Azalea: New Low Cost or Investment Homes for Cypress Village

[brergnat]

Starting in July, our rent is going up to $3700. That's pretty close to $4000. We are a family of 4 with teemagers in a 3bd condo.

Our gross salary is well under $190k. Wanna know how we can afford to pay this much in rent but not have money for a down payment? 22 years in the military. They give us a non-taxable housing allowance every month. That's how. When you take that away, we just barely now make over $100k per year. We are a single income family due to many factors. We need to save for retirement, higher education for our kids, and basically pay for the rest of just regular life. It's expensive. Until very recently, we never had anything left over at the end of the month. We live a VERY modest lifestyle. My car is 14 years old. I shop for clothes at Target and Costco. We don't take fancy vacations. Our house is full of Ikea furniture. For the majority of our married life, our rent was over 50% of our take home pay.

We live in Irvine for the schools and specifically, for the special education program. We refuse to send our autistic kids to any other district in OC. It's not an option. So, we pay the Irvine premium for that.

We are just now barely at the point where we have saved a 6 month emergency fund. Next up is the house down payment fund. We planned to use a VA loan, but after hearing how hard that is here, we have given up and decided that we will need 20% down. We will have our kids living with us as adults and will NOT be able to tolerate a home smaller than we are in now, 1900 sq ft. From what I can see, a house the size we will need long term will cost us at least $1M, thus the need for a $200K down payment.

If we are lucky, we will be able to buy a house before we turn 50.

 

[brergnat]

Anyways, back to the topic. Azalea is prioritizing non-contingent primary home buyers first. Secondary and investment buyers are 2nd priority. Last in line are contingent buyers.

I'm actually really happy to hear this. This is how it SHOULD be with new construction. Give primary honebuyers priority over landlords who want yet another rental property.

 

[usctrojancpa]

Starting in July, our rent is going up to $3700. That's pretty close to $4000. We are a family of 4 with teemagers in a 3bd condo.

Our gross salary is well under $190k. Wanna know how we can afford to pay this much in rent but not have money for a down payment? 22 years in the military. They give us a non-taxable housing allowance every month. That's how. When you take that away, we just barely now make over $100k per year. We are a single income family due to many factors. We need to save for retirement, higher education for our kids, and basically pay for the rest of just regular life. It's expensive. Until very recently, we never had anything left over at the end of the month. We live a VERY modest lifestyle. My car is 14 years old. I shop for clothes at Target and Costco. We don't take fancy vacations. Our house is full of Ikea furniture. For the majority of our married life, our rent was over 50% of our take home pay.

We live in Irvine for the schools and specifically, for the special education program. We refuse to send our autistic kids to any other district in OC. It's not an option. So, we pay the Irvine premium for that.

We are just now barely at the point where we have saved a 6 month emergency fund. Next up is the house down payment fund. We planned to use a VA loan, but after hearing how hard that is here, we have given up and decided that we will need 20% down. We will have our kids living with us as adults and will NOT be able to tolerate a home smaller than we are in now, 1900 sq ft. From what I can see, a house the size we will need long term will cost us at least $1M, thus the need for a $200K down payment.

If we are lucky, we will be able to buy a house before we turn 50.

Thank you for your service!

 

[sleepy5136]

Starting in July, our rent is going up to $3700. That's pretty close to $4000. We are a family of 4 with teemagers in a 3bd condo.

Our gross salary is well under $190k. Wanna know how we can afford to pay this much in rent but not have money for a down payment? 22 years in the military. They give us a non-taxable housing allowance every month. That's how. When you take that away, we just barely now make over $100k per year. We are a single income family due to many factors. We need to save for retirement, higher education for our kids, and basically pay for the rest of just regular life. It's expensive. Until very recently, we never had anything left over at the end of the month. We live a VERY modest lifestyle. My car is 14 years old. I shop for clothes at Target and Costco. We don't take fancy vacations. Our house is full of Ikea furniture. For the majority of our married life, our rent was over 50% of our take home pay.

We live in Irvine for the schools and specifically, for the special education program. We refuse to send our autistic kids to any other district in OC. It's not an option. So, we pay the Irvine premium for that.

We are just now barely at the point where we have saved a 6 month emergency fund. Next up is the house down payment fund. We planned to use a VA loan, but after hearing how hard that is here, we have given up and decided that we will need 20% down. We will have our kids living with us as adults and will NOT be able to tolerate a home smaller than we are in now, 1900 sq ft. From what I can see, a house the size we will need long term will cost us at least $1M, thus the need for a $200K down payment.

If we are lucky, we will be able to buy a house before we turn 50.

So if you factor in the housing subsidy from the military, you?re not paying 4K then. Again, I?m specifically talking about people that pay 4K in rent. Like 4K being deducted from ones bank account each and every month towards rent.  If one has roommates, subsidies, or any outside assistance to use towards rent, that means one isn?t paying 4K in rent. The fact that the responses that I?ve gotten are people mentioning people are getting assistance like funding from roommates or outside sources like the military actually proves my point that paying 4K in rent makes little sense and is not practical long term.

