[jtodd_fl]

About as likely as this kid listening to black Jesus.

[ResoKP]

Buying a house as soon as possible was a 10 years-ago argument, especially in a high COL area.

Just as an example, in my neighbourhood, 6 years ago, the average house price was around $800K. Now it's around $3.5-$4M.

OP is young and his biggest asset is time. As long as he invests $2K/month in his retirement fund for the next 30yrs, he can retire early at 55 with a $2.7M portfolio generating him $108K income @ 4% SWR.

OP should buy a house together with his spouse, after he gets married. Combine incomes for a higher leverage.

[natedog7700]

Originally Posted by brandoningram14

I'd love to buy a house first, but the SF Bay Area housing market is insane and I'm not sure if it's coming down any time soon

I was going to say the same, but yeah in that case lol get a car first. Not a terrible idea but a better one would be to wait or spend less. Your money though, you can easily afford it IMO.

[silvergray545]

Originally Posted by csu87

Does no one use the 30% rule anymore? 30% of your annual income is the total price of the car. You can still finance it if you want, but shouldnt be buying a car worth over half your annual income.

I've actually never heard of that rule. I've always heard that your car payment shouldn't be more than 10% of your monthly income. I'm assuming net monthly income since gross doesn't really mean much.

[jgoens]

You have a good income and a low rent. Really depends on your living situation and how you like that. I don't think it is a good time to buy a house in this area--maybe a lot better in about five years and you will be best to have $100k at least for a down. So think, how much you need to save each year to have that much ready( just for down payment--you still want savings) in a few years. I would take the advice of not buying new--a two or three year old car is going to feel pretty new and save you a lot.
Drive an M3 and also 335 and see what you like.

[R3dliner]

OP don't do it. I was in a similar situation at your age. Bought a brand new G37 coupe back in 07. Out the door was 47k. All the $$ tied into the car I couldn't travel like I wanted to. Do it when you're little older and more established.

[M3 Number 86]

Originally Posted by csu87

Does no one use the 30% rule anymore? 30% of your annual income is the total price of the car. You can still finance it if you want, but shouldnt be buying a car worth over half your annual income.

what the hell rule is that? never heard of it.

isn't it more like 30% of your monthly income on a payment?!

[M3 Number 86]

Originally Posted by jtodd_fl

The leverage conversation...

nice quote in the sig. Without context it sounds Megan's Lawish.....FUCK!

[jtodd_fl]

Originally Posted by M3 Number 86

nice quote in the sig. Without context it sounds Megan's Lawish.....FUCK!

That's why I picked it. Hehe...

[brandoningram14]

Thanks for the responses. I knew I couldn't afford it but I had to just toss it out to see what everyone else thought. I'm in the south bay, ~12k mi/yr is about right and I do have a garage (for now - thinking about moving somewhere cheaper but not sure).

I've been driving a boy racer for the last 7 years until someone rear ended me last month and the car was worthless so now I'm car-less. Should I just get a newer wrx/evo? E46 sounds intriguing but I really wanted a newer car with low mileage. I'm not sure an E92 with near 100k miles is at the top of my list either.

[shoei]

Fack the car or mortgage question... Nobody else want to know how he's paying only 1700 a month in San Francisco?!! My buddy just got a new apartment and its frickin' 6K a month, lol...

To bimmette's point, gotta have roommates... Or 3 roommates... Plus, where are you parking said M3? Plus, have you seen the roads in SF??

As for mortgage, unless you're planning on buying far far away from SF, $1xx,xxx salary isn't landing you anything besides a cardboard box in the alley off of mission st...

[fecurtis]

Originally Posted by M3 Number 86

what the hell rule is that? never heard of it.

isn't it more like 30% of your monthly income on a payment?!

Yup, that's the old adage I'm used to.

[jgoens]

Originally Posted by brandoningram14

Thanks for the responses. I knew I couldn't afford it but I had to just toss it out to see what everyone else thought. I'm in the south bay, ~12k mi/yr is about right and I do have a garage (for now - thinking about moving somewhere cheaper but not sure).

I've been driving a boy racer for the last 7 years until someone rear ended me last month and the car was worthless so now I'm car-less. Should I just get a newer wrx/evo? E46 sounds intriguing but I really wanted a newer car with low mileage. I'm not sure an E92 with near 100k miles is at the top of my list either.

What part of South bay are you at? Only way your going to get cheaper is going pretty far out in East bay or maybe East Palo alto...but then make sure your car is worth less than $5000.

[jaye944]

before or afterwards

Originally Posted by brandoningram14

I've been driving a boy racer for the last 7 years until someone rear ended me last month and the car was worthless

[brandoningram14]

Originally Posted by jgoens

What part of South bay are you at? Only way your going to get cheaper is going pretty far out in East bay or maybe East Palo alto...but then make sure your car is worth less than $5000.

