Buying a 2.5mil home in south bay

Netflix Polis
Nov 10 67 Comments

I'm looking at Saratoga/Cupertino right now, any thoughts/comments/suggestions? This will be my first home purchase.

Have two young kids, wife and I are early 30s. Single income, wife is SAHM.

Worried about market top but don't really spend money on anything either.

Thanks in advance!

EDIT* 500K TC, 500k down payment. Have around 150k in savings accounts, no other assets other than the down payment.

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TOP 67 Comments
  • Oracle lkR77
    You can’t afford that home.
    Nov 10 8
    • Netflix Polis
      OP
      Netflix comp is all cash, so no fluctuations there
      Nov 10
    • Google nyutask
      what would the mortgage be? are you willing to take a 30 year mortgage on that monthly price on the bet that you'll make 500k+ TC throughout that period? 650k in total $$ doesn't seem like nearly enough for a 2.5M house. I have 520k in assets at 250k TC and even a 1.25M house seems out of my price range. maybe I'm just conservative
      Nov 10
    • Netgear lostping
      You should be able to get a 1.25m house of expenses are well managed ..
      Nov 10
    • Google nyutask
      in NYC that's basically a 6k a month mortgage, which is a huge expense to take on after dropping most of my liquid cash (outside of 401k) on the down payment.
      Nov 10
    • Oracle lkR77
      Are you planning to stay at Netflix for thirty years?
      Nov 10
  • Cadence Mariposa
    You are so much ahead In life for an early 30's person. Good for you :)
    Nov 10 5
    • Netflix Polis
      OP
      Thanks! I've been very lucky
      Nov 10
    • Cadence Mariposa
      I, on the other hand have been pretty unlucky :/
      Nov 10
    • Netflix Polis
      OP
      Leetcode/change jobs if you're able to, I've hopped around a lot
      Nov 10
    • Cadence Mariposa
      The money part is not what I am talking about.
      Nov 10
    • Netflix Polis
      OP
      Ah, sorry mate
      Nov 10
  • This comment was deleted by original commenter.

    • Netflix Polis
      OP
      Most people definitely seem against the idea, thanks for your input.
      Nov 10
    • Facebook public2
      Leveraging millions at historically low rates to buy an appreciating assest is actually a very easy to gaurantee you do "get rich" :)
      Nov 10
  • Netflix the.oa
    Are you worried you can’t afford it or that the market will crash?

    If you’re worried about a crash, wait a bit longer. Prices are adjusting downward since those areas jacked up to the moon the past 5 years. Just hope interest rates don’t turn on you.

    Edit: my worry would be being fired and not being able to find another 500k TC job to cover this house. If you have good seniority and are in a solid team, then the risk is less.
    Nov 10 4
    • Netflix
      MindHunted

      Netflix

      PRE
      Google, Amazon
      MindHuntedmore
      ^^
      This. "My worry would be being fired and not being able to find another 500k TC job to cover this house."
      Nov 10
    • Oracle lkR77
      500k all cash. Which nobody but Netflix does
      Nov 10
    • HPE baebo
      I wouldn’t be comfortable spending that much, especially without substantial savings. The market is wobbly and probably not the best time to buy, even if you could afford it/
      Nov 10
    • Netflix the.oa
      Having 500k cash plus an extra 130k in savings is huge. I think it’s good to cool your heels and wait things out. Just be be on the safer end. 5 years ago it was a no brainer to beg borrow and steal to get anything you could in LG and Saragota. Now is a good time to chill. The shit is frothy AF.

      Honestly, the only other company that will give you 500k is probably FB and it’s not all cash. Be mindful of this risk and good luck dude.
      Nov 10
  • Netflix
    MindHunted

    Netflix

    PRE
    Google, Amazon
    MindHuntedmore
    OP,
    I wouldn't bet on keeping a job at Netflix for a very long time. Unless, you've become an expert in dealing with politics. The market is all time high with a great chance of correcting within 2 years. When that happens, TC of other top tech firms will go down because of RSUs. It would also mean that your TC will go down as well. Netflix hasn't been through a recession since we started streaming and gotten lofty valuation. In my opinion, it will correct a lot.

    If you're on Visa, I'd strongly advice to not do it :)
    Nov 10 0
  • Uber listen!
    I was in a similar situation as yours OP, with exactly the same amount of saving. Early this year, I bought a 4 BR townhome in Mt. View for a little over 1.6M. Based on my mortgage approvals, I had much higher capacity so I felt at that point that I am buying under-capacity. Like you, I also do not invest anywhere else and thus wanted to put most of my money in real estate.
    I can tell you that I find my mortgage payments pretty expensive at the moment and hoping to get a good RSU vest to recast my loan and reduce my EMI. 2.5mil would be crazy at your comp. PM me if you need more details.
    Nov 11 2
    • Instasize cplus
      Dude all of your risk is concentrated in US technology. You’re a fool

      It’s not your fault there’s a whole herd of people that I’ve bid up these properties to these prices but just know it absolutely represents risk
      Nov 11
    • Uber listen!
      @cplus thanks for calling me a fool. I am sure you are really super talented to come to that conclusion based on the little data I shared with you without knowing my complete situation and inputs which went into decision making. You should remember most people who can afford to buy expensive properties through their personally earned money can also research the safety aspects of their investment and take a calculated risk. I believe I did that for myself
      Nov 11
  • Oracle dragonflyy
    Do you have savings outside the downpayment? Should protect yourself for a loss of a job - understand that likelihood of that is low and you will find another job soon but with a $2M mortgage, you’ll drain funds quickly.
    Nov 10 1
    • Netflix Polis
      OP
      Not really, would be putting it all into the house. That's a good point, ill add that to the origin post as well.
      Nov 10
  • Amazon
    de5i

