Author Topic: Griping on LA real estate  (Read 2834 times)

dios.del.sol

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Griping on LA real estate
« on: January 20, 2015, 03:17:31 PM »
Inspired by another thread, I'm curious if there are enough people here to toss some ideas around on LA real estate. I'll share my situation, others can share theirs, and maybe we can come up with some creative ways of dealing with the real estate situation around here.

My situation: We're in Northeast LA. We have around of $100k for a down payment. At 25%, that would be a $400k house, which is, well... not enough around here. Our monthly rent is around $2k. We aren't convinced that LA is the place for us, so we can't pull the trigger on real estate as a long-term move. We can't come close to finding anything that would cash-flow in the short term if we decided to move. I'm not into betting on the appreciation game right now. And then there is the school situation - not great in many neighborhoods. So the $100k is sitting in a "high" interest savings account for now. I think we're making the right decision just staying put, but it's frustrating that $2k in rent is a sensible decision.

biffwhipster

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Re: Griping on LA real estate
« Reply #1 on: January 20, 2015, 03:43:40 PM »
Must you live in the city? If not, have you thought about Santa Clarita?

gatorNic

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Re: Griping on LA real estate
« Reply #2 on: January 20, 2015, 03:52:05 PM »
"We aren't convinced that LA is the place for us" - this say it all right there.  At LA prices don't buy a place unless you are planning on stay there a good 10 years.

Perspective is crazy, was in the westside for 8 years and was alway complaining about rent at about what you are paying.  Now I moved to the SF and I am like what was I thinking LA is so cheap! Basically 3K or more now for the same thing. 

marzy08

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Re: Griping on LA real estate
« Reply #3 on: January 20, 2015, 04:09:12 PM »
I would agree that if you are on the fence about staying in Southern CA then it may not be worth buying. We purchased our house a little over a year ago, but all of our family is within 45 minutes. As biff mentioned, there's always the option of going further out (what we did), but there is a definite downside to that in the form of commuting. At that point in time my thinking on finances was different than it is now. We only used a 10% down purchase and spend 22% of our monthly income on mortgage.

BigRed

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Re: Griping on LA real estate
« Reply #4 on: January 20, 2015, 04:37:42 PM »
I put our situation in the other thread, but I'll drop it here also, we have about $80k saved (70k cash, 10k stocks) and live on the Westside (Mar Vista).  I'm pretty sure the answer to all our 'problems' is to move to the East Coast, where family is, and we're all set.  But, we like it here, over 10 years we've built a nice life and community here and career as well, even if it isn't lawyer/doctor/hollywood producer money.  We'll have to move from our current place in about a year, but I can't see being in a position to buy at that point. 

waltworks

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Re: Griping on LA real estate
« Reply #5 on: January 20, 2015, 04:55:59 PM »
If you can rent for $2k and there aren't any acceptable houses under $500k or whatever... why not just forget about buying a house and keep renting?

-W

dios.del.sol

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Re: Griping on LA real estate
« Reply #6 on: January 20, 2015, 06:45:27 PM »
I'm not worried about the standard analysis - every calculation tells me that with our time-frame and the current rents and purchase prices. It would be very imprudent to load up on a mortgage. The issue is more that I feel like I'm leaving creative solutions on the table.

biffwhipster: Going farther away is definitely an option, except I hate commutes more than paying expensive rent. Every moment I am stuck in traffic I die a little. On the upside, when I commute by bike and I pass cars stuck in traffic I get some of it back. Or maybe it's my mana recharging. Living somewhere along the Metrolink corridor might work - San Gabriel Valley.

waltworks: "why not just forget about buying a house and keep renting?" That's what I'm doing. Now why can't I let it go? Why do I keep analyzing it as if it will change? Good question. I should let it go. I suppose that I see housing costs as the  major elephant in the room on the way to FI... and it bugs me. And things that bug me get thought about.

BigRed: Moving... that's the best option. But I stay here for the career. Moving would kill it... though I could probably make more money. Interesting situation coming up for you in a year.

Poorman

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Re: Griping on LA real estate
« Reply #7 on: January 22, 2015, 06:38:01 PM »
You might try doing a house hack where you buy a 2-4 unit building and live in one unit while renting the others out.  This might reduce your monthly housing costs while having the tenants partially pay the building off.  If you decide to move out of state, you could rent your unit out and keep the building as a rental indefinitely...  OR similarly...  buy a house with more bedrooms than you need and rent them out to others.  You could even do the vacation rental thing on AirBnB and rent the rooms out short term for higher rents that would help offset your mortgage.  That is more like running a business but if done right, it can be semi-automated and make for a nice side income.