San Jose. I already have two roommates.

The car was worthless both before and after 😭

I think my choices for cars for pretty limited given that I'm looking for something a little newer and lower in miles and 6MT

[csu87]

Originally Posted by M3 Number 86

what the hell rule is that? never heard of it.

isn't it more like 30% of your monthly income on a payment?!

Originally Posted by silvergray545

I've actually never heard of that rule. I've always heard that your car payment shouldn't be more than 10% of your monthly income. I'm assuming net monthly income since gross doesn't really mean much.

I dont remember where I heard it, think one of my finance or accounting classes in school, but it makes sense imo. Say for 130k annual income you can get a $39k car. 20% down, 48month finance w/ the 0% they are giving people and you are close to 10% of your monthly net income. Now if you arent going to finance, or you are going to put a ton down, then this doesnt apply to you.

30% of your monthly income is the rule for housing. This is from Mortgage companies. Its hard to get a loan if you are outside of this ratio.

[jtodd_fl]

Originally Posted by brandoningram14

San Jose. I already have two roommates.

The car was worthless both before and after 😭

I think my choices for cars for pretty limited given that I'm looking for something a little newer and lower in miles and 6MT

You could sell your ass down in the tenderloin. Allegedly. Amirite, jgoens ? How do you all think he can afford his skunk mistress ans even give her a shed to live under? Huh?

[jgoens]

Originally Posted by brandoningram14

San Jose. I already have two roommates.

The car was worthless both before and after 😭

I think my choices for cars for pretty limited given that I'm looking for something a little newer and lower in miles and 6MT

I get it..you had a fun car and are looking for a more upscale fun car. You have to balance that with what your long term plans are as far as staying in this area.I rented here for 15 years until the crash and then was able to get into a house. I think you would be surprised how nice a car you can get under $40k and still be able to save well.

[ASBSECU E93]

Originally Posted by ResoKP

Buying a house as soon as possible was a 10 years-ago argument, especially in a high COL area.

Just as an example, in my neighbourhood, 6 years ago, the average house price was around $800K. Now it's around $3.5-$4M.

OP is young and his biggest asset is time. As long as he invests $2K/month in his retirement fund for the next 30yrs, he can retire early at 55 with a $2.7M portfolio generating him $108K income @ 4% SWR.

OP should buy a house together with his spouse, after he gets married. Combine incomes for a higher leverage.

Disagree on waiting to buy a home.

OP can borrow $$ toward RE purchase at record low interest rate levels. If/when he marries, then he has the option of selling an asset that should have appreciated, or they can live together in a house that has equity - valuable for a young married couple that plan to expand family, etc....

Home ownership is power....IMO, that's what OP should invest in...

[csu87]

i dont recommend anyone buying a house right now.

Not sure about everywhere else, but the majority of markets ive looked at recently have prices that have gone up a ton in the last 1-2 years. Its got to start dropping soon, probably once interest rates start going back up, and when it does, if you are able to, that is the time to jump on a house.

[Flying Ace]

all this talk, yet nothing on the other side of the equation...Income. What's your monthly DTI bruh?

I'm going to give it to you straight here, unless you make over $100k+, you can't afford a $71k car...not in the Bay Area. Hell my wife and I both make over $100k each, and we can't afford a $71k car.

Do you even care about things like retirement, tax advantaged savings like a Roth IRA, building equity in property, passive income sources and having a brokerage/investment account?

My household has checked every box above and contributed for it and the max we're willing to spend on any car is still in the $50k range. And I had to dig hard into convincing my wife I can sell my M3 for $30k to come out of pocket $20k. Hell the most I've paid for any car to date is $46k (for my M3 in 2010), and that's after selling a car worth $13k to come out of pocket $33k. Our monthly debt-to-income is roughly 3%, likely less. I want to say, after basic living expense (including taxes), we bank and invest about 90% what's left. And yes, we own a house, in SF no less.

Let me put it this way, your goal in life is to set up a retirement where you monthly income is $1000...and you can afford a $71k car EVERY YEAR when you retire, how does that sound?

[jgoens]

Originally Posted by ASBSECU E93

Disagree on waiting to buy a home.

OP can borrow $$ toward RE purchase at record low interest rate levels. If/when he marries, then he has the option of selling an asset that should have appreciated, or they can live together in a house that has equity - valuable for a young married couple that plan to expand family, etc....

Home ownership is power....IMO, that's what OP should invest in...

Problem is, is that he needs a car and basically wants to know how much car he can afford.
Not sure how much appreciation will be had with buying a house in this area right now..in the short term. Prices are leveling now at peak levels. While they say it won't happen, I still think some sort of bubble will burst in upcoming years. This area is seeing problems due to high rents and housing prices.