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[B52slinger]

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[Bartelby]

Would a physician working this job be able to purchase a $3 million house without losing sleep at night?

I wouldn't. Even if you have a 20% down payment, you would need to sustain that full 700,000 salary to make payments on your 30-year mortgage. I certainly would not count on a $700,000 per year locums opportunity continuing on for 30 years. I do not know how long these roles tend to last, but I suspect they are on the lookout for a permanent replacement and that they are paying a premium basically to have someone move out to do the job temporarily.

 

[reca]

Where are you getting 375/hr for locums?

 

[nexus73]

There is one place in my area that pays 700k for locums at 40 hours per week. How stable are these jobs long-term? Could someone work these jobs for say 2-3 years straight? Or would you be replaced within months forcing you to find a new job?

Would a physician working this job be able to purchase a $3 million house without losing sleep at night?

the benefit to using locums is you can be let go with essentially zero notice. maybe they have to pay off your last month but you can be out tomorrow.

 

[B52slinger]

deleted

 

[TexasPhysician]

how long do prison locums normally last? recruiter says 6 months or 12 months contract but how long do people actually work before getting replaced usually?

There is no normal. Finding someone at a less desirable location can be luck.

I’ve seen someone stay at a locum job for years. It was supposed to be 6 months. The employer even changed locum companies, and my friend found a way to switch locum companies to stay locum there.

I’ve also had a friend have a great locum job lined up a couple months out. The facility cancelled the locum contract < 1 week before he was to start when they found someone. My buddy was stranded without a paid option that month.

 

[dl2dp2]

There is one place in my area that pays 700k for locums at 40 hours per week. How stable are these jobs long-term? Could someone work these jobs for say 2-3 years straight? Or would you be replaced within months forcing you to find a new job?

Would a physician working this job be able to purchase a $3 million house without losing sleep at night?

Perhaps you have not applied for a mortgage yet, but for 1099 gigs, banks require 2 years of income statements and use the average of the two as a basis for income.

Depending on the context, it might not be as unstable as you think.

 

[comp1]

Regardless of what the experience is on the provider end, it can't possibly be sustainable on the company end. They aren't getting that much back in revenue for any extended period of time. States might have received some sort of weird block grant to pay out crazy prison prices for while they are in federal receivership, but it cannot last. Tax revenues come and go. Interest in what to fund also waxes and wanes. You'll always do very well as a doctor, you won't always be making 3x the average psychiatrist salary and definitely shouldn't financially plan as such.

 

[Celexa]

Even if the job is stable in the sense that it won't go away, what if you hate it? Trapped in a too expensive mortgage in a ****ty job (no matter how well paid) sounds miserable.

$700k from a well developed private practice, now that is stable.

 

[PsyDr]

They're not paying 3X market rate because it is stable.

 

[forchinet121]

Perhaps you have not applied for a mortgage yet, but for 1099 gigs, banks require 2 years of income statements and use the average of the two as a basis for income.

Depending on the context, it might not be as unstable as you think.

So if you graduate and sign up for full time 1099 work making 400k a year you can’t get a mortgage?

 

[clausewitz2]

So if you graduate and sign up for full time 1099 work making 400k a year you can’t get a mortgage?

No, it just means that you need to be able to produce two years of tax returns and/or bank statements demonstrating income over a longer period of time. So it's going to be very difficult to qualify for one immediately.

 

[dl2dp2]

So if you graduate and sign up for full time 1099 work making 400k a year you can’t get a mortgage?

I'm not someone who's underwriting mortgages lol so I can't tell you exactly the current standard. But the way this works is that when I applied for a mortgage based on schedule C income, the bank asked me to fill out a uniform mortgage application, which contains items that look at 2 years of income. Were you a resident before the 400k a year? What is the size of the mortgage you are applying? If you provide evidence of the contract promising 1099 for one year of 400k, you can probably get a mortgage of 200k.

We are not the right audience for this question. You should ask the bank.

