Instructions to my son on how to buy a house in the SF Bay Area (San Francisco: loans, school)

[neutrino78x]

Originally Posted by bodyforlife99

I wholeheartedly agree with Mountain when he says it's great there are so many people that say it can't be done. It simply makes it easier for those of us that say it can be done as it eliminates the competition.

Well, a SFH in an excellent school district is 1 million dollars in SF or SJ. Therefore, if you want one, you would have to have income after taxes of at least 200k, probably more like 300k.

But the real takeaway is that most who make the median income or lower don't own their own SFH. They own a condo inside of a building that contains other condos, at most.

Middle class in major cities = condo inside of a building with other condos.

And that's the way it should be. Concentrating the population in cities means there is less damage to the environment. And as the population gets higher you MUST build denser. You can't put an infinite number of SFHs in a finite area of land. Therefore the value of any SFHs would have to get higher.

I would advocate a ban on new SFH in all major cities, actually. But that's another forum.

[bodyforlife99]

Originally Posted by neutrino78x

Well, a SFH in an excellent school district is 1 million dollars in SF or SJ. Therefore, if you want one, you would have to have income after taxes of at least 200k, probably more like 300k.

Thank you. That's already been addressed and called out as nonsense. Feel free to read through the thread if you choose (if not, no big deal either). No one's going to waste their time repeating it.

[neutrino78x]

Originally Posted by bodyforlife99

Thank you. That's already been addressed and called out as nonsense. Feel free to read through the thread if you choose (if not, no big deal either). No one's going to waste their time repeating it.

It is not nonsense. The median price for a SFH in San Francisco is 1 million dollars.

$1 million city: S.F. median home price hits 7 figures for 1st time - SFGate

Can they be found cheaper outside of the major cities? Sure. But then you're not living where you want to live. Which defeats the purpose of the exercise.

[bodyforlife99]

Originally Posted by neutrino78x

It is not nonsense. The median price for a SFH in San Francisco is 1 million dollars.

$1 million city: S.F. median home price hits 7 figures for 1st time - SFGate

Can they be found cheaper outside of the major cities? Sure. But then you're not living where you want to live. Which defeats the purpose of the exercise.

On second thought, don't even read the thread

[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.

[WithDisp]

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.

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.

[2sleepy]

Originally Posted by MountainHi

You can retire at 55 at 90% of your highest pay IF you survive the profession. Don't forget, it's a high-risk job, you could get blown away like the lady cop who was on the job one day and got shot dead. And physical survival isn't the only challenge. The profession is rife with opportunities to get mentally scarred with PTSD. Cops see all kinds of horrific stuff. And deal with the extreme stress of getting in shoot-outs. It's hard to come down off those extreme adrenaline rushes, and they're not healthy.

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.

[neutrino78x]

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.

Again, assuming we're talking about what most people when they say "the Bay Area is not affordable", that is to say "I cannot buy a SFH in an excellent school district", well, the cost of that would be 1 million dollars, approximately. So that means you have to have a combined income of 250 or 300k, really 400k.

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. Which in the major cities of the Bay Area would be a condo, not a monolithic SFH.

5. Strategize about your location, or scale back expectations (condo vs. house, fixer-upper, whatever).

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

We all agree that someone who makes 100k after taxes can buy a condo in a building containing other condos. 100k is the median income for Silicon Valley, hence it is affordable.

But a condo in a building with other condos is NOT "a single family home in an excellent school district".

Don't me wrong; I'm not complaining. I'm too old to start raising kids, and, depressing as it may be, I will probably never have a GF, and don't want to get married because I'm too old to start raising kids. Therefore I don't want or need a SFH in an excellent school district.

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

[2sleepy]

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.

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 have been trying to buy a house in SF. They save every penny they can, they live in a very modest rent controlled apt. in the Richmond Dist. 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.

[neutrino78x]

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.

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