Dave, Is This A Dumb Idea? 

Dave earns the bulk of my respect when he demonstrates that he is a reasonable person. For example, how strongly he disagrees with Ronald Reagan's housing policies, but still admitting he was a fan of him. It's a reasonable mindset, unlike many people today, who are all or nothing.

This caller will do well in life--he's young and energetic, a plumber and already doing projects. He should call back in a few years so we can hear how he's doing.

If you have to ask if it's a bad idea, it is a bad idea.

Wonder if we could ever get Dave to debate Roberrt Kiyosoki or Grant Cardone, or any of the top people who preach using debt. No arguing just a good old fashioned debate

I knew that this was going to lead to: "well, back in the day...." 🤣

Caller: Should I fly to the moon? Dave: Sell the Dog

He asked Dave if a HELOC was a dumb idea! 😂

Haven't watched it yet but I hope the answer is yes

People tell me to use OPM. The problem with using other people's money is that once I borrow it then I'm responsible for it, as if it's MY 💰. If I lose it in a bad investment then I gotta come up with the difference.

Lol, ask Dave what time it is, he tells you how the watch works.

Dave talks like he's an older man who's been through some things and knows what he's talking about.. oh wait, Dave IS an older man who's been through some things and knows what he's talking about. -_- Just take his advice and use cash for your transactions (all investments for that matter).

I’ve done debt with rentals and I can HIGHLY advise to not do this! It’s not worth it. Listen to Dave’s advice and move at the speed of cash.

After all those expenses, renovations, realtor, taxes, other garbage. You will make literally 0 money selling the house.

Dave skipped a detail. He only got those loans because of family connections, not his own merit, so when ownership changed they called notes on a completely unqualified buyer. Us normal people, those not born to a real estate family like Dave, will never get those loans because we don’t have unfair connections at the bank

I don't think there is a dumber idea than taking something you just renovated and letting other people live there. People are gross. They will wreck your house lol

Narrator: It was a dumb idea.

Reminds me of when I asked the police if I can rob that one bank.

Skinny-dipping when the tide goes out lol there’s a picture!

Dave explained it so well to this young man.

I wouldn't take out a HELOC to get into rentals, but I'd definitely recommend using a mortgage to get into RE. You have to make sure you have a solid amount of reserves

Yeah, and Dave used 90- day ARM loans, absolutely horrible. By the 3rd/4th property Dave was in the gutter.

Asking Dave about getting a HELOC isn't a great idea for this strategy. There's not a lot of equity in this house, so he may only be able to get $20k - $30k. Probably not worth it.

I thought a mortgage was a contract between you and the lender. How can the new owner of that contract say they want the money back before the contract says you have to pay it back?

Even if he wanted to do this, a HELOC is a callable loan. So even if Dave was for debt, this is still the wrong loan to get.

Dave leaves out that when he was younger he was financing homes with short term 90 day loans. Debt might not be a good idea in certain circumstances but I feel confident his financial product was the real issue with his bankruptcy.

Just like shutting the whole world down during that thing going around messed everything up.

Idk how many more times I can listen to Dave's story

Real Estate is the way to go if you have an income capable of doing it

What about the millionaire that called Dave’s show who used this method? Dave didn’t tell that guy anything. Why? Because he knew he had to shut up when talking to someone who understands what he is talking about. Btw you got to CARRY IT by way of paying property taxes. So you can still lose a property if you don’t pay those taxes.

"It wasnt that i was stupid it was that debt was stupid" Uh...

Wrong channel bud lol. Go to bigger pockets channel for guidance on this strategy. Dave will just tell you to deliver pizza until you can pay cash for a house

The honest is appreciated

I did it. It worked out great.

Dave is so off the mark here. Anybody that has made wealth in real estate is doing it exactly how this caller described. Just because Dave was greedy and dumb when he was younger doesn't mean he has good advice in this situation. Don't forget, Dave made his money selling books, not investing in property. Source: I'm a successful property investor going on 20 years.

Interest hiding fees 🤔

Yes, it is a dumb idea... don't do it!

Why do people call Dave and ask him stupid stuff?? As if they do not know what he will tell them.

This video should be perfect timing with a lot of people.

There goes Dave again saying he was a millionaire at 26. Maybe he was managing over a million in properties, but he didn't own them. Net worth is assets less liabilities (the total amount he owed the bank). Sounds like he was counting properties 100% as an asset when a bank actually owned the property and he had little or no equity (his liability).

I have used a HELOC to buy property before. I’d never have done it if I didn’t have a LOT of experience with it, and complete analysis and comfort with all the numbers well in advance. I also work in real estate and save commissions on deals and know how to find good deals. I would not recommend it to someone who has never done this before, and it’s very easy to get into a hole too big to recover from very fast. Be careful out there.

Yes.

Ken's coffee intake is hurting their bottom line. Hugh thermos.