Anyways I apologize for going off topic.

 

[freedomcm]

yes, thank you for aiding our nation.

question-once you are financially able to buy, won't your kids have aged out of the schools, and so you could substitute another city?

Starting in July, our rent is going up to $3700. That's pretty close to $4000. We are a family of 4 with teemagers in a 3bd condo.

Our gross salary is well under $190k. Wanna know how we can afford to pay this much in rent but not have money for a down payment? 22 years in the military. They give us a non-taxable housing allowance every month. That's how. When you take that away, we just barely now make over $100k per year. We are a single income family due to many factors. We need to save for retirement, higher education for our kids, and basically pay for the rest of just regular life. It's expensive. Until very recently, we never had anything left over at the end of the month. We live a VERY modest lifestyle. My car is 14 years old. I shop for clothes at Target and Costco. We don't take fancy vacations. Our house is full of Ikea furniture. For the majority of our married life, our rent was over 50% of our take home pay.

We live in Irvine for the schools and specifically, for the special education program. We refuse to send our autistic kids to any other district in OC. It's not an option. So, we pay the Irvine premium for that.

We are just now barely at the point where we have saved a 6 month emergency fund. Next up is the house down payment fund. We planned to use a VA loan, but after hearing how hard that is here, we have given up and decided that we will need 20% down. We will have our kids living with us as adults and will NOT be able to tolerate a home smaller than we are in now, 1900 sq ft. From what I can see, a house the size we will need long term will cost us at least $1M, thus the need for a $200K down payment.

If we are lucky, we will be able to buy a house before we turn 50.

 

[JadedOne]

Anyways, back to the topic. Azalea is prioritizing non-contingent primary home buyers first. Secondary and investment buyers are 2nd priority. Last in line are contingent buyers.

I'm actually really happy to hear this. This is how it SHOULD be with new construction. Give primary honebuyers priority over landlords who want yet another rental property.

How is this enforced? Are there actual consequences if the place shows up on zillow after closing? Seems like a waste of time for a builder to worry about it after they got their money.

 

[Cares]

Anyways, back to the topic. Azalea is prioritizing non-contingent primary home buyers first. Secondary and investment buyers are 2nd priority. Last in line are contingent buyers.

I'm actually really happy to hear this. This is how it SHOULD be with new construction. Give primary honebuyers priority over landlords who want yet another rental property.

If you're getting a loan it needs to be stated as owner occupied or investment/secondary home. I guess if you're buying cash it would be near impossible to enforce.

How is this enforced? Are there actual consequences if the place shows up on zillow after closing? Seems like a waste of time for a builder to worry about it after they got their money.

 

[AccidentalAnalytics]

Thanks for your service!

I am new here, but I believe you can qualify for a VA loan.
If you get 100% financing, there wont even be PMI.
Additionally, your non taxable BAH will get augmented for DTI calculation.

If you lower you Sqft a bit, it might coin for you. 

yes, thank you for aiding our nation.

question-once you are financially able to buy, won't your kids have aged out of the schools, and so you could substitute another city?

Starting in July, our rent is going up to $3700. That's pretty close to $4000. We are a family of 4 with teemagers in a 3bd condo.

Our gross salary is well under $190k. Wanna know how we can afford to pay this much in rent but not have money for a down payment? 22 years in the military. They give us a non-taxable housing allowance every month. That's how. When you take that away, we just barely now make over $100k per year. We are a single income family due to many factors. We need to save for retirement, higher education for our kids, and basically pay for the rest of just regular life. It's expensive. Until very recently, we never had anything left over at the end of the month. We live a VERY modest lifestyle. My car is 14 years old. I shop for clothes at Target and Costco. We don't take fancy vacations. Our house is full of Ikea furniture. For the majority of our married life, our rent was over 50% of our take home pay.

We live in Irvine for the schools and specifically, for the special education program. We refuse to send our autistic kids to any other district in OC. It's not an option. So, we pay the Irvine premium for that.

We are just now barely at the point where we have saved a 6 month emergency fund. Next up is the house down payment fund. We planned to use a VA loan, but after hearing how hard that is here, we have given up and decided that we will need 20% down. We will have our kids living with us as adults and will NOT be able to tolerate a home smaller than we are in now, 1900 sq ft. From what I can see, a house the size we will need long term will cost us at least $1M, thus the need for a $200K down payment.

If we are lucky, we will be able to buy a house before we turn 50.

 

[Spike_Capital]

My assumptions are based off of people specifically paying 4K in rent in Irvine.

Agreed.  If you can pay $4k every month and don't have enough saved for a down payment then you did something wrong a long time ago.  But this is America, right, where people making $1 mil per year have $0 in savings.

I know we are getting off topic quite a bit now but there are plenty of newly graduated college kids in tech (google, amazon, etc) that makes $150k a year, easily can afford $4k rentals but don?t have the savings. Similarly there are a lot of people in tech that doesn?t want to buy because their visa could cause them to have to leave the country after a few years while still want to enjoy a nice house.

