“My friend knows this realtor who told her it’s literally impossible for people to buy a house in L.A. without help from their parents,” my friend said. It’s 2016, and we were waiting in line for a fashion show on the Venice Boardwalk. We were a block away from the house I grew up in, which now would easily sell for close to $2 million (my parents paid around $400,000 for the place in the ‘80s), surrounded by a bunch of other houses I can’t afford. I bit my tongue, and avoided saying, “WATCH ME.”
I’m not sure of the exact day I woke up and decided I wanted to be a homeowner, or when it grew from an idea to a (healthy) obsession. I think it was in 2013, around the time I saved my first $10,000, an unofficial challenge I gave myself in my first job as a marketing manager at a startup. I was making $40,000 and living in NYC, so it was no easy feat.
I started tweeting about homeownership all the time, so much so that people started calling me “wanna-buy-a-house-Twitter.” But as much as I shared online about my goals, I never really went into detail when talking to my friends about my plan, and I never mentioned the specifics of my rapidly growing nest egg. It’s difficult to decline brunch invites on financial grounds when you mention you have $40,000 in your savings account. But I didn’t even miss those bottomless mimosas. Instead, I would fantasise about eating breakfast on my front porch, or living room, or deck — in the home that I owned.
In September 2017, a week before my 27th birthday, that dream became a reality. I bought a house in L.A. I am single; I have student loans; and I didn’t have parental financial support. It might have only taken me four years to save for a down payment, but it felt like an epic journey to me.
How did I end up with $60,000 in the bank? I hustled. I set aside 25% of my take-home pay, and then I took on every odd job you can imagine — and some you probably couldn’t even make up. I had a 40-hour-per-week full-time job, a 20-hour-a-week night job, and a healthy freelance career. I became someone who everyone knew was always down to pick up some extra work, from selling glo-sticks to the rave crowd at an NYC nightclub to copywriting gigs for an Armenian-based startup. In 2015, I even started AirBnB-ing my apartment, sleeping on couches while charging up to $150 a night for my place. It wasn’t a very glamorous way to make a buck, and it drove my then-boyfriend absolutely crazy, but it worked. One year, I made over $10,000 off AirBnB alone.
I had a 40-hour-per-week full-time job, a 20-hour-a-week night job, and a healthy freelance career.
My approach to hustling and saving has always been more focused on finding new revenue streams rather than living frugally. I travel frequently, thanks in part to credit card points (I pay for everything with my credit card and I pay it off in full each month); I even bought the $700 Gucci mule loafers everyone wanted last year. For me, the effort of making an extra $100 always beats the frustration and sadness of cutting out something I love, like boutique fitness classes or acrylic nails.
I liked my busy life, even when I was juggling five jobs at a time. I had my big priorities and I try to avoid little indulgences that can up quickly. I try not to buy $4 iced coffee, I pack my lunch, I quit buying fast fashion, I changed my hair to an ombre style that required one appointment a year, and I still have the iPhone 6. But while I was saving for a home, I wasn’t a hermit eating ramen either.
Every month, I paid $120 more than the $280 minimum on my student loans and contribute 7% of my pre-tax income toward my 401(k). In 2016, I put $5,000 towards my student loan at once and later regretted it, my interest rate is low and that would have covered closing costs on the home I bought less than a year later. You live, you learn.
Once my savings account hit $50,000 in mid 2017, I knew my home ownership dream was within reach. I wanted at least two bedrooms, so I could rent one out, but was otherwise pretty open-minded. I found my beloved realtor Lexi through Trulia, and she devoted months of her life helping me find my dream home. I was very clear from day one about my expectations, and she promised to never, ever show me a home outside my price-range. She was also incredibly helpful walking me through the buying process.
After I found Lexi, but before I started hard-core house-hunting, I also found a mortgage broker recommended my step-Grandma. Having a broker took some of the pressure off finding the best loan, because they do all the research for you. Before I could make an offer, I needed the pre-approval letter that tells prospective sellers how much house I could actually afford to buy.
The bank approved me for a 10% down payment on a house that costs up to $475,000. That would leave me with a 30-year loan of $428,000 at a 4.2% interest rate, making my monthly payments around $2,050, plus property tax. I was also required to take out private mortgage insurance (PMI) since I couldn’t put down 20%, which is around $110 a month. My all-in monthly payment is around $2,700 before utilities, which right now is about 65% of my take home income. This is a was a big increase in what I had been paying in rent ($1,200 a month). To offset this cost, I’m going to have a roommate, at least for the near future. My liquid savings will suffer, but now I’ve got equity.
Once I had that pre-approval letter, I started looking at homes for real. I must have looked at close to 30 homes in-person, made offers on six, and was outbid by people who could afford 20% or more, and in some cases, who could pay all-cash. I wasn’t surprised when I lost out on the first house — it was a gorgeous craftsman in Boyle Heights. By the fourth time it happened, I started to feel like it was impossible to buy a house without rich parents, a spouse, and a suitcase full of cash.
I must have looked at close to 30 homes in-person, made offers on six, and was outbid by people who could afford more.
Then, one afternoon in August, I pulled myself out of bed despite a high fever, and toured a house in City Terrace, a safe, residential neighbourhood in East LA. I hadn’t sent Lexi the link to this one, her assistant found it. It had a hideous online listing with inaccurate square footage and very few photos, all of which were blurry. The reality was much more appealing: It didn’t have much curb appeal, but it did have an insane deck with a view of both the Downtown L.A. skyline and the Hollywood sign. I really wanted it and immediately called my dad to gush about the view, but after six failed bid, I figured I wouldn’t win this one either, so I kept feverishly touring more and more houses.
Two weeks later, I got a call saying my offer $470,000 — $5,000 over asking — had been accepted.
My ugly-cute dog Chiquita and I moved in and the rest is happily ever after, right? Not. The next few days were a rush of annoying expenses and never-ending paperwork. I had three different types of inspectors come look at the house (ranging in $150-300 each) to check for a variety of issues from foundation to termites to plumbing. This isn’t mandatory, but it’s a small price to pay to know what kind of costs you might be dealing with down the line. I had to pay a licensed home appraiser to tour the house and tell the bank what it was worth, This is to make sure that I’m not taking out a mortgage that is higher than the actual home value. They are known to under-appraise, and it appraised for exactly $470,000. Thankfully.
And so began the period of escrow, which is basically 30-days filled with paperwork. The bank, who had access to my lifetime of financial transactions, got nervous about all the back-and-forth I had done living on both coasts. My original plan was to rent the house for a while before I lived in it, but in the end, the bank insisted I be a full-time resident, or it wouldn’t give me a mortgage with the down payment and interest rate I needed. So I changed my plans in order to buy the home. So goodbye, South Williamsburg, hello East L.A.
After the 30-day escrow period and nearly an entire month of repairs ranging from levelling floors to ripping out carpeting to painting bedrooms, I officially got the keys to my very own front door, which I had painted Tiffany Blue. My roommate is getting ready to move in, and my dog already has already picked her favourite sunny spots for lounging. I’m back to declining brunches because I need to rebuild my nest egg, plus my deck has a better view than any restaurant in the city anyways.
My next challenge is picking the perfect Beverly Hills Hotel inspired Martinique wallpaper for my office slash future third bedroom. Honestly after all of this, I have a feeling I can handle it.