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Old 03-24-2021, 10:29 PM
 
Location: Uptown Phoenix, AZ
5,210 posts, read 4,736,283 times
Reputation: 4783

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Wow this thread really got away from me while I was at work. I'll try to play catch up here, but I'm not sure if I can.

Quote:
Originally Posted by MN-Born-n-Raised View Post
Both of my kids currently rent. So like the Op, I'm a little concerned with their buying power as this housing inflation continues.
Quote:
Originally Posted by MN-Born-n-Raised View Post
Both kids will make $300K-$500K a year (dentist and a doctor).
You're joking, right? My uncle exceeds that amount a little (partner at medical practice) and owns three homes, one over a million, the other two are at least 500k. He's the last person I worry about buying power. I feel silly asking for advice from a billionaire clearly if 500k is qualifying criteria for "worrying about their buying power". You must think I'm homeless then. I make 50k on my own (yes, a whole less 0 than one of your kids!). I don't necessarily care to be wealthy, I want to be financially stable in the long-term. If I end up wealthy then that's cool but I'm doubtful, how I'd end up that way would probably be the loss of my family, and having money is not worth losing family. Owning your own house is the best way to do that (in addition to having good skills for work, of which I am not short of), it has been since post-WWII, and it hasn't changed.

In regards to your other comments, I want a higher-paying job and I have been trying, but there's just not a lot open right now. I've had some interviews for high-paying out of state jobs with the Federal Government (six figures even), but I'm not necessarily sold on staying in the public sector forever if I can get something good in the private sector. It really depends on what opens up.

Quote:
Originally Posted by Sno0909 View Post
I honestly think you'd be surprised at what you can accomplish by working with the right team (eg mortgage broker and realtor). First off, you never know what you can actually afford until you start the process with a lender. Things like low interest rates and first-time homebuyer programs put you in a much better position than you might think. A good realtor will be on top of anything new coming to market and will make a concerted effort to speak with the listing agent to see what they are truly looking for. Can you compete with a cash offer? Probably not, but it depends and you never know. Every home is different and so is every seller. You will probably strike out a few times and lose some homes you love, but you will never really know until you start the process. You have to start somewhere - complaining just takes you a couple steps in the wrong direction.
My basis is using Zillow and their auto calculator which I know isn't 100% accurate for the cards I have been dealt but it's a starter, especially regarding the interest rate (Zillow auto calculates somewhere in the 3% range on average). For properties under 250k, I can afford to put 3-5% down, contingent on the price of course. That would still leave me with emergency savings and enough for closing costs. HOA and PMI plays a role in what I can afford, as I'm looking at condos and townhouses. Some seem affordable on paper, until a 400+ monthly HOA fee pops up and just for maintenance! That's a game changer for a single-income individual like myself at this price range. Some HOAs are that high but then also include all utilities (electric and A/C even), so I'm more open-minded to those. The big barrier at these prices is the HOA and PMI, not the mortgage in and of itself.

Quote:
Originally Posted by FirebirdCamaro1220 View Post
Again, you have no understanding of macroeconomics, and are honestly giving people like OP what amounts to false hope for over 90% of us
I have agreed with your posts so far in this thread, C-D won't let me rep you though. I'm not going to engage in debate though because I'm looking for advice and a more constructive thread on the local real estate market and what people in me (or our) shoes are supposed to do in a system that seems "rigged" against us.

Quote:
Originally Posted by blisterpeanuts View Post
Is living with your parents an option, for a year or two, to cut down on your housing costs and save more downpayment? Or get a roommate?

Would your parents be willing to help you with a downpayment on a property?

I haven't been following the Phoenix market very closely except that I do own a place in Glendale (that's gone up quite a lot, but we haven't raised our tenant's rent so give me a pat on the back for that ), but I wonder if there are some outlying communities where the houses are cheaper, I don't know, in Apache Junction or maybe south toward Tucson. I mean, a longer commute isn't going to be fun, but if it's important to get into a property you own (which I think is a good idea) or find a cheaper rental...

Another possibility - get a part time job to add to your nest egg. Ironically, the stimulus checks and generous unemployment payments are de-motivating people to seek jobs, so that stores and other businesses are unable to find help. Around where I am, pretty much every retail business needs people, not to mention skilled trades, trucking, installation, tech support, etc. Seems like the sky's the limit right now.

