Can I really afford a BMW?

[ASBSECU E93]

Originally Posted by brandoningram14

Thanks for the responses. I knew I couldn't afford it but I had to just toss it out to see what everyone else thought. I'm in the south bay, ~12k mi/yr is about right and I do have a garage (for now - thinking about moving somewhere cheaper but not sure).

I've been driving a boy racer for the last 7 years until someone rear ended me last month and the car was worthless so now I'm car-less. Should I just get a newer wrx/evo? E46 sounds intriguing but I really wanted a newer car with low mileage. I'm not sure an E92 with near 100k miles is at the top of my list either.

Hypothetically- I know where you can get a E9X M3 with a Supercharger and 6MT and low miles for full retail

I have it on good authority it sleeps under a blanket every night and is a garage queen....

[jtodd_fl]

Originally Posted by ASBSECU E93

Hypothetically- I know where you can get a E9X M3 with a Supercharger and 6MT and low miles for full retail

I have it on good authority it sleeps under a blanket every night and is a garage queen....

shoei sent me this picture of said car sleeping under a blanket.

[Flying Ace]

Originally Posted by shoei

Fack the car or mortgage question... Nobody else want to know how he's paying only 1700 a month in San Francisco?!! My buddy just got a new apartment and its frickin' 6K a month, lol...

To bimmette's point, gotta have roommates... Or 3 roommates... Plus, where are you parking said M3? Plus, have you seen the roads in SF??

As for mortgage, unless you're planning on buying far far away from SF, $1xx,xxx salary isn't landing you anything besides a cardboard box in the alley off of mission st...

PM me for more info on this cardboard box in Mission St alley please! sounds like a nice flip opportunity.

[ASBSECU E93]

Originally Posted by csu87

i dont recommend anyone buying a house right now.

Not sure about everywhere else, but the majority of markets ive looked at recently have prices that have gone up a ton in the last 1-2 years. Its got to start dropping soon, probably once interest rates start going back up, and when it does, if you are able to, that is the time to jump on a house.

If you believe some of the people here on BP - I live in Hicksville, and yet my neighbor just sold their house for $750k....full asking price with 4 contingent offers if the sale does not go through in 30 days.

They paid $500k for the house 3 years ago....

My advise - buy a house, or a rental property and continue to rent where he's at.

[ASBSECU E93]

Originally Posted by jtodd_fl

shoei sent me this picture of said car sleeping under a blanket.

Still faster than his weedeater

[shoei]

Originally Posted by jtodd_fl

shoei sent me this picture of said car sleeping under a blanket.

@ASBSECU E93 sent you a pic of his car tucked in at night in the barn as well??!!

[Flying Ace]

OP should buy my M3, $30k for 52k miles....seriously, bank the rest.

[ASBSECU E93]

Originally Posted by Flying Ace

OP should buy my M3, $30k for 52k miles....seriously, bank the rest.

Case in point - buy slightly used M3, buy extended warranty, bank rest...

/thread

[csu87]

Originally Posted by ASBSECU E93

If you believe some of the people here on BP - I live in Hicksville, and yet my neighbor just sold their house for $750k....full asking price with 4 contingent offers if the sale does not go through in 30 days.

They paid $500k for the house 3 years ago....

My advise - buy a house, or a rental property and continue to rent where he's at.

but whats that $750k house going to be worth in 3 years? $1m or back around $500k.

Same thing is happening around me. I could right now, list my house for $150k more than I paid exactly 1 year ago and have multiple offers by the time i go to sleep tonight. But then Im going to have to buy one of these inflated houses or wait for the market to drop again to buy one.

Instead I took advantage of the low interest rates and refid and save almost a car payment a month in mortgage.

[Naz24]

Originally Posted by brandoningram14

I don't really have as much real life experience and no plans/projections I ever make ever come true, so I have come here for advice. I am thinking about purchasing an F80 M3. I originally started off wanting a E92 M3, but I didn't want to have one without warranty as my first euro car (I guess I could always purchase third party or get a CPO, but they're all near 50k) and at that price point, I could just buy an M2, right? I should be getting an allocation in September, but the interior just felt cheap to me and if I'm already spending the 53k MSRP on an M2, I might as well get a proper M and get the 2017 M3. I test drove the E92 and F80 back to back and fell in love with the F80. I optioned out an M3 (only option I wanted was the upgraded wheels), and it came out to 65k (63.5k invoice, best price I could find in California was 1.5k over invoice). Plus taxes and misc, it will come out to 71k.

