House Poor

[shedfinder7]

I’m currently debating giving up my 2.75% ($1650/mo) mortgage to build on some land. Problem is land prices are through the roof right now it’s ridiculous.

What’s even more ridiculous though, is building is still penciling about the same cost as buying someone else’s shit box in this current economy. (atleast for my area of the country) I’m also not talking a total custom home.

DONT DO IT!!

 

[NRA4LIFE]

We're in our late 20's. Lots of our acquaintances who were in the same grad program as my wife get help from family. We know of two separate couples our age who purchased 600-750k homes after grad school. They went to grad school with my wife, same career/wages, and we know the rough household income. They admitted they got help, and the parents paid for the 130k of grad school out of pocket as well. At a minimum, the parents gave them the 20% down for the homes otherwise, the payments wouldn't be possible. Absolutely insane. They're good people, and I don't fault them for taking the gift. I am certainly jealous, but it's bizarre how many parents just gift insane amounts of money to their children. Even if you can afford it, everyone needs to struggle a little in life to grow and learn ownership and responsibility. I'd have been so grateful if my parents could gift us 10k to help with a down payment or closing costs, but I also have a ton of pride about where my wife and I are at especially being made by ourselves. These folks are 28-30, never bought their own car, still on the parents phone plan, didn't pay for undergrad or grad school, never paid their own rent/groceries in college, and were gifted 100+ thousand for a house. That is one hell of a way to get ahead in life, and I sure hope they pay it forward to others.

And I wonder how many folks like this that get X amount of money (I think the untaxable limit is like $15K now) declare that on their taxes?

 

[Svivian]

DONT DO IT!!

Alright guy on 5 acres

 

[Alpineelk]

This thread blows my mind. I'm 27 and hoping to own my own house someday. Looking a little like a long shot in my area what do u guys do for jobs? It seems by some of the numbers I've seen on this thread I'm in the bottom percent of what most people make. Guess I need to up my game

 

[bowhuntercoop]

This thread blows my mind. I'm 27 and hoping to own my own house someday. Looking a little like a long shot in my area what do u guys do for jobs? It seems by some of the numbers I've seen on this thread I'm in the bottom percent of what most people make. Guess I need to up my game

Retired from the Marines and full time trophy husband who watches the kids. Wife’s an anesthesiologist who’s the bread winner lol.

I just shoot stuff with the stick bows and try to manage the money and resources. DIY a ton of stuff on our farm.

We got super lucky buying our farm in 2020 with a dirt cheap Va loan, and I sold my last house for double what I paid for it in 2016.

We plan on raising our children here and staying for a good while, 20-30 years, after that who knows.

Having my 40x60 shop that I turned into my bowshop, gym, man cave, garage will be hard to give up even when I’m older.

 

[sasquatch]

And I wonder how many folks like this that get X amount of money (I think the untaxable limit is like $15K now) declare that on their taxes?

They can go way over that gift amount and still avoid taxes.

That limit you’re talking about is just the limit where you don’t have to file gift tax paperwork.

After that you file paperwork to show it’s a gift, and there’s a lifetime limit that applies which is like 11-M or something.

I don’t feel like looking up the exact numbers but those are close


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[Alpine4x4]

This thread blows my mind. I'm 27 and hoping to own my own house someday. Looking a little like a long shot in my area what do u guys do for jobs? It seems by some of the numbers I've seen on this thread I'm in the bottom percent of what most people make. Guess I need to up my game

Wife and I are both in trades/manufacturing. I work management in concrete, she works management in industrial fruit/vegetable processing equipment. We're mid 30s and north of $200k/yr combined. I bought my first house making 40k/yr 25 years ago and sold it for a $200k cash profit which kick started our adventure. My advice, find somwthing now and buy it so you can roll equity sooner, housing is one of the best and most stable investments to make as it rarely goes down.

 

[Pony Soldier]

The difficulty in my mind, is it is not what a house is worth to sell but what you have to get to move to the next one. I lost $30K on my first one and took a $10K cut in wages to move back to Montana. It took me 30 years and a $30k inheiritance to catch back up. There is a lot of luck involved in this game. I feel the end game is you have to be able to pay it all off by retirement to survive.