I'm not sure how one can easily pay 4k of rent making 150k. As a fresh grad on W2, one is getting taxed at 30%+ and if you save 15% for retirement, it makes it almost impossible to afford a place for 4k. Unless of course they have help from family and what not then that is different. Also, I don't think anyone really expects fresh grads to buy a place right out of college...

As for students on visas, that is a completely separate matter and it would make sense for them to rent longer term as their choices due to their visa is limited. But I do know a good amount of Chinese students that are on visa who have ended up purchasing a place. Chinese people generally don't believe in renting so they do tend to buy eventually.

At 30% tax rate, 150k turns into about 100k take home. One can easily afford to pay 4k in rent because that's 48k rent annually. They would have 52k left over that can pay for car / food. Yes it's not the best financial decision but can they afford it? Absolutely.

 

[Spike_Capital]

Anyways, back to the topic. Azalea is prioritizing non-contingent primary home buyers first. Secondary and investment buyers are 2nd priority. Last in line are contingent buyers.

Is the demand for Azalea through the roof?

 

[sleepy5136]

My assumptions are based off of people specifically paying 4K in rent in Irvine.

Agreed.  If you can pay $4k every month and don't have enough saved for a down payment then you did something wrong a long time ago.  But this is America, right, where people making $1 mil per year have $0 in savings. Maybe we have different definitions of affordability. I wouldn't say paying nearly 60% in housing costs affordable. I call it reckless.

I know we are getting off topic quite a bit now but there are plenty of newly graduated college kids in tech (google, amazon, etc) that makes $150k a year, easily can afford $4k rentals but don?t have the savings. Similarly there are a lot of people in tech that doesn?t want to buy because their visa could cause them to have to leave the country after a few years while still want to enjoy a nice house.

I'm not sure how one can easily pay 4k of rent making 150k. As a fresh grad on W2, one is getting taxed at 30%+ and if you save 15% for retirement, it makes it almost impossible to afford a place for 4k. Unless of course they have help from family and what not then that is different. Also, I don't think anyone really expects fresh grads to buy a place right out of college...

As for students on visas, that is a completely separate matter and it would make sense for them to rent longer term as their choices due to their visa is limited. But I do know a good amount of Chinese students that are on visa who have ended up purchasing a place. Chinese people generally don't believe in renting so they do tend to buy eventually.

At 30% tax rate, 150k turns into about 100k take home. One can easily afford to pay 4k in rent because that's 48k rent annually. They would have 52k left over that can pay for car / food. Yes it's not the best financial decision but can they afford it? Absolutely.

what about 15% retirement? Oh right, Americans have basically no retirement income.

 

[Cares]

Anyways, back to the topic. Azalea is prioritizing non-contingent primary home buyers first. Secondary and investment buyers are 2nd priority. Last in line are contingent buyers.

Is the demand for Azalea through the roof?

I'm sure it will sell well and quickly through the early phases.

 

[Spike_Capital]

My assumptions are based off of people specifically paying 4K in rent in Irvine.

Agreed.  If you can pay $4k every month and don't have enough saved for a down payment then you did something wrong a long time ago.  But this is America, right, where people making $1 mil per year have $0 in savings. Maybe we have different definitions of affordability. I wouldn't say paying nearly 60% in housing costs affordable. I call it reckless.

I know we are getting off topic quite a bit now but there are plenty of newly graduated college kids in tech (google, amazon, etc) that makes $150k a year, easily can afford $4k rentals but don%u2019t have the savings. Similarly there are a lot of people in tech that doesn%u2019t want to buy because their visa could cause them to have to leave the country after a few years while still want to enjoy a nice house.

I'm not sure how one can easily pay 4k of rent making 150k. As a fresh grad on W2, one is getting taxed at 30%+ and if you save 15% for retirement, it makes it almost impossible to afford a place for 4k. Unless of course they have help from family and what not then that is different. Also, I don't think anyone really expects fresh grads to buy a place right out of college...

As for students on visas, that is a completely separate matter and it would make sense for them to rent longer term as their choices due to their visa is limited. But I do know a good amount of Chinese students that are on visa who have ended up purchasing a place. Chinese people generally don't believe in renting so they do tend to buy eventually.

At 30% tax rate, 150k turns into about 100k take home. One can easily afford to pay 4k in rent because that's 48k rent annually. They would have 52k left over that can pay for car / food. Yes it's not the best financial decision but can they afford it? Absolutely.

what about 15% retirement? Oh right, Americans have basically no retirement income.

Let's say the person puts 15% into their 401k, then the taxable income becomes 127500k. At 30% tax rate the take home becomes 89250. After paying rent, they have 41250 left. Assuming car payment of 500/month, they still have 35k left. Assuming food is 1k/month, they would still have 23k left. At this point, they can invest the money into a safe index fund and generate ~8% return per year on average. Honestly, this actually isn't bad at all in my opinion. They can certainly afford to pay 4k rent. Obviously they can build wealth faster if the rent is lower, but I think the math points to that 150k income and 4k rent is fine.

 

[Spike_Capital]

Anyways, back to the topic. Azalea is prioritizing non-contingent primary home buyers first. Secondary and investment buyers are 2nd priority. Last in line are contingent buyers.

