Can a family of 3 making $165k-170k afford to live in the District?

[Anonymous]

Anonymous wrote:

Anonymous wrote:I'll bite. We live in dupont in a 2 unit house we bought for 1.2m. We put down 10% which we got from our first place. Mtg is a little under $6000. Tenants pay $3250 leaving us with $2750 for a 3 bedroom and den. Add utilities and you get $3 k roughly

Grocery is one block from us say $150 per week. $1000 per month with eating out

Don't own a car. Everything is walking distance including work $200 per month for zip car and taxis

Health insurance is 75 % paid by employer and runs $200 per month. Call it $400 with co pays

Dental and eye are another $50 per month (employer pays 75 %). Call it $150 with co pays

That brings me to $4750 excluding clothing, school supplies savings 401k and college

I think $150 k pre tax and homeowner would have me taking home $7k after maxing $401k, maybe more

Does that not work? And comfortably?

It works fine, but you couldn't do it if you started today. You can't buy that 2-unit property in Dupont for $1.2 million today. Even if you could, you can't buy a $1.2 million property with only 10% down today: no one will do a jumbo mortgage with 10% down. And even if you could find a bank that would, you'd need more than $150K in pretax income to qualify for the loan.

+1. The people posting in this thread don't seem to realize how much tougher it is for people who don't already own a house.

[Anonymous]

What good is it to live near everything if you can't afford doing anything (and living something resembling a traditional American lifestyle, i.e., no 12 people to a house, at least one car, etc.)?

Not all of us get free childcare from family, not all of us work within walking distance of our house (and talk about tying you in to your job!), when discussing our own situation, we have to consider (1) what may be impossible for other's (e.g. getting free childcare or having bought a place in 2001) and (2) what requires discussion and conscious choice to limit your life choices (e.g. working within a 10 minute commute, etc.)

[Anonymous]

Anonymous wrote:

Anonymous wrote:I'll bite. We live in dupont in a 2 unit house we bought for 1.2m. We put down 10% which we got from our first place. Mtg is a little under $6000. Tenants pay $3250 leaving us with $2750 for a 3 bedroom and den. Add utilities and you get $3 k roughly

Grocery is one block from us say $150 per week. $1000 per month with eating out

Don't own a car. Everything is walking distance including work $200 per month for zip car and taxis

Health insurance is 75 % paid by employer and runs $200 per month. Call it $400 with co pays

Dental and eye are another $50 per month (employer pays 75 %). Call it $150 with co pays

That brings me to $4750 excluding clothing, school supplies savings 401k and college

I think $150 k pre tax and homeowner would have me taking home $7k after maxing $401k, maybe more

Does that not work? And comfortably?

It works fine, but you couldn't do it if you started today. You can't buy that 2-unit property in Dupont for $1.2 million today. Even if you could, you can't buy a $1.2 million property with only 10% down today: no one will do a jumbo mortgage with 10% down. And even if you could find a bank that would, you'd need more than $150K in pretax income to qualify for the loan.

Actually you couldn't do it easily today. It is doable. Here's how:

Find a 4 unit in Logan for $1.45M. Use FHA financing requiring on 3.5% down and get the seller to cover closing costs. The loan limit is $1,40,340 (not a typo). And you can use the rental income to qualify. Sell that place after 5-10 years or maybe take a second mortgage and buy a 2 unit in Dupont Circle

Does that not work, even today?

[Anonymous]

Buying a 1.45 million dollar home on an income of 150k seems wildly irresponsible unless you have a very large down payment. And 4 units in LogaN Circle for 1.4 seems crazy cheap to me, unless it is four studios or a total slum. Cannot imagone how this is possible on today's market. And being a four unit landlord is no joke, and could involve a lot of costs.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I'll bite. We live in dupont in a 2 unit house we bought for 1.2m. We put down 10% which we got from our first place. Mtg is a little under $6000. Tenants pay $3250 leaving us with $2750 for a 3 bedroom and den. Add utilities and you get $3 k roughly

Grocery is one block from us say $150 per week. $1000 per month with eating out

Don't own a car. Everything is walking distance including work $200 per month for zip car and taxis

Health insurance is 75 % paid by employer and runs $200 per month. Call it $400 with co pays

Dental and eye are another $50 per month (employer pays 75 %). Call it $150 with co pays

That brings me to $4750 excluding clothing, school supplies savings 401k and college

I think $150 k pre tax and homeowner would have me taking home $7k after maxing $401k, maybe more

Does that not work? And comfortably?

