or worst

[@slappywhite2669]

Somehow I was familiar with this info. Ramsey was into Home Runs and Hail Mary's. He didn't know when to stop. When it comes to money, I'll gladly settle for getting on base(baseball) and 1st downs(football). Eventually you'll score..

[@AlexM-xr4rc]

Maybe he should have just stayed with BIICONNNEEEEEEEEEECCCCCCCCCTT!

[@GrahamStephan]

😂

[@Veganphobic]

Reminds me of that Asian dude I’m subscribed to

[@zolopane117]

HEY HEY HEY!

[@raezor82]

What I'm a gonna do?

[@Words-of-encouragement.-.]

Nonononono thassa scam!!

[@lauromartinez8948]

Fact is doesn’t matter what kind of real estate investment you are doing, if the bank AND the law changes, you may go bankrupt.

[@investornabil8825]

Dave is right about this. This kid is going broke. He thinks he will always stay as privileged as now. I've never heard of anyone buying multiple properties and pay them off after 30 years with tenants money. I've heard of tens of thousands of people who got rich in other ways including having very little debt.

[@J_Bravo]

*Man You Got That Ring Light Run'n at Full Blast!* 😘

[@mikeypee2365]

Hey Dave, how do I acquire my first rental property? “Pay cash!” Oh wow: didn’t know it was that easy

[@od4407]

It is, you're just looking in the wrong market if you think it is too expensive

[@zachdowdell583]

@@od4407 I got like $50 where should I look?

[@judithkimball2125]

It is not easy neither impossible. Following his 7 steps should be a guide.

[@chipskylark5086]

@@zachdowdell583 job listing, save money

[@MillisConstruction]

Not that difficult. I’m 32 and have 6 all paid for cash 😊

[@umoramayori]

(Location location location) Realestate is very very risky business, especially rental properties. You can get lucky and actually make money, most people barely break even if that, unless they bought during the 08 crash. As soon as the HVAC system goes down, or you need to put a new roof on the place, you have likely lost 8-15 months rent. Never mind any other repairs that would be required. People have been jumping out of the residential rental game in my area in droves. Doesn't matter if your house is "worth" 500,000 if the market will only bear 400,000 for it.

[@GrahamStephan]

All of those items need to be factored in your return. You should factor in a set monthly expense set aside for repairs, and use that to calculate your return.

[@jesusfelix2605]

Simply put its more of a Rich vs wealthy. The average American needs to have build some type of wealth for when they retire. I am a Ramsey believer and thank him for getting me on track of my finances. Getting rich by leveraging money is not ideal for all and I highly disagree with it too risky for me.

[@abhinavitsmebellamy]

Great stuff, Graham. Thank you so much for this!!

[@alexmarchenko92]

There's one caveat here though: what if due to an economic downturn there's nobody willing to rent the property (high vacancy) or in order to rent it out, you'll need to reduce rent so much that it wouldn't cover your mortgage payments, that are still due even during the recession. And if you have a lot of these properties and your savings won't be sufficient to weather them out - here is one way to get in trouble. Idk what should be a protention again that. A short term loan to pay off the mortgage on a rainy day? Or it's a straight way to bankruptcy? Another scenario is property value decline in a certain neighborhood/area where you own property while somewhere else across the town the market could be going up. The value of the property goes down while the mortgage principal dosn't. That could really be happening to the Silicon Valley area where I live and thus LA market could look more promising from that point of view.

[@nathanhedglin931]

That is definitely a risk. With diligence this risk is low and having more properties reduces the risk; it takes time to a quite so many. It really depends on how leveraged you are. I’m going to buy RE in a few years and I’ll buy all them with 20% down and have them paid off in less than 10 years. This means lower risk, less work and fewer properties needed. I’d rather have 3 paid off properties cash flowing 3k / month than 10 properties with the same cash flow. Quality > Quantity in most cases.

[@chukah9484]

Ideally you factor that into your return rate in case of evictions or being forced to lower the rent cost a small amount to get tenants as soon as possible. You should also save up several months of rent as an emergency fund in case you do need to pay 1 or more months of rent for many possible reasons like renovations/evictions before a tenant is in there cash flowing it. You do all these calculations prior to purchasing/making an offer on the home. It is also ideal if you buy homes on the lower end of the areas average income so that it doesn't become too much home for the people in the area to afford but also allows the value of the home to increase. Generally speaking if the area is a highly desired area to live it likely won't have long term lasting drops in the market, eventually the real estate value will increase. I think of it as similar to the stock market long term. Now this is me speculating but I could see the possibility of a market crash in the Silicon valley area if it is artificially inflated by tech people where majority of the tech industry is currently transitioning over too more remote work it would decrease the need for the tech people to live there as well as if Tesla manufacturing relocates to Texas. I am not sure if their is any other positive reason to live their other than knowing it for tech besides it being in California and close to other very nice bay area places. I would think though if the market isn't dramatically high compared to other cities/counties an hour or two away from there it likely won't be its own bubble just because its nearby so many great cities that people will be desiring to live there.

