Instructions to my son on how to buy a house in the SF Bay Area (college, salary)

[bodyforlife99]

What I find most amusing is the splitting of hairs over a whopping $26k-$27K of college tuition. When people make an argument for exorbitant colleges costs, they are typically talking about the student that finished their college career owing 100K, 150K, or maybe 200K. I don't think there's a reasonable person out there that wouldn't agree that would cause a hardship for quite some time (that's the equivalent of a house in many areas of this country). That's not what we're talking about here.

I'm completely in agreement with Mountain and TR...

"I see a pattern of bringing specious arguments to bear, that overlook the OP's scenario and conditions."

"Very few people here have raised valid points against the plan. A few have, but the ones kicking and fussing the hardest aren't even on-topic half the time, with their criticisms."

Yep, couldn't have said it any better.

[WithDisp]

Originally Posted by bodyforlife99

What I find most amusing is the splitting of hairs over a whopping $26k-$27K of college tuition. When people make an argument for exorbitant colleges costs, they are typically talking about the student that finished their college career owing 100K, 150K, or maybe 200K. I don't think there's a reasonable person out there that wouldn't agree that would cause a hardship for quite some time (that's the equivalent of a house in many areas of this country). That's not what we're talking about here.

I'm completely in agreement with Mountain and TR...

"I see a pattern of bringing specious arguments to bear, that overlook the OP's scenario and conditions."

"Very few people here have raised valid points against the plan. A few have, but the ones kicking and fussing the hardest aren't even on-topic half the time, with their criticisms."

Yep, couldn't have said it any better.

Well then be clear-

A. ) Is your son currently of working age and considering a house in the near future.
B. ) Ballpark his salary.

[Ruth4Truth]

Originally Posted by WithDisp

So the requirement presented here is two college grads, getting married, with no existing debt, and having the ability to live at home until they are late 20s or early 30s to buy.

It sounds quite like the situation presented, but still is alienating to more than half the population.
.

True, the scenario is limiting to people who can either live rent-free, or who are willing to live as a couple in a single room in a shared household, say. That would be another way to do it.

I'm going to reframe the OP's statement to make it less controversial and more understandable to some, without sacrificing accuracy of what he wanted to say (feel free to correct me if I goof, OP):

Home purchasing in the Bay Area is impossible UNLESS you:

1. Can live at home with parents [or have some other very low-cost rental opportunity] to save for a downpayment;

2. Have a working partner with whom to live at home and contribute to the savings;

3. Are willing to give up luxuries and frills, including eating out for lunch or dinner, except as a rare treat;

4. Have little or no college debt, having strategized your college education wisely, perhaps with parental help;

5. Are willing to take an extra part-time job, to beef up your savings capacity.

6. Are brutally realistic, and accept that you won't be able to buy a house for perhaps 8-10 years, while you save. Amt of time needed to save depends on whether you have a partner to contribute, how much you make, whether you have any debt to pay off.


If you're not willing or able to do the above, then home ownership may not be in your future. Unless you know a guy like Ultrarunner, who can turn you onto some unusual opportunities.

[bodyforlife99]

I don't have a problem with that at all Ruth. Of course, as nice as you put it, we may be fooling ourselves into thinking it won't be controversial. There are just a collective group of people that don't want to accept my post (as reworded by you) under any circumstance.

[Ultrarunner]

Sounds good to me and that was before I got to the end of the post...

Buying in the Bay Area takes a plan, dedication, desire, sacrifice, being relisted... etc.

Whether it is worth it is a question only the individual can answer.

Of course having someone willing to front the cost, winning the lottery or working for a startup have worked for some.

[bodyforlife99]

Originally Posted by WithDisp

Well then be clear-

A. ) Is your son currently of working age and considering a house in the near future.
B. ) Ballpark his salary.

I have no need to supply you with anything. If you have a point to make, you can make it with or without that info. And by the looks of the posters here, they would just say I was lying anyway.

Let's say 27 and $67K so you can have your fun. Please proceed (I'm sure this will be good...can't imagine how many more tangents this thing can take).

