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rated:
I have lived all my life in the SF bay area and work in the City.  With the tech boom the bay area has gotten very crowded.  Traffic is noticeable worse and BART is maxed out during rush hour.  Over the past few months we have been looking to move into SF to ease up on the commute.  I have been following prices fairly closely for the districts I like and have done a lot of research to better understand why it's so bleepin' expensive to live in a shack.  Nevertheless, we would like to try and buy.

Coincidentally a friend of mine is currently looking to buy there as well but in a different district.  We're both running into the same problem that we can't come up with a strong enough offer to compete.  Even with my knowledge of the SF real estate market, the offers coming in defy rationality on every level I can think of.  For example, I made an offer on a modest 3/2 $100k over asking price (which was prices at market value compared to the comps).  Realtor got back and said I'm at least a half million off from being competitive with the other offers.  Another example is my friend made an all cash offer at full price with no conditions and a 5 day close.  He actually ended up being the highest offer but the seller balked and took it off the market - presumably because he thinks he could get even more if he waits.

Another example: This tear-down home on a 3,000 sq. ft lot in a decent neighborhood: https://www.zillow.com/homedetails/232-Clipper-St-San-Francisco-CA-94114/15181230_zpid/.  You could see through the walls and fall through the floor.  It needs to be completely torn down so you're basically buying the lot (but you can't tear it completely down due to historical rules in SF building code which means more $$$ to renovate).  Not sure what the sold price is as it's still pending, but I know it went for more than the $1.1m asking.

I make over $300/yr with no debt, excellent credit and have rental income and I feel that SF has slipped out of my reach other than the Tenderloin and some of the poorer districts along the south bay.  My question is what else can I do to buy a house there and how the heck are so many people able to afford/get credit to buy these homes?

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Or OP can rent a 3/2 from me for 6k a month and you can get to downtown in 20 minutes. I love this city and we dont need... (more)

rentrent (Jun. 30, 2017 @ 12:07p) |

You really signed up just to post this? Sad.

MrSamsung (Jun. 30, 2017 @ 12:28p) |

I feel like Ruffles needs to troll a San Fran thread, and knows doing it under his real name isn't fun enough.

stanolshefski (Jun. 30, 2017 @ 12:51p) |

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rated:
My question is
what else can I do to buy a house there

As people did in New York for Apts, check the obits.

how the heck are so many people able to afford/get credit to buy these homes?
Because they make more than you.

rated:
They make more than you do. They have family that is willing to help with the down payment and lending requirements. To go it alone in that market, you won't be competitive.

Don't fall in love with an inanimate object, it won't love you back. Find someplace else and commute.

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jpfern15 said:   I have lived all my life in the SF bay area and work in the City.  With the tech boom the bay area has gotten very crowded.  Traffic is noticeable worse and BART is maxed out during rush hour.  Over the past few months we have been looking to move into SF to ease up on the commute.  I have been following prices fairly closely for the districts I like and have done a lot of research to better understand why it's so bleepin' expensive to live in a shack.  Nevertheless, we would like to try and buy.

Coincidentally a friend of mine is currently looking to buy there as well but in a different district.  We're both running into the same problem that we can't come up with a strong enough offer to compete.  Even with my knowledge of the SF real estate market, the offers coming in defy rationality on every level I can think of.  For example, I made an offer on a modest 3/2 $100k over asking price (which was prices at market value compared to the comps).  Realtor got back and said I'm at least a half million off from being competitive with the other offers.  Another example is my friend made an all cash offer at full price with no conditions and a 5 day close.  He actually ended up being the highest offer but the seller balked and took it off the market - presumably because he thinks he could get even more if he waits.

Another example: This tear-down home on a 3,000 sq. ft lot in a decent neighborhood: https://www.zillow.com/homedetails/232-Clipper-St-San-Francisco-CA-94114/15181230_zpid/.  You could see through the walls and fall through the floor.  It needs to be completely torn down so you're basically buying the lot (but you can't tear it completely down due to historical rules in SF building code which means more $$$ to renovate).  Not sure what the sold price is as it's still pending, but I know it went for more than the $1.1m asking.

I make over $300/yr with no debt, excellent credit and have rental income and I feel that SF has slipped out of my reach other than the Tenderloin and some of the poorer districts along the south bay.  My question is what else can I do to buy a house there and how the heck are so many people able to afford/get credit to buy these homes?