None of these things are easy - just some ways people have used to get out of a tough situation. Good luck!
Quote:
Originally Posted by FirebirdCamaro1220 View Post
OP's parents left the area, and live in Florida now
Yes they do live in Florida. But I do have other family here. I have a roommate and do alright financially. I can buy what I want, save, and not obsess over purchasing little things. I could stretch my budget and live alone, but I would obsess over my budget and be anxious and that's not healthy. I don't want to move in with my family to save, when I can and have been making do with what I get.

My family is somewhat wealthy (outside of my parents who are middle class), but I don't like asking them for help. I take pride in being self-sustaining and I intend to do that as much as possible. When I was on FMLA unpaid I asked for a loan from my family when my credit card took payment twice and I couldn't get refunded from that until after my rent was due (despite complaining to my credit card company), and I paid them back when I got that refund even though they insisted I don't pay them back.

They did offer to consider cosigning on the mortgage, which would be a substantial game changer in what I qualify for I am assuming, but I'm not sure it would reduce my overall financial burden of the place after I purchased. It may mean I become house poor a bit more quickly if I'm not careful.

Quote:
Originally Posted by stub303 View Post
OP: It sucks, but you have to hustle. I would look to cut costs, stop saving (and start investing) and seek how you can grow multiple income streams outside a typical W2. Learn a trade or in-demand skill. Sh.. Even my undocumented housekeeper earns 6 figures cash in Phoenix. She gets out and hustles.
Investing where? Open a robinhood account you mean?

Quote:
Originally Posted by Sno0909 View Post
This isn't 1992 - you don't need anywhere near that to put down. In fact there are several first-time homebuyer programs that will actually give you money for a down payment with no requirement to pay back if you live in the residence for three years. But I feel like I've told you this before, so it must have just been dismissed.
What is the requirement for such a program? Good credit history?

Quote:
Originally Posted by apple92680 View Post
No, they aren't. COL/wage adjustments for people who moved out-of-state are being deliberated at the corporate level and are on their way into HR and contract renewal.





Not to the extent you think it's happening. The data for out-of-state moves in California that occurred over the course of 2020/2021 has been out for about a month now. Arizona and Phoenix didn't even crack the top destinations. Published reports from USPS show that most younger workers who left the inner-Bay Area ended up in the outer counties of the Bay Area, along with Sacramento, the Greater Los Angeles Area and San Diego. And, most of these workers are well-aware of the possibility of losing wages, so they instinctively knew that staying in California was a better investment.

The relatively few millennials that have moved to Phoenix from California has been overhyped by Phoenix and Arizona real estate boosters and their cohorts in the local media there. Most of what you've got (and keep getting) in Arizona is conservative-leaning Boomer retirees from Illinois, Minnesota, Iowa and Indiana. Some from California too, of course. Arizona becoming a "blue state" in 2020 has less to do with younger millennials moving in, and more to do with existing, native millennials and Gen Zr's getting to vote, and actually doing so.
As a BnR millennial who votes blue, you are right. Most of the transplants I have met are conservative, with the ones in my social circle (actual friends) being blue because they are here in college or just starting out. Most of my friends are Gen Z. Phoenix does provide a lot of opportunities to people in comparison to where they came from (the Midwest mostly) in certain fields. We aren't really attracting blue Millennials to move here though, most move away, so it's us born and raised folk as well as the other cities in Arizona (Tucson, Flagstaff, etc.) that changed the state federally.
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Old 03-25-2021, 12:44 AM
 
Location: East Central Phoenix
6,853 posts, read 10,020,332 times
Reputation: 8095
Quote:
Originally Posted by Prickly Pear View Post
You all know what this thread is about.

I'm in the process of saving up to try to get a place for myself and I'm basically at the point where I can enter the market now. Just seems very discouraging to see what's available. I am still seeing decent things in my price range (though still somewhat overpriced many of the options), but they are going so quickly that one cannot even tour and get a feel for it because they are selling within a day or two at the very latest, which is a problem if it comes on the market on a Tuesday.

How are people so comfortable making one of the biggest purchases in their life site unseen? Especially all of these out-of-towners. At least me, being a long-term resident, know if I will generally like a neighborhood or not...

What I really don't understand is how our housing market is like this here in Phoenix but it also seems to be this way in about 98% of other American cities. I know not all of these buyers are from the same 2% of cities, there's not enough of them to be feeding the insane housing markets of all these different places simultaneously.