[Ultrarunner]

I want to add one more path that I have suggested to friends and it worked out very well...

Skip the single family home... buy a duplex, triplex of fourplex.

I have bought all of the about and all had rents from the start that covered the mortgage...

The duplex with a 3 bedroom home with a 1 bedroom cottage in back... I lived in the cottage.

The triplex was a 3 bedroom home with a duplex on the property... I lived in one of the duplex units.

Buying income property and living in one of the units is the quickest way to build equity and have trim the tax bill that I know.

Friends that have done it said it was 5 years of being an onsite manager... with all that entails.

It also let them make enough to get out of the landlord business and buy the home they wanted in Santa Clara...

What I am saying is sometimes thinking outside the box can be lucrative.

[bodyforlife99]

And to your list Ruth, one of the arguments we typically hear is a comparison of median income to median rent, and how no one can afford to live in this area. Unfortunately, that is a flawed argument. The median income is based on all the income in the area. But the median rent is only based on available houses/apartments for rent. There are plenty of people that can survive in this area on median income. If they couldn't, a massive amount of people would have been displaced as we speak. So who are these people? Well, clearly there are people in rent controlled apartments that pay less than that $3600 price on that 1 bedroom apartment. How about people that bought their homes in the 60's, 70's, 80's, 90's, and early 2000's? Is it possible that they are either paying no mortgage at all or at least have mortgages that are half as much as that median rent? Of course. And if you took all that information combined and got an average, the monthly for housing units would be considerably less (hence people are able to live here for much less than implied by the median rent). Is anyone saying that average is available to people moving to the area now or young people starting off? No. Was the average 20+ years ago available to me and my wife when we bought our home? No. More times than not, that will be the case. You pay a higher premium than others, and down the road, new people pay a higher premium than you. It's been that way for years (if you're fortunate to buy on a dip, then not so much...good luck to anyone that wants to try and time the market...I'm simply not that good).

In no way did my list, or the list you cleaned up ever say it was easy. It gave parameters on what it would take...nothing more, nothing less. And then throughout the conversation, many of us just downplayed the notion that this time was so much harder than many other times in this area (it's clear to most of us that have been around that it has always been hard to buy a house here). There are numbers galore to support this assumption, and yet, no matter how much information you post, there just simply are the head shakers that can't retort it, but continue to shake their heads anyway.

Why this is so controversial, I don't know. And as stated before, there are simply those that can't accept the fact that others have had to struggle to get by for years here.

[bodyforlife99]

Originally Posted by Ultrarunner

I want to add one more path that I have suggested to friends and it worked out very well...

Skip the single family home... buy a duplex, triplex of fourplex.

I have bought all of the about and all had rents from the start that covered the mortgage...

The duplex with a 3 bedroom home with a 1 bedroom cottage in back... I lived in the cottage.

The triplex was a 3 bedroom home with a duplex on the property... I lived in one of the duplex units.

Buying income property and living in one of the units is the quickest way to build equity and have trim the tax bill that I know.

Friends that have done it said it was 5 years of being an onsite manager... with all that entails.

It also let them make enough to get out of the landlord business and buy the home they wanted in Santa Clara...

What I am saying is sometimes thinking outside the box can be lucrative.

There you go. Another avenue to take. Nice.

[WithDisp]

Originally Posted by bodyforlife99

I have no need to supply you with anything. If you have a point to make, you can make it with or without that info. And by the looks of the posters here, they would just say I was lying anyway.

Let's say 27 and $67K so you can have your fun. Please proceed (I'm sure this will be good...can't imagine how many more tangents this thing can take).

No. You really can't make the point without that info.

It's like a realtor asking what your budget is, and saying "don't worry- with determination and time we can afford anything". Maybe it's a true statement, but it isn't going to help narrow down the house search at the time.


Could it be done on 67K without a spouse? Probably not if housing prices continue to rise.
If you lived frugally, you could bank 39K a year or so, assuming some mild raises each year.

However, if housing prices have plateaued. He could likely afford a small 2BR 1BA in a good enough neighborhood.