buying a house without family money is very scary

Not if you're a man.

not really wrote:

Not if you're a man.

Why's that?

Got tired of posting the same stuff as osaka?

You can't win if you don't play. I have friends from HS who dropped out of college and went to VoTech to become plumbers, HVAC repairmen, etc. They bought houses close to the city in relatively crappy neighborhoods because most of their work was in the city. 20 years later, there are fancy coffee shops on every corner and their lots are now worth $500-600k. They wen through periods where they ran out of cash and were threatened with foreclosure. But they managed to land on their feet every time.

nagoya wrote:

not really wrote:

Not if you're a man.

Why's that?

Since you're not one, there's no way you can understand.

Precious Roy wrote:

You can't win if you don't play.

Exactly. With the OP's attitude, every person would stay in the first job s/he got, no matter how crappy. Why put yourself out there when you have "stability" where you are?

There's risk no matter what you do with your money, OP. Invest it? Yes, historically, it will appreciate on average, but what if you get a big downturn at a time you have to have the cash? You're screwed. So, put it in a bank, there's FDIC insurance. Terrible return, and if the bank goes under, yes you'll get your money, but it's a huge pain in the butt to get. Stick it under the mattress? Your apartment might burn down or get robbed.

Long term, putting your money in your house is relatively safe. At a minimum, you have an ownership stake in your residence. That said, if you think you would move within five years, just rent.

People without family money should take fewer risks. They didn’t grow up learning how to be successful and, almost as important, deal with success. They are pre-wired for failure.

If you attain wealth it’s very important to pass it to you children to ensure they have as many advantages over their peers as possible.

OP, not sure why everyone is jumping down your throat on this one. Your post is quite accurate. In this state, a down payment for a crappy $600,000 condo is still $120,000. Only ones I know that can comfortable do this here are:

Chinese immigrants who pay cash for everything somehow

Recently married couples whose in-laws gave them $$$ for a down payment

EVERYONE I know that owns a decent home here had SOME help, if not LOTS, from family members.

Maybe it's my own fault for living in a state where a couple each making 6 figures is not considered

"well off".....

Precious Roy wrote:

You can't win if you don't play. I have friends from HS who dropped out of college and went to VoTech to become plumbers, HVAC repairmen, etc. They bought houses close to the city in relatively crappy neighborhoods because most of their work was in the city. 20 years later, there are fancy coffee shops on every corner and their lots are now worth $500-600k. They wen through periods where they ran out of cash and were threatened with foreclosure. But they managed to land on their feet every time.

+1

I was laid off from my job in 2009 but left my money in the stock market and it did really well so I bought a place in 2015 and it’s gone up over 100k in value since then.

If you invest in things with the long term in mind you’ll never go wrong

Then don't put yourself in that position. Wait until you have enough money to 1) Put 20% down, 2) Still have 6 months salary in savings for an emergency (loss of job, medical, etc.). It's not that scary if you are smart about it. I bought my first house 18 years ago (not a dime of family money) and now I am mortgage free. That being said, now is not a great time to buy (prices are still high in most areas and interest rates are high). If you do not plan on staying in one place for a while, then it may not be a great decision as the house may not have appreciated enough for you to overcome the transaction costs (unless you have tenants that you will be renting rooms out to).

nagoya wrote:

even if you're buying well within what you can/should afford, it's terrifying to lock up most of your savings when you could be one wrong move away from being canned, or company downsizes, or you want to move/change careers. If you do lose your job, you're x number of months away from having to deal with a forfeiture, losing your down payment, and ending up renting a 1br in a marginal part of town.

it makes sense that all of my prole friends rent forever, whereas those that came from upper middle to upper class all own their own homes.

How do you not have that risk if you are renting? You still have to downsize, you still break the lease and lose your deposit, and end up in a "marginal part of town".

Buying a single family home is the safest investment anyone can make.

Grow. Up.

Do you live on the West Coast?

I recommend moving to a 'flyover state'. Here in Missouri you can buy an older house under 2000 sq ft in a top 10 school

district for easily under 300K. Lower property taxes too. It's no California but we do have oppressive humidity and not much traffic.

As a rule, if you're having to use essentially all your savings to put a down payment on a house, you probably shouldn't

be buying that particular house at that particular point in your life.

Exceptions: help from family or extremely high earning potential (eg physician) w/ ability to take out a doctor's loan without PMI. However even high earners should probably wait a few years and reserve at least 50k in savings if paying a large down payment, IMO

eff off busta. my wife and i saved our money and paid off 70k in student loans with NO HELP from our parents. we're ready to make a 100k downpayment because we worked hard and earned it.

move out of california

didn't you know 100k is chump change on these boards where everyone makes at least 300k a year? =)

But seriously, nice work. Congrats on saving and hopefully you aren't spending everything on your down payment

i'm mad at you wrote:

eff off busta. my wife and i saved our money and paid off 70k in student loans with NO HELP from our parents. we're ready to make a 100k downpayment because we worked hard and earned it.

move out of california

Being poor is nothing to be proud of.

You make good points but when you are young it's clearly worth it. You need to assess the risk and possible reward.

My Story (Silicon Valley):

Bought low end house in OK neighborhood, rented 2 rooms. 100% down, parents co-signed.

Year 4: refi as sole owner, still renting rooms

Year 9: sell for 227% gain, buy in average neighborhood cost 130% over sale

Year 15 sell for no gain. Buy in nice neighborhood cost 135% over sale

Year 37 still in 3rd house, appraises at 450% of purchase price

Buy the dam house. You won't be sorry. I've owned 6 houses in my life (33 years since buying my first house) and still own two of them. I can tell you this much .... I wish I still owned all of them. I'd be up significantly on every one of them. Even the ones I bought/sold in Texas. The worst appreciating one is a condo in AZ that is only up ~$40K in 10 years. But thats on a purchase price of 150K and I've got 10 years of positive cash flow from rent in my pocket.

That one gave me some fits though. Bought it for 150K in 2006, saw it appreciate almost immediately to $220K then th bust of 2008 came. At it's worst it went down to $90K. But it kept putting money in my pocket that whole time, now it's worth about 190K and still throwing cash my way. Shoulda bought five more of em back then.

Moran.

Houses are free.

Potentially, they pay you to live in them.

You have to be a moran's moran to mess this up.

Suppose you rent for $500 per month. That's $6000 per year. Let's say over a 10 year period. 60 thousand.

So you buy a house and LOSE 60,000 selling it 10 years later. You are only out your rent.

If you "LOSE" only 50,000, you're ahead by $10,000.

Renting is moranity writ large.

I was literally homeless at 18, (I lived in a car). (letsrun.com disclaimer... Now 30 years later wife and family, house and car, two weeks vacation per year, but still not quite sub 14 5k.)