Episode Overview

Theme:
In this episode of The Ramsey Show Highlights, 21-year-old Braden calls in for advice after inheriting a costly real estate nightmare—he’s underwater on a rental property saddled with a $519,000 mortgage that he cannot afford. Dave Ramsey and co-host Rachel Cruze dissect the steps that led to this predicament, highlight the dangers of get-rich-quick real estate schemes, and provide a candid, step-by-step plan to help Braden escape a looming financial disaster.

Key Discussion Points & Insights

1. How Braden Got Into Trouble (00:06-01:38)

• Braden’s Background: At 21, Braden took over a house through connections with a house-flipping company, not fully understanding the financial implications. The company paid the down payment, but the mortgage—and later, the debt—were left for Braden to handle.

• Debt Details: The house is now worth less than what is owed ($519,000 mortgage vs. ~$500,000 market value). Braden is 60 days behind on payments, the property is rented out under his mother’s Airbnb account, and he’s losing $1,500 a month.

• Bad Mentor Relationships: Dave is incredulous about Braden’s so-called “mentor,” noting the risk of trusting unqualified or self-interested friends.

  “Friends like that, who needs enemies?” — Dave Ramsey (01:30)

2. Assessing the Financial Damage (01:38-02:16)

• Mortgage Structure: The mortgage is a conventional loan, fully in Braden’s name.
• Delinquency: Braden admits he’s prioritizing credit card debt payments over the mortgage, further complicating his cash flow, while the rental income does not cover expenses.
• Failed Sales Attempt: Braden tried listing the house at $540,000 without success, reaffirming that he overpaid.

3. Exploring Options: Foreclosure, Short Sale, or Other? (02:18-04:26)

• Foreclosure Risks: Dave warns that giving the house back to the bank would result in foreclosure and legal troubles.

  “If you give it back to them, they’re going to foreclose on you and sue your—. You understand that, right?” — Dave Ramsey (00:50)

• Short Sale Guidance:

  • Definition: Selling the property for less than the mortgage balance with the lender’s approval.
  • Execution: Braden knows a local agent specializing in short sales, but is told the process is easier without tenants.
  • Tenant Problem: Current lease runs until March; tenants are under an agreement through Braden’s mother’s Airbnb profile, potentially threatening her business reputation if things get ugly.
  • Dave’s Advice: Notify tenants of impending foreclosure, offer leniency on lease breakage, and start short sale negotiations—don’t delay for the lease to expire.

• Rachel Cruze’s Input:
  Rachel highlights that in real estate circles, trusted agents (like Ramsey-endorsed advisors) are essential, and Braden should lean on his network.

4. “Stacked Stupid On Top Of Stupid” — Tough Love & Lessons Learned (03:23-07:39)

• Dave’s Candid Feedback: The situation is a classic case of compounding mistakes: bad partnerships, getting into debt with nothing down, and falling for social media-hyped “get rich quick” real estate myths.

  "Man, y’all just stacked stupid on top of stupid, didn’t you?... I’m sorry. I’ve done worse. That’s why I just feel bad for you." — Dave Ramsey (03:23)

• Advice for Moving Forward:

  • Remove Tenants: Begin the process of notifying/relocating renters, even if it’s before lease end, to facilitate house tours during the short sale process.

  • Ramsey Trusted Agent: If Braden’s original agent won’t help with tenants in place, find a new one who will.

  • Short Sale Terms: Prioritize a deal “without recourse” to ensure the bank can’t pursue Braden or the co-signer for the difference between the sale price and the loan balance.

    “Remember this phrase: without recourse. Because that means they don’t come after you for the difference.” — Dave Ramsey (04:42)

• Co-signer Fallout:

  • The loan was co-signed by a friend of Braden’s former boss, now also facing financial risk.

  • Dave and Rachel stress never to co-sign or accept a co-signer due to the dire consequences when things go wrong.

    “You co-sign for a 21-year-old who’s overpaying for a piece of property, and you’re shocked you get stung?” — Dave Ramsey (05:39)

• Core Ramsey Principles Reiterated:

  • Never co-sign on loans.

  • Never buy property with nothing down.

  • Don’t rely on debt or partnerships for real estate investments.

  • Avoid “get rich quick” mentalities, especially in real estate.

    “The borrower [is] slave to the lender. And boy, don’t you feel that right now, man.” — Dave Ramsey (06:30)

5. Encouragement & Final Advice (07:39-07:58)

• Rachel’s Closing Words:
  Rachel acknowledges Braden’s initiative and ambition but encourages him (and the audience) to stick to sound, time-tested financial strategies instead of shortcuts.

  "You’re a go-getter... but this real estate world, there’s so many traps. Remember these principles, and it’s going to be a more boring ride, but a safer ride for you.” — Rachel Cruze (07:39)

Notable Quotes & Memorable Moments

• “Friends like that, who needs enemies?”
  — Dave Ramsey (01:30)
• “Man, y’all just stacked stupid on top of stupid, didn’t you? ... Every time I bring something up, there’s another hook in it.”
  — Dave Ramsey (03:23)
• “Never cosign. Never accept a cosign. Never buy a piece of property with nothing down. Don’t borrow up to your eyeballs and expect a piece of real estate to work.”
  — Dave Ramsey (06:00)
• “Don’t get in the Airbnb business either, Braden. Don’t follow your mom’s footsteps.”
  — Rachel Cruze (06:25)
• “The only ship that won’t sail is a partnership.”
  — Dave Ramsey (06:30)
• “You’re a go-getter... but real estate’s full of traps. Stick to these principles.”
  — Rachel Cruze (07:39)

Timestamps for Important Segments

• 00:06-01:38 — Braden explains how he ended up with a $519k rental property at 21.
• 01:57-02:16 — Braden discloses he’s already delinquent and losing money each month.
• 02:18-03:00 — Short sale as a potential solution discussed.
• 03:23-04:26 — Dave and Rachel provide candid critique and next steps.
• 05:11-06:25 — Discussion about co-signers, irresponsible borrowing, and lessons learned.
• 07:39-07:58 — Final encouragement and principles for moving forward.

Summary

Braden’s call is a cautionary tale about the dangers of over-leveraging, trusting inexpert mentors, and chasing quick-money real estate ventures. Dave and Rachel’s direct, practical advice not only offers Braden a path out via short sale but also delivers essential lessons on responsible investing, the value of patience, and the dangers of financial shortcuts. Anyone considering real estate investment—especially young or impressionable listeners—should take this episode's lessons to heart.