Pause Investing To Buy A Rental Property? 

Just paused investing for 4-6 months to pay off two small debts and increase my savings.

Lol. Bubble burst folks. Every doctor, CEO, or lawyer who could afford and want to pay $4000 a month to rent a 1400 SQ ft shack has already done so. Everyone owns an air BNB and prices are collapsing. The time to invest was 2019 not 2022 unless he wants to liquidate and sell 1/2 the price 18 months from now

"Pause Investing to Buy a Rental Property?" I thought that rental property IS investing. That's how we treat ours. It may not make sense on other grounds, but the distinction between rental property and mutual funds doesn't apply; they're both investments. Attention to liquidity is in order, though, if Dave's points about debt are also attended to.

Good basis advice for majority of people earning high net worth salaries. Majority of us will take years to save up in cash by which time the equity in the hone has already more than doubled your deposit down. I’ve got rentals all on interest only majority of profits into stocks and extra borrowing of equity gains carefully for deposits to buy more houses. Buy refurb refinance rinse repeat, 20-30 years sacrifice some houses to pay off other ones with capital appreciation plus you’ve got your compounded stock growth. Just started to purchase more in a ltd company in UK, thing is it’s pointless paying any of those off as the interest on mortgages is totally 100 percent tax decuctable so encourages you to become more savvy with careful leveraging.

Paying cash for a rental property is not a good investment. If you're debt adverse, just invest in index funds and call it a day.

This is where I believe Dave steers people in the wrong direction. Why even call Dave knowing he hasn't changed his philosophy in this area for almost 30 years...

We paid our mortgage and eventually moved and got a new mortgage. The option was to either sell the previous house to help for the new mortgage or rent out the previous house. We were not in a pinch with the new mortgage. So we decided to rent. It is still early so I can't say if it was the best option. It is a standard long term rental property though. We do not do the dave Ramsey plan or anything. Currently we only have our current mortgage, no other debt.

I’ve completed all the FPU steps already. Now I’m in a situation where I can buy an investment property right on the beach that I can pay cash for , but I’ll need to use my emergency fund to buy it. The house is a rare opportunity and I don’t want to miss out. Can I use my energy fund for this ? I’ll make a lot of money when I sell it. I’ll only be without my emergency fund for about 6 months or so. This is the only way I can buy this house without going into debt.

Dave: Beach house? Caller: Mountain house Dave: I figured Not quite.

So you want to stop investing in stocks that are 80%+ down and buy properties that are up 25%+ in the past year and at record highs?! BRILLIANT!!

Our mortgage is paid off and I would like to buy some lower end rental property -- nothing fancy, just some older duplex or triplex. The problem is that I don't have enough to pay cash, but I can put down 25% or even 50% easy. Dave says to only pay cash for rental property but there are other gurus that claim you're crazy not to use leverage to buy rental property. It's a quandary.

I mean a rental property is still an investment that also cash flows right?

"the blessings of the Lord have no sorrow added to them" Getting married, having children, starting a business, just living life in general will have it's ups and downs. There will be sorrow, and there will be joy. To think there will never be problems with anything is delusional.

Pro tip: When you say "debt free" that means NO DEBT!!!

It is incredibly unrealistic to save up 100% cash to buy a rental property of any kind. This is where I disagree with Dave completely, the difference between good debt and bad debt

Yeah Dave, it's a beach house in Kansa. /s They're basically lakes, not beaches.

Where do you recommend to go to begin investing in stocks?

With this current situation, it would be wise to keep your investments going and be patient in buying properties right now as rates are quite high. Still, it's up to you though, just study and learn more about this current situation before making major decisions.

to Dave, if you have to get a mortgage for a rental property, you can't afford it.

always amazes me when people call Dave with questions like this.... what about no debt don't you understand? he is already off the DR plan and probably gonna do whatever he wants.

Buying a rental property IS investing (if you're using realistic numbers to evaluate) so his question is: "Should I stop investing to start investing?"

Depending on where you are now is a really iffy time for buying properties. With interest rates skyrocketing and inflation going up now is not the time to be buying in my area. Everyone is buying and hardly anyone is selling. Be cautious

Feels odd to get a drag ad on a Ramsey video

I'm convinced people have never heard of Dave before they make these calls

"It's a good time to buy". Video was posted September 2022. It was absolutely not a good time to buy. Anywhere.

