PLEASE Help, need advice. Young dreamer here!

Do you really want to sacrifice 5 years of your life, living with your parents, in order to own a place?

Have you looked other places to rent/buy?

If it were me I'd do anything, even live behind a dumpster, to move out of the parents' house. Talk about serious style-cramping. Dreamer, you're 25! Have fun! Rent in the city for a few years. See how you like it. I know you have your heart set on Manhattan but you might also consider Brooklyn, at least for the time being.

Also, don't listen to a biased party telling you to rent/buy now.

Live with a roommate or two for a few years. Best of both worlds and allows you to save. Just dont blow all your money on partying.

Live your life.

Move out of the house.

At this point, you'll never save enough money to buy anything decent in Manhattan; the down payment is a moving target. By the time you've saved up 20% for a down payment on that one bedroom (which I would recommend you NEVER buy a one-bedroom in the first place), the price of that apartment has shot up beyond your means. So you wait and save more. And the price keeps outpacing your ability to save, and before you know it, you're 45 years old still living in New Jersey in your childhood bedroom.

Unless you're making a significant income right now (over $100K), the waiting-in-the-parents-house strategy is unrealistic. And your 20s will be gone before you know it.

Go. Live life. If you're meant to own, it will happen. But if you're like 85% of New Yorkers, chances are you'll rent your entire life. Don't beat yourself up over it.

Can you provide more details? How much have you saved? You can still buy a nice one bedroom in a doorman building in Midtown East for $500K. Will your parents 'gift' you any funds? They might enjoy having you out on your own as well. That would take a down payment of 100K.

either way, if you don't have some savings you should live at home until you save up.
You won't enjoy living in Manhattan if you can't afford to go out and spend money on fun.
Everyday expenses are more. Food, eating meals out at a restaurant,things like dry cleaning can add up every month.

Living with a roomate just causes frustration especially if they have spending money and you don't.

Hello Everyone. Thanks for your invaluable input. I really appreciate it!

I'm leaning toward your advice as well, that I should just rent, and keep saving on the side. Perhaps it's not the worst thing in the world if I'm never an owner. Maybe I could use my savings for travel, nice lifestyle, nice wedding, etc. And that will just have to do.

@NYCMatt I agree with you.. It seems like a moving target sometimes, and I shouldn't let myself feel like a failure. It's irrelevant, it's like asking "Why can't I be rich??" ...pointless

@Smal By the end of this year, i'll have about 20K saved (I started saving a year and a half ago, so my approximate rate of saving is 12k/yr) I make good money, and am starting a "side gig" so I expect to make in the $100k range within the next year or so, so my rate of saving will surely increase. In addition, my parents wanted to "lend" me about $80k, but I decided I wouldn't feel comfortable tying up their nest egg, so instead we've agreed that they'll "gift" me by matching my down payment (if/when I ever decide to go for it).

Live at home and buy re young.
Find friends in Manhattan and be their weekend couch crash.
If you can tolerate living with the folks there are more bennies than free rent.
Free laundry,free food, free car rentals, furnished home, free cable.
Be the saver, get your prize.

ManhattanDreamer, I agree with West34: roommates are the solution. Unless your parents live really close to the city (Hoboken, say, or Jersey City), in which case you might want to stay home. Better to be surrounded by family than to be suffering in a miserable, bug-filled low-grade rental apartment (and paying handsomely for the privilege!), I think. Do your parents like having you around or are they nudging you out?

You're only 25. Life can change and it's best to be flexible if you want to enjoy it.
Travel and nice lifestyle will introduce you to new places, people and interests.
You don't know where and what you will want at age 30.

Having a nice lifestyle and travel was more important to me than owning when I was 25.

@Triple Hello, Thanks for the opposing opinion. I live on the border of Queens/Long Island, and have a very easy commute via LIRR straight to Penn Station. I really can't complain about my home situation, as my parents are very supportive, minimally annoying, and no bad circumstances to speak of.

However, I don't think i'm willing to try the roommate situation (unless it's someone I know). Besides, what would that really save me? $100/month?? I mean, I've thought about it, and figured that renting a 2bdrm with a roommate would cost me $1,200/month anyway (at the absolute cheapest), where I can get a Studio or 1bdrm for not too much more on my own.

@Falco I feel like you have an underlying valid point, but it's masked by your sarcasm/irrelevance. Thanks anyway though lol I'm at the point where i'm kind of passed the "free ride," and ready to handle the responsibility on my own.

Personally, I would completely have lived with my parents, if they hadn't moved. My parents are easy to live with and never home. I also had a huge network of friends in the city, so plenty of places to crash. What I actually did was live in Queens with a roommate for a couple yrs (HUGE savings). Then I moved into Manhattan and had a roommate until I had saved enough to buy (at age 36). The last roommate was my husband, with whom I bought a 2-BR. Don't rush to commit yourself to real estate and enjoy your life in the interim.

It sounds like you have a nice arrangement now. If you and your parents get along well, I'd stay put. Renting is expensive - and you have to spend considerable cash on things like a deposit and the move (and maybe even a broker's fee). Having the kind of financial security you can have by adding further to your current $20K will give you greater flexibility (where you want to live and with whom) - when you're finally ready to move out.

@ManhattanDreamer

If you are set on buying a place, consider a junior four as you can convert it into a small 2 bedroom 1 bath and take on a roommate to help make the payments. I'm the same age as you, and that is what I am doing/did (submitted board package today).

Dreamer, can you host in your parent's house?

^ Host?

I belong to the camp that says get out of your parents' house. You're 25. People who are 25 need to be on their own. No matter how well you get along, you're still living with Mommy & Daddy, and the free laundry/car/food/cable TV gig is.....embarrassing.

If you're trying to save money, skip the lavish wedding. Your wedding day will be equally happy at City Hall as it would be at some dopey "wedding palace" which will put you $100,000 in debt.

have others stay for the night without them having to have breakfast with your parents. key question in my view as you are 25. If you don't live now...

"^ Host?"

Meaning invite a "friend" over for some kinky slap & tickle without worry of your Mom breezing in with her laundry basket and can of Tab.

@NYCMATT: "I would recommend you NEVER buy a one-bedroom in the first place"

Why do you feel this way? I'm interested . . .

What Lucy said. Living with your parents at 25 (especially on Long Island where it's practically a cliche) = loser

The wildest times of my life were my roommate years (3) on the UES and WV. One big blurry never-ending party.

Sorry, but living in your childhood bedroom as a 25 year old fully employed adult is beyond pathetic.

Hahaha! Thanks for the laugh.. That's what I thought it meant, but didn't want to be presumptive. No I really can't "Host," as I live with not only my parents, but 2 younger brothers. Thank heaven my boyfriend has his own place.... In the "PG" sense of the word, I have had friends stay over, but yes, they have breakfast with my parents lol.

@Isle Thanks for the honesty. I am in agreeance. I just won't feel like an "adult" unless i'm out of the house. I still feel like that kid in high school you know?

For what it's worth, I did that New York Times Rent/Buy Calculator thing, and it said that if I own a 2bdrm for 30+ years, that's when it becomes more worth it that renting. That there kinda says it all right?? I don't want a 30yr commitment, that's for sure. Long term, yes, 30yrs, probably not.

