We ended up buying a relatively small and modest home in a modest neighborhood with good public schools for our children. Where we made our own luck… Housing arbitrageĪfter being lucky enough to make a nice profit on our condo, we could have easily used it as a down payment on a flashy new home in an upscale neighborhood. We ended up selling at a 70% profit after only 5 years due to tremendous appreciation in the market overall but particularly in this area. We took out a 7/1 adjustable rate mortgage (ARM) to lock in a minuscule interest rate up front because we had every intention of selling the property prior to our 7 year rate adjustment. Not only did we acquire the property at a great price, but it turned out to be a fantastic time to buy. We did our homework to study the litigation and determined it was not terribly serious. Even at the time, it was undervalued due to a building litigation that scared off potential buyers. In 2014, we purchased a condo in Oakland. More often than not they fizzle out due to poor management, poor products, an insufficient market, or some combination. There are so many private companies who issue stock options as compensation with the “potential” for it to be worth something someday, either through an acquisition by another firm or through an IPO. An area where we got lucky was in company equity at private companies that actually went public. We went the conventional route of getting a good education and getting stable jobs at stable companies.Īs I alluded to earlier, reaching financial freedom in the Bay Area probably requires a bit more than the typical “save 50–70% of your income” mantra that works elsewhere. I’ve met many of them over the years, but I can’t say I’m one of them. There are countless stories of entrepreneurs in their 20s and 30s in the Bay Area striking gold by building new companies, products, and services. No founder (or extremely early employee) status at a startup that made it big We started at zero like most everyone else.
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