I Want to Borrow $100,000 From My Father-in-Law to Buy a Rental Property

Summary

Podcast Summary: The Ramsey Show Highlights

Episode: I Want to Borrow $100,000 From My Father-in-Law to Buy a Rental Property
Host: Ramsey Network (Featuring Dave Ramsey & Rachel Cruze)
Date: February 13, 2026

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Overview

In this episode, Matthew calls in seeking advice on a complicated real estate deal: buying an eight-unit rental property using a mix of personal funds and a $100,000 loan from his father-in-law. Dave Ramsey and Rachel Cruze dissect the proposed arrangement, highlight major risks, and offer clear recommendations in line with Ramsey principles. The conversation exposes the potential pitfalls of borrowing from family, overleveraging, and jumping into complex investments too soon.

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Key Discussion Points & Insights

1. Matthew’s Proposal: The Rental Property Deal

• Structure of the Deal ([00:05] – [01:29]):
  • Property price: $900,000 (8 units, 3% owner-financed, 10-year balloon payment)
  • Down payment: $100,000 personal, $100,000 loan from father-in-law
  • Seller contributes $100,000 in “in kind” repairs/improvements over 10 years
  • Seller to mentor Matthew and wife for two years

2. Matthew's Financial Situation

• Primary Residence:
  • Owns a home, $190,000 remaining on mortgage ([01:32]–[01:44])
• Income:
  • Household income approx. $135,000/year with growth potential ([01:47]–[01:53])
• Savings/Investments:
  • $100,000 cash, $250,000 in market investments ([03:58]–[04:05])

3. Rachel and Dave’s Reaction: “85 Ways This Could Go Sideways”

• Initial Skepticism & Major Concerns ([02:32]–[02:54], [03:30]–[04:39]):
  • Consistent, strong aversion to borrowing from family
  • Complexity and risk in deal structure (balloon payment, owner-finance, repair credits)
  • Large leap from single-family to multi-unit investing
  • Risks of leveraging investments and borrowing for more investments
  • Rachel: “I just see 85 ways this could go sideways. So it's not worth it.” ([03:30])

4. Borrowing from Family: Broken Principles

• Core Ramsey Principles Violated ([04:58]–[05:24]):
  • “We never recommend you buy investment property until your primary home is paid off.”
  • “We never recommend you borrow to invest in a rental property, always recommend paying cash.”
  • “We always tell people, never borrow money from family.”
  • Dave: “There’s a lot of principles here that are being violated all for the sake of a quote unquote, good opportunity.” ([05:24])

5. Seller’s Motivation and Ethical Caution

• Rachel’s Candid Analysis ([05:34]–[06:32]):
  • Warns that seller identified Matthew as a novice investor for an off-market deal
  • Rachel: “I think she saw. Ding, ding, ding. Here's my ticket out. I gotta get out of this horrible situation I'm in because my husband's sick...” ([05:34])

6. The Dangers of Borrowing from Family

• Potential Family Fallout ([07:45]–[08:13]):
  • Dave: “I've rarely seen it where they go, yeah, borrowed money from dad. It worked out perfectly.”
  • Risks: repayment disputes, family friction, unexpected needs for cash

7. Ramsey’s Advice: Start Slow, Reduce Risk

• The Peaceful Approach ([06:38]–[09:37]):
  • Rachel shares her experience of starting small with investment properties: “Start small and then start to work your way up... That is a peaceful way to do this...” ([06:38])
  • Dave recommends paying off the primary mortgage before investing in rentals ([08:48]–[09:01])
  • Save and buy with cash to minimize risk

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Notable Quotes & Memorable Moments

• Rachel Cruze (03:30):
  “Matthew, I just see 85 ways this could go sideways. So it's not worth it. It's not.”

• Dave Ramsey (05:24):
  “There's a lot of principles here that are being violated all for the sake of a quote unquote, good opportunity.”

• Rachel Cruze (05:34):
  “You thought you hit a great deal and you hit a horrible deal. Not good. Not good.”

• Dave Ramsey (07:45):
  “I've rarely seen it where they go, yeah, borrowed money from dad. It worked out perfectly. Paid him back and he was happy, I was happy. Usually it becomes, well, dad wants a piece of the pie now... And it just always ruins.”

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Timestamps for Important Segments

• Matthew Introduces the Deal: [00:05]–[01:29]
• Financial Snapshot: [01:32]–[01:53]
• Initial Cautions from Rachel and Dave: [02:32]–[03:30]
• Principles & Core Ramsey Advice: [04:58]–[05:24]
• Seller’s Motivation Analyzed: [05:34]–[06:32]
• Risks of Family Loans: [07:45]–[08:13]
• Peaceful Path to Property Investing: [06:38]–[09:37]

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Tone and Final Thought

Throughout the episode, Rachel and Dave maintain their characteristic direct yet empathetic tone. They applaud Matthew’s savings discipline but urge patience, risk avoidance, and adherence to time-tested principles. The consensus: say “no” to this complicated deal, pay off your house, grow your cash reserves, and only invest in real estate with cash, family harmony, and steady progression in mind.

