History repeats...and by the looks of this thread...it will again...
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Buy house or nsx first?
- Thread starter NSXFRIEND
- Start date
satx said:
You can have sex in your house, but you can't have sex on the NSX :biggrin:
Oscar
yes, finance 101 will tell u to buy the house. of course, buying a car isn't the same kind of "investment" people talk about. you're comparing very differnt thing here. on the one hand you want to buy a house to make some profit. on the other hand, you want an nsx (i think cuz you love the car).
forget for a minute about what everyone else is saying. house first house first. yes, strictly speaking (financially) that may make sense given the right conditions. ultimately, you need to understand what you really want and i'm not sure you realize what you want. until then, you may regret either purchase.
however, if you're not that serious about buying a home and you're content with renting for a while, why not just buy the car? you can't always judge everything you do in life as an investment. i like to see the "enjoyment" you get from the car that love as the investment itself. it's intangible and precious.
just think hard about what you think is important before you do anything and don't ask other people on what you should buy.
forget for a minute about what everyone else is saying. house first house first. yes, strictly speaking (financially) that may make sense given the right conditions. ultimately, you need to understand what you really want and i'm not sure you realize what you want. until then, you may regret either purchase.
however, if you're not that serious about buying a home and you're content with renting for a while, why not just buy the car? you can't always judge everything you do in life as an investment. i like to see the "enjoyment" you get from the car that love as the investment itself. it's intangible and precious.
just think hard about what you think is important before you do anything and don't ask other people on what you should buy.
I was in the same situation and had even got preapproved on the loan for the house, found the perfect one, and then all of the news about the declining housing market came up.
For me, i'm not planning on staying in the same city for more than 5 years and every real estate broker i've talked to with the current downturn if you cant afford to ride it out in the long term (10+ years) dont buy. So for me, right now, I couldnt justify it.
That, and, I got a ride in an NSX after 10 years of waiting and i decided i cant live without that kind of enjoyment in my life. A house? That doesnt make me smile, laugh, and go outside and stare at whats sitting in the driveway. That brings me happiness, and that makes me feel like i'm really living my life and not playing everythign so safe.
For me, it is the right decision. For you? Maybe not. The way i looked at it, i can turn around and sell the NSX (Gasp, with a gun to my head) if i needed a downpayment on a house without much, or any depreciation on the car. I cant turn around a do that with a house in a year or two.
For me, i'm not planning on staying in the same city for more than 5 years and every real estate broker i've talked to with the current downturn if you cant afford to ride it out in the long term (10+ years) dont buy. So for me, right now, I couldnt justify it.
That, and, I got a ride in an NSX after 10 years of waiting and i decided i cant live without that kind of enjoyment in my life. A house? That doesnt make me smile, laugh, and go outside and stare at whats sitting in the driveway. That brings me happiness, and that makes me feel like i'm really living my life and not playing everythign so safe.
For me, it is the right decision. For you? Maybe not. The way i looked at it, i can turn around and sell the NSX (Gasp, with a gun to my head) if i needed a downpayment on a house without much, or any depreciation on the car. I cant turn around a do that with a house in a year or two.
^^^
I understand what you're trying to say since we share passion for cars (like most people here) but believe me, getting a house, making a better place, taking care the grass, doing floors, throwing parties for your friends using rooms for work, sleep, tv, games etc etc is not bad either, specially if you put the same passion that you have for your car/woman on a house ... i'm 100% sure i'll get a NSX some day, buying the house costed me some $$$ (reforms etc ect) but i'm not wasting on rent ... i wish i did B4 :biggrin: ... and by the way if you have good credit 0% down is also available!
Oscar
I understand what you're trying to say since we share passion for cars (like most people here) but believe me, getting a house, making a better place, taking care the grass, doing floors, throwing parties for your friends using rooms for work, sleep, tv, games etc etc is not bad either, specially if you put the same passion that you have for your car/woman on a house ... i'm 100% sure i'll get a NSX some day, buying the house costed me some $$$ (reforms etc ect) but i'm not wasting on rent ... i wish i did B4 :biggrin: ... and by the way if you have good credit 0% down is also available!
Oscar
Ski_Banker
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jbum said:
Jbum, I agree with 90% of what you wrote. Just highlighting the part that irritates me to no end. Not at all calling you out, either, just pointing out how "conventional wisdom" is so damn wrong sometimes. BTW, I drag up this corpse because of the loan officer thread someone else posted. Anyway...in the spirit of Christmas...here's a little tale of recent investment lore.
______________________________________________
Ghost of Christmas Past:
-"Can't go wrong investing in stocks"
-"Diversify"
-"It's a new technology era"
-"Stocks may dip, but always come back...just look at this 100 year chart"
-"8% mortgage rate is ok, but I can get 20% per year in stocks"
-"What's a commodity?"