DAVE list up up i made my 1.4 million in assets leveraging my rentals. 20% down will make it possible to market it under the competition and keep a high occupancy rate. So dave you can no longer say you never heard a millionaire buy leveraging rental debt.

Short term gain against long term liability not smart

The only prescription is more cowbell.

He has 150k saved up, I would put it into your current mortgage. It doesn't sound as nice but the idea of no mortgage would be nice. Not sure how much he still owes.

My prime went from 1.52 up to 3.9! Dam you inflation oh wait nvm thats just the banks being greedy!

Every millionaire and land lord I have ever met uses Leverage. Debt involves risk, paying cash is a massive opportunity cost which also involves risk. Without risk there is no return...ever.

This is not the thing to ask Dave for advice about. He has an earned fear of real estate. He did it in the stupidest way possible, and went broke with it, so I get why he does. That said, there are ways to do this with a lot less risk

Pay cash? Only wealthy people can pay all cash for a house. Go and do it. It sounds like he has a plan. That's way Dave cut him off. But one million in Kansas? How long would that take to recoup the cost? Rent is like 1k in Kansas. That would take eighty to ninety years to recoup it.

Real estate is investing . . . A much better investment than a 401k.

.Dave everyone is not a multi Millionaire bringing in revenue like you do.This poor guy is going to be dead by the time he comes up with the cash for the rental.Keep your close minded advice for your multi millionaire friends and not the average blue-collar worker.

Dave is dead wrong on this. As long as you can swing the payment when not rented it is a good investment. He is missing all the tax advantages of depreciation

He interviewed all these millionaire and missed nearly every real estate millionaire 🤔

I missed it, how much does he owe on his first house?

Why would you want to buy a rental when homes prices are sky high?

That guy should definitely own a rental property he just needs to go a different way of dealing with it. He can even do something similar if he wants and it does not have to all be cash but less debt is better for him. So I disagree with dave somewhat when it comes to practicality.

The only cure for house fever is more cowbell.

Million dollars 😂 Some people love to spend money

yeah, being a landlord has no risk......pass.

Why not get a $300k property instead

Wow

Built a bigger property on the same lot??????? HAHAHAHAHA

So pay off your house. Then save a $1million which would take another 20years at that rate. Got it.

Ramsey: "You should not buy investment property unless you can pay for it in cash." You have a choice here, you can save for twenty years and never have the cash to buy a property because the price keeps increasing, or, you can get a mortgage now and allow your tenants to make the payment for you and after twenty years, you have a paid off property PLUS all the money you have been saving. "B-b-b-b-b-but that's risky. What if you can't make the payments?" Well, unless you do something stupid, like borrow 100% on property with declining values, you sell, pay the loan, and pocket the equity that has accrued. But hey, if you want to do it the Ramsey way, just figure out how you can sell folks a bunch of books and seminars. Cash flow is what got Dave where he is. Drink the Koolaid at your financial peril.

There is nothing dumber than buying rental properties.

And this is why people should not take Dave seriously on most financial advice.

when you make zillions a year its real easy

Pay off your primary home first then save to buy a rental.

His advice is right, but his continual quoting of his own cherry picked millionaire study is just comical.

Go chiefs!

Buy a house cash. Sorry but this is not geared to Dave’s targeted audience which is middle class. Get the rental property on a loan and investment the rest.

Rich dad and poor dad say it otherwise

“If I can look at the situation and can perceive sorrow in the future of it that usually tells me it’s not a God thing I’m doing” Then why get married. Then why apply for a mortgage at all Then why take risk and start your own business Then why trust a friend with a business venture All have the potential to produce sorrow. Your wife could leave you. You could lose your job and default on a payment. You could break off ties with a friend. Horrible quote. No one jumps on an opportunity that has a 100% rate of return for sorrow. The decision is based off a likely analysis that you will reap more profit than losses. The thing is, I think an investment opportunity is great if your leveraged at 20% and your generating great cash flow from the property. As long as you have a great savings to account for any renovations, hikes in taxes, hoa fees, or hidden expenses, then I’d say do it. Dave is out of touch

If you have a mortgage you’re not debt free.

Boomer needs to rethink his method.

Ramsey is so out of touch.

Love all the advice and vids, but the second religion somehow becomes part of financial advice they totally lose me.

Because of the economic crisis and the rate of unemployment, now is the best time to invest and make money 💯

Buy real estate ? Wow I know many fools still falling for this trap . God save them.