Dave Ramsey: How I Lost EVERYTHING Flipping Houses 

"Run it like a business, not a get rich quick scheme". Solid advice for any activity, not just real estate :)

Dave has made hundreds of millions of dollars and STILL remembers the details of the deals that went wrong FORTY years ago! The failures hurt!

As I listen to Dave tell his experiences from back then, how he made a lot of money and then lost everything, the one thing that I come away with has nothing to do with the financial side of things. The one thing that I appreciate is that his wife stuck with him. He is a lucky man to have found that woman that early in his life.

Totally agree with Dave. I was a landlord some properties for several years. You can not count on rents and you will have unexpected expenses that eat away at profits.

In the housing crash of 2008, I had to relocate for work. Not wanting to sell my place at a loss, I decided to rent it until the market rebounded. Even though I was clearing about $500 a month, I never slept well... there was always some looming threat that hung over me like a dark cloud. Burst pipes, HVAC going out, noise complaints, renters who are always late with the payment... it sucked. One guys even snuck in a 100 lb rottweiler in spite of the "no pets" agreement. That dog destroyed my wood floors. Another guy threatened to sue me because he dropped a jar on his foot and broke his own toe. (He thought I should pay his medical bills since it happened on my property) One of the happiest days of my life was when the housing market rebounded and I sold my unit.

I laugh every time Dave says 'Tic Tac' 😄

My dad had 6 rental units, and he did not like confrontation, so if the renter didn't pay, my dad would just set up a payment plan with the renter, and the deadbeat renters took advantage of his humbleness....he eventually got tired of it all, and sold the buildings and the land to an Autozone, who leveled the houses and built a store on the land.......my dad did make more than a million dollars on that transaction.

Thanks for being so transparent! Everyone sees success but rarely know the failures! Love this

Great video Dave, I'd suggest making the most of the recession and inflation. Recessions are an inherent part of the economic cycle, therefore you can only plan and prepare for them. After graduating, I fell into a rut because my first job out of college was as an aerial acrobat on cruise ships. I currently run my own company, serve as a vice president for a significant corporation, own three rental properties, make stock and company investments, and have increased my net worth by $500k over the previous 28 months.

Did my first flip in 2018 made 50,000 haven't found another perfect deal since but I'm waiting patiently

Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got to talking about investment and money. I started investing with $150k and in the first 2 months, my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and get more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.

I learned my lesson with $50. I brought $500 at the age of 18 to a storage unit auction. I bought a unit for $50. The unit had a dresser, bicycle, a dryer, and a handful of clothes. My next issue I realized was how the hell I was going to sell everything. After all the time I put in, I figured I would be making like $1/hour. I quit that business right away. lol

I was a wholesaler right around the time the market fell out in 08. I was getting calls from so many destressed and upside down owners and landlords, it wasn't funny,

Thanks for addressing this Dave. My parents went through the same issue and the tenants refused to pay the rent. We eventually sold the property after the eventual eviction of the tenants. Like you said, there is the people factor to consider and that can ruin the real estate investment. Tenants are not always reliable.

He did a good job on that first property and the ones that didn't go well he learned the best of lessons

Dave: You don’t get rich off leverage. Nobody: “how did you get rich Dave?” Dave: umm not leverage. Nobody: can you elaborate? Dave: No.

Also with the eviction moratorium that was passed during the pandemic, that was extremely hurtful to the property owners. The banks, (like the tenants) were completely off the hook. Yet, they were still foreclosing on the poor landlords who couldn't pay the mortgage, due to tenants living for free. I'm never getting a mortgage again!

One thing I hate is having to start over. Ive done it so many times to advance in life. But it sucks when you think it's finally over, then you get in a wreck because of a drunk idiot, lose your car and then realize you are right back where you started. You can break a leg, lose a job. All these things lead to having to start over. I hate it. But the worst part is you have no control over this. It just happens.