@Bael Congratulations! I admire you, and yearn to be in the same situation. I would definitely consider taking in a roommate (that I know) to assist with payments on something I own. Let's see how I do with savings. Thank you for your comment.

...Still laughing @NYCMatt

Because unless you have a significant amount in savings (and I mean at least two years' worth of living expenses -- and that's soup to nuts, not just "housing") -- and if your primary source of income is a JOB -- you never know what the future may hold.

If you lose your job for any significant amount of time (and these days, particularly at higher income levels, LONGER is generally the rule), you will need the flexibility to easily take in a roommate. You won't be able to command much more than about $500/month if the best you can offer is your living room couch (or worse yet, for you, to relinquish your bedroom and YOU take the couch -- indefinitely).

You'll need at least two bedrooms to do this. Preferably two bathrooms, too.

@West Lol.. Thanks. Good thing I can take constructive criticism. I do find it a tad harsh, as I'm not just here to "mooch" off of them, and eat their food at 3am. I do have a professional, well-paying job (for my age), and am as independent as one could be in this situation. I think the fact that I am thinking about using my savings as an investment in my future, rather than endless partying and using my house as a crashing pad, doesn't warrant the "pathetic" title. But, everyone's entitled to their opinion. I appreciate yours, Thank you.

Dreamer- Your maturity is very impressive. I think you are going to do well whatever path you decide to take. And the bonus...at 25 you have time to try several. Enjoy life and it's adventures.

I am 33 years old. I have friends that stayed at home telling everyone that they were living with their parents to save money. Fast forward 10 years, they are still living there, and likely didn't save much money. Their paychecks somehow became black holes.

I don't know any successful people with realistic ambitions that still live with their parents. Maybe moving out gives the rest of us more drive, not sure. I know plenty of people that rented in their 20's, roommates or cramped apts, saved up money and managed to buy a place in their 30s. I do know a hand full of people that lived with their parents, and did save money to buy a place. These people were extremely disciplined, and saved every penny. Either way is possible, but I think moving out now is better, it will give you a better idea of what you want, what can you tolerate, and real independence. Plenty of people rent for a long time, and I've never heard one of them to say to me wow I wished all these years I lived with my parents to save money.

NycMatt loses his job a lot. Apparently so do his friends. Maybe they should move to detroit and get a two bedroom there where it is more affordable.

@Smal Thank you for the compliment! I appreciate it very much, hope it does get me somewhere :)

@Cra Thank you too.. I see your point about living on your own and having more drive. Although I do consider myself an excellent saver, as I'm not a party lover or drinker, I still can't shake the urge to fend for myself. There is a difference between worrying about my future and planning for my future wisely, which I think i've yet to learn. Right now i'm finding myself with a lot of anxiety and stress worrying about every aspect of this, and how it'll affect me in years to come. I need to just go for it, and enjoy the ride.

Thank you to everyone who gave their 2 cents.

"NycMatt loses his job a lot. "

Where do you get that?

go get an FHA 3.5% down loan, and start deadbeating. you can live in your manhattan home for at least 10 years because no one gonna forclose in manhattan, (seriously, look at the current data)

ManhattanDreamer, based on your lifestyle it sounds like you are disciplined enough to stay in Long Island and live with the parents and save save save. To me, the deciding factors are that a) you wouldn't really be going out and partying much if you lived in Manhattan anyway, and b) you already have a significant other who has his own place.

What i'm more concerned about is a bunch of your assumptions (and that no one else seems to have commented on):

1. what you can buy is much nicer than what you can rent.
In my experience, you can always get something much nicer (for the same net outlay per month) by renting vs owning. Lots of new developments turned rentals out there that are way cheaper to rent than if you bought them.

2. what would getting a roommate really save me? $100/month??
I'm not sure where you're looking, and admittedly its been a long time since i seriously looked for rentals myself, but the cheapest most horrible 1st fl studio i can think of is still going to run you around $1700. You can absolutely get a 2 person share for under $1400 a person (and a MUCH nicer apt to boot). You always pay a premium for having a whole apt, so roommates work out to be cheaper.

3. I did the math, and renting a 2bdrm, even for 20 years, comes out to be cheaper than owning anything.
It does? Again, i'd question what your rental $ assumptions are and if you're considering tax breaks, inflation, etc. Today's rents are STEEP, interest rates are CHEAP, and housing prices are ... well they're pretty much "ok". I'm in the middle of buying my own place, and on day 1 its going to be the same cost as a comparable rental, and there's the benefit of equity (as well as never having your landlord tell you the rent's going up $200/mo).

Anyway, sounds like you're on a good path either way. Good luck!

Hi MH! Thank you for your comments. My assumptions are very general, you're right. Just a few things i've noticed along the way.

1. I got this idea because a realistic budget for me to buy in seems to be around $350k. With 25% down and a maintenance under $1,000/month that would make my monthly payments in the $2,100 range. So, for 350k i've seen quite nice studios and even some small 1bdrms. When I say nice, I mean finished, renovated, livable, spacious, etc. If you look for rentals in the $2,000/month range, you'll find 1bdrms, but most have old bathrooms, teeny tiny kitchens, etc. This is solely a general statement based on the research i've done. Keep in mind i'm looking in the Midtown, UES, UWS area.

2. By saying "$100/month" I was exaggerating a bit. In reality it may save me $300-$400, but is that really worth sharing? I'm not sure. Not that i'm 100% against it, but If I had that choice i'd rather spend a few extra dollars, or sacrifice a few sqft to live alone. And, I know you mentioned you haven't looked in a while, but believe it or not, i've found quite a few lovely rentals in the $1,500/month range. But a 2bdrm rental would run me and a roommate at least $2,400/month, therefore my share would be about $1,200/month.. So, it's give or take a $300 difference. So, you are right, that the roommate situation is cheaper, but is that worth my privacy? I don't know. Perhaps you have a good point. Maybe I could live with a roommate and put that $300 towards savings.

3. I did not consider tax breaks/inflation. I've only gone as far as using that (questionable) NY Times Rent/Buy Calculator, which takes rent increases, and market changes into consideration. All those things aside, I just did lame math, for argument's sake... Let's say I rent a 2bdrm at $2,400/month for 20 years = $576K. Buying that same 2bdrm i'm guessing could be around $550k, plus all the interest i'll pay with a mortgage, could be another $150k, so at the end of 20 years i'm spending over $700k. I don't even know if that makes any sense, like I said, I'm just playing around.

" I got this idea because a realistic budget for me to buy in seems to be around $350k. With 25% down and a maintenance under $1,000/month that would make my monthly payments in the $2,100 range. So, for 350k i've seen quite nice studios and even some small 1bdrms."

HOLD.
THE.
PHONE.

You're not even making $100K and you're looking in the $350K range??

Absolutely not. You cannot afford anything in that price range.

You said in an earlier post that you'll only be able to break into the six figures with another part-time job. Not good. Even if your salary was $125K -- a SOLID, dependable salary, not with the help of a "side gig" -- it would still be a stretch, even with the down payment.

I'm guessing you're making about $85K. That puts you in $250K territory.

