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Some Silicon Valley Tech Workers Get Home Loans with No Money Down

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Re: Some Silicon Valley Tech Workers Get Home Loans with No Money Down

#131

Post by rckclmbr »

CPLX wrote: post #122
GeneralMayhem wrote: post #98

Earlier quoted context omitted.

The new elites are in tech, but they're not the rank and file. Making even $250k/yr may be top-5% for income and give you breathing room to make a few investments, but it will never make you wealthy . That's lifetime earnings of about $10m before taxes, so you likely wouldn't get to fuck-you money ever, let alone with time to use it. There's a very serious discontinuity somewhere around the $1m/year mark where you ge…

> it will never make you wealthy. That's lifetime earnings of about $10m before taxes This thread has taught me that people in the valley or the HN echo chamber really sort of have no idea how most people live in this country, let alone around the world.

and you must have no idea how much it costs to live in the bay area. a dentist in arizona will have a higher net worth at retirement than a tech worker in the bay area.

Re: Some Silicon Valley Tech Workers Get Home Loans with No Money Down

#132

Post by phamilton »

JumpCrisscross wrote: post #129
phamilton wrote: post #123

Earlier quoted context omitted.

When is it not liquid? Sure, it's highly variable and the value could tank, but when has an S&P 500 company had zero liquidity? Edit: Additionally, salary falls in the same boat. If your stock in your S&P 500 employer tanks, you salary will tank too. Also, I'm talking about a "sell as soon as it vests" strategy, which makes it pretty much just a variable form of salary.

> When [are blue chip stocks] not liquid? Liquidity is a surface over the time in which a transaction must occur, transaction size and price. If you have a large amount to sell or buy (relative to the market), want it sold or purchased quickly (relative to the market) and/or don't want to eat more than an X% discount (if selling) or premium (if buying) (relative to the market), you will find the securities illiquid,…

That was really informative. Thanks.

My point, however, isn't about collateral. It's about future cashflow. A Senior engineer at Google might have a salary of $150k, but total compensation package including 270 shares of GOOG distributed per year (~23 shares per month) for a total comp of $350k. For such an individual, do you lend based on salary alone or do you factor in the stock?

I imagine that with a correct discount the stock can and should be used in the cashflow calculation.

Re: Some Silicon Valley Tech Workers Get Home Loans with No Money Down

#133

Post by CPLX »

rckclmbr wrote: post #131
CPLX wrote: post #122

Earlier quoted context omitted.

> it will never make you wealthy. That's lifetime earnings of about $10m before taxes This thread has taught me that people in the valley or the HN echo chamber really sort of have no idea how most people live in this country, let alone around the world.

and you must have no idea how much it costs to live in the bay area. a dentist in arizona will have a higher net worth at retirement than a tech worker in the bay area.

> and you must have no idea how much it costs to live in the bay area

I live in New York City. I could probably grok the basic concept.

Re: Some Silicon Valley Tech Workers Get Home Loans with No Money Down

#134

Post by mmanfrin »

gmarx wrote: post #52

Does anyone else experience mild anxiety reading stories about Bay Area real estate? Long ago I decided it can't be wise to buy instead of rent. Logic and math argue this must end and yet it seems there is always another "sucker". We seem to have entered a new phase in which Chinese are moving money offshore and into the local market. Lots of Chinese, lots of money, could go on and on but for how long? Ultimately a h…

I think the market is over-exuberant right now for sure, but I also feel that people like the Bay Area because the Bay Area is an exceedingly pleasant place to live. This market has hit a little perfect storm of pricing and may correct, but I think the longview is that Bay Area housing prices will just keep marching up.

A lot of the price of homes is the land, which means that (barring local regulation) homes will begin to be built up a lot more. Already on my residential street there is a 7 story live/work building going in where a pottery store used to be. Density will lower renting costs but the land itself will remain valuable.

Re: Some Silicon Valley Tech Workers Get Home Loans with No Money Down

#135

Post by superuser2 »

mmanfrin wrote: post #134
gmarx wrote: post #52

Does anyone else experience mild anxiety reading stories about Bay Area real estate? Long ago I decided it can't be wise to buy instead of rent. Logic and math argue this must end and yet it seems there is always another "sucker". We seem to have entered a new phase in which Chinese are moving money offshore and into the local market. Lots of Chinese, lots of money, could go on and on but for how long? Ultimately a h…

I think the market is over-exuberant right now for sure, but I also feel that people like the Bay Area because the Bay Area is an exceedingly pleasant place to live . This market has hit a little perfect storm of pricing and may correct, but I think the longview is that Bay Area housing prices will just keep marching up. A lot of the price of homes is the land, which means that (barring local regulation) homes will b…

It won't be an exceedingly pleasant place to live when there's no salary left over for food after taxes and rent.

