I’m 22 y/o living in Southern California with an 80k salary. Everyone talks about putting 20% down, that means I have to save up at least 150k on something that doesn’t resemble too close to a shack. I have to save at least 6-7 years before I can see myself buying a house with my calculations. Are there something off or this is the reality?

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You can always move. Big cities out there where 300-400k will get you A LOT.

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I bought my first house in Austin which was booming and more affordable than CA. Eventually bought a second house in Austin. Sold the first after about 10 years and that provided the 20% down payment for a $825k home. Sold the second home, also after 10 years of ownership and did a 1031 exchange for three unit rental. I rented rooms until I was married. It was worth it! Find a market outside CA to build equity.

likesmart

If there really isn’t anything you can buy less than 750k (and I’m not saying that isn’t the case), then yeah. Unfortunately that’s reality.

Otherwise just put down less than 20% and pay PMI.

Your salary should be much higher than 80k to purchase a house at that cost though. So I would imagine you would need at least 6-7 years anyway to get to salary where that would be feasible.

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It’s quiet depressing. At 500k, I’m literally throwing my money into an apartment and sharing a wall with another family.
I also don’t know how long I’m going to have my current job (just a bit of a rant) and want to go on here to see how others have done it.

Very common and makes perfect sense. SoCal weather is AMAZING. I resent being unable to afford living there.

Live in a mansion in Texas, though.

likesmartfunny

Your salary will increase as will your ability to make money investing. It tends to snowball if you do it right.

Honestly, 6-7 years is still very aggressive if you're not looking into the valley, south central, or something east. A 30-year $600k mortgage is going to rack up about $40k-$50k per year in principal and interest and you'll need to be able to cover that.

Getting married helps, twice the income.

likefunny

I bought right outside DC and put down less than 5% on a place under $500k. 3 bedroom townhouse, got a couple roommates to pay down the mortgage. Refinancing with these great rates too. You can make it work.

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What would a duplex run you out there? Here in the Cincinnati market I know property type and buying power are two totally different things (600k buys you a new 4-5 bed 5,000 SQ/FT estate on a half acre here.)

The reason for my original question regarding a duplex is the process of purchasing, then renting out one side to help off set the mortgage expenses, then letting equity build, using a HELOC loan to leverage said equity built (and magnified by market appreciation) as the down payment on your next home. Then renting out the side you previously lived in and using the profits towards your new residence.

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Duplex is something I am actively hunting for. Asking price for a half constructed duplex is around $750k and it goes fast.

You can buy outside of the heart of the city and also look into FHA loans.

helpful

The SoCal market will correct. Be patient. Do you want to live there for 10 years? If so, wait for a deal. You can time real estate. It’s cyclical.
Or move to a different environment. Charlotte NC is a big banking and FS center with major health care players moving in and a growing tech sector, for example. A really nice 2br townhouse can be had in a great neighborhood with walking distance to breweries and restaurants for less than $300 k.

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Best of luck. Hope it works out for you.

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Why 20% down? I mean first home buyer is only 3% required. I don’t mean this in a rude way but if I was only getting compensated 80k in an area that expensive I’d move.

Right now I only make about 70k but you can find nice houses for 150-300k

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