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Updated over 8 years ago on . Most recent reply

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James P.
  • New Haven, CT
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Should I Calm Down?

James P.
  • New Haven, CT
Posted

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

Most Popular Reply

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Natalie Kolodij
  • Tax Strategist| National Tax Educator| Accepting New Clients
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Natalie Kolodij
  • Tax Strategist| National Tax Educator| Accepting New Clients
ModeratorReplied
Originally posted by @James P.:

I am sorry. I knew getting the car was going to be a loss. I brought the car for him, but the car was even better than my old one. I decided to give him my old car and keep the new one. 

What I learned from real estate taught me the steps to getting the car. This car deal taught me a lot about getting a loan, negotiating, and closing. My reasoning was if I could buy this car with low or no money down. Why can't I do it with real estate?

 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. 

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Kolodij Tax & Consulting

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