Should I Calm Down?

Question

I started out in real estate investing kind of different than others. I've been studying for about two months and the studying still continues. But while learning I've heard, "get out there and get your feet wet." A family member needed a car and I decided whelp this could be a good time to get my feet wet. I went out got a loan, I went to craigslist got a deal, I closed the deal, and I did a rehab on my car by getting it repaired. I imagined the car was a piece of real estate and used what I learned to get a car. This little experiment has caused my credit score to go up, but has also exhausted a lot of my free income. I enjoyed every bit of this little learning experience and was excited to get into real estate as soon as possible. I began calling realtors and they directed me to mortgage brokers. I have two meetings with two different mortgage brokers and I plan on calling more if everything doesn't pan out.

Now as I drive my car, I begin to coach myself out of moving forward. I keep telling myself that I need to calm down and take sometime to actually free up my income again.

Should I calm down? Or continue with the momentum and see what happens next?

I feel this should be my introductory post to biggerpockets and I appreciate all the support and advice given in the near future!

Thank you!

James

Now as I drive my car, I begin to coach myself out of moving forward. I keep telling myself that I need to calm down and take sometime to actually free up my income again.

Should I calm down? Or continue with the momentum and see what happens next?

I feel this should be my introductory post to biggerpockets and I appreciate all the support and advice given in the near future!

Thank you!

James

Natalie Kolodij · Answer

This is madness. You did not apply what you learned in real estate to something comparable. Real estate is an investment- being able to acquire something that will make you with no money down is a learned skill.

What you did was finance an excessive amount on a depreciating asset. The two don't apply. ANYONE can finance a car with no money down. That's literally how banks and dealers make more money off you. However very few people have developed the skill the finance a house with no money down.

This car has nothing to do with your future as an investor. Pay this off ASAP and move on to actual investments.

Ryan Dossey · Answer

I was really hoping as I was reading this that you were going to tell us you flipped the car for a profit. I know SEVERAL Real Estate Investors who do this for fun.

Thomas S. · Answer

Defiantly calm down. Adjust your thinking/reasoning going forward.

Never ever take a "hit" for anyone, family or friends, in the future. When you put their concerns ahead of your own you proved beyond a shadow of a doubt that you are no where near the point of being prepared to invest. Other peoples problems are not your problems. You will never survive having tenants.

Account Closed · Answer

@James P.

Yeah I would "pump the breaks" so to speak. I do not see the similarities between cars and real estate. As far as acquiring the loan for the car, there will not be a lot of parallels to getting a mortgage. Car loan right now are like mortgages in the early 2000's while mortgages from a traditional lender is about as invasive as you can get.

I would recommend keeping the meetings with the lenders though, wouldn't hurt just to sit down with them and get a feel for what you will need. You can get a good idea of what they are looking for and start positioning yourself for a future acquisition.

Best of luck!

Stephanie Medellin · Answer

@James P.  Well on the plus side you are building credit which will help you in the future when it's time to apply for mortgages.  You may need to sell or otherwise pay off the car if the car payment is using up too much of your income, but at least you have that option if you're ready to start investing.  Hopefully the loan is small and the car is worth enough to pay off the loan should you decide to sell it.

JD Martin · Answer

OK. Experience is good but the cheaper it can be procured, the better off you usually will be. You could have tagged along with someone making deals to see how it was done instead of actually buying something, much less an expensive liability.

You should probably pay off the vehicle then move forward, or sell the vehicle and move forward.

Thomas S. · Answer

Your post is confusing, you say you bought a car for a family member and then you say you are driving the car.

If you bought it for someone then you should be earning a return on the investment however if you bought it for yourself it is a depreciating liability not a investment. Which is it.

James P. · Answer

Account Closed I was thinking that loans were going to eventually pop up in the future with real estate, so I got a loan. I honestly didn't believe that banks and credit unions were actually willing to give me money. I had to find out. I thought my credit score was bad and it turns out its really not. There maybe no parallels, but I do feel more confident now.

As for the lenders, I had some conversations and they were a bit discouraging. In order for me to do what I want, I need more income. I hope to find something out soon.

Thanks.

James P. · Answer

Thomas S. thanks. i really needed to read that.

James P. · Answer

@Stephanie Irto Indeed! I want to know more about mortgages. I am definitely missing details about them.

Should I Calm Down?

Most Popular Reply