I'm mostly ranting but hopefully I am not the only one feeling discouraged especially since my other option is insane rent increases... feels like a lose-lose situation.
If I recall, you were the one who said that the Phoenix real estate market should be cheap because we're in a desert. Sorry, but it doesn't work that way. It's all about supply & demand. Obviously, the Phoenix area is a fast growing, high demand metro area (not just for home sales, but for renters as well). A while back, I read where Phoenix will need over 150,000 apartments by 2030 to keep up with the growth. Obviously, many newcomers will be renting ... and even though I don't like to encourage renting for the long term, you have to do what you think is best for your financial situation. That should start with tweaking your skills and seeking a better career path with higher earning potential. Prices aren't going to come down just because you think they're out of reach.

Quote:
Originally Posted by FirebirdCamaro1220 View Post
No, no it isn't! There is a reason that almost everyone earns less than $100,000/year. And it's because most employers can't afford to pay people that much, and there aren't enough jobs to go around at that wage for everyone. You keep focusing on the micro level, while we're talking about the macro level!
Here's what you seem to be missing: while it's true that the vast majority of people earn under $100K in their jobs, there is such a thing as saving & investing wisely. Saving money involves a different strategy than putting away a certain percentage in a money market, CD, or traditional savings account. The return is next to nothing these days. Do some research and invest in reputable stocks/mutuals which pay dividends and offer a decent ROI. Of course there is somewhat of a risk, but it's much safer than Bitcoin or options trading ... especially considering that historically, the market is bullish at least 3 out of 4 years, and many people have created nest eggs on their investments alone.
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Old 03-25-2021, 05:20 AM
 
6,994 posts, read 8,451,011 times
Reputation: 6395
Quote:
Originally Posted by FirebirdCamaro1220 View Post
And you two wonder why people hate landlords.....
Correction: broke people hate landlords. I rented with a few vacation rental spots and I got stellar reviews! Personally, I rented out two condo homes on the beach in Mazatlan. From 2012-2015 we rented our Surprise, AZ home (one year to the manager of the Texas Rangers), and we rented our lake home from 2008-2012. All by the week and all for top $$$. No one complained because you get what you pay for. And they are paying for quality and service. Broke people focus on price.

Now you don't need to have an above-average IQ to get back to people quickly and fix any issues that renters run into. Nor do you need to be "smart" to figure out it's better for other people to pay for your toys (by way of short-term renting).

Finally, if owning a small business was reserved for smart people, obviously, you haven't met a lot of sub-contractors in town.
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Old 03-25-2021, 05:48 AM
 
Location: Live:Downtown Phoenix, AZ/Work:Greater Los Angeles, CA
25,990 posts, read 10,343,854 times
Reputation: 8629
Quote:
Originally Posted by MN-Born-n-Raised View Post
Correction: broke people hate landlords. I rented with a few vacation rental spots and I got stellar reviews! Personally, I rented out two condo homes on the beach in Mazatlan. From 2012-2015 we rented our Surprise, AZ home (one year to the manager of the Texas Rangers), and we rented our lake home from 2008-2012. All by the week and all for top $$$. No one complained because you get what you pay for. And they are paying for quality and service. Broke people focus on price.

Now you don't need to have an above-average IQ to get back to people quickly and fix any issues that renters run into. Nor do you need to be "smart" to figure out it's better for other people to pay for your toys (by way of short-term renting).

Finally, if owning a small business was reserved for smart people, obviously, you haven't met a lot of sub-contractors in town.
I'm certainly not broke, and I've had a landlord who I hated. To the point where we will never rent another one of their properties. I'll even name them, since they're a big company. BH Management. Let's just say maintenance was a BIG issue.....
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Old 03-25-2021, 05:52 AM
 
Location: Live:Downtown Phoenix, AZ/Work:Greater Los Angeles, CA
25,990 posts, read 10,343,854 times
Reputation: 8629
Quote:
Originally Posted by MN-Born-n-Raised View Post
Correction: broke people hate landlords. I rented with a few vacation rental spots and I got stellar reviews! Personally, I rented out two condo homes on the beach in Mazatlan. From 2012-2015 we rented our Surprise, AZ home (one year to the manager of the Texas Rangers), and we rented our lake home from 2008-2012. All by the week and all for top $$$. No one complained because you get what you pay for. And they are paying for quality and service. Broke people focus on price.

Now you don't need to have an above-average IQ to get back to people quickly and fix any issues that renters run into. Nor do you need to be "smart" to figure out it's better for other people to pay for your toys (by way of short-term renting).

Finally, if owning a small business was reserved for smart people, obviously, you haven't met a lot of sub-contractors in town.
In my industry, starting a business requires too much start up capital (it takes over $100k just to buy one truck that is in acceptable condition to operate and not fail a DOT inspection). It’s why bigger companies are taking over, and buying out more and more of the little guys.

