Denver man running a money-losing Airbnb while living with friends admits to 2 big money mistakes. Dave Ramsey tells him to 'shovel out' of his mess

Then there was his next decision: sinking $100,000 in renos into the home to turn it into an Airbnb.

He thought “house hacking” would make the math work. It didn’t, leaving him $10,000 in the hole in the second year — even though he was living with friends, babysitting their kids in return for housing.

“You've made a mess, and so you've got to get the shovel out,” Dave Ramsey agreed. “The barn is full of poop.”

Both Ramsey and his co-host Jade Warshaw said Chris should sell the house and get a day job. Neither option appeals to him. Here’s why he may have to bite the bullet anyway.

Ramsey reality check

To date, Chris has invested $750,000 in his home ($650,000 plus $100,000 in renovations).

Unfortunately, Zillow and Redfin estimates suggest his home is worth far less — somewhere between $580,000 to $615,000. So he’s reluctant to sell.

“I think I might be falling into a sunk-cost fallacy,” he admitted, referring to the reluctance to abandon something you’ve invested heavily in, even if it’s a lost cause.

Still, with just $10,000 in total savings to his name and no paycheck, Chris doesn’t have the flexibility to wait out the market or absorb losses. So the Ramsey Show hosts encouraged him to cut his losses and sell, despite his reluctance.

As to getting a day job, Chris is equally reluctant.

“I’m not suited for a nine-to-five job,” Chris told Warshaw and Ramsey, saying that he thought being an entrepreneur was a better fit for him.

Ramsey wasn’t having it, suggesting that “not suited” meant “not preferred,” a distinction he doesn’t have time for when people are in debt and need a paycheck.

“First thing you’re suited to is to pay for food, lights and water,” he said. “Second is to pay your stinking bills. And the third thing is to find something that is a style of work you enjoy.”

Reactive fixes vs. financial stability

Research shows that when people are experiencing financial scarcity, it can impact their decision-making abilities (2).

A lack of liquidity is a major reason why reactive decisions, like Chris’s move to launch an Airbnb venture, can backfire.

Airbnbs are marketed as an easy income stream (3), but the reality is you need a steady stream of guests and must invest in ongoing maintenance.