Instructions to my son on how to buy a house in the SF Bay Area (Fullerton: middle-class, loan)

[neutrino78x]

Originally Posted by WithDisp

Take for instance a buddy of mine. Went to a so so state school, lower than average grades. Got a BA in a social work related field. Lives in San Mateo. The 40-55K income just doesn't cut it. Given their work field, there really isn't going to be a huge increase in pay.

Scrimping and saving may at one point lead to subpar home ownership.
My advice has been to leave. He has friends here. A lot of them get by with substantial support from parents.

He doesn't have to leave. He should be able to afford his own apartment with that salary. Definitely a very good quality room in a shared apartment. I would live like a king on 55k; all I need is a room to myself, and I could afford to get that on 55k.

He would need a spouse who also makes at least 55k, preferably 100k, in order to buy a condo.

Of course I do agree that he won't be able to buy a SFH with that income. He would have to move to Nowhere, Kansas.

[TR95]

Originally Posted by 2sleepy

I agree, maybe you can make this work on paper, but the reality is that only 15% of families in San Francisco have a combined income of 200k or more. My step-son and his wife and their three year old son both make a decent salary. They save every penny they can, they live in a very modest rent controlled apt. in the Richmond. But with student loans, a $1500 a month childcare bill, health insurance, and all of their other expenses in three years they have only saved enough to make a down payment on a $650,000 house, feel free to look at the gems you can buy in SF for $650,000.

How old are these individuals you are discussing. My guess is they are less than 10 years out of college if they are still paying student loans. Affording a $650k house isn't that bad at that age. Similar to what many other generations encountered.

[TR95]

Originally Posted by WithDisp

The advise is plenty -practical-, but it's omitting the minimum income one needs to have to make such feasible.

Take for instance a buddy of mine. Went to a so so state school, lower than average grades. Got a BA in a social work related field. Lives in San Mateo. The 40-55K income just doesn't cut it. Given their work field, there really isn't going to be a huge increase in pay.

Scrimping and saving may at one point lead to subpar home ownership.
My advice has been to leave. He has friends here. A lot of them get by with substantial support from parents.

Ok so I guess one should study a little harder and get better grades. So so grades in a low paying field not necessarily a recipe for success. How about at least getting good grades and being the best damn social worker which will eventually open up opportunities in the long run. Seems like so many youngsters just want to throw in the towel nowadays. You'd be surprised what a little hard work might do no matter what field one studies. Maybe less time on the Internet is a start.

[likealady]

Originally Posted by MountainHi

I still don't see where the problem is, except that marrying a second wage-earner in time to start early saving for a house would be a challenge for some. In fact, one of the posters admitted that there isn't much wrong with the OP's advice; they're just mad at something he said from another thread.

1. Marry into a 2nd income.
2. Take a PT job, if you have to.
3. Live with parents or in-laws so you can max your savings
4. Slash spending to bare necessities. Use public transit instead of a car, if possible (my addition to the strategy). If you must have a car, by a good Toyota for a couple thousand $$.
5. Strategize about your location, or scale back expectations (condo vs. house, fixer-upper, whatever).
6. Focus, focus, focus on your savings.

What's not to like? I think there are no solid objections, because people went off on a tangent about SF in a desperate attempt to prove that the plan wasn't practical. But the original post wasn't about SF. It's about the Bay Area, that's very clear. People can achieve more than they think, if they're willing to make the sacrifices. Sure it's not fun to count pennies and scrimp. But if home ownership is important, and if being in California is important, there's no other choice but to count pennies and scrimp. And hope the parents don't get tired of the kids living in the basement.

OK, I found a hole in the plan. If people have student loans to pay off, that could throw a wrench in the works. It could mean a few extra years at home in the basement. Or working out a college plan that requires only a minimum of loans, if any.

Wow, that'd be great if many of us even had family living in the Bay Area. Of course I'd live at home to help save money if it were an option. But the reality is that many of us don't have that kind of support, and our parents live in more practical, low cost areas - and in my case, every single time I see my parents they make some stab at how I pay ridiculous prices to live in a shoebox.

