s/o--so how did you afford a 2 million dollar home?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Good friends just bought a house for just over $2M (and they own a $1m-ish (my estimate) vacation home. He's a partner at a dc law firm (just turned 40) and they don't have any family money. kids are in public school or about to be, and they drive really nice cars and take nice vacations. I dont know their saving habits or how much they put down. I do remember talking about 529s so they have definitely been putting money away for the kids.

Numbers don't add up. Either they have family money or they are saving very little. Putting some money in a 529 is only a fraction of what they should be saving right now.

Big Law isn't an annuity these days. Last person I knew who came from this type of background and took on this much mortgage debt ended up in a government job later and the vacation home in the Outer Banks hit the market soon thereafter.

I am the pp you quoted. According to my husband he made nearly a million last year. I used to be an associate at a big firm for several years and my DH is govt employee, and we saved $500k in a few years before we had kids so considering he had like 3 more years as an associate before he had kids (likely making $300 base by the end) and another 4 years as a partner at $700-950k/year I'd say the numbers add up quite nicely. I doubt they have a $3 million mortgage. I would bet he paid a huge chunk of cash.

[Anonymous]

So I guess the answer was that you either have to be a biglaw partner or have family money. That about sums it up for dc.

[Anonymous]

We recently bought a $3M home. No family money involved. No huge down payment from our prior home. And, we kept our beach home.

I own my own business and I invest in good opportunities, for which I am always looking. Our main objective is cash flow, not net worth. But, practically had we not bought the house we could have retired instead. But, I'm not yet 35 and don't yet know what I want to do when I grow up.

[Anonymous]

Honestly don't know. Have a friend who bought a $3.5 million and did major renovation. They also have a second home. He is not big law, but there is no family money.

[Anonymous]

Anonymous wrote:We recently bought a $3M home. No family money involved. No huge down payment from our prior home. And, we kept our beach home.

I own my own business and I invest in good opportunities, for which I am always looking. Our main objective is cash flow, not net worth. But, practically had we not bought the house we could have retired instead. But, I'm not yet 35 and don't yet know what I want to do when I grow up.

So, is it safe to assume you are highly leveraged?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Family money. Those who purchased without any assistance are the exception, not the rule.

Same here. Everyone I know with a $2M+ home has family money.

I'd say half half. Half of the people have family money. The other half are keeping up with the Joneses and overextending themselves.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

I am the pp you quoted. According to my husband he made nearly a million last year. I used to be an associate at a big firm for several years and my DH is govt employee, and we saved $500k in a few years before we had kids so considering he had like 3 more years as an associate before he had kids (likely making $300 base by the end) and another 4 years as a partner at $700-950k/year I'd say the numbers add up quite nicely. I doubt they have a $3 million mortgage. I would bet he paid a huge chunk of cash.

I never said they had $3 million in debt. I said they may have mortgage debt on $3 million in real estate. If they spend money on all the other things you mentioned, it sounds like they still have a lot of debt, unless they were astute investors or had family money. We saved more than this family likely was in a position to save before buying a primary residence in the $2 M price range, but other people are comfortable going out on more of a financial limb.

Not really trying to call other's choices into question at all. Those who wonder how other people afford such homes, however, might want to understand that, in some cases, there's a fair amount of stress and uncertainty associated with this type of lifestyle. As I mentioned, I've known some former law firm partners who had to deleverage quickly.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We recently bought a $3M home. No family money involved. No huge down payment from our prior home. And, we kept our beach home.

I own my own business and I invest in good opportunities, for which I am always looking. Our main objective is cash flow, not net worth. But, practically had we not bought the house we could have retired instead. But, I'm not yet 35 and don't yet know what I want to do when I grow up.

So, is it safe to assume you are highly leveraged?

I would say that I am intelligently leveraged. Interest rates are extreme historical lows and I absolutely am betting on high inflation in coming years. I owe about $6.7M on assets of about $12.8M. Would you consider that highly leveraged?

[Anonymous]

22:17...im so impressed. Could you share what sort of good opportunities you invested in? I really would love to learn how to be more business smart!

[Anonymous]

Anonymous wrote:I am the pp you quoted. According to my husband he made nearly a million last year. I used to be an associate at a big firm for several years and my DH is govt employee, and we saved $500k in a few years before we had kids so considering he had like 3 more years as an associate before he had kids (likely making $300 base by the end) and another 4 years as a partner at $700-950k/year I'd say the numbers add up quite nicely. I doubt they have a $3 million mortgage. I would bet he paid a huge chunk of cash.

Here's one thing that doesn't make sense to me: You say your husband was making $300 base at least 4 years ago as an associate. But current top-end associate salaries in DC (even for firms based in NY) are all less than $300 -- often far less. http://www.infirmation.com/shared/search/payscale-compare.tcl?city=Washington&usps_abbrev=DC Four years ago, those base salaries were even lower.

In my experience, a partner making close to $1 million either has a $4-5 million personal book of business herself (which is not too common), or else is working her ass off as the high level point person for another partner who has a $10-20 million book of high-paying clients (also not too common). These situations definitely occur, but they're certainly not common.

[Anonymous]

Ok, here is how we are looking to do a $2m+ home on income that is far far lower than what is cited in other posts and no family income. When we bought our house many years back, we did a massive renovation (had too) mainly all cash and partially did the pieces ourselves, lived with inlaws. all painful. Very aggressively paid down mortgage. We have close to 80% equity. Had we not been this aggressive, we wouldn't have a significant down payment. Because of relative /special needs situation, realized we would need to move to something more accessible and made several spend decisions accordingly. Never fully decorated house as wanted - but hey, kids beat it up anyway when they are young. Drove older cars. Less expensive vacations. If we didn't do all that, no way could consider this.

