4 ms·

Not really an option near; or in Silicon Valley. You pay the savings in sanity points when you get roommates or family. No amount of savings is worth it. Down

by than3 3y ago

Not really an option near; or in Silicon Valley. You pay the savings in sanity points when you get roommates or family. No amount of savings is worth it. Downpayments for houses in that area with a 740+ credit score is at least 200k and only goes up from there, don't know many parents that could help that much given the high amount taxable event, that's also not taking into account most homes have significant maintenance the first year, you never know what you'll find. I've seen some places where they found out they had to fix the foundation after opening up to do some safety fixes, ended up costing around 120k. Involved a hillside sliding too so geotechnical engineer had to come in, no clue how much that cost after all was said and done. Wasn't found during the normal pre-sale inspection.

baremetal 3y ago
If its on a hill, get soil tests before purchasing.
singleshot_ 3y ago
What is a “high amount taxable event” in this context?
- sokoloff 3y ago
  Presumably a misunderstanding or misinterpretation of the gift exclusion rules. It’s a common misunderstanding that gifts over the annual exclusion limit ($17K per donor-recipient pair, so a couple could give a person $34K or a couple could give a couple $68K in a year) incur tax. They do, but only after exhausting the lifetime gift exclusion amount (currently a little over $12M per donor). There is also a process for designating that you’re gifting 5 years’ worth of gifts all at once (so 5x the amounts above before even touching the lifetime exclusion amount). It would be exceedingly rare for a $200K gift to actually incur a gift tax payment (though it would require a Form 709 gift tax disclosure filing).
  - dualityoftapirs 3y ago
    My understanding of the comment is the way the parents would get the money is to liquidate something which would incur taxes, which will be a lot in taxes on $200k even with long term capital gains treatment.
    - than3 3y ago
      Yes, this was the general sentiment. There may be loopholes and financial engineering that can be done, but its generally not available to the average joe. I looked into this as a possibility not too long ago, and the professionals we spoke with basically said you'd either need them to take care of the taxes or be co-signer. Co-signer rights effectively negate the point of getting 'your' house, and can lead to a lot of drama.
      - singleshot_ 3y ago
        Best bet is probably to have them own the house and step up in basis when they move on, if you're really worried about taxes.
linguae 3y ago
Some people unfortunately have no choice regarding living alone versus taking on roommates or moving back in with family (and this isn’t an option for everyone). Thankfully in my situation I can shoulder my upcoming rent increase without needing to contemplate roommates or moving back with my parents. For me the big problem is the purchase prices. I’m not going to get a six-figure windfall; my parents are low-income and can’t provide down payment assistance, and I don’t work for FAANG and thus I have no RSUs, instead relying on salary and annual bonuses. It will take me over a decade to save even $100k, which isn’t enough for a down payment. Then there are the actual mortgage payments. I see the writing on the wall. I will need to leave Silicon Valley eventually, barring either a major drop in housing prices or a major rise in my compensation. I have no idea where I’d move to; I’m a lifelong Californian who was raised in Sacramento and whose only significant periods of time out of state were in Tokyo (eight months) and Seattle (one summer). But a move is looking inevitable.
- nradov 3y ago
  As a Silicon Valley resident since 1997 I would advise young people starting their careers to not move here in the first place, unless perhaps they get an exceptionally good job offer that requires being physically present. I am kind of stuck here due to personal circumstances but if I had fewer attachments I would would have left years ago. The combination of broader macroeconomic and technological circumstances plus the negative effects of authoritarian leftist state and local governments has really driven the place downhill. There are many better places now to launch a career and build a life.
  - adave 3y ago
    For example?? Without practical answers this reads like an old fart complaining about good old times. Texas might be the only reasonable alternative for home ownership, even then salaries are lower and we all know about their current situation especially in smaller localities.
    - nradov 3y ago
      Texas is hardly the only reasonable alternative. Several other states make it much easier to own your own home. Look around and find somewhere you like. https://ipropertymanagement.com/research/homeownership-rate-by-state https://ipropertymanagement.com/research/homeownership-rate-...

by than3 3y ago

baremetal 3y ago

If its on a hill, get soil tests before purchasing.

singleshot_ 3y ago

What is a “high amount taxable event” in this context?

sokoloff 3y ago
Presumably a misunderstanding or misinterpretation of the gift exclusion rules. It’s a common misunderstanding that gifts over the annual exclusion limit ($17K per donor-recipient pair, so a couple could give a person $34K or a couple could give a couple $68K in a year) incur tax. They do, but only after exhausting the lifetime gift exclusion amount (currently a little over $12M per donor). There is also a process for designating that you’re gifting 5 years’ worth of gifts all at once (so 5x the amounts above before even touching the lifetime exclusion amount). It would be exceedingly rare for a $200K gift to actually incur a gift tax payment (though it would require a Form 709 gift tax disclosure filing).
- dualityoftapirs 3y ago
  My understanding of the comment is the way the parents would get the money is to liquidate something which would incur taxes, which will be a lot in taxes on $200k even with long term capital gains treatment.
  - than3 3y ago
    Yes, this was the general sentiment. There may be loopholes and financial engineering that can be done, but its generally not available to the average joe. I looked into this as a possibility not too long ago, and the professionals we spoke with basically said you'd either need them to take care of the taxes or be co-signer. Co-signer rights effectively negate the point of getting 'your' house, and can lead to a lot of drama.
    - singleshot_ 3y ago
      Best bet is probably to have them own the house and step up in basis when they move on, if you're really worried about taxes.

linguae 3y ago

Some people unfortunately have no choice regarding living alone versus taking on roommates or moving back in with family (and this isn’t an option for everyone). Thankfully in my situation I can shoulder my upcoming rent increase without needing to contemplate roommates or moving back with my parents. For me the big problem is the purchase prices. I’m not going to get a six-figure windfall; my parents are low-income and can’t provide down payment assistance, and I don’t work for FAANG and thus I have no RSUs, instead relying on salary and annual bonuses. It will take me over a decade to save even $100k, which isn’t enough for a down payment. Then there are the actual mortgage payments. I see the writing on the wall. I will need to leave Silicon Valley eventually, barring either a major drop in housing prices or a major rise in my compensation. I have no idea where I’d move to; I’m a lifelong Californian who was raised in Sacramento and whose only significant periods of time out of state were in Tokyo (eight months) and Seattle (one summer). But a move is looking inevitable.

nradov 3y ago
As a Silicon Valley resident since 1997 I would advise young people starting their careers to not move here in the first place, unless perhaps they get an exceptionally good job offer that requires being physically present. I am kind of stuck here due to personal circumstances but if I had fewer attachments I would would have left years ago. The combination of broader macroeconomic and technological circumstances plus the negative effects of authoritarian leftist state and local governments has really driven the place downhill. There are many better places now to launch a career and build a life.
- adave 3y ago
  For example?? Without practical answers this reads like an old fart complaining about good old times. Texas might be the only reasonable alternative for home ownership, even then salaries are lower and we all know about their current situation especially in smaller localities.
  - nradov 3y ago
    Texas is hardly the only reasonable alternative. Several other states make it much easier to own your own home. Look around and find somewhere you like. https://ipropertymanagement.com/research/homeownership-rate-by-state https://ipropertymanagement.com/research/homeownership-rate-...