'@Falco I feel like you have an underlying valid point, but it's masked by your sarcasm/irrelevance. Thanks anyway though lol I'm at the point where i'm kind of passed the "free ride," and ready to handle the responsibility on my own.'

sarcasm/irrelevance??? WTF Dream Boy???
You ask for advice and I'm the only poster that see's your point. Delay your gratification and buy a place. You can live at home and still manage a social life. You'll have more money for you dream home and you'll be able to do some travel. If I could have lived at home I would have, problem was, I was raised by wolves.

could take five years to save sufficent $$$. You might even meet a potential spouse who would hopefully share desires and also be willing to make sacrifice for a nicer life.

Falco is under appreciated. But he.s no alanhart.

You're a girl. Live at home. No social stigma. You have a boyfriend anyway. If you want to trade up, then move into NYC. Else, save up a huge wad, and some guy will REALLY appreciate you didn't piss it all on shoes and bags. Stay home for another year. Saving up $30,000 in cash is much harder when you have bills. Focus on your side gigs and save. You can move out any time. You seem fine for now.

"but If I had that choice i'd rather spend a few extra dollars, or sacrifice a few sqft to live alone."

peace of mind is priceless....

can get more stuff done at home alone re: sidegig/sidedude than being forced out by roomies (ahhh, memories) to dinner/drinks/friend's staying over so let's entertain lest you be cast the hermit of the pad/etc..

FORGET ALL THE ABOVE. Look into the HDFC listings. They are designed specifically for people like you. They are OWNERSHIP opportunities for middle class people.

If you truly want to own your own place, then sacrificing a few more years at home with the parents should be worth it to you. If not, then all you really want is a place of your own, rather than one that you own--in which case, you rent. Not sure if there's really more to it than that.

I would think that all of us here have all made that decision. If you are really prepared to be on your own (either renting or buying) then this decision is one you have to make to prove your maturity and readiness.

go back to bed.. keep dreaming

@NYCMatt I really, really appreciate your comment. Thanks for the honesty. I'll explain where I got the assumption that 350k was in my budget. Perhaps i'm being naive, that's totally possible, so feel free to correct me: If I were to put 25% down on a 350k place, that's about 90k. With a 30yr mortgage, 5% interest rate, and a maintenance lower that $900, my monthly payments could be in the $2,100-$2,300 range. So, using the "40x your rent" rule, I would have to make about $95k/yr to carry a $2,300 monthly payment. And, as for the 90k down payment, I'm banking on saving up at least half of that in the next few years, and then my parents would match that.... What are your thoughts? Am I in over my head regardless? This hypothetical situation, of course, would require me to stay home and save. I say 350k range, but I'd probably negotiate down a bit to accommodate room for unseen costs, moving costs, and closing costs, etc. Am I putting myself too close to the edge?

@Jbnyc Thank you for that perspective. Seems least complicated, and very clear. While I have it in my head (where it originated I don't know) that I should own, perhaps what I really do want is my own place, and for that reason renting makes most sense.

@Craig Hi! Thanks for your input. I've thought about that but it seems to be such a complicated process. And, very tedious. Even from reading forums on here, people talk about their stress with those HDFC buildings. But, maybe i'll look into it further. Do you know of a site or listing where I could explore this?

@Dealboy Your comment made me laugh, thank you! I'm definitely not the type to fall back on a man, never have been and never will be. I don't even feel totally comfortable falling back on my parents. Oh, and thanks for not making me feel like a "loser" for still being at home LOL

@Falco Hi, sorry perhaps I misinterpreted your tone. (I'm a girl by the way) Thanks for your suggestions :) My boyfriend does have similar dreams (he owns in Brooklyn), but I don't want to put my eggs in that basket. I want to know I can do this on my own.

ManhattanDreamer, the numbers in your latest post are almost exactly the same as the ones I'm using for myself when thinking about my own future purchase, so if people tell you you can't do it, take solace in the fact that there are also others who think you can! (And I don't have the luxury of parents willing to match anything, plus I'm ten years your senior and don't see myself making six figures like you seem to!)

Thinking about it more, living at home looks like a great option. Stay disciplined and save your money. Plus -- and don't take this the wrong way -- I suspect that your boyfriend gets a lot more peace of mind knowing you're at your family's house!

Hi Triple.. Thanks for the comment. Six Figures is my projection, doesn't mean it's a given. As this is something that I really want, I'm going to push myself as hard as I can until I get there. I don't think as if there are any alternatives. I did the same thing when applying to college years ago. I applied to one place only, the place of my dreams, and nowhere else. People thought I was crazy, but I knew where I was going, and didn't see any other options. And, guess what? I made it. We all have our ideal future in mind don't we? That's mine. The career that I have allows for growth in that a figure like 100k+ isn't unattainable for me. Plus, my "side gig" should fill in any holes on the way. So, I am just a young professional who hopes to reach my full potential. Actually, my boyfriend supports the fact that I want to own. We've decided that we wouldn't want to co-habitate until marriage (or at least engagement), and would like to maintain independence in that respect until we find it necessary to discuss the next steps.

I truly thank everyone here for their input and suggestions. I respect you all, and appreciate insight from those who have way more experience than I do.

"If I were to put 25% down on a 350k place, that's about 90k. With a 30yr mortgage, 5% interest rate, and a maintenance lower that $900, my monthly payments could be in the $2,100-$2,300 range. So, using the "40x your rent" rule, I would have to make about $95k/yr to carry a $2,300 monthly payment. And, as for the 90k down payment, I'm banking on saving up at least half of that in the next few years, and then my parents would match that.... What are your thoughts?"

Speaking as a co-op board president ...

You're going to need at an absolute minimum 12 months' worth of mortgage and maintenance in post-closing liquidity. That's close to $30K. AFTER your down payment.

And the "40x your income" is a handy measure for rentals (an extremely liberal one at that), but not quite as reliable for ownership. You need to be much more conservative, because if your income situation changes, it's a hell of a lot easier getting out of a rental than a co-op or condo.

Also, there was a time when I was making $95K/year, and my rent was $1700/month. According to the "40x" rule, I was "easily" affording that. In reality, however, $1700 was tight. And a friend of mine who made an identical salary paying $2250/month found it absolutely crippling. It's one thing to look at these numbers on paper, but it's altogether different when you're trying to do it in practice.

Consider: At $95,000, after every level of government has taken their share out of your paycheck, you're taking home about $1020 each week. It will take you not just one, not two, but two plus a portion of THREE paychecks just to pay your housing expenses. That's not counting the insurance you'll be carrying, or of course utilities. It's financially unhealthy to tie up that much of your income in housing alone. ONE paycheck is ideal. ONE and a portion of a second is still decent. TWO is dangerous. More than two is unacceptable -- particularly when you're in an apartment that you cannot easily extract yourself from if your income takes even a modest hit.

As an owner, there will be months where there will be unexpected expenses: the toilet blows up ... you get a leak in the kitchen and need to replace the floor ... the refrigerator dies ... you need new air conditioners ... you encounter wiring problems ... plumbing problems ... the list is endless. You'll need to have enough of an income buffer to pay ALL your bills ... right down to your food and MetroCard ... AND have at least an extra $500/month to meet these surprise expenses.