Re: Some Silicon Valley Tech Workers Get Home Loans with No Money Down

#136

Post by white-flame »

gmarx wrote: post #52

Does anyone else experience mild anxiety reading stories about Bay Area real estate? Long ago I decided it can't be wise to buy instead of rent. Logic and math argue this must end and yet it seems there is always another "sucker". We seem to have entered a new phase in which Chinese are moving money offshore and into the local market. Lots of Chinese, lots of money, could go on and on but for how long? Ultimately a h…

Regarding Chinese capital coming in, there's a sense that they're not doing it to invest for a profit. They're doing it protect funds from the Chinese government access and potential future instability. So it might not matter to many of these "investors" if they houses are profitable or not; they're just funds being held in something perceived as more real/secure than what they can get in China.

Re: Some Silicon Valley Tech Workers Get Home Loans with No Money Down

#137

Post by encoderer »

gmarx wrote: post #52

Does anyone else experience mild anxiety reading stories about Bay Area real estate? Long ago I decided it can't be wise to buy instead of rent. Logic and math argue this must end and yet it seems there is always another "sucker". We seem to have entered a new phase in which Chinese are moving money offshore and into the local market. Lots of Chinese, lots of money, could go on and on but for how long? Ultimately a h…

Everybody thinks it's Chinese money, and sure there is some. But there are just a lot of very highly paid ppl in the bay area. Facebook, Google, &c are moving a lot more money into this region than any Chinese outflows. In all my experience here, SF is not a city of the empty pied-à-terre.

Re: Some Silicon Valley Tech Workers Get Home Loans with No Money Down

#138

Post by abraca »

TomVDB wrote: post #81
brebla wrote: post #35

Earlier quoted context omitted.

Yes. Completely irrational. I can secure $60k+ in a matter of hours to purchase a new Tesla or Merc. Drive it off the lot and suddenly worth less than the loan. Real Estate, however, can take 45 days to close a loan when the projected value of the asset is surely positive. Antiquated and balkanized title process and (I suspect) unhealthy regulatory requirements are a bog. From there, I think it is simply inefficienci…

FWIW, the lender seems to take urgency into account as well. And it's important to have a loan agent who's will to go the extra mile. We made an offer on $2.2M house last year in July, and needed a $1.3M mortgage and $500k HELOC (so $400k down.) We had a fantastic agent at Wells Fargo who promised he could pull it off in 15 days, at which point we'd leave on a 3 week vacation out of country. We signed 13 days later.…

That was my experience too. My guy at Wells Fargo knocked it out of the park. SOFI's service was not great. Slow to respond , often not responding to my direct questions with the info I needed, slow to move through underwriting etc. Oh and terrible rates compared to the banks I talked to. Even their technology was worse, in terms of being able to upload docs and track my loan.

Re: Some Silicon Valley Tech Workers Get Home Loans with No Money Down

#139

Post by [deleted] »

aphextron wrote: post #96
gmarx wrote: post #52

Does anyone else experience mild anxiety reading stories about Bay Area real estate? Long ago I decided it can't be wise to buy instead of rent. Logic and math argue this must end and yet it seems there is always another "sucker". We seem to have entered a new phase in which Chinese are moving money offshore and into the local market. Lots of Chinese, lots of money, could go on and on but for how long? Ultimately a h…

It's reaching the point of absolute absurdity. Check out the forecast price on this listing: http://www.zillow.com/homedetails/811-Arlington-Ave-Oakland-... I hadn't looked at zillow in a couple years, I can't believe how insane it's gotten. $800k for a century old 2 bedroom home on a rough stretch of MLK boulevard in Oakland.

[deleted]

Re: Some Silicon Valley Tech Workers Get Home Loans with No Money Down

#140

Post by coldcode »

ryandrake wrote: post #29
tantalor wrote: post #24

Earlier quoted context omitted.

> carrying costs of a house Indeed, taxes and insurance can dominate the mortgage.

Not to mention a new roof.

Or fixing it up in order to sell it at a reasonable price (not in SF area).
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