Quote: (03-27-2017 09:18 PM)The Beast1 Wrote:
So I should add to this guys, that i'm a regular person (well I like to think I am) . As in married, want to start a rather large family soon, and gainfully employed.
I don't particularly see a home as an investment and I don't have many qualms in doing home repairs myself.
My market is Los Angeles and i'm basically looking to live any where north of i10, east of the 405 (including small parts of the coast, north ridge, etc), and west of Pasadena. Not trying to be too north of Burbank and Van Nuys. Is this at all feasible to do so in any of the areas i'm interested in?
TLDR: Good foreclosure deals are almost always snapped up before they hit the market or auctions. What's left is mostly the marginal deals and even then you gotta bring 100% cash money. My opinion is that buying in LA is a mug's game.
Long version: How much money do you make? Obviously, you're not going to want to broadcast your entire financial situation to a bunch of Internet strangers, but hopefully you'll be honest and ascertain if you really make enough to buy in LA.
I'm not trying to burst your bubble but unless you're making big bucks, you're going to find it extremely difficult to live in the area you've described. I have several friends that live in the area you've laid out (East of 405, N of the 10, W of the 605) and they're all lawyers/doctor/finance couples or successful small business owners making mid six figures. Even these people are complaining about how shitty their houses are compared to what they thought they could afford once they started making money.
Ktown, which was long one of the cheapest areas to buy/rent has shot up insanely in price. Nearby, the median home price in Echo Park (this is where cholos used to dump bodies in lake in the 90's) is $786,000. Everywhere in SoCal prices have appreciated 30-50% since the 2008/09 crash.
About foreclosures and auctions: LA is home to some of the sharpest real estate investors in the country so all the good deals are long gone before it even hits the MLS. Title agents, bank employees, RE agents and all the people in the process tip off their go-to guys. My folks aren't even big-time, but they've developed a reputation in their circle as no-nonsense buyers with cash so they get a fair number of deals thrown their way that are much better than the average deal...
As a regular Joe you basically only have a very few options to buy a house that'll have enough room for a big family if you're not making big bucks:
1) Have someone float you a huge downpayment (several of my friends have had their parents or in-laws give them a $500k+down payment as a wedding gift). That way you'll be able to make the monthly nut on your PITI mortgage that will hopefully be under the 36% price to income ratio that another poster mentioned. Shit, even with a $500k house on a 1.25M house (nothing special), you'll still be on the hook for a nearly $5000 monthly payment with principal + interest + taxes + insurance. Even then, you'd need to be making $166k to meet the 36% PTI requirement.
2) Move all the fuck away into the deep IE or Antelope Valley. Traffic will be a bitch, demographics are pretty awful but you can get a lot more house for your money. Personally, I'd never pick this option, but I used to work with a guy who had 7 kids, and he'd make the 2:30 commute each way into Beverly Hills from Moreno Valley each day so he could live in a 5 bedroom house. These places are still gonna run $400k+, $500k if you don't want to live right next to undesirables.
3) Try and con some old person to give you really good terms on a sale and/or seller backed financing. RE gurus used to pitch this a lot back in the first boom (2002-2006) and I've done deals like this myself, but it's basically finding a needle in a haystack. For completeness sake, I've included it in the list.
All this is basically a long-winded treatise on why I think buying (in general and especially in LA) a big mistake. As much as rents have shot up in recent years, the rent/buy ratio in LA is still strongly skewed towards renting. I understand the nesting instinct and the appeal of having one's own house but the cost to attain homeownership in LA is untenable for many young, urban professionals. Please don't stretch your finances to the brink just to buy a crapshack that will likely fall apart on you merely for the "pride of ownership".
Why don't you carefully vet your next landlord just as much as he'll probably vet you, and see if he has the type of personality that won't clash with yours. If you're dead set on buying, first try finding the most reasonable rental possible and bank as much cash as you can, preferably earning some sort of return. Then, when the next housing crash comes (nobody knows when, yet it's all but a certainty) you'll hopefully have decent scratch to bring to the table, plus favorable buyer's terms when panicked sellers are trying to get out at a big discount.
However, currently from the info you laid out, it doesn't seem like buying a house that can accommodate a big family in the area you're describing is realistic. That is, unless you're making a lot of money or have a huge down payment laying around. Sorry dude, wish I had better news for you.