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The Ramsey Show

What Do We Do With Our Rental Properties? (Hour 3)

23 Jun 2023

Transcription

Transcript generated automatically by AI and may contain errors.

Chapter 1: What is the main topic discussed in this episode?

28.972 - 48.074 Ken Coleman

Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studio, this is The Ramsey Show, where we help you win in your life, specifically your money, your relationships, and your work. I'm Ken Coleman, joined by the fabulous, the incomparable... Rachel Cruz is sour.

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48.114 - 51.258 Rachel Cruz

You like that? That's great. Great word. Great adjective.

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51.278 - 63.855 Ken Coleman

Yeah, there you go. I studied all day for that. 888-825-5225 is the phone number. And Rachel and I would love to help you. We really enjoy this, and we have so many new people coming in all the time. And so I want to point out two things.

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63.895 - 76.991 Ken Coleman

If you're new to the show and you're trying to figure out some of the language we use, we're talking about baby steps and then the different numbers and all that, I want to make sure that you know that we have a Get Started button at RamseySolutions.com. That's the mothership, the website there.

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77.471 - 96.292 Ken Coleman

And you can just take just a few minutes, a brief survey, and we kind of let you know where you are in this journey that we call financial peace and the baby steps. And you get caught up pretty quick. And now you feel like, okay, I understand how all this works. Because quite frankly, we challenge you with some pretty countercultural ideas about money. And so we want to get you caught up.

96.332 - 107.512 Ken Coleman

So go do that. It's the Get Started button at RamseySolutions.com. All right, let's do what we're here to do is just encourage and coach people. Audrey's up next in Chicago, Illinois. Audrey, how can we help?

109.015 - 134.516 Rachel Cruze

Hi. My husband and I – thank you for taking my call, first of all. Of course. My husband and I live in our home that we paid off about six years ago. And, um, shortly after that we purchased an apartment, um, because my daughter was paying ridiculous amount of rent in the city. So we thought, why don't we buy something and have her rent it? So she did.

134.976 - 163.206 Rachel Cruze

So, um, I think we're about a little bit over halfway, uh, done paying that. And, um, late last year I lost my job and we purchased a property. that we wanted, um, for planning towards our future, which, uh, for our retirement, um, because, um, we live in the Midwest and it's cold. So we want to go somewhere warm because, um, I have some health issues.

163.606 - 181.855 Rachel Cruze

So anyway, long story short, I'm wondering if we would be better off selling the apartment that we have the condo and. having less debt because now I feel like I'm not used to having any debt. And so I'm wondering if we have taken on too much.

Chapter 2: Should we sell our rental properties?

344.346 - 346.048 Rachel Cruz

And how, how much do you guys make a year?

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347.63 - 353.857 Rachel Cruze

Well, before it used to be 200, but now it's cut in half because I don't, I'm not working.

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355.439 - 358.863 Rachel Cruz

Okay. Okay. So one, so a hundred, a hundred grand a year.

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359.483 - 359.944 Bruno Satin

Okay.

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359.964 - 380.213 Rachel Cruz

Yeah. Um, and how soon are you guys to retirement? How soon will you guys be actually utilizing this condo? Condo number two. Probably in like seven years. Okay, and you plan on... We didn't have the option to rent it. Okay, but you plan on using it within the seven years, but you think, will you be there full-time?

380.293 - 386.984 Rachel Cruz

Will you sell the home that you guys currently have to go to this condo full-time, or will you keep both was your plan?

387.986 - 406.885 Rachel Cruze

Well, we've thought about actually selling our house and then maybe getting a townhouse or something to not have to worry about the maintenance. But for now, with the housing market, I've been told that it's not to our benefit to do that. So we're fine in our house now, but I don't know what our plan is for the future.

Chapter 3: What should we consider when our business isn't making enough?

406.905 - 407.085 Rachel Cruze

Yep.

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407.526 - 411.35 Rachel Cruz

And then the other 130 is going to be due when?

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411.41 - 416.736 Rachel Cruze

Next, probably next summer.

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417.537 - 419.119 Rachel Cruz

Next summer. So a year from now.

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420.26 - 431.662 Rachel Cruze

Yeah. And we've been looking at options on how we're going to finance that, whether to do a HELOC or a, I think there are a couple of options, a HELOC or I forgot what the other one is called.

431.683 - 433.566 Rachel Cruz

Man, Audrey, and how much do you guys have in retirement?

436.031 - 445.852 Rachel Cruze

In my 401k, I have over a million, probably 1.2, I think. My husband probably is close to a million.

445.972 - 447.475 Ken Coleman

And your primary home is paid off?

448.248 - 458.652 Rachel Cruz

Yeah, our property home is paid off. And sorry, you guys are how old? All the numbers, but it helps with the retirement and everything, taking it out. Oh, I'm sorry. I'm 54, and my husband is 57.

Chapter 4: How do we manage our debt while planning for retirement?

