I'm $1.8M In Debt With No Job

Summary

Podcast Summary: The Ramsey Show Highlights

Episode: I'm $1.8M In Debt With No Job
Date: August 19, 2025
Host: Dave Ramsey (plus Ramsey Financial Coaches/Advisors)
Guest/Caller: Tom
Source: Ramsey Network

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Overview

In this episode, Dave Ramsey takes a distress call from Tom, a listener who finds himself drowning in $1.8 million of debt with no steady job. The episode unpacks Tom's real estate investments gone wrong, the dangers of over-leveraging through debt, and discusses practical next steps under high financial stress. Ramsey and his team offer direct, tough-love advice as Tom describes the urgency and despair of his situation.

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Key Discussion Points & Insights

1. Tom's Financial Situation (00:06 – 01:12)

• Tom's Background:
  • Recently discovered Ramsey’s principles but finds himself already in a major financial crunch.
  • Previously employed in credit risk for commercial real estate, earning $130k/year.
  • Laid off for seven months due to a downturn and defaults in his sector; wife earns $130k/year.
  • Has picked up Uber driving to supplement income, but it's nowhere near his prior salary.

2. The Debt Breakdown (02:13 – 03:17)

• Liabilities:
  • Four mortgages: Includes a primary residence ($540k at 5.75% interest, $4,400/month) and three rental properties with varying debt, rates, and joint ownership.
  • Also holds a car loan and credit card debt.
  • Tom is trying to off-load rental properties; some are up for sale, one almost sold, another has seen significant depreciation and slow/no offers despite price drops.
• Action being taken:
  • Everything except the primary residence is for sale—considering even selling the primary.
  • Car is also being listed for sale to raise cash and reduce liabilities.

3. The Market and Undervaluing of Properties (03:46 – 04:54)

• Tom faces a depressed market in which properties have lost value. He's contemplating further price drops but is unsure where market reality lies.
• Dave’s Guidance: Get a clear, realistic view of what each property would fetch if sold “today, not what you wish would happen.” (04:01)

4. Risky ‘Buyer’ Option and Mortgage Rules (04:54 – 06:21)

• Tom mentions a "buyer" offering $20,000 if he becomes current on mortgage and taxes, but the deal involves the buyer “taking over the mortgage” without being on the title—a risky, legally problematic proposition.
• Dave Ramsey Response: Stern warning against such deals due to the “due on sale” clause in mortgages:
  • "That mortgage that you have has a due on sale clause. You transfer title, they're going to call the loan." (05:22)

5. Short-Term Problem Solving (06:21 – 06:59)

• Tom is behind on payments and property taxes; lender has put forced insurance on one property, adding to costs.
• Barely surviving on a $12,500 emergency fund.

6. Core Lessons & Ramsey's Tough Love (07:05 – 08:00)

• Debt’s Hidden Risks:
  • Dave delivers a memorable lesson on the underestimated risk of debt, particularly in real estate.
  • Quote:
    • “The things that you were taught in academia and I was taught in academia about risk analysis on real estate does not include the risk that debt represents. And you are now experiencing the risk that debt represents wholesale.” (07:05)
• Reality Check:
  • Tom’s case is a “face-slap” moment illustrating that more debt equals more risk and that tenant stability and repair costs were underestimated.
  • Most of Tom’s effort, after sales and debt repayments, will simply leave him breaking even or with little to show for years of high leverage.

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Notable Quotes & Memorable Moments

• On Real Estate’s “Risk of Debt”:

  • Dave Ramsey (07:05):

    "The things that you were taught in academia and I was taught in academia about risk analysis on real estate does not include the risk that debt represents. And you are now experiencing the risk that debt represents wholesale. I mean, right across your face. You're getting slapped repeatedly with the risk that debt represents."

• On Desperate, Dangerous Sales Tactics:

  • Dave Ramsey (05:22):

    "That mortgage that you have has a due on sale clause. You transfer title, they're going to call the loan. Read paragraph 17 of your Fannie Mae deed of trust. You'll see what I'm talking about."

• On Facing Market Reality:

  • Dave Ramsey (04:01):

    "What is the stinking thing really worth? What is the actual market value? What is someone going to walk up and pay for this house today? Not what have you got in it? Not what do you wish would happen."

