Friday, March 14, 2008

Mc Mansions --- A Drive Down Peachtree Dunwoody Rd (Part 1)

Fashionista and I were driving down Peachtree Dunwoody Rd in Atlanta the other weekend on our way to a girls lunch/gossip session. (For those of you not familiar with Atlanta – that part of town is where the mega McMansion’s reside). Fashionista and I were ridding along and couldn’t help talking about homes with for sale signs advertising their price and size. There we two homes in particular we(me) couldn’t believe a 7bd/8ba house of 4.3 million and a 6bd/6ba house for 3.7 million. I say we(me) because Fashionista said sees herself in a home like that one day.

I on the other hand, even if I had a billion sitting in the bank I don’t think I’d use some of that money to buy one of these homes – I mean what would you do with all the bedrooms, these homes are so large they already have offices, gyms, craft rooms, and just about every other room type most of us “normal” folks would use extra bedroom(s) for.

I commented that I wanted to know what these people did for a living. I mean seriously what do these people do to make the kind of money to buy/ qualify for a mortgage to buy these homes. It’s not just like there’s only one house like this and a Donald Trump type lives there, these multi-million dollar homes are all over plus there’s a ton of condo’s coming into the market that are selling at over a million dollars. In fact my company is building several condo’s where the smallest units go for a million, no, not the penthouse that one goes for about 15 million. Shesh!

Fashionista made some suggestions for their jobs including investment banker, doctor, lawyer, business owner, and real estate investor.

Now I know this might be possible but it still blows my mind.

Their salary has to be ridiculous – on the drive I did a quick calculation and dividing 4.3 million by 3, the common rule of thumb I’ve seen for mortgages is your house should be about 3 or less times your annual salary, which means they’d have to be making about 1.5 million are year. Before posting this I went to my bank’s calculators and discovered to be qualified to have obtain a mortgage with $880,000 down (20% of the purchase price of 4.3 million for a house) you would have to make $75,000 a month - which is more than I make in a year! If you had no money down you would have to make more than 100,000 a month. I couldn’t even figure out the real value as the calculator will only let you impute up to 100,000 a month income and it comes short of reaching the 4.3 million mark for your loan. Pure craziness!

There’s more good conversation to discuss on this blog from our drive down Peachtree Dunwoody Road beyond Multi-Million Dollar Homes, check tomorrow for that portion. In the mean time, would you ever consider buying a home that expensive? What do you think these people do for a living? And for my pure curiosity since we’ve recently had the in debt debate - could these Multi-Million Dollar Home Owners be in debt beyond their mortgage?


Seb said...

I think when you're buy a house that size, you generally pay in cash. Which makes it even more crazy.

"Future Millionaire" said...

@ seb - I know its absolutely ridiculous. If they're paying cash what kind of income do you think they are making. Shesh - it really blows my mind.

Anonymous said...
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"Future Millionaire" said...

FYI the previous comment was deleted as it was spam.

BK Brian said...

that's crazy, yes, but the NYC real estate market is crazier! to get a "starter home/apt" you need about 40-50k minimum - by the time you're done paying the apt off it's worth more than most americans have net worth in general - these prices have to come down if our generation is to have a chance at buying some of this property, otherwise the market will work its magic and prices will have to come down to meet the demand for the capital that sales bring in

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