Is the demand for Azalea through the roof?

I'm sure it will sell well and quickly through the early phases.

Thanks...was hoping to see if I can buy a plan 1 there as an investment but the price is a bit inflated right now.

 

[sleepy5136]

My assumptions are based off of people specifically paying 4K in rent in Irvine.

Agreed.  If you can pay $4k every month and don't have enough saved for a down payment then you did something wrong a long time ago.  But this is America, right, where people making $1 mil per year have $0 in savings. Maybe we have different definitions of affordability. I wouldn't say paying nearly 60% in housing costs affordable. I call it reckless.

I know we are getting off topic quite a bit now but there are plenty of newly graduated college kids in tech (google, amazon, etc) that makes $150k a year, easily can afford $4k rentals but don%u2019t have the savings. Similarly there are a lot of people in tech that doesn%u2019t want to buy because their visa could cause them to have to leave the country after a few years while still want to enjoy a nice house.

I'm not sure how one can easily pay 4k of rent making 150k. As a fresh grad on W2, one is getting taxed at 30%+ and if you save 15% for retirement, it makes it almost impossible to afford a place for 4k. Unless of course they have help from family and what not then that is different. Also, I don't think anyone really expects fresh grads to buy a place right out of college...

As for students on visas, that is a completely separate matter and it would make sense for them to rent longer term as their choices due to their visa is limited. But I do know a good amount of Chinese students that are on visa who have ended up purchasing a place. Chinese people generally don't believe in renting so they do tend to buy eventually.

At 30% tax rate, 150k turns into about 100k take home. One can easily afford to pay 4k in rent because that's 48k rent annually. They would have 52k left over that can pay for car / food. Yes it's not the best financial decision but can they afford it? Absolutely.

what about 15% retirement? Oh right, Americans have basically no retirement income.

Let's say the person puts 15% into their 401k, then the taxable income becomes 127500k. At 30% tax rate the take home becomes 89250. After paying rent, they have 41250 left. Assuming car payment of 500/month, they still have 35k left. Assuming food is 1k/month, they would still have 23k left. At this point, they can invest the money into a safe index fund and generate ~8% return per year on average. Honestly, this actually isn't bad at all in my opinion. They can certainly afford to pay 4k rent. Obviously they can build wealth faster if the rent is lower, but I think the math points to that 150k income and 4k rent is fine.

yeah, what about student loans? car insurance? phone bill? utilities? entertainment? clothing? gas? gym membership? travel? I see TONS of young ppl owning pets now. What about the cost of that? Need I list more? Also, how much % of fresh grads make 150k? This is not even factoring in the fact that some people even marry early in their mid 20s and have kids. Let's be realistic here. Small percentage of people can make 150k early in their careers and you missed out on a lot of expenses that are not factored in.

Your affordability definition is different from mine. If one is paying more than 40% of their take home for housing, that is financially irresponsible and arguably reckless. That by itself to me means one cannot afford it. I don't even think a loan officer would approve your mortgage if you're paying ~60% of your take home on a mortgage. And if they don't approve, that means one can't "afford" it. My point here is that paying 4k in rent is not practical long term as one can easily own when paying that much in rent. Granted that there are exceptions, it generally doesn't make sense and can hinder one from meeting other financial milestones in life. The other point is paying 4k in rent means one really has no excuses to not be able to save for a down payment for a home.

 

[Spike_Capital]

My assumptions are based off of people specifically paying 4K in rent in Irvine.

Agreed.  If you can pay $4k every month and don't have enough saved for a down payment then you did something wrong a long time ago.  But this is America, right, where people making $1 mil per year have $0 in savings. Maybe we have different definitions of affordability. I wouldn't say paying nearly 60% in housing costs affordable. I call it reckless.

I know we are getting off topic quite a bit now but there are plenty of newly graduated college kids in tech (google, amazon, etc) that makes $150k a year, easily can afford $4k rentals but don%u2019t have the savings. Similarly there are a lot of people in tech that doesn%u2019t want to buy because their visa could cause them to have to leave the country after a few years while still want to enjoy a nice house.

I'm not sure how one can easily pay 4k of rent making 150k. As a fresh grad on W2, one is getting taxed at 30%+ and if you save 15% for retirement, it makes it almost impossible to afford a place for 4k. Unless of course they have help from family and what not then that is different. Also, I don't think anyone really expects fresh grads to buy a place right out of college...

As for students on visas, that is a completely separate matter and it would make sense for them to rent longer term as their choices due to their visa is limited. But I do know a good amount of Chinese students that are on visa who have ended up purchasing a place. Chinese people generally don't believe in renting so they do tend to buy eventually.

At 30% tax rate, 150k turns into about 100k take home. One can easily afford to pay 4k in rent because that's 48k rent annually. They would have 52k left over that can pay for car / food. Yes it's not the best financial decision but can they afford it? Absolutely.

what about 15% retirement? Oh right, Americans have basically no retirement income.