Also, under your plan, not only will you BARELY be squeaking by, I guarantee you'll have nothing left over to save.

With these financials, even if you could prove $32K post-closing liquidity, I doubt you'd get a "yes" vote from my board. $350K is just out of your reach. Revisit the idea of buying when you're making $140K/year, or when you've settled on something in the $250K range.

Real estate is not all about dollars and cents. If you can make renting in the city work, by all means go for it. You're only young and free once - you have your whole life to be a homeowner. The experience of being on your own in the city is priceless in my humble opinion. Ownership for the sake of ownership (or for the belief that it is automatically a money-making investment) is a thing of the past... especially since the small apartment you want to buy now will likely only last you a few years before you (and maybe Brooklyn boy and some little ManhattanDreamers) need more space. Given the high transaction costs of buying and selling, a short hold period is kryptonite to your investment. The friends you make, fun memories, eye opening experiences, professional connections, potential mates, etc. you make living in the city will last a lot longer than your 1 BR!

And if your parents are willing to support you by feeding you and paying your utilities now, maybe you can score a little allowance to ease the transition into the city. And finally... do not spend all your available cash and savings on a downpayment. Having 100% of your liquid wealth in an apartment is very risky. What if you get fired (or alternatively, have a once in a lifetime opportunity outside of the city) or have an illness in the family or an unexpected baby or whatever - do you really want to have close to nothing in the bank and need to sell in a hurry to get access to cash?

@FreebirdNYC: Ditto.

ManhattanDreamer,

I commend you for your "youthful" ambition of owning your own home in the not too distant future. I think assuming homeownership early in life without it being too onerous for you is a great idea. (If that is the case.) I believe in "bottom fishing" in real estate as in stock investments. It appears real estate for sale prices have come down quite a bit from the high of the real estate boom in 2007-2008. In fact, at one point, around 2 years ago, I was wishing I could have put my son's $200,000 college fund into real estate at the low of the market. Unfortunately, that was not to be since the family still values the traditional route of going to a good albeit expensive university like NYU. Now, sonny has struggled to rent off-campus housing for ridiculous amounts in sum ($4000 to $5500/ month) for 4 people in Brooklyn (starting with a disaster in Bushwick that I will start a new thread on in the near future; for now, still dealing with the mess from that unpleasant experience :( ).

Anyhow, the rental process in NYC is so unpleasant to me (my first on behalf of sonny) I am almost thankful for what I have to deal with, which are just the stringent requirements of a mortgage company for a loan on a condo purchase in Brooklyn. This mortgage application seems like a piece of cake compared to the brutal rental process in NYC, along with high income requirements (even more so for guarantors, who have to make 80x monthly rent).

I have purchased and sold around 5-6 properties. Only one time, I bought at the high (1989) and had to suffer years of renting it out. Even so, that rental quickly became self-paying in terms of mortgage payments and maintenance costs (minimal on a new condo development). I would have made over $400,000 if I had held on and sold just a couple of years longer. Unfortunately, under pressure from my husband who did not want the hassle of owning, we sold too soon and lost $95,000. But after that initial purchase, I have come out ahead in my real estate purchases. Including houses in Summit, NJ: Long Island: Fire Island, etc.

So, my point is I think you can do well with real estate if you can buy at a relative low (which it is right now, though we do not know what the immediate future brings). And if you can hold the real estate over time. Manhattan or NYC (the overflow of Manhattan-like prices and demand in Williamsburg and Greenpoint, Brooklyn is incredible) real estate is really limited in supply, compared to the demand for housing units in what we can say is the most exciting city in the US, if not in the world.

If you have a long term horizon and can afford the monthly payments and upkeep, I recommend you purchase while the real estate market has taken a hit and interest rates are gloriously low (I remember my friend buying a condo with 18+% interest rate on her loan in the early 1980s). Parts of Manhattan have now gotten "OK" price wise, even with moderate maintenance fees. So, while you have personal considerations and a great set up with your parents, I also believe in real estate as a long term investment that will also allow
you the pleasure of independent living in a very stimulating and exciting city.

@Matt - "Consider: At $95,000, after every level of government has taken their share out of your paycheck, you're taking home about $1020 each week."

Wow; that just shows how insane NY taxes are. I take home just slightly less than that (we get paid monthly, so this is an approximation), and my income is closer to $70,000 than $95,000.

(My boss, who's in his fifties, doesn't even make $95,000. And *nobody* under 30 gets paid that much at any Japanese company.)

Matt, I'm curious as to why you're so hung up on income as opposed to equity percentage. A high income is only relevant when there's a mortgage to be paid off. Once that's done -- and it would be done awfully quickly if Dreamer (or I, for that matter) were putting $200k down on a $250-300k place -- all that matters is maintenance, and *any* job in the city will earn enough to pay the sub-$1000 maintenance that a typical 1BR requires.

"Matt, I'm curious as to why you're so hung up on income as opposed to equity percentage. A high income is only relevant when there's a mortgage to be paid off. Once that's done -- and it would be done awfully quickly if Dreamer (or I, for that matter) were putting $200k down on a $250-300k place -- all that matters is maintenance, and *any* job in the city will earn enough to pay the sub-$1000 maintenance that a typical 1BR requires."

In this case, I'm "hung up" on income because Dreamer is stretching just to put 20% down -- with, from what I'm able to surmise, little or nothing in the way of post-closing liquidity.

In this case, Dreamer WOULD have a mortgage to pay off, and according to Dreamer's own numbers, a $95K/year income is not adequate to service that kind of debt.

@NYCMatt Thanks for sharing your personal renting experience, as well as your friend's. That's really interesting to consider. I wonder where/why they get this 40x rent rule then? It's like setting us up to fail. Anyway, I already figured that a typical NYC co-op board would reject me, as they seem to lean towards the "wealthy." (no personal offense intended, and I totally understand why they do what they do) Even though I have virtually zero debt, and excellent credit, I know that I would not be approved, unless it were a WAY more lenient board. Some things will probably always be out of my reach, and i'm okay with that.

@Freebird You and Matt have excellent insight. I feel that the best approach here is to go with my heart, not my head. After-all I don't want to lose sight of my original dream, which is to live in Manhattan. How I get there should be the simplest way. Not to strap myself with a mortgage that ties up all liquidity for 30 years. But, to have the freedom to move about as my life changes course. Unless I manage to become a millionaire somehow, I feel like owning will be more of a headache, and for what? Just to say I'm an owner? While all my peers get the full experience of what this city has to offer, I should be sinking into a hole and fighting to keep my head above ground? And you hit the nail on the head when you acknowledged the fact that in 5years I could have enough to buy the 1bdrm, but I could be at a point in my life where I need a 2bdrm. Then i'm back where I started.

@rlr Congratulations on your success in this crazy field of Real Estate. You seem to have accomplished the dream, and then some. I agree with your suggestion to take advantage of the low rates/prices right now, but unfortunately i'm not in the position, and probably won't be for a while. I truly wish that I was. I think I have to understand what others are saying, and that is to NOT think of this as an investment, because I don't plan to hold on to an apartment for 30years, so I wouldn't benefit on any returns anyway. Real Estate investment may not be the route for me at this time, just looking for a place to rest my head. I hope to be an investor...some day.

