Sell my car for a home?

Question

How's it going everyone! I'm in need of some decent advice so hopefully this is in the right section. Lately I've been thinking of selling my car, I have a 370z and although I do like my car it's becoming more and more impractical as my only vehicle. I can get about 20k and instead of selling it for another new car that will eventually depreciate I was thinking of saving that money and buying a little car for 5k. I would then save as much on the side as I could and combine it with what I have from the car to use as a downpayment. Would it be wise? Or should I just get a car for what I sell mine for. My background. I live in LA, 25, and moved back home with my parents to save some money. I hated feeling like I was paying someone's mortgage every month. I have an ok job, make about 22$ an hour and I'm fortunate enough to not have to pay any rent anymore while I'm back with my parents. I'm looking into house hacking but don't have much for a downpayment which is where the idea of using my car came in. I've always taken a huge interest in real estate but never really made a move. Any advice is greatly appreciated! Thank you!

JD Martin · Answer

Yes. And yes. Also, did I say yes?Never ask advice from people who are where you don't want to be. 20 years from now the car will be long forgotten but the returns from real estate will still be paying dividends.

Manolo D. · Answer

By end if the day, youll have about 15k, and your mortgage limit will be about 1,700-1800/month all inclusive. Maybe you can make it if you go out of state.

Thomas S. · Answer

A car is a material item. Your friends are material people. Leave them behind.Sell and invest. Also although your parents may say they love you, at 25, they do not want you living with them. Move on with your life and allow them to enjoy their older years with out children under foot. You are taking advantage. Time to man up and take on life's responsibilities.

Eric Bueno · Answer

Chris T. Hey chris! Thanks for the response. It truly means a lot. At 25, when I tell people I'd like to sell my car for an old civic to buy a house I always get an earful from just about anyone and everyone I know. Lot of people tell me to just wait when I'm older and how could I sell such a nice car for an old Car but it just doesn't make sense to me when I can start the process to reach my goals. It's incredible how badly my car depreciated watching over 10k just disappear and pay for rent so that someone else can use it to pay their mortgage, I just can't do it anymore. But I get such negative comments from my own friends and family that I thought I'd ask in a place that might see what I see, and not treat a car like it's an end all be all. I'd like to start small and buy more property as I go.

Chris T. · Answer

@Eric BuenoYou've the right mindset to save money AND free up some cash.@Alexander Ramos did the same thing w/ his car and now he is a proud owner of a duplex! If you can find a reliable car for $5K and get a fair price for your current car, I say go for it. I'm still driving my Civic bought over 15 years ago. And I just convinced my wife to spend $$ on some minor home reno AND buy another house, instead of buying a shiny vehicle. :)

Grace C. · Answer

I'm brand spanking new to this forum and am trying to learn as much as possible. However, I wanted to let you know that you can absolutely find a great, reliable car for under $5k. We are in L.A. also and recently bought my husband's car from a used car dealer in Whittier. It was $4,200 out the door. It's a 2005 Toyota Camry Solara. The miles are around 120k but we've maintained it well and so far, we are quite pleased. It doesn't look old at all. We also got it inspected by a mechanic and I highly recommend doing that when buying a used car. So worth it and it feels awesome to not have a car payment. I agree with others that you should most definitely sell the car and use the cash for investing in real estate! I wish I had started when I was your age. Good luck!

Alexander Ramos · Answer

@Eric Bueno I went through the same thing. My car wasn't worth 20K. It was an 01 Lexus. I also had a jeep. So I figured sell it. I didn't get much but helped for down-payment on first house hack. We are doing reno now. No looking back!

Michelle J Olson · Answer

If you have pretty good credit, and some money in savings (or maybe after selling the sports car?), why not look into some first-time buyer mortgage options & then house-hack .... Dress nice & walk into some banks and just ask about what they offer. Different banks can offer Very different options. Sometimes small banks are better, sometimes larger... it just depends. But while interest rates are still low, ... over & over my husband & I wish we'd started at your age! We're now trying to help our young adult children to get started. Depending on where in LA, (IDK LA very well) but may be a good consideration to look for an area that you could also offer Air-BnB, if tenants move out, to help cover mortgage payments .... I've not got experience with either of these, but they always sound interesting on the great Bigger Pockets Podcasts, re: renting out rooms in one's house, in various ways, to help some get into REI.You're young and able, learn how to do some DIY projects, pick up some extra work in your free time helping older folks who need things done and look for a lesser expensive multi-family (duplex, triplex, etc...?) or a ranch style that can be split up, or at least offer some space between room mates; live in part of it & do the work it needs. I'm a girl (ok, ahem, an over 45 southern lady with long hair & fingernails) and still gotten my kiddos & me to learn how to do a lot from the Internet & TV shows that do house flips & stuff like that. Watching it on a screen is never quite the same as really doing it, but it's helpful for us to watch and then dive in and get into the deeper learning. We're farming home schoolers all the way through, though, so maybe it just fits with our southern country lifestyle. But seriously, we crank up the music, get on our safety gear, fire up the tools and have fun .... and we know that mistakes are also deep learning lessons. One more thing... all our friends who moved out there to southern Cali somehow managed to buy something (even when rates were much higher!) and they got some equity built up, even in what seemed like extremely small housing, to me, then turned into huge growth when they sold and came back home to the South, with such lower cost of living. Good luck!🍀Maybe someone here can provide some direct links to specific Podcasts? (IDK how to do that).

Chris Herman · Answer

The reason your friends tell you not to sell your car is twofold. First, they don't understand or see the long term gains possible through real estate investing. They don't understand so they are negative about the possibility. Second, your generation( with the obvious exclusion of you) doesn't want to wait for anything. They want immediate results without putting in any effort. I can't expect them to understand when they grew up with many things coming so easily to them ( in comparison to the world war 2 generation). Parents have showered their children with everything while the whole time doing them a terrible disservice. Read the forums and get to know people. And read "rich dad poor dad". It changed my life.

Chris T. · Answer

@Eric BuenoIf you have not yet, read Robert Kiyosaki books. Just don't enroll in his guru classeshttps://www.amazon.com/Rich-Dads-Guide-Investing-I...Listen to ALL the podcasts here, and here're recommended books on BP as wellBiggerPockets Presents: The Best Real Estate Books Ever