Now all that having been said, DTIs at banks are often ridiculously high (30-40%), especially if you apply for a jumbo. Banks would happily let you become mortgage slaves, but it's not prudent to do so.

 

[jbomba]

No, it just means that you need to be able to produce two years of tax returns and/or bank statements demonstrating income over a longer period of time. So it's going to be very difficult to qualify for one immediately.

Not entirely true. I'm currently applying for loans now and will be 1099. Some want one year, one said one month, a physician loan company was okay with signed contracts.

 

[Marasmus1]

Even if the job is stable in the sense that it won't go away, what if you hate it? Trapped in a too expensive mortgage in a ****ty job (no matter how well paid) sounds miserable.

$700k from a well developed private practice, now that is stable.

But is it even possible to make these rates in private practice? I thought what makes private practice desirable is autonomy rather than compensation. I mean even if we say you are a top notch psychiatrist in HCOL metro and running a cash practice making 400 bucks an hour on average with 4 weeks off annually, it would not hit 700k taking overhead into account.

 

[calvnandhobbs68]

Not entirely true. I'm currently applying for loans now and will be 1099. Some want one year, one said one month, a physician loan company was okay with signed contracts.

Highly depends on the specifics of what the “1099” position entails. If it looks more like a W2 contract (guaranteed salary or $/hr for guaranteed minimum number of hours per week), then yes they’ll often go with just a contract. If it’s more of a real contractor position (paid on collections or $/hr with no minimum or set schedule), then they look at it more as you owning your own business and want the more traditional 2 years of recorded income (or at least 2 tax returns including that income).

I’m currently living this situation right now so I’m quite well versed in the specifics of this.

 

[Jules A]

>4xs annual salary for house doesn’t sound like a great strategy regardless of how stable the job may be.

 

[Celexa]

But is it even possible to make these rates in private practice? I thought what makes private practice desirable is autonomy rather than compensation. I mean even if we say you are a top notch psychiatrist in HCOL metro and running a cash practice making 400 bucks an hour on average with 4 weeks off annually, it would not hit 700k taking overhead into account.

I was speaking more to what would make a theoretical 700k desirable psych job stable than how common it is.

700k private pracrice does exist. Certainly 400k while living a very nice chill life is more frequent. And still more stable than locums!

Speaking from experience seeing and talking to supervisors and coresidents who went into cash pay private practice in the metro area where I did my residency.

 

[Shikima]

No job is guaranteed. No house is worth 3 mil with the cavate that it came with 40,000 acres.

 

[comp1]

It's very weird. I find that physicians tend towards ascetic where they way underspend, don't enjoy life and die with millions in the bank or...buy 3 million dollar homes a couple of years out of residency.

 

[sloh]

It's very weird. I find that physicians tend towards ascetic where they way underspend, don't enjoy life and die with millions in the bank or...buy 3 million dollar homes a couple of years out of residency.

It's about 2-3 million for a good home in a good neighborhood in SoCal. Guess no physicians should buy houses here lol

 

[BiscoDisco]

It's about 2-3 million for a good home in a good neighborhood in SoCal. Guess no physicians should buy houses here lol

People not from the bay area or socal just don't understand what the reality is out here.

 

[Merovinge]

It's about 2-3 million for a good home in a good neighborhood in SoCal. Guess no physicians should buy houses here lol

There's a big difference between 2 million and 3 million though. I know several people who live in SoCal and have homes between the 1.5-2million range that have relatively good schools that are totally reasonable to live in. You absolutely do not need to spend 3 million to have a reasonable home in SoCal.

 

[comp1]

When your income is $250k, there is a huge difference between a cost of $2 million and of $3 million. The median home price in the city of San Francisco itself is $1.3 million and $1.1 million in LA. I'm not saying either is cheap. I'm saying $3 million is too much to pay for a house in either for one physician income. If there are two physicians or some tech millionaire involved or an investment banker, then it might not be.

