4 ms·

Don't the IPOs have a six month holding for employees? if so they wont be able to cash out well into holiday season. edit:spelling

jfaat 8y ago
It’s typically 90 to 180 days[0] [0] https://www.investopedia.com/ask/answer/12/ipo-lockup-period.asp https://www.investopedia.com/ask/answer/12/ipo-lockup-period... edit: removed ‘usually much shorter’ which was wrong. Parent stated the right timeframe and I mathed bad.
- seattle_spring 8y ago
  It's usually 180 days, equal to 6 months and consistent with what the parent claimed.
mitchell_h 8y ago
I'm not in the bay area....However I did recently buy a house. Banks are taking locked out stock, or even pre-ipo shares, as people's "gross value" in order to get people qualified.
- fossuser 8y ago
  What banks? The banks I worked with to get qualified didn't value any of this above zero, they also didn't value tenant income. They did value whatever the max was you could borrow against your 401k.
  - TomVDB 8y ago
    That's unusual: whenever we got a new mortgage or refinanced (US Bank, Wells Fargo, Chase, ...), our rental income and the rental cost was included in the calculation.
    - fossuser 8y ago
      To clarify - tenant income from renting out one of the rooms of the place I'm trying to buy (not existing tenant income). Basically the peninsula is unaffordable to own alone, but if I could get a two bedroom and rent out a room I could do it (alternative is having to buy in SF a one bedroom for 780-875k). Banks don't let you do this though and without this I'm priced out of two bedroom units. I suspect you could create some new mortgage instrument that allows groups of friends to buy a house together since now we typically just do this via renting and splitting the cost for individual rooms (though I hesitate to suggest this since it would ultimately drive up prices even higher). It's also hard to find people willing to risk this, but I think a standard contract structure could go a long way to reducing the social risk.
      - refurb 8y ago
        though I hesitate to suggest this since it would ultimately drive up prices even higher I went to one open house in SF and the top floor was a nicely updated if small house. The basement/garage? The owner had put up walls to create 6 rooms and 2 bathrooms. The rooms were maybe 10'x10'? Apparently they rented them out to help with the mortgage. You could probably get $500-700/month for each or $3000-3600 for all six? And that's one reason why parking is an absolute mess in SF even if you get away from the city center. A lot of houses have one or more in-laws (many illegal). And no place to park the car in the garage!
      - roguecoder 8y ago
        You can absolutely get a joint mortgage with a friend: I did. The real challenge is finding someone you want to go in on a long-term coliving arrangement with, agree with on how to handle home maintenance and the like, and trust not to try to screw you over.
  - ProfessorLayton 8y ago
    Bank of America will indeed value tenant income, however, you'll need to provide proof of multiple years of steady tenant income before they'll value it above zero.
  - nostrademons 8y ago
    Wells Fargo will do this for publicly-traded stocks.
- dontbenebby 8y ago
  Is the market for condos as insane as for houses? I think I'd be happy with a 1BR in someplace like SOMA where you can walk to everything you need. Conversely I'm not sure I'd want a long commute (across bay bridge, down South Bay, or in Marin) even if I could have a sweet house.
  - fossuser 8y ago
    It's a little better, I was looking in SOMA and 1BR is around 875k, but you might be able to find older stuff around 700k.
bradlys 8y ago
From what I've heard from everyone everywhere on HN, banks are willing to give you a loan knowing you have a lot of stock in a big tech IPO. (Even if you can't liquidate for 6 months) I don't know how much you need but presumably more than the home is worth. I'd love to hear some real world examples of people doing this. I'm curious if you need 20% down because that alone will put most of these folks who have been living off their salary alone out. (You can't easily save 20% down in less than 10 years for a $2-4m home on a single startup salary)
- PopeDotNinja 8y ago
  > From what I've heard from everyone everywhere on HN, banks are willing to give you a loan knowing you have a lot of stock in a big tech IPO That could have gotten me in trouble when I was younger. I had startup stock that traded at $50+ on the day of the IPO. When the lockup ended, the stock was trading at $12. At the time, I more likely to think the stock was going to $1200, not $12. I'd likely have ended up owing a bunch of money I couldn't pay off AND a big tax liability. If I were in that situation today, I'd see if I could find someone who would give me money at today's price and get N shares of stock in 6 months (the duration of the lockup period).
  - CydeWeys 8y ago
    It would've been bad for you, but the bank would've been OK. Mortgages are collateralized loans, so they'd just get the house, plus whatever money you had left, and it wouldn't be a big loss for them. I don't think you'd be able to get a non-collateralized loan based on putative IPO stock value.
    - PopeDotNinja 8y ago
      > I don't think you'd be able to get a non-collateralized loan based on putative IPO stock value. I've heard that people with a ton of stock can find people willing to work with them. If you have $100 million USD in HawtStartup, I'm sure someone who believes that stock is going WAY up would be happy to buy at today's price w/ some discount in 6 months. Kind of like how farmers sell futures. I'm not an expert on the subject, and I've never had the kind of equity locked up, so who knows.
usaar333 8y ago
You can get lock-up loans from ibanks to secure down payments.

