Grambles Crossroads (House Building Thread)

[grambles423]

Gentlemen (And Ladies),

An idea. Resilient, highly contagious. Once an idea has taken hold of the brain it's almost impossible to iradicate. An idea that is fully formed, fully understood. That sticks, right in there somewhere. - Leonardo DiCaprio "Inception"

I'm a thinker. I love thinking. Often times I spark a thought that consumes and I become a little obsessive about it. Sometimes it makes sense, sometimes it doesn't but the journey to find the detail to make the decision is awesome. Call it an enlightenment. But when it comes to personal events things, emotion is a variable we cannot easily "objectify" and things tend to get out of hand. How can you make an objective decision when there is emotion attached? How do you assume the unknown? How do you objectify a multivariate equation?

I'm at a crossroad in life. We (The wife and I) are now looking for a house. We know what we want. We know where we want it. We know how much we can spend. And we are determined to make this happen before next January due to our lease end. What's the point of sinking $1250/mo on rent when it doesn't go anywhere? Pure expense. No equity, no tax benefit......nothing. Just a negative cash flow.

To get a house we're looking at BEST CASE having to put down 5% for the best mortgage available to us (%, monthly payments, loan amount...etc). No problem right? Well, putting my wife through master's school has really vacated and prevented me from my savings. I didn't save MUCH in the last year. Now, with our awesome budget (Thanks to Dave Ramsey) and DINK lifestyle, We are currently saving almost $400/week. However, we are far from an initial payment and that $400/week often goes towards other things as well. So far its mostly been the car, her school loans, and various other bigger expenditures around the house or just daily life stuff. I'm afraid...at this point....we might not have enough for a down payment when we need to unless I totally drain my savings. No Good on my part. I need a safety net. That's just how I roll.

My wife is putting ALL of her savings into paying off her student loan. That will clear that debt in almost 10months.

"So why the HECK are you posting this on the forum Grambles?" I spend a lot of time around here. TOO much on some days. I KNOW the people here and their input is always welcomed. Not that it matters at all if I ever see them. Plus, this is an open forum. Everyone is always welcomed to share their thoughts! :thumbsup:

So let's hammer out some details. Let's brain dump to free up some brain cells for thinking. I have 3 options I'm considering:

1) Sell Car. Buy Old reliable Car. Sell Parts. Net Roughly $6000-$10000 depending on sale.

2) Keep car. Sell certain parts. Net about $3000. Keep saving.

3) Do nothing. Keep saving. Pray for Lottery win.


Option 1
Feels like a great idea. I could buy an older civic (6th gen to 8th gen) for a pretty damn good range. $5000-$9000. If I could sell my GTI (Without Parts $12K. With Most Parts $15K), I could then sell the Bilsteins and Porsche Brakes (Refinish them for more money) and trade for Detroits for Denvers ($200-$300ish) and could net probably around $1800-$2000. Considerable...but selling the car would take time. The process of it all is tedious and could cause some unneeded strain.

Option 2
This is where emotion comes to play. I love my car, but I also know its a material object. But to satisfy my car urges, I could keep it. Down grade to a very skim Stage 2 or a stocklike Stage 1. I know either of these will suffice my craving for power until 2015/2016 when I can look into another vehicle (Honda).

Selling almost ALL my parts could net me anywhere $3000-$5000 give or take. I've already received 5 PMs about my parts so I know there's interest, so maybe there's hope. That would be a hefty dent and saving the rest of the year could make up the eventual investment. But its an unknown quantity.

Another thing to consider is reliability of my current car. Intake Manifold will need to be replaced soon. Chain Tensioner is a time bomb waiting to happen. With a volkswagen.....anything can happen. I have to be ready, but that will eat into our safety net. I feel like I can maintain this beast until 150K but I'm not CONVINCED it will last that long. Who knows..........

Option 3
Who likes change? I sure dont. This would essentially be the same route I was on before even considering this thought. However, now that I have it, I would probably still stay on my "Hell Functional" route and downgrade the wheels which would cost me. I would put all my parts on (Bilsteins and Porsche Brakes) and just go on my merry way of a an awesome fully built Stage 2 vehicle.

..........but.....Is this really the route to consider KNOWING the other two options? KNOWING I could be happy with my GTI yet sell a lot of my parts? :iono: Emotion is key here.

Your input is welcomed. Your questions are welcomed. Vultures are NOT. I hope I conveyed what is really going through my mind well enough.