I'm 25, graduated college 2 years ago and have been aggressively paying off my student loans since (wanted to wait until I finished paying them off before I purchased a car) and now have ~40k in the bank. I'm sure with most car enthusiasts, we purchase cars with our emotions more than our brains, but is buying a car that's twice my net worth an okay idea? My annual income is ~130k, rent is around 1700 and I don't have much other expenses except I buy a lot of groceries because I like eating. If I put 20k down (pre-approved @ chase for 2.49% @ 48months), I'm paying $1117 a month. What do you all think? Thanks in advance for the advice

I'm 25 as well, and i have an M3.

Granted, i leased it, so my payment is about $300 less than what you quote here a month, and i OWN a two family house, so my monthly expenses aren't so bad. I also do decently well for my age....

Depends on your goal here, do you still live at home?

[ASBSECU E93]

Originally Posted by csu87

but whats that $750k house going to be worth in 3 years? $1m or back around $500k.

Same thing is happening around me. I could right now, list my house for $150k more than I paid exactly 1 year ago and have multiple offers by the time i go to sleep tonight. But then Im going to have to buy one of these inflated houses or wait for the market to drop again to buy one.

Instead I took advantage of the low interest rates and refid and save almost a car payment a month in mortgage.

Market trends are relative to the economic health of your area and supply/demand.

I can only speak regarding the markets I know.

Charlotte NC for example - never saw a housing bubble, and continues to see exponential growth with lower supply.

[zx10guy]

Originally Posted by ASBSECU E93

Disagree on waiting to buy a home.

OP can borrow $$ toward RE purchase at record low interest rate levels. If/when he marries, then he has the option of selling an asset that should have appreciated, or they can live together in a house that has equity - valuable for a young married couple that plan to expand family, etc....

Home ownership is power....IMO, that's what OP should invest in...

Not to mention the current tax incentive (unless this goes away) in being able to claim the interest. Heck, you can even apply PMI now. Also, the Feds giving you a pass on capital gains taxes on the appreciation of your primary residence if you've lived in it at least 2 years out of the last 5. This is huge as the Feds are allowing this tax exemption up to $250k of capital gains for single and $500k for married.

And the low interest rates are no joke. I have my primary locked in at 3.75% for 30 years and my vacation property at 3.25% for 30 years. My monthly payment (PITI) on the vacation property is less than the number being thrown around here for the M3 being talked about. Yet in the 4 years of owning the property, I've experienced (on paper) an appreciation of about $40k based on comparable new construction homes just sold as the development is still being built out.

[ResoKP]

Originally Posted by jgoens

Problem is, is that he needs a car and basically wants to know how much car he can afford.
Not sure how much appreciation will be had with buying a house in this area right now..in the short term. Prices are leveling now at peak levels. While they say it won't happen, I still think some sort of bubble will burst in upcoming years. This area is seeing problems due to high rents and housing prices.

1. I'm willing to bet that OP is priced out of buying a house in the bay area already or in other high COL areas.

2. If he somehow manages to buy a place (perhaps with the help of his parents) he would be incredibly house-poor. Not what you want to do when you're in your mid 20's with life/career uncertainties. He's got 40 years of investment horizon until retirement. Going all in on a house equity wouldn't be the best bet... Diversification is a more important factor..

3. What jgoens said (minus the bubble, I don't think there's going to be any significant bubble that will burst)

[Joekerr]

Originally Posted by Flying Ace

Let me put it this way, your goal in life is to set up a retirement where you monthly income is $1000...and you can afford a $71k car EVERY YEAR when you retire, how does that sound?

It sounds like these maths are very interesting. Very interesting indeed.

Still though, I think OP should save now - it pays huge dividends in the future. Which is basically what almost everyone is saying. Short term pain for long term gain and all that.

[Flying Ace]

Originally Posted by csu87

but whats that $750k house going to be worth in 3 years? $1m or back around $500k.

Same thing is happening around me. I could right now, list my house for $150k more than I paid exactly 1 year ago and have multiple offers by the time i go to sleep tonight. But then Im going to have to buy one of these inflated houses or wait for the market to drop again to buy one.

Instead I took advantage of the low interest rates and refid and save almost a car payment a month in mortgage.

your problem is, where are you going to go? You're job is still in Colorado, so you're buying back into "inflated" prices. Rental prices also go hand in hand with house appreciation, usually it outpaces the rate of property prices as more people get priced out and is forced to rent, reducing supply.

BTW, IMO, the house appreciation in certain parts of Colorado is organic and sustainable, i.e., it's fueled by long term structural job growth. Don't just look at one number that is house appreciation, look at population, household income and job figures in your area to see if the appreciation is sustainable.

[Flying Ace]

Originally Posted by Joekerr

It sounds like these maths are very interesting. Very interesting indeed.