It works fine, but you couldn't do it if you started today. You can't buy that 2-unit property in Dupont for $1.2 million today. Even if you could, you can't buy a $1.2 million property with only 10% down today: no one will do a jumbo mortgage with 10% down. And even if you could find a bank that would, you'd need more than $150K in pretax income to qualify for the loan.

Actually you couldn't do it easily today. It is doable. Here's how:

Find a 4 unit in Logan for $1.45M. Use FHA financing requiring on 3.5% down and get the seller to cover closing costs. The loan limit is $1,40,340 (not a typo). And you can use the rental income to qualify. Sell that place after 5-10 years or maybe take a second mortgage and buy a 2 unit in Dupont Circle

Does that not work, even today?

That would be incredibly irresponsible if you do not have quite a bit saved as a safety net for repairs, unrented units, etc. Also, you should probably proofread before you say that something is not a typo.

[Anonymous]

Lenders do not take into account rental units in homes, e.g., basement apartments, as income for mortgage purposes. A family's earned income, such as wages, would count. Not planned rental income. Our hypothetical family could not qualify to borrow the mortgage for a million plus piece of real-estate on a $60 K annual income.

[Anonymous]

I am the poster who indicated that it was possible to live in a good part of NW with a family of 4 on 150K. I am also the poster who provided real life numbers from my own experience, buying a $1.2M house in Dupont. When it was suggested that it was impossible today, I was also the same poster who suggested that it was possible with a 4 unit in Logan Circle for $1.2M

Most importantly, however, I want to point out that I am the same poster who indicated an income of $700K. If you wonder why I make $700K it is because, unlike everybody here telling me it is impossible and continually putting up hurdles, I don't take no for an answer until I know for a fact that something is impossible. People who accept the status quo in Washington make $60K, $200K and $400K. I am 33 and make $700K because I do take calculated risks.

A 4 unit in Logan would run a max of $1.4M. One sold on 13th and W (4 2 bedroom units) about a year ago for $1.2M. There was one listed in West Dupont a few months ago for $1.4M. I specifically mentioned FHA because they do permit rental income to be used toward qualifying. 3 2 bedrooms units would rent for $6K-$8K/month. Do the math and you will realize that the owner would actually pay less than if he lived in a $400K- $500K condo (which people making $150K routinely buy). In fact, the monthly out of pocket corresponds to less than a $250k-$300K (even after utilities and repairs), which is far less than people who make $150K routinely buy. Of course as a landlord you need to put money aside for unexpected expenses, but its not that hard, it just requires commitment and common sense budgeting.

Life is about risks. I don't take stupid risks, but I take calculated ones. In fact, I would suggest that a family making $150K, who buys a $400K house is actually the one taking unnecessary risk. My way and you will likely have the rental covering your mortgage entirely within 10 years and then you will have freed up income to invest in retirement, college or true wealth development. Take the traditional route and 10 years from now you will want a new house an be in the exact same postion.

[Anonymous]

Anonymous wrote:I am the poster who indicated that it was possible to live in a good part of NW with a family of 4 on 150K. I am also the poster who provided real life numbers from my own experience, buying a $1.2M house in Dupont. When it was suggested that it was impossible today, I was also the same poster who suggested that it was possible with a 4 unit in Logan Circle for $1.2M

Most importantly, however, I want to point out that I am the same poster who indicated an income of $700K. If you wonder why I make $700K it is because, unlike everybody here telling me it is impossible and continually putting up hurdles, I don't take no for an answer until I know for a fact that something is impossible. People who accept the status quo in Washington make $60K, $200K and $400K. I am 33 and make $700K because I do take calculated risks.

A 4 unit in Logan would run a max of $1.4M. One sold on 13th and W (4 2 bedroom units) about a year ago for $1.2M. There was one listed in West Dupont a few months ago for $1.4M. I specifically mentioned FHA because they do permit rental income to be used toward qualifying. 3 2 bedrooms units would rent for $6K-$8K/month. Do the math and you will realize that the owner would actually pay less than if he lived in a $400K- $500K condo (which people making $150K routinely buy). In fact, the monthly out of pocket corresponds to less than a $250k-$300K (even after utilities and repairs), which is far less than people who make $150K routinely buy. Of course as a landlord you need to put money aside for unexpected expenses, but its not that hard, it just requires commitment and common sense budgeting.

Life is about risks. I don't take stupid risks, but I take calculated ones. In fact, I would suggest that a family making $150K, who buys a $400K house is actually the one taking unnecessary risk. My way and you will likely have the rental covering your mortgage entirely within 10 years and then you will have freed up income to invest in retirement, college or true wealth development. Take the traditional route and 10 years from now you will want a new house an be in the exact same postion.