  
The house you bid on was under priced in the first place.  There are a few realtors who price them far below what they are worth to generate buzz.  Sometimes its the realtor that you use isn't enough to win a deal and doesn't know the market to steer you in the right direction.  Your cheapest option right now if you want to be in sf, is to move to the sunset area where you can still get something decent for 1.1 to 1.5 million.  Your other option is drive 5 more minutes south and buy in Daly city where its under 1 million.  I was also born and raised in sf and moved to SJ to be closer to work in the last 6 years so I know the market well.  My parents bought their house in sf 35+ years ago for 30k...haha but my family member just purchased a house 15 blocks away from them for 1.8.  They came in 400k over ask because that's where the comps came in at.
 

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jpfern15 said:   Buying a house in San Francisco... 
 

  
You don't.

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I would need to win the lottery twice if I were to live in San Francisco.

I wonder how employers in SF even manage to hire employees given the high cost of living. I'm not only talking about employees in service and retail jobs, but even professionals or government employees stuck in standard low pay scales. A high salary elsewhere only achieves living on the streets in S.F.

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burgerwars said:   I would need to win the lottery twice if I were to live in San Francisco.

I wonder how employers in SF even manage to hire employees given the high cost of living. I'm not only talking about employees in service and retail jobs, but even professionals or government employees stuck in standard low pay scales. A high salary elsewhere only achieves living on the streets in S.F.

I grew up in SF, know plenty of people growing up that still live in SF with their parents. If/when they feel they want to live on their own they rent in-law units, move outside of the area, get married (2x income), or are just plain rich to start.

They also aren't like OP who want to live in the most expensive places within SF. Here's a thought OP, look outside the Mission, SOMA etc..Live in the Sunset if you want to live in SF. Plenty of places still sell for under 1M, it's relatively safe, and there are express buses that take you downtown and back in 30-40 minutes during commute hours (7X/NX-N).

300k/year is nothing nowadays, sorry.

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That is crazy. Maybe they should just ban cars and make it a bike city like Amsterdam. Reclaim all that parking space for housing.

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plenty of people were here before this market and they are not all paying the same prices you are looking at. buy the crown vic of housing.

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jpfern15 said:   
I make over $300/yr with no debt, excellent credit and have rental income and I feel that SF has slipped out of my reach other than the Tenderloin and some of the poorer districts along the south bay.  My question is what else can I do to buy a house there and how the heck are so many people able to afford/get credit to buy these homes?

  Get a spouse who also makes that much. I think $600/yr should do it. Also make sure you have parents who can watch the kids instead of paying for daycare.

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MrSamsung said:   
burgerwars said:   I would need to win the lottery twice if I were to live in San Francisco.

I wonder how employers in SF even manage to hire employees given the high cost of living. I'm not only talking about employees in service and retail jobs, but even professionals or government employees stuck in standard low pay scales. A high salary elsewhere only achieves living on the streets in S.F.

I grew up in SF, know plenty of people growing up that still live in SF with their parents. If/when they feel they want to live on their own they rent in-law units, move outside of the area, get married (2x income), or are just plain rich to start.

They also aren't like OP who want to live in the most expensive places within SF. Here's a thought OP, look outside the Mission, SOMA etc..Live in the Sunset if you want to live in SF. Plenty of places still sell for under 1M, it's relatively safe, and there are express buses that take you downtown and back in 30-40 minutes during commute hours (7X/NX-N).

300k/year is nothing nowadays, sorry.

  
This statement is so true. If OP wants to live in SF, he should stop looking at areas that are clearly out of his price range. Noe Valley (aka Stroller Valley) is one of the hottest neighborhoods in SF for young families and it's no surprise that there are intense bidding wars for homes there. Unfortunately, this is the case for many of the popular neighborhoods. I won't be surprised if most of these neighborhoods fall under OP's category of "... districts I like and have done a lot of research..."

If you can't afford a house in SF, you can consider condos. If you insist on having a house in SF, then you should consider alternative SF neighborhoods where you can actually afford and be competitive. If you're unhappy with the alternative SF neighborhoods or simply want more square footage, stick to the suburbs.

Supply and demand.
 

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MrSamsung said:   
burgerwars said:   I would need to win the lottery twice if I were to live in San Francisco.

I wonder how employers in SF even manage to hire employees given the high cost of living. I'm not only talking about employees in service and retail jobs, but even professionals or government employees stuck in standard low pay scales. A high salary elsewhere only achieves living on the streets in S.F.

I grew up in SF, know plenty of people growing up that still live in SF with their parents. If/when they feel they want to live on their own they rent in-law units, move outside of the area, get married (2x income), or are just plain rich to start.

