Is this reasonable? Won $2 million in lotto, looking to purchase Irvine condo in cash. (Huntington Beach: fit in, lease)

[E46driver]

Hello all,

Last year I won $2 million in the New York lottery and I realize how lucky I am! I'm looking for advice on where you think the best place to buy a condo would be for someone thats not so liberal and doesn't like being the "minority" if you know what I mean...being a 28 year old professional white guy. As much as I love Newport Coast and Laguna Hills/Beach..I just don't think it is that smart to blow over 50% of the cash I have left after taxes on a small place and then have to worry about paying taxes and fees.

I've hated the weather in NY after living there and Pennsylvania my entire life so I'm glad I didn't buy anything there...but where I'm from -- 500,000 gets you a NICE house with a yard and relatively low taxes per year. Not so much here!


Here is some basic info to start:

-Moved to Irvine 3 years ago. Summered in Long Island with my parents the following year and subsequently won this money in that summer. Got 1,526,000 after taxes. Paid off student loans, credit cards, bought an $80,000 Mercedes convertible and some clothes and then shut down the spending and invested wisely. Have a little more than 1.45 left total if you count everything.

-Working as a .NET software engineer in Irvine for the past year making $85,000 salary. I was making 60k when I first moved here and it was barely cutting it -- I had started racking up credit cards to the tune of about $15,000 over the course of a year just trying to "live" and still have a decent life. Which is why I summered in New York in the first place and quit my original job...to live with my parents or 3 months, do side freelance jobs and pay that crap down some.

- Max price is around $450,000 - $600,000 for a nice condo (is that spending too much???). Decided to pay with cash and get it over with as much as I'd rather invest the money and make more than I'm paying for a mortgage. I just have a bad feeling I'll get into some bad spending habits again and over 10 years will go through that money and still owe a crapload on the place.

Anyway, I love OC the most after living in LA for 6 months. All that traffic and so many mexican/asian people up there just made me throw in the towel. I realize there is a lot of that down here too, but not nearly as bad in the nicer areas suich as where I'm currently renting. I am really trying to find where it is not so liberal, is the most white, and has a ton of tech job opportunities since I eventually want to get to a Senior position making over $100,000 a year. Since I'm a total weather fanatic, northcal just doesnt work even though thats where all the tech market is. I will say, I do like spending money and having nice things..I have nice furniture and all that stuff and my car...but its because I can really appreciate finer things. Of course, I want to fit in wherever I go but I don't exactly like all that snobby and fake/pretentious mommy & daddy money stuff that you see so much around Newport.

Thanks so much for any advice!

[scgali]

You can get a nice condo in Irvine for your budget and paying cash is probably a good idea if you don't trust yourself not to blow through your money. Newport/Laguna may be tough for you not only since prices are higher but also you will be a small fish in a big pond and may run the risk of blowing money trying to fit in since you said as much. I don't think spending 25%-33% of net worth on your primary residence is too much. Sounds about right since you have a decent job as well. Good luck!

[DinsdalePirahna]

Orange County also has a lot of Mexican and Asian People. I guess you'll need to get use to that.
Laguna Beach may be too liberal for you.

You may want to try Dana Point where you can still get nice condos in your price range, but you will need to get use to the Hispanic population in Capistrano.

Huntington Beach also has condos near the water in the 300k - 600k (anything less than 300K is usually on leased land, something you want to stay away from)

[Fontucky]

One doesn't move to Irvine hoping to avoid Asians.

[DinsdalePirahna]

Originally Posted by Fontucky

One doesn't move to Irvine hoping to avoid Asians.

...or Persians, or Arabs or other dark skinned fur-in-ners that wear cheap cologne.

[LuvSouthOC]

Buy a small house and avoid HOA fees. Also, don't pay off the property, you need a mortgage for tax purposes. For the rest of the money, see a financial advisor.

Please lose the racism, this is California.

[denverian]

Originally Posted by LuvSouthOC

Buy a small house and avoid HOA fees. Also, don't pay off the property, you need a mortgage for tax purposes. For the rest of the money, see a financial advisor.

Please lose the racism, this is California.

Yeah, the whole "looking for a white area" won't go over very well anywhere in OC. Last time I looked around, Irvine is quite racially diverse. And there are plenty of well-off, college educated Hispanic and Asian people in South OC.

[DewDropInn]

Originally Posted by E46driver

All that traffic and so many mexican/asian people up there just made me throw in the towel.

Thanks so much for any advice!

Take your towel someplace besides Orange County.

p.s. The Asian you don't like will be your boss at the tech job. She'll be making the $100K a year.

[NickofDiamonds]

Personally, I wouldn't buy a condo because the HOA fees will always keep going up every year.

Buy a 3 bedroom 2 bath house because 90% of the people will want to buy it when the time comes to sell whereas a small percentage of people will want to live in a condo complex because of all the rules, regulations, and small town politics that are involved with living in a governed non profit corporation.

If you can, buy it outright and max out your 401k and I.R.A as a better tax deduction against your income rather then an interest write off which would be minimal now because interest rates are low.
Once you own it, you will always have a roof over your head if you ever have to go through hard times again and have to take a huge pay cut to where you can't make your house payment.

If you look at the amortizment tables, you'll see how much you give a bank in principle payments.
You can use that money for other investments with higher returns.

Remember, paradise isn't forever but taxes are.

[Ragnar]

Originally Posted by LuvSouthOC

Buy a small house and avoid HOA fees. Also, don't pay off the property, you need a mortgage for tax purposes. For the rest of the money, see a financial advisor.

I disagree. It's much better to never pay the interest in the first place than to get a marginal write-off come tax season. If the OP purchases a condo or small home in cash, then he can invest what he would've spent on interest in good growth stock mutual funds. Owning your home is a prime way to manage risk. Fully owning a home means he can weather career changes easily without worrying about paying a mortgage. With the numbers he's showing, he has plenty of money left over to invest after a home purchase.

I also second the notion that the OP should look for a small 3-bedroom home rather than a condo. Home lots in Irvine are generally small, so there shouldn't be much yard maintenance. A stand alone home should sell much faster than a condo, when it comes time to do so, and you generally will have less HOA stuff to deal with.

OP, I also recommend that you use a good financial advisor. You definitely needs some help being more disciplined with your money habits. With your savings and income, there is no reason for you to ever be in debt. I'm afraid that living in the O.C. will just encourage you to blow through money on stuff you don't need to try to impress people you don't really even like.

Also, do not forget to make giving a part of your financial plan. You have the resources to help others, so I encourage you to resist spending every last dime on yourself. Giving is the fun part!