Keep Investing In Real Estate Or Pay Off Debt?

Keep Investing In Real Estate Or Pay Off Debt?
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[@magicbuskey]

I appreciate these more advanced topics. Thank you.

[@303sky]

Dave should make a book that elaborates more on real estate investing

[@hannesproductions4302]

Hahaha pay cash or pay it of

[@jpadila7]

I really like this discussion. Dave respected this Guys intelligence and taught him about the debt-free perspective and didn’t just call the guy stupid or tell him what he needed to do right away.

[@ronwhiteleo3352]

Great teachings DAVE... brilliant break-down of the situation..

[@aatheus]

Love the technicals of this call. Adds some nice flavor

[@brianshishnia3278]

I do a few things different than Dave but this advice was spot on in answering my question of "what Dave would do" and what I may very well do! Thanks Dave!

[@Je.rone_]

Mathematics notwithstanding, Dave will almost always suggest to pay off the debt in lieu of investing... Nuff said🎭💪

[@NicE-jq3wv]

Black Vito - Moneyology & Philosophy exactly...either these people aren’t regular followers or aren’t paying attention

[@Je.rone_]

@@NicE-jq3wv very true

[@JamConcerned]

🤣🤣What a way of getting right to the heart of it. So true if there is any hiccup in the economy or disaster, he is in deep.

[@Je.rone_]

@@JamConcerned yup💪

[@donbooger]

He wants to create a mindset that will work for everybody to some degree rather then one that will work extremely well for some but terribly for most.

[@carlesalbertnavedapallares1272]

Great episode! Thanks 👌

[@InvestingHustler]

This was great advice Dave 🙏

[@ggreedy8668]

a rule of thumb for property investing is that u never wanna go more in debt then half of your net worth. or else if there's ever a financial crash or anything about to happen like it did in 2008. then u wont lose everything u own

[@jimroscovius]

Don't go into debt at all.

[@raddadization]

@@jimroscovius you must not be rich

[@jimroscovius]

@@raddadization What do you consider rich?

[@raddadization]

@@jimroscovius ...having an abundance mentality for one. Dave's advice is good for newbs who are in foolish debt, but not pros who are wise about the monetary system.

[@jimroscovius]

@Joseph B I followed Dave's plan, and I have a paid-off house, no debt, and a great retirement built up with a legacy for my kids.

[@jantonsen7480]

hey i work in the financial city of London and Iove this channel.

[@Josh-ii1eq]

Love the topic. Living in my first place now, paying it off (66k left)( it's worth $200k) and renting it out. Just going to repeat the process as I pay each one off.

[@ChrisInvests]

I always tell people on my channel that every person's situation is different and each requires careful consideration.

[@QUISE5380]

Best one so far for me!

[@mangrove-1]

this is the first episode where i learned Dave had 90 day notes as a loan. that’s a lot different than 30 year notes backed by Fannie Mae. no wonder Dave is terrified of debt.

[@suzydixon4930]

Quickest way to wealth is the right Powerball ticket. The safest way to wealth is to be debt free and buying investments that pay!

[@DanielIles]

Suzy Dixon most reliable way is to get a huge mortgage and have a tenant pay it off for you!

[@suzydixon4930]

I suppose that works well until it doesn’t. I couldn’t put so much trust into a creditor or the tenant

[@DanielIles]

Suzy Dixon creditor have gone bad before but there really isn’t another alternative if you want to be in real estate. Tenants are another thing and I agree, they can be really bad. I have a few strategies to finding top notch tenants and while it does take me on average 2 more weeks than my competition to find a tenant so far all of them have been around over 2 years and no damage to any of my 8 units!

[@suzydixon4930]

Hmm good luck then. We’re just focusing on funds and annuities as we don’t live in an area suited to make much on real estate aside from being a successful agent. Far from water and tech jobs so appreciation is slow going.

[@DanielIles]

Suzy Dixon good move for your market. Good luck with equities! I love those too!

