Making a big SFH investment in Sunnyvale/Saratoga
I owe 500k on My current SF home and have 750k+ equity. I have 1m cash saved up, between me and my wife we make 600k. I have additional 1m cash reserves (stocks+ unvested RSUs) I want to diversify the portfolio, so thinking of buying a 4br/5br SF home in Sunnyvale/Cupertino/Saratoga prices are around 2.4-3m. I’m not sure if I’ll be able to manage mortgage payments on a 1.4-2m loan just wanted to see and feel the vibe in the community for such risky investment. I’ll eventually pay of once the RSUs vest in 2-3 years but for the time being feels scary to step in for a big RE investment as I have feeling of economic recession in a year or so
You can get yourself a mansion outside of SF, do you really want to stay there!
You lost me at “cash reserves = unvested RSUs” that is NOT CASH. Maybe wait to go deeper in debt.
Are you saying you have 750k in home equity and 1m in a savings account? What are the other 1m reserves? No point including *future* RSU (or salary for that matter) compensation in your current net worth, keep in mind you're going to be taxed on it as income. Make a spreadsheet with your net worth, and make sure it's diversified in a way you're happy with. There are plenty of ways to diversify in the stock market (developed / emerging markets, REITs, etc) for little effort. Personally it sounds like you would be too heavy if bay area real estate if diversification is your goal. Also, do you want to be a landlord?
I have diversified assets in 401k, whole life Insurance, index funds. I’m not sure on what other investment vehicles that would give huge rate of return long term other than real estate and stocks
Is your $1M saved just in a savings account?
Saratoga is beautiful
Saratoga if you find something you like and can afford it
Saratoga is definitely beautiful but not very accessible to companies unlike Sunnyvale. Commute is still 30 mins from Saratoga to most of companies
Yeah that is the trade off. But that is the case anywhere so i guess decide which is more important to you.
Buying a house you can not afford in an overpriced area on a leverage is not diversifying. It is a high risk investment where you risk to lose it all in the next recession.
California is a non-recourse state for foreclosures. Strategic default is an option if market tanks.
Do you plan to live there? If not, and you want a diverse portfolio, invest in Austin and Boulder (you can literally get places in both).
Yes I want to live there for may be 6-7 years and rent my current property in San Jose which would pay of current monthly mortgage. Planning to make it cash +ve in 2-3 yrs.
Why Boulder? Why not Denver?