patrick.net

Generally, when people make less than 100k they tend to be lower-middle class and along with that stigma comes gangs, no pride in ownership and a bunch of non-sense I dont want to be around.

Unfortunately, there are plenty of dubious types who easily make 100K and well over, so this is a very poor determinant of class. Strippers, pimps, dealers, pornographers, scam artists, traffickers, drug reps, real estate agents and other lowlifes with luck on their side. On the flip side, you have the waitress with the BFA or the furloughed Librarian or the public school teacher.

There are no safe havens at any price.

@AustginHousingBubble

Unfortunately, there are plenty of dubious types who easily make 100K and well over, so this is a very poor determinant of class. Strippers, pimps, dealers, pornographers, scam artists, traffickers, drug reps, real estate agents and other lowlifes with luck on their side. On the flip side, you have the waitress with the BFA or the furloughed Librarian or the public school teacher. There are no safe havens at any price.

Sorry, I was referring to the pride in ownership of the neighborhood and attitudes of the people. Not many of the types you refer too are buying in the neighborhoods i listed. I just wouldnt want to live next door to people who dont have the funds available to fix their home nor the drive to raise their kids properly. Those types live in Sylmar, not East Pasadena, Hastings Ranch areas.

Sorry, I was referring to the pride in ownership of the neighborhood and attitudes of the people. Not many of the types you refer too are buying in the neighborhoods i listed.

Are you so certain? Have you had a thorough look under the rug in those neighborhoods? Not to be contrarian, but if you're going by the rationale that water seeks its own level, prepare to be disabused. Fact is, by hook or by crook, everybody wants to live in the tony neighborhoods, including the bad guys.

I just wouldnt want to live next door to people who dont have the funds available to fix their home nor the drive to raise their kids properly. Those types live in Sylmar, not East Pasadena, Hastings Ranch areas.

I think the idea of pride-in-ownership has been largely diminished by the mindset of the current market. The "you can always walk away" mentality has become the new byline for prospective buyers of all demographics, and that kind of halfheartedness doesn't really parlay into a rich community spirit. What's more, I suspect that all the free money from the government might have the same effect as when daddy buys junior his first car, and junior drives it into the ground,

Austinhousingbubble says

The “you can always walk away” mentality has become the new byline for prospective buyers of all demographics,

I agree, just look at the rise in numbers of foreclosures of prime mortgages. The media blames these prime foreclosures on job losses, But for what percentage? They don't say or know. If someone did decide to walk away, Why not tell the people that you are getting foreclosed on because of a "loss of income"? That way you don't have to deal with people who think there is some kind of moral obligation in a real estate contract.

4X says

it sounds like she has a 1k per month extra cushion and if she should not have any student loans, car loans or credit card debt she may not be so bad off. But, you are right….if she loses one job then our money wasnt well spent.

I'm not seeing $1k extra cushion - I see food, utilities, transportation of whatever type, at least finishing home improvements, home furnishings, clothing, etc. That's not a whole lot for California.

BTW, I make less than $100k. Much, much less. It's the curse of my chosen profession - but enough for me to live on and then some - and I don't belong to a gang. I realize we're talking Calif vs rural America, but even in Calif I wouldn't make $100k.

just sayin'

4X says

@Misstrial

btw, by becoming a slumlord, she will simply pass off her “circumstances” (your term) onto some other vulnerable renter. Have you ever met a slumlord? I have. Quite a few, actually. Ever heard of the saying: “Water seeks its own level”??? Now just apply that to this 20-year old. I am not “proud of her accomplishments” (your term). More likely than not, her father arrived here illegally and she is an anchor. They came to the USA seeking to cash in on the casino enviro and with your accolades, they got it - flat screens and all.

…and you can tell all this by looking at the color of her skin?…we should not speculate or assume her background to be that of an illegal immigrant, many might take your comments and assume you are race biased. If she is illegal, then I agree that a better course may have been taken. However, I would still be proud of her accomplishments…and even more so had it not been on my dime. Now, your right…she will be a slum lord as she doesnt have the cash flow to maintain the property. Partly why I refuse to live in Altadena, West Pasadena areas. No pride in ownership.

LOL, my spouse is 100 percent hispanic. You accused the wrong person.