Let's say the person puts 15% into their 401k, then the taxable income becomes 127500k. At 30% tax rate the take home becomes 89250. After paying rent, they have 41250 left. Assuming car payment of 500/month, they still have 35k left. Assuming food is 1k/month, they would still have 23k left. At this point, they can invest the money into a safe index fund and generate ~8% return per year on average. Honestly, this actually isn't bad at all in my opinion. They can certainly afford to pay 4k rent. Obviously they can build wealth faster if the rent is lower, but I think the math points to that 150k income and 4k rent is fine.

yeah, what about student loans? car insurance? phone bill? groceries? utilities? entertainment? clothing? gas? I see TONS of young ppl owning pets now. What about the cost of that? Need I list more? Also, how much % of fresh grads make 150k? This is not even factoring in the fact that some people even marry early in their mid 20s and have kids. Let's be realistic here. Not everyone operates their life on rent, food, and their car payment.

Your original argument was that someone making 150k will not be able to comfortably afford a 4k/month rent. And I am telling you that they can (if they really want to), based on all the information provided. I can also assume that if someone knows how to properly budget their life style, they can afford anything.

You're assuming someone making 150k cannot afford 4k rent, which is just an incorrect assumption. Why are we discussing how many new grad makes 150k? As long as there is one new grad who does, we can argue that he/she CAN indeed afford 4k rent. And just want to point out that all the new grads going to Apple, Facebook, Google, and many other big tech, will be making 150k+.

We can agree to disagree, but I showed my math based on a person making 150k, single, and knows how to budget. That would lead to a 20k surplus after car/food/rent/15% retirement. Are you telling me that, student loan, phone bill, and all the other necessities will cost 20k excluding having kids/pets? Come on.

You can show me your math about someone making 150k, have 3 kids, have a stay-at-home wife, doesn't know how to budget. Well yeah, of course they can't afford it if they operate their life this way, but again, you are making an assumption that it's not possible to afford 4k rent on 150k income, and I provided a counter argument based on a different set of assumptions, that's really it.

All it comes down to, is how much responsibility the person has, and how they intelligently budget their expenses. This is not a binary outcome.

Edit: take myself as an example, in my 20s I saved up and fully paid out my car, paid off student loans, was in a big tech firm, I can comfortably afford 4k rent if I wanted to, I just didn't because I wanted to build up my wealth.

 

[moc]

My assumptions are based off of people specifically paying 4K in rent in Irvine.

Agreed.  If you can pay $4k every month and don't have enough saved for a down payment then you did something wrong a long time ago.  But this is America, right, where people making $1 mil per year have $0 in savings. Maybe we have different definitions of affordability. I wouldn't say paying nearly 60% in housing costs affordable. I call it reckless.

I know we are getting off topic quite a bit now but there are plenty of newly graduated college kids in tech (google, amazon, etc) that makes $150k a year, easily can afford $4k rentals but don%u2019t have the savings. Similarly there are a lot of people in tech that doesn%u2019t want to buy because their visa could cause them to have to leave the country after a few years while still want to enjoy a nice house.

I'm not sure how one can easily pay 4k of rent making 150k. As a fresh grad on W2, one is getting taxed at 30%+ and if you save 15% for retirement, it makes it almost impossible to afford a place for 4k. Unless of course they have help from family and what not then that is different. Also, I don't think anyone really expects fresh grads to buy a place right out of college...

As for students on visas, that is a completely separate matter and it would make sense for them to rent longer term as their choices due to their visa is limited. But I do know a good amount of Chinese students that are on visa who have ended up purchasing a place. Chinese people generally don't believe in renting so they do tend to buy eventually.

At 30% tax rate, 150k turns into about 100k take home. One can easily afford to pay 4k in rent because that's 48k rent annually. They would have 52k left over that can pay for car / food. Yes it's not the best financial decision but can they afford it? Absolutely.

what about 15% retirement? Oh right, Americans have basically no retirement income.

Let's say the person puts 15% into their 401k, then the taxable income becomes 127500k. At 30% tax rate the take home becomes 89250. After paying rent, they have 41250 left. Assuming car payment of 500/month, they still have 35k left. Assuming food is 1k/month, they would still have 23k left. At this point, they can invest the money into a safe index fund and generate ~8% return per year on average. Honestly, this actually isn't bad at all in my opinion. They can certainly afford to pay 4k rent. Obviously they can build wealth faster if the rent is lower, but I think the math points to that 150k income and 4k rent is fine.

yeah, what about student loans? car insurance? phone bill? groceries? utilities? entertainment? clothing? gas? I see TONS of young ppl owning pets now. What about the cost of that? Need I list more? Also, how much % of fresh grads make 150k? This is not even factoring in the fact that some people even marry early in their mid 20s and have kids. Let's be realistic here. Not everyone operates their life on rent, food, and their car payment.

Your original argument was that someone making 150k will not be able to comfortably afford a 4k/month rent. And I am telling you that they can (if they really want to), based on all the information provided. I can also assume that if someone knows how to properly budget their life style, they can afford anything.