-"9% high yield bond??? You're crazy, I can get 50% returns on YHOO"
-"I'd buy 'Realestate.com' but that's about it"
-"(when oil hits $8/brl in '98) Why the hell would I buy an, (what's that?) Energy company???"
Ghost of Christmas Present:
-"Can't go wrong investing in Real Estate"
-"There is a housing shortage"
-"There is a land shortage"
-"I can make my monthly mortgage payments whatever I want them to be...how neat!!"
-"China / India / globalization = commodities (???)"
-"Oil shortage - invest in energy"
-"Fixed income - "ya done well, I'd be happy to take 14 bps BBB- spread over 10yr"
-"Stock market... eh...what have you done for me lately?"
Ghost of Christmas Future:
(stay tuned:wink: )
Note, also, that 4/5 of the population will read this and say "sounds like real estate and commodities are doing well in Christmas Present...better load up on those investments. :frown:
"
Good God! This is pretty much a no brainer ......house then car. I do agree that one must not be tempted by all of these stupid mortgages being offered. Interest only, 0% interest for the first 5 minutes just to get one to qualify, etc. The industry needs regulation unfortunately as they are apparently unwilling to regulate/control themselves. Those types of loans likely more often than not, are what drives the foreclosure market and leads people into financial ruin with no credit. Remember house then car. Say it over and over again.....
Ski_Banker
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Cairo94507 said:
I disagree, to some extent, except for on the issue of regulation.
1. It's not the financing type that will necessarily get people into trouble (but could), it's the issue of paying too much for the underlying asset. A $300k condo today selling for $200k in a few years - that is the bigger issue. Even if you have a very long time horizon (10+ years), why buy a house now when you can get the same one for 20% less in a few years. No brainer.
2. Housing won't have bottomed in the speculative areas until people are broken of the conventional "wisdom" (always buy a house, can't go down for any extended period, etc.). Judging by the responses here, we've got a long way to go (in time, or value, or both).
I ask: If 80% of the population can purchase a home, as they now can due to lenient lenders and creative financing, why should national housing prices rise/fall due to anything other than interest rate changes and changes in speculative demand?
BTW, I don't own a home (but could) so my money is where my mouth is 100% on this subject. Can't wait to buy the heck out of some real estate in a few years though. :biggrin:
Ski_Banker
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How 'bout that stock market? Another new high today. :smile:
Ski_Banker said:
I am glad i held out on the house. 5 Months later the over valued prices in DC metro and flooding of new homes are causing prices to continue to reduce. Analyst are saying that it will take at least one year to reduce inventory and prices to stabalize. My friend purchased a 600k townhome in Loudon county VA and it has lost 100k in value in 8 months time. He is stuck paying a $4800 mortgage.lol
Since I do not plan on living in the same home for more than 5 years and given the 5-9% appreciation value, I can save more money renting than I would make on appreciation nd Equity at least here in the DC area. Based on what I have read the hot markets are san bernardino la and of course Hawaii and Bay area and Seattle.
I have been watching the nsx market for past year and finding an excellent car in the mid 20's is difficult. Maybe I will get lucky in the following 6 months.
NSXFRIEND said:
Not to mention you're avoiding padding the bank's pocketbook with the massive interest payments of a mortgage. Interest has been largely overlooked as a factor in analyzing the wisdom of your timing to not buy. Particularly in the flat/depreciating market of the DC metro area, the $2-4k/month you'll pay in interest (or more, depending on how large your mortgage is), effectively offsets the appreciation you may experience. This is a double whammy if your property happens to be depreciating, causing you to LOSE equity, even while you're paying thousands a month in interest like the friend you mentioned is.
Over the next couple years, it is likely that the interest a newer homeowner will pay will be greater than the appreciation of the property itself, making owning a losing game, at least in the short term.
buy that beautiful rare NSX first.......there are plenty of homes you can buy later to put on top of your NSX
oscarhmoyano said:
That is not always true.......
Ski_Banker said:
You can still find good deals in any market. I have been offered an investment property @ $1.4 million ((2) side by side 6 unit properties in San Diego). It appraised at $2.1 in 2004. Is it a good deal? I'm getting the Schedule E to do analysis this week to find out. It's not as simple as it sounds but you can find motivated sellers (or they can find you). You can make money in real estate in any/every market. I helped my buddy buy his dream car last week (328gts) with just deals I shared with him since the end of Oct. If I had enough cash (all tied up currently) it would have been all mine :biggrin:
Ski_Banker
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Gaymond said:
Yep, that's true. But the hardest part of investing is sitting on cash and doing nothing. If you can overcome the urge to invest actively, all the time, whether valuations are good or not, you'll make a lot more money however.
Ski_Banker said:
I agree that doing nothing sometimes is the best choice. I have had some clients perform 1031 exchanges when it was perfectly clear paying the tax was the better choice than the upleg property. I sold one of my homes earlier (Hancock Park adj. area) this year and decided to eat the taxes rather than exchange for something else when nothing was available that met my needs.
