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      07-12-2013, 01:46 AM   #89
grimlock
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Actually it makes sense to get a new M3 when you're young instead of buying a house
cause bang bitches
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      07-12-2013, 02:25 AM   #90
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Originally Posted by Zeros and ones View Post
I live in cali and he is way off base.

a cheap shitty place with one bedroom, kitchen, a living room at $1200.

You start adding roommates it starts to go up from their. I have a friend that is living with 3 other room mates. Each room mate pays up 600 every month and that is a good part of town.

I pay only $200 dollars more every month and I have a house and I live in a very nice part of town in Southern California.

So follow me with this for a second. He said that he can afford a couple of M3s. So lets say 2 is a couple. We will assume afford is to lease. To lease and m3 for a term of 36 months, drive 15000 miles annually and put down 2500 come to $787 every month. So with two M3s is about $1574 every month. And lets assume he is also paying 600 every month cause he has roommates. That brings the total to $2174. This is a lot of money just for cars and rent.

But lets stick with one M3. If he takes his rent money, again assuming he is paying 600 (we don't actually know what he is paying very month) and re purpose that for mortgage and getting rid of California ago of, I can afford a couple of M3s and re-purpose that money to Mortgage, that brings that total to $1387. Hmmm... that is a nice chunk of money to be paying for mortgage. That is how much I was paying in California for my mortgage before the housing crisis.

However, if he is referring to owning a house on mount olympus in california, bell air, some parts of Beverly hills or just any house all up in the hills with a exceptional view, than I will agree with him. Till than, I can not say that I can agree with his statement.

Again... this are all assumptions based on information I know from my friends and, from myself being an actual home own for over 7 years, and the statements the OP made. I have no idea how much he actually pays for rent or his M3.

If you are smart about it you can purchase a very nice house with a very low interest rate right now and it would be much better than renting out.




My statement was not about roommates or even geared towards that. It was toward a particular comment that he made about renting is cheaper than owning a house and how he can afford a couple of M3s.

I do know one thing is us Californians have bigger egos and mouths than we can actually afford. I lost count how many people I know that have multiple fast cars yet they live in shitty places spouting off their mouths on how great they are cause they can smoke anyone on the road.

you don't need to buy or live in a 3.5 million dollar house unless you choose too. To each his own though. But if you are as money savvy as you say you are, wouldn't it be better to buy a house that is even $600,000 and than rent it out to three attractive women? But as you said, their is no point in buying a house unless you found a wife or anti-social.

But if you like throwing your money away on renting than that is your choice.
I don't disagree with your numbers, but just because one can afford a house from a cash flow perspective doesn't mean he should buy one, as a matter of fact, it's a pretty dangerous thing to do.

It's interesting because the owner of the 3 bed townhouse I'm living in right now actually is kicking us out at end of our lease so he can sell the place (mkt price about $1mm). Market rent is about $4k, that's the owner's income, he also pays for maintenance (call it 500 a month) and property taxes (call it 1k) - I'm being super conservative about the last two numbers here. So if I were to buy this house based on those numbers, I'm looking at a less than 3% return on my investment per year unlevered. That to me makes no sense at all.

Of course you can say well I'm only putting say 20% down so my returns relative to my cash investment in the house is a lot higher. But the principal risk here is enormous, if your house goes down 4% then you basically lose your equity.

One thing I can never get comfortable yet with buying a house is that right off the bat you lose say 10% in broker fee when you buy and sell a place, so you are really stuck in it for the long term. But given that interest rates can only go higher from here and economy is only barely chugging along, I think they are reasons to be concerned as to how much appreciation potential there is. Obviously if you bought in 08 / 09 then you've absolutely killed it. But now is a totally different game.

Now lets say if you want to live in this townhouse I'm talking about, would you rather buy it, be stuck with it in the long term, make minimum returns from rent and hold the bag when sht potentially go south, or would you want to be the guy renting it for cheap and have the flexibility to actually buy a worthwhile property when it comes along? I think this applies to most properties I've seen, and I've seen quite a few. The point is one can't indiscriminately say buying a house is the right thing to do, without considering how much it cost, and how much it rents for.
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      07-12-2013, 02:28 AM   #91
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Originally Posted by Goat Rodeo View Post
House:
- Real estate taxes
- Maintenance
- Upgrades required to maintain saleability (have you priced a kitchen or bathroom remodel lately?)

Renting:
- Having to deal with tenants
- Having to deal with tenants
- Having to deal with a management company

There are easier ways to make money. Any stock or business can become worthless yes, but you seem to ignore what has happened since 2007. Many real estate investments have become worthless or worse as well.

