[Music]
jake is with us in dallas texas
hi jake how are you doing how are you
better than i deserve what's up so uh
about a year ago me my wife
we had some stupid we had still had to
get out of our system uh we'd been
married for about 20 minutes and of
course had to buy a house
and we didn't have a whole lot of money
for it so we didn't put 20
down we put closer to 5 down and now we
have
a job offer is about 50 60 miles away so
we're going to be moving out of that
house
and i'm wondering should we because i've
kind of been interested in real estate
and running a rental property business
because this is in a college challenge
should i still kind of keep this house
since you might be upside down if we try
to sell it with all the fees included
or should i just try and throw as much
money as it uh
as i can to be able to sell it and
profit a little bit
yeah well it's not profit it's just a
matter of whether you write a check when
you sell it it's all
so good with one of our real estate elps
at ramseysolutions.com find out what
your reality is
this market is so hot my guess is you're
gonna get out of it
that's my guess and here's the thing if
you were living 50 miles away and
working a new job
you would not call me up and say hey
dave
i want to buy a house 50 miles away with
nothing down
leverage it all the way up to what oh as
much on it as it's worth
which means the rent is barely if at all
going to cover the payment
and so i really want to take on this
liability 50 miles away
nothing down by the way you wouldn't do
that that's effectively what you got
here
house has got no equity in it and by the
time you rent it
for uh you're barely going to cover the
payment and by the time it's vacant a
time or two
and then the heat and air burps on you
you're going to have
a loss for the year this thing is a
problem it is not a blessing
and i just heard the other day that they
maybe today that they reinstated the
mask mandate in california in some place
like
you're one cove it away your one
tick uptick in numbers et cetera for
colleges going back online and suddenly
this thing that feels like it's a
surefire bet in this college town
not being so surefire anymore the guys i
know with college
real estate and it's not admittedly not
a lot they're getting out
just because it's so unsure uncertain
yeah
you don't know if the kids are ever
going to go back in that classroom again
or if they are
it's going to be an unstable and
volatile situation at best
so in and out in and out depending on
who's panicking where
and where we're going to overreact again
but
anyway that's that's just a shot do you
have a do you have a
i i wrote a check one time to get out of
the house
i think i took 4 500 bucks or something
to closing
and that next 18 months we ended up
paying off six figures of student loan
debt
but it was a painful check it was hard
to write
but it was what was right for an
upcoming season that ended up freeing us
forever um is it ever okay it's
i felt good about writing that check
even though i didn't feel good about it
does that make sense yeah well it was
the right thing to do
right so i mean if you lost 450
a month for um 10 months you'd have
broke even but it's not going to be that
bad probably
but you're probably going to lose that
much on a house in a year
if you're fully leveraged on it and we
know you're fully leveraged because you
didn't make any money
above the mortgage so meaning that your
payment is so stinking high
because you've got the most borrowed
possible on it that that the rent is
going to be right there at it
and so and you put in the realtor fee
and then you're stuck and your break
even is just not there
so what you don't want to do is i'm
losing
dollars a year and so i'm gonna panic
and
write a hundred thousand dollar check oh
yeah you know we don't want to go that
far
on the way but but most of the time and
and here's the thing i've always wanted
to own rental real estate you don't want
to own rental real estate
that you owe as much on it as it's worth
because it does not make money
right and this is not fun this is me
this is going through all the hassles of
real estate and making no money
that's that that's rental real estate
that's fully leveraged there's no fun in
here anyway
oh well 30 years from now the renter
will have paid it out and bull crap
you know that's just that's not how this
works