Rachel Cruze (closing encouragement, [09:01]):
“You guys are amazing savers... You can do this slow walking it, but do it in the right order.”

Transcript

[Dave Ramsey]

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[Matthew]

Today my wife and I are looking at taking a hundred thousand dollar loan from my father to buy an eight unit rental property. And I just kind of wanted to see what you guys thought based on the details of the property and everything else.

[Rachel Cruze]

Yeah, let's hear it because not super excited about this as of now taking out a loan but for your father in law. But yeah, give me your, your numbers. What are you thinking?

[Matthew]

Okay, so I got a $900,000 property at 3% interest, owner finance. And so it's going to be $100,000 of my money, $100,000 loan from my dad. And then the owner is willing to do $100,000 of in kind money is what she calls it. And that includes repairs and improvements on the property for a period of 10 years. And then she's also willing to mentor my wife and I for two years. The first two years that we own the home. And then at the end of the 10 years it's going to be a balloon payment. And I know this kind of goes against a lot of the Dave Ramsey, I guess, principles, but I wanted to see what you guys thought because I, I think it might be a good opportunity for us to kind of get a business and start moving that way.

[Dave Ramsey]

Do you guys own a home currently, a primary home?

[Matthew]

Yes, we do own a home currently and we have no debts or payments at all. Besides that house.

[Dave Ramsey]

Oh, besides the house, what's left on that mortgage?

[Matthew]

190,000.

[Dave Ramsey]

Okay. And what's your household income?

[Matthew]

We make around 135,000. And there's a lot of room for growth. There's cool.

[Dave Ramsey]

How did this idea come up of the 8 unit and then your dad loaning you the money? Who brought it up?

[Matthew]

So we met this woman at a graduation and we had owned a single family home investment property and we got to talking to her and I kind of told her that we're real estate investors and she's like, oh well, I got a deal for you. My husband and I are trying to get out of this property because her husband is, is pretty sick and they're just trying to move down to Arizona. And so that's kind of how this got brought up. And then she is the one that's kind of structured this deal.

[Rachel Cruze]

Sounds like it.

[Dave Ramsey]

So she knows your dad and was like, well, if he ponies up 100, you pony up 100, we can make.

[Rachel Cruze]

This work and I'll mentor you for two years?

[Matthew]

Yes.

[Rachel Cruze]

From Arizona.

[Matthew]

Yeah, she's kind of curtail related to my wife. Not by blood or anything, but Matthew.

[Rachel Cruze]

I just see 85 ways this could go sideways.

[Dave Ramsey]

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[Rachel Cruze]

Matthew, I just see 85 ways this could go sideways. So it's not worth it. It's not. I mean, from the way the loan structured with the balloon happening in 10 years, all this borrowing from family going into a $900,000 investment property that you don't have the money for, you got. I mean, do you how much y' all have saved? How much cash do you and your wife have?

[Matthew]

So I have $100,000 for the down, and then we have about $250,000 in the markets right now.

[Rachel Cruze]

Okay, why don't you. Why do you have to borrow money from your dad? Take your money out if you're going to do the deal. I wouldn't do the deal. But don't. Don't borrow money from your dad. You have $350,000.

[Matthew]

Okay, got it. And I get. I don't know, I guess my thought is if I could keep it in the markets and make 10%, whereas I could pay my dad back 10% on the money that he loans the company.

[Dave Ramsey]

I mean, you're needing the stars to align with this. You need eight tenants who pay on time with no risk there. You need to pay dad back. You need to make money in the markets. There are so many variables here that.

[Rachel Cruze]

Could go wrong and all this just tanks, you're screwed. Right. If the market tanks, you're screwed. You can't find renters. You're screwed. If the market goes down, as Dave always says, if, if Trump burps and the market, you know, goes.

[Dave Ramsey]

He was like, we're going to invade Greenland. The stock market got spooked.

[Rachel Cruze]

That's right. Yeah.

[Dave Ramsey]

And so you just don't know. Well, I mean, yeah, but here, here's the parameters that are underlying house, Matthew. Yeah. The underlying principles are we never recommend you buy investment property until your primary home is paid off. Number two, we never recommend you borrow to invest in a rental property, always recommend paying cash. And number three, we always tell people, never borrow money from family. And so there's a lot of principles here that are being violated all for the sake of a quote unquote, good opportunity.