You're assuming someone making 150k cannot afford 4k rent, which is just an incorrect assumption. Why are we discussing how many new grad makes 150k? As long as there is one new grad who does, we can argue that he/she CAN indeed afford 4k rent. And just want to point out that all the new grads going to Apple, Facebook, Google, and many other big tech, will be making 150k+.

We can agree to disagree, but I showed my math based on a person making 150k, single, and knows how to budget. That would lead to a 20k surplus after car/food/rent/15% retirement. Are you telling me that, student loan, phone bill, and all the other necessities will cost 20k excluding having kids/pets? Come on.

You can show me your math about someone making 150k, have 3 kids, have a stay-at-home wife, doesn't know how to budget. Well yeah, of course they can't afford it if they operate their life this way, but again, you are making an assumption that it's not possible to afford 4k rent on 150k income, and I provided a counter argument based on a different set of assumptions, that's really it.

All it comes down to, is how much responsibility the person has, and how they intelligently budget their expenses. This is not a binary outcome.

Edit: take myself as an example, in my 20s I saved up and fully paid out my car, paid off student loans, was in a big tech firm, I can comfortably afford 4k rent if I wanted to, I just didn't because I wanted to build up my wealth.

This seems like a very particular edge case and not anywhere close to an average or "normal" scenario for someone in their early to mid 20s. Does that mean it doesn't happen? No, of course this is plausible. It just seems unlikely that most people would be in this situation.

Median household income for Irvine zip codes is between 100k-120k. I personally often wonder how my neighbors afford the cars, homes, and lifestyles they have. Are some of them paying $4k for housing? Absolutely. Can they all responsibly afford it? I have no idea.

I'm in my late 20s and myself and most of my peers have student loans, and live pretty frugally (regardless of salary). Most in LA/OC have given up on owning a home anytime in the near future and feel that owning a home and building wealth is going to take their whole lives, and is not really achievable in one's 20s. I'm not saying this is universal (we own our home) but I see a lot of hopelessness when it comes to our prospects as a generation.

 

[Spike_Capital]

My assumptions are based off of people specifically paying 4K in rent in Irvine.

Agreed.  If you can pay $4k every month and don't have enough saved for a down payment then you did something wrong a long time ago.  But this is America, right, where people making $1 mil per year have $0 in savings. Maybe we have different definitions of affordability. I wouldn't say paying nearly 60% in housing costs affordable. I call it reckless.

I know we are getting off topic quite a bit now but there are plenty of newly graduated college kids in tech (google, amazon, etc) that makes $150k a year, easily can afford $4k rentals but don%u2019t have the savings. Similarly there are a lot of people in tech that doesn%u2019t want to buy because their visa could cause them to have to leave the country after a few years while still want to enjoy a nice house.

I'm not sure how one can easily pay 4k of rent making 150k. As a fresh grad on W2, one is getting taxed at 30%+ and if you save 15% for retirement, it makes it almost impossible to afford a place for 4k. Unless of course they have help from family and what not then that is different. Also, I don't think anyone really expects fresh grads to buy a place right out of college...

As for students on visas, that is a completely separate matter and it would make sense for them to rent longer term as their choices due to their visa is limited. But I do know a good amount of Chinese students that are on visa who have ended up purchasing a place. Chinese people generally don't believe in renting so they do tend to buy eventually.

At 30% tax rate, 150k turns into about 100k take home. One can easily afford to pay 4k in rent because that's 48k rent annually. They would have 52k left over that can pay for car / food. Yes it's not the best financial decision but can they afford it? Absolutely.

what about 15% retirement? Oh right, Americans have basically no retirement income.

Let's say the person puts 15% into their 401k, then the taxable income becomes 127500k. At 30% tax rate the take home becomes 89250. After paying rent, they have 41250 left. Assuming car payment of 500/month, they still have 35k left. Assuming food is 1k/month, they would still have 23k left. At this point, they can invest the money into a safe index fund and generate ~8% return per year on average. Honestly, this actually isn't bad at all in my opinion. They can certainly afford to pay 4k rent. Obviously they can build wealth faster if the rent is lower, but I think the math points to that 150k income and 4k rent is fine.

yeah, what about student loans? car insurance? phone bill? groceries? utilities? entertainment? clothing? gas? I see TONS of young ppl owning pets now. What about the cost of that? Need I list more? Also, how much % of fresh grads make 150k? This is not even factoring in the fact that some people even marry early in their mid 20s and have kids. Let's be realistic here. Not everyone operates their life on rent, food, and their car payment.

Your original argument was that someone making 150k will not be able to comfortably afford a 4k/month rent. And I am telling you that they can (if they really want to), based on all the information provided. I can also assume that if someone knows how to properly budget their life style, they can afford anything.

You're assuming someone making 150k cannot afford 4k rent, which is just an incorrect assumption. Why are we discussing how many new grad makes 150k? As long as there is one new grad who does, we can argue that he/she CAN indeed afford 4k rent. And just want to point out that all the new grads going to Apple, Facebook, Google, and many other big tech, will be making 150k+.

We can agree to disagree, but I showed my math based on a person making 150k, single, and knows how to budget. That would lead to a 20k surplus after car/food/rent/15% retirement. Are you telling me that, student loan, phone bill, and all the other necessities will cost 20k excluding having kids/pets? Come on.

