somebody talk me out of this (car related)

With a rate that low, why put that much down? If you can find a rate that low for a used car then I would finance as much as they let you and keep the cash on hand for an emergency. You can always pay more but they aren't going to give you any of that down payment back if you get in a financial jam. Just my 2 cents.

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Creamer

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I am currently in law school (too late to talk me out of this) wife makes great money, we are looking to get a new car in the next few months. By new I mean used and under $20k. we can pay cash and still be fine financially, but I am debating putting 10k down and financing 10k at 2%. The reason for this is to keep cash on hand for purchasing investment properties as soon as I graduate. Is my reasoning flawed here? I don't feel good about losing this, but haven't talked myself out of it. I have no other debt.

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So my flash thoughts:

2% is fantastic. Why not finance 15K if you can do that? My note on financing 16K on a new car at .9% was $295/month for 60 mo term. That's an outstanding monthly note amount if you ask me. Especially if you're going to be making more money shortly thereafter.

But what about the investment property deal? You're essentially going to be leaving yourself with zero nest-egg if you plow it all into that, and with the student loans coming due, while you're going to be making money, the lack of a safety net there with Sallie Mae, the car note and costs with rental units is fairly worrisome if you ask me.

you are looking at this all wrong. You have to look at the cost for you to borrow (2%) and the CAP rate for your rental properties. If your cap rate is higher (it should be a minimum of 10-12%) then you should finance as much of the car as possible and use that money to make more money for you.

Shoot me an email if you'd like to talk some more about the house investing djw70726@yahoo.com