Renowned financial guru Dave Ramsey told a 20-year-old man he’s ‘too broke’ to buy an investment property.
Cesar, a 20-year-old would-be landlord from Mobile, Alabama, called into The Ramsey Show on July 15 to ask the debt-free master his thoughts on buying an investment property with his uncle co-signing the loan.
‘You sir are walking straight into a razor and I’m going to beg you not to buy this house,’ Ramsey, 63, told the man. ‘You’re too broke to buy a property.’
Cesar told Ramsey and his cohost John Delony that he learned that ‘being a landlord is really not as hard as I thought’ and that he has decided it’s his dream job.
Cesar said he can’t get another VA loan because he already received one and needs his uncle, who doesn’t live in the state and is on disability, to cosign an FHA loan with 7 percent ARP in order for him to buy the $300,000 property he has in mind.
Cesar, a 20-year-old landlord hopeful from Mobile, Alabama, asked Dave Ramsey (pictured) if he should buy a $300,000 house with his uncle as the co-signer because he was unable to get a second VA loan after taking one out six months ago
‘Me and my uncle are splitting everything in the home,’ he told Ramsey.
Cesar is unable to get a second VA loan because he got one six months ago and they won’t allow him to have two mortgages, he claimed.
Ramsey flatly told Cesar he was ‘too broke to buy a property’ and deeply encouraged the man to ditch his plans.
The financial guru then told Cesar a personal story of how he had similar dreams in his 20s and had taken millions in loans from a bank to flip houses. One of the banks he worked with got sold, and he suddenly had to come up with more than a million dollars in 90 days.
‘I spent the next two-and-a-half years of my life losing everything I owned, getting sued, getting foreclosed on, and finally with a brand new baby, a toddler, and a marriage hanging on by a thread, I was bankrupted,’ he told the young man.
‘I never borrowed money again and I never took on another co-signer, because those two things caused me tremendous trouble,’ he continued.
‘You sir are walking straight into a razor and I’m going to beg you not to buy this house,’ Ramsey, 63, told the unidentified man. ‘You’re too broke to buy a property.’ It is unknown if Cesar took out the loan and bought the property
‘And everybody that I knew that did the type of real estate deals that you’re doing, all of my friends in that business were broke too and the only ones that survived were the ones that got out of debt.’
He went on to say that being a landlord isn’t passive income, especially if the tenants aren’t paying.
‘Real estate is not passive at all, it’s very active,’ he warned. ‘I love real estate and I own a bunch of it, I’d love for you to own a bunch of it, but I’d also love for you to avoid a nightmare.’
Ramsey then admitted to Cesar he didn’t think he’d be able to talk him out of it as it sounds like he’s ‘completely in.’
‘You’re living on the edge,’ he said. ‘You don’t even know it, you don’t even feel it, you’ve not assessed the risk that you’re under correctly, you’ve taken on way more risk than your heart is grasping.
‘Just take your time.’
He told Cesar to ‘be the tortoise’ and ‘slow down.’
Ramsey’s cohost warned Cesar that if he doesn’t have the money on his own, it could affect his uncle and then his whole family would be involved in trying to track down the money.
‘Now, you’re not going to be able to go to Thanksgiving, you’re not going to be able to go to Christmas,’ he said. ‘No one takes that into consideration when you get starry-eyed, man.’
Ramsey then told Cesar to ‘go take a cold shower, son, you’ve got house fever.’
As for what Cesar ultimately ended up doing, Ramsey did not reveal.
