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[MUSIC PLAYING] Brought to you by the Every Dollar App, start budgeting for free today. So I was trying to help my husband about, I guess, a year and a half ago, September 2023, basically. I asked if I could borrow from his 401(k) so that I could invest in flips and flip them and then help pay down the mortgage so he could retire earlier. The first house did not sell, and I was nearing the end of the loan. I had to refinance. We refinance that. So now it's stuck with that house, but the renter is paying for that. It's covering the expenses. I did it again with the hopes of the same goal, and now I'm stuck with a house that is nearing its maturity for the high money loan to be paid. So I'm trying to figure out whether I should refinance-- because I'm going to suffer a loss. I can't sell this for some reason. It's the interest rates in the area that we're in. So I don't know if I should sell it at a loss or refinance it into a conventional loan again so that I can pay back the high-money lender and just keep the house and rent it for a while to recoup my money back and try to resell it later. I think we need to sell-- We got a sunk-cost fallacy here. And you keep digging yourself into a hole, and you touch the hot stove, and then you did it again. And so I think we need to get out of the real estate game entirely. I don't know that I would-- What's the loss on this that you would take? It would be at least $12,000. OK. I'm getting out. Do you guys have this money? Do you have it? Do you have any money in the bank? We have about-- let's see. For the-- like in emergencies, I'm like $9,001. And then in another-- in like the business account, there's like maybe $4,000 or $5,000 in that. And then he has a little more left in his 401k. Like $49,001. Let's stop robbing the 401k. How much have you taken that? How much did you take out? $40. $40,000. And that was a straight-up withdrawal. Yeah. So you paid upwards of what? 35% in taxes and penalties? Actually, it wasn't even-- yes, yes, yes. That's exactly what happened. Funny you knew that, but-- Yeah. That's just what happened when you take it out before $59 and a half. That's why we told people not to. He's 68. He was 68 when he took it out. But they told-- he was trying to put it back in, some-- a little back in, and they said he couldn't put it back in because he was over a certain age, if that makes sense. Yeah, it doesn't work like that, where you can just put the money back in. And so you took a withdrawal out of that, a $40,000, which robbed you of all the compound growth that could have happened along with that amount. And so now you're out of that money. You sold one of the houses. You got out of that flip, right? I didn't sell-- we're renting it. We couldn't sell it because of the area that the interest rate is higher than the-- So how many properties do you have? We have the main one we live in, the one that I was trying to help pay down so you could retire. And then the one that we tried to flip the first one, and now that's the conventional loan, and we're renting that. And then we have this one now that we're trying to figure out what to do. I mean, I don't know whether to-- So three total-- So one is being rented and one you can't sell right now, and you're thinking about doing the same thing. How long has it been on the market, the first one? How long have you-- Tell us more about the efforts. OK, so the real estate person-- I'm not sure if he knows me a lot about the economic area. I mean, about the economic area, but-- Who is this person? Is this a trusted real estate agent that you're working with? Well, yeah, I mean, she would refer to me through an agency that I work with. It's called-- I don't know if I should mention names, but that, yeah. When you get off the phone, I want you to go on to RamseySolutions.com. And I want you to get hooked up with one of our real estate trusted pros. Because whoever it is should know the economics of the area. And I don't know, like, what did you put the house on the market and after 30 days of it didn't sell? You pulled it, like, tell me more. Because when was the hard money loan do? On the first house you asked me on the first house, it was on the market for, I say, maybe almost four months. Four months? And we didn't get-- yeah, we didn't get any offers at all. Was it priced right? Supposedly it was priced right, you know, I mean, she's a totally priced-- What area of Boston is this? No, this is in Birmingham, Alabama. OK, what you're buying real estate across the country? Yeah. Are both rentals in Birmingham? Say that again? Are both of these properties in Birmingham? Yes. What made you go? We're going to purchase property thousands of miles away and hope for the best. Someone on YouTube. Oh, goodness gracious. They said that they-- Unsubscribe. Yeah, and then they-- the properties were just cheaper. It was just easier to get into the market. I mean, you could buy a house. I mean, I think I'd take, like, $47 in cash for it. So what did you buy the house for and what are you trying to sell them? Let's talk about flip number one. What'd you buy it for and what are you trying to sell it for? Because something tells me it's not priced right. Health number one, I think I'd take $64, $5. OK. That was what my husband gave me and what we had to go towards it. And then we took the hard money loan for $10, $2, $5 to rehab it. OK, so you've got, like, $168 all in on this house, right? Right. And what would it sell for? We could sell it while we were told. It could, it could sell for $229 and it did not. It didn't, it didn't move. Well, could it sell for? That's what you said. I mean, that's what everyone's saying. Could it sell for $180? Um, maybe, maybe. Well, I would sell it and get out of this thing and you still made a little bit of profit and you learned a lesson. The fact that you got zero offers makes me think that it's overpriced. OK. Are there other houses in the area similar that sold for $229? Yeah. The thing is, I refied, so actually I would be in it for a little more because my refi cost for, like, $4,000. So I, you know-- OK, so you're in for $172. I'm saying if you even sold it for-- you got $180 after fees, you still can walk away from-- You can walk away. I think y'all-- you know, there's-- we don't need to get greedy and try to get $230 out of it. Yeah. Right now we shouldn't get out of it. If you can get $12,000 more, then you can cut your losses on the other one and sleep well at night. I think that's the goal. The goal is to try to clear $12,000 from this and get out of the other loan and then never go into real estate, living again. How much have you invested into this third property? So that's the issue. So it's $138.5, and that is for all hard money loan money. It's a great hard loan money. What does it do? $138.5. It was due-- it was due, like, like three months ago, and he extended it again, and then I had to pay on top of the interest, the monthly interest. I had to pay an extra month of interest to keep it going. What's the interest now? $1,385. A month? Only, that's it. Yeah, a month. Until you do what? Paid all back? Until I sell-- yeah, until I paid all back. But the thing is, like, now, so this come June, he's going to attract me in addition to $1,355. A solid 1% every single month. That this thing doesn't sell. Right, but he's charging me a 2% on the third month, and it doesn't sell money. You need to get out of this chain, and you need to never touch real estate again. Let's just cut our losses. Yeah, sell it out a lot. I don't care what you have to do. And you are not meant to be real estate moguls, and unsubscribe from the freaking YouTube channel. And I hope this is a lesson to all of you, America. This is how Dave Ramsey went bankrupt in the '80s. It's the same exact concept. He's been telling you all for 30 years not to do this crap, and here you are trying to be a money mogul real estate agent, and it's going to rob you blind. I'm sorry, Jane. I hate that that happened. Create your free $3 budget today, the simplest way to budget for your life.