So he got rich but tells the listeners to not do the borrowing method only because Dave Ramseys bank ended up going bankrupt.. come on now.. get a good bank. Get rich

If your flipping and can't do the work your in trouble. Try find contractors that are fair prices is imposable

The real estate part of Reagan's tax reform act of 1986 was designed to make it less advantageous for investors to hold residential property (note not commercial) and more advantageous for owner occupants (note non investors). I'm not sure I understand why Dave has an issue with this other than he got burned (probably why lol) If anything something similar would be a good thing today. Institutional investors are a huge factor in this crazy housing pricing surge. They are buying up a substantial percentage of your classic ~800-1500ft starter homes. Simply don't see how making it less advantageous for Wallstreet to buy and hold properties that should be purchased by homeowners is a bad things. Wallstreet has hundreds of other vehicles to pursue wealth, does single family housing really need to be one of them?

My take on Dave's going broke is that he financed illiquid assets with short-term, callable debt. He has a degree in finance, and the first lesson I remember from finance education is to match your maturities. If your debt is short-term and callable, the property you bought better be quickly salable in case the debt is called. If your assets are illiquid, your debt better be long-term debt.

Debt is okay just have the odds in your favour, cash is a very slow way of going about FIRE

Why did the bank call your notes if you were not behind on your payments?

Ima guess “Yes”

HELOC is not acceptable with DR for those new listeners.

Ben Mallah?

This guy obviously hasn't listened to Dave. Yes, it's a stupid idea.

Unless it’s to stop bleeding (e.g., getting a personal loan to get from under a car loan you can’t afford) the answer to debt is always no.

I watch HGTV alot and all or most of these flips are on paper. Most make a profit. Some borrow to buy house then use there cash to fix just incase something would go wrong. But it is a tv show. Im old so i wouldnt do it but if i was young and had the cash in the right location i woukd try one at a time. Location, Location

I hate how Dave equates the more moden methods of using debt to build a rental portfolio to what ge was doing. Is it a good idea, probably not, but nothing like the idiocy he exhibited when he did it. He had 4 million dollars worth of real estate on 90 day ARM loans with the bank having the ability open to call the notes at any point after the initial 90 day term.

And yet all those same risks are still true when buying a personal home, but Dave always advices that. No one that ever got rich did it without debt, even Dave acknowledges that in his “millionaire” study - 90% of people have a good portion of their net worth in their home. How did they buy that? With debt.

The Bible does *not* mention debt negatively 100% of the time. See Prov 19:17 for details.

What the heck is a heloc

This guy clearly doesn’t listen to the show very often. Dave, should I get a loan to buy something?

If you are reading this, remember that Life is worth working on yourself.... make yourself a new brand of yourself to be known and loved and create value to others....a fellow creator~

What Dave is REALLY saying is that you should make as much cash as possible before you do ANYTHING. Similar to what my grandfather told me. Sounds great, but pulling that off isn't always so easy. But if you can, Dave's methods are the best and least risky for the average Joe. Problem is, most really aggressive young men aren't gonna wait that long. So, for that breed of cat, Robert Kiyosoki's method of using debt for real estate is probably the better choice. Debt is like a tool, you can use it the right way or the wrong way. It's hard for me to believe when I hear Dave say that millionaires don't use debt. One size fits all may be best for the average, but in actuality, there are undoubtedly more ways to skin a cat. Don't get me wrong, I am NOT a real estate investor, and Dave IS. I am just thinking common sense here.

Ok,Dave this sounds like nonsense.If you’re satisfying a note no bank will “call” your note.I’ve owned all kind of real estate used to have notes paid them all off and never once did a banker bother to even call me as long as I was current.

But Dave that was not the question

If you have have been following/listening Dave for at least a month, maybe even a week, you would know the answer. NO!

He’s a Plumber! Already is doing well.

Dave has several hundred million dollars. Just in case you didn’t know people. Several. Hundred. Million. Now what’s your question?

A lot of triggered comments here...🤣 I like that Dave is consequent.

Dave just talks about his ONE experience. Never mentions all the thousands of good experiences by others. Weird isn't it?

Most of your banking you can do online now, I don’t see a bank being bought out in todays society

Dave's personal experiences will not be everyone's.

"Don't do it because it didn't work for me 35 years ago." Hmmmm... I wonder if the world of banking, finance, and real estate has changed since then?

Small time landlord. what's that?

Plumber wants to get rich quick. Maybe he sees the writing on the wall about his chosen profession.

Airbnb is huge right now, heloc might be tooooo risky Just keep the new one as airbnb amd save for the down And yeah dave keeps mentioning his idotic history when he used 90 days loan to flip Its totally DIFFERENT NEVER EVER pay cash for investing real estate, never, dont listen to their dumb advise

It’s like nobody listens to him and knows what he’s gonna say every single time he says it.

Another knock on Reagan, he ended open carry in California and we've been trying to get our rights back ever since 😢

Dave’s story is good, but he denies that many people do the borrow/invest approach and it does work for them. A wise person will consider both approaches and decide accordingly.

bad advice

Ramsey is being disingenuous with his “private loans” story.. No bank, nor lender is simply going to “call your loan due”. I don’t disagree with his advice.. but his reason is BS.

Who really believes Dave is worth 100s of millions of dollars?? Lol 🤦‍♂️

First 🕺

First here imao 🙌🏻🙌🏻