To all - I think I, like a lot of people on these forums, have some kind of deep love for Real Estate. It "gets us off" in a sense (sorry for the inappropriate reference) I really love the game, and want to be a player. Hopefully one day I get my chance.

"I wonder where/why they get this 40x rent rule then? It's like setting us up to fail."

Because if landlords weren't at least this lenient, NO ONE would be able to afford to even rent.

***

"Anyway, I already figured that a typical NYC co-op board would reject me, as they seem to lean towards the "wealthy.""

Not true.

We lean towards the financially solvent. The fact of the matter is, however, that because NYC real estate is so expensive, it is true that generally speaking, buying is affordable only for the "wealthy". This is why 85% of all New Yorkers RENT. This isn't a bias, this is just how the market is; Manhattan real estate inventory is pretty much a showroom full of Mercedes, Porsches, and Ferraris. No one ever said EVERYONE could afford to buy in this showroom.

@NYCMatt I see what you mean, and like I said, I agree with their (your) logic and why they (you) do what they (you) do. I would too, to protect myself. Nothing wrong with that at all. You're right to compare it to a luxury show room. I harbor no resentment towards boards, or anyone for that matter. Thanks again. Your opinion is invaluable given your position and experience, and I'm truly grateful :)

@Dreamer: I was in your position back when I purchased my first co-op, but I was already at about 6 figures and bought a fixer-upper in a great building for ~$250k (never buy the most expensive house on the block right?), which I gutted and renovated and then sold for a tiny gain of about $10k several years later. Granted, my *net profit* was small, but when I factored in the equity I was getting back in cash after selling, it was 100x better than renting and gave me the liquidity to move up and purchase a new larger apt.

The monthly costs are surely an important aspect to consider, but if you really are looking years down the road with regards to your future, equity and liquidity for your *next* apartment is another very important aspect that you cannot forget about.

Hi ManhattanDreamer

Many first time buyers face the same issue. However, there are ways to make it work. First, crunch your numbers again using more accurate mortgage rates. You would not expect to keep a one bedroom for more than 5 to 7 years. Using that as a baseline, 5/1 and 7/1 ARMs are much less expensive than the 5% you're using in your model. Recent 5/1 rates are 2.375% ($385 per $100,000) and a 7/1 ARM is 2.675% ($402 per $100,000). Ownership can be a better deal financially than renting - you have to run the after tax effect on income. There are other strategies and potentials for first time buyers with low income and savings. And there are apartments that are available in your price range. Not that it's really easy to find them, but they are around. I recently saw an apartment on Streeteasy in a great location for just under $400k (probably will go for the high $300's when it sells.) As for down payment - many first time buyers borrow money from family and repay them over time. Whatever you do...Good luck!

You're welcome, Dreamer. And thank YOU.

Matt how do union dues factor into the income equation?

nbnyc,

Excellent point and What I was trying to get to in my own post except I got bogged down by my own wordiness.

Sorry, typo, meant to address "jbnyc" in my last post.

@JBNYC That's pretty great! I wouldn't mind a fixer-upper at all. And for $250k?? That's surely a steal.

Hi Manhattan Dreamer...

I'm in a similar position, almost exactly the same. I'm 25 as well and have been renting with roommates for the last 4 years. I've had decent jobs since I've been in the city and made over $100k most of my time here. I lived on the UWS to save money and have more space and didn't really need the "hip" and "cool" scene downtown. I figured I've probably spent over $60k on rent over the past 4 years and have absolutely nothing to show for it but monthly statements. I've been at the process for a few months now and getting close to closing on a 1BR condo in Manhattan.

All this to say, I figure rents aren't going down anytime soon, inventory doesn't really look to be increasing, and mortgage rates are sitting at all-time lows. With that in mind, why would anyone rent? In addition, when you factor in programs such as FHA and SONYMA mortgages, which allow you to put a minimum of 3.5% down (with PMI and MIP until your LTV is 20%) and 421(a) tax abatements which can save you a significant amount of money over a 15-25 year time period. Most of the new inventory coming on line now doesn't have an abatement; these are also transferable upon sale or disposition. From a financial standpoint, you can look at buying as a speculative play/view on interest and mortgage rates. Think of the stability/predictability you're affording for yourself if you can lock up 30 years of financing for as little as 3.75% with FHA. Some sovereign governments can't even do that. You've effectively stabilized one of your largest monthly costs for the next 30 years. Let's face it, you're always going to have uncertainty, volatility, and unpredictability. The trick is to control as much as you can control, while you can control it. I’ve looked at my monthly principle and interested payments for the next 30 years, barring no refi’s, and it’s roughly $1,650. That’s a good thought to have as opposed to a rent that fluctuates.

I'm not even going to get into my view on Manhattan real estate. But this island is the most iron-clad real estate market in the world. It's a global city, largely buoyed by international demand. And at the end of the day, they can't just cut down more trees! Furthermore, coming from where we’ve been, if you’re down 20% this time next year, then we’ve got bigger problems on a macro scale.

Bottom line is, if you have good credit, a decent amount of cash saved up, and actually want to accrue equity, then give strong thought to purchasing. Depending on where you want to live, there are some good deals out there. If you’re not hung up on being in the trendiest areas, you can make this work with a downpayment as little as $15-$18k. I hate to use the cliche, but where there's a WILL, there's a WAY!

Why settle for a fixer-upper for $250k when you can have a ready to move in unit for $50k more: http://streeteasy.com/nyc/sale/622123-condo-461-west-150th-street-hamilton-heights-new-york

Manhattan Dreamer...something I really like about your vibe, which just comes through in your posts...

You sound Independent and adventurous, willing to think and investigate for yourself!

I would encourage you to come and take a self-guided walking tour in Harlem and see and experience the variety of micro-neighborhoods, for yourself.
You might want to start with the 8th avenue corridor from 110th up to 125th...and then do the same with 7th, Lenox, 5th and Madison avenues.
You alone know the level of comfort that works for you...
There are still tons of Opportunity precisely for someone as yourself, especially within the realm of HDFC Units as someone has already mentioned. They do run the gamut from Excellent to not-so-hot; but again, its a situation that you have to determine what works for you!
There are over 100 properties in East to central Harlem LESS than 250K!
Though, in my humble opinion, these opportunities will become fewer and fewer as time progresses, if only for the simple reason that "Prime" Manhattan which shares the same Island, same Public Transport, etc, but is just 20-30 blocks south of Harlem...this "Prime" Manhattan has prices easily 1.5-3+ x's the cost of similar properties in Harlem.
If you do not already truthfully know from experience, these days, there are some areas of Harlem which not only readily resemble some of these areas of "Prime" Manhattan, they have similar services, businesses, demographics that have changed incredibly within the last 3-5 years, and most importantly less congestion and less of the frenetic pace that is more associated with "Prime" Manhattan.
Again, the important thing is to see and experience for yourself, and then proceed from there, or not...as the case may be!
I like what I sense as your spirit in your posts, and I imagine you may find a welcome in some areas of Harlem that may pleasantly surprise you!
I don't say the same for many, some especially so, but I venture you may like things.....

