I am $20M in Debt (Biblically)- Here’s What They Don’t Want You To Know About Leveraging Debt

My partner and I have over $20 million in debt through our real estate portfolio, and we did it biblically. In this video, I'm going to show you what the Bible actually says about debt and how to use it to grow your wealth. My partner and I buy large apartment complexes and run several businesses doing over eight figures a year. And I have started several ministries. And so doing things in alignment with the word of God is absolutely paramount for me and everything I do. Now, with that being said, Dave Ramsey and all the financial gurus out there that advise against debt and even say that it's against the Bible, first off, I'm not anti Dave Ramsey. I think that helping the average consumer get out of massive amounts of debt, they've been spending it on just stuff and liabilities is very important. But when it comes to investing, if we're advising no debt, I think that comes against the statistics of how most millionaires made their wealth. In fact, there's a statistic that says 97% of millionaires use debt. And typically when Dave Ramsey is confronted with stuff like that or situations where people did really well in that situation or in debt, he normally says, well, it still increases risk. And so then the conversation becomes, let's talk about risk and how much risk should we be taken? Is the Bible inherently against risk, or does it actually say we shouldn't be taking risk, that risk is a good thing, and to what degree that's what we want to talk about. And here's a couple things that is very important to understand is broke people buy liabilities while wealthy people buy assets. And here's a couple stats for you. 82% of Americans have a credit card, according to the Government accountability office, while 77% of Americans have some type of debt, whether that's a car payment, student loan, credit card, mortgage, and 97% of American millionaires use credit cards. And I'll say this, 100% of people have to pay taxes. And if they don't, the government's going to come and take their property. So either way, Jesus obviously says, pay taxes, pay what you owe. But saying that borrowing is bad is inherently wrong or a sin is to say all of these people are living in sin and not just the people who have payments, but anyone who uses a credit card at all, whether they pay it off in full in 30 days or not, whether they pay it off as soon as they purchase something or they make payments on it for a long time. It is saying anybody who uses a credit card. Because what this is saying is you use someone else's money and then you pay it off. So you were in debt for however long, whether it was a minute or whatever, you were in debt. So the question is, how far do we go with this? Now? What does the Bible say? What are scriptures in the Bible that actually talk about debt says you will lend to many nations but not have to borrow. So lending is actually important. Lending is very good. And there's other places in the Bible that says you will lend and don't even expect it to be paid back. So obviously there's an aspect to lending and not just giving, not just giving things away, but lending is a term, is a strategy that the Bible says we should be doing, but however, we should do it from a generous heart. So we're going to talk about our strategy in a second. 2nd Kings 4 this is a very important passage that needs to be understood when thinking about debt in a biblical way. The wife of a man, it's a widow that comes to Elisha and says that your servant my husband is dead. And you know that he revered the Lord, but now his creditor is coming to take my two boys as his slave. First off, that sentence alone says that there was a righteous man living righteously revered the Lord, but he was in debt. So that's number one. And Elisha's reply to her, to help her get out of debt, he said, go around and borrow jars from all your neighbors. Don't ask for just a few, ask for a lot. So he literally instructs her on how to get out of debt by using debt. He instructs her to use debt to borrow jars so that she could sell and make money and be able to pay off debt. Now, last story from the Bible that I believe is most important in this subject, and it is the parable of the talent. So many of you may know the story Parable of Talents. Master comes to the sons, gives 1 5, gives 1, 2, gives 1 1. Talent basically releases them. Master returns, they come back and two of them, the one with five, the one with two, had multiplied their wealth, had gone out, invested, put it to work and multiplied their wealth. The one comes back and he had hidden his talent in the field and comes back and says, I did not want to come back with nothing. I wanted to make sure your talent was still here. I wanted to make sure I still had it when you came back. And what happened to that servant? He was rebuked, he was destroyed, he was condemned. So the implication of this passage is that the biggest issue, the biggest sin is not Going out and risking your wealth, it is hiding your wealth, it is trying to preserve your wealth, trying to play it safe in life. That is the implications of this passage. You must be in a place where, where you're willing to risk. So if the issue of debt is too much risk, then we have to ask ourselves, well, how much risk is too much and where's the lineup? Because the Bible actually tells us to use risk. So what is our strategy and how do we buy apartments and how we accumulate so many apartments now? And it is through using debt. But it is through several risk mitigators that I want to break down for you right now. So if you want to grow your wealth biblically, I want to tell you how we do it and how we feel like the Lord is telling us to do it. And there's several things I want you to understand. I'm not going to break down everything about apartments right now, but I'm going to tell you the factors that you should understand while taking out debt. James 3 says the teachers of the Word are held to a higher standard. So when I'm on here on YouTube, whatever teaching, I understand that I will be held accountable. So all that I'm saying right now is not to say if you feel convicted about something that no, you shouldn't feel convicted in. Romans 14 says, Whoever has doubts is condemned. And it goes through. It says if it's not done in faith, it is sin. So if you have convictions about it, then you shouldn't do it. Don't let what I'm saying tell you you should. So back to it. Number one, risk mitigator and how to buy apartments and how we've scaled our portfolio to become what it is is we buy with pre built equity. We buy at a discount. So when we go find properties we're looking for or distressed owners, people who are ready to sell fast or who are just tired of operating the property or whatever and are looking to sell at a discount, you say, well what happens if the market crashes and that doesn't cover. You can't sell the property and immediately pay it back? Well, again these are risk mitigators that you got to consider. But you want to have other properties tied and most lenders are going to be looking for someone to personally guarantee the loan. So you want to have a loan sponsor or have somebody in there, whether it's yourself that is guaranteeing that thing can be paid back immediately if the market market crashes. Number two, banks are typically going to be assessing and they're only going to give you 70, 80% of the value anyway. But we are also buying for cash flow. So we're not buying properties that are in the red day one. We're buying properties that are cash flowing currently so that we have wiggle room to pay for the loan and make sure to service the debt. And number three, and most importantly, we are buying properties that are below market rent compared to the properties right next door. So typically there are properties in in the area that are significantly above rent and we can immediately go in there and increase the rents to increase cash flow. That is the three biggest mitigators for risk. When we're thinking about buying properties and making sure we scale safely using debt. So that is our strategy. If you want to learn more about how we buy apartments, how we structure the deals, we're typically refinancing after 18 to 24 months, getting better debt stuff, stabilize debt, that's cheaper and we increase cash flow and do all kinds of different things like that. If you want to check that out, we'll link a video below. So to summarize, what is the Bible saying about debt? What does God think about debt and how do you use it? Number one, the biggest risk is not taking risk, not using what God has given you well and investing it, unlike debt, is a sin. Not taking risk and the goal should be to get out of debt, but it is not inherently wrong. Debt should only be used if there is certain ability to pay it back and, and if everything goes wrong, you can pay it back in full. So in real estate, put up property as collateral and you could put up other property as well, personally guarantee it. And then also the Bible says lending is actually encouraged, but it is meant to be out of the generous, freely giving heart. Hope that helps. See you next time.