Is this possible without family money?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Why do you care?

OP here. We are same age, roughly same income and I don’t get the math without them being very very house poor.

Ok. But why do you care?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here. So are people guessing large downpayment or mammoth mortgage?

If they put 20% on 1.6mil that's 320k. You realize that's like 2-3 years of bonuses if he's 6-7th yr+ associate right? Sorry you're jealous.

Sure assuming taxes magically don’t exist it’s 2-3 years

Uh you realize some people invest their bonuses right? You realize the market has been up significantly since 2013 including 2 years of 20% gains, right? Do you assume everyone holds their bonuses in 0.1% savings accounts?

DP. Even you were planning to need that money for a down payment in the next couple of years, it actually would have been stupid to have it in the market. Now, that bet would have paid off over the last couple of years, but it still would have been a dumb move that just happened to work out this time.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here. So are people guessing large downpayment or mammoth mortgage?

If they put 20% on 1.6mil that's 320k. You realize that's like 2-3 years of bonuses if he's 6-7th yr+ associate right? Sorry you're jealous.

Sure assuming taxes magically don’t exist it’s 2-3 years

Uh you realize some people invest their bonuses right? You realize the market has been up significantly since 2013 including 2 years of 20% gains, right? Do you assume everyone holds their bonuses in 0.1% savings accounts?

DP. Even you were planning to need that money for a down payment in the next couple of years, it actually would have been stupid to have it in the market. Now, that bet would have paid off over the last couple of years, but it still would have been a dumb move that just happened to work out this time.

If the bet doesn't work out you continue renting or living in the smaller house. What's the big deal? If things had gone wrong in the market, do you think that there wouldn't be tear downs in Bethesda to be had 5 or 10 yrs from now?

[Anonymous]

I would guess they probably had family help in the sense that they went to decent high schools (private or good public), didn't have a ton of college debt (scholarships thanks to the good high schools, or paid by parents), were able to start saving early, and have a family safety net so they aren't afraid to take some risks such as a big mortgage. They know they won't be living on the street if they miscalculated or have an unexpected emergency.

Not necessarily family help in the form of contributions to a down payment. It's totally possible to do that if you don't mind stretching a bit and taking some risks. Those of us who survived the last housing crisis tend to be fearful of going underwater on a house.

[Anonymous]

Doesn't sound hard to me. We are raising two on $150k and could easily bank $150k/year if we increased to that salary. That's only a few years of saving to get a hefty downpayment. I mean, what kind of expenses do you think they have? This is a high COL area, but 350/year is a very high salary.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here. So are people guessing large downpayment or mammoth mortgage?

If they put 20% on 1.6mil that's 320k. You realize that's like 2-3 years of bonuses if he's 6-7th yr+ associate right? Sorry you're jealous.

Sure assuming taxes magically don’t exist it’s 2-3 years

Uh you realize some people invest their bonuses right? You realize the market has been up significantly since 2013 including 2 years of 20% gains, right? Do you assume everyone holds their bonuses in 0.1% savings accounts?

DP. Even you were planning to need that money for a down payment in the next couple of years, it actually would have been stupid to have it in the market. Now, that bet would have paid off over the last couple of years, but it still would have been a dumb move that just happened to work out this time.

If the bet doesn't work out you continue renting or living in the smaller house. What's the big deal? If things had gone wrong in the market, do you think that there wouldn't be tear downs in Bethesda to be had 5 or 10 yrs from now?

You'd be pretty pissed if you were forced to rent (or stuck in a house you could have otherwise traded up from) for many additional years because you decided to play the market with money that you wanted to use in the next couple of years. It is easy to say no big deal because that isn't how the market actually turned out, but most of the time you aren't going to benefit from historic levels of appreciation.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here. So are people guessing large downpayment or mammoth mortgage?

If they put 20% on 1.6mil that's 320k. You realize that's like 2-3 years of bonuses if he's 6-7th yr+ associate right? Sorry you're jealous.

Sure assuming taxes magically don’t exist it’s 2-3 years

Uh you realize some people invest their bonuses right? You realize the market has been up significantly since 2013 including 2 years of 20% gains, right? Do you assume everyone holds their bonuses in 0.1% savings accounts?

Someone who is a sr assoc today (like me) got $80k last year and $50k the year before and, going back 3 years, $25k.

Or someone a year ahead of me (like DH) got $90k in 17 then $65k the year before that then $50k the year before that.

How you turn that into $320k after taxes despite how strong the market has been.

[Anonymous]

Anonymous wrote:Doesn't sound hard to me. We are raising two on $150k and could easily bank $150k/year if we increased to that salary. That's only a few years of saving to get a hefty downpayment. I mean, what kind of expenses do you think they have? This is a high COL area, but 350/year is a very high salary.

Orly you could save the significant majority of your takehome on $350k? Do you live with your parents?

[Anonymous]

Anonymous wrote:When we earned around $300k, we bought a $600k with 40% down. We paid off the house within 3 years. Our HHI increased over the years to over a $1M, and I wanted to buy a $1.4M house. But DH balked because the property tax on the $1.4M house was around $26k while the current house was around $8k. And here we are today still in the first house!

Oh jeez. Shut up.

[Anonymous]

I think this is relatively common in California. Although it involves a lot of sacrifices that DCUMers are probably not going to make, and yes it does mean that many of us are what you call "house poor".

[Anonymous]

OR it's very possible that they have family money.

I know a ton of people in NW DC who had help in their 30s with down payments from their parents. I can think of 20+. Some received a down payments=, some received the house paid-in-full.

[Anonymous]

Anonymous wrote:Friend of mine and her husband just bought a $1.6M house. 3 kids (public school) wife stays home. Husband is a senior associate in Biglaw (but not partner yet.) They are not that old (upper 30’s) and weren’t part of any company IPO’s or anything like that. I say no way they could do this without help. DH says they could if they really stretched.

What day you? They had help or no? (And yes it’s none of my business - not going to ask her, just curious how others read this.)

It might not be family money in the way you think of it. I know several people who were able to do similar, but the source of the money was through family tragedy. Eg. parents dying in an accident or inheriting early as a result of a fatal illness.

[Anonymous]

It is but only if they're not saving enough for college. My FA says you have to be saving at least 1250 for every kid from BIRTH if you want to be able to pay 100% of private college in 18 years (need to save up 300-400k).

Also, how do they take vacations or do anything fun like go out to dinner or get concert tickets or theater tickets? How do they pay for activities and camps? Even "cheap" ones add up with 3 kids.

Also with the mom being a SAHM she's not saving anything for her own retirement.

If they don't have family money, and they do spend money on vacations and entertainment, their finances must be a mess.

[Anonymous]

OP do they take vacations? What kind?

That should tell you whether they are getting family money or not.

If they are taking baller vacations, then their money is not all tied up in their house.

If they take no vacations or just a cheap one to the beach every year, they may very well be house poor.

[Anonymous]

Anonymous wrote:I would guess they probably had family help in the sense that they went to decent high schools (private or good public), didn't have a ton of college debt (scholarships thanks to the good high schools, or paid by parents), were able to start saving early, and have a family safety net so they aren't afraid to take some risks such as a big mortgage. They know they won't be living on the street if they miscalculated or have an unexpected emergency.

Not necessarily family help in the form of contributions to a down payment. It's totally possible to do that if you don't mind stretching a bit and taking some risks. Those of us who survived the last housing crisis tend to be fearful of going underwater on a house.

This.