I Borrowed $300,00 For Family And They Haven't Paid Me Back

Brought to you by the EveryDollar app. Start budgeting for free today. About eight years ago, I started trying to buy real estate, you know, with, you know, saving 20 or 30 percent down payments and borrowing money from friends to be able to buy. I know it's a huge mistake now, and it's not what TikTok says that it is. In the same time, my cousin asked for money to do the same, and I borrowed about $300,000 on her behalf from my network so that she can also grow her portfolio. Fast forward to now, real estate is the opposite of what TikTok says. I am also married, and we are planning a wedding next year. I paid off over $600,000 of real estate debt that I borrowed from my friend after listening to you guys for the last two years. Wow. And I also have about, I also have five of my rental properties have been paid off. Wow. That's amazing. And I am working, thank you, and I am trying, actively working towards becoming debt-free with all of my real estate and all of my debts. Amazing. I do have some debt outstanding. And I still have, so I paid off all the debt that I borrowed from friends, and I only have mortgages on about 15 of my rental properties. But the balance that my cousin borrowed is still outstanding, and she hasn't made any interest payments in over 18 months, and she also got, she got foreclosed on all of her houses. And with a wedding to pay for next year, newly married, I'm thinking, should I sell some of my real estate to pay off her debt and start over from scratch, or should I wait it out and pay it off little by little? Did you borrow the money on her behalf, or she borrowed money, you had $300,000 cash that you lent her? So the same people that I borrowed from to start my own portfolio, I borrowed from them so that I can give to her to... And I think it's fairly easy to figure out she's not going to pay this. So no. And so you're going to have to... Some of her houses foreclosed on. So I am on the hook for that. Yeah. So how are you going to pay the $300,000? Now, the numbers you're throwing around are amazing. Congratulations on your change in direction. So you paid off $600,000 already. How did you do that? Little by little, I've just been saving up cash from the income that's been coming in, my regular W-2 job. And I also sold a couple houses. In what period of time did you pay off $600,000 doing that? Two years. In the last 30 months. So why could you not just continue on that track and clear this $300,000? I still have 15 houses with mortgages on them. But you paid off $600,000 in your current situation, you paid off $600,000 in 30 months, right? Yeah. And you sold a couple properties and you cash flowed the rest of it out of the rentals, right? Yeah. So you've still got that cash flow and you can sell one other rental or two other rentals and do that. How much are you making a month, James? Don't wait for the interest rate to be perfect before buying or refinancing a home. Talk to Churchill Mortgage. Smart buyers buy the home they can afford now and then refinance later if rates improve. Churchill helps you make decisions with confidence instead of guessing. And Churchill Mortgage has a webpage with special offers just for our audience. Go to churchillmortgage.com slash Ramsey Offer. This is a paid advertisement. NMLS ID 1591. NMLSconsumeraccess.org. Equal housing lender. How much are you making a month, James? They vary. It's usually anywhere between $20,000 to about $28,000 after mortgages, utilities, and taxes is paid out. And then your personal W-2 income is what? $180,000. Yeah. Good job. Well, so overall, let's just say this, okay? You got 15 still mortgaged. You make $108,000. You've got cash flow because you've got a bunch of them paid off. And you have a $300,000 unsecured loan hanging over your head like a knife. And so that I need to clear. That's the overall picture. And so what would I do in that overall picture? Not just the 300, but everything else. I would lay out a game plan and say in X number of years, I want to be 100% debt-free with my real estate portfolio. Now, what I would suggest you do is play with the math because you're good at it. I've been listening to you. You've got this dialed in. You know where you are and you know how you got there. So this is a gift you've got. You like math riddles almost, right? So lay out this math riddle and say, how many properties do I have to sell and which ones would I sell of the ones that are mortgaged in order to be 100% debt-free in three years? Does the 15 that have mortgages also have equity? So you don't have to sell them all to clear the mortgages. You would sell the ones you hate the most or that have the most equity because you want to get the most traction in this scenario. So let's just use an example. I've got to sell seven of the 15 that are mortgaged to clear the 300 grand and clear the other eight. And I can do that in three years. Well, that's one thing to consider. What if I waited and went a little slower and I took five years? Oh, then I've only got to sell five of them or whatever the number is. I'm making that number up. It's probably not that far off. But, you know, lay out a three-year plan. What would have to be true? What would I have to sell? And what would I have to do with the cash flows to clear the 300 grand and to clear all mortgages in three years? What would I have to sell? What would I have to do? What would have to be true to do all mortgages in five years? And then you decide which one of those programs you want to work. I'm okay with either one of those two. I'm going to stay in debt the rest of my life. That's the only time I would yell at you. But you're not urgent right now. No, no. Because it's real estate. But if it was credit card debt, we'd be having a different discussion or student loan debt. Yeah, but he's got the ability to retain some of this portfolio. He doesn't have to destroy it. You don't have to burn it down to clear it. Because you've already made progress on my idea when it wasn't my idea, right? Yeah, well, I've been trying to pay it off. I've been mainly focused on like my own debt. But now I'm just thinking there's just no way that she's ever going to pay it back. Honey, let's just change. Let's just change the name on that. That is not her debt. You borrowed it. What you did with it was really stupid, but you borrowed it. It's your debt. You gave it to an incompetent real estate investor who happens to be kin to you. And you lost your money that you borrowed. So it's not her debt. She's not going to pay it. Does she talk to you, James? Does she feel bad about it? Not at all. I think the relationship is strained there. So at no point, you know, text messages aren't returned. Calls aren't returned. Oh, wow. Okay, so she returned. I'm sorry. Truthfully, even if she wanted to pay it, she doesn't have anything left. They took all the property. She's working in a coffee shop. I mean, you're not getting $300,000 out of this check. Not at all. That's what I want to carry up and just get it out of the way. So you need to pay your debt, your $300,000. You've already paid $600,000 of your $900,000. And now you've got $300,000 left to go. Another example of cosigning. Don't put your name. Well, a worse loaning money to relatives. The only thing worse than loaning money to relatives is loaning money to relatives that you borrowed to loan. I know, but it's that same idea that I'm having to step in the middle of your debt situation. A cosigner taking out a loan on behalf of someone else. Yeah, not great. Yeah. So I'm sorry, James. Yeah, it's awful. And then it destroys the relationship. I think you're going to be, I think you're going to end up with the property that you have now that's debt-free plus some portion of those 15 properties. And it's got five sold off or paid off. Five properties paid off. I think you're going to clear it all. I don't know what the equities are in them, but you start running the math out on that. It's a neat math riddle to run. Create your free every dollar budget today. The simplest way to budget for your life.