If I had the money to buy my own truck, I would use it for a healthy down payment on a house or condo instead and obviously wouldn't be complaining about high home prices
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Old 03-25-2021, 06:00 AM
 
6,994 posts, read 8,451,011 times
Reputation: 6395
Quote:
Originally Posted by Prickly Pear View Post
You're joking, right? My uncle exceeds that amount a little (partner at medical practice) and owns three homes, one over a million, the other two are at least 500k.
The income range for doctors and dentists is ALL over the map. Actually, the more desirable spots pay less. You can KILL it if you don't mind living in a flat TX community. Is your uncle under 30 years old? Fiscally smart doctors and dentists learn valuable lessons on how to stretch money when they are in school or training for 8-15 years. Plus, as I said in my post, you make more $$'s if you own your own gig. And your uncle owns his own gig.

Quote:
Originally Posted by Prickly Pear View Post
You must think I'm homeless then. I make 50k on my own (yes, a whole less 0 than one of your kids!). I don't necessarily care to be wealthy, I want to be financially stable in the long-term. If I end up wealthy then that's cool but I'm doubtful, how I'd end up that way would probably be the loss of my family, and having money is not worth losing family. Owning your own house is the best way to do that (in addition to having good skills for work, of which I am not short of), it has been since post-WWII, and it hasn't changed.
Our son wants to live long-term in the Bay area with his fiancee who is also doing her residency. As a resident, they currently make $65K and $70K respectively while housing is CLIMBING. Have you priced out Bay area homes? Buyers are competing against the ultra-wealthy! Figure $2M for something inferior to a $350K home here. That's about $30K in property tax (that cannot be written off) and massive payments. Next, have kids and smart people hire a nanny. The good ones are spendy! Never forget that the income and state marginal taxes are atrociously expensive. So while a couple making $700K-$800K sounds amazing, it will be gobbled up fast. Oh, and this assumes they don't have massive student loans. Yes. I've nudged them to consider going to a 2nd tier spot and banking the Hell out of it. My daughter is more of a capitalist and receptive to sound financial advice.

Since housing has gone up 9% LAST YEAR in CA, that was a couple of hundred Grand swing on a modest home. So my "worry" is they get leveraged or they buy high and the price drops. My daughter has a different combination but that has to do with how many hours do you work when you eventually have kids. And her career has repetitive motion. You better have a super strong neck and back. She is already feeling it from time to time. Sorry for babbling... And yes, you should be talking to your uncle. He obviously has a good financial mind. I will save you some time: he is going to recommend a career change. If you were my son or daughter, I'd say punt on the home until you combine incomes with someone special or (much) better yet, switch gigs. I get the feeling that you are happy where you are. Fine. Just realize that you are where you for a reason.

My free advice is to RUN from a $50K job. I never read that you wanted to be wealthy. But $50K a year is a massive compromise. Why settle? I made $90K at age 32 in 1996 COL. That's NOT wealthy. Trust me, there will be a day when you don't want to go to work ever again. You wake up and put your spurs on (known as coffee) and pretend to care in your morning meeting. Remember these words in 20 years.

Thanks to you and another poster, I've learned a thing or two from this thread: some people just are not comfortable stretching themselves. They are in their own paradigm/comfort zone. And when they fall in the "average income" range, they rollover. I agree that the system is gamed! For instance, on average, sexism is real, companies don't like to share, white-privilege (I'm white) is an absolute fact. Luckily for those who get paid more, most people including yourself don't think about the ways to get out of the gamed system. Because if everyone was savvy and driven, all of the posts that I typed wouldn't work.

But something tells me you are going to fall in the category of someone who gets stuck in the mud. It seems most people have a defeatist attitude and they simply are not capable of seeing what is obvious to me and others. In summary, you need to learn the game. Anyways, I wish you the best.

Last edited by MN-Born-n-Raised; 03-25-2021 at 06:34 AM..
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Old 03-25-2021, 06:15 AM
 
6,994 posts, read 8,451,011 times
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Quote:
Originally Posted by FirebirdCamaro1220 View Post
I'm certainly not broke, and I've had a landlord who I hated. To the point where we will never rent another one of their properties. I'll even name them, since they're a big company. BH Management. Let's just say maintenance was a BIG issue.....
They did not teach this lesson in your favorite topic: macroeconomics. Rather, this lesson comes from an ops management course that I took at the UofMN. And it was spot on! Price, quality, service. Pick two of the three. Companies can deliver all three for a very short term. If they try it long-term, they will go out of business. Obviously, you got an incredible deal (I can see that is how you roll). OF COURSE, they had lousy service (maintenance)! If you want a quality place with good service, get your checkbook out! It's why some places charge 2x-5X more for hotels etc.

