Should I buy a car?

[jec1521]

Hey guys, Haven't come around lately. Been busy building up my real estate business. I have been working as a RE agent, while also working on a RE flip. RE agent work is not my main goal, I have just used it to get by while working on this house flip, and my end goal is to own rental properties.

My first flip is about to close, and I will have profited all said and done about $80k pretax. Now here's the story...

My whole family is in real estate and has been very successful. My grandfather owns about 200-250 rental units, so he does very well. A couple years ago my POS old ford explorer decided to blow a motor, and I didnt have the $$$ to get my own car at the time, so my grandfather was nice enough to buy me a 2011 jeep grand cherokee. The payment is somewhat small for a nice truck ($290/month) but I am still extremely fortunate.

Main question: Since I just achieved my first RE investment and it was a success, should I go and buy a car and pay for it on my own? Or should I take advantage of the "free car" and put that money to better use? The fastlaner inside of me says to save the money and invest it in the next project, but it would be rewarding to be completely self dependent.

I know this isnt a car forum, but I just wanted your opinions from a business and moral POV.

BTW I would probably replace it with another Jeep. Probably a $30k Wrangler.

-Jay

 

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[Vigilante]

Hey guys, Haven't come around lately. Been busy building up my real estate business. I have been working as a RE agent, while also working on a RE flip. RE agent work is not my main goal, I have just used it to get by while working on this house flip, and my end goal is to own rental properties.

My first flip is about to close, and I will have profited all said and done about $80k pretax. Now here's the story...

My whole family is in real estate and has been very successful. My grandfather owns about 200-250 rental units, so he does very well. A couple years ago my POS old ford explorer decided to blow a motor, and I didnt have the $$$ to get my own car at the time, so my grandfather was nice enough to buy me a 2011 jeep grand cherokee. The payment is somewhat small for a nice truck ($290/month) but I am still extremely fortunate.

Main question: Since I just achieved my first RE investment and it was a success, should I go and buy a car and pay for it on my own? Or should I take advantage of the "free car" and put that money to better use? The fastlaner inside of me says to save the money and invest it in the next project, but it would be rewarding to be completely self dependent.

I know this isnt a car forum, but I just wanted your opinions from a business and moral POV.

BTW I would probably replace it with another Jeep. Probably a $30k Wrangler.

-Jay

If you have to drive clients around, you need a nice ride. If you don't, buy a $9k car for cash and use the rest for reinvestment.

 

[Nero55]

Well as MJ's book says,buy only something you can afford in cash.Besides that you could do what Vigilante says,buy a cheaper one which you can afford or a used one,as long as it's like new.

 

[Mr.Chaos]

Hey guys, Haven't come around lately. Been busy building up my real estate business. I have been working as a RE agent, while also working on a RE flip. RE agent work is not my main goal, I have just used it to get by while working on this house flip, and my end goal is to own rental properties.

My first flip is about to close, and I will have profited all said and done about $80k pretax. Now here's the story...

My whole family is in real estate and has been very successful. My grandfather owns about 200-250 rental units, so he does very well. A couple years ago my POS old ford explorer decided to blow a motor, and I didnt have the $$$ to get my own car at the time, so my grandfather was nice enough to buy me a 2011 jeep grand cherokee. The payment is somewhat small for a nice truck ($290/month) but I am still extremely fortunate.

Main question: Since I just achieved my first RE investment and it was a success, should I go and buy a car and pay for it on my own? Or should I take advantage of the "free car" and put that money to better use? The fastlaner inside of me says to save the money and invest it in the next project, but it would be rewarding to be completely self dependent.

I know this isnt a car forum, but I just wanted your opinions from a business and moral POV.

BTW I would probably replace it with another Jeep. Probably a $30k Wrangler.

-Jay

if you have the cash needed for your next deal I would say go ahead. If not i'd wait until after your next deal as to be completely sure you wont need all of the 80k.

How much is left on your current car? Can you pay it off and have your granddad transfer the title over to you?
I don't see why he would be opposed to you buying your current car from him.

 

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[ZCP]

Buy your grandfather a car as a sign of thanks. Then go spend a day with him driving him around in it. Tell him it is for both of you and to give you a call anytime he wants to go for a ride.

 

[OldFaithful]

My opinion is that you should put the ENTIRE $80k down as initial payment on loan for a $5,000,000 Lamborghini Veneno! Now that just oozes success and virility. No need to limit yourself to a paltry $30k.













Oh, who am I kidding. I'm with @Vigilante on this one. Return the loaner and put a few $k toward a good quality, 2nd hand vehicle and get back to business.

 

[Dave510]

I'm going to go against the grain and say keep using the current car.