 

[Bender1]

I say two - you stay happy and become a bit more liquid. If you go with 1 you will end up spending more in the end because you will end up going through two cars between now and 2016 because you wont be happy in something that isn't super fun to drive.

If you go with 1 it has to be cheap and fun (Miata, Civic SI)

 

[GTIMKV20]

I agree with #2. I was in the exact same situation awhile back and am much happier still being in the vdub.

Continue to sock away as much as you can - and buy soon! The best market is now for houses with interest sooo low on mortgages.

I wish you the best - it's a fun road!

 

[troyguitar]

I'd just slow down the car stuff and the loan stuff to increase savings until you have your down payment set. Student loans aren't that bad to have, it's not like you have it on a 29% credit card.

(that is also what I am doing - planning to buy a place this summer)

 

[thedude4bides]

Option 4: generate alternate source of income via one of the most creative minds out there.

Your "decision space" is much larger than you think:thumbsup:

Edit: just to spur thought... How much per hour could you make tutoring engineering students on the side? What if you were to spend an equal amount of energy on creating an ad-revenue generating website/blog with your creative writing as you do on these forums? Etc. etc.

 

[flomaa6]

Sometimes u have to sacrifice small things for better reward at the end.
I say 1 a house is a huge investment unlike a car is one of the worst investments u can do just because these things depreciate within a few years.

A lot of what if's come to play when one plans for the future,
Like what if u don't sell the car but it craps out or god forbid u have an accident.
What if something happened and ur wife got pregnant.
So many variables to life, but what I'm trying to say if u have a plan set out why not start the process now, sell the car the parts, keep saving because when it comes down to it u want the easiest and stress free solution

 

[SmokeyGTI]

I say 2. Keep the car and get rid of some / all the mods. That way you can at least still drive the car you want. You do need and deserve something to keep you happy.

I think it's a lot like the house. You can still get the house you want, but just maybe not with all the "mods" if you will (pool, deck, big screen tv's, etc..)


Sent from my Sprint iPhone using Tapatalk

 

[Zillon]

I vote option 2. Keep the car. Maybe install what you have, or sell a couple things off, and enjoy it. Either do it yourself, or find a shop that can do the decarbonization, intake manifold, and update the timing chain tensioner, and call it a day for another several thousand miles. Are you currently paying off the GTI, or is it paid off?

Something to consider when buying a house vs. renting: Sure, you might think that you're sinking money into nothing, but you're basically paying for your safety net. If something goes catastrophically wrong with the place you're living in now, it's not on your shoulders. If you buy a house and liquidate your assets to buy it, and something goes wrong... uh oh.

So, if you have to liquidate all your savings just to get into a house, don't do it. Take your time, pay off her debt, save up for a down payment, and do it then. I was on the same line of thought until I recently made up my mind to keep renting until I am liquid enough to afford a down payment without blowing up all of my assets.

I imagine that this cropped up because you found a house you really want, right?

 

[fredf]

As you know, it's a complicated question. While home ownership is the Holy Grail of North Americans, it is not the only solution for housing. Continuing to rent while you save money for a larger down payment can be very lucrative.

There have been a lot of articles in our local business press about young people being house poor when they should have continued to rent.

I have no idea what age you are and other demographic/social data. However I always wonder at the amount people spend on their cars at an age when they should have other priorities.

If you can afford both, go ahead. Otherwise I would be inclined to advise you to put your living situation well before your car. You spend more time at home than in the car.

And when your wife finishes her Masters, lets hope she starts to bring in a good pay check at which time you can revisit a new car.

So I guess I am advising Option 1.

Delayed gratification builds character (if it doesn't kill you first!).

Good luck.

 

[mattdibart]

I'm not sure if this is an option but I thought I would throw it out there. I really am not sure on the renting rates in your area but I work for a Property Management Company and we own hundreds of apartments and 1250/mo seems high. Now if that is the going rate in your area just disregard my post.

Assuming you have no kids, why not downsize your apparent? I am guessing you are getting at least a 2 bedroom if not a 3 bedroom for that price. If it's just going to be you and your wife for the foreseeable future why not keep everything you have and move into a small 1 bedroom apartment? Possibly find something for $800-900/mo and add another $400ish to your savings per month.

Just a thought.

 

[greasyginzo]

You should really speak with an experienced mortgage broker it really is easier to buy a house then most people think.

 

[mattdibart]

As you know, it's a complicated question. While home ownership is the Holy Grail of North Americans, it is not the only solution for housing. Continuing to rent while you save money for a larger down payment can be very lucrative.