Ski_Banker
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Gaymond said:
See the 1031 exchange is actually a situation where I would, for investment property, stay "in the market" because paying the LTCG is like guaranteeing that the market will decline another ~20% just to breakeven (if lots of appreciation). If you lived in one of the hot markets (most major cities, FL, etc.), I would reduce the market risk w/o paying the taxes by doing a 1031 exchange for rental property somewhere that hasn't run up (and thus, is not likely to drop much). Pick up that condo in west Kansas you've always wanted. Then 1031 again for someplace interesting in a few years when the market is bottoming. No quicker way to guarantee a loss than paying taxes when you may not need to.
Ski_Banker said:
The place I sold in 3/06 actually shot up about 15-18% from 10/05-1/06 (very small market) so it made paying the taxes a no brainer. I did not want to do a partial 1031 nor did I want to do a full 1031. I was happy to walk away with the money to pay down my other mortgages (trust deeds if you want to be technically correct). As I said nothing is ever as easy as it seems. I can make higher returns with other real estate investments/opportunities at the moment.
A house is not always the best investment option. Possible moves in the future might be something to consider. Purchasing a house is a long-term contract and unless you have job stability, I wouldn't really recommend it.
They don't always appreciate in value, but people seem to like the idea of owning one, even though you really don't. The bank owns it not you.
Come to think of it, you don't really own your house even if its paid off. Try not paying your property taxes and see what happens. The government owns it.
I do own my house though, about 40% of it. I rent one of the rooms out and wi probably rent the other 2 out when school reopens to make the payments on them. But my house hasn't appreciated in value, although I did pay 20,000 less under the appraised value when the economy went really bad here.
Think carefully and don't jump into something you haven't really put that much thought into.
It amazes me how many low mileage used cars are on the market because people like to spend what they don't have and get into debt.
Buy what you can afford. It is bliss to be debt free.
Happy holidays and take care.:smile:
They don't always appreciate in value, but people seem to like the idea of owning one, even though you really don't. The bank owns it not you.
Come to think of it, you don't really own your house even if its paid off. Try not paying your property taxes and see what happens. The government owns it.
I do own my house though, about 40% of it. I rent one of the rooms out and wi probably rent the other 2 out when school reopens to make the payments on them. But my house hasn't appreciated in value, although I did pay 20,000 less under the appraised value when the economy went really bad here.
Think carefully and don't jump into something you haven't really put that much thought into.
It amazes me how many low mileage used cars are on the market because people like to spend what they don't have and get into debt.
Buy what you can afford. It is bliss to be debt free.
Happy holidays and take care.:smile:
Ski_Banker said:
Just to be technically correct-
You could only lose this amount in LTCP (and actually 15%) if you were all cash in, fully depreciated in your improvements and the land was virtually worthless (Inland Empire) :wink: Other than that leverage can make the total tax less than the above stated and negative leverage can magnify the total risk and make it far greater than just the STCG/LTCG tax.
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I'm in the same situation... I live at home... this year I will have enough for a down payment or buy a used NSX in cash... now seeing that I'm single and living at home doesn't really help my chances with girls... I think the home in the long run will be better for my future.
Actually I'm gonna try to tack on the price of the NSX on top of my mortgage to see if I can buy both
Actually I'm gonna try to tack on the price of the NSX on top of my mortgage to see if I can buy both
I don’t quite understand the “House First” mentality. This would be a great choice a few years ago, but not now.
Here is my situation. I’m 28, live a rented house with my fiancé. Credit score is about 780-890 depending on the agency. I save 29 – 32% of my annual income in three different accounts 401K, SEP, and a Roth IRA. I max out each one every year. That will more than cover the possible ROI a house can give you.
As for gaining equity, the above accounts net me between 13-14% each year (that part takes a lot of homework). Buying a house now would simply be a gamble I’m not willing to take. By nature, I am comfortable with risks, and I have had some losses. However, I think it’s foolish to look for equity gains now.
Warren Buffet said “be fearful when others are greedy and greedy only when others are fearful." Now is not the time to be greedy in real estate. I plan to become greedy when there is more blood in the streets of the real estate market.
In the meantime, I’m shopping for my NSX
Here is my situation. I’m 28, live a rented house with my fiancé. Credit score is about 780-890 depending on the agency. I save 29 – 32% of my annual income in three different accounts 401K, SEP, and a Roth IRA. I max out each one every year. That will more than cover the possible ROI a house can give you.
As for gaining equity, the above accounts net me between 13-14% each year (that part takes a lot of homework). Buying a house now would simply be a gamble I’m not willing to take. By nature, I am comfortable with risks, and I have had some losses. However, I think it’s foolish to look for equity gains now.
Warren Buffet said “be fearful when others are greedy and greedy only when others are fearful." Now is not the time to be greedy in real estate. I plan to become greedy when there is more blood in the streets of the real estate market.
In the meantime, I’m shopping for my NSX