[Rachel Cruze]

And can I, I'm going to say this, Matthew, and I don't want it to be rude, but you guys had one single residential investment property, correct? You and your wife.

[Matthew]

That is correct.

[Rachel Cruze]

And you tell this lady that you're your, your real estate investors, which I guess technically you are. You have one investment property. And I think she saw. Ding, ding, ding. Here's my ticket out. I gotta get out of this horrible situation I'm in because my husband's sick. And yet I don't think it's like ill will on her end. I just think she thought, oh my gosh, here's a guy who's probably doing all these like, deals that you see on Tick Tock and he's, he's got eight VRBOs and here, you know what I mean? And he'll do it. I bet, I bet, I bet I could offer him this and we'll, we'll structure the loan where it works for him so I can get out of here. That's what she saw. I mean, honestly, she didn't list it. She didn't go and go to some, you know, investment firm that has, you know, 18 different investors around the country that go and buy property. You know, I mean, like. No, no, no. She found you and your wife and you thought you hit the, hit a great deal and you hit a horrible deal. Not good. Not good.

[Matthew]

Okay. Okay, thank you. I appreciate the advice.

[Dave Ramsey]

Not what you wanted to hear, I know, but.

[Rachel Cruze]

Sorry, Matthew. So listen, what you and your wife did, though, with. I would pay off your house, but I, I'm all about, I think, I think having investment properties is amazing. My husband and I do, my family. I mean, I think it's, I think it is great. You just have to start slow. Like the first one Winston and I got, this was, gosh, probably 10 years ago. It was a short sale condo in this like, kind of like sketchy part of Nashville. But it's what, we did it, but we got a deal. We saved up, you know, we, we bought it for really not a lot. Had to go do a lot of work in it. We sold it probably, gosh, seven years later when Nashville was on and it was Amazing. I was like, this is great, right? Like you have to start slow, start small. Don't start with a million dollar eight unit property. Cause you're about to take on all those people. Like that's going to be a huge headache. Like get some things under your belt, start small and then start to work your way up, which is not as flashy, not as exciting, but it is, it is peace. That is a peaceful way to do this and not create chaos. Because you guys are setting yourself up from chaos and maybe to ruin a relationship with your dad if this goes bad too.

[Dave Ramsey]

I've rarely seen it where they go, yeah, borrowed money from dad. It worked out perfectly. Paid him back and he was happy, I was happy. Usually it becomes, well, dad wants a piece of the pie now. He wants his money back because he needs to retire.

[Rachel Cruze]

That's it.

[Matthew]

Yes.

[Dave Ramsey]

Which means I need to sell the property. Oh. And he wants appreciation and so he wants that too. On top of his hundred thousand, on top of interest. And it just always ruins.

[Rachel Cruze]

Yeah. Or he gets family dynamics and he needs a hundred grand back. You know, and I don't know, there's just a, there's a lot, a lot of things.

[Dave Ramsey]

So I would, I would hold off and just go slow and, and it's not exciting.

[Rachel Cruze]

It's not exciting, but it's worth.

[Dave Ramsey]

What is the 250 invested for? What is that earmarked for?

[Matthew]

What do you, what exactly do you mean by like what am I saving that for?

[Dave Ramsey]

Yeah, you said you had 250,000 in the markets. I'm guessing that's not a retirement just in a brokerage account.

[Matthew]

Yes, it's a mix of IRAs and then just personal brokerage account. And that's just saving for retirement is kind of what I've been doing and kind of learning to trade it on my own and with the help from a financial investor and stuff.

[Dave Ramsey]

Okay. I was gonna say if you have liquid money that is really earmarked for nothing and you wanna take it and throw it at the house, the non retirement portion, you could do that and speed up the process, free up a mortgage payment and then you can stack cash fast.

[Rachel Cruze]

And you guys are amazing savers. So then yeah, stack up some cash and get 300 grand here. You know, like save that over the next five years or whatever your income is and then go buy a rental property with cash and that's it. You know what I mean? Like you can, you can do this slow walking it, but do it in the right order. Pay off the house if you have the money, I would pay off your primary home. And the key is just stay away.

[Dave Ramsey]

From this, is reducing risk. And right now we're just adding more and more and more risk. And your first real investment property to be a $900,000 8 unit. Just feels like we're biting off a lot here.

[Rachel Cruze]

Yes.

[Dave Ramsey]

I mean, for the purposes of helping this woman move.

[Rachel Cruze]

Right.

[Dave Ramsey]

With her ailing husband.

[Rachel Cruze]

Yeah. I mean, eight different families, eight different situations. I mean, that's a part time job right there of what you just signed up for as a landlord. So there's not passive income. It's a lot of work. A lot of work.

[Dave Ramsey]

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