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Practical Next Steps Discussed

• Sell everything except (and maybe including) the primary residence.
• Don’t engage in “takeover” schemes or under-the-table deals with buyers—these can trigger foreclosure.
• Continue job search, potentially outside commercial real estate, broadening skillset application.
• Use available emergency fund sparingly, maintaining essentials while waiting for property sales or new income.

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Important Segments & Timestamps

• Tom outlines his financial situation: 00:06 – 01:12
• Breakdown of the mortgages: 02:13 – 03:17
• Market reality check & sale strategies: 03:46 – 04:54
• Risky buyer (‘takeover’) scenario & legal warnings: 04:54 – 06:21
• Discussion of default, emergency fund status: 06:21 – 06:59
• Dave's summary & the core lesson about debt: 07:05 – 08:00

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Tone & Takeaways

This episode is a sobering reality check for listeners about the dangers of over-leveraged real estate investing. The tone is honest, direct, and urgent, reflecting Ramsey’s signature tough love style. Tom’s story is a cautionary tale about the underestimated risks of debt and the importance of conservative financial planning.

Listeners are reminded:
Never assume debt is safe, even with supposedly solid assets and tenants, and always be ready to face market realities rather than wishful thinking.

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For anyone who hasn’t heard the episode:
This is a stark, educational conversation packed with real-life consequences, actionable advice, and hard-earned wisdom about money, risk, and financial survival.

Transcript

[Dave Ramsey]

Brought to you by the EveryDollar app. Start budgeting for free today.

[Caller (Tom)]

Unfortunately, I found your stuff a little too late and I have quite the financial mess.

[Dave Ramsey]

Okay, tell me about it.

[Caller (Tom)]

So I have four mortgages, a car loan, and one credit card. And I started listening to your stuff. I was working. Me and my wife, we were building an emergency fund. And I have been trying to get rid of these rental properties for some time now. And I've made some leaps and strides in the last few months. And my question is pertaining to the remainder of our money, our savings. My wife is still currently working and she brings in 130,000. I am not working. I have been laid off for seven months. I have been looking tirelessly for work. I had unemployment and I that had ran out. I recently have just signed up with Uber and I've been doing that. But compared to my previous income, it isn't too great.

[Dave Ramsey]

What did you used to do?

[Caller (Tom)]

130.

[Financial Coach/Advisor]

Oh, wow.

[Dave Ramsey]

You used to make 130 doing what?

[Caller (Tom)]

Credit risk, commercial real estate.

[Financial Coach/Advisor 2]

Okay.

[Dave Ramsey]

And why were you laid off?

[Caller (Tom)]

$2 billion in defaults. Billion dollars of debt. Assets were sold off to another asset management firm and the position was eliminated. And given the current interest rate environment, a lot of people are skittish to hire specifically for commercial real estate.

[Dave Ramsey]

Credit risk underwriting wouldn't disagree with that. But the skills that you use to do that are still usable in other things. So that nuanced job position is probably gone for a while. I would agree with you on that. But you've learned to do financial analysis and risk analysis, and that can be applied to a myriad of different things. So you need to broaden your search.

[Caller (Tom)]

I'm closing in on one and I'm very optimistic. And it is a pay bump, but I'm not counting on it. It's not in my hands yet.

[Dave Ramsey]

All right, so we're working on your income. And so how can we best help you today?

[Financial Coach/Advisor]

Tell us about the for mortgages.

[Caller (Tom)]

So I have my primary 540 at 5.75 payments. 4400. I have a rental property with 453 at 6, 6.5% payment P&I is 2956, not including insurance, not including taxes. I have another one at 192p and I is 1019. And then I have another one with a business partner which is at 11 and a half percent. And that is 184. Which yesterday I am hoping that we are closing. Someone is purchasing at cash.

[Financial Coach/Advisor]

Okay, and what will you take from that 45,000.

[Dave Ramsey]

Okay, but you're out. Heck with the cheese. Let me out of the trap. Okay, I'm in. And so the other two are up for sale.

[Caller (Tom)]

So the other two are up for sale. The one that's up for sale, I've dropped the price from 340 to 295,000. My one question is, do I continue dropping the price until I get an offer?

[Financial Coach/Advisor]

Is that property number three?

[Dave Ramsey]

No, you just said. I said there's two left, and you said the one that's up for sale. Why are they not both up for sale?

[Caller (Tom)]

Everything is up for sale, okay, except your home. Except my primary, which we're considering also putting up for sale.

[Dave Ramsey]

Is your car up for sale?

[Caller (Tom)]

The car is going up for sale.