“So when I get aggravated at the idiots on tic tac it’s because I was one of them. I was doing the exact same stuff and I can smell neophyte… beginner… a mile away.” - Dave Ramsey

From 1985 to 1998 my husband who is a building contractor and I bought 23 rental properties in Scottsdale AZ. We were careful who we rented to and all the properties had a positive cash flow. During the same time, we also started flipping houses making some great money. Housing prices in AZ. had gone through the roof so two years ago we sold all 23 rentals before the market started to drop again. With the price of houses now, even with the small dip in the market, I don't know that it's a very good time to get into real estate.

my first house was in a new area of the heights outside of Portland. I bought the plot in 98? for just under 100K, its on a hill. From ground level, the view is partially blocked by trees on the downside. I picked a 2400 sq ft design out of a catalog. The builder quoted 200K ($83/sqft excluding lot, and I am paying interest as he bills). I think this was appropriate for that design on flat land, not on a slope. Furthermore, I ask him to push the house back on the plot, a raise above ground level a little to enable a better view. This added a lot of extra building material that he did not factor in. He (the builder) also told me I could have had an architect customize the plan. Basically get the Autocad file from the design owner. Because my plot was on a bend in the road, a customized design with a flare on the downhill side plus large windows would have improved a very good view to an awesome view, but this was my first house and first custom construction. In any case, the builder was under water because his margin was low (6K) and the extra material from raising the house. This also meant adding a floor below the main floor was highly feasible as much material was already there and it would have an ok view. I sold it shortly after for 390K minus commissions. I asked the builder if he wanted extra money because of the changes I asked for. He said no, but he did want his wife, a young hot realtor, who at the time did not have clout to get listings in the fashionable neighborhoods, and letting her list it would help her build portfolio for future listings. I think Zillow has it for just under 1M now, but much of this was in recent years, not the first several years after I sold. Note: many of the lots were custom built for the (house) owner. Some builders bought lots and built houses to be sold. An adjacent lot (110K) was such. It was a new builder. He built a 3600 sqft (typical for neigborhood) mcmansion (most were proper luxury homes). I am inclined to say his cost was lower than mine, I had marble in all bathrooms and lots of granite in the kitchen with HW floors. At the time, $100 per sqft was adequate for luxury construction, and $60 for low cost, so I was middle. I am guessing his cost excluding interest was less than 400K. He listed for 550K initially and gradually lowered and was at 475K after almost a year?

Thanks you for sharing your failures and showing us that when we fail we can get back up again and be successful! Thank you for the hope Dave!! And the cold hard facts and truth and guidance! May God bless you always!!! ❤

Personal finance is “Personal” finance. Find a mentor that works for you. There are different paths to wealth. Dave Ramsey had a painful personal experience using debt. So he adopted the debt free path. The guy is now worth over $500 million (probably closer to $800 million) debt free. When you get to Dave Ramsey or Ben Mallah’s age you will “know” the path you believe in. Ultimately when you use other people’s money…. (you are in bondage). Dave used his sweat and money to build his current wealth. I lost 2 properties to foreclosure (because I borrowed money). So Dave’s plan make’s sense to me.

Dave got his notes called because he was using short term loans to invest long-term. If you have Fannie/Freddie 30yr fixed financing you can still lose your shirt doing rentals but not because the note gets called.

The fact he made money on the first one. Make genius. I lost on every house I own.

Copper are the good pipes they last 80 years.

The failures don’t post on TikTok. So when you’re young and all you see if people in your age range being super successful online you think everyone is doing great except for you. But again.. those that fail don’t post TikToks about it.

Hey guys never take chances and just pay your bills. Dream killer right here

Dave learned on the job and he got really good at it!!!

Thank you for sharing this. I need to hear this to help aging parents.

Lost everything flipping houses then made millions selling books and giving advice of how get get out of bankruptcy.

The first contractor wanted $1500 and wanted it up front.... Today this may not seem like much, but back then it was like giving someone a whole $7000 upfront.

Jade, when Dave said his first flip was 1983 and you said the year before you were born, he said 30 years ago. He was figuring it out but you should have kept him going at 30 years ago!😉

There's a people factor with 90% of all businesses 😂

Bought first house (fixer upper) for $65,000 sold for $200,000. Bought a townhouse for $130,000 sold for $120,000. Bought another house (fixer upper) for $170,000 and sold it for $280,000, bought my current home (fixer upper) for 140,000 and now it's worth close to $300,000. Now I'm waiting because I'm not interested in taking out a loan in this economy. I did gave renters live with me in these houses while I fixed them up and for the most part it payed the mortgage while I lived in them, though a few times it didn't go as well. All that to say I did make money doing it though it wasn't quik flips like most people are into.

