Renowned financial guru Dave Ramsey told a 20-year-old man that he was “too broke” to buy an investment property.
Cesar, a 20-year-old prospective homeowner from Mobile, Alabama, called into The Ramsey Show on July 15 to ask the debt-free homeowner what he thought about purchasing an investment property with his uncle as a co-signer on the loan.
“Sir, you’re getting straight to the point 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 co-host John Delony that he learned that “owning really isn’t as hard as I thought” and that he 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 lives out of state and is disabled, to co-sign on an FHA loan with a 7 percent ARP so he can purchase the $300,000 property he has in mind.
Cesar, a 20-year-old aspiring homeowner living in Mobile, Alabama, asked Dave Ramsey (pictured) if he should buy a $300,000 home with his uncle as a cosigner because he couldn’t get a second VA loan after applying for one six months ago.
“My uncle and I split everything in the house,” he told Ramsey.
Cesar can’t get a second VA loan because he got one six months ago and they don’t allow him to have two mortgages, he said.
Ramsey flatly told Caesar that he was “too broke to buy property” and strongly encouraged the man to abandon his plans.
The financial guru told Cesar a personal story about how he had similar dreams when he was 20 and had taken out millions in loans from a bank to buy and sell houses. One of the banks he worked with was sold and suddenly he had to come up with over a million dollars in 90 days.
“I spent the next two and a half years of my life losing everything I had, getting sued, facing foreclosures, and finally, with a newborn baby, a toddler, and a marriage hanging in the balance, I was broke,” he told the young man.
“I never borrowed money again or hired another co-signer, because those two things caused me tremendous problems,” he continued.
“Sir, you’re coming straight to the point and I’m going to beg you not to buy this house,” Ramsey, 63, told the unidentified man. “You’re too broke to buy property.” It’s not known if Cesar took out the loan and bought the property.
“And everyone I knew who was in the real estate business that you’re in, all my friends in that business were also broke, and the only ones who survived were the ones who got out of debt.”
He went on to say that being a landlord is not passive income, especially if tenants don’t pay.
“Real estate is not passive at all, it’s very active,” he warned. “I love real estate and I own a lot of it. I’d love for you to own a lot of it, but I’d also love for you to avoid a nightmare.”
Ramsey later admitted to Caesar that he didn’t think he could dissuade him, as he seemed to be “fully committed.”
“You’re living on the edge,” he said. “You don’t even know it, you don’t even feel it, you haven’t properly assessed the risk you’re taking, you’ve taken a risk far greater than your heart can bear.”
‘Just take your time.’
He told Caesar to “be the turtle” and “go slower.”
Ramsey’s co-host warned Cesar that if he doesn’t get the money himself, it could affect his uncle and then his entire family would be involved in trying to track down the money.
“Now you won’t be able to go to Thanksgiving or Christmas,” he said. “Nobody takes that into account when you get all excited.”
Ramsey then told Caesar, “Go take a cold shower, son, you have a house fever.”
As for what Caesar ultimately ended up doing, Ramsey did not reveal.