Tell me why this is a bad plan

[hj 60]

Invest in the house to keep the mortgage as low as possible, whats left save for the kids school.
Eat dry bread with water, stretch, enjoy the sunset, go smell a pancake.

 

[TonyP]

Getting close to pulling the trigger on a new LC200. Just need to close on the house in a couple months, then it's time to find the best deal on a new one.

Buying a house in this market? Brave.

 

[RET2]

Buying a home today is probably the best investment one can make, provided you buy smart. Interest rates are very low historically.

 

[TonyP]

Buying a home today is probably the best investment one can make, provided you buy smart. Interest rates are very low historically.

They said the same thing in 2007. I dabble in real estate investing. The market (around here at least) is 100% sellers. There will be a market correction, maybe not like 2008, but a correction is enviable. Just my opinion at least.

 

[Markuson]

They said the same thing in 2007. I dabble in real estate investing. The market (around here at least) is 100% sellers. There will be a market correction, maybe not like 2008, but a correction is enviable. Just my opinion at least.

I think you meant inevitable...

 

[TonyP]

I think you meant inevitable...

That too. Auto correct after cardio means typos

 

[RET2]

Key word was "smart" Renting is just making someone else's mortgage payment isn't it?

 

[TonyP]

Real estate.
A strange game. The only winning move is not to play. How about a nice game of chess?

 

[Markuson]

Real estate.
A strange game. The only winning move is not to play. How about a nice game of chess?

Greetings Professor Faulken...

 

[jwestpro]

Getting close to pulling the trigger on a new LC200. Just need to close on the house in a couple months, then it's time to find the best deal on a new one.

Is this seriously a 2 yr thread pause - follow-up?! hope life has been good since feb 2016.
Honestly, I had paperwork all done and negotiated, took new one home for extended test drive just me and gf. Decided to wait as I’ve bought too many new vehicles over last 12 yrs.

In hindsight, I’d be just fine w another 06 LC 100. They are killer value plays right now if you think of where you can put dollars to other uses. Example, new lc200 $ = LC100 & maybe piece of land, etc. you could save the equivalent of 10 $5000 trips. You could invest $2000 each into 25 different stocks, or buy a Sweet as heck Kimberly Karavan... or just dump it all into a nice new shiny thing ...

 

[jwestpro]

They said the same thing in 2007. I dabble in real estate investing. The market (around here at least) is 100% sellers. There will be a market correction, maybe not like 2008, but a correction is enviable. Just my opinion at least.

Lol there is almost no chance of a 2008-ish correction looming. Of course there will Be fluctuations but that was a special mix of circumstances. W

Now, I also would be careful whatvsnd where I’d buy right now. For example I wouldn’t buy on my street, I like a deal and right now they’re harder to find. You have to have time as a buyer and be ready when one pops up or have nonstandard priorities.

Here is Seattle it’s nuts having this house supposedly worth twice now what it was 5 or so yrs ago. There are areas but you have to look where it’s not hot.

Biggest thing like a guy above said, don’t stretch yourself AT ALL on too much house mortgage. Who ever complained that they had a smaller payment than they could afford...? Better to feel like rounding up the payment every month rather than barely sending it on time or ever worrying.

Sorry for unsolicited preaching !

But used and even more than 3-5 yrs. it’s a freakin Toyota

 

[TonyP]

Lol there is almost no chance of a 2008-ish correction looming. Of course there will Be fluctuations but that was a special mix of circumstances.

OK...
We'll see

 

[Roy Park]

I vote get the 200. I also vote on waiting on the housing market. Almost every homeowner I know wants to believe that this is not a bubble and that the market is sustainable. Why wouldn’t you hope your hone which is valued at double its value from 5 years ago is an accurate valuation? I hear all types of rationalizations, such as, if 2008 never happened, the arc or growth would be linear. But it did happen. Our whole economy took a dump. Oh and one of my clients is a Company that owns a major city in So Cal and then some. And I’ve heard that they are firesaling their long term leases on commercial properties in preparation for a pretty major correction. But hey, what do they know? My mom might be right.

 

[TonyP]

And I’ve heard that they are firesaling their long term leases on commercial properties in preparation for a pretty major correction. But hey, what do they know? My mom might be right.

Yup. Most of my investor associates started liquidating a few months ago. The market around here is pretty sustainable though because of the Air Force base and it's transitioning to F-35s. But that's another situation altogether. Even so, they're liquidating.

 

[NMNORSSE]

Under the 2017 tax reform, if you can buy your LC/LX for a business reason, the answer is definitely buy new.

Check with your CPA first, of course. As I understand it, you can claim the entire purchase price on your taxes (depreciation) which means your tax bracket is your discount.

If you pay 30% combined state and federal taxes, you get what amounts to a 30% discount off the purchase price. So let's say out the door with taxes etc it's $80k, your effective price would be $55k. On the used market, 55k gets you something 4 or 5 years old PLUS you pay income tax on the 55k you paid for the LC. At 30% income tax, you are really paying 70ish. So, if you buy new in the name of your business for net $55 and sell it after 5 years for $50k, it was almost free at 1k/year.

There is a draw back: you'd have to use it for 50% business purposes for 5 years. If you sold it within those 5 years, there would be some depreciation recapture.

Talk to your CPA to get the details.

 

[linuxgod]

In most cases (business tax deductability aside) the smarter financial play is always to buy used and let someone else eat the depreciation. i.e.

New 2018 LC with 0 miles = $85k
Used 2015 LC with 40k miles = $55k
Used 2011 LC with 80k miles = $40k
Used 2008 LC with 120k miles = $28k

You could buy three 2008 LCs for the price of one new 2018 LC. If you assume the truck goes 300k without major issues, that's 540k miles you could put on the 3 of them vs 300k for one new 2018, or almost another truck's life worth of miles. (Or consider three 2015s for the price of two 2018s and get 210k additional usable miles).

Even if you assume 0% financing on the new vehicle and 10% on the used ones it's still a significantly better investment to buy used. I've bought vehicles new before and there are many emotional reasons to do so, but finance isn't one of them.

 

[NMNORSSE]

In most cases (business tax deductibilty aside) the smarter financial play is always to buy used.

Agreed. Whatmore, with an LC there is less reason to buy new than other brands.

I'd just note that a new LC sticker might be 85, but you can get it for 78 with a little effort or a costco membership.

 

[arich]

78 with a little effort or a costco membership

TELL MORE PLEASE

 

[jwestpro]

OK...
We'll see

Well, I'm also a trader so while regular folks get home from work and discover their 401k has been decimated, I've already sold and bought put options.... it's all about perspective and time frame. Today I made $ on Russel index dropping off from all time highs while also on Merck popping on good cancer treatment news.

However, bitcoin fools got really hammered over the weekend!

 

[jwestpro]

78 with a little effort or a costco membership

TELL MORE PLEASE

When I was close to buying, I found similar % could be had. You just have to shop around and not listen to that "we don't negotiate" BS. Someone, somewhere, will, always.