If the comments you've made here are at all similar to the decisions you've made in your own life, then you have taken some really stupid risks. Evidently they all worked out, and now you're wealthy. But that doesn't mean you were smart, or that they were intelligent risks to take. It just means you got lucky.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I am the poster who indicated that it was possible to live in a good part of NW with a family of 4 on 150K. I am also the poster who provided real life numbers from my own experience, buying a $1.2M house in Dupont. When it was suggested that it was impossible today, I was also the same poster who suggested that it was possible with a 4 unit in Logan Circle for $1.2M

Most importantly, however, I want to point out that I am the same poster who indicated an income of $700K. If you wonder why I make $700K it is because, unlike everybody here telling me it is impossible and continually putting up hurdles, I don't take no for an answer until I know for a fact that something is impossible. People who accept the status quo in Washington make $60K, $200K and $400K. I am 33 and make $700K because I do take calculated risks.

A 4 unit in Logan would run a max of $1.4M. One sold on 13th and W (4 2 bedroom units) about a year ago for $1.2M. There was one listed in West Dupont a few months ago for $1.4M. I specifically mentioned FHA because they do permit rental income to be used toward qualifying. 3 2 bedrooms units would rent for $6K-$8K/month. Do the math and you will realize that the owner would actually pay less than if he lived in a $400K- $500K condo (which people making $150K routinely buy). In fact, the monthly out of pocket corresponds to less than a $250k-$300K (even after utilities and repairs), which is far less than people who make $150K routinely buy. Of course as a landlord you need to put money aside for unexpected expenses, but its not that hard, it just requires commitment and common sense budgeting.

Life is about risks. I don't take stupid risks, but I take calculated ones. In fact, I would suggest that a family making $150K, who buys a $400K house is actually the one taking unnecessary risk. My way and you will likely have the rental covering your mortgage entirely within 10 years and then you will have freed up income to invest in retirement, college or true wealth development. Take the traditional route and 10 years from now you will want a new house an be in the exact same postion.

If the comments you've made here are at all similar to the decisions you've made in your own life, then you have taken some really stupid risks. Evidently they all worked out, and now you're wealthy. But that doesn't mean you were smart, or that they were intelligent risks to take. It just means you got lucky.

Do you really think that? That people become wealthy by luck?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I am the poster who indicated that it was possible to live in a good part of NW with a family of 4 on 150K. I am also the poster who provided real life numbers from my own experience, buying a $1.2M house in Dupont. When it was suggested that it was impossible today, I was also the same poster who suggested that it was possible with a 4 unit in Logan Circle for $1.2M

Most importantly, however, I want to point out that I am the same poster who indicated an income of $700K. If you wonder why I make $700K it is because, unlike everybody here telling me it is impossible and continually putting up hurdles, I don't take no for an answer until I know for a fact that something is impossible. People who accept the status quo in Washington make $60K, $200K and $400K. I am 33 and make $700K because I do take calculated risks.

A 4 unit in Logan would run a max of $1.4M. One sold on 13th and W (4 2 bedroom units) about a year ago for $1.2M. There was one listed in West Dupont a few months ago for $1.4M. I specifically mentioned FHA because they do permit rental income to be used toward qualifying. 3 2 bedrooms units would rent for $6K-$8K/month. Do the math and you will realize that the owner would actually pay less than if he lived in a $400K- $500K condo (which people making $150K routinely buy). In fact, the monthly out of pocket corresponds to less than a $250k-$300K (even after utilities and repairs), which is far less than people who make $150K routinely buy. Of course as a landlord you need to put money aside for unexpected expenses, but its not that hard, it just requires commitment and common sense budgeting.

Life is about risks. I don't take stupid risks, but I take calculated ones. In fact, I would suggest that a family making $150K, who buys a $400K house is actually the one taking unnecessary risk. My way and you will likely have the rental covering your mortgage entirely within 10 years and then you will have freed up income to invest in retirement, college or true wealth development. Take the traditional route and 10 years from now you will want a new house an be in the exact same postion.

If the comments you've made here are at all similar to the decisions you've made in your own life, then you have taken some really stupid risks. Evidently they all worked out, and now you're wealthy. But that doesn't mean you were smart, or that they were intelligent risks to take. It just means you got lucky.

Do you really think that? That people become wealthy by luck?

There are three main reasons people become wealthy: talent, hard work, and luck. Usually, it takes two or three of those factors working together (in my own case, it was a healthy combination of all three). And I find it very obnoxious when a wealthy person who obviously benefited from a great deal of good luck denies that luck played any role in his/her success.