 

[sloh]

Maximum price for a house for a doc?

Hey, Is it possible for a single doctor with an annual salary of 300k $ to buy a house for 6 million dollars?

forums.studentdoctor.net

Similar topic brought up in this thread. 600k income, entertaining 2-3 million dollar house. It's not unreasonable

 

[erg923]

Cost is certainly one issue depending on geographics. Total floor space/square footage is another altogether and has to take into account your actual family size. I cant understand the want for abnormally large homes unless you have a large family?

Round here, you can get really high quality 5 bedroom 3 bath stuff with yard/land in a nice area and a possible country club membership to boot all for less than 1.2 mil or so.

 

[BiscoDisco]

Cost is certainly one issue depending on geographics. Total floor space/square footage is another altogether and has to take into account your actual family size. I cant understand the want for abnormally large homes unless you have a large family?

Round here, you can get really high quality 5 bedroom 3 bath stuff with yard/land in a nice area and a possible country club membership to boot all for less than 1.2 mil or so.

For those in CA, they arent usually getting big homes for 2-2.5M. Somewhere in the 1600-2800 sqft range depending on neighborhood. A fair bit more square footage if you go further east from the coast.

 

[erg923]

For those in CA, they arent usually getting big homes for 2-2.5M. Somewhere in the 1600-2800 sqft range depending on neighborhood. A fair bit more square footage if you go further east from the coast.

Few things are more psychologically and financially stressful for a relatively upper middle-class family than being "house poor." I just don't get it.

Buy under your means. I'm not sure that advice will ever change? Unless you are a somewhat experienced flipper/renovator too, I guess?

 

[jbomba]

Few things are more psychologically and financially stressful for a relatively upper middle-class family than being "house poor." I just don't get it.

Buy under your means. I'm not sure that advice will ever change? Unless you are a somewhat experienced flipper/renovator too, I guess?

Depends on income. 2.5M house has a PITI of 14k/month in CA. With combined family income of 600k you should bring in about 31k a month after tax and after maxing out 401k. That leaves 17k a month for everything else.

As a psychiatrist in these HCOL places, making 450 a year shouldn't be difficult. A non-medical spouse in a major CA city should be making 150k in run of the mill middle manager roles (non tech). Seems quite doable honestly.

Now if you're single, working at Kaiser making your 350k a year...then yes, its a different story.

 

[erg923]

Depends on income. 2.5M house has a PITI of 14k/month in CA. With combined family income of 600k you should bring in about 31k a month after tax and after maxing out 401k. That leaves 17k a month for everything else.

As a psychiatrist in these HCOL places, making 450 a year shouldn't be difficult. A non-medical spouse in a major CA city should be making 150k in run of the mill middle manager roles (non tech). Seems quite doable honestly.

Now if you're single, working at Kaiser making your 350k a year...then yes, its a different story.

Buy a home that is under your means/earnings, son. This advise will never go out of style.

 

[Abacab]

It's about 2-3 million for a good home in a good neighborhood in SoCal. Guess no physicians should buy houses here lol

If you avoid the beachside cities, there are plenty of really nice homes in excellent neighborhoods out here in socal between $1.5-2M. Between $1-1.5M fetches some nice places too, albeit smaller sq footage and less upgraded. I guess it depends on a person's definition of "nice neighborhood." Places are like Pasadena are much more affordable than Santa Monica, Los Feliz, etc...and arguably nicer to live in too.

Spending $3M for a house will also come with higher insurance costs, property taxes, etc. Bigger house means more maintenance costs, higher heating/AC bills. Bigger lot means more gardening/landscaping costs.

OP, spend less on your house so you can spend more on life experiences like travel, social activities, good food, entertainment, hobbies. Getting a modest home at an affordable price allows you have the finances to renovate and upgrade the high traffic areas like the kitchen and master bathroom to your liking. If you save up a lot of money over time, you can always get a bigger home in the future. Don't go all out on your first home. Life may take you other places someday.