Still though, I think OP should save now - it pays huge dividends in the future. Which is basically what almost everyone is saying. Short term pain for long term gain and all that.

haha, I mean, $1k per month when you retire isn't even that much, and likely won't cover basic living expense if you don't own your own house by then. Sadly this is the case for a lot of people here in SF, CA.

[Flying Ace]

Originally Posted by bimmette

I'm curious if the OP has about 50 experienced BMW owners all telling him no, will he listen?

has nothing to do with being a BMW owner... 50 experienced 30+ year olds who's gone through it all....

[jtodd_fl]

Originally Posted by Flying Ace

has nothing to do with being a BMW owner... 50 experienced 30+ year olds who's gone through it all....

It does... because he was asking about the advisability of becoming... (it's not a trick question, you can just shout it out any time)... a BMW owner.

Heh.

[Delta0311]

Simple
Do you have a house?
Do you have any other debts?
Do you have a chick hitting you up for cash?
Can you afford the car and still live comfortable after ALL monthly bills are paid?

Let me put in the cheat code for you here
If your answers are
Yes
No
No
Yes
Then yes go on out and get your M3. Otherwise, fuck NO!

[zx10guy]

Originally Posted by Flying Ace

all this talk, yet nothing on the other side of the equation...Income. What's your monthly DTI bruh?

I'm going to give it to you straight here, unless you make over $100k+, you can't afford a $71k car...not in the Bay Area. Hell my wife and I both make over $100k each, and we can't afford a $71k car.

Do you even care about things like retirement, tax advantaged savings like a Roth IRA, building equity in property, passive income sources and having a brokerage/investment account?

My household has checked every box above and contributed for it and the max we're willing to spend on any car is still in the $50k range. And I had to dig hard into convincing my wife I can sell my M3 for $30k to come out of pocket $20k. Hell the most I've paid for any car to date is $46k (for my M3 in 2010), and that's after selling a car worth $13k to come out of pocket $33k. Our monthly debt-to-income is roughly 3%, likely less. I want to say, after basic living expense (including taxes), we bank and invest about 90% what's left. And yes, we own a house, in SF no less.

Let me put it this way, your goal in life is to set up a retirement where you monthly income is $1000...and you can afford a $71k car EVERY YEAR when you retire, how does that sound?

^Truth here.

I actually had to convince myself to splurge on buying the 2013 135i I have now. I was always a car enthusiast but could never break down and spend the cash for a really nice car. Could I have gotten into a marque brand sooner? Sure. But what made me change my mind was some recent life changing events which made me step into the YOLO camp for a bit. My previous cars were a 2006 Ford Focus, 1994 Cavalier Z24, and a 1994 Camaro Z28 bought used.

One thing I wished I had done was to take more advantage of a Roth IRA. By the time I wanted to do more with that account, I was disqualified from contributing based on IRS rules.

[Flying Ace]

Originally Posted by Delta0311

Simple
Do you have a house?
Do you have any other debts?
Do you have a chick hitting you up for cash?
Can you afford the car and still live comfortable after ALL monthly bills are paid?

Let me put in the cheat code for you here
If your answers are
Yes
No
No
Yes
Then yes go on out and get your M3. Otherwise, fuck NO!

I still think the flaw in many people's thinking is still this:

Originally Posted by Delta0311

Can you afford the car and still live comfortable after ALL monthly bills are paid?

It's not about "paying the bills". It's about putting money away consistently for retirement, rainy day, etc AND pay the bills. Then if you have extra money left over, then yes, you can afford a $71k car.

My view has always been, you need to be banking/investing at least 50% of all residual income after basic expenses like rent/mortgage, food and taxes. IMO, what's remaining is discretionary income.

[ResoKP]

Originally Posted by Flying Ace

all this talk, yet nothing on the other side of the equation...Income. What's your monthly DTI bruh?

I'm going to give it to you straight here, unless you make over $100k+, you can't afford a $71k car...not in the Bay Area. Hell my wife and I both make over $100k each, and we can't afford a $71k car.

Do you even care about things like retirement, tax advantaged savings like a Roth IRA, building equity in property, passive income sources and having a brokerage/investment account?

My household has checked every box above and contributed for it and the max we're willing to spend on any car is still in the $50k range. And I had to dig hard into convincing my wife I can sell my M3 for $30k to come out of pocket $20k. Hell the most I've paid for any car to date is $46k (for my M3 in 2010), and that's after selling a car worth $13k to come out of pocket $33k. Our monthly debt-to-income is roughly 3%, likely less. I want to say, after basic living expense (including taxes), we bank and invest about 90% what's left. And yes, we own a house, in SF no less.

Let me put it this way, your goal in life is to set up a retirement where you monthly income is $1000...and you can afford a $71k car EVERY YEAR when you retire, how does that sound?