The golden rule doesn’t work for most CA real estate. Effective tax is 35%+ for most yuppies
so your mortage pmt should be no more than 33% of gross. If your buddy has a net of 7k then the mortgage should be 2.4K. At 5% rate and 20% down, the max house value is 550K (this ignoring taxes, insurance, HOA). he has a family of 5. What kind of house do you get in SD during the bubble for 550k?

Home values have severely outpaced the salary income for SD residents. Basically the cheap finance available in the US allowed people who
‘weren’t getting ahead’ to make money / take money out of their house(s). But you needed to own not rent. You see your neighbor buying a ski boat / Escalade and then you jump in late and get left holding the bag.

Even with 20% unemployment, homes are still unaffordable b/c govt wants to help irresponsible hmoeowners rather than letting the market do its own thing.

If he had flipped the house for 200K more and got a Cadillac out of it, would you call him stupid?