 

[sloh]

If you avoid the beachside cities, there are plenty of really nice homes in excellent neighborhoods out here in socal between $1.5-2M. Between $1-1.5M fetches some nice places too, albeit smaller sq footage and less upgraded. I guess it depends on a person's definition of "nice neighborhood." Places are like Pasadena are much more affordable than Santa Monica, Los Feliz, etc...and arguably nicer to live in too.

Spending $3M for a house will also come with higher insurance costs, property taxes, etc. Bigger house means more maintenance costs, higher heating/AC bills. Bigger lot means more gardening/landscaping costs.

OP, spend less on your house so you can spend more on life experiences like travel, social activities, good food, entertainment, hobbies. Getting a modest home at an affordable price allows you have the finances to renovate and upgrade the high traffic areas like the kitchen and master bathroom to your liking. If you save up a lot of money over time, you can always get a bigger home in the future. Don't go all out on your first home. Life may take you other places someday.

I agree Pasadena is nice but I'm not sure 1-1.5 million fetches you a pretty decent house in a neighborhood like that.

 

[Doctorows]

Few things are more psychologically and financially stressful for a relatively upper middle-class family than being "house poor." I just don't get it.

Buy under your means. I'm not sure that advice will ever change? Unless you are a somewhat experienced flipper/renovator too, I guess?

As another poster mentioned above, people who don't live in HCOL/VHCOL areas have a hard time understanding why buying under your means may not be possible for some. As a fresh attending, I cannot afford a house in a nice area on one salary where I live. Been looking for a house under my means for over a year now. Even within or slightly above my means isn't doable. Saw an $800k listing on Zillow the other day for a 1600 sq house in a good suburb, rushed to click on it only to read "for demo, build your dream home here!" I would love to buy a house under my means, but I'd have to choose between an hour+ long commute and... well no alternative. A decent 4br/3bd house in a good area does in fact go for 2-3 million in some parts of the country.

 

[erg923]

As another poster mentioned above, people who don't live in HCOL/VHCOL areas have a hard time understanding why buying under your means may not be possible for some. As a fresh attending, I cannot afford a house in a nice area on one salary where I live. Been looking for a house under my means for over a year now. Even within or slightly above my means isn't doable. Saw an $800k listing on Zillow the other day for a 1600 sq house in a good suburb, rushed to click on it only to read "for demo, build your dream home here!" I would love to buy a house under my means, but I'd have to choose between an hour+ long commute and... well no alternative. A decent 4br/3bd house in a good area does in fact go for 2-3 million in some parts of the country.

I understand your frustration but cannot sympathize fully here. You need to either move locations or rent a property to obtain what you feel is "fair" for you and your earnings.

 

[Abacab]

I agree Pasadena is nice but I'm not sure 1-1.5 million fetches you a pretty decent house in a neighborhood like that.

You're right, Pasadena is more likely to require $1.5M and up for a nice home. However, this is one of the premier parts of socal. And still, $3M really isn't necessary. There are plenty of more affordable cities in LA that are also very nice places to live with great schools, restaurants, etc. How about Woodland Hills, Sherman Oaks, Glendale, etc? There's also north Orange County. There are options.

 

[Abacab]

As another poster mentioned above, people who don't live in HCOL/VHCOL areas have a hard time understanding why buying under your means may not be possible for some. As a fresh attending, I cannot afford a house in a nice area on one salary where I live. Been looking for a house under my means for over a year now. Even within or slightly above my means isn't doable. Saw an $800k listing on Zillow the other day for a 1600 sq house in a good suburb, rushed to click on it only to read "for demo, build your dream home here!" I would love to buy a house under my means, but I'd have to choose between an hour+ long commute and... well no alternative. A decent 4br/3bd house in a good area does in fact go for 2-3 million in some parts of the country.