[@derkgold6395]

I totally agree with dave.. sell 4 properties go with 10. Save the interest and pay some more debt he could prob fully pay off a few of the properties with the equity built on 4

[@oropeza2013]

Interesting

[@thehALomolov2]

Owning 100% of 1.5mill in real estate is better than owning 30% of 3.5million. No debt risk of full ownership vs being responsible for additional debt that's cutting into your cash flow, helping the lender(bank) more than you in the long term. Otherwise the bank wouldn't have lent to begin with

[@donbooger]

Don't think you can make a blanket statement like that. If property prices double it looks like this (any increase will magnify your returns, double is just the example). Guy with no loans - 1.5Million becomes 3Million, good result. Guy with loans - 3.5Million becomes 7Million, take away 2Million of debt. 5Million networth. Better result. Banks lend you the money because they can increase the scale of there business. If they put there time into property purchase they can make 10% return on 10 properties. Good result. Lend out to others to do the work 4% return on 100 properties. Better result. There are negatives to this of course, they are well known but don't forget the positives because when it works, it works well.

[@grantr1556]

thehALomolov2 no it’s not

[@saraklein1874]

gut with loans will only get 2.1M according to my calculation @@donbooger

[@crazy3rdgen]

I get it but in order to scale you cannot simply focus on paying down debt to limit risk.. I feel if you have decent upside and portfolio isnt at a huge risk, continue to scale. We do this for the cash flow.. if you purchase a few properties and focus on paying them down you'll retire with a couple properties. Scaling helps to obtain larger properties if starting small. So many factors. Investors with huge risk possibly didnt grab the right deal?

[@user-ot7jd9dt7t]

What actually happens when ur 80 lets say and u pass away, ur debt is left to insurance? Or.. Idk

[@danightryder]

Greyhound216 Durbauree put a family member in your will and teach them the business.

[@lililililililil9132]

What loan should you get, interest only or principal fixed rate for 30 yrs?

[@DNaupari]

this video was May 2019 By May 2020 New York placed a rent/eviction moratorium 😖😖😖 Wonder what happened with this man 🤔🤔🤔

[@orangeboy97]

I'm in a similar boat, just on a smaller scale and slightly different. I work part time, student with engineering major, and I live with my parents. I've been able to save up through my first years at a community college and this summer I'm going to a university that is a block away from my parents house. I have about 3k invested in index funds, and 2k in mutual. I have enough cash for my first year at uni, but not enough for my second. I won't have a part time job at university so I'm probably going to have to take out a student loan(about 10k). My question is do I take out my investments and use for the loan or just pay off loans after I get a decent job after graduation?

[@DanielIles]

Tall Random Guy look at the interest rate you have been making from investments and how much the loan is at. Take the difference between the two to decide

[@racheljackson6253]

Why don’t you just work the summer in between 1st and 2nd year and cash flow it?

[@ChrisInvests]

Dave will always say to pay it off. That's how he lost all his money in his 20s 🏡💵

[@DanielIles]

Chris Invests he has to keep it black and white for this show to keep people out of trouble!

[@KTSpeedruns]

Um, no. Dave lost all of his money because he was borrowing too much and truly owning nothing, and when a bank he borrowed from got new ownership, they decided to force Dave to either pay it or lose the property. They thought Dave was too high risk and didn’t believe he would continue paying the loans. They wanted all the money/equity back right away because they were afraid of Dave causing them to lose too much money.

[@Light-vu6ws]

Or it's just common sense to not have too much debt because then there is a lot of risk of defaulting your payments when something bad happens. Dave always tells you to avoid debt is because it is in general the safest route.

[@ImStuckInStockton]

Dave took ridiculous 90 day loans. He was indulging in crazy amounts of risk via loans that aren't even legal nowadays

[@epauloconnor]

@The Dave Ramsey Show I'd love you to have Brandon Turner or David Greene or even Josh Dorkin from Bigger Pockets on your show or for you to go on the BiggerPockets Podcast.

[@gthree0239]

I honestly think that would be an awesome show. I’d like to get both perspectives. The bigger pockets guys tend to lean a little more in the Dave Ramsey at 26 direction.

[@LucyWonglondonbody2body]

7.7k a month is good income but not on portfolio over 3 mil. Far too tight for that large portfolio value. Just a few maintenance and void periods could get him into a snowball of trouble. He tried to grow it too fast.

[@amolgill7480]

Lucy Wong I agree with you. It should be at least 12k a month.