Please be more careful when throwing around accusations of "racist."

Anyway, in the article referenced, it reports that she and her immediate family immigrated here from Guatamala.

The minimum costs to legally immigrate to the U.S. (law office paperwork with Immigration & Naturalization) is $15k. Per person.

So, you're going to tell me that based upon the facts presented in this article that she and her father came here legally? They're taking out "funny money" loans and financing their lifestyles on credit and HELOCS - its all fake wealth.

Just so that you know, from someone like myself who has actually lived in Mexico, Mexicans are killing Guatamalans and other Central Americans seeking to pass through Mexico to come to the US. Attacking them and killing them with machetes, actually. Within the past 2 years, Mexican authorities have set up buses to simply bus these people through their country to the US border where a coyote can smuggle them through.

And, the article states she is a "first generation" American. For her, whose family MOST LIKELY arrived illegally, she is an anchor.

So, Mexico knows how to guard its border (unlike US).

And my previous posting still stands.

~Misstrial

Austinhousingbubble says

Generally, when people make less than 100k they tend to be lower-middle class and along with that stigma comes gangs, no pride in ownership and a bunch of non-sense I dont want to be around.

Unfortunately, there are plenty of dubious types who easily make 100K and well over, so this is a very poor determinant of class. Strippers, pimps, dealers, pornographers, scam artists, traffickers, drug reps, real estate agents and other lowlifes with luck on their side. On the flip side, you have the waitress with the BFA or the furloughed Librarian or the public school teacher.
There are no safe havens at any price.

This is very true.

Real Life Example:

M.D. and spouse live in Mt. Olympus near Los Feliz area in Los Angeles. They live in a 1920's mansion. As Austinhb has posted, everyone wants to live large and who moves in to this tony neighborhood: drug dealers.

That's right, drug dealers. Complete with gunfights.

~Misstrial

Lots of people enter the country legally. They pay the $15K or more and do it. Lots don't.

Being illegal doesn't really mean she can't afford the loan. Having backup plans is great, and she has a lot of ways out if her jobs start dwindling away. She doesn't have a family to support right now, she has spare rooms, she has 3 jobs vs 1, granted they could be unstable, but with her work ethic she's probably going to be able pick up another pretty quickly doing "something". She might be talking about the riches, but it doesn't mean she's going to try and cash out now and collect on those riches. It just means she feels good about what she's done.

As for renting and finding good tenants. I'm guessing she would use friends and/or others she knew, rather than just posting ads and trying to get people in there. That is just a guess. She is pretty young, and probably has a large pool of people she knows that she could tap. If she has to dig through low income people with histories, I agree, it could end poorly.

If she had said anything along the lines of "I'm going to sell and................." I wouldn't be here. But jumping all over someone with speculations as to their ability to manage money with no sense of how she does it, is really stereo typing her.

I agree with ellie-- Calling anyone making less than $100K lower middle class is not realistic. Maybe in California, but CA is almost a different country than the rest of the US. In the vast majority of the country, making $100K would put you comfortably in the upper middle class.

Tatupu70,

The reality is that anyone making even $100K as my family is, is unfortunately lower middle class in CA. The costs to live here exceed the benefit. The only reason we stay is that this is where we were raised and we enjoy the weather and visiting some of the attractions. It is really hard to live here and see that we are now lower middle class, when we were once solidly middle class. The housing boom increased some peoples incomes so much that it drove up the cost of everything else.

It could be as you say Michelle in some parts of CA, but I recently lived in Northern CA(not the Bay area) and lived very comfortably on $100K/year. Rented a house in a very nice area for $1650/mo.

I imagine that you must be in Southern CA because noone would stay in the Bay area because of the weather! Maybe you can rethink your reasons for staying though because in your own words the costs exceed the benefits of living there. There are plenty of attractions in other cities. And no forest fires or mudslides!

@Misstrial

I wasnt accusing you of racism, I just couldnt understand how looking at a person you can tell their situation. Sorry.

I think it depends on how you manage your money. I make 60 grand a year and live in california so what am I? Lower class? too bad I have 80 dollars in bills each month. I don't have a dime of debt so my entire income is going to savings. I'd say I'm upper class..

I think it depends on how you manage your money.