Dreamer:

http://streeteasy.com/nyc/building/333-east-85-street-manhattan

http://streeteasy.com/nyc/sale/568863-coop-235-west-102nd-street-upper-west-side-new-york

http://streeteasy.com/nyc/building/2788-broadway-manhattan

140 west 69th. http://streeteasy.com/nyc/sale/663705-coop-140-west-69th-street-lincoln-square-new-york

OMG - you need to move out. Be an adult. Your considerations will change. Life will change. Ownership will tie you down. Why give up your freedom? What's the rush? Plus Manhattan is a great idea when you're 25, but there is a reason that a lot leave in their 30s. You are never an adult living with your parents. Go read some Sartre.

>Isle Thanks for the honesty. I am in agreeance. I just won't feel like an "adult" unless i'm out of the house. I still feel like that kid in high school you know?

Did you use the "word" 'agreeance'?

@HomeBody Hi! Thanks for your input. Nice to know others my age are thinking the same way. Congrats on being close to purchasing, and a condo! That's wonderful.. I'm not hung up on living in the trendiest area, UWS/UES is fine for me, just not sure I'd want to go as high as 150th. I feel like if i'm going the New Dev Condo route, then i'd probably look into Williamsburg or Astoria and Forest Hills areas, as i'm more familiar with them. Then again, that's coming from ignorance because the truth is I haven't explored uptown at all. My logic is that if i'm living so far up, my commute is similar to if I was still at home in Long Island you know? But, maybe that's irrelevant when I could have my own place. Thanks again, I appreciate the opinion!

@Lenox Wow, thanks for your post. And, thank you for the lovely compliment. I should really expand my horizons. Many of you seem to have that same suggestion. I'll definitely keep your ideas in mind, and perhaps drag my boyfriend along on a tour of Upper Manhattan :)

@NYC Great Listings! It's funny because my friend just moved into the building 2 doors down from 333 E. 85th. We moved her, her husband, and their 5yo son in this weekend. A 2bdrm HUGE rental for $2,000/month! They seem to have amazing prices up there, and it's an great area. It'll be even better when/if the 2nd Ave subway ever comes along. I'd definitely consider. Thank you! And thanks for the others as well, I love 102nd & Broadway. I worked in the hotel on 103rd during college and LOVED the area. Very young crowd from Columbia.

Hi MD:

I agree with you about distance...hence the reason I didn't chose that development and probably the reason they haven't sold a single unit. Just wanted to bring it to attention. I know many people will disagree with me on this, but I think after a certain distance, you lose the proverbial "Manhattan premium" (which you still pay for by the way) and you'd be better served living in another borough...you'd probably have a shorter commute as well. What that distance/street # is, I don't know. I also don't think it's be a good idea for me to start listing street #'s. Besides, areas change fast, and what's too far today, could be just right 5-10 years from now. Who knows. But distance and location is definitely not irrelevant, even though it's your own place. As much as this is a big accomplishment with a lot of emotion, it's also an investment and business decision with economic implications that exist for a long time. Therefore, you have to be conscious of resale even though you're not really thinking about flipping it when you buy it...at least I hope not.

I'm also glad you're giving thought to this important decision at such a young age. Whatever your outcome/final decision, you'll be better served for having thought about it, and you'll be much further ahead of your cohort.

That area in the 100's on Broadway is VERY nice! I live there now and will be very sad to leave. Pity it's above my purchasing price point. Prices in that area have really moved over the last few years, new restos have come in, and transportation is great! I've been on the same street for a few years now, and it's always been my "suburbia in the city." Nice, quiet, residential, and family-oriented. Only drawback is that it's stroller paradise on the weekends. So be careful when you venture over to Whole Foods and Home Goods. But I love to cook and there are so many grocery stores within a 30 block radius: Whole Foods, Trader Joes, Associated, Fairway, Westside Market, Garden of Eden, Gristedes, and Citarella, just to name a few. Not to mention, a plethora of bodegas for that last minute ingredient that you forgot.

Oh, also meant to say, regarding resale, you have to consider, "What's going to draw a potential buyer to chose this apartment/location as opposed to another?" Unless you've got a massive appetite for risk and speculation or huge conviction on a particular area developing, an area that's hard to sell now will probably be hard to sell later. Price isn't always the only consideration. I definitely went above my target price on the basis of one area being better than another.

But yes, take a walk around upper Manhattan. I'm sure you're familiar with the development that's taken place around the 117th-125th corridor: Red Rooster, H&M, Chocolat, aloft, Harlem Tavern... There's also good express train service there with the 2/3 and A/D. I don't think you'll be disappointed. You can do a resto/pub crawl up there and not leave the neighborhood.

@LENOXav - Sorry to repeat your thoughts, but I agree.

@ManhattanDreamer - You might want to check out some of the listings posted in the thread about "moving back in 2-3 years" that I made; we have similar budgets and they might appeal to you too!

@Homebody:

"With that in mind, why would anyone rent? In addition, when you factor in programs such as FHA and SONYMA mortgages, which allow you to put a minimum of 3.5% down (with PMI and MIP until your LTV is 20%) and 421(a) tax abatements which can save you a significant amount of money over a 15-25 year time period."

OMG, here we go again. Have we not learned our lesson about down payments of less than 20% or tax abatements that will eventually bite you in the ass??

***
"I’ve looked at my monthly principle and interested payments for the next 30 years, barring no refi’s, and it’s roughly $1,650."

What will be your monthly outlay when your tax abatement ends?

@ManhattanDreamer "I wouldn't mind a fixer-upper at all. And for $250k?? That's surely a steal."

Here are two real world examples:

Family Friend: Purchased a 2BR coop apartment in Sunnyside, Queens for $260,000 which required a small amount of work, but she also wanted to tear down a wall and move the kitchen. 4th floor corner apartment. She is a little older than you and works as a kitchen designer. She ordered her kitchen direct from Italy, although it hasn't arrived yet. Her parents paid her down payment and possibly paid her renovation costs. She had no problem tearing down the wall or moving the kitchen.

Me: Just closed on a 2BR coop apartment in Upper Manhattan for $305,000 which is not in bad shape considering it was an estate sale. 4th floor corner apartment. I am older than you or the family friend so, I put down my own money for the down payment and will pay the out of pockets costs of the alterations. My closing was delayed over a month and cost me close to 2 grand in fees because the management company of my building made unreasonable document demands from the estate. Both my attorney and seller's attorney were in shock at the amount of and type of paperwork requested. In their collective 50 years of doing RE transaction they have never seen such requests.

Now after closing, I am encountering the same kind of unreasonable paperwork demands from the management company and the Board. I had planned on a partial wall removal, and submitted the alteration proposal according, but after making what I viewed as unreasonable paperwork demands, I have now submitted a revised proposal without the wall alteration. I had a difficult and delayed closing because of paperwork demands, and decided I was not going to allow that to happen after closing, now that I am on the hook for the carrying costs of the apartment.

I know you have your heart set on Manhattan Island, but you should consider the outer boroughs too. Sunnyside, Queens is a very nice part of Queens.

But, generally be aware that when you sign a contract for the purchase of an apartment, you are now married to the seller, the seller's attorney, the management company, the superintendent of the building and the Board. If any of those participants are incompetent or of mediocre intelligence, then your purchase transaction and subsequent living conditions will be negatively affected.

