How do people afford to buy a house here? (Los Angeles: foreclosures, assessors)

[SHABAZZ310]

Originally Posted by iama30something

RANT: I'm 31 and frugal. I've been saving since I was in high school and have a sizable amount saved for a down payment on a house. I also bring home a salary close to 6-figures. I have no kids and I'm not married.

...and I STILL can't afford a house within an hour of my office! I work in Santa Monica and I know the Westside isn't cheap. I'm not looking to live on the ocean by any means, but I can't even afford a house in Culver City, Mar Vista, West LA, Playa Del Ray, El Segundo... no where! I'm really looking for a house and not a condo...if I wanted a apartment with a HOA fee, I'd just rent (which is what I have been doing).

The best deal I've found was up to Topanga Canyon, for a nice 2 bed / 2ba, 1000 sq ft for $699k. That's a downpayment of $150k + a mortgage of $3600/month. Insane.

How on Earth do people actually afford to buy here?

The best route to take is to buy a fixer upper in a good area and roll your equity into the next house when you sale. If you want to start out on the west side it might take you 10 plus years and selling a couple houses for a profit to get into something you really want.

[preetlove]

May be, people at that place would love to find places for living their, according to their income standards and lifestyle too. If you rent a house or decides to buy a new house then you have to think about your income amount first. Because the houses are too expensive for purchase and hire.

[CA4Now]

"Most economists predict continued price appreciation ahead, though at a slower pace than in recent years as families struggle to afford the increased cost of housing."

In Los Angeles County, the median price--the point where half the homes sold for more and half for less--rose 4.7% to $492,000, from July, 2014.

Southland home sales hit a nine-year high; prices up 5.5% - LA Times

[jm1982]

Originally Posted by SHABAZZ310

The best route to take is to buy a fixer upper in a good area and roll your equity into the next house when you sale. If you want to start out on the west side it might take you 10 plus years and selling a couple houses for a profit to get into something you really want.

I think this is a good idea too . Fixers that are actually priced as fixers are hard to come by especially in really desirable areas like the westside .. But they are out there I am sure.
It would even be worth doing some marketing like an investor would do to find a good deal .

If you start out with strong equity " built in " then it's less scary if the market does drop a bit . If it goes up of course you'll do better than the other neighbors that bought recently .

Another advantage of the " live in flip " that a lot of people might not realize is that if you live in it for at least two years then the 250k of the profit is exempt for single people and 500k for couples .
So let's say if you bought a house for $1million in west la and are married and when you come to well you have a profit of 500k that whole 500k profit will be tax free . Pretty amazing if you think about it.

[jm1982]

Originally Posted by CA4Now

"Most economists predict continued price appreciation ahead, though at a slower pace than in recent years as families struggle to afford the increased cost of housing."

In Los Angeles County, the median price--the point where half the homes sold for more and half for less--rose 4.7% to $492,000, from July, 2014.

Southland home sales hit a nine-year high; prices up 5.5% - LA Times

Which is why any " slowdown" still won't make housing in LA affordable for most .

[SHABAZZ310]

Originally Posted by jm1982

I think this is a good idea too . Fixers that are actually priced as fixers are hard to come by especially in really desirable areas like the westside .. But they are out there I am sure.
It would even be worth doing some marketing like an investor would do to find a good deal .

If you start out with strong equity " built in " then it's less scary if the market does drop a bit . If it goes up of course you'll do better than the other neighbors that bought recently .

Another advantage of the " live in flip " that a lot of people might not realize is that if you live in it for at least two years then the 250k of the profit is exempt for single people and 500k for couples .
So let's say if you bought a house for $1million in west la and are married and when you come to well you have a profit of 500k that whole 500k profit will be tax free . Pretty amazing if you think about it.

I had an old boss how did this and he eventually was able to get into a house worth over a million dollars in Newport Beach. This was before the last bubble.

[jm1982]

Originally Posted by SHABAZZ310

I had an old boss how did this and he eventually was able to get into a house worth over a million dollars in Newport Beach. This was before the last bubble.

It's a sacrifice in a way since you are buying a house that needs work...and not everyone will want to do it...but it has been a great creator of wealth for many people.

[SHABAZZ310]

Originally Posted by jm1982

It's a sacrifice in a way since you are buying a house that needs work...and not everyone will want to do it...but it has been a great creator of wealth for many people.

It is a ton of work and you have to get in during the right times at the right price.

[jm1982]

Originally Posted by SHABAZZ310

It is a ton of work and you have to get in during the right times at the right price.

Yeah true. It does require the right deal...but right now I don't see much on the market(MLS) being much of a deal.

In every market there will always be distressed sellers - people that need/want to sell quickly ; divorce, job move, death , bankruptcy, etc.

Even in a strong economy and stock market all of these situations happen.

Quick sale usually means lower price...everyday people will 'leave money on the table' just to get out of a situation. People do this with real estate, cars, boats, etc.

but in this market one can throw up their fixer house on the market and will get people to get in a bidding war..especially if it's in the desirable area...but maybe even a non desirable area too.

It's a lot harder to 'cherry pick' deals from the MLS these days versus 2009-2012 or so when the talking heads on TV and headlines kept telling everyone how "toxic" real estate is and a bad investment.
It's certainly a seller's market now versus a buyer's market.

[Pennychaser11]

Good luck with fixers in LA or anywhere in CA. If it's a good deal people will flock to it like flies on crap. Competition is insane and that pushes the price up to the point where a novice can easily overpay for already expensive POS.

I do see opportunities where you can get the home in 'subject to' deals but you have to find really desperate sellers and most likely you won't find them in MLS. Even if you find them you have to convince the seller to trust you to not screw them over when they sign over the deed.