I’m Begging You Not To Do This

[Music] brought to you by the every dooll app start budgeting for free today I wanted to ask you guys if I I want to buy an investment property with my uncle who's on disability I currently already own a home and I got that house for $156,000 at 6.25% APR my mortgage on that is about $1,200 um I mean $1,200 per month I have two tenants that live there so they're paying off my mortgage I have about $133,000 in my savings account and I have no com car payment and I'm giving about 10% of my payment into a uh rth ra okay and what do you make I make about uh four grand I um and where do you live if you if you rent out the house what do you live in the house with a roommate yeah I live in the I live in the houses it's like a roommate sort of deal so it's um how old are you I live with my girlfriend I'm 20 years old okay and why do you want to buy an investment property so I want to buy an investment property because it I saw that you know being a a landlord is really not as hard as I thought it was I have the the what's like the credit for it and I believe that you know that's what I want to do with my life just buying homes either flipping them and renting them out you know I have a home actually that is $300,000 I would me and my uncle um who are splitting everything in the home um is about we're going to split everything the down payment like absolutely everything in the home it's the house is worth about $300,000 we're getting about 7% 8 and we would be doing an FHA loan on that the thing is that my uncle doesn't live in the state so I would be in charge of maintaining the property and we would go essentially half Seas on the and you need your uncle involved why so I need my uncle involved because I just got this loan from uh this VA loan about 6 months ago and they're not letting me get another mortgage payment [Music] mhm okay because you're too broke to buy a property that's why they're not letting you do that okay so the bank is telling you not to do this and you're figured out the way to beat that is to use an uncle and do it anyway yes yes sir okay um well Caesar I I've got just a moment with you you to try to offset all of the bull crap you've been reading on the internet about real estate and I don't know if I'll be able to accomplish the goal of offsetting all of that I will tell you that when I graduated from college at 22 years old I bought my first property by the time I was 26 I had over $4 million worth of real estate with a million dollar net worth doing exactly what you're talking about I had co-signers I had had banks that I had talked into loaning me money I was flipping houses and um with no money and you got no money and I was buying property basically with no money and so I was leveraged up to my eyeballs one of the banks got scared and got sold to another bank and they looked down and said there's a kid in his 20s that owes us over a million dollars and they called the notes on the flips that I was doing they were 90-day notes and they called the flip notes was a million two and I had 90 days to come up with a million two I spent the next 2 and a half years of my life losing everything I owned getting sued getting foreclosed on and finally with a brand new baby a toddler and a marriage Hanging On by a thread I was bankrupt that's my story okay that guy that did that now owns me several hundred million dollars worth of real estate I recovered in my 30s and 40s and 50s I'm sitting in one building that's worth over 600 million right now and it's debt-free okay so just to give you an idea that this can be done but I never borrowed money again and I never took on another co-signer because those two things caused me tremendous trouble and everybody that I knew that did the type of real estate deals that you're doing all of all of my friends in that business were broke too the only ones that were survived were the ones that got out of debt and you sir are walking straight into a razor and I'm going to beg you not to buy this house I want you to own real estate and I want you to be good at it later I want you to take your time and pay cash for the next little property you buy and I think between now and 30 years old you probably are going to have several properties that you could pay cash for without your uncle and without 7% APR and just cuz you can manage three roommates doesn't mean you know how to manage tenants yet that's a bit of a leap they're a little different and um I've managed tenants for 40 years believe me I know and the idea that the tenant is paying for your house is internet crap because you're paying for your house and you got some tenants you will find out that the tenant is not paying for your house when one of them doesn't pay that's when you'll discover that I that real estate is not passive at all it's very active so I love real estate I own a bunch of it I'd love for you to own a bunch of it but I'd also love for you to avoid a nightmare and I don't know if there's any chance that I talk to you out of it cuz you were completely in it almost sounds like you've already done the deal and then call me back to bless it and I'm not going to if you did that deal I wish you didn't cuz you set yourself up for problems you set your uncle up for problems you set up relationships for problems you're living on the edge and you don't even know it you don't even feel it you don't you don't you've not assessed the risk that you're under correctly you've taken on way more risk than your heart is grasping um ple or you're about to please don't just take your time every time I read the book The Tortoise and the hair the tortoise wins so be the tortoise that's about all I got John yeah yeah and again if that doesn't give you pause then nothing's going to give you pause um you mentioned this um at the very end there this is a Surefire way to implode family relationships as well yeah cuz it's not going to work out it won't work out number one and the hus the uncle's on disability for God's sakes and he's in another state he's going to be and so when this doesn't work out trying to help his little nephew out but the uncle's brother his dad's going to call and say you need to do this and grandmother's going to call and Mom's going to call and now you're not going to be able to go to Thanksgiving you're not going to be able to go to Christmas everyone always enters into these things only considering the upside and nobody understands the risk profile man spend spend your life studying risk and that's where you'll man that's what that the fulcrum always has to has to equili uh I used to said it wrong it's got to there's always another side to the folr let me say it that way yeah and nobody takes that into consideration when you get stari man yeah go take a cold shower son you got house fever yeah slow your butt down that's what I would tell you yeah you made the mistake of calling asking for my opinion which I'm 100% of the time going to give you I'm an expert on my opinion and I love you and so I'm going to tell you the truth create your free every doll budget today the simplest way to budget for your life