There have been a lot of articles in our local business press about young people being house poor when they should have continued to rent.

I have no idea what age you are and other demographic/social data. However I always wonder at the amount people spend on their cars at an age when they should have other priorities.

If you can afford both, go ahead. Otherwise I would be inclined to advise you to put your living situation well before your car. You spend more time at home than in the car.

And when your wife finishes her Masters, lets hope she starts to bring in a good pay check at which time you can revisit a new car.

So I guess I am advising Option 1.

Delayed gratification builds character (if it doesn't kill you first!).

Good luck.

Renting is a money pit, end of story. You get no benefit paying someone every month for rent yet you benefit from making monthly payments on your mortgage. Even if you are broke from paying your mortgage in the long run you come out on top especially when you can sell your home for more then you bought it for (especially true in southern Ontario).

How it is a good idea for people to rent and not buy a home seems very odd to me. Maybe if they said stay home and live with your parents but renting? doesn't make much sense.

 

[Homebrew1709]

While cool cars will always be around, these stupid-low interest rates will not. If you guys are really serious about buying a house, then you should probably go all in and put the car on the back burner for now. Keep in mind that on top of the 5% cash you put down, you'll also need to pay closing costs i.e. mortgage fees, title insurance, first year's taxes & insurance, etc. Can easily be another 2-3% of your mortgage amount.

It may hurt to get rid of the car that you've put so much money, time and effort into but who knows, maybe in a few years you'll be driving a MKVIII!

 

[troyguitar]

It's the same as leasing vs buying cars... Buying is USUALLY better but not always.

People continue to spout all of this crap about equity but the fact is you need to carefully consider a lot of numbers (and other less objective things) to determine what is truly better.

 

[grambles423]

I say two - you stay happy and become a bit more liquid. If you go with 1 you will end up spending more in the end because you will end up going through two cars between now and 2016 because you wont be happy in something that isn't super fun to drive.

If you go with 1 it has to be cheap and fun (Miata, Civic SI)

I think the resisting from going 1 IS the process. Probate this, bill of sale that, title swap this...etc. etc. It would take a lot of time, something that I rarely have right now.

I agree with #2. I was in the exact same situation awhile back and am much happier still being in the vdub.

Continue to sock away as much as you can - and buy soon! The best market is now for houses with interest sooo low on mortgages.

I wish you the best - it's a fun road!

Thanks! So you demodded and sold your stuff?

I'd just slow down the car stuff and the loan stuff to increase savings until you have your down payment set. Student loans aren't that bad to have, it's not like you have it on a 29% credit card.

(that is also what I am doing - planning to buy a place this summer)

I hate debt. Hate it 100%. I currently have none. No car payments, no credit card balance, nothing. My wife has $20K in loans and I'm funneling some money towards that to pay it off quick.

Our goal is to be 100% debt free before we buy a house and have kids. Its looking very promising.

Option 4: generate alternate source of income via one of the most creative minds out there.

Your "decision space" is much larger than you think:thumbsup:

Edit: just to spur thought... How much per hour could you make tutoring engineering students on the side? What if you were to spend an equal amount of energy on creating an ad-revenue generating website/blog with your creative writing as you do on these forums? Etc. etc.

I REALLY like this idea. However, I'm very skimp for spare time lately. My project is ramping up because we launch this vehicle in 2015 but start building next April!!!!! Things are getting hectic and lots of overtime is being made by focusing on design quality and making sure the customer gets our best work. My system is having a huge build issue causing us to get a little creative with how we design.

That being said, I like your idea of mentoring and/or maybe an ad-revenue blog. I have no idea where that starts though or how you GET people to want to share ads. Heck, I wouldnt know what to write about.

Sometimes u have to sacrifice small things for better reward at the end.
I say 1 a house is a huge investment unlike a car is one of the worst investments u can do just because these things depreciate within a few years.

A lot of what if's come to play when one plans for the future,
Like what if u don't sell the car but it craps out or god forbid u have an accident.
What if something happened and ur wife got pregnant.
So many variables to life, but what I'm trying to say if u have a plan set out why not start the process now, sell the car the parts, keep saving because when it comes down to it u want the easiest and stress free solution

I think that is my goal for option 1. Sacrifice now to have a huge pay off in the end. Once having the house and a steady mortgage cash flow, I can always free up my savings again for cash payment on a car.

But again..the unknown is a consideration we cannot budget for. THAT is why I need my safety net.

I say 2. Keep the car and get rid of some / all the mods. That way you can at least still drive the car you want. You do need and deserve something to keep you happy.