Your grandpa clearly isn't hurting when it comes to money and I'm guessing he would much rather see you make use of the extra capital to succeed rather than to pay him back.

Don't lock down money on a car if it's not necessary, keep using the money on hand to make more money. And if you were to buy a car, I personally wouldn't rule out financing if the numbers work out (if the interest rate for financing is lower than the return you can get on investing the money).

 

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[100k]

Sounds like your Grand papi is doing fine. So I'd re-invest all $80k into another deal or 2.

Then when you have a nice little chunk give him a nice present in return... I don't think your grand papi bought you that car as an investment or loan... I believe it was a gift. You don't return gifts.

 

[CaptainAmerica]

Why don't you ask him what he would do? I'm guessing he didn't start out with more than one sale...

 

[Tapp001]

Lots of good opinions here, but I think @ZPC hits the nail on the head. Take over the payment on your current car, and keep driving it if its nice enough to for driving clients. Either way, I think financial independece is an awesome feeling that is worth the monthly cost of the Jeep.

 

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[jec1521]

Thanks for the great advice guys. Much appreciated.

Sent from my SAMSUNG-SM-N920A using Tapatalk

 

[SparksCW]

End of 2014 I ordered a brand new Range Rover.. I ran it for almost a year and loved it, but it was obviously quite expensive and whilst I could afford it, I hit a problem with expanding my business as I needed every available penny, this resulted in having to sell the car as I had to stop paying myself, plus borrow money (personally and via the business).

It also held me back with some other bits I want to do which are more important than 4 wheels which is making life a bit difficult right now.

Since then I've been using a new, but rubbish van! I've caught up significantly now, I so want to buy a new car but I've realised how important growth is at early stage of business and how low overheads (personally and in business) really help progress.

The way I see it and the way I am trying to live now (albeit very difficult!), is that I'll buy another Range Rover (as an example, applies to anything) when it doesn't matter if I buy a Range Rover or not.. if that makes sense? If you have to think about and justify costs then you can't afford (or more importantly, justify) it. I'll buy one when I really won't notice $1000 a month and I'd recommend anyone that wants to be rich, not just look rich, does the same.

 

[Almantas]

When you buy a toothbrush, do you ask yourself "can i afford it?", I hope not. Replace a toothbrush example with anything you want to buy and the answer is right here in front of you - if you have to think whether you can afford it, the answer is: you can't.

Keep flipping houses and buy that new car when you can afford it. It seems that the new car is a want and not a need, so keep your emotions under your belt and make your family proud of your success!

Best of luck!

 

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[IceCreamAction]

In RE I'd definitely suggest something that is easy on the eyes, but don't go and buy a 50k vehicle that'll possibly have maintenance through the roof..just my 2c tho.

 

[mayana]

BTW I would probably replace it with another Jeep. Probably a $30k Wrangler.

My instinct is to keep driving the old car (unless you need to impress potential customers).

If you NEED to buy another car, why do you have to buy a $30k brand-new one?

For 6-9k you can get something that looks decent and that will be fairly reliable. After you close your NEXT deal, then I would consider upgrading. Actually, I personally wouldn't, but cars aren't that important to me. I'd probably take a nice trip or something if I wanted to blow some money on something nice for myself.

Just my opinion

 

[EvanOkanagan]

I'm in your exact same shoes almost but I didn't start out flipping houses. I'm a Realtor and own multiple rental properties.

Along my career, some of the most successful Realtors in my town (some making easily 500k+/yr) drive 5-10 year old decent, reliable, clean vehicles. Nothing fancy.

If I could turn back time I wouldve never gotten into my car lease of a brand new Cadillac. At the time it was my "reward" for purchasing my 3rd rental house... I was making more than enough cashflow to cover the cost of payments.

What happened though is its put me behind.. my overall monthly net cashflow is lower (having a set amount of cashflow was is my goal so this takes away from it), it eats up about $50k in additonal financing that I can get (more effort to get approval on financing more homes), and after about a year the Shiney-object wears off and now it's just a regular vehicle that fit in with the 5 year old models.

I'm currently trying to break my lease, and I'm going to buy something used for cash. Not worth it buying new--especially in the start-up stage which I consider I'm at as well right now.

 

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[vitality11]

When you buy a toothbrush, do you ask yourself "can i afford it?", I hope not. Replace a toothbrush example with anything you want to buy and the answer is right here in front of you - if you have to think whether you can afford it, the answer is: you can't.

Keep flipping houses and buy that new car when you can afford it. It seems that the new car is a want and not a need, so keep your emotions under your belt and make your family proud of your success!

Best of luck!

Great advice.