For example, my friend
- Bought a fixer-upper house near the water in a well located development for about 300K in 2006. Comps were around 400K.
- Invested 50K replacing AC, remodeling kitchen, flooring, replacing water heater, etc.
- Pays 5K per annum or whatever in taxes
- House is currently worth 180K, comps are around 150-180K
- Because he only spent 50K remodeling the place people are passing on his unit even for 180K because he needed to spend about 100K to compare with fit and finish of longer term owners.
- Currently rents it out for about $1200/mo

Had he invested that 300K in the stock market at the *worst part* in 2007 and just held through the downturn till now he would probably have ~500K worst case right now. Instead he is significantly upside down and has to deal with tenants.
Agree 100%
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      07-12-2013, 02:29 AM   #92
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OP, driving someone else's car without permission is really a disgraceful and illegal act - regardless of whether the car owner is an enthusiast or not. Moral issues aside, both he and you could have been screwed if he drove it and crashed it, let alone if he killed someone with it. As such, you have sincerely let him know the potential danger of becoming a criminal (car thief and a murderer) if he does not ask for permission again next time, saying that you'll just report the car stolen under similar circumstances.

After that's been described, you have to punish him for his immoral actions - that's only fair. I don't know what would be the best way, but if I were you, I would propose him to pay for an overall inspection at the dealer as well as the break-in oil change at minimum, that is, if nothing is broken. I would describe this as an important part of enjoying a car of such caliber. If he drove it, he has to understand and carry-out the responsibilities and costs associated with driving it. No one in his right mind should expect to drive someone else's M3 without some sort of compensation.

Of course, I think you should only try to have a gentlemanly conversation about this in a calm way, and get him to agree to your reasonable proposal. There's no use of arguing or fighting about it. If he doesn't agree to this, then either take legal action by accumulating whatever evidence you can, etc. if it really really means a lot to you (b/c this will take a lot of time and effort), or just consider him a dirt of the world and forget about it - you'll get over it. If he agrees, that would be respectable of him (and unexpected for this day and age), so give him another chance to develop your trust to be a friend, that is, if you're interested.

Hairy situation, but I don't see much tangible damage here. As a young professional, you'll learn a lot from this, so all I see is your gain in life experience from here on. Good luck.
Thanks man, really good advice here. I'll keep all you guys posted.
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      07-12-2013, 02:30 AM   #93
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Quote:
Originally Posted by grimlock View Post
Actually it makes sense to get a new M3 when you're young instead of buying a house
cause bang bitches
Hope thats not the only way to get bitches - hard to tell tho
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      07-12-2013, 02:33 AM   #94
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...when you are driving an M3
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      07-12-2013, 05:47 AM   #95
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Quote:
Originally Posted by grimlock View Post
Actually it makes sense to get a new M3 when you're young instead of buying a house
cause bang bitches
You must have no game if you think some sports car is gonna help you pick up chicks.
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      07-12-2013, 06:02 AM   #96
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id be so pissed... if you're making payments on the car I would deduct the 200 miles by the average a month and have him pay up. Nothing in life is free, dude had some balls to do what he did and obviously has no respect for other peoples belongings especially yours, as a roommate I would kick his ass out, wouldn't want that kind of untrustworthy person living in the same house as me.
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      07-12-2013, 06:21 AM   #97
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He's probably eating your food too.
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      07-12-2013, 08:27 AM   #98
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Might also be sleeping in your bed while gone and using your toothbrush too.
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      07-12-2013, 11:05 AM   #99
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Drive his car for 300 miles and don't fill up his tank.
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      07-12-2013, 01:20 PM   #100
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Get a bj from his gf or mom and top shelf his toilet monthly for as long as he still lives with u
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      07-12-2013, 01:27 PM   #101
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So was it confirmed that he actually did joy ride in the car, or did he fess up?

If he did, that shows a total lack of respect. I wouldn't live with someone like that, and would move out ASAP.
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      07-12-2013, 02:40 PM   #102
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Quote:
Originally Posted by Vddr View Post
It's interesting because the owner of the 3 bed townhouse I'm living in right now actually is kicking us out at end of our lease so he can sell the place (mkt price about $1mm).
You've highlighted one of the principal problems with renting: you can be kicked out for economic reasons outside of your control. You're subject to the owner's bank, and the owner's ability to pay the bank. You also have significantly less control over how the property is used, other than the contractual terms of your lease, but then there are costs to enforcing your rights under your lease. On the other hand, owning a home offers security, particularly if you have a family. If you have a wife and kids, there's no way you could live in an apartment if you could afford to own in fee.

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So if I were to buy this house based on those numbers, I'm looking at a less than 3% return on my investment per year unlevered. That to me makes no sense at all.
I always chuckle a bit when people look at their home as an investment. I see a house as primarily a secure place for shelter. Yes, I have equity tied up in that house, and yes that equity may not be making the same returns that I could, but I have a place to live, and my family has a place to live, and -- if I have a mortgage -- no one can kick me off my land so long as I have a job that can pay that mortgage.