[Dave Ramsey]

Good.

[Financial Coach/Advisor 2]

Okay, good.

[Dave Ramsey]

So we're cleaning this out.

[Financial Coach/Advisor 2]

All right.

[Dave Ramsey]

I don't know. I mean, you've got to assess the real estate market there as to what's going on.

[Financial Coach/Advisor 2]

Okay.

[Dave Ramsey]

Is the market simply slow or are you overpriced?

[Caller (Tom)]

There was a significant depreciation in one of the properties, which is the one I had the specific question about to use the remainder of our savings to get out of that property.

[Dave Ramsey]

The question I want to do, the question I want to know is, what is the stinking thing really worth? What is the actual market value? What is someone going to walk up and pay for this house today? Not what have you got in it? Not what do you wish would happen. But if you were going to put this thing on the market and you were not standing in the forest, instead you were outside looking at the trees, what is it actually freaking worth?

[Caller (Tom)]

475,000.

[Dave Ramsey]

All right, and what have you got on the market for.

[Caller (Tom)]

I have it listed for 495.

[Financial Coach/Advisor 2]

Okay. All right.

[Dave Ramsey]

Well, if it's actually worth 475, that may be a bump high, but it's not enough high to keep somebody from coming and giving you a market value offer. So how long has it been on the market for? 475.

[Caller (Tom)]

The problem is. So this is kind of a unique situation. Someone has offered to purchase it and give me $20,000. I'm two months behind on that payment and I owe the property taxes. The conditions for them to come through with that are to be current with that mortgage and to be up to date on those property taxes and the $20,000.

[Dave Ramsey]

I'm sorry, they're going to take over your mortgage.

[Caller (Tom)]

Sorry, can you repeat that?

[Dave Ramsey]

You threw your phone out the window. I'm sorry, what happened? They can't take over Your mortgage, honey, they service it. No, they can't do that. How does a real estate guy not know this? Okay, that mortgage that you have has a due on sale clause. You transfer title, they're going to call the loan.

[Caller (Tom)]

I'm not going to be off the title.

[Dave Ramsey]

I know, but if you transfer title in form, even though you didn't move. So you haven't really sold the house, you just lease, purchased it to someone. No, thank you. No, thank you. I'll pass. Don't do that. That's a bad deal. A. If any of the insurance or anything else, any of the tax notifications, anything gets transferred out of your name and the mortgage company notices that, they're going to say you have transferred, inform even though you haven't moved the title, and they're still going to call the loan. Read paragraph 17 of your Fannie Mae deed of trust. You'll see what I'm talking about.

[Financial Coach/Advisor]

How much are you. How. How much is the total of the months that you are behind in the property taxes? Because you were talking about dipping into.

[Caller (Tom)]

Your emergency fund to clear that behind $6,000. They put a lender, a lender forced insurance policy on it, which is more than the other.

[Dave Ramsey]

Oh, yeah, Way more.

[Financial Coach/Advisor 2]

So.

[Caller (Tom)]

For the two months, I owe a thousand in insurance, which they build to a forced escrow account, and then 2956 for June and July's payment. You got.

[Dave Ramsey]

You have two issues. Number one, you've got to work on that issue. Number two, we've got to get a buyer. The buyer that you have is not a real buyer. Run him off. You're going to get in trouble here, man, because you're getting desperate.

[Financial Coach/Advisor]

Yeah. What's in your emergency fund? Real quick?

[Caller (Tom)]

12,500.

[Financial Coach/Advisor 2]

Yeah.

[Dave Ramsey]

Okay. So and so the lesson, Tom, is this.

[Financial Coach/Advisor 2]

Okay?

[Dave Ramsey]

The things that you were taught in academia and I was taught in academia about risk analysis on real estate does not include the risk that debt represents. And you are now experiencing the risk that debt represents wholesale. I mean, right across your face. You're getting slapped repeatedly with the risk that debt represents. So you went into all these properties thinking there was no risk and the tenants were going to pay everything, and the tenants were always going to be there and they were always going to pay, and they weren't going to tear up anything. There wasn't going to be any repairs. And you found out that the more debt there is, the more risk there is, and you just took on a boatload of risk for no money. One property sells, you make 45,000. The other one sells, you get out. Barely. You got no money. And you traded all of that for risk. So now I hope you can get out of these. And that's your goal. And I hope you get this job. And that's your goal. Create your free every dollar budget today. The simplest way to budget for your life.