You are perfectly correct, Rich. Class, in my mind, also has a lot more to do with conduct, intelligence and culture. Generally, wealth is just not a dependable indicator of any of these.

It is all relative, There are plenty of suburbanites who think that driving 4/yo Honda Accord is for the lower middle class because everyone in their neighborhood drives a newer Lexus or BMW. Very few people who make under 200k would say they are upper class, and if you ask them why they say "upper class people have *luxury item X* and I cannot afford that"

On the flip side if you went to Cambodia and gave a peasant rice farmer $5 an hour to do manual labor he would consider himself very well off.

and yet the person with the honda probably owns it outright while the lexus/bmw owner doesn't. stuff doesn't indicate wealth, cash flow does. when you owe more than you make in a year by many times over (like most home 'owners') then you aren't truly wealthy. you are penniless..

I think that we can all agree that the picture they paint of the young woman as a homeowner isn't what we'd like the poster child of responsibility to be. It shows that anyone can buy a home, regardless of their ability to actually pay for it.

$80 in bills each month? I'm so jealous!

Yes, agreed...she is not being responsible. I say get your education first, start your career, then buy at a time where home mortgages are 30% less than the rent you can get on a home.

Newton says:

and yet the person with the honda probably owns it outright while the lexus/bmw owner doesn’t. stuff doesn’t indicate wealth, cash flow does. when you owe more than you make in a year by many times over (like most home ‘owners’) then you aren’t truly wealthy. you are penniless..

RIGHT-O. But gullible Americans are fed a line of crap by government and media that DEBT=WEALTH. Magic math!

Misstrial says

Kevin:
Please reread my post: its one percent of your gross annual income.
Example: we make $198k/yr. We rent at $1700/mo which is actually under one percent gross annual.
Thanks.
~Misstrial

Ok, so you really meant that you should only spend 12% of your gross income on housing and you just have a very strange way of phrasing things.

That's also a really arbitrary decision, and for most people (remember, the average person makes about $50k a year) it would leave you living in a real shit hole. There are certainly exceptions, in cities where housing is ridiculously cheap, but most of those cities aren't very interesting places to live.

Kevin says

Ok, so you really meant that you should only spend 12% of your gross income on housing and you just have a very strange way of phrasing things.
That’s also a really arbitrary decision, and for most people (remember, the average person makes about $50k a year) it would leave you living in a real shit hole. There are certainly exceptions, in cities where housing is ridiculously cheap, but most of those cities aren’t very interesting places to live.

Guilty as charged. We go to the big city over 100 miles away for more entertainment than an occasional concert, movies, or plays. I should mention that we do have an awesome venue for concerts & plays.

elliemae says

Guilty as charged. We go to the big city over 100 miles away for more entertainment than an occasional concert, movies, or plays. I should mention that we do have an awesome venue for concerts & plays.

Another problem with living that far away from an urban center is that there aren't a lot of career options where the local housing costs would fall anywhere near that "12% of gross" number. If you happen to have one of those careers, great, but most of us don't have such a luxury.

I should have been a physician or a lawyer. You can pretty much live anywhere you want and you'll always have work.

It seems that everyone is just coming up with their own random numbers for what they consider acceptable.

1% for this, or 12% for that. Having a lease on a car is good for some, but others are complaining. Expecting everyone to go to college before starting their lives is the only way for others.

If she understands how to manage her debts, and lives a life she wants, that's great. If she defaults and causes the rest of us pain then people complain, and rightfully so. However everyone here is jumping on her with their own goals, expectations and claiming she's irresponsible or doomed because she's not following how they wish to lead their lives.

Some people work really hard, don't make a lot but do fairly well through investments and other paths. If she continues to work hard, she'll be fine. If she loses a job, she'll likely find another. If she tries to sell and realizes there aren't any buyers she'll figure something else out. As far as we know, she might have a 30 year mortgage. Jumping on her for being irresponsible isn't fair though.

Jumping on a story that doesn't have many facts other than she's bought a house, she's paying for it, she's proud and it's possibly gained value but unverified, and that she's happy with her decision. Something work getting worked up over, is what the story implies: Anyone can do this, while continuing living their current life, without making the sacrifices she's like making.