When I finished residency, I chose to keep renting the same small apartment I stayed in during residency. I paid under $1k a month for humble but nice surroundings and was able to save up a ton of money in the early part of my career and subsequently put 30% down on a very nice house three years later when I was in the financial position to do so. I understand where you're coming from but, sorry to say, as a newly minted attending, you may still have to endure delayed gratification a little while longer.

 

[Doctorows]

You need to either move locations

There are many factors that can prevent some people from just up and moving.

or rent a property to obtain what you feel is "fair" for you and your earnings.

That's what I am doing. We were talking about the cost of buying.

I also don't know what "decent" means to you?

3 bedroom 2 bath single-family house that isn't 100 years old last renovated in 1950, in a safe upper middle-class neighborhood, not on a busy road, within a 30 min radius from work.

I had no idea that this was asking too much until I couldn't find one under 1mil. And even those typically need some work.

 

[Doctorows]

When I finished residency, I chose to keep renting the same small apartment I stayed in during residency. I paid under $1k a month for humble but nice surroundings and was able to save up a ton of money in the early part of my career and subsequently put 30% down on a very nice house three years later when I was in the financial position to do so. I understand where you're coming from but, sorry to say, as a newly minted attending, you may still have to endure delayed gratification a little while longer.

I am still living in the same rental I moved into as an intern. Listen, I don't really need advice on how to manage money, I am plenty frugal and hopefully on the path to FIRE. I am not saying that newly minted attendings need to buy an expensive house - or any house - right away. Or that attendings at any stage in their career require an extravagant multi-million dollar home. I am simply responding to the comments stating that it is absolutely possible to buy a cheap house, and going for expensive ones is an unnecessary luxury. In some parts of the country it is not.

 

[BiscoDisco]

You're right, Pasadena is more likely to require $1.5M and up for a nice home. However, this is one of the premier parts of socal. And still, $3M really isn't necessary. There are plenty of more affordable cities in LA that are also very nice places to live with great schools, restaurants, etc. How about Woodland Hills, Sherman Oaks, Glendale, etc? There's also north Orange County. There are options.

I would argue against Pasadena being a premier part of socal. Could probably think of 15 other areas that are significantly more upscale off the top of my head. Pasadena is nice for sure, but it's not at the top. Which is the problem. You're still paying a ton to live somewhere that's good, not great.

 

[finalpsychyear]

for most living in cali is a disaster if you are trying to FIRE. 4-5k sq ft new houses where i am in a top 15 city are around 850-950

 

[BiscoDisco]

for most living in cali is a disaster if you are trying to FIRE. 4-5k sq ft new houses where i am in a top 15 city are around 850-950

Just gotta make more money, but yes certainly more difficult. That said, the pay is often higher. I have an ER psych position that is paying >$300/hr for overnights. The jail gigs are also above 300/hr. Reimbursements for our common codes are higher. At least in CA, its not all that difficult to make 600k a year as a psychiatrist.

 

[forchinet121]

Depends on income. 2.5M house has a PITI of 14k/month in CA. With combined family income of 600k you should bring in about 31k a month after tax and after maxing out 401k. That leaves 17k a month for everything else.

As a psychiatrist in these HCOL places, making 450 a year shouldn't be difficult. A non-medical spouse in a major CA city should be making 150k in run of the mill middle manager roles (non tech). Seems quite doable honestly.

Now if you're single, working at Kaiser making your 350k a year...then yes, its a different story.

I’m confused does this mean that you’ll spend 14k of your remaining 17k on a house? Then live off of 3k for everything else?

 

[sloh]

I would argue against Pasadena being a premier part of socal. Could probably think of 15 other areas that are significantly more upscale off the top of my head. Pasadena is nice for sure, but it's not at the top. Which is the problem. You're still paying a ton to live somewhere that's good, not great.

Agreed. I wouldn’t want to raise a family in Glendale, Sherman Oaks, or Woodland Hills either.

This is more of what I have in mind. Irvine isn’t exactly super expensive either compared to other cