1,000,000 house

[Egoist]

come on guys..

let's someone has an APR at 5.5 percent.

That is now a 1055000 house (if i am not mistaken, the interst might roll over every year, have to ask Star8up about that)

say it's broken down to a 30 year buy plan which is a $2930 payment every month.


a guy who makes 90000 a year before taxes could afford to stay in that house, without too much trouble, assuming he knows how to budget his money. If he is married and they have additional income coming in, he's good to go.
.

well, A-Unit pretty much hit the nail on the head.. I have bought a house but I bought it outright, but I do know that with everything that has to do with credit, what's as important as your credit, is your income/debt ratio. It doesn't matter how well you can save, no bank in their right mind is goign to put you in a 3k house a month if you have 4.5k coming in. My first apartment, they told me as long as I made 3 times rent per month (which I did) I could move in. Cars are the same way.


"i have doctor relatives - they make 300-500k/yr. lawyers *start* out of law school at 80k, lawyers make 200k easy after a few years."

that's so not true.. it all depends on how good you are at your job, just like anything else. Getting out of law school isn't like cashing a million dollar payday. Where do you think public defenders and the ambulance chasers come from?

If you are GOOD, top precentile of your class good, then yes, big law firms are always looking to add talent, just like the technology field.

Our old lawyer for my old company was about 36, and was making at leat 500k a year... then again I have seen some laywers who make considerably less than me.


"I think it's interesting that people tend to disparage "$200 shoes and $300 jeans", but think it's important to buy $60k cars."

So so true. I hate people who think think they are wasting money on expensive clothes. Contary to what you may think, clothes are expensive for a reason. It's not like Gucci just woke up one day and said "you know what, wer are just going to charge 200 dollars more for shirts that are the same thing you can get at Wal mart! Brilliant!!!". If they weren't worth thier salt, they wouldn't be able to charge as much as they do.

Actually, usually shirts/pants/slacks that are higher in price tend to last longer, made with better fabrics, etc. eihter buy a pair of pants and take care of them for 30 bucks, and end up buying an ew pair in a year and a half or two, or pay 100 bucks and keep them for 10 years. You loose money in the front, but save alot in the back.

When it comes to dress clothes, slacks, blazers, you can't sakte buy on cheap.. you just can't... which is what I tend to wear more times than not now.

You will never be happy in life if you are always worried about doing what's the most cost effective things... getting the civic, even though you want, and can afford the new Infiniti G35 Coupe, because it's chepaer and better on gas. You have to learn to find the happy medium.. some things I am very finanically prudent on... Food, Gas, misc expenditures, bills, etc.. some things I am not. Clothes, I love too much to be cheap on, I have a bigger wardrobe than most women. Cars is another. I drive what I like. Neither I am just outlandish with, but you get the point.

backbreaker: for a guy who is supposedly financially astute, you totally got the mortgage thing wrong.

Your payment would be like 2-3 times as much at least. And thats without property taxes (figure at least $25K annually) maintenance fees if any and utilities etc (figure at least a couple hundred monthly, most likely much more... heating bills alone would be crazy in the winter or a/c in the summer.. pick your climate...)


but I do agree with you on the rest. Materialistic wh0res unite - we make the economy run. But then again, we are also the producers here

 

[STR8UP]

Depends on how you come into it. If you make all that mula selling your house, your first thought is "oh sh!t now I'm homeless". Your second thought (unless your name is STR8UP) is "holy sh!t I wanna buy something".

Actually, when I come into money I DO say "holy sh!t I wanna buy something", it just isn't depreciating junk.

I have millions of dollars worth of real estate, but I only have $1,500 in my personal checking account right now. I have business accts. with money to cover payments and such, but any excess CASH is invested in more assets. If I want a new car or whatever I BORROW to buy it, with the knowledge that my assets are making me enough to pay for it. Not an easy concept to grasp, but when it makes sense to you it can make you a lot of dollars.

And as for someone only making $90k yet owning millions in real estate.....it's not only possible, but it's also the way you become wealthy while you are young.

This is what separates the men from the boys in this game. The boys will tell you 1000 reasons why it CAN'T be done, the men go search and FIND the one way that it CAN be done.

 

[backbreaker]

backbreaker: for a guy who is supposedly financially astute, you totally got the mortgage thing wrong.

Your payment would be like 2-3 times as much at least. And thats without property taxes (figure at least $25K annually) maintenance fees if any and utilities etc (figure at least a couple hundred monthly, most likely much more... heating bills alone would be crazy in the winter or a/c in the summer.. pick your climate...)


but I do agree with you on the rest. Materialistic wh0res unite - we make the economy run. But then again, we are also the producers here

\
the one house I bought I bought outright, so mortgages are not my thing.. I amg etting ready to buy another house and will do the same.

 

[backbreaker]

Actually, when I come into money I DO say "holy sh!t I wanna buy something", it just isn't depreciating junk.

I have millions of dollars worth of real estate, but I only have $1,500 in my personal checking account right now. I have business accts. with money to cover payments and such, but any excess CASH is invested in more assets. If I want a new car or whatever I BORROW to buy it, with the knowledge that my assets are making me enough to pay for it. Not an easy concept to grasp, but when it makes sense to you it can make you a lot of dollars.

And as for someone only making $90k yet owning millions in real estate.....it's not only possible, but it's also the way you become wealthy while you are young.

This is what separates the men from the boys in this game. The boys will tell you 1000 reasons why it CAN'T be done, the men go search and FIND the one way that it CAN be done.

you are correct, but I don't think he was talking about just a guy in real estate owning that much worth of land/property.. I think he is talking about just an average say, software designer, making 90k a year, living in a million dollar house.

You and I go to show that there is not one straight path to success.. just reaidng what you say shows me how different we think. While I fully grasp the concept of how you make money, how you spend money, etc... It couldn't be any different than the way I think. If I don't have the CASH IN MY BANK ACCOUNT TO BUY IT OUTRIGHT, I don't want it. I pay all my bills as far in advance as I possibly can. Right now, I have about a 2 year credit on my comcast bill, and I don't even have a house... so when I do move, all I have to do is tell them to cut it on at such and such address and I won't see a bill, at least one saying I owe anything, until at least 2008, and that's if I stop paying on it, which I won't.

that's why I am able to take some money and simply blow it.. because everything else i can possibly think of is paid for. Only a fool would go to say, a strip club and spend money, knowing he might be cutting into his electric bill or something stupid like that.

 

[Latinoman]

What kind of gross income do you have to make yearly to afford a million dollar house? I realize a lot of factors determine the house you can afford; income, debt, expenses, etc. But i was just curious!

Thanks-

Okay...
Let's assume you are buying a 1 million U.S. dollars house (without any down payment). Let's assume that you are taking a loan for 30 years (fix) and 6.0% (which is low) interest rate.

You will be paying around $6,000 per month in the principal. Add to that amount whatever property taxes you would have to pay in your city/county and hazard insurance too.

 

[Latinoman]

I kinda doubt that's accurate Poohead. Half of the houses here in OC are getting close to 1mil in value and most home owners here aren't making nearing that much (though they are still much higher than the national average).

Remember...those homeowners probably bought those homes when they were affordable. Or they sold and made a LOT of profit in their prior homes and used that profit as a down payment (decreasing the amount of the loan considerably).

 

[Latinoman]

the bank wouldn't let him take out a mortgage loan with those high priced properties if his income was only 90k.

Perhaps those are the CURRENT values of those homes. I bet he bought the first home at a ridiculous low value. And the market boomed and now those homes have very high values.

I don't think $90K is such a "low income". No many people can make that ammount of money in America.

 

[Latinoman]

i have doctor relatives - they make 300-500k/yr. lawyers *start* out of law school at 80k, lawyers make 200k easy after a few years.

High salaries is not clear indication of "wealth". They might be making all that money in salaries...but their wealth might be very low (e.g. they owe more than they own).

The 90K man...perhaps have more wealth, because he actually OWN several homes valued over $1 M. (once again, maybe he bought the first one or two when the market was affordable).


If that 90K man loses his job...he can still be comfortable, because he can sell ONE house and be okay.

If the 200K lawyer loses his job...he probably puts a bullet in his head.

My point is...wealth and high salaries is not the same.

Like Chris Rock said... "Shaq has high salary. The man that signs his check has the wealth".

 

[chickenlegs03]

I have millions of dollars worth of real estate, but I only have $1,500 in my personal checking account right now. I have business accts. with money to cover payments and such, but any excess CASH is invested in more assets. If I want a new car or whatever I BORROW to buy it, with the knowledge that my assets are making me enough to pay for it. Not an easy concept to grasp, but when it makes sense to you it can make you a lot of dollars.

And as for someone only making $90k yet owning millions in real estate.....it's not only possible, but it's also the way you become wealthy while you are young.

This is what separates the men from the boys in this game. The boys will tell you 1000 reasons why it CAN'T be done, the men go search and FIND the one way that it CAN be done.

exactly.

and let me quickly clarify something that i think a lot of people have misconceptions about with real estate. my parents or you (str8) could probably explain this better, but i know people usually think like this...

they think in the mentality of capital gains. people think you always gotta buy low and sell high.

you guys think we actually paid for those houses in cash or put millions of dollars down? nope. in fact, the equity we have on the homes is not that much right now, compared to the value.

what's important in real estate, and how you get ahead is with cash flow. not capital gains. someone mentioned that we probably bought the homes at cheaper and they just appreciated. nah...you take out loans, when the equity reaches a certain point where you can use it as a downpayment on a new house, you buy a new house, and rent it or something.

sure, there's times when you get lucky and make a capital gain, but that's not what it's about.

it's about cash flow. and yes, i've read rich dad (which my parents rec'd i read).

we don't buy the expensive clothes and stuff that is depreciating because it doesn't put money back in our pockets. when you buy enough stuff that put money back in your pocket (and you can do this by using loaned money, you don't really need cash)...then you can live more lavishly than before. and it just keeps going.

take this with a grain of salt though, because this is what i've seen from my parents doing. i personally haven't done any of this yet, but i'm getting started on it soon...

 

[Shiftkey]

chickenlegs03, I get where you're going, but I think you made a mistake in your calculations. If your parents buy a house and rent it out, with the rent covering the mortgage and taxes, that rent should still be considered a part of their income.

 

[chickenlegs03]

...that rent should still be considered a part of their income.

true, but i figured income usually means annual salary sort of thing.

i guess with that my dad's income would be a bit more. but my real point was to say that even a guy with 50k per year could do it...with enough good spending habits, good credit, and effort. (then you'd tack that extra cash flow on that guy's income too).

but yeah you're right, i emphasized the 90k too much, it's a bit more if you count all the assets we have.

 

[Good_ol_boy]

My uncle has a $6million house. Bought it for $39K in 1963.