@PKENNEDY

We expect for her to live up to our decency standards?...you try living next to her and tell us we are asking to much. She cannot afford the upkeep of the property let alone any major repairs. I worked 3 jobs to get myself through college on a FHA loan...very similar, right? Well, my loan was forebeared until after I graduated at which point I moved up in pay scale and was able to afford my loan. Once I graduated I bought a home on FHA at 23...very similar right? Well, I was making in advance of 60K per year at that time, my career was getting started and the housing market was growing. Owning a home in 2009 isnt the same investment as owning in 2001...so for her to view this as a investment is flat out stupid. For us, it is another high risk loan that has the potential to reduce the value of the program. Yes, we need to help the poor but not if they are not taking appropriate steps to start a career that will give them the stability to buy in the right markets.

There are differences in the paths we chose. She has bypassed Step 1 for Step 4. Where I attempted to use the programs to move slowly out of poverty she is attempting to take advantage of the system and use it as a wealth building tool. FHA, SALLIE MAE, FREDDIE MAC need to realize that their qualifications are too loose...a person working 3 jobs is a high risk but they dont care because of their non-profit mentality.

Obama needs to reform these programs....I realize now, that home ownership cannot fund our GDP and should be looked at as a long term investment and not for short term gains.

@ Misstrial @austinghousingbubble

Generally, when people make less than 100k they tend to be lower-middle class and along with that stigma comes gangs, no pride in ownership and a bunch of non-sense I dont want to be around.

Unfortunately, there are plenty of dubious types who easily make 100K and well over, so this is a very poor determinant of class. Strippers, pimps, dealers, pornographers, scam artists, traffickers, drug reps, real estate agents and other lowlifes with luck on their side. On the flip side, you have the waitress with the BFA or the furloughed Librarian or the public school teacher.
There are no safe havens at any price.

This is very true.

Real Life Example:

M.D. and spouse live in Mt. Olympus near Los Feliz area in Los Angeles. They live in a 1920’s mansion. As Austinhb has posted, everyone wants to live large and who moves in to this tony neighborhood: drug dealers.

That’s right, drug dealers. Complete with gunfights.

~Misstrial

This is not a good comparison...umm Los Angeles is one big giant ghetto with pockets of nice neighborhoods where by Pasadena, Sierra Madre are giant upper class neighborhoods with pokcets of run down homes. In the center of Pasadena (West Pasadena) you will find lower income neighborhoods like these but in East Pasadena (Hastings Ranch, Sierra Madre) you wont find one gang member. Los Feliz is not an area you or I would want to raise our kids. It is surrounded by gangs, thugs and pushers. The city of Los Angeles is a giant ghetto....good luck to everyone who visits.

The type of people that live in Sierra Madre are professional, working class without a bunch of lower economic issues...meaning everyone can afford to buy at high prices and maintain their properties. We cant say that for Los Feliz.

@Misstrial

Can I comprehend the effort? Buddy, I’ve lived the effort. I applaud her wanting to improve herself, but I doubt that taking on huge amounts of debt and working three jobs is the way to do it - especially if that’s the only way she’ll be able to continue paying for the place for 30 years. The capitalistic spirit on my dime concept is hard to swallow at this point - because I don’t think that setting someone up to fail by loaning them a couple of hundred thousand dollars is the way to untold wealth.

Yes, ***APPLAUSE***
It is not the smart and responsible way to do it. I took out school loans with Sallie Mae to start my career and have since paid them back. Then once my payscale increased to 60K I took out FHA loans to buy a 175K house at $1200/mo with my wife, who at the time made 45K as a postal worker. People need to get "somewhat" settled in their careers before investing into property and/or there needs to be a giant cushion between the rents and mortgage.

If she works three jobs, she should work them a couple of years, save a 20% downpayment toward a home, and see if she can continue at that pace for 30 years before she takes our money. People should buy homes that they can afford.

****MORE APPLAUSE*******

I agree, homeownership should be a 5-10 year process that is started in our late 20's and early 30's. There is an ideal path for the American public should taken to build up their lives in a responsible way. 1. Education (Trade School, College, Apprenticeship) 2. Life Skills, Wisdom 3. Marriage, Family, and Homeownership. We simply cannot have 20 years going out, buying, then dumping the loan when it does not work out.