The one thing I think you're forgetting (and what many people who see their house/apartment as an investment first, residence second) is that you'll always need a place to live (unless you don't mind living on the street). Hence, the financial benefit of ownership is really not in the front end but in the back end (when your mortgage payments, if you have a mortgage, are mainly towards principal; ultimately, you won't have any payments left in order have secure shelter. Your only expenses would be maintenance and utilities, which you would have to pay if you were renting anyways, so that would be a wash).
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      07-12-2013, 03:42 PM   #103
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You must have no game if you think some sports car is gonna help you pick up chicks.
Agreed. "I own M3" is not written on your forehead when you go in a club. Do not buy an M3 if you are thinking it will help you bang girls left and right. Work on your game!
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      07-12-2013, 03:49 PM   #104
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And seriously what is wrong with all the people criticizing OP for still renting? When you are in your mid-twenties with a good paying job, you do not want to get a house even if you can! That's after marriage crap. I live with 2 roommates which happen to be my really good friends. It's just fun to live with buddies and renting is the best way. That way everyone is responsible for any damages. If they live with you in your house than they won't give a crap about anything no matter how civilized they are. That's just what out of school graduates with decent paying jobs do! Work and party!!

Last edited by badazzm; 07-12-2013 at 03:54 PM.
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      07-12-2013, 05:43 PM   #105
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And seriously what is wrong with all the people criticizing OP for still renting? When you are in your mid-twenties with a good paying job, you do not want to get a house even if you can! That's after marriage crap. I live with 2 roommates which happen to be my really good friends. It's just fun to live with buddies and renting is the best way. That way everyone is responsible for any damages. If they live with you in your house than they won't give a crap about anything no matter how civilized they are. That's just what out of school graduates with decent paying jobs do! Work and party!!
What is this crap? I hope you're being sarcastic. I'm 25 and just signed a closed on my first house in a highly desirable area. Maybe I should pay someone else's mortgage instead of ensuring I have a roof over my head and my own home to be proud of and blow my money on depreciating assets!! Yippie!!!
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      07-12-2013, 06:02 PM   #106
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It's amusing how many people think you should only look at buying a house until after you are married. There are many factors to consider on whether to rent or to buy, though I would not ever think of marriage being a requirement in order to buy.
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      07-13-2013, 07:42 PM   #107
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Of course you can say well I'm only putting say 20% down so my returns relative to my cash investment in the house is a lot higher. But the principal risk here is enormous, if your house goes down 4% then you basically lose your equity.
read this again, wrong math here...I meant to say that basically your returns are magnified, in this case 5 to 1. (i.e. if house goes down by 1% you basically lose 5% of your down payment)
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      07-13-2013, 07:44 PM   #108
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id be so pissed... if you're making payments on the car I would deduct the 200 miles by the average a month and have him pay up. Nothing in life is free, dude had some balls to do what he did and obviously has no respect for other peoples belongings especially yours, as a roommate I would kick his ass out, wouldn't want that kind of untrustworthy person living in the same house as me.
Yep agreed, I'm actually moving out very soon, not for this reason though

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He's probably eating your food too.
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Might also be sleeping in your bed while gone and using your toothbrush too.
Wouldn't be surprised

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So was it confirmed that he actually did joy ride in the car, or did he fess up?

If he did, that shows a total lack of respect. I wouldn't live with someone like that, and would move out ASAP.
Yep - he admitted to it, said he drove it 4 times. (so it's at least 4 times)

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Originally Posted by schoy View Post
You've highlighted one of the principal problems with renting: you can be kicked out for economic reasons outside of your control. You're subject to the owner's bank, and the owner's ability to pay the bank. You also have significantly less control over how the property is used, other than the contractual terms of your lease, but then there are costs to enforcing your rights under your lease. On the other hand, owning a home offers security, particularly if you have a family. If you have a wife and kids, there's no way you could live in an apartment if you could afford to own in fee.
Totally ok with potentially getting kicked out, if that means I'm not stuck with a risky asset with low yield (and worst case potential for depreciation) that would tie up a disproportionate amount of my wealth for a very long time.

I see your point though, and will prob change my mind couple yrs down the road. But buying anything without considering how much it costs doesn't seem like good business, esp when it comes to the most expensive thing u can purchase

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Agreed. "I own M3" is not written on your forehead when you go in a club. Do not buy an M3 if you are thinking it will help you bang girls left and right. Work on your game!
amen. also chicks r prob more impressed by a 328 convert anyway

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What is this crap? I hope you're being sarcastic. I'm 25 and just signed a closed on my first house in a highly desirable area. Maybe I should pay someone else's mortgage instead of ensuring I have a roof over my head and my own home to be proud of and blow my money on depreciating assets!! Yippie!!!
If you live in London then it's much better value to buy so congrats. I know the area pretty well actually...went to school there, you can guess which one.
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      07-13-2013, 10:49 PM   #109
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Originally Posted by Goat Rodeo View Post

People, especially a few generations older, always say "you're renting? you should buy a home!" I go home, spreadsheet out the numbers, and scratch my head. Why?
because any money spent on renovations is a waste on a rented space.

Maybe I think differently, but I want my own space where I can do whatever the hell I want with it.
First thing I do when I move in anywhere is tear the bathroom apart and redo it.
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      07-14-2013, 11:12 PM   #110
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So...this thread got hijacked. To the OP, I suggest you leave town again, but disconnect the brakes this time. Collect on insurance.
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