I think it's a lot like the house. You can still get the house you want, but just maybe not with all the "mods" if you will (pool, deck, big screen tv's, etc..)


Sent from my Sprint iPhone using Tapatalk

I like this train of thought. The GTI would certainly keep my happy and satisfied even in stock form. ...hmmmm

I vote to keep the car. Install what you have, and enjoy it. Find a shop that can do the decarbonization, intake manifold, and update the timing chain tensioner, and call it a day for another several thousand miles. Are you currently paying off the GTI, or is it paid off?

GTI is 100% paid off. Just paying insurance. I like the idea of "fortifying" my maintenance. I'd pay a little up front for intake, valve cleaning and tensioner update to satisfy my VW reliability qualms.

Something to consider when buying a house vs. renting: Sure, you might think that you're sinking money into nothing, but you're basically paying for your safety net. If something goes catastrophically wrong with the place you're living in now, it's not on your shoulders. If you buy a house and liquidate your assets to buy it, and something goes wrong... uh oh.

So, if you have to liquidate all your savings just to get into a house, don't do it. Take your time, pay off her debt, save up for a down payment, and do it then. I was on the same line of thought until I recently made up my mind to keep renting until I am liquid enough to afford a down payment without blowing up all of my assets.

I imagine that this cropped up because you found a house you really want, right?

Point taken. Actually we've been looking at a house for quite some time. Just finally getting her out of school allows some MAJOR cash flow now that we've arranged out budget accordingly.

As you know, it's a complicated question. While home ownership is the Holy Grail of North Americans, it is not the only solution for housing. Continuing to rent while you save money for a larger down payment can be very lucrative.

There have been a lot of articles in our local business press about young people being house poor when they should have continued to rent.

I have no idea what age you are and other demographic/social data. However I always wonder at the amount people spend on their cars at an age when they should have other priorities.

If you can afford both, go ahead. Otherwise I would be inclined to advise you to put your living situation well before your car. You spend more time at home than in the car.

And when your wife finishes her Masters, lets hope she starts to bring in a good pay check at which time you can revisit a new car.

So I guess I am advising Option 1.

Delayed gratification builds character (if it doesn't kill you first!).

Good luck.

Going back to the above. I myself have no debt (Car included). My wife is currently working and bringing home almost the same that I am, slightly less. We have the cash flow and budget.

This however will kill us on taxes if we do not adjust properly.

We currently are allotting ourselves about $250K-$270K MAX for a house when the bank clearly wanted to give us upwards to $350K. That's way too much in my eyes, hence why we want to live within our means. I'm the froogle kind of man. She has exquisite taste....so often...there's much compromise that needs to be had.

I'll say this....I budget like a Nazi and I've very very proud of it.

I'm not sure if this is an option but I thought I would throw it out there. I really am not sure on the renting rates in your area but I work for a Property Management Company and we own hundreds of apartments and 1250/mo seems high. Now if that is the going rate in your area just disregard my post.

Assuming you have no kids, why not downsize your apparent? I am guessing you are getting at least a 2 bedroom if not a 3 bedroom for that price. If it's just going to be you and your wife for the foreseeable future why not keep everything you have and move into a small 1 bedroom apartment? Possibly find something for $800-900/mo and add another $400ish to your savings per month.

Just a thought.

1250/mo for a 3bed/2bath house with 2 car garage in an almost rural part of our city. (Chelsea, AL)

Our goal is to settle down in this town. The next house WILL be the house we live in for a very long time. Have kids. Watch them grow up. You know...typical Suburban America type of stuff. The "wanting" of a house is almost a necessity at this point.

You should really speak with an experienced mortgage broker it really is easier to buy a house then most people think.

Exactly....they're practically GIVING money away right now.

While cool cars will always be around, these stupid-low interest rates will not. If you guys are really serious about buying a house, then you should probably go all in and put the car on the back burner for now. Keep in mind that on top of the 5% cash you put down, you'll also need to pay closing costs i.e. mortgage fees, title insurance, first year's taxes & insurance, etc. Can easily be another 2-3% of your mortgage amount.

It may hurt to get rid of the car that you've put so much money, time and effort into but who knows, maybe in a few years you'll be driving a MKVIII!

Yeah, I definitely was taken aback by closing cost amount in the end when we first found out. All the more reason for more initial upfront allotment.

I will NOT be owning another VW after this one, unfortunately. Honda has some great stuff coming out soon and will aim my sights on that when they do. I mean....why not? I work for them......I design for them.....make sense right?