459.173 - 481.756 Rachel Cruz

Okay, so you guys are, yeah. And our... Our home is paid off. I mean, your net worth, your overall picture, Audrey, you guys can't afford this. I mean, you can, is what I'm saying. I just want you guys to be able to save and do what you can in the next year to be able to not only just cash flow this 130, but gosh, I would almost pay off this other apartment first.

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481.877 - 489.311 Ken Coleman

I don't think they can cash flow it. If I heard you right, Audrey, you're not going to be able to cash flow this out-of-country condo. Is that right?

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489.331 - 492.474 Rachel Cruz

For the 130. I know, but when he turns 15, yeah.

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493.195 - 493.896 Ken Coleman

I'm selling.

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494.897 - 496.659 Rachel Cruz

Which one? Condo A or Condo B?

497.26 - 501.725 Ken Coleman

I'm going to try to get out of Condo B. I think Condo B. I think you guys will have other options.

501.986 - 502.887 Rachel Cruz

I know. That's my other thing.

502.907 - 508.233 Ken Coleman

So if they can't get their money back, I'm selling Condo A, and I'm going to pay off Condo B like it's my life depended on it.

508.253 - 516.122 Rachel Cruz

With that. But if you can get out of Condo B, I would, Audrey, because in the next four years, you guys may even switch locations of where you want to be, considering it's an out-of-the-country destination. Yeah.

Chapter 5: What are the implications of pulling from retirement for education?

560.836 - 570.412 Ken Coleman

Okay, Rachel, I've got a fun treat for you here. I don't know if you, I love the realtor.com, the Zillows. Oh, yeah.

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Chapter 6: How can we effectively budget for our daughter's vet school tuition?

570.432 - 579.808 Ken Coleman

I always like looking at the local real estate market, largely because I want to see what the trends are doing. Yeah. And I get a little house itch every once in a while. I don't act on it.

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580.379 - 581.701 Bruno Satin

But you see what's out there, Ken.

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581.721 - 590.811 Ken Coleman

I'm known to get a little house itch. And, you know, some people look at cars all the time. I'm looking at houses all the time. And so this story got my attention, and I thought it would be fun for our audience.

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590.831 - 612.484 Ken Coleman

Now, for our podcast listening audience, the radio and all that, you need to go to YouTube a little bit later this afternoon or later this week if you want to see this segment because we've got some pictures. This is a visual segment. And so I've got an article here in my hands. And the headline is Zillow Gone Wild. I love doing that sound. James hates it. That's partly why I do it.

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613.045 - 619.638 Ken Coleman

Zillow Gone Wild broker make Jared Hewitt's Oklahoma City home listing viral.

619.919 - 620.079 Rachel Cruz

Can I?

620.34 - 620.821 Ken Coleman

Yeah, go ahead.

621.963 - 622.785 Rachel Cruz

Who's Jared Hewitt?

622.805 - 623.286 Ken Coleman

I don't know.

Chapter 7: What alternatives exist to avoid student loans for education?

631.278 - 636.874 Ken Coleman

Is he anything other than the owner of this home? Do we know? Austin? Don't know.

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636.894 - 638.699 Rachel Cruz

We don't know. Okay, great. Okay, good. Just double checking.

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638.739 - 640.002 Ken Coleman

But I love that you asked that.

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641.787 - 648.754 Rachel Cruz

voice-over actor that worked for Disney Channel. Okay, good for Jared, and he's done quite well. Well done, Jared.

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649.115 - 684.113 Ken Coleman

He's done well. So this has gone viral, and I guess it was posted on Zillow Gone Wild, and that's a site, I guess, and it featured this home. It's got five bedrooms, five baths, and magic in every room. I don't know who wrote that, but that's kind of interesting. I got questions. It's listed for $1,593,000 or, Rachel, $2,450,000 if you keep the furnishings.

684.553 - 686.636 Rachel Cruz

So close to another million with the furnishings.

686.696 - 687.116 Ken Coleman

Absolutely.

687.136 - 690.34 Rachel Cruz

So anyway, this realtor says- Do we know how big it is?

690.455 - 691.877 Ken Coleman

I don't see square footage.

Chapter 8: How do we balance financial obligations with family support?

693.8 - 696.945 Rachel Cruz

4,800 square feet. Almost 5,000. Okay. Yeah. All right.

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696.965 - 703.695 Ken Coleman

So there you go. All right. So can we show the pictures, guys? Here we go. Wow. Now that looks like the dining room to me.

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704.276 - 706.239 Rachel Cruz

So, so unfortunate. And there we go.

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706.259 - 708.562 Ken Coleman

I will tell you that I'm immediately feeling dizzy.

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708.863 - 709.003

I know.

709.405 - 713.936 Ken Coleman

I have a hint of dizziness. Look at that living room.

713.956 - 718.486 Rachel Cruz

And can we just talk about the filter on these pictures that really brings out the primary colors, Ken?

719.589 - 725.743 Ken Coleman

See, it needed someone of your ilk to explain that to me. I would have thought that's what it looks like. You're saying that's a filter?

725.977 - 729.942 Rachel Cruz

No, no, it probably looks like it, but you can tell it's an exaggeration.

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