Anyone looking to buy a 993?
 

I hate to say it but I am considering a quick sale of the car! My wife and I have stumbled upon a nice piece of real estate. I am about 65k short of buying it with no mortgage and this would be our home for life. I would really hate to part with this car but this house is really nice. Anyone?

BigP meet Nostatic. Nostatic meet BigP.

sorry...too rich for my blood :)

btw Kurt, did you finally get my check? Sorry for the delay, but the envelope finally turned up.

This is my half hearted attempt to sell my car. I am in no hurry. But a house my wife and I have looked at was just reduced 20k making it all to appealling. I cant have my cake and eat or can I?

Ok, who was running the pool on this? I believe someone owes me money.

With interest rates this low, why would anybody not carry a mortgage? Have your cake and eat it too.

Time to sell that stamp collection.

I agree and why would you not want to be able to use the house as a deduction?

It would be a shame to sell the car Brian!

House as a deduction? And what give the interest to a bank for what, thin air?

OK, I'm turning @sshole mode off for a minute BBP.

Do you have a note on your current primary residence, BBP? If so, you are allowed to deduct the interest you are paying on that note in your itemized deductions. This is what the other guys are talking about. Yes, given current interest rates, it is silly not to refinance (or acquire new property as you mention). As an aside, I hope you or your tax preparer have been taking this deduction-if not you need to look into some amendments on prior returns!! I'm not sure of the rules on this but you may be looking at cubic $$$ refund adjustment...

In essence, you are buying yourself your cake and floating the ability to eat it too at a low rate. Or, the interest you pay on the new residence allows you to keep your 993. Consider this:

-Go look at the 15-year rates available, plug in some numbers with the 65k on an internet P&I calculator.
-Note that this interest rate is effectively even lower since the IRS is going to let you deduct the interest expense each year.
-Realize you'll be free and clear in 15 years and will have been able to keep the 993.
-Weigh this extremely low relative cost of accomplishing your goals against the end result. Debt doesn't have to be a bad thing when managed properly.

-dtw

Nothing wrong with having a small mortgage.... or maybe they will take the car as payment toward the house..... worth a try ;)

I am aware of these deductions. I am aware of the cost of a mortgage over its term. I am a loyal, honest tax payer as well. Please dont jump on me for what I choose to do. If anyone would like to talk about buying a 993 please email me.

Dave, That's not quite true...it's not a dollar for dollar trade, the interest rate deduction. You get to deduct the interest paid from your income, not from the tax owed. The savings on taxes are variable, depending on your tax bracket. Brian, it pays to crunch numbers on this if you're serious about it....check with an accountant, or at the very least with your tax preparer, and then compare the scenarios...how they relate to you personally...this would help in your decision process.

I am with you on this Paul, and I have. Keep in mind with four children I receive many tax breaks. I think we all work towards the day we can hold our deed in hand. With four kids growing like weeds my expenses our high indeed. I love my car and I want to keep it and I may. I also want to mention I am not asking any where near 65k for my car, I wish I could but its worth 25% less than that and no tax breaks.

BigBpainta - oops, I mean Brian993 is correct. Carrying a mortgage for the deduction is the biggest real estate myth out there - no doubt created by bankers and real estate agents.

Take the following basic example:

$200,000.00 house
$ 40,000.00 downpayment of 20% conventional loan to avoid pmi
$160,000.00 30yr note at 7%apr

$ 1,064.00 monthly payment for 360 months.
$ 130.00 per month applied towards principal
$ 934.00 per month to the smiling banker! ( in the beginning )
$ 11,208.00 interest in the first full year
$ 7,600.00 2001 standard federal deduction for married couple
$ 3,608.00 benefit of deductibility over standard deduction
$ 1,082.00 real benefit assuming a 30% tax base

So......

You give the smiling banker $ 11,208.00 the first year and you get to write off a whopping $ 1,082.00 in real dollars. Much better off starting up a failing home business every few years and claim a small loss of a couple thousand dollars each year. IRS does not like you to have lots of unprofitable business' over the years but as long as you keep it small you will not stand out.

But.....

I also think it is a bad idea to get rid of nest-egg cash and investments just to pay for a dream home. Real money is hard to come by and save. Coming up with a couple extra hundred a month is much easier than saving up $50k. I suggest finding a home you truly can afford, put about 5% down, carry the other 15% down as a second mortgage, finance the 80% for as short a term as you can or go the 30yr route and put any extra monthly cash into the p-car - I mean put out any extra monthly cash as additional principle payments - termed paying on the back side. Make sure the loan has no penalties for early payment.

Bottom line. You can live in a Porsche but you can't drive a house.
Keep the car - who wants a nice house with a big empty garage.

The only way this makes any sense is if you take the money you would have plowed into the house and instead invest it in some asset that grows in value at a rate close to or faster than the rate of interest your paying for a mortgage. When the mortgage interest rates are low, this seems like a sure bet. Except this past year, and maybe next year. And beyond - who knows. Keeping the assets in a car, even a beautiful 993, just isn't going cut it as an investment.

what a wierd night on pelican bbs, firat nostatic now this...

well I don't know about the east coast, but in SoCal your nestegg is your house. We have seen 10-30% increase in housing prices annually for the last few years. We are mortgaged up to our noses right now, but we have short commutes and decent public schools. While the "salad days" that my parents enjoyed are probably gone (my parents bought their house in San Diego in 1958 for $12K. Today it is worth $400K), a house in SoCal is a pretty sound investment. Even if the market tanks, as long as we stay employed we'll be OK and any lost value should be regained (unless GW does something stoopid).


Land...they aren't making it anymore.

Can we erase this thread and pretend it never happened...