If I had known before signing the contract, the type and quality of the people I wound up dealing with before closing, and will now continue to deal with after closing, I doubt I would have signed and just walked away. But, it is difficult to know these things before signing a contract.

Nevertheless, good luck.

@ManhattanDreamer - I did exactly what you are asking. I saved and then purchased an apartment in Manhattan. If your dream is really that important to you, as it was to me, don't let anyone tell you to forgo it.

It is possible to do but most of it comes down to how much you make vs your expenses vs what type of property you plan to buy vs what type of lifestyle you would like to live. The financial aspect is not something I really want to get into here but if you can save around $30K a year, you'll be able to have a nice size down-payment on a $500K apartment in around 5-7 years ($150-$210K). You can save less but it'll take longer or you'll be buying a smaller apartment. You'll really need to work on the numbers! Don't do the %10 down; you'll most likely get into trouble later on and be spread to thin. You most likely won't have much of a life either. Much of the analysis depends on your yearly expenses (mortgage / taxes / maintenance) after purchasing your apartment, given your income.

Instead of living at home with my parents, I found rooms to rent on the UES or UWS through craigslist. These were apartment shares; I had roommates. My objective was to find rooms that cost $1000-$1200 total for everything including all bills. Were they ideal roommates? No. But I found them in areas that had a high standard of living that I would be paying around 2.5-3x the amount if I were to rent in the same location on my own. Could I rent on my own? Yes. Would I have been able to save enough so quickly if I rented a $2500-$3000 a month apartment by myself? No. Once I found a place I would save like crazy. I certainly indulged -- vacations, eating out, etc. -- but they were all loosely budgeted. I trying to save a certain amount per month and would adjust my spending accordingly. I then always saved my entire bonus for the year. I did this for ~5 years, 27-33. Since I was saving before I moved into the city I also had a small, but substantial base savings. I purchased in 2009 when the market dropped with an interest rate of %4.5. (I know it's lower now but hey, who knew it would continue to fall back in 2009?) I purchased a 1 br condo. Since it's a condo I can rent it if I decide to move out and my tenets can put in equity and, when rents rise a bit, I can make a few dollars too. It's a great nest egg. Remember the three tenants of real estate: location, location, location. Save much and choose wisely.

Don't give up on your dream if it's what you really want. It was certainly one of the best accomplishments of my life. Even now, almost 3 years later, virtually every time I come home from work and I walk through the door I remember that I own my place, the space and that I have a Parcel Identifier identifying me as owning a piece of Manhattan real estate. I then remember the sacrifice I needed to make to get it and it fills me with a sense of satisfaction of being a home owner in the greatest city in the world. Was it worth it?

It's worth it 100%.

@NYCMatt,

I think there was a lot of careless lending during the boom and ensuing bust; however, I don't think that by using an FHA or SONYMA loan, one is more inclined to default or foreclose. These programs have pretty stringent requirements and not everyone qualifies. Also, I'm of the opinion that greater emphasis should be placed on a borrower's credit rating, earning history, and liquid assets. At 25, I have a 770 FICO but don't necessarily have 20% to sink into a downpayment. Even if I did, I don't think it would make fiscal sense to drain all of my liquid on the illiquid downpayment. To me, the more financially prudent decision would be to put less money down and preserve sufficient cash for closing costs and unforeseen circumstances: that's how you prevent rapid default and foreclosure. Again, I hate to use a cliche, but at the end of the day, CASH is king.

Regarding your second question about the expiration of the abatement, I have no idea what the assessment will be. I'm sure it will be a function of the prevailing market. However, I don't plan to be there 25 years from now. Nonetheless, you're question is rather moot because newer developments don't have abatements and 25 years from now, I'm not sure if buyers will expect them.

Anything else...?

This is the best advice you will ever get - LIVE WITH YOUR PARENTS. Save every penny you can. Then buy a fixer-upper, get a few books, spend your weekends at Home Depot, and fix the heck out of your space. Start looking for a place to buy now so you learn the market. That way, when a deal comes along (and it definitely will), you will know that it's a deal and be able to move quickly. You are closer to your dreams than you realize, and by the time you are 30, you will be sitting pretty while most of your age group will be moving every year because their landlord jacked up rent again or won't deal with their 30 year old appliances. They will have nothing to show for the 5 years they spent renting and partying in Manhattan or Brooklyn, you will have a home.

@Ace - Fantastic post. I did almost all the same things, and at the same ages. Nothing like having property that you own.

Hey Dreamer - Don't forget that whatever numbers you're running in your affordability calculations, you should be adding ANOTHER 10% of your gross income for retirement savings. Really.

After reading a bit more in this thread I should add that I made sure I had enough money left over to cover ~24 months of expenses. In addition, I put enough down that I am still saving today given my monthly expenditure on the apartment: morg/tax/maint. In addition to all of that, I made sure that I could pay all my bills: don't forget your cell phone, electricity, cable, home insurance (which is now a requirement for condos thanks to frank-dodd), etc... I cut out a few things and I remain on the frugal side -- how else do you think I saved so much? -- but I still have a very good quality of life that I enjoy.

@Argopo Thanks for your comments. Sorry that you had such trouble with the board. I know that depending on the building, you never know what you're gonna get and it's a serious commitment, as you correctly compared it to a marriage. You're situation is a good example of why I'll need to have back-up savings for unforeseen costs. Yes, I do like Queens, I currently live on the border of Queens/Long Island. But, if I'm going to invest my life savings, and pour most of my money into this, I think I should live where my heart is you know? Or at least give it my best shot.

@NYCAce Fantastic post indeed! Thank you so much. This seems like the best game plan for me, and thanks for the encouragement that this isn't an impossible dream. 30K a year is definitely a reasonable savings for me. I appreciate your input. Congratulations on your accomplishments!

I just wanted to say something un-related, but interesting. So, I was looking at the building that my friend and her husband and son just moved into on 85th St. (the one that I mentioned in an above post). I see that they updated the listing for her apartment and noted that it's now been rented. However it says "Now Rented for $2,200" This is false, I happen to know she pays only $2,000. I just thought it was weird that there's false info posted. I find this upsetting, as I use this site and the information it provides as a guideline and to educate myself on the current market, as I'd assume all of you do as well.

As fate would have it, one of my best friends called me yesterday and said that she needs to get out of her house, and suggested we find a place together! We have similar goals to own in the future, and want to save. We also both have professional jobs in Midtown, almost exact same credit score, similar income, so this seems like a really good fair balance. I'm showing her this thread and all of the amazing advice i've received here, so once again i'd like to say a big THANK YOU to all! Not to get off topic, but I saw someone mentioned how ridiculous NYC income taxes are these days, and i'm seeing that now! I make about 10k more per year than my friend does, but I only take home $12 more per week than she does! That's really ridiculous no?

(for anyone who cares) I'll update the thread once/if we find a place, and figure out what we're doing. Thank you!!!

@MD: While NYC income taxes do take more of your money, it is not what is taking that extra $10k that you earn over your friend. Has to be something with your exemptions, differing withholding %, etc.