[@DanielIles]

Lucy Wong the appreciation of property on +3 mil is where is he really making his money. Even at a conservative 2% appreciation he is making full time income from increased property value. Sure he doesn’t pocket it but when he goes to sell it will be an instant home run!

[@LucyWonglondonbody2body]

No. You assume it only goes up in value ie cap growth. Over maybe 20 years yes but with 10 or so years or less you may have a major crash and lose 30% or so. Then some property maybe in negative equity and can not sell unless pay debt off. His income is dangerous currently from the rental as not enough safety.

[@DanielIles]

Lucy Wong Absolutely! But holding any property for less than 10 years is pretty bad regardless. 20+ is the real safe way to get rich!

[@rons.6683]

Lucy Wong My 18wheel trucker pay is comparable to that, not as much but comparable, and I sleep vary well at night.

[@raddadization]

It all comes down to emotion. No one can predict the future. Leveraging on real estate deals in growing cities, to me, is common sense.

[@DNaupari]

this video was May 2019 By May 2020 New York placed a rent/eviction moratorium 😖😖😖 Wonder what happened with this man 🤔🤔🤔

[@jeanqbxx]

I'm also an investor and I just couldn't breath after I heard his leverage ratio, that's way too high. I would sell sole properties to pay off others and lower my ratio.

[@nathanc30]

Leveraged vs over leveraged.

[@DrogoBaggins987]

Sounds like if this guy just budgets really well and lives frugally he could hold on to everything and do his ten year and change debt payoff. If he is disciplined he will probably be able to pay everything off quicker.

[@zaidtoy]

Drogo Baggins also he’s in hot real estate market NEW York

[@Maurazio]

it's his side job so...

[@chrisbaker2669]

The guy is making $253 dollars a day in passive cash flow in addition to paying down his principal he could live off of that.

[@JourneymanLineman]

Yeah until a massive deleveraging event occurs which they always will.

[@lililililililil9132]

@@JourneymanLineman if he has enough cash reserves he can survive, also rents generally dont change much in such a situation

[@jchristopherh5675]

Wow you’re blowing me away with knowledge … facts!! Get rappers hiphop generation this info the kids 19 16 14 🙏🏽

[@jimroscovius]

Get that debt paid off before investing any more.

[@DanielIles]

Dave’s show is about black and white rules to keep people out of dangerous financial situations. This guy sounds like he may know what he is doing and should look for advice where he can get more than a black and white answer. I just made a video on how I got a quarter million dollar property for 8k and I will never pay off my mortgage quicker because the interest rate is 1/3 of what I am getting with every dollar invested in an index fund.

[@allan2263]

Daniel Iles yes but that seems to be working now in growing economic conditions (slow growing but growing nonetheless). If you have a variable rate mortgage, what happens when interest rates go up? And if the economy takes a turn for the worse, what happens when your mutual funds aren’t bringing enough of a return to compensate for the interest rate on the mortgage. Additionally what if your property falls in value? All of these are risks that are amplified when you’re over leveraged. Dave was you! And he lost it all like many other investors have. The key is to keep your leveraging ratio at a point that is sustainable even in a stagnant economy or even in a recession. It’s like you didn’t even listen to a word Dave said.

[@huggyuk]

Allan It’s such a shame how people love to overlook the real risk.

[@AaronItOut94]

Dave, you inspire me, I am 25 years old and I am starting your 7 baby steps, with the goal of having my own real estate portfolio one day. I want to be just like YOU

[@Josh-ii1eq]

Nah man, be yourself and exceed what Dave has. Never settle to be like someone, inspire to go past them.

[@billyrayband]

He could have answered that in 30 seconds that he should reduce his debt by selling some of worst performing properties. Leverage is not what the hypsters would make ya think.

[@billboss3090]

But Dave took 90 day notes doesn't compare to what the guy is saying.

[@tymom9313]

This is WAY over my head 🤪

[@Ishisah]

Over my head: I’m on Step 2 and that’s all I understand. But soon I’ll understand this too.

[@mso008]

I would pay off the debt, have clean income and play with that!

