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Originally Posted by AlpineWhite_SJ
The west side, Beverly Hills, Hollywood Hills - sure. you're competing with entertainment moguls and actors. Palos Verdes and the valley (Woodland Hills, Calabasas, Thousand Oaks) you can get some decent places for the money.
Best option is to find a starter house in a good neighborhood, put some upgrades into it, build equity and then sell and take any gain to roll into a better place. Beats flushing rent money down the toilet every month, helps your tax situation and interest rates are super low.
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This is the key part. In the game of home ownership, you have to get into it and into it smartly. The biggest hurdle is getting into your first home. There are a bunch of programs out there to assist first time home buyers. I took advantage of one program to get into my first home. The townhouse was a new construction "back to back" single car garage home. The townhouse qualified under the Community Reinvestment Act. The loan program allowed me to get into the home with a small down payment. I think the program allows up to 3% down payment. I put 5% down. The interest rate was competitive at 6.375% fixed for 30 years; this was back in 1999. And the big thing....no PMI assessment. Plus if I remember correctly, closing costs were either fully covered or were kept very small.
So ask around as there are other programs out there that are not just the standard FHA loan for first time buyers.
Getting into this first home allowed me to build some equity to spring board me into getting my next nicer home. The nice thing that Feds give home owners besides the tax deduction is the ability to roll over any gains in the sale of your home that you've lived in for a minimum of 2 years into another home without paying any gains taxes on it.
I know of people that on paper are house poor but are taking in roommates to lower the effective mortgage they pay per month. Even though I can take on roommates with my primary home and rent out my vacation home, I choose not to as I value my privacy more.
But rent prices are pretty outrageous in my area. I found out a new construction townhouse in a very nice development less than a mile from my home is renting out for $2500 a month. In contrast, I'm paying about $1577 a month all in for my 4 bedroom 2 car garage single family on a 1/4 acre lot in a cul de sac.