Hi JB.. You're probably right..Of course i'm not aware of the details, but just as a comparison i found it interesting.. Also, I'd imagine we're mostly similar since we're both living with the parents, etc. I could be wrong.

@ManhattanDreamer - Take your time and find the right place to co-rent. Saving $100-$300 a month off rent adds up faster than you might expect, and don't forget to incorporate your bills into your budget!

I also suggest printing out the open house listing every weekend on street easy and making the rounds on Sunday. You can visit apartments without any type of commitment. Ask tons of questions and educate yourself. Make it a game: why is the properly good? why bad? Why is this one on the market for 3,6,9,12,24 months? Think about the apartment details and amenities: layouts, apartment locations, southern facing/Northern facing, number of rooms, doorman, elevator, pool, weight room, etc. Focus on differences between co-ops and condos.

Find a good RE attorney. You will most likely not need a buyer's agent if you do your homework and know how to locate properties (street easy!). Get a history of the sale price of the property and compare the current apt price to relative to other building and the same line in the same building.

This "free" education will payoff when you decide to buy.

One last pointer, when you finally decide to purchase go much more by the numbers and much less by what RE agents tell you. Play hardball! They will say anything to get a sale. Trust me.

Live the nightmare, put all your equity into a place in manhataan, take out a huge mortgage, watch your apartment depriciate over time when you try to sell you can't, when you lose your job, find a sugar daddy to pay your mortgage and other living expenses and tell everyone you are a successfully real estate broker

I would wait until marriage marriage to buy as that should change the financial situation (unless you are marrying a bum). However I would agree with others that moving out of the house at this point should be a priority, damn the money you could save living at home. You will have a much different relationship with your roommates than with your parents. Also, how can you know where your heart is if you haven't lived there before? Test drive (rent) before you buy. I have lived in several neighborhoods inside and outside of Manhattan, none were anything like my preconceived notion and after living there I had a good idea of what I considered the best and worse blocks for me personally.

I think your life plan is looking too far ahead, especially being in the dynamic phase of life that you are in. First, I wouldn't count on that $100k salary. Look how many managing director/partners your firm has compared to analysts/associated - most people clearly don't ever make Tribeca loft money. Of course your prospects will depend on industry - finance and law are the most likely to hit $100k for a young professional but also the most ravaged by layoffs at the moment. On the other hand, if you buy sooner than later, the possibilities of going back to school, changing your parenting plans or accepting an international job offer are all jeopardized.

Finally, there was another thread that pointed out that each $1,000 spent on real estate is 142 beers not being had out with friends. In your case, it seems to be 5 years living with your parents. When you look at the real opportunity costs you have by devoting 5 years of your life to a downpayment, is it worth it? Paying with 5 years in your 20s is a high cost and that could be a lot of nights out on the town, people you could meet, parties thrown at your own apartment, etc. that you are giving up. Most people buying $500-700k apartments in Manhattan are in the 30s and can afford both the downpayment and beer.

Sorry my prior post is riddled with typos, I haven't had my coffee yet.

Well said, Paul.

My two cents..get in the game. It may not be your dream apt., but it will be yours and you trade up or buy the apt. , next door if it becomes available. Visit your parents often, not just for the free dinners but because you obviously have a wonderful relationship, take their down payment offer and say thank you. Find a stable building with low maintenance and enjoy yourself. If times are tough, bring in a roommate or make sure the coop/condo board allows sublets. I wish I got this advise at 25... Most importantly.. Have fun.

"My two cents..get in the game. It may not be your dream apt., but it will be yours and you trade up or buy the apt. , next door if it becomes available. Visit your parents often, not just for the free dinners but because you obviously have a wonderful relationship, take their down payment offer and say thank you. Find a stable building with low maintenance and enjoy yourself. If times are tough, bring in a roommate or make sure the coop/condo board allows sublets. I wish I got this advise at 25... Most importantly.. Have fun."

***

-- Dreamer is not ready to get into the game. Not with an under-$100K income in the $350K price range, with no post-closing liquidity.

-- "If times are tough, bring in a roommate ..." Very, very difficult to do in a studio or one-bedroom. This is why I recommend never buying anything smaller than a two-bedroom, for this very reason. Also, so you won't be forced to move immediately when you take on a significant other or have a baby. Studios and one-bedrooms are fine for renting. Not fine for *buying*.

ManhattanDreamer: Thanks for asking a question that is thought-provoking AND related to real estate. I've had some time to think about your situation. We know so little about you (and please, don't provide any more details) and yet are all jumping to advise you on major life and financial decisions.

My gut says that:
1) You are financially conservative and prudent. Probably have been so from a young age (affected your choice of major, profession, etc).
2) Your desire to have a nice place to live is stronger than your desire to escape the parental coop.
3) Related to 1) - you've spent a lot of time mulling the tradeoffs between living by yourself in Manhattan earlier v. having a nicer place that you own v. having more savings to do whatever you want to do
4) The life that you envision living in Manhattan is more sedate - closer to yuppie 20-dom, rather than living with 4 roommates in Bklyn, going to parties, clubbing, finding yourself, dating (I'm so far from that I lack the vocabulary to describe that lifestyle).

What I think:
1) Max out your retirement savings - time-value of $. Max out 401(k), Roth IRAs.
2) Look for apartments to buy that break even with respect to renting. They exist. Maybe they're in HFDC or ex-HFDC or similar with very low property taxes (w/o abatement) and by extension, low maintenance. Look for apts that allow for easy subletting and possibilities of having roommates. Think about resale value.
3) Don't rush into any deals to buy. If you want to try living in Manhattan for a while, rent.

Listen to nyc10023, very well thought out and generous consideration of a 25 year olds quest for independence and a piece of the rock. Nicely done. I will send my children to you with their quests. :)

i am not one for extremists as dealboy seems to be here, but in the long term, i'd have to agree with him.

"Dreamer is not ready to get into the game. Not with an under-$100K income in the $350K price range, with no post-closing liquidity."

Matt, you're doing it again. The ratio of income to home price is completely immaterial without knowing the size of the mortgage. Someone with $100k income buying a $350k apartment with no money down is in much more dangerous territory than someone earning $50k who buys the same apartment with $250k down, who will do just fine.

Earning $100,000 per year means, roughly, that you earn more in an hour than a minimum-wage burger flipper earns in a day. Only a tiny fraction of society will ever reach such rarefied heights. For us mortals who will never get there, dutifully and diligently saving our money is the clear route to home ownership. Stop pretending that this path doesn't exist.

@Triple Zero: Your examples are 100% correct, but Dreamer has only said that she has about $20k saved and could possibly get up to another $80k from her parents, which she doesn't want to do. So it would seem that Dreamer is setting herself up for $0 in post-closing liquidity:

For condo @ 10% down (which may be unlikely) she needs $35k, which is more than she has saved.

For co-op @ 20% down she will have to borrow $50k from her parents ($70k total), which is also more than she has saved.

I have to agree with Matt here.

@jbnyc - She only has $20k saved *now*, but seems to want to aggressively save in the near future, and seems willing to accept a (very generous) matching down payment from her parents. I should probably add a third scenario: $100k down on a $350k purchase, plus an aggressive pay-down of several hundred dollars per month. I suspect she'll own her home free and clear long before she's outgrown it.