They also aren't like OP who want to live in the most expensive places within SF. Here's a thought OP, look outside the Mission, SOMA etc..Live in the Sunset if you want to live in SF. Plenty of places still sell for under 1M, it's relatively safe, and there are express buses that take you downtown and back in 30-40 minutes during commute hours (7X/NX-N).

  
Isn't the Sunset district like four miles from the Financial District?  Seems like you could almost bike or walk as fast as the bus.

rated:
jpfern15 said:   

I make over $300/yr with no debt, excellent credit and have rental income and I feel that SF has slipped out of my reach other than the Tenderloin and some of the poorer districts along the south bay.  My question is what else can I do to buy a house there and how the heck are so many people able to afford/get credit to buy these homes?

 
What do you do for a living? Is that 300k mostly stock incentives? There will come a time when people will be laughed at for considering stock compensation as "real money". You should buy home using the cold hard cash you can count on every year, not supposed stock gains.
MrSamsung said:

300k/year is nothing nowadays, sorry.


I don't care what people say, individuals actually making over $300k/year cash in the bay area are still a small minority.
 

rated:
It's not a popular thought around here on fatwallet (aka landlord central), but in many cases the best option in SF is to rent a rent controlled place and forget about buying.

rated:
A house for most folks in both a place to live/sleep/etc. It is also quite often an investment in real estate.

If you're unable to afford buying a house, consider continuing to rent. You are not throwing money away by renting, you're covering your housing expenses the most efficient way given your desire to live in a certain place, your income, and your desire of how much of than income to spend on housing, etc. Good way to visualize: https://www.nytimes.com/interactive/2014/upshot/buy-rent-calcula...

If you'd like concurrent exposure to real estate as an investment, do so through any number of REIT, ETFs, etc. I like SCHH (but is heavily biased to commercial and multi-unit residential apartments).

If you want your own place because you really want to paint a room a certain color, put nails in the walls to hold pictures, flush mount your flat screen tv, etc., then feel free to do that in a rental. Just keep in mind you may be asked to repair/restore to previous condition...and if you move those expenditures aren't readily recovered by and large.

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sfchris said:   
jpfern15 said:   

I make over $300/yr with no debt, excellent credit and have rental income and I feel that SF has slipped out of my reach other than the Tenderloin and some of the poorer districts along the south bay.  My question is what else can I do to buy a house there and how the heck are so many people able to afford/get credit to buy these homes?

 
What do you do for a living? Is that 300k mostly stock incentives? There will come a time when people will be laughed at for considering stock compensation as "real money". You should buy home using the cold hard cash you can count on every year, not supposed stock gains.
MrSamsung said:

300k/year is nothing nowadays, sorry.


I don't care what people say, individuals actually making over $300k/year cash in the bay area are still a small minority.

  

rated:
That's what I'm saying. I have a wife and two small kids and can't afford to live where I work. I have looked at Sunset, the prices are up there too. Look at the sales history for any 2+ bedroom house (not condo) in Sunset. Just about all of them are well over $1 million now and the ones still below will get offers far above $1m.  In fact the median sales price over asking price in Sunset is 22% which is the highest in the city.  My wife works and I could use her income as leverage for additional financing but then that builds dependencies to pay on debt at a level that I'm not comfortable with. I work for a Fortune 5 (five) company. Base pay is $200k with average bonus 20% and equity providing an additional 25-50% annually. Rental income is $50k/yr on a house that is 20% LTV. It's a solid higher-level position for a world class organization which is why it irks me that no matter how far I go up the ladder, I can't seem to make it in the city I work in without additional support from somebody else. I wonder if anybody buys in SF anymore based solely off their single income... Which actually raises a question as I think about it: Is there a higher macro-economic risk to a real estate market if the vast majority of home owners in an area rely on multiple incomes to pay the mortgage/rent vs a single income?

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sfchris said:   It's not a popular thought around here on fatwallet (aka landlord central), but in many cases the best option in SF is to rent a rent controlled place and forget about buying.

Renting makes sense in SF.