[@MarkNehemiah]

I listen to Dave Ramsey everyday. 90% of his calls are people that are $100k plus in debt, make $60k or less a year, have an upside down car note, at least a $40k student loan, and a slew of small consumer debt. Those are the people he uses to invoke fear in all of his listeners regarding debt. Now I’ve made my fair share of bad decisions, but I have some self control and common sense. Most of the people who call Dave do not. They are absolutely oblivious. They are the people that go get an oil change and walk away with a $25k car with a $32k note on it. Now with that being said, Dave tells his bankrupt story a lot, but he did rebuild his real estate portfolio without debt afterwards and has millions in real estate in his 50’s without and debt on any of them. However, I don’t think he would have been able to do that without selling literature to people who finance their restaurant trips. A lot of his principles are very useful, but borrowing money with some actual strategy and insight isn’t going to bankrupt someone who’s paying attention.

[@YoungRay]

Nice breakdown on what Dave meant when he said they called his notes. 😭🤣😂

[@GrahamStephan]

🙌🏼

[@ryanbyrn4613]

I've been waiting for someone to cover this topic for the longest time. Awesome video Graham, keep up the great work!!!

[@GrahamStephan]

Thanks so much!

[@brettbolyard6478]

Thanks for the video. I watch your content and his and was confused about how his loans were called. You cleared that up perfectly. Thanks again .

[@brittneyyoung1882]

Or you could just buy the property outright and don't have to worry about banks taking it and have 100% cash flow.

[@MACA_Zeon]

Brittney Young I think the reason not to do this is to have more money for other properties 🤔

[@ImKittyCow]

this would be the absolute safest bet, but it severely limits your growth potential

[@thomaslynch9858]

House flippers remind me of those day traders sometimes. I do think they provide great value for buyers though, especially in what were formerly depressed areas!

[@GrahamStephan]

🙌🏼

[@Freeyourdollar]

If they do quality work versus painting over black mold and other B.S. Most just throw up paint on cabinets and walls and sucker in first time buyers.

[@MrThew1228]

I have watched a lot of your videos, and find them to be very informative. This video however compares Apples to oranges, and misses the point of Dave Ramsey's message. Dave Ramsey preaches no debt because of people's tendencie to not factor in risk when they take on debt. I live in a sand state, and had several properties with 30 year fixed mortgages before the crash. I barely made it out unscathed. I know several people in my same position who were not so lucky. I hate to use anecdotal evidence to support an argument. That being said, I think your advice here is irresponsible. I get where you are coming from, but you make it seem like a fixed rate 30 year mortgage makes you bulletproof.

[@emandktoo6542]

Whew! A comment with sense and experience to back it up.

[@hzuiel]

I mean....that was the worst financial collapse since the great depression. There weren't many unscathed people in general, not just people with investments in real estate. If most people lived like as if the next 2008-2009 recession was right around the corner, nobody would invest anything and the economy would be beyond stagnant.

[@ThemindofOZIII]

@@hzuiel And yet here we are with another recession right around the corner.

[@RKmndo]

@@ThemindofOZIII ...And some people are getting wealthier. Keep enough cash on hand to buy during dips. Try to invest in sound ventures.

[@ThemindofOZIII]

@@RKmndo, my comment was in response to the one above. All my investments are jumping because I bought more during the dips. In fact, all my stuff is all back in the 11-12% range for the most part due to the buying heavy in the dip.

[@jenningsguitarscompany1730]

Dang algorithm, but great videos! Thank you for being a part of the best educational system out there! Learning so much!

[@Enocan]

Wow this is the first time his reaction was synced when I hit the like button, your getting good at the timing XD

[@Starrynight002]

I have a sense of urgency to start doing real estate, for me it’s something I NEED to do. It’s not an option. Especially now a days with the world getting more darker for the 95% of people who don’t have another income besides their job. I have 2 businesses that are doing great, but spend a lot of time with repairments and time with clientele.... and I have a lot of pressure to do something else different. And diversify my portfolio... just don’t understand many things from real estate and I want to hang out with people who are successful at it. Just to learn and see if it’s something duable for me at this time. I have to definitely watch and learn from all ur videos and other KZbinrs I much rather invest my time learning then watching tv for sure.

[@MrSmity413]

Every time I watch one of your videos I get hyped about investing in real estate lol. You ever considered doing a Q&A video btw?

[@GrahamStephan]

Haha awesome!! I’ve considered it, might do it for IG!

[@bmorehemi392]

I love how he filed bankruptcy for a fresh start ...but tells his callers to not file themselves lol...they just gotta work they way out of it huh lol

[@JazzymineA]

That's partially true. If the callers have debt that is less than what they make annually. He just says to pay off the debt. If the callers are filing bankruptcy he gives them advise on the process.

