Orchard Hills 4 - "The Summit" Updates

NEW -> Contingent Buyer Assistance Program
The financial commitment to a 5 m house is going to be a lot and forever. Gardener, housekeeper, property tax, all the insurance, maintenance and upkeep, and the lifestyle that comes with maintaining all of it. And to furnish it, put in a pool and the cost of pool maintenance. Not to mention most people want to retire at some point. How do they keep it all going then?
 
My pool man quit back in 2023 so I started doing the pool myself.
Takes about 10 min/day.
Chlorine costs about $50/month.
 
Imnotmoving said:
The financial commitment to a 5 m house is going to be a lot and forever. Gardener, housekeeper, property tax, all the insurance, maintenance and upkeep, and the lifestyle that comes with maintaining all of it. And to furnish it, put in a pool and the cost of pool maintenance. Not to mention most people want to retire at some point. How do they keep it all going then?
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Seriously! Also HOA, utilities.. These are similar issues for a house at half the price in Irvine/OC as well. It is incredibly expensive and hard to sustain unless you can increase your income even faster. There is also a TON of deferred maintenance on most homes.
 
Imnotmoving said:
The financial commitment to a 5 m house is going to be a lot and forever. Gardener, housekeeper, property tax, all the insurance, maintenance and upkeep, and the lifestyle that comes with maintaining all of it. And to furnish it, put in a pool and the cost of pool maintenance. Not to mention most people want to retire at some point. How do they keep it all going then?
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Other than extra property tax, how is this different from a $3M or $4M house? Also, most Irvine lots can't fit a pool in the backyard. And these $5M lots aren't big enough either. Only the $7M-$8M TB homes have big enough lots to fit a pool. Unless you're talking about those tiny little pools that are only big enough for you to sit in.

Anyway, to be able to comfortably buy a $5M home, it means you'll have at least $10M saved up by the time you retired, so it's pretty easy to keep it going.
 
Why in the world would anyone want to keep it going? To impress the Wongs, Kims, and the Patels in Irvine?

Isn't it much better to have $1M primary home paid off owned free and clear with a $10M networth? Think of your primary residence to networth % ratio to your fat % to your body. 15% fat is considered healthy, but 50% body fat is not considered healthy.

This reminds me of the book Millionaire Next Door by Thomas Stanley about being income statement rich vs balance statement rich. This type of home is attractive to the income statement rich / balance sheet poor type of folks. The Big Hats with Small Cattle type of guys.

That $5M home is a very hungry Beast that you will need to continue to feed til your Grave.
CalBears96 said:
Other than extra property tax, how is this different from a $3M or $4M house? Also, most Irvine lots can't fit a pool in the backyard. And these $5M lots aren't big enough either. Only the $7M-$8M TB homes have big enough lots to fit a pool. Unless you're talking about those tiny little pools that are only big enough for you to sit in.

Anyway, to be able to comfortably buy a $5M home, it means you'll have at least $10M saved up by the time you retired, so it's pretty easy to keep it going.
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I just feel that elite people such as Elon Musk, Bill Gates, Donald Trump, Lion Messi, Michael Jordan, Kobe Bryant, et al can easily afford 5m homes in their thirties. Just imagine all these elite people from around the US or even the world come to Irvine to buy homes. They will feel Irvine house price is very affordable.
 
panda said:
Why in the world would anyone want to keep it going? To impress the Wongs, Kims, and the Patels in Irvine?

Isn't it much better to have $1M primary home paid off owned free and clear with a $10M networth? Think of your primary residence to networth % ratio to your fat % to your body. 15% fat is considered healthy, but 50% body fat is not considered healthy.

This reminds me of the book Millionaire Next Door by Thomas Stanley about being income statement rich vs balance statement rich. This type of home is attractive to the income statement rich / balance sheet poor type of folks. The Big Hats with Small Cattle type of guys.

That $5M home is a very hungry Beast that you will need to continue to feed til your Grave.
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This has been our approach. We have a very low mortgage balance/payment. Make good money and live a pretty stress free lifestyle because we have never traded up our lifestyle. I still never buy any clothes that are not on sale, drive a 5 year old car, refuse to use DoorDash, etc.
 
panda said:
That $5M home is a very hungry Beast that you will need to continue to feed til your Grave.
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It's hard for the working class regular folks to understand how people can buy expensive homes like that. These buyers are not looking to save $10 to eat at Chipotle instead of eating at a nice Mexican restaurant. They can afford multiple multi-million dollar homes paying cash. They have Porsches sitting in the garage as toys. And there are more people with a lot of money than you think.
 
qwerty said:
This has been our approach. We have a very low mortgage balance/payment. Make good money and live a pretty stress free lifestyle because we have never traded up our lifestyle. I still never buy any clothes that are not on sale, drive a 5 year old car, refuse to use DoorDash, etc.
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Same for us. I still drive my 2017 Prius Prime. My wife used to buy a lot of clothes, but non-expensive ones. Then she realized that she bought too many, so she hasn't bought any clothes for years now. And she doesn't like to buy expensive brand names either.