You can show me your math about someone making 150k, have 3 kids, have a stay-at-home wife, doesn't know how to budget. Well yeah, of course they can't afford it if they operate their life this way, but again, you are making an assumption that it's not possible to afford 4k rent on 150k income, and I provided a counter argument based on a different set of assumptions, that's really it.

All it comes down to, is how much responsibility the person has, and how they intelligently budget their expenses. This is not a binary outcome.

Edit: take myself as an example, in my 20s I saved up and fully paid out my car, paid off student loans, was in a big tech firm, I can comfortably afford 4k rent if I wanted to, I just didn't because I wanted to build up my wealth.

This seems like a very particular edge case and not anywhere close to an average or "normal" scenario for someone in their early to mid 20s. Does that mean it doesn't happen? No, of course this is plausible. It just seems unlikely that most people would be in this situation.

Median household income for Irvine zip codes is between 100k-120k. I personally often wonder how my neighbors afford the cars, homes, and lifestyles they have. Are some of them paying $4k for housing? Absolutely. Can they all responsibly afford it? I have no idea.

I'm in my late 20s and myself and most of my peers have student loans, and live pretty frugally (regardless of salary). Most in LA/OC have given up on owning a home anytime in the near future and feel that owning a home and building wealth is going to take their whole lives, and is not really achievable in one's 20s. I'm not saying this is universal (we own our home) but I see a lot of hopelessness when it comes to our prospects as a generation.

If you trace back to the start of this discussion...one poster basically said a person making 150k as a new grad can easily afford a rent of 4k/month. A new grad making 150k is already an edge case, and my entire argument was just that, yes they should be able to afford such rent without any issue.

If you're making 150k+ in Irvine, single, you should be able to afford 4k rent. I did mention that it's probably not the best financial decision, but that's not what we are discussing here.

 

[Cares]

Email from sales office:

"We are excited to say that we released the first five homes in phase 1A last weekend and all the homes were reserved.  We do understand that it is difficult not knowing when you might get a home but please know that we sincerely appreciate everyone?s patience as we work through the priority list.  We are anticipating phase 1B to release near the end of June and as soon as we have specific information, we will update you.

Phase 1B will consist of 1 plan two, 1, plan four, 1 plan five and 2 plan six.  As soon as we have pricing for plan six, we will update you on that as well.  The estimated move in for phase 1B is mid to late October and like phase 1A, everything except for flooring has been selected by our designers."

 

[sleepy5136]

My assumptions are based off of people specifically paying 4K in rent in Irvine.

Agreed.  If you can pay $4k every month and don't have enough saved for a down payment then you did something wrong a long time ago.  But this is America, right, where people making $1 mil per year have $0 in savings. Maybe we have different definitions of affordability. I wouldn't say paying nearly 60% in housing costs affordable. I call it reckless.

I know we are getting off topic quite a bit now but there are plenty of newly graduated college kids in tech (google, amazon, etc) that makes $150k a year, easily can afford $4k rentals but don%u2019t have the savings. Similarly there are a lot of people in tech that doesn%u2019t want to buy because their visa could cause them to have to leave the country after a few years while still want to enjoy a nice house.

I'm not sure how one can easily pay 4k of rent making 150k. As a fresh grad on W2, one is getting taxed at 30%+ and if you save 15% for retirement, it makes it almost impossible to afford a place for 4k. Unless of course they have help from family and what not then that is different. Also, I don't think anyone really expects fresh grads to buy a place right out of college...

As for students on visas, that is a completely separate matter and it would make sense for them to rent longer term as their choices due to their visa is limited. But I do know a good amount of Chinese students that are on visa who have ended up purchasing a place. Chinese people generally don't believe in renting so they do tend to buy eventually.

At 30% tax rate, 150k turns into about 100k take home. One can easily afford to pay 4k in rent because that's 48k rent annually. They would have 52k left over that can pay for car / food. Yes it's not the best financial decision but can they afford it? Absolutely.

what about 15% retirement? Oh right, Americans have basically no retirement income.

Let's say the person puts 15% into their 401k, then the taxable income becomes 127500k. At 30% tax rate the take home becomes 89250. After paying rent, they have 41250 left. Assuming car payment of 500/month, they still have 35k left. Assuming food is 1k/month, they would still have 23k left. At this point, they can invest the money into a safe index fund and generate ~8% return per year on average. Honestly, this actually isn't bad at all in my opinion. They can certainly afford to pay 4k rent. Obviously they can build wealth faster if the rent is lower, but I think the math points to that 150k income and 4k rent is fine.

yeah, what about student loans? car insurance? phone bill? groceries? utilities? entertainment? clothing? gas? I see TONS of young ppl owning pets now. What about the cost of that? Need I list more? Also, how much % of fresh grads make 150k? This is not even factoring in the fact that some people even marry early in their mid 20s and have kids. Let's be realistic here. Not everyone operates their life on rent, food, and their car payment.

