How can it be done...? (Irvine, Newport Beach: mortgage, credit, loans)

[teisb007]

Seeing the million dollar mansions and all of the toys a guy could imagine has me asking myself, "what are they doing that I'm not?"

I want to know how people in the OC can afford these million dollar homes with the expensive cars and the lavish lifestyle?

Is it inheritance, or are their thousands of surgeons running around the OC?

[RainydaysGirl]

When we lived there, we used to tell ourselves everyone was selling drugs. I really think that the people are just working everyday jobs and are overextended on their credit. My ex and I drove an Audi TT and an Expedition, lived in a big house in OC and bought anything we wanted-ON CREDIT. Don't believe what you see.

[sirwinston73]

Where I live in Newport Beach it's mostly entrepreneurs with high-paid professionals and executives mixed in, along with a handful of authors and celebrities.

On my street, I'm a bestselling author, next-door is the area's top personal trainer who owns a high-end gym and is also a Dr., across from him is a developer, across from us is a CFO of a large corporation, next to them are owners of a popular restaurant, etc... there are some regular middle-class people in the neighborhood too who bought 10-15 years ago or so when it was still affordable and have stayed in their houses ever since. Interestingly everyone is very down-to-earth and you can't tell the middle-class families from the wealthy ones other than looking at their cars.

I guess it's like any other highly expensive community as far as the kinds of people who live here.

You will hear people say it's a bunch of losers on over-extended credit and maybe that's true in the less expensive inland communities but I haven't experienced that at all in Newport. If you consider a starter house is a million+ and run the numbers it just isn't possible for someone to "fake" it here....... even the apartments are too expensive to pull that off.....

[OutOfSoCal]

The reason the housing market is in a tailspin right now is because SO MANY people are "faking it" they bought million dollars home with an initial payment of 4K(neg AM) adn now they are coming due and payments are going up to 8-10K. Clearly once you hit a certain price you cannot "fake it" but that price is certainly higher than the one million dollar area. I could go buy a house for ovber a mill now am I am nowhere near rich. I could afford the payments for 3-5 years, then I am toast unless it appreciates and I can sell or use the equity.

IMO Most are living paycheck to paycheck and are way overextended on credit cards, they have every toy adn take 2-3 vacations a year. it will catch up to them. It just can't be done in So Cal, particularly OC with anything less than 150K, not possible without a HUGE down payment or you were willed the house

[sirwinston73]

Originally Posted by OutOfSoCal

IMO Most are living paycheck to paycheck and are way overextended on credit cards, they have every toy adn take 2-3 vacations a year. it will catch up to them. It just can't be done in So Cal, particularly OC with anything less than 150K, not possible without a HUGE down payment or you were willed the house

Like I said maybe in places like Coto but in my neighborhood in Newport I know everyone on my street and they most definitely are not fakes, in fact none of them even have jobs, they don't need to....

[EscapeCalifornia]

A lot of people got in before the bubble and are spending the equity in their houses. If I'd been able to buy my $600k house 5 years ago for $250k, my monthly expenses would be a heck of a lot less. Then if you've got $350k in equity, what's $80k for a nice car or $50k for a new kitchen?

[Charles]

Originally Posted by sirwinston73

Like I said maybe in places like Coto but in my neighborhood in Newport I know everyone on my street and they most definitely are not fakes, in fact none of them even have jobs, they don't need to....

How do you know what their financial situation is?

[YLresident]

Originally Posted by Charles

How do you know what their financial situation is?

If you're close enough to your neighbors, it's not hard to know--we share things with our closest neighbors periodically, and word spreads pretty quickly. We've had one family go down the drain in our neighborhood because of the idiot mother's spending affliction (she totally ruined her poor ex-husband's life, not to mention credit), but other than that, we mostly all bought 20 years ago... so in 20 years, you can really get to know your neighbors. Depend on how open and honest you are with your neighbors--some people aren't comfortable with that, but our street's pretty open with each other.

[JSuccess]

Originally Posted by sirwinston73

Like I said maybe in places like Coto but in my neighborhood in Newport I know everyone on my street and they most definitely are not fakes, in fact none of them even have jobs, they don't need to....

I totally agree with you on the type of lifestyle that most of the million dollar homeowners lead. I live in Los Alamitos and most of the homes in that area are 900K+ and it seems that most people I come into contact with are business owners. I also am looking to move to Irvine/Newport Beach with my family and at first I wondered how people afforded the high homes (which are coming down) but then after meeting a few people in the area I realized that having your own company was the way they usually went. Even the celebrities and authors pretty much can be considered business owners since they are selling their books or their brand. Overall, I see the only way to live comfortably in this type of area is to step outside the norm and make your own way (entrepreneurship) because the housing and cost of living out here is out of the norm.

[Parrotpaul]

Originally Posted by teisb007

Seeing the million dollar mansions and all of the toys a guy could imagine has me asking myself, "what are they doing that I'm not?"

I want to know how people in the OC can afford these million dollar homes with the expensive cars and the lavish lifestyle?

Is it inheritance, or are their thousands of surgeons running around the OC?

If you can make the payments on your credit cards you can have pretty much of anything you want.

There are some very huge income people in this county...there are also great numbers of people living from paycheck to paycheck.

Many of those large expensive houses you see were purchased with the loans that are now forcing them out..they drive leased cars and probably can't afford to furnish much more than the living room and one bedroom in their 5 BR 4 bath houses.

My wife and I were very lucky. We moved here in 1996 from Maine and purchased two 1,000 square foot condos for $140,000 for both. We pay about $1600 a year in taxes on both, and we could probably sell them for about $325,000 each. We have no mortgage, and we can live quite well with
both of us working two days a week. I have a teacher pension and a small social security check. We aren't big spenders, but owning the property free and clear is about the only way we could swing living very well in OC. We are debt free and save most of our money...restuarants, a few cocktails, road trips throughout the west, both owning five year old paid for cars that are mechanically and aesthetically excellent, and having a fashion statement that includeslots of short pants and T shirts helps as well.

Life is good in south OC.

I rent one condo for $1385 a month. It is all about timing. We were lucky...our timing was excellent...not by design but by happenstance.