    Amazon

    BIO
    Just taking it easy
    de5imore
    Might be a bit tight, but you can afford it.
    Nov 10 1
    • Facebook / Other
      lovethez

      Facebook Other

      PRE
      Facebook
      lovethezmore
      I wouldn't spend more than 30% of my net worth on real estate.
      Nov 10
  • Facebook mifscgug
    My savings are 4x of what you’ve mentioned in your post and I bought a 1M home. Don’t buy a home just because the bank will give you a loan. Remember you need to pay off that 2M after the down payment. Don’t plan to be in a mortgage for 30 years, try to pay it off much sooner. Life is unpredictable and you might be hit by recession or layoffs at a company and that mortgage will be a huge burden at that time.
    Nov 10 0
  • Salesforce lsSn48
    Cupertino is very crowded. Kids at school are very competitive.

    Saratoga has bigger lots, better schools, more lay back. More expensive too
    Nov 11 6
    • Cadence Mariposa
      Condo/townhome kids - Asian/Indian ?
      Saratoga rich kids - White
      Nov 11
    • AOL CwXk65
      Yes maam
      Nov 11
    • Netflix the.oa
      Your kid might go to school with 50% white kids in Saratoga schools. Cupertino is practically 97% Asian.
      Nov 11
    • AOL CwXk65
      It's not about white or asian, but rich or middle class rich .
      Nov 11
    • Netflix the.oa
      Pretty sure in this context it is. Because white American parents, regardless of income class, didn’t grow up with parents that drove rote learning and grinding away high academic demands on their kids at a young age. The white middle class doesn’t do this. Mostly because they don’t have the luxury of time and can’t afford the kumon-style schools.

      This is a unique property of Silicon Valley and communities which are predominantly all asian and ultra competitive.
      Nov 11
  • Cisco
    🦙 Alpaca

    Cisco

    BIO
    I am the Alpaca. DM me if you want to cuddle.
    🦙 Alpacamore
    Rent, or buy a 1-1.2M house, and do renovation yourself to make it a 2M-like house
    Nov 10 0
  • NVIDIA errorh
    Saratoga will be a good choice. Great location and neighborhood.
    Nov 10 0
  • Visa Dtrm86
    Don't spend that much! That's not a lot in savings if you lose your job. No one besides Netflix will pay cash. If your job goes you'll be totally screwed.
    Nov 10 3
    • Facebook public2
      People know equity can be sold in exchange for goods and services right? Why are folks worried that others pay cash and rsu. 500k is 500k :)
      Nov 10
    • Google ShakeBake
      Folks are scared about cash flow when selling vested RSUs (and losing bonuses) at market bottoms, which may turn 500k TC into 350k TC or less (many people autosell RSUs). For stocks that vest after the drop you cannot reap capital loss benefits.

      OP doesn’t need to worry as much about RSU grants tanking while at NFLX - if they get fired during the drop just find another 500k job and enjoy the appreciation from a lower cost basis. I would really like to know what job offer TCs look line amid a downturn, I have asked in another thread and heard that during 2008 they were significantly lower and jobs are significantly harder to find than before the drop but I didn’t get any concrete data out of it.

      Also that is a pretty bad scenario, not all market downturns are as bad as 2008.
      Nov 11
    • Facebook public2
      Ok, so apply a 50% discount to be extremely conservative if that is something you are worried about. The reality is stock comp is still not recovered. I made more in stock comp in the late 90s than today.
      Nov 12
  • BlackRock fnHO861NYC
    Both of you work at netflix? If yes may be yes you can think
    Nov 10 3
    • Netflix Polis
      OP
      Wife is a stay at home mom, I'll add that to the post
      Nov 10
    • BlackRock fnHO861NYC
      Are you a senior software or manager? YOE?
      Nov 10
    • Netflix Polis
      OP
      SSE, 10
      Nov 10
  • Zillow Group k5g8hf
    I’ll give you a good analogy. Have you ever seen those sob-story exposé videos where dejected lower/middle class millennials talk about how they’re stuck with these massive student loans and how that’s preventing them from building a life? That’s gonna be you, assuming there’s a bank that’s actually willing to give you a $2M loan. (Hint: there likely isn’t, even with your $500k all cash TC).
    Nov 10 2
    • Facebook public2
      Confusing assest backed loans with non asset back loans much lol? OP can afford easily if they chose to.
      Nov 10
    • Amazon / Eng Ack
      Yeah getting a bank to approve the loan is the last thing OP should be worried about. I make less than him and I was pre approved at 1.8m
      Nov 10
  • Flowcast lulll
    Tons of asians in cupertino. Id go palo alto or atherton
    Nov 10 1
    • Amazon
      de5i

      Amazon

      BIO
      Just taking it easy
      de5imore
      Plot twist: op is asian himself.
      Nov 10
  • McKinsey alphabro
    What’s wrong with renting...?
    Nov 10 1
    • Facebook public2
      Lack of control, rent increases, and landlords, else nothing.
      Nov 10
  • Symantec GoRams
    3x or 4x TC should be your target. Dont stretch beyond your means.

    Also add monthly expenses - private schools, etc
    Nov 10 1
    • Netflix Polis
      OP
      Yeah, it feels like quite a gamble. Thanks for your input
      Nov 10
  • Arista Networks rBi1nrp
    Is your net worth 500k+150k? Seems low for 500k TC.
    Nov 19 0
  • New XoAY48
    I agree with most. Your high salary means you are in a role that demands high responsibility. And unfortunately things fail. And people get fired. All savings and house will be gone over night. If you buy a cheap house, you may still keep house and have money
    Nov 10 0

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