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I wanted to ask you guys if I want to buy an investment property with my uncle who's on disability, I currently already own a home, and I got that for $156,000 at 6.25% APR. My mortgage on that is about $1,200 per month. I have two tenants that live there, so they're paying off my mortgage. I have about $13,000 in my savings account, and I have no car payment, and I'm giving about 10% of my payment into a Roth IRA. Okay, and what do you make? I make about four grand, if you rent it out the house, do you live in the house with a roommate? Yeah, I live in the house. It's like a roommate sort of deal, so 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 I saw that being a landlord is really not as hard as I thought it was, I have the credit for it, and I believe that that's what I want to do with my life, just buying homes, either flipping them and renting them out. I have a home actually that is $300,000. Me and my uncle who are splitting everything in the home is about, we're going to split everything, the down payment, absolutely everything in the home. The house is worth about $300,000, we're getting about 7% APR, and we will 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-seize on the- And you need your uncle involved, why? So I need my uncle involved because I just got this loan from this VA loan about six months ago, and they're not letting me get another mortgage payment. Because you're too broke to buy a property, that's why they're not letting you do that. 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, sir. Okay. Well, Cesar, I've got just a moment with you to try to offset all of the bullcrap 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 banks that I had talked into loaning me money, I was flipping houses, and 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 $1 million, and they called the notes on the flips that I was doing. There were 90 day notes, and they called the flip notes. It was $1 million, too, and I had 90 days to come up with $1 million, too. I spent the next two 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. That guy that did that now owns me several hundred million dollars worth of real estate. I recovered in my 30s, at 40s and 50s. I'm sitting in one building that's worth over $600 million right now, and it's debt-free. 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. Everybody that I knew that did the type of real estate deals that you're doing, all of my friends in that business were broke, too. The only ones that 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 because 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 I've managed tenants for 40 years, believe me, I know. The idea that the tenant is paying for your house is internet crap because you're paying for your house, and you've 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 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 talked you out of it because 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 because 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've not assessed the risk that you're under correctly. You've taken on way more risk than your heart is grasping. Please or you're about to. Please don't. Just take your time. Every time I read the book, the tortoise and the hare, the tortoise wins. So be the tortoise. That's about all I got, John. Yeah, and again, if that doesn't give you pause, then nothing's going to give you pause. You mentioned this at the very end there. This is a surefire way to implode family relationships as well because it's not going to work out. It won't work out. And the uncle's on disability for God's sake. And he's in another state, and so when this doesn't work out, John, 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 the 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. And spend your life studying risk, and that's where you're old man. The fulcrum always has to equilibria. I used to say it wrong. There's always another side of the fulcrum. Let me say it that way. And nobody takes that into consideration when you get starry eyed, 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 and asking for my opinion, which I'm a hundred percent of the time going to give you. I'm an expert on my opinion, and I love you, and some will tell you the truth. Create your free every dollar budget today, the simplest way to budget for your life.
