The Ramsey Show Highlights: “I'm $1,800,000 In Debt”

Host: Dave Ramsey (Ramsey Network)
Guest Experts: Chris Hogan, Unknown Financial Expert
Caller: Ryan
Date: October 13, 2025

Episode Overview

In this episode, Dave Ramsey and Chris Hogan are joined by a caller, Ryan, who finds himself $1.8 million in debt with a $4.4 million real estate portfolio. Ryan’s case opens a candid discussion about the pitfalls of over-leveraged real estate investing, the importance of cash flow and ROI, and options for resetting a property-heavy investment strategy. The advice centers around optimizing for returns, getting out of bad debt, and deciding whether real estate or mutual funds are a smarter long-term play.

Key Discussion Points & Insights

1. Ryan’s Situation: Overleveraged and Underperforming Properties

[00:06-01:45]

• Ryan’s Portfolio:
  • $1.8 million in debt
  • $4.4 million conservative portfolio value (mainly commercial properties)
  • Rental income ranges widely: $5,000 to $19,000/month due to commercial lease gaps
• Past Win:
  • Profitable early deal: bought a building for $426k, sold for $1.6 million, then used a 1031 exchange on new properties

2. The Core Problem: Poor Rate of Return

[01:41-01:54 | 03:10-03:57]

• Dave’s Direct Critique:
  • “Your rate of return on that portfolio sucks.” — Dave Ramsey [01:41]
  • Ryan admits return is low (approx. 3.8% ROI)
  • Dave calculates, “You should be making a half million dollars on that” [03:39]
• Underlying Issue:
  • Properties not cash flowing to justify value and debt
  • Poor acquisition strategy: overpaying and overleveraged

3. The Psychology of Chasing Wins

[02:29-02:57]

• Dave’s Analogy:
  • “You’re still the guy that hit the slot machine once, and so you keep putting quarters in a stupid thing...” — Dave Ramsey [02:30]
  • Ryan acknowledges chasing past successes but believes he’s had more than one

4. The Right Real Estate Metrics

[04:06-04:46 | 07:10-07:52]

• Optimal Returns — Dave & Chris:

  • Residential: 8-10% cash-on-cash ROI
  • Commercial: 10-12% cash-on-cash ROI
  • Full IRR (including appreciation & depreciation): 15-20%+
  • “If I put a half million dollars in a house... we want an 8 to 10% cash on cash after all expenses are paid.” — Chris Hogan [07:12]

• Problem with Ryan’s Portfolio:

  • Debt outpacing rents; rents not “commensurate with values and debt service” [04:48]

5. Actionable Solutions: Clean Up, Optimize, or Get Out

[04:46-06:52 | 06:54-08:18]

• Sell Off Poor Performers:

  • “Shed yourself of the properties that are not giving you a return.” — Dave Ramsey [03:57]
  • Build up a model portfolio with only high-performing properties

• Reset Option:

  • “If you did 100% slate clean and dropped it all in mutual funds, you’d make more money…” — Chris Hogan [06:18]
  • Example: $2M in mutual funds → $200k/year, zero hassle

• Preferred Path:

  • Cherry-pick portfolio over 3 years
  • “Get rid of the properties that aren’t cash flowing but have equities and then get out of the debt business.” — Chris Hogan [06:37]
  • Use profits to pay off remaining debt, aiming for total debt freedom

6. Mindset Cautions & Forward-Looking Advice

[05:52-06:02]

• On Debt Addiction:

  • “I don’t think you’re going to do that because I think you like borrowing money.” — Chris Hogan [05:52]
  • Dave & Chris urge Ryan to prioritize freedom and discipline over chasing the next big deal

• Life Perspective:

  • Recognize the impact of decisions on family and long-term security

7. Final Benchmarks: ROI Reiterated

[07:10-08:18]

• Dave and Chris repeat:
  • 8-10% cash-on-cash for residential
  • 10-12%+ for commercial
  • Internal rates of return (IRR) should hit 15-20% for residential, 20%+ for commercial
  • Otherwise, go for mutual funds

Memorable Quotes & Moments

• Dave Ramsey [01:41]:
  “Your rate of return on that portfolio sucks.”
• Dave Ramsey [02:30]:
  “You’re still the guy that hit the slot machine once, and so you keep putting quarters in a stupid thing.”
• Chris Hogan [04:46]:
  “But you’ve just been buying crap.”
• Dave Ramsey [03:39]:
  “You should be making a half million dollars on that [portfolio]…”
• Chris Hogan [06:18]:
  “If you did 100% slate clean and dropped it all in mutual funds, you’d make more money than you’re making now.”
• Chris Hogan [07:12]:
  “We want an 8 to 10% cash on cash after all expenses paid.”

Noteworthy Timestamps

• [00:06-01:45] Ryan outlines debt, property value, and rental income
• [01:41] Dave’s critique of ROI
• [02:29-02:57] The ‘slot machine’ analogy and Ryan’s mindset
• [03:39-03:57] Dave’s return expectation and diagnosis
• [04:46-05:07] “You’ve just been buying crap.” — Solutions begin
• [06:18] Mutual funds as alternative
• [07:10-07:41] Reiterating proper real estate return metrics
• [08:00-08:18] Summary benchmark: why settle for less ROI?

Conclusion

Dave Ramsey, Chris Hogan, and additional experts make it clear: Success in real estate requires disciplined, metrics-based investing, not just expansion for its own sake. Ryan is advised to clean up his portfolio, eliminate underperforming assets, and refuse to settle for poor ROI—whether that means restructuring his holdings or moving into hands-off investments like mutual funds. The episode serves as a wakeup call for listeners tempted by leverage and “big wins,” emphasizing long-term strategy over short-term excitement.