The great thing is that even though Dave made mistakes early in his life, they were all part of his journey to financial success. He learned from his errors. I made a few costly errors myself, but it's one way to learn! 👍

After owning a co-op apartment in Manhattan for years, and other houses before and after, renting may not be the worst option. You never really own real estate as long as there are property taxes. Miss a payment and they take it away.

Your first deal should be a house you can move into and learn how to do some jobs yourself, and if you need a contractor, have them do small jobs at a time and don't tell them you're going to flip. Some contractors will take all your money.

Thanks for the knowledge, sharing your experience, great sense of humor, awesome show.

i think you need to make these mistakes in any business in order to learn. it's like either paying a college $100,000 to get a business degree and write essays about starting a business...or....using the money and actually starting a business and learning on-the-job.

Real estate investing always sucks. The lack of liquidity alone drives me away. I’ll stick with s&p 500 index investing. Slow and easy

Does Dave ever explain what exactly caused him to lose everything in the late 80’s? He always mentions it but never gives details on what exactly caused his downfall. Also I bought my first rental property this year. Wife and I made sure we could still afford the mortgage even if we didn’t have tenants that way we don’t have to rely on the them to pay the mortgage.

We all learn from our mistakes Dave! It makes us the wise people we are today.

Flips are super hard ...best thing is buy cash free and clear and only get a house with minor things fixer upper cosmetic and do it yourself. Otherwise better to work a high paying job

The key to ensuring profit on the flip is properly executing the 1031exchange. Botching the 1031 process means a big tax hit; executing it properly means eluding the tax hit.

Why did the contractor have to run off to Kalamazoo tho 🤦🏽‍♂️😂

Dave was doing great he just got unlucky when the bank was sold and all of his loans were called in overnight. That wasn't his fault. The only way to have prevented that was not to be leveraged to the hilt like he was.

My uncle bought parking lot spaces in Manhattan years and years ago. Best investment he ever made. Super low maintenance and highly profitable.

No doubt , about it , Greed is Toxic !

The open concept trend is here to stay, and it's a wise choice for modernizing a property.

Flipping has gone nuts in Florida rentals. I’m seeing 1,000sqft shacks going for $2k/month because they’ve got new floors and kitchens. Of course they’re all asking for proof of 3x monthly salary and credit checks, so it will be interesting to see the rent delinquency rates down here over the next couple years

apparently Dave Ramsey has never seen the recent reaction video from Ben Mallah 😂

There’s a guy on the radio who always says “I can make you rich.” “I’m so rich.” But you find out that it’s just an education program and you buy a “membership.” His name is Del Walmsley.

The thing that Dave never mentions is that people knew 90 day notes were stupid already in the mid 80s, which is why, unless you are a really well established real estate professional with tons of flip experience, banks won't even do it today. He did it then because it was cheap and easy, but it has very little in common with what a lot of people doing that he did will do today

This why he is so bitter, theres tons of people out here still making BIG money flipping

I have a problem with the dudes who buy 10,20, 30+ houses to rent them out. If enough people do that, the supply gets drained for all the families who just want their own home. Perhaps the future will look like 90% of people who want to own a home are forced to rent, while those who own homes don't even live in them themselves?

I hate real estate!

At least Dave learned from his mistakes and turned the ship around. Some people never recover. I know a working-class couple who filed for bankruptcy around the same time he did. A lot of medical debt + really bad decisions resulted in car repo, utilities cut off, foreclosure, then Section 8 & food stamps. The husband died broke, left his widow with nothing but bills, and she's still struggling to this very day.

I thought FORECLOSURE meat cheaper also...up until 10 minutes ago

I love the dig on Meet Kevin about the "I have a jet airplane!" at 7:53

Dave, "If you can find a path with no obstacles, it probably doesn't lead anywhere"

Thanks Dave! Respect!💪

Have to agree,rental is dead.stay out of it.youll loose your shirt,then your shoes..The dam courts act like they own it and won't evict ..I sold mine 10 years ago ,best thing I ever did.

First step in making money. Already have money.

Did I miss something? He didn't explain how he lost those properties? He said some contractors bailed. But on one property. Did that happen to ALL his properties?

PhD in DUMB. Funny Dave. He's the grandpa we all needed growing up.

Buck an hour- baller!!!