Marry into a 2nd income (did that), although my earnings are much lower than my husband's. Take a PT job (yep did that too). Slash spending - I usually brown bag my lunch, cook at home 6 days of the week, and neither of us have student loan debt or car payments. There's not much else we can do aside from hoping we get raises or bonuses. IMHO, it's not a good idea to buy a house that depends on two incomes should something happen to one person (disability, lay off, caring for children, illness, etc). Nor is it a good idea to stretch yourself so thin that you can't continue to save. Thanks, but I'll be waiting for a crash, as it's the only time that makes sense to buy here.

[neutrino78x]

likealady, you guys should be able to buy a condo. Maybe not a SFH where you own the land underneath, but you can probably buy a condo in a building that contains other condos. That's middle class around here (and in all major world class cities).

[2sleepy]

Originally Posted by TR95

How old are these individuals you are discussing. My guess is they are less than 10 years out of college if they are still paying student loans. Affording a $650k house isn't that bad at that age. Similar to what many other generations encountered.

In their mid 30's, they paid off student loans shortly after graduating but both returned to college and obtained advanced degrees. I'm sure they haven't done everything right, but they have been living in a 500 sq ft one bedroom apt. for four years now, just so they can save for a house. There is no family with a basement close enough to them to be of any assistance. At this point they are so discouraged they are looking at jobs in the Sacramento area.

[MountainHi]

Originally Posted by likealady

Wow, that'd be great if many of us even had family living in the Bay Area. Of course I'd live at home to help save money if it were an option. But the reality is that many of us don't have that kind of support, and our parents live in more practical, low cost areas - and in my case, every single time I see my parents they make some stab at how I pay ridiculous prices to live in a shoebox.

Marry into a 2nd income (did that), although my earnings are much lower than my husband's. Take a PT job (yep did that too). Slash spending - I usually brown bag my lunch, cook at home 6 days of the week, and neither of us have student loan debt or car payments. There's not much else we can do aside from hoping we get raises or bonuses. IMHO, it's not a good idea to buy a house that depends on two incomes should something happen to one person (disability, lay off, caring for children, illness, etc). Nor is it a good idea to stretch yourself so thin that you can't continue to save. Thanks, but I'll be waiting for a crash, as it's the only time that makes sense to buy here.

All those measures would be necessary even to buy during a crash or correction. That's the point. The post wasn't about buying now. It was about how to save for a future purchase. But you make a good point about it being potentially risky to be dependent on two wage-earners to make the house payments.

[CA4Now]

Originally Posted by neutrino78x

So even if both you and the spouse work, you are still both going to have to have fairly high incomes. Each will need a minimum of 200k after taxes before you consider buying a SFH in an excellent school district. If your combined income is only 100k, you can't afford a one million dollar investment. Your budget would be more like 400k, maybe 500k.

ok, like I told the other guy, this defeats the purpose of the exercise.

But neutrino, don't you realize that you're not allowed to have an opinion on this thread about this topic? You'll be shot down and called stupid, incompetent, negative, jealous, unable to read statistics, etc. Anyone who disagrees with these two is told that they have nothing intelligent to say. On a discussion forum.

But those who insist on that living arrangement are correct to say it is difficult to afford in this area.

Shhh!

[boulder2015]

Originally Posted by 2sleepy

It's really not that dangerous of a job.
The myth of the hero cop: Police unions have spread a dangerous message about America’s law enforcement officers.

Ok, so you hate cops. Got it.

[boulder2015]

Originally Posted by neutrino78x

Lame article written by someone who has never been in the military or law enforcement.

Police officers are the ones who run TOWARD gunfire. They risk their lives to keep the rest of us safe. That is what makes it an honorable profession worthy of deep respect and admiration.

--Brian, USN submarines veteran

Thank you for your service, brian. I dont see corporate ceos runnning towards bullets, so im not losing sleep over well paid cops.