 

[Idagnome]

Moved in 2023 when my second kid was born. Left a 3.25% mortgage and house in town, but close to the highway for almost 3 acres fenced and a house where the grandparents have their own bed and bath when they visit. Bought the house in town in 2016, as it was the cheapest home in the market and only one I could afford.

Also had a lot out of town that we were going to build on (bought in spring 2020) but a subdivision got approved right next to it. Sold the house and lot for almost 3x what we paid for them and then put that cash to our county home with a mortgage. Mortgage is basically the same amount I would have borrowed if we bought pre covid, just at a high rate (c’mon Kevin).

My advice to OP on reading some of this thread, if the numbers make sense, do it. Your kids aren’t getting younger and watching your son pee off the back porch or your kids run free with space is worth the change. We were lucky and I wished I could have kept that house in town, but putting it in the rear view with kids has been a blessing. They’re not making more land or time so enjoy it while you can.

 

[ReaptheHeat]

I think its a ticking time bomb. The only people buying from my generation are using parents $$$ right now.

I could barely afford my own house now at these interest rates and I make way above household income, no car payment, no student loans, etc.

Heaven forbid you need any work done because its going to cost as much as a new car. I bet a lot of homes are going to have deferred maintenance when they pop up on the market in the next decade. I have learned so much DIY in the last 5 years that I could probably start my own contractor business.

Cost of living crisis is real and coming. Gas is up and food is about to increase here in the next couple months. Everything is more expensive and wages arent tracking.

 

[Idagnome]

This thread blows my mind. I'm 27 and hoping to own my own house someday. Looking a little like a long shot in my area what do u guys do for jobs? It seems by some of the numbers I've seen on this thread I'm in the bottom percent of what most people make. Guess I need to up my game

Up your game or up your price for your time at work. 2 years ago I got sick of taking the table scrap offerings of comp increases at work. Went to boss with job description upgrade proposal, comp increase, and how the company was going to win even more than I was. 16% raise last year, 23% raise this year, and the company’s still winning more than I am. Your skills and time are the only things you own debt free in life, don’t sell them for too little.

 

[willfrye027]

My group of 5 friends all in our early 30s own homes, none of us got any money from parents. Everyone is working hard and smart about maximizing income while maintaining sanity, and saving aggressively for quite a long time. While I was a medical resident my wife was making good money (120k) and no kids yet and we essentially got 500k put away in various saving/retirement vehicles within 4 years. That allowed us to make a large down payment and get into the market. Yes we make a lot now but we are smart about where it goes, drive older Toyotas, and don’t go on expensive vacations.

It can still be done it’s just harder than it was for my parents generation.

If buying a house is the ultimate goal go for it…but back to the theme of this thread it does suck to have 1/2 of my take home pay or more going to the mortgage, most of which is interest and not building equity..we could be building more wealth if we still rented at this point.

 

[Deeker]

I bought my first house in 08 when I was 19. Forclosure, really nasty house that needed a ton of work. But the mortgage was equal to the rent I was paying so it was a wash. Since then I have bought and sold 4 houses, always buy the nastiest house I can find for as low as I can find. Have kept my mortgage the same or lower since 09. Started in a tiny house on a 1/8 acre lot in an undesirable neighborhood. My current house is in the county, 5 acres, 3k sq feet, fully remodeled. Will go on the market next weekish, and then we will build our “ forever” home, with no mortgage.

 

[Jon Boy]

I think everyone’s first home will make them house poor but I also think it’s the best investment you can make. I encourage everyone I can to take the leap. It does take some strategy however and making a wise investment. It will be tight with these interest rates but there will be a drop at some point time and you can always refinance

I bought my first house at 25 and everyone thought I was nuts, hell looking back, I was nuts a $260k mortgage at 5% when I was make making $20/hour. I packed the house full of room mates and made it work. Worked every side hustle I could. Sold the house (way too soon) bought a lot, and then another lot. Sold the first lot for a healthy gain and built a house for cash on the second lot. Tripled my investment (good timing)

I rent that house out now and borrowed against it to build a second house (nearly my dream home). One $350k mortgage and two new houses on 1 acre lots by 33. I’m going to sell the rental this fall and clear out all of my debt and put a little change in my pocket for something else. Not sure what I will do next. I have zero in other investments currently as I leveraged everything in real estate the last ten years so I will likely get aggressive on that front.

