I get to keep my Baur!

[GraphicRage]

Was able to pull together enough cash and yank my 401k for my house purchase. The Baur is still mine all mine!!

Good thing, because the 2100 sq ft garage I bought the house for sure would have looked empty without it...

[hendrixvodu]

whoooooowee! e30 FTMFW!!!!!!!!!!

[nosignal]

Sweet! I've got another one for you if you really want to fill up that garage. :o

[GraphicRage]

Go on...... :twisted:

[Danny]

+ Rep

[RobertK]

Was able to pull together enough cash and yank my 401k for my house purchase. The Baur is still mine all mine!!

Good thing, because the 2100 sq ft garage I bought the house for sure would have looked empty without it...

Don't get me wrong cause I love a nice E30 like anyone else but yanking your 401k for any reason other than to avoid bankruptcy is a bonehead financial move.

Once you calculate the penalty and taxes you end up paying just to access the money not to mention you are pulling money out of an asset that appreciates in value in order to keep a liability that depreciates. Depending on the amount you pull it could take you a few years of double payments back in to make up your lost time. Especially now that the market stinks which means stocks are on sale and the last thing you want to do is pull out when the market is low. If anything now is the time to dump money in your 401k while everything is cheap.

You can always buy another Baur if you retire with plenty of $$$ in your retirement fund.

[bimma360]

Don't get me wrong cause I love a nice E30 like anyone else but yanking your 401k for any reason other than to avoid bankruptcy is a bonehead financial move.

Once you calculate the penalty and taxes you end up paying just to access the money not to mention you are pulling money out of an asset that appreciates in value in order to keep a liability that depreciates. Depending on the amount you pull it could take you a few years of double payments back in to make up your lost time. Especially now that the market stinks which means stocks are on sale and the last thing you want to do is pull out when the market is low. If anything now is the time to dump money in your 401k while everything is cheap.

You can always buy another Baur if you retire with plenty of $$$ in your retirement fund.

Good point on all sides. But don't forget the 401K still contributed to buying a house, and in the same sense buying a home when the housing market is down could mean a huge equity build up in the years to come. Plus his situation could be different. He may not have been invested for as long as you would assume, and the percentage he has lost in pulling his 401K may be worth it to gain the real estate. And if he actually rolled over some of that 401K into property... he may be able to avoid some of those taxes you were talking about. There is a lot of ways this could play out. Its never a bad idea to buy property (if you're smart), and it makes life worthwhile sometimes to hang onto simple luxuries (such as an e30). Glad you got to hang onto the car. I've heard way to many people regret selling their hot rods and whatnot when they were younger... funny enough, most of the time to buy their first home.

Dave

[GraphicRage]

I took a 401k loan from myself, which incurs no tax penalties and will be paid back in Feb when I get my annual bonus.

I only took $5k anyway since I got an FHA mortgage and bought the house dirt cheap due to the market.

Thanks for playing.

[FredK]

Good thing, because the 2100 sq ft garage I bought the house for sure would have looked empty without it...

You won't even have to buy shelves for the garage. You can just put everything on the floor! :mrgreen:

Congrats on the house purchase!

In certain markets it could make sense to buy a house if it is inexpensive enough to avoid renting, to build equity, and to gain homeowner tax benefits. Upstate NY is definitely one of these places.

Generally it is not a great idea to withdraw money from a 401K needlessly BUT as I think it was previously mentioned in another thread, you can withdraw up to 10K penalty-free if you are a first time homebuyer. In terms of market timing, it is sorta the worst time to withdraw the money, but people have made worse financial decisions.

[RobertK]

I took a 401k loan from myself, which incurs no tax penalties and will be paid back in Feb when I get my annual bonus.

I only took $5k anyway since I got an FHA mortgage and bought the house dirt cheap due to the market.

Thanks for playing.

I was just making a generalized statement. Of course $5k is much less than most of the people I have met end up taking out and if you can replenish it easily without penalty then putting in real estate is always a good thing. My comments were based on the assumption that you were yanking out your entire 401k to put down a 10-20% downpayment which in NY I would assume would be between $20k-40K. Buying your own home is a good thing but always remember that it is an liability not an asset. Those thinking otherwise is the reason that we are in this mortgage mess.

I recently had a friend cashout his entire 401k to buy a new car... that's right.. a new car! Anyone who can do simple math would realize that you are losing your ass when you yank your entire 401k to buy a new car.

Of course was simply trying to pass along some sound financial advice to any youngsters who read these threads. Never meant to get anybodies panties in a wad.

[FredK]

in NY I would assume would be between $20k-40K.

Dude. Property in the Buffalo area is CHEAP. In fact, most of Upstate is cheap as hell. Most nice houses are like 100-120K. My friend lives outside of Rochester. Cheap living, but there ain't shit to do.

[GraphicRage]

The house I bought is actually outside of Buffalo, but yeah, still only $65k - it was listed at $80k w/ the garage (considered a commercial property because of the size) but in the depressed market they were ready to deal. FHA is 2.5% down, so I only needed $5k, half for the down payment and the other half to buy appliances.

I dunno, I think the greater niagara region gets a bad rap - granted I'd rather be in the Buffalo area than the Rochester area, but if you are a musician or an artist as I am, Buffalo is the place to be. Very active community and ridiculously cheap real estate. And if you hate it that much, Toronto is 2 hours north and NYC 6 hours east.

[FredK]

Eh, I really don't know what it's REALLY like in either the Rochester or Buffalo area. My only experience with Buffalo is dropping by the Anchor Bar for wings, which after going, I learned is not even the best place for wings. Dammit. The low cost of living must be pretty sweet though. A mortgage is probably less than rent.

[GraphicRage]

Yeah, my mortgage will be $400 less than my current rent!

The 2100 sq ft garage is sectioned in three with two garage doors in different sections (used to be three garages that were combined into one)

So I'm leaving one section as a 4 car garage and the rest will become my studio/office (I work from home).

[RobertK]

Wow.. that cheap eh? In my mind I was thinking metro NY prices.

I just bought a 1200sqft house with a 1 car garage in Knoxville and it cost me $95k which was still 10k under the going rate in the neighborhood we're in. I think the median house price in Knoxville is $130k which is why I'm surprised NY real estate is so cheap.

My co-worker bought 2100sqft house for $175k on the out skirts of west Knoxville and it's pretty pimp. I certainly wish they had 2100sqft homes in Knoxville for 65k right now I could use all the extra room I can get.