Financing a Complete/Partial Build

Cash is king! - Mayor

 

cash cash cash.................or i dont need it

 

About the only thing I have ever farmed out was a automatic transmission rebuild, which I paid in full when it was done. And seeing how I just sent them the transmission and no car to pull it out of and put it back into, I saved a lot of money. Other than that, like the rest are saying, if you don't have it, don't spend it. My plastic comes off of my checking account, so I am very cautious when using it.

 

Hell yes!!!!!!

 

Funny story about that - who do ya think opened up the entire aftermarket iPod/iPhone repair industry?
http://lists.apple.com/archives/augd/2005/Jul/msg00010.html

I'm the guy that got the component manufacturers to get Apple to modify their exclusive contracts with them so we could buy parts direct. Until then, the only way to get parts for 'em was to part down a known-good one!

I got out of it and was semi-retired for three years, staying home with my newborn twins. Now I'm an ACMT (Mac Tech) at a large medical-based .Org, and a nobody (no responsibilities, zero stress), and like it that way. You'd be shocked who you meet when you're "in the biz" for 28 years... shocked.

~Jason

 

I remember an awesome thread on here a few years back about "How do you pay for your parts". There was a guy that posted that he busted up an RC helicopter and sold the parts on eBay. He did so well he started buying kits/partial kits and parting them out online too, and turned his side deal to get parts money into enough bank to do a couple of builds!

Computer fixin' isn't in too high of a demand right now, or as illustrious as it once was. We're all just "skilled labor" nowadays, and blue collar (and proud) all the way. Too bad we don't get the cool jumpsuits.

 

If you can't afford the build, you can't afford the build.

 

I agree with most others but I also agree with Daddy O... but borrowing is the exception not the rule. Borrowing to finance a whole build is unrealistic but passing up a screaming deal just because you don't have the cash laying around isn't always the best plan either. I bought a very nice high end drag car one time because it was unbelievably cheap. I walked around it and added up at least 2x the asking price just in visible parts. I went straight to the bank and borrowed the full amount. Ended up running the car (paying it off quickly) and winning about 4x the price I paid for it in prize money over the next few years (tons of fun) then ended up selling it for about 20% more than I paid for it originally.

Deals like that only happen once or twice a lifetime. However... as I said that are the exception, not the rule. Unless it is a clear no brainer deal, never finance a hobby car... period. I could have wrecked the thing or a host of other unforuntate unforseen issues could have killed my deal but lucky for me it didn't. Would I do it again? Probably... but it truely HAS to be the right deal. Haven't even come close to that again and maybe never will.

 

I have financed builds before. But you better know what you are doing or you will either become buried in it due to the finance charges, or even lose it, or whatever other collateral you might put up altogether.
But, like I say, I have done it. Usually on a build that I was going to sell and i knew I was going to make money on. Case in point, i borrowed $40K against my equity line of credit at 3% apr interest only. This was a build that sold for $80k. I had a little more than the 40 in it, plus my shop time. I kept it about a year. The interest on the loan was about $1400.00 and so I made good money on the deal. Would never do it if there was a chance that I couldn't turn it for more than "Costs" plus loan fees. If you decide to do it on a Keeper, then know what you are getting into and look at it like a loan on the Daily Driver - there is a cost involved with financing that probably isn't recoverable. I have a friend that wan't a Model A in the worst way. He didn't have the money in cash for it, but did have an excellent income and the ability to borrow. he got a loan at 5.5% and is enjoying his dream car. If he had waited the same 5 years as the term of the loan to save up, he would not have had a car to enjoy for those 5 years and probably wouldn't have saved it all anyway. To him the 5.5% loan cost were well worth it!

 

never ever take out a loan especially a second mortgage for a build. throw the plastic away- get your finances in order so that you can start saving money for your build. if that is not possible scratch the build until you can especially in this economy and uncertain future. you would be surprised how cheap you can build a dependable safe ride if you use your head. use the salvage yards and swapmeets for cheap useable parts and learn the skills that you need to do the work yourself. there is plenty of info on here. that is true hotrodding. remember it is a hobby not a necessity. my2cents

 

I've talked to the bank about a line of credit that was NOT tied to my home (because fuck that, that's why), and they said they indeed do that. A "line of credit" (not a "home equity line of credit") is like having a credit card, with a credit limit and rate decided on with your credit in mind, but without the card itself (you use checks).

http://en.wikipedia.org/wiki/Line_of_credit

Apparently if you have direct deposit and a credit score of 650+ they set you up an account, and you can write checks for up to your credit limit. But the rates - get this - were FAR BETTER THAN A CREDIT CARD! With a credit limit of like $3k (the bank folks said they've seen up to $10k - even more for business folks), minimal interest (hell, interest isn't even charged on the part of the line of credit that's unused), and smaller monthly payments, I could get machine work, plating, etc done, and nickel and dime my way there. What's more, once we have no more car payments this seems totally do-able... as long as nobody becomes an asshole with this process.

I'd much rather do things in smaller increments if I'm going to finance anything at all, and pay them off as I go. It works for the budget, and the speed the build is going can be adjusted so that by the time I've finished working on the section I've financed, I'd be done paying that section off, and can begin a new part of the build. Nobody says I'd have to go apeshit and max anything out - and when it's done if I keep paying off each section at a time, I won't have a 5-figure debt. What's more, I'll have killer credit. Best of all, my build will gain fluidity - being constantly worked on, and not sitting. Some progress is better than zero progress!

I'll fill y'all in on the actual rates after I call the bank (lines of credit are handled by the loan department). I seem to recall last night that the rate was under 8%!

Still not sure if I'll do this, but am throwing it out there for anyone interested. We have a small bank, and it feels like borrowing from family (only nobody bitches about "when you borrowed money from them that one time" every Thanksgiving and Christmas for 30 years).

~Jason

 

HA! Now that's pretty cool!

 

My current boss: "I really thought he was totally full of shit... until I looked it up and it was all true!" ROFLMAO!

I'm just a normal-ass guy that fixes Mac stuff. I've just done it for movie studios and agencies that send rockets into space. I'm blue collar as hell - nothing more than "skilled labor", like a mechanic or HVAC guy (only without the cool jumpsuit).

~Jason

 

Never financed any part of a car that I couldn't pay off when the credit card bill came at the end of the month. Cash only for my hobbies. Financing is for homes.

 

I've never made a ton--but I have not paid intrest since 1992--cash--built everything out of my back pocket even a house

 

I did a home improvement loan, fixing the car improved the hell outta the morale at my home!

 

We used to get a big bonus at the end of the year. Started counting on it and we set up a line of credit that we drew off of during the year then paid back when the bonus came through. Worked fine for many years but then there was the year that the boss said we made no money. That one hurt.

What the heck do you use for security? The rusty cowl and rotted out frame? What do you tell the banker? "Picture it in black"?

 

I found out the rate is 15% fixed, but that's better than most credit cards. You don't get charged for having this credit line, even if it sits unused either. The max you can take out is whatever your gross monthly salary is, so you don't get to take out enough to screw yourself too bad.

I'm stoked - this will help me out when I begin my build in earnest. By that time I may not even need it (especially if I can sell our other house). Even so, it's nice to know there's an option. And I've added it to the HAMB collective so it'll show up in searches in case there's anyone else out there interested. Doubtless there are folks that will be (nobody exactly tells folks about this stuff).

~Jason