With all of that said, everyone needs a place to live. You’re either paying rent or paying a mortgage. There are starting to be deals popping up in my neck of the woods where real estate has really cooled. Don’t over extend yourself too far but no matter what you do the first couple of years will be a stretch. But it will be worth it if you have half a brain.

 

[sasquatch]

I do not understand how people think it’s harder today than it was for our parents/grandparents

That is so far from the truth where I live. I feel a lot of people are delusional and are looking through a narrow lens.

Growing up I never seen a car newer than 10years old, going fishing and towing a little boat we always had a break down due to pieces together junk, never ever seen 4 door vehicles or extended cap trucks, vacation was something you maybe did 2-3 times in your whole childhood, eating out as a family wasn’t even heard of, never heard of such a thing as traveling to some other state to hunt, no such things as credit cards to buy now pay later etc etc

I can go on and on. My grandpa grew up when his first house cost 17k and he had no earthly idea how he’d ever afford the note!

He always said “yea bread was only a nickel when I grew up, but we never had a nickel!


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[Rich M]

This thread blows my mind. I'm 27 and hoping to own my own house someday. Looking a little like a long shot in my area what do u guys do for jobs? It seems by some of the numbers I've seen on this thread I'm in the bottom percent of what most people make. Guess I need to up my game

This thread should provide some incentive. A bunch of folks made it work, why not you?

I didnt start making better money until 5-6 yrs ago. Up until then, wife and i were bringing in 100k or so/yr. Still bought a house, had 2 cars, a fishing boat, and took family vacations where we’d split costs.

It is very doable. Just takes time to scrape up the down payment. And buy what you can afford.

 

[Jon Boy]

It is very doable. Just takes time to scrape up the down payment. And buy what you can afford.

This. I can’t believe the little amount all of the guys who are or who have worked for me have in savings. They’re making double or more than I was when I bought my first house. Some how I had 20k socked away by my mid 20s and all of these guys need paid early at least once a month. None of them have families or dependents so that isn’t even a consideration. Cost of living has gone up significantly but it hasn’t doubled in the last 8 years and even by that math they could still afford a $500k house if I could buy a $260k house 8 years ago.

 

[hoosierhunter11]

This thread blows my mind. I'm 27 and hoping to own my own house someday. Looking a little like a long shot in my area what do u guys do for jobs? It seems by some of the numbers I've seen on this thread I'm in the bottom percent of what most people make. Guess I need to up my game

I was 27 and and my wife was 25 when we bought our house in 2020. 270kish purchase price. We made slightly over $100k/year combined at the time and 6 years later we have 2 young kids and make more than double that income. Like many have said, sometimes you need timing and a bit of luck but don’t discredit discipline and a good work ethic. In the last 6 years I switched careers which really kicked started my compensation increase but I also ran a carpentry side hustle for a bit. We’ve now remodeled the majority of our home on our own and have all the tools and equipment to continue to improve the house. Lord willing, we make a nice profit on this home in a few years when we sell and move to the country and build a home/small farm that we love.

Just sharing more details to help show it’s possible! Everyone has their own situation to deal with… we still have student loans we need to wipe out and a HELOC we used to finance some of the remodeling.

 

[Alpineelk]

Ya u guys are right. I know it's doable just need to figure out how. Last year I made less that 60k and at my current job thers not a good way to make a lot more so idk wat my rout is but I may need to switch it up. However at the moment I have all my vehicles paid for and no debt my wife and I have a good chunk saved altho not quite enough for a down payment yet I don't think

 

[magicishmike]

As a mortgage lender, I see a lot of people willing to be house poor (or so it might seem). And the rules allow it. Sometimes renting is better even if you aren’t building equity. Yeah it sucks, but if you’re saving $1,000 a month rather than buying, invest that money and it’ll do you quite well and get you into a place to be less house poor when the time is right.