I'm a landlord.

rated:
jpfern15 said:   That's what I'm saying. I have a wife and two small kids and can't afford to live where I work. I have looked at Sunset, the prices are up there too. Look at the sales history for any 2+ bedroom house (not condo) in Sunset. Just about all of them are well over $1 million now and the ones still below will get offers far above $1m.  In fact the median sales price over asking price in Sunset is 22% which is the highest in the city.  My wife works and I could use her income as leverage for additional financing but then that builds dependencies to pay on debt at a level that I'm not comfortable with. I work for a Fortune 5 (five) company. Base pay is $200k with average bonus 20% and equity providing an additional 25-50% annually. Rental income is $50k/yr on a house that is 20% LTV. It's a solid higher-level position for a world class organization which is why it irks me that no matter how far I go up the ladder, I can't seem to make it in the city I work in without additional support from somebody else. I wonder if anybody buys in SF anymore based solely off their single income... Which actually raises a question as I think about it: Is there a higher macro-economic risk to a real estate market if the vast majority of home owners in an area rely on multiple incomes to pay the mortgage/rent vs a single income?
  More that at other times in SF history, I think a lot of the demand right now is driven by stock funny money. You seem to have one of those jobs that is NOT compensated in funny money and it seems like your job is secure. You'll be in a much better position to buy when we have the inevitable downturn like we did in the early 2000s and again in the late 2000s.

Just rent in the city, relax and be patient and keep investing in index funds.

 

rated:
At 300k income if you saved properly you should have well over 500k saved over the last 5+ years and then you can easily afford a 1.5 million dollar house especially if you have rsus and invested properly

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You are probably pissing too much of your cash away eating out.  I own in SF and if I needed to buy now I probably could find a way with $300k a year.  I would look towards South Van Ness or 3rd St as both areas while a bit less than perfect are turning around.  Since they built the street car up 3rd houses are catching fire at a fair rate clearing out the rent control tenants, the same could be said about a good portion of the Mission  Daly City is an option I would avoid as the weather is depressing as hell.  Same could be said of the Avenues to a lesser degree.  I haven't looked at the cost of houses across from Crocker Amazon but they are probably on the lower end of what is available in SF.  There was at $799k on Niagara that is pending here is one on Ottawa for just less than a mil http://www.realtor.com/realestateandhomes-detail/255-Ottawa-Ave_...

rated:
Just sit back and wait for the air to come out of the bubble.

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There will be a bit of that too. Last time this was a really big issue was when Japan started buying up everything like China is now. The US kicked the box out from under them temporary drop US bought back properties and it will happen this time around too

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bobluciano said:   There will be a bit of that too. Last time this was a really big issue was when Japan started buying up everything like China is now. The US kicked the box out from under them temporary drop US bought back properties and it will happen this time around too
What are you talking about

rated:
"how the heck are so many people able to afford/get credit to buy these homes?"
if it's a south-facing house, it's probably someone from China offering all cash. Seattle is going thru something similar. Outside money is driving the market insane.

rated:
Kids out of college not Ivy League are being offered 125k+25k sign on +200k in rsus from fb and google... 1.5 mill after they have been working for 8-10 years is nothing.

rated:
brettdoyle said:   Just sit back and wait for the air to come out of the bubble.
  Not much of a bubble this time around. You actually have to qualify to buy the house with atleast 20% down.

rated:
jpfern15 said:   ...
 how the heck are so many people able to afford/get credit to buy these homes?

  
Maybe, you are up against all cash offers from you know where ... it is all corruption money which need to be invested ... and they don't care it is a shack or a tear down ... they don't even look at the property and send money in through realtor.

rated:
Tell me about it, I own a condo in SOMA and am looking to buy a SFH in Potrero Hill or Bernal Heights. There is just no inventory so prices are Sky high.

The only reason I and other people I know can afford it is by selling our over-priced equity from startups. My cash comp is significantly lower than yours but total comp is great because I won the startup lottery twice.

rated:
DoonGuy said:   
jpfern15 said:   ...
 how the heck are so many people able to afford/get credit to buy these homes?

  
Maybe, you are up against all cash offers from you know where ... it is all corruption money which need to be invested ... and they don't care it is a shack or a tear down ... they don't even look at the property and send money in through realtor.

  They are not cash offers, they are just strong offers that waive contigencies. They will waive a loan contingency, appraisal and home inspection. They will deposit 10% into escrow to show they are serious as well.  It has to be your realtor that sucks if you don't know this. Let me know if you need one in sf. I'm not a realtor.

rated:
How many offers have you made so far?

rated:
Just make offers 20% above asking price, sight unseen, no inspection, no appraisal, fraud immunity, and 100% escrow... disregard all due diligence and you will be well positioned to buy into the bubble at the top.

rated:
Bayview is up-and-coming, although it's a longish commute on Muni to downtown

rated:
Luniz97 said:   At 300k income if you saved properly you should have well over 500k saved over the last 5+ years and then you can easily afford a 1.5 million dollar house especially if you have rsus and invested properly
  This assumes he was making 300k over the past 5+ years. May very well be that this is his income in the most recent year and he was making far less earlier on.

rated:
brettdoyle said:   Just make offers 20% above asking price, sight unseen, no inspection, no appraisal, fraud immunity, and 100% escrow... disregard all due diligence and you will be well positioned to buy into the bubble at the top.
  