Your original argument was that someone making 150k will not be able to comfortably afford a 4k/month rent. And I am telling you that they can (if they really want to), based on all the information provided. I can also assume that if someone knows how to properly budget their life style, they can afford anything.

You're assuming someone making 150k cannot afford 4k rent, which is just an incorrect assumption. Why are we discussing how many new grad makes 150k? As long as there is one new grad who does, we can argue that he/she CAN indeed afford 4k rent. And just want to point out that all the new grads going to Apple, Facebook, Google, and many other big tech, will be making 150k+.

We can agree to disagree, but I showed my math based on a person making 150k, single, and knows how to budget. That would lead to a 20k surplus after car/food/rent/15% retirement. Are you telling me that, student loan, phone bill, and all the other necessities will cost 20k excluding having kids/pets? Come on.

You can show me your math about someone making 150k, have 3 kids, have a stay-at-home wife, doesn't know how to budget. Well yeah, of course they can't afford it if they operate their life this way, but again, you are making an assumption that it's not possible to afford 4k rent on 150k income, and I provided a counter argument based on a different set of assumptions, that's really it.

All it comes down to, is how much responsibility the person has, and how they intelligently budget their expenses. This is not a binary outcome.

Edit: take myself as an example, in my 20s I saved up and fully paid out my car, paid off student loans, was in a big tech firm, I can comfortably afford 4k rent if I wanted to, I just didn't because I wanted to build up my wealth.

This seems like a very particular edge case and not anywhere close to an average or "normal" scenario for someone in their early to mid 20s. Does that mean it doesn't happen? No, of course this is plausible. It just seems unlikely that most people would be in this situation.

Median household income for Irvine zip codes is between 100k-120k. I personally often wonder how my neighbors afford the cars, homes, and lifestyles they have. Are some of them paying $4k for housing? Absolutely. Can they all responsibly afford it? I have no idea.

I'm in my late 20s and myself and most of my peers have student loans, and live pretty frugally (regardless of salary). Most in LA/OC have given up on owning a home anytime in the near future and feel that owning a home and building wealth is going to take their whole lives, and is not really achievable in one's 20s. I'm not saying this is universal (we own our home) but I see a lot of hopelessness when it comes to our prospects as a generation.

If you trace back to the start of this discussion...one poster basically said a person making 150k as a new grad can easily afford a rent of 4k/month. A new grad making 150k is already an edge case, and my entire argument was just that, yes they should be able to afford such rent without any issue.

If you're making 150k+ in Irvine, single, you should be able to afford 4k rent. I did mention that it's probably not the best financial decision, but that's not what we are discussing here.

Your quotes:
1. "I can also assume that if someone knows how to properly budget their life style, they can afford anything."  -- If that is the case, we wouldn't have articles mentioning only 39% of Americans can handle a 1k emergency expensehttps://www.cnbc.com/2021/01/11/jus...-could-pay-for-a-1000-emergency-expense.html.You live in quite a bubble to assume that about Americans.

2. "you are making an assumption that it's not possible to afford 4k rent on 150k income" - I never said it's not possible, I said its almost impossible, financially irresponsible, and not practical long term.

3. "If you're making 150k+ in Irvine, single, you should be able to afford 4k rent. I did mention that it's probably not the best financial decision, but that's not what we are discussing here." -- Let's agree to disagree. Our definitions of affordability does not align and that's where the issue lies. I already gave you an example where if one takes a mortgage which will be ~60% of take home pay, one will most likely be denied. So if the mortgage company thinks you can't afford it but you believe you can, then let's leave it at that. I, however, would trust the bank more than the person that thinks they can afford it in this case.

4. "A new grad making 150k is already an edge case, and my entire argument was just that, yes they should be able to afford such rent without any issue." -- Man I'm glad you're not a personal finance teacher. You're basically letting people off the hook on reckless financial decisions saying one can make 150k and pay 4k rent "easily" as if one should not be bothered by the fact one is paying ~60% of take home pay towards housing costs. So your point of assuming financial responsibility and budgeting is already out the door.

5. "Edit: take myself as an example, in my 20s I saved up and fully paid out my car, paid off student loans, was in a big tech firm, I can comfortably afford 4k rent if I wanted to, I just didn't because I wanted to build up my wealth." -- I really hope you realize that making X take home and paying X - 4k < Z on rent does not mean one can afford it. If Z is > 40-45% of X, that does not mean you can afford it. I know you're simply trying to push your argument that it is possible, because Z is slightly higher, but just because it's possible, it doesn't mean you can afford it. Especially when you don't want to be house broke. People have bills to pay and things to do besides living in their luxury 4k rental.

Lastly, I know that you're getting at the point of 150k and while we can agree to disagree on whether it's affordable, you also need to look at household income data in Irvine. Looking at household median income in Irvine already shows making 150k is not even the norm. The average income is 111k (2019)https://www.city-data.com/income/income-Irvine-California.html.And if the median is not even making 150k in Irvine, what makes you think people can pay 4k rent in Irvine without it being an issue? We can talk theory and assumptions all we want, but the data itself already shows paying 4k rent in Irvine is almost impossible in this case.