Hello Dave I learn so much from you. By the way Kalamazoo Michigan is my home town. We will stick with you we always learn something new. God bless.😊

I think it's phony they way Dave REPEATEDLY calls himself stupid for the things he did that failed. In 1983, he was 22-23. It's pretty darn IMPRESSIVE for someone so young to have such active drive, daring and even basic understanding of real estate and investment and then not only think and wish about it, but to act on it.

He went from zero to hero, back to zero and now he's a hero again. This guy's basically Hercules LOL

Don't gamble with houses, invest and flip. Beautiful woman there .

Dave should have gotten a good lawyer to read his contracts....so he would not gotten foreclosed.

So he made lots of money initially with 90 day notes and that was working amazing until he started leveraging rental portfolios. Now he is anti-debt completely but at the beginning it was working fantastic for him so I think debt as long as you don’t use it the wrong way can be very lucrative. If he never bought those rental portfolios he would’ve never gone bankrupt… P.S.I’m a first generation immigrant apologies for my broken English grammar.

Chapter 13 bankruptcy usually lasts 3-5 years and you can always appeal the stay injunction. I Could be wrong but that's from a quick search on the subject. That last statement at the end of the video comes off as gaslighting and it really doesn't make sense. Otherwise if people are gaining the system that easily I don't think rental properties would still be a thing.

Now this was a practical talk that Dave gave. A lot of practical info. I like it. A "useful" rant.

So now that you've told tenants how they can use a chapter 13 to protect themselves, how about an explanation on the procedures to protect the landlord from getting screwed by a chapter 13 tenant?

He’s the og of HGTV house flippers 😅

scared money makes no money, there will always be risks. Know your financial wealth, know what you are signing, do your research before paying and know what $$ you will loose and $$ you will make. Then make a decision.

Flipping is tough and can lead to ruin if you go too fast. Ive made good money with real estate through the years by buying an apartment or home when prices are down, living in it for a while, and when prices go up quickly sell. Then either rent for a while or try to find another deal. This works if you dont mind moving.

Hes saying 'tic-tac' making fun of tic-toc. He knows the difference...

But if you have not tried your first home flip experience, would you have become a rich person now?

Not the jet airplane 😂😂😂

7:53 Thank you for telling us the truth!

Keep the rentals and let the renters pay for everything.

I swear I thought I saw Dave at Burger King today loll

When are these flippers going to learn no one wants to buy an upside down house?

They have made it more difficult for people to sell their homes for a fair market price! Not everyone wants a gray and white home inside, this should not be the default color scheme. Plus, not all people want the tubs to be torn out, especially if they have children. They have raised the price of all homes, and set an unrealistic expectation for buyers!!!

"Run it like a business, not a get rich quick scheme." Amen! All these real estate advice crack heads on tic tac are living in a house of cards. There's not such thing as get rich quick.

Tenants will not pay your mortgage no matter what anybody says. Dave Knowles and through experience just like him I know.

STOP been too harsh...all businesses are the same....all about learning from mistakes and moving on. When you went bankrupt another person became rich of doing same thing you were doing

I agree with his get out of debt philosophy that helps a lot of people. Then he mentioned on his show one day that he thought Elizabeth Warren was a financial genius. Stopped listening to his show after that. Her crowd are the same people that give mortgages to ham sandwiches, student loan forgiveness, ad nauseam… playing his listeners for a bunch of suckers. Choose your lane DAVE!

Buying and holding is the least risky real estate investment strategy. Flipping is very risky and not tax efficient.

I love when Dave says tik tak 🤣🤣🤣

Good old days over!!! Making money 💰 🤑 💸

5:38 It’s $2,571 compensating for inflation.

Since when did Hillary Banks start talking to Dave Ramsey

The whole reason Dave lost his shirt was because he used 90 day notes aka, after 90 days your loan is due in full. While real estate renting is always risky and I would argue more risky then the stock market, his whole story here is literally impossible now a days. Actually the only reason he went under was because of the competitive equality banking act passed by congress in 1987. So he omits this stuff to kind of scare people into long term real estate investing. Now if you are going to real estate invest. Go for it, but have a separate emergency fund that would cover that mortgage for a full year incase your tenant doesn't pay and is difficult to get out.

Don't ever believe anyone on Tic TAC!!!

The gambler's curse - you won the first game.

Section 8 tenants guarantee that your mortgage will be payed and make you a profit. And before people say section 8 tenants are bad…threaten to report them to housing and get their voucher taken, they’ll be silent as a mouse lol.