All Forum Posts by: Scott V.

I’m on my phone so I can’t type as much as I normally would but I’ll try to respond as best as I can. As far as trying to portray myself as having “made it”, I do think that’s a bit forward and presumptuous. Some people who don’t have hobbies don’t really “get” the whole car thing and that’s understandable but attributing some type of ulterior motive to my potential purchase is kind of strange.

As far as my income goes, I realize it’s a bit lower than many of yours on here and as I mentioned I’m going to be moving into practice ownership within the next 24 months. I’m trying to progress as fast as possible toward that. 

The whole purpose of making this thread was to hear opinions like yours and I appreciate it. 
 

Also here's for the fellow car nuts wondering what I'm shopping for :)

Thanks to everyone for replying, I noticed a few people were asking about my lack of investments currently. I had been putting a good amount of money into my Schwab portfolio and investing in some basic index funds but I took all of it out last year. The reason for that was that I felt the market fundamentals were (and still are) really shaky. The fed is artificially propping up the economy with QE4, developers are overbuilding, and the market seems like its shooting up way faster than it deserves to and I feel a correction is imminent. I know many strategists say to ignore market fluctuations and just keep investing for the long haul but I just felt at the time that it would put me at a huge advantage to wait for the correction then jump back into the market rather than see my investments slashed and have to try and recover. Curious to hear opinions about this. 

As far as real estate investing goes, competition in the residential real estate space is fierce right now and returns are minimal due to the housing boom and very few good deals to be found. I'm keeping my powder dry so-to-speak so that I can invest in my dental business. The reason for this is that there is far less competition in this arena and many dentists don't know the first thing about real estate and business generally so I stand to gain much more than if I were to go out and buy 3/2 homes in this environment. 

I'm not sure if this is a joke or not haha. You do realize that most dental and medical students actually pay upwards of $100k a year to attend those programs and certainly do not actually make any money unless it's $10/hour waitressing in the evenings...

I do have plans to dramatically increase my income by becoming a dental practice owner in the next 12-24 months but my current salary is about average for a dental associate in the U.S.

Thanks for the reply Mason! As far as the car goes, the MSRP of the car is about $75k and you can't really find them for less than $40k. The one I've got the deposit on is $45k and it's a 2016 model year with 500 miles on the clock (it was owned by a collector who never drove it supposedly). I would normally buy an older car (I was looking at 2006 911s for awhile) but the risk is so high with mechanical issues costing you tens of thousands of dollars. This one still has almost its entire factory warranty remaining since it was titled in 2018 originally.  

I'm totally prepared to get my *** grilled based on the title of this thread but that's fine. Please share your honest opinions. Here is the situation:

- I'm a complete car nut. I spend a lot of my free time researching cars, shopping for cars, watching videos, etc. and I've had my eye on a few models for some time now.

- I'm 30 years old, I'm a dentist, I do not have student loan debt, I live in an area of the country with one of the lowest costs of living, I have a monthly mortgage on my home of $2100. I make approximately $140,000/year and save 40% of my income. The remainder is budgeted for my expenses including mortgage, food, entertainment, etc. 

- My current car is paid for by the company I work for and I have no car payment. I'm going to be keeping this car as my daily driver.

- I put down a refundable deposit on a second "fun" car and the car costs $45,000.I think I negotiated well, the average estimated "value" of the car currently is about $50k. I've done a ton of homework and this particular car is projected to depreciate very minimally and even has the potential to appreciate in value as it may become collectible (I won't be counting on this as most all cars depreciate). The car is a few years old and has already done most of its depreciating but it still has 3 years of factory warranty remaining which minimizes risk to me in terms of repair costs.

- I have about 100k in cash savings but I will not be looking to buy the car in cash (I'll put a chunk of cash on a down payment and finance the rest at approx. 3% interest).

- I'm torn between the idea of total fiscal responsibility and buying something I've always wanted to own at a relatively young age. I'm not dead set on buying it and my deposit is refundable but I'd like to make my final decision in the next few days. 

- I'm currently single with no wife or kids (gonna do all that someday)

- Since this is a real estate investing forum and the topic is bound to come up, no, I do not have real estate investments at this time because I'm waiting to invest in my own business next year. I'll be looking to go about real estate investing in my field of expertise which is dentistry. 

Have any of you with more life experience gone through something similar and would you have done the same thing over again? 

Short summary of the situation: A friend of mine would like me to loan him approx $32k which he needs as a down-payment for something. I have a pretty good general idea of his financial situation and I know that he has access to lots of cash and could quite easily make this down payment on his own but since he has some cashflow property deals pending he would rather defer paying the amount. He has written up a contract for me to look over and it yields me a 20% cash return on the principal in 12 mo. with a personal guarantee on the loan and the interest if not paid in full at the 12 month mark. I've gone ahead and copied the text of the agreement and have redacted all identifying details. To those of you familiar with these types of arrangements, I'd love to hear your opinion since I'm not adept at personal lending. Hard to turn down a 20% return. Thanks in advance.

Repayment Agreement

This agreement is made between XX and XX

RECITALS

XX is in the process of buying a new XX

[item description]

XX desires to loan the down payment of this item from XX

XX desires to loan the down payment of this item to XX

In consideration of the promises contained in this agreement, the parties agree as follows:

COST OF RENOVATION

1. XX desires to loan the down payment of this item to XX, and shall provide cash, check, etc. (Estimated and not to exceed $32,800.00) to XX.

1. XX shall reimburse XX the total cost of this down payment (Estimated and not to exceed $32,800.00) in a 12 month period commencing on the date of execution of this agreement.

1. Additionally XX shall pay XX a 20% return on the (Estimated and not to exceed $32,800.00), which is to be paid at the end of the 12 month period commencing on the date of execution of this agreement. ( Interest estimated and not to exceed $6,560.00)

1. If XX does not reimburse XX the down payment and interest in the 12 month period. (Estimated and not to exceed $39,260.00) in a 12 month period commencing on the date of execution of this agreement. He shall pay this total personally via AMEX, funded through PayPal.

OHIO LAW TO APPLY

5. This agreement shall be governed by the laws of the state of Ohio.

WHEREFORE, the parties to this agreement have signed it on ___________ ___, 2019.

Thanks to the above posters as well as those who have PM'd me to help. You've all definitely turned me away from trying to jump straight into a commercial deal off the bat and to focus more on a beginner deal as well as my profession. My biggest hurdle in all this will be the infamous analysis paralysis but I'm hoping at least my awareness of my proclivity toward overanalyzing will help me avoid it. 

Thanks again for all the replies everyone! Based on what you all have said, over the next 5-10 years my primary pursuits will be to first and foremost maximize my education and income in my profession and secondarily to invest in my business from a cashflow perspective (buying practices and dental real estate, hiring new associates to run those practices, etc). From what it sounds like, the headaches and time requirement of purchasing and cashflowing SFHs simply do not make sense right now. I'm also not an accredited investor so syndication involvement would be limited so becoming accredited is something I'll be working toward. I'm a bit uninspired by the idea of IRAs and index fund investing because I can't leverage those and it's just such a slow and tedious path that won't bear fruit for so many decades (or at least that's how it feels). 

Also for those who have asked about what market I'm in, I live in the city of Cleveland.