However, the only thing that is important to her is the home itself. So we're willing to take a higher mortgage balance and she's willing to spend a bit more on furnishing that makes the home look nice. Other than that, we don't splurge on anything else.
 
My housekeeper recently asked for a raise from $200 to $250
25% increase is a bit much don't you think?

So I talked her down to $230. ¯\_(ツ)_/¯

I'm glad I don't have to deal with a pool man.
 
panda said:
Why in the world would anyone want to keep it going? To impress the Wongs, Kims, and the Patels in Irvine?

Isn't it much better to have $1M primary home paid off owned free and clear with a $10M networth?
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No, that would be ridiculous. Having an extra 10% more money *in the bank* at the cost of not living in the city you dream about or having enough space for kids to run around is insane. Assets are assets more or less, maybe they have slightly different single digit percentage point returns but the delta is small in the grand scheme of things.

I'd pick giving my family a nicer place to live over watching my Schwab account grow slightly faster. Obviously this can be taken too far with being house poor, but the other extreme is arguably worse.
 
zovall said:
It’s all about balance. Lifestyle creep is so real and also very risky. But living like a miser (not saying anyone here) when you have enough money is also foolish. Your time/life is limited and all that hard earned money can be used to make the most of the time you have remaining.
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I grew up with nothing and never really placed any value in material things - I don’t get any enjoyment from buying things. I’m just very practical - my wife does call me cheap though :). I always just wanted to make as much money as I could so I didn’t have to live check to check or stress out about finances. Now my goal is to just set up my kids as much as possible. This next generation is going to have it tougher than mine, I think.
 
CalBears96 said:
However, the only thing that is important to her is the home itself. So we're willing to take a higher mortgage balance and she's willing to spend a bit more on furnishing that makes the home look nice. Other than that, we don't splurge on anything else.
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This makes a lot of sense to me. I like nice cars and fancy clothes too, but I resist the impulse to splurge there. Instead i've got a really nice place that is great for my family, close to parks, and good for entertaining. Easily the best splurge I've ever made. The Porsche will have to wait...
 
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Live however it makes sense for one’s family without going into debt and while saving and investing along the way and spending in a meaningful way. Only the present moment is promised. I’ve had patients who passed away with an abundance of wealth they didn’t utilize during their time living, or didn’t travel when they had the means to before retirement while their body was functioning well physically.

Why are some people here seemingly concerned others can buy up a $5+ mil home?
Chances are it could be generational wealth, successful business people or multi-clinic/law office owners just as much as someone going into unsustainable debt to appear a certain way - anyone’s guess. And not everyone is trying to keep up with others. Maybe they don’t have limits on their thinking and actions in a prosperous and productive way. You don’t know their situation and it’s not your business to, just worry about what’s within your sphere of influence. Remember comparison is the thief of joy.
 
GrowthStateofMind said:
Live however it makes sense for one’s family without going into debt and while saving and investing along the way and spending in a meaningful way. Only the present moment is promised. I’ve had patients who passed away with an abundance of wealth they didn’t utilize during their time living, or didn’t travel when they had the means to before retirement while their body was functioning well physically.
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Waking up, healthy everyday is precious and a blessing. Your bank account is meaningless when you are sick.
 
One could look at the Palisades as to how much "value" of their home really is there after all. For example, some folks bought in late 2024 only to see the property vanish in January.


Now lots in that same area are for sale at some pretty high prices:

https://www.redfin.com/CA/Pacific-Palisades/16751-Edgar-St-90272/home/6842898

At $600 PSF to rebuild (low, IMHO) and carry costs for 2-3 years, it's hard to say if final values will be stretched into the $4-6M range once the entire area comes back. Some premium lots might be pushed higher than this one on Edgar, but if you were to build to speculate, one has to wonder what LA's "Mansion Tax" will do to resale values.

Putting so much cash into equity can be a dangerous thing. For this development, $4m - $5m (remember, landscape costs.....) for a 2-3 CG "same as the house 2 doors down" just doesn't pencil in the long run.
 
sgip said:
One could look at the Palisades as to how much "value" of their home really is there after all. For example, some folks bought in late 2024 only to see the property vanish in January.


Now lots in that same area are for sale at some pretty high prices:

https://www.redfin.com/CA/Pacific-Palisades/16751-Edgar-St-90272/home/6842898

At $600 PSF to rebuild (low, IMHO) and carry costs for 2-3 years, it's hard to say if final values will be stretched into the $4-6M range once the entire area comes back. Some premium lots might be pushed higher than this one on Edgar, but if you were to build to speculate, one has to wonder what LA's "Mansion Tax" will do to resale values.

Putting so much cash into equity can be a dangerous thing. For this development, $4m - $5m (remember, landscape costs.....) for a 2-3 CG "same as the house 2 doors down" just doesn't pencil in the long run.
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2500 sqft sold for $3m? That’s insane. That is even higher than Eastwood per sqft.
 
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