I know from experience poor people are very impatient, looking to blame others for their plight. In this instance, I think the girl's father is not showing his daughter how to be patient and take the right paths.

A college degree worked for me because I had a chosen field of work that requires a diploma and a license. By the way, I’d like to send a shout-out to ya’ll that contributed to my education, for without it I would have been a welfare recipient. College isn’t for everyone, and there are a helluva lot of college grads looking for work as we speak. But 4x’s comment about “mopping the floors at McDonald’s” negates the possibility that the floor mopper will someday become Manager. Ya gotta start somewhere.

*** No Applause...YOU LIE!!!! *****

I think we are saying the same thing here.....but just for the fun of it: YOU LIE!!!

Yes, lower wage paying jobs should be used as stepping stones, but it is flat out IRRESPONSIBLE if a person plans to stay in the lower economic situation, then buy a home and start a family on $6.50/hour. The floor mopper should do as you say, work their way into a manager position and/or find another career choice. While I was in college I was a security guard and I also used a Sallie Mae loan to pursue a career in Architecture, but once I found out Architects starting pay was 20K per year I quickly changed to IT at which point within a few years I was making 60K per year. I had a choice to stay impoverished or to seek another option for my career choices. I also, used a FHA loan later that year to buy my first home for 175K, which I could more than afford the mortgage. Plus, if I were ever laid off, I could find a job within 3 mos without going on welfare or filing unemployment to support myself. It is all about being responsible, a McDonalds employee should not buy but a Mcdonalds Manager should if they can afford it. Jobs flipping burgers at McDonalds should be used by college students to aid them in getting to the next level and not as career choices. What if I would have simply foregone my college experience and tried to buy a house on a security job wage like this girl?...I would still be poor.

Once I left college it took me 10 years to build up my lifeskills and wisdom, I think she is simply making some poor choices as a young adult that have the potential to affect everyone. My mistakes were that I sold my house for 50K profit at a time where if I had held on to it 2 more years I could have sold for a 300K profit. Ouch!

Again - I applaud the spirit of the person who is trying to get rich by buying a house for $155k and a 2nd of $28k; she now believes that she has an asset of $255k while she’s paying 54% of her income (article doesn’t specify gross or net) toward her house payment. But 2005 is calling, it wants its optimism back.

*****ROARING LOUD APPLAUSE*********

Right, next year at this time this house wont be worth 100K. What will she do then with her 3 jobs and investment opportunity? Will she start her family in a responsible manner that wont result in you and I paying for it?

you will find lower income neighborhoods like these but in East Pasadena (Hastings Ranch, Sierra Madre) you wont find one gang member. Los Feliz is not an area you or I would want to raise our kids. It is surrounded by gangs, thugs and pushers. The city of Los Angeles is a giant ghetto….good luck to everyone who visits.

I would at least anticipate a shift in the status quo, regardless of zip code. It is normal too see a rise in crime rates, but especially violent and organized/gangland crime, particularly when the economy is on the skids to the degree that it is now -- at least at street level.

@ 4x

She fixed up the house already. Spent money doing it. Whoever was there before hadn't, so this is already an upgrade.

If she chooses not to further her education and pursue a life with lower paying jobs, higher working hours and decided to purchase a house early in life, what is wrong with that? If she can maintain the loans, housing, and jobs, she is fine.

She has at least 2 loans on the house now. One for the house itself, and one for the upgrades. If she defaults, she'll lose her down payment, and the 2nd recourse loan could come after her. She'll have decent incentives to keep up the work. If she's competitive, like it appears to be from the video, she'll find a way to keep winning.

There are lots of people who CAN afford to keep their homes up to a normal decency level and who don't. Money helps, but doesn't dictate that they will be. Gardening is free. Paint is pretty cheap. She can do the things herself. Probably a good hobby for her as well, since she won't have that much money for spending on external entertainment!

When there are rules and economic incentives, people will find ways of abusing them. Telling people they can't buy until they've been to college, or this has to happen first, will invariable lead to problems within a few years. People will always find a way.

@Pkennedy

I am not saying we need rules, but stating there is a less riskier way to go about a home purchase. From the start she has not been operating under ideal conditions, especially with her father direction. God bless her if she can maintain this home, I am rooting for her.

Can you at a minimum agree that she has bought more house than she can afford?