This statement is a great way to illustrate the buying insanity here. 

rated:
jpfern15 said:    I work for a Fortune 5 (five) company. Base pay is $200k with average bonus 20% and equity providing an additional 25-50% annually.
  Had to look that up (2017):
1. Walmart
2. Berkshire Hathaway
3. Apple
4. Exxon Mobile
5. McKesson
...
12. Amazon
...
27. Alphabet

rated:
Don't buy. Let other people hold the bags.

rated:
Morty said:   
jpfern15 said:    I work for a Fortune 5 (five) company. Base pay is $200k with average bonus 20% and equity providing an additional 25-50% annually.
  Had to look that up (2017):
1. Walmart
2. Berkshire Hathaway
3. Apple
4. Exxon Mobile
5. McKesson
...
12. Amazon 
...
27. Alphabet

  Gotta be McKesson then, only one that has a large corporate presence in downtown SF. Had no idea it was that big. 

rated:
RichieZZZ said:   
Morty said:   
jpfern15 said:    I work for a Fortune 5 (five) company. Base pay is $200k with average bonus 20% and equity providing an additional 25-50% annually.
  Had to look that up (2017):
1. Walmart
2. Berkshire Hathaway
3. Apple
4. Exxon Mobile
5. McKesson
...
12. Amazon 
...
27. Alphabet

  Gotta be McKesson then, only one that has a large corporate presence in downtown SF. Had no idea it was that big. 

  Same - didn't realize McKesson was so big!!

Skipping 7 Messages...
rated:
MrSamsung said:   
rentrent said:   
rascott said:   
jpfern15 said:   I have lived all my life in the SF bay area and work in the City.  With the tech boom the bay area has gotten very crowded.  Traffic is noticeable worse and BART is maxed out during rush hour.  Over the past few months we have been looking to move into SF to ease up on the commute.  I have been following prices fairly closely for the districts I like and have done a lot of research to better understand why it's so bleepin' expensive to live in a shack.  Nevertheless, we would like to try and buy.

Coincidentally a friend of mine is currently looking to buy there as well but in a different district.  We're both running into the same problem that we can't come up with a strong enough offer to compete.  Even with my knowledge of the SF real estate market, the offers coming in defy rationality on every level I can think of.  For example, I made an offer on a modest 3/2 $100k over asking price (which was prices at market value compared to the comps).  Realtor got back and said I'm at least a half million off from being competitive with the other offers.  Another example is my friend made an all cash offer at full price with no conditions and a 5 day close.  He actually ended up being the highest offer but the seller balked and took it off the market - presumably because he thinks he could get even more if he waits.

Another example: This tear-down home on a 3,000 sq. ft lot in a decent neighborhood: https://www.zillow.com/homedetails/232-Clipper-St-San-Francisco-CA-94114/15181230_zpid/.  You could see through the walls and fall through the floor.  It needs to be completely torn down so you're basically buying the lot (but you can't tear it completely down due to historical rules in SF building code which means more $$$ to renovate).  Not sure what the sold price is as it's still pending, but I know it went for more than the $1.1m asking.

I make over $300/yr with no debt, excellent credit and have rental income and I feel that SF has slipped out of my reach other than the Tenderloin and some of the poorer districts along the south bay.  My question is what else can I do to buy a house there and how the heck are so many people able to afford/get credit to buy these homes?


You don't make enough to buy a SFH in the city. It's a tiny area with an enormous concentration of money. Your opportunity was 6-9 years ago, unfortunately. Don't expect to see that again in your working lifetime.

You should seriously consider moving to a different part of the country....or finding a way to make considerably more money in a different job. Or waste a good portion of your life commuting. Not any other options.


Or OP can rent a 3/2 from me for 6k a month and you can get to downtown in 20 minutes. I love this city and we dont need to contemplate for months about spending a measely 5k on a new furnace like rascott.

  You really signed up just to post this? Sad.

  I feel like Ruffles needs to troll a San Fran thread, and knows doing it under his real name isn't fun enough.

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