[@y.martel842]

If you dont pay debt, you pay taxes

[@BrianArons]

When it comes to real estate, I advise you don't over-analyze the risk or calculations. Always good to leverage debt as long as you know what you're doing

[@ralphdeep9029]

stay away from banks....build slow ..only spend the money you earn ....and soon....you are the bank.....

[@fullbattlerattle2493]

Ralph Deep I 100% agree, but sometimes a steal is a steal

[@deanfahy6066]

10x~Uncle G

[@y.martel842]

If the guy goes debt free hes gonna pay way more taxes.

[@richarddimassa164]

His calculations are reversed. Happens to us

[@jesusvazquez326]

Cash it out and sell it

[@mattyp3119]

Agreed take the dogs out, pour the monry into debt reduction but also pour the money into your highest performers, increase the rent to new renters according to how much better your properties are. Huge benefit in that approach. I'd rather have 5 fully paid off properties than 50% of 15.

[@annierosesmith6504]

Bcuz you can't count money

[@ocvegasproperty]

What math model is he talking about? Cause where I come from loans at 4% are worth taking when your return is significantly higher. His math is wrong.

[@DanielIles]

OC Vegas Property that’s what I was thinking..

[@annierosesmith6504]

Finally someone can count!!!

[@KnockoutInvesting]

Pay off debt. Any form of debt keeps you poor with a negative networth. Even your house is not an asset until you have equity in it.

[@deanfahy6066]

Rember Netflix ? They borrowed $$

[@jaydynamite8680]

@@deanfahy6066 well cotton, how's he gonna respond?

[@deanfahy6066]

@@jaydynamite8680 10x

[@erikrohr4396]

Dave acts like it was a surprise that the banks called his 90 day notes - after the 90 days was up I assume. That's exactly what they are supposed to do.

[@ajlegend321]

Why do people keep asking these dumb questions when they know what his answer will be given FPU?

[@joshuamclean4588]

ajlegend321 this is a good question and he’s a new listener. I listen to Dave and have had similar questions

[@ajlegend321]

@@joshuamclean4588 well I'll give him a pass since he's a new listener, but there are way too many current listeners the calling asking questions to get his validation on whatever decision is going to keep them in debt but make them feel good. Those are the ones I just don't understand.

[@joshuamclean4588]

ajlegend321 true even though I asked this question I still came to the conclusion Dave did in terms of the long term. I’m actually figuring out some way to get into it with out debt and with out waiting super long. Start out small, I have some ideas which is good. I asked God for some ideas how to get into real estate with out debt. I trust in the Lord to show and guide me, and he has given me some strategies and I trust for Him to work everything else out. He always said “start small.” And the bible says do not despise small beginnings. So I don’t have to leverage my way into something too big to handle right now, but he will put into my hands what he trusts me with and will provide all I have need of. I will start small, and be a good steward of what he has given me, and he gives rewards and gifts. Not so that I owe Him, but because he loves me. And then everything I have belongs to Him, and I love Him, and I am faithful and happy to give and sow into the kingdom.

[@joshuamclean4588]

ajlegend321 and yes usually what it is is they het torn knowing what the right thing is, vs what they actually want to do. So they just need confirmation or they need to hear the right things from Dave just to give them the verification they need. Or sometimes the caller is on board, but they need to get their partner on board etc…

[@colinjames9562]

takes the time to say we shouldn't consider growth and growth/income to be the same thing when it comes to risk. But then he goes straight to lumping buy and hold real estate and flipping properties (the short term loans that killed him). It is good advice to take it easy on leverage but he spent about 20 seconds talking about the only elephant in the room

[@sers499]

CONGRATULATIONS? On 2 million in debt to make $8,000 a month in income? Sure.....sounds really smart

[@forgiven5377]

He's making a lot more than $8k a month. He is cash flowing 8k, which doesn't include the amount his mortgage is being paid down every month which most likely is a huge amount.

[@OmahaTonyG]

He is around 66% leverage, that is a good and safe equity position. Even if the value of his rentals all dropped 33% he still wouldn’t be upside down. On top of that his properties are all cash flowing and paying the mortgages. After all expenses this guy makes nearly $7700 a month, or $93,000 a year in cash flow and Dave acts like that’s nothing. Idiotic. Ramsey gives terrible real estate advice.