[@Itsjustanopinionchill]

Most people who think their only option is to file bankruptcy, are just so lost they don't know what else to do. He isn't saying that they shouldn't, he's helping them see They do have other options. There have been a many of callers who file bankruptcy and he give his advice on how the process works and what they can do get through it.

[@Brian-cs4og]

He sees bankruptcy like divorce. Very difficult to go through and best to avoid but he wouldnt tell someone not to do it.

[@Audrey-fo2ic]

not true

[@bubbles1978]

Bmore Hemi He says it’s a difficult and draining process, it’s advice, as he already went through it. He’s not trying to be hypocritical about it.

[@XavierCarter9129]

Excellent video. Makes perfect sense. I am now a subscriber. .

[@weareorigin]

So many similar stories in Australia, where people over age 50, buy real estate. They use interest-only loans and then the banks decide to demand full payments with principle. The people couldn't make a profit on their real estate with principle+interest payments. They go bankrupt or push back retirement for decades.

[@MikeRosehart]

I enjoyed this exposure ;)

[@GrahamStephan]

😜

[@Wildboy789789]

Debt is the key to becoming rich... debt is also extremely dangerous... I've borrowed 75% on margin, I'm currently trying to get that debt down to 66%

[@MinecraftZockaa]

What did you buy?

[@Wildboy789789]

@@MinecraftZockaa ATT, because I like the buisness and I like the cash flow, they are a dividend aristocrat and have paid an increasing dividends every year for 40 years, and I think 30$ is a strong bottom... so my debt cost 5% a year and att current dividend is 6.5% a year, so I'm making 1.5% dividends on money thats not mine... I made 2 videos about stocks on my channel if u want to get deeper details

[@MACA_Zeon]

Wildboy789789 how did you borrow to buy stock

[@jaypan888]

Pitchfork ready! :) In Defense, Dave rebuilt his real estate empire debt free. His main inspiration to live this way is text in the bible. Proverbs 22:7 "The borrower is slave to the lender." Debt isn't wrong but it is risky, always read the fine print of a mortgage.

[@josselinec4711]

Would that count as a person that’s renting they’re borrowing that place ?

[@jaypan888]

@@josselinec4711 Rent is not debt, it’s a yearly agreement that contains terms and conditions to exit the deal at the end of the year and after that year some places go to month to month. BUT interesting concept, we borrow and share all things. The national parks, the mall, paint of a house fades back into the air and needs new paint. Jesus borrowed everything during his 3 year ministry.

[@markwegner6100]

Excellent advice. I've done the 30 year fixed strategy numerous times.

[@korygill5350]

Graham really intelligently researched!!

[@allenmiller1627]

Do you have llc or do you just have the property under your name?

[@aldodabest12]

Hey Graham, Was wondering how banks will continue to approve on loans when you get to house #2 and beyond. My understanding is that your credit goes down as your debt increases. A curiosity I’ve have and would appreciate if you can talk about it! Thanks!

[@nocoolname32]

normally they look at a rental house for 2 years as a liability. after 2 years of positive cash flow they will then view it as an asset and count it TOWARDS your income. then you move on to the next house. if you buy a house that was already a rental, they will normally count that history towards the 2 years.

[@chukah9484]

It will depend on your income to debt ratio. The banks will use this to determine your risk. If ~50% of your income is going to paying off the minimums of debt (total monthly payments) you would likely be declined for another loan. So your eligibility will be dependent on if you have any other outstanding debt like credit cards / car / school loans and how much your first home is returning to increase your income after 2 years the banks no longer see it as a liability but as income generating if it is cash flowing or other ways you can artificially increase your income or increase your taxation for that year.

[@J_Bravo]

*If The DAVE RAMSEARIAN Cult Sees This Video They'll Come After You With Pitchforks 🔥I Had To Learn The Hard Way 😖*

[@GrahamStephan]

😬

[@MeetKevin]

I fit in here

[@thematthewlong]

🦁🐯🐻

[@J_Bravo]

Kevin don't you have Grant Cardone videos to make?

[@HepCatJack]

I believe the bank repossessed their pitchforks.

[@yakster87]

THANK YOU for posting this! I invest in real estate and my sister is always telling me to “slow down, look what happened to Dave Ramsey.” And I always thought that couldn’t happen to me since I’m using conventional loans. Thanks for explaining this so clearly, I’ll have to have her watch this! 🤗

[@GrahamStephan]

Thanks for watching!!

[@DoinTheMoms]

I've been watching your videos for a couple months now and I think your channel is great. You feed my ambition and hopefully lots of other early 20 "investors". One suggestion to you from me is make a 10 second intro that you play in between your overview and the actual content. Idk why but I feel like when a channel has an intro it makes me feel more welcomed. It doesn't make a lot of sense but it is what it is.

[@GrahamStephan]

Really? Doesn’t seem too commercial?

[@DoinTheMoms]

@@GrahamStephanIf you use simple video editing and don't go overboard, It shouldn't be too commercial. Especially with your modest vibes it will be fine....