Basic economic laws are at play. After lecturing me on how bad I am at macroeconomics, it seems you should have been in my Operational Management class. ALL in fun!
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Old 03-25-2021, 06:36 AM
 
Location: Live:Downtown Phoenix, AZ/Work:Greater Los Angeles, CA
25,990 posts, read 10,343,854 times
Reputation: 8629
Quote:
Originally Posted by MN-Born-n-Raised View Post
They did not teach this lesson in your favorite topic: macroeconomics. Rather, this lesson comes from an ops management course that I took at the UofMN. And it was spot on! Price, quality, service. Pick two of the three. Companies can deliver all three for a very short term. If they try it long-term, they will go out of business. Obviously, you got an incredible deal (I can see that is how you roll). OF COURSE, they had lousy service (maintenance)! If you want a quality place with good service, get your checkbook out! It's why some places charge 2x-5X more for hotels etc.

Basic economic laws are at play. After lecturing me on how bad I am at macroeconomics, it seems you should have been in my Operational Management class. ALL in fun!
My 1st Apartment was a good deal, and had no problems. A 700 Sq ft 1 bed 1 bath (no in unit washer dryer though), and cable (w/HBO) and high speed internet included for $700/month. And in Central Phoenix (16th St&Osborn) Though that was in 2013, just for comparative purposes, looked at the same apartment/same complex today, and it is now $1,100/month.

Caveat: it was mom&pop owned when I lived there, but has since been sold to a bigger property management company
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Old 03-25-2021, 06:41 AM
 
6,994 posts, read 8,451,011 times
Reputation: 6395
Quote:
Originally Posted by FirebirdCamaro1220 View Post
In my industry, starting a business requires too much start up capital (it takes over $100k just to buy one truck that is in acceptable condition to operate and not fail a DOT inspection). It’s why bigger companies are taking over, and buying out more and more of the little guys.

If I had the money to buy my own truck, I would use it for a healthy down payment on a house or condo instead and obviously wouldn't be complaining about high home prices
As every industry matures, the bigger companies take over. This cycle has happened forever. Well, if I wanted to start a grocery store, I would need a massive amount of capital too. Therefore, I cannot start a grocery store business. In your case, don't start an (ultra-competitive) trucking company. Start something else.

And no matter what business you start, there are barriers to entry. I have a friend on the lake that is a GM and sells semi-trucks. I'm guessing he makes a few hundred Grand. He as a $1.5M cabin. I'll bet the farm the best guys on his sales staff make a six-figure income.

In 2021, I suspect the easiest business to start is in the trades. Their industry is plump-full of average (or less) brainpower folks making >$100K a year. Personally, I do what I do on-line. My overhead is my 3-year-old computer. I drop-ship most of my inventory. Obviously, not everyone can do what I do because sales and communicating with conviction is a skill. But I could repeat my business model in 10 different industries.

I hire people that started their own business out of their home. Like a financial services business, a healthcare broker business, app or website developer, water softener sales and installation, my accountant, a handyman business, etc. I bet every one of them is in your elusive 9% club. People need to think outside the box. Don't go to work for the government and wonder why they don't pay you what you're worth! Yea, the system IS rigged. So be smart and learn the system.

Last edited by MN-Born-n-Raised; 03-25-2021 at 07:09 AM..
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Old 03-25-2021, 07:02 AM
 
Location: Live:Downtown Phoenix, AZ/Work:Greater Los Angeles, CA
25,990 posts, read 10,343,854 times
Reputation: 8629
Quote:
Originally Posted by MN-Born-n-Raised View Post
As every industry matures, the bigger companies take over. This cycle has happened forever. Well, if I wanted to start a grocery store, I would need a massive amount of capital too. Therefore, I cannot start a grocery store business. In your case, don't start an (ultra-competitive) trucking company. Start something else.

And no matter what business you start, there are barriers to entry. I have a friend on the lake that is a GM and sells semi-trucks. I'm guessing he makes a few hundred Grand. He as a $1.5M cabin. I'll bet the farm the best guys on his sales staff make a six figure income.
Why would I start a business in an industry that I have no experience or connections in?
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