I don’t understand how my neighbors are paying for their renovation

[Anonymous]

Anonymous wrote:Are sure they only make $160k? That’s very low for a 30+ year old married couple from wealthy families. Are they teachers? I have a feeling their income is a lot higher than you think it is.

Who said their families were wealthy?

Pretty sure the house was not valued at $900k when the parents bought it.

[Anonymous]

Anonymous wrote:They got a free or nearly free house. That why they have so much money. I don't understand why you still think it's mystery where the money is coming from.

This. If it’s the childhood home for one if them, they’ve been able to save the amount of a mortgage for years. And if both parents have passed, there could have been an inheritance on top of that.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Are sure they only make $160k? That’s very low for a 30+ year old married couple from wealthy families. Are they teachers? I have a feeling their income is a lot higher than you think it is.

Who said their families were wealthy?

Pretty sure the house was not valued at $900k when the parents bought it.

Passing down an almost $1M home means you’re wealthy. Doesn’t matter when the parents bought it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:They got a free or nearly free house. That why they have so much money. I don't understand why you still think it's mystery where the money is coming from.

This. If it’s the childhood home for one if them, they’ve been able to save the amount of a mortgage for years. And if both parents have passed, there could have been an inheritance on top of that.

Also, without a mortgage and as others have already suggested, they could pay a decent loan amt for renovations.

[Anonymous]

Anonymous wrote:It’s called generational wealth, honey, and no. You wouldn’t get it. Keep looking, though! We see you.

As someone who has been the beneficiary of intergenerational wealth, you disgust me.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Are sure they only make $160k? That’s very low for a 30+ year old married couple from wealthy families. Are they teachers? I have a feeling their income is a lot higher than you think it is.

Who said their families were wealthy?

Pretty sure the house was not valued at $900k when the parents bought it.

You don’t understand what wealth means.

[Anonymous]

Yeah, the answer is so obvious I’m surprised you had to ask. There’s so much of this in the area too. Pass your kids a huge down payment while you’re still relatively young and then write it off as a gift over time. Wealth transfer without inheritance tax and you give your kids the money while they could really use it.

[Anonymous]

Family money
Inheritance
Lottery

Who knows? Who cares?

[Anonymous]

Anonymous wrote:We live in a neighborhood of 1.5-3 mil homes (think Tulip Hill, Mohican, Glen Echo Heights) and there are quite a number of people living in their parent's houses, paid for long ago, who are sitting on lots and homes with a massive capital gains. Pretty easy to get a HELOC or equity loan for 500-700 and still not approach 80% LTV

My parents live on a lot of land in this area. They want me to do this. Any resources on this? I didn’t realize so many people did it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We live in a neighborhood of 1.5-3 mil homes (think Tulip Hill, Mohican, Glen Echo Heights) and there are quite a number of people living in their parent's houses, paid for long ago, who are sitting on lots and homes with a massive capital gains. Pretty easy to get a HELOC or equity loan for 500-700 and still not approach 80% LTV

My parents live on a lot of land in this area. They want me to do this. Any resources on this? I didn’t realize so many people did it.

You just go to a bank and say you want a home equity line of credit for X dollars with X being less than 80% of your home’s value

[Anonymous]

Anonymous wrote:Yeah, yeah, I should mind my own business – but I still don’t get it. They are in their mid-30s with three young kids. I obviously don’t know their exact salaries, but based on their jobs, I’d bet one earns about $90,000 and the other about $70,000.

Pre-renovation, the house was probably worth $900,000. And they’re now doing so much work that it’s almost like a new build (adding square footage, completely gutting the inside, adding a deck, etc.). I don’t see how they’re spending any less than $500,000 on the renovation, and it’s probably more.

I don’t get how a family with three young kids making $160,000 a year can afford this. I guess the answer is family money, but is there really this much of it going around? This is not even in Bethesda or some place like that. I should add that it is the childhood home for one of them, so maybe they were gifted it by their parents – but still, are parents giving an extra $500,000+ cash on top of a paid-off $900,000 house (plus rent for a second place while the remodel is happening)??

You’re correct it’s none of your business. On that note, you need to open your eyes on the various ways people make money other than their “primary jobs”. It’s called multiple income streams. It’s not necessarily family money. Perhaps they invested in a stock or stocks that went ballistic. I know a few people that made a killing buying Tesla stock a few years ago and then sold and took profits before the decline. Or perhaps they make money online with blogs, influencing, you tube videos, e-commerce, etc. If you limit your income to just your primary job then that’s on you. All that aside, it sounds like they didn’t pay for the house as it was gifted to one of them, so taking a $500K loan for a renovation doesn’t sound unreasonable regardless if they have multiple income streams or family money.

[Anonymous]

Anonymous wrote:Family money, or you're just completely wrong about their salaries. When we bought our house my in laws were apparently shocked and gossiped for months about how we were showing off or in over our heads or something. They just had literally no idea how much I made at work and that we actually bought at the very low end of our budget. And I'll never correct them, because it's none of their business (and in our interest to have people think we have less $ than we do, not more).

Spot on….I’m a total believer in stealth wealth. Completely in your best interest to never ever let people know you have more money or make more money than they think. Humility is a rare trait these days for sure. Live large when away from your neighborhood but don’t post any of it on social media.

[Anonymous]

Anonymous wrote:For us it was Apple stock and a decade of frugality.

Not everything is about family money, far from it, but after spending years on DCUM, I've seen that people feel more comfortable thinking their neighbors benefited from family help than from their own investment decisions or their own frugality or hard work. It must make them feel better about themselves, a la "it's not my fault I can't have the same thing, this family just started out on a different rung".

Agree with PP. Why do people always assume it’s family money? In most cases it’s not.

For us it was Tesla stock and frugality. Bought in 2019 and sold most of it after its meteoric rise in fall of 2021 (included multiple stock splits). Made more money in Tesla stock in 2 1/2 years than we would make working 20 years in our current jobs (total combined $200K annual salary) and we don’t even own an EV. We make our own investment decisions, take our own risks, have no financial advisor, no family money, and no inheritance.

[Anonymous]

Anonymous wrote:Family money
Inheritance
Lottery

Who knows? Who cares?

You missed a big one:
- Investments

[Anonymous]

Love the term stealth wealth!

Keep ‘em guessing! Stay humble. Quietly donate to charities. Reinvest. Live below your means. Splurge on non material items like travel.