jfaat 8y ago

It’s typically 90 to 180 days[0] [0] https://www.investopedia.com/ask/answer/12/ipo-lockup-period.asp https://www.investopedia.com/ask/answer/12/ipo-lockup-period... edit: removed ‘usually much shorter’ which was wrong. Parent stated the right timeframe and I mathed bad.

seattle_spring 8y ago
It's usually 180 days, equal to 6 months and consistent with what the parent claimed.

mitchell_h 8y ago

I'm not in the bay area....However I did recently buy a house. Banks are taking locked out stock, or even pre-ipo shares, as people's "gross value" in order to get people qualified.

fossuser 8y ago
What banks? The banks I worked with to get qualified didn't value any of this above zero, they also didn't value tenant income. They did value whatever the max was you could borrow against your 401k.
- TomVDB 8y ago
  That's unusual: whenever we got a new mortgage or refinanced (US Bank, Wells Fargo, Chase, ...), our rental income and the rental cost was included in the calculation.
  - fossuser 8y ago
    To clarify - tenant income from renting out one of the rooms of the place I'm trying to buy (not existing tenant income). Basically the peninsula is unaffordable to own alone, but if I could get a two bedroom and rent out a room I could do it (alternative is having to buy in SF a one bedroom for 780-875k). Banks don't let you do this though and without this I'm priced out of two bedroom units. I suspect you could create some new mortgage instrument that allows groups of friends to buy a house together since now we typically just do this via renting and splitting the cost for individual rooms (though I hesitate to suggest this since it would ultimately drive up prices even higher). It's also hard to find people willing to risk this, but I think a standard contract structure could go a long way to reducing the social risk.
    - refurb 8y ago
      though I hesitate to suggest this since it would ultimately drive up prices even higher I went to one open house in SF and the top floor was a nicely updated if small house. The basement/garage? The owner had put up walls to create 6 rooms and 2 bathrooms. The rooms were maybe 10'x10'? Apparently they rented them out to help with the mortgage. You could probably get $500-700/month for each or $3000-3600 for all six? And that's one reason why parking is an absolute mess in SF even if you get away from the city center. A lot of houses have one or more in-laws (many illegal). And no place to park the car in the garage!
    - roguecoder 8y ago
      You can absolutely get a joint mortgage with a friend: I did. The real challenge is finding someone you want to go in on a long-term coliving arrangement with, agree with on how to handle home maintenance and the like, and trust not to try to screw you over.
- ProfessorLayton 8y ago
  Bank of America will indeed value tenant income, however, you'll need to provide proof of multiple years of steady tenant income before they'll value it above zero.
- nostrademons 8y ago
  Wells Fargo will do this for publicly-traded stocks.
dontbenebby 8y ago
Is the market for condos as insane as for houses? I think I'd be happy with a 1BR in someplace like SOMA where you can walk to everything you need. Conversely I'm not sure I'd want a long commute (across bay bridge, down South Bay, or in Marin) even if I could have a sweet house.
- fossuser 8y ago
  It's a little better, I was looking in SOMA and 1BR is around 875k, but you might be able to find older stuff around 700k.

bradlys 8y ago

From what I've heard from everyone everywhere on HN, banks are willing to give you a loan knowing you have a lot of stock in a big tech IPO. (Even if you can't liquidate for 6 months) I don't know how much you need but presumably more than the home is worth. I'd love to hear some real world examples of people doing this. I'm curious if you need 20% down because that alone will put most of these folks who have been living off their salary alone out. (You can't easily save 20% down in less than 10 years for a $2-4m home on a single startup salary)

PopeDotNinja 8y ago
> From what I've heard from everyone everywhere on HN, banks are willing to give you a loan knowing you have a lot of stock in a big tech IPO That could have gotten me in trouble when I was younger. I had startup stock that traded at $50+ on the day of the IPO. When the lockup ended, the stock was trading at $12. At the time, I more likely to think the stock was going to $1200, not $12. I'd likely have ended up owing a bunch of money I couldn't pay off AND a big tax liability. If I were in that situation today, I'd see if I could find someone who would give me money at today's price and get N shares of stock in 6 months (the duration of the lockup period).
- CydeWeys 8y ago
  It would've been bad for you, but the bank would've been OK. Mortgages are collateralized loans, so they'd just get the house, plus whatever money you had left, and it wouldn't be a big loss for them. I don't think you'd be able to get a non-collateralized loan based on putative IPO stock value.
  - PopeDotNinja 8y ago
    > I don't think you'd be able to get a non-collateralized loan based on putative IPO stock value. I've heard that people with a ton of stock can find people willing to work with them. If you have $100 million USD in HawtStartup, I'm sure someone who believes that stock is going WAY up would be happy to buy at today's price w/ some discount in 6 months. Kind of like how farmers sell futures. I'm not an expert on the subject, and I've never had the kind of equity locked up, so who knows.

usaar333 8y ago

You can get lock-up loans from ibanks to secure down payments.