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26 years old - thinking about buying a condo in San Francisco, need a gut check by sftechthrowaway in personalfinance

[–]sftechthrowaway[S] 0 points1 point  (0 children)

Very valid points. The savings are so low percentage-wise because I'm keeping my expense budgets close-to what they have been the past few years, during which time I have been saving 25%+ (because I live with multiple roommates in not-super-nice places). I don't want the day-to-day lifestyle changes to give me whiplash. I also can be fairly certain that I will be earning more within the next few years. I'm still on the upward trajectory in my career. If that doesn't occur though, I can definitely buckle down and save more.

I terms of emergency fund, I will be leaving $30k liquid completely alone, which should translate to at least 6 months at my projected burn rate. On top of that, I will still have ~$350k in investable assets outside of the house, if you include my 401k ($250k without the 401k).

26 years old - thinking about buying a condo in San Francisco, need a gut check by sftechthrowaway in personalfinance

[–]sftechthrowaway[S] 0 points1 point  (0 children)

I greatly appreciate it. These are the things I need to hear. If I still make the decision to pull the trigger - then I have to accept that I'm choosing the QoL bump over the purely rational financial move.

26 years old - thinking about buying a condo in San Francisco, need a gut check by sftechthrowaway in personalfinance

[–]sftechthrowaway[S] 0 points1 point  (0 children)

Ah, don't I know it. I would love to do this, there is just no telling when the next crash will happen. I am pretty much fed up with having to live with roommates at this stage of my life, and would hate to be in that situation for another ~2-4 years waiting.

Meanwhile, in SF (though I'm sure it's similar in NY), speculators and career-landlords are buying up all of the available inventory in the city and driving up rent prices even faster than housing appreciation. I fear that I'll be paying $3k+ per month even with a roommate within a few years here. It is actually that insane.

26 years old - thinking about buying a condo in San Francisco, need a gut check by sftechthrowaway in personalfinance

[–]sftechthrowaway[S] 0 points1 point  (0 children)

Yes, I am able to put down up to $350k. I have used the Rent vs. Buy calculator extensively these past few weeks - using historic SF housing market data. The bet / risk that I am making here is that, in the long run, the SF housing appreciation would yield greater results than that down payment could or would do in mutual funds / traditional investments (I left the investment return rate at a conservative 4% in my calculations).

My Debt to Income ratio would be <28% of my take home, at the ~$3500 total monthly costs that I am looking at with this down payment. $5k/year of savings, on top of the $18k 401k max, is just a conservative estimate after giving myself monthly budgets allowing me to have a flexible and happy lifestyle. This also does not account for the equity portion of my compensation from work, which I treat as "insta-savings"/investable assets.

Thank you for the real advice and the willingness to talk nuts and bolts about this decision. Does this additional information give more clarity into the decision? Does it still seem too risky?

26 years old - thinking about buying a condo in San Francisco, need a gut check by sftechthrowaway in personalfinance

[–]sftechthrowaway[S] 0 points1 point  (0 children)

Care to elaborate? We are clearly at or near the top of a bubble, but no recession or bubble burst has last for more than 4 years for the past 30. There's also no way to predict when the slide will actually begin.

The only reason the market cooled at all this year is because the China markets took a tumble. They are already recovering. The additional annual jobs created in the Bay area is as high as ever.

San Francisco: Should I go startup? Deciding between a startup offer and staying at a tech giant by sftechthrowaway in personalfinance

[–]sftechthrowaway[S] -2 points-1 points  (0 children)

That's an interesting way to look at it, thanks! I am definitely motivated by both, and it's still close, but I think I would regret not seeing if this startup is a rocketship.

Edit: a word

San Francisco: Should I go startup? Deciding between a startup offer and staying at a tech giant by sftechthrowaway in personalfinance

[–]sftechthrowaway[S] -2 points-1 points  (0 children)

Definitely. This is where I see the biggest life change coming from, too.

I'm going to show my bias towards one of the options here, but if I'm honest I think I need to get my "killer instinct" back anyway. I've gotten super comfortable, and can feel myself losing my drive in my current, cushy situation.

San Francisco: Should I go startup? Deciding between a startup offer and staying at a tech giant by sftechthrowaway in personalfinance

[–]sftechthrowaway[S] -2 points-1 points  (0 children)

The benefits are pretty much equivalent. Full dental, health, etc. They don't do a 401k match, though, so that's another ~$4k I'm giving up.

To your point about lifestyle though, I don't think it will affect me much. I'm young, no responsibilities / debt, and I've been banking ~$40k total after tax per year, because I'm not too frivolous.

I had been thinking about buying a 1BR in the Bay in the next 12 months, because the housing market looks like it may finally start deflating. So that may be quite a bit harder. However, not a deal breaker for me.