[Anonymous]

We recently moved to DC. My spouse and I are/were both in BigLaw. Where we came from, BigLaw paled in comparison to the wealth of any investment banker, hedge fund type, finance guy (or girls, but pretty much all guys). Does this sector just not exist in DC or what?? BigLaw types could've been in 1-2M homes as young, successful partners with a lot of hard work (mid-late 30s), 2+ million w/ luck on selling a previous place, lots and lots of saving and having kids later rather than earlier, and/or family. But it was the finance guys at the same age and amount of experience (VP, young directors/MDs) that were the ones always in the 2+ millions places at late 30s, early 40s.

[Anonymous]

Anonymous wrote:We recently moved to DC. My spouse and I are/were both in BigLaw. Where we came from, BigLaw paled in comparison to the wealth of any investment banker, hedge fund type, finance guy (or girls, but pretty much all guys). Does this sector just not exist in DC or what?? BigLaw types could've been in 1-2M homes as young, successful partners with a lot of hard work (mid-late 30s), 2+ million w/ luck on selling a previous place, lots and lots of saving and having kids later rather than earlier, and/or family. But it was the finance guys at the same age and amount of experience (VP, young directors/MDs) that were the ones always in the 2+ millions places at late 30s, early 40s.

We (finance - PE/hedge fund folks) do exist here.. but just not that many of us! DC is a lawyer's town and NY a banker's. So when people here say big money, they think biglaw partners.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I am the pp you quoted. According to my husband he made nearly a million last year. I used to be an associate at a big firm for several years and my DH is govt employee, and we saved $500k in a few years before we had kids so considering he had like 3 more years as an associate before he had kids (likely making $300 base by the end) and another 4 years as a partner at $700-950k/year I'd say the numbers add up quite nicely. I doubt they have a $3 million mortgage. I would bet he paid a huge chunk of cash.

Here's one thing that doesn't make sense to me: You say your husband was making $300 base at least 4 years ago as an associate. But current top-end associate salaries in DC (even for firms based in NY) are all less than $300 -- often far less. http://www.infirmation.com/shared/search/payscale-compare.tcl?city=Washington&usps_abbrev=DC Four years ago, those base salaries were even lower.

In my experience, a partner making close to $1 million either has a $4-5 million personal book of business herself (which is not too common), or else is working her ass off as high level point person for another partner who has a $10-20 million book of high-paying clients (also not too common). These situations definitely occur, but they're certainly not common.

First of all, i never said it was my husband at biglaw. Women are sometimes the major breadwinner. I also never said I was making $300 base. I was making $265k base by the end, and I know the classes above me were making 275 and 285. Add to that between $30k-$100k bonuses in the last few years I was there and we very comfortably saved a huge chunk of cash to buy an over $1m house by the time I was 32 with a VERY managable mortgage on our current (significantly lower) hhi.

Now, our friend, biglaw partner, is by the way a partner in the dc office if a top tier NYC firm. $1 million is not unheard of in your early partner years. At my (also ny based) firm, I don't think any partner made less than $700k. And given that 9th years at my old firm made $285, I assume he made at least the same by the end. Our friend is an equity partner. That said, I think if someone is making $1million (or close to that), and has been for the past 15 years successively making an increasing salary (at a prestigious established firm, not one of those that is constantly merging and goes belly up), $3 million in real estate is not a big deal at ALL. I would bet they have enough cash flow to pay off a good portion of it just within the first couple years.

[Anonymous]

He goes around forcing the building of group
homes and halfway houses in other people's
neighborhoods before he drives home to his
secluded 4 million dollar 8500 SQRFT Mclean
mansion
http://www.fairfaxcounty.gov/dranesville/
http://www.zillow.com/homedetails/7822-
Swinks-Mill-Ct-Mc-Lean-
VA-22102/59786308_zpid/
7822 Swinks Mill Court Fairfax, VA
Owner: JOHN FOUST
Land value: $851,000
Building value: $1,914,510
Total value for property: $2,765,510
Land area: 36,151 square feet
Living area: 8,429 square feet
Utilities: Water connected, Sewer connected,
Gas connected
Number of stories: 2
Building use: Single Dwelling or Patio House
Style: 2 Story
Exterior wall: Brick
Floor type: Hardwood
Roof type: Composition Shingle
Basement: Full
Basement type: Daylight
Number of bedrooms: 6
Number of full bathrooms: 5
Number of half bathrooms: 3
Heating: Yes
Number of fireplaces: 8
Year property was built: 2001
Additions:
Addition type: Lower: Basement full, First: Brick
Addition area: 407 square feet
Addition type: Lower: Basement full, First: Brick
Addition area: 16 square feet
Addition type: Lower: Basement full, First: Brick
Addition area: 126 square feet
Addition type: Lower: Basement full, First: Brick
Addition area: 50 square feet
Addition type: Lower: Basement full, First: Brick
Addition area: 16 square feet
Addition type: Lower: Open porch or portico
Addition area: 63 square feet
Addition type: Lower: Attached garage
Addition area: 414 square feet
Addition type: Lower: Attached garage
Addition area: 664 square feet
Addition type: Lower: Patio
Addition area: 414 square feet
Sale date for most recent sale: 08/29/2006
Sale price for most recent sale: $3,112,500
Sale date for second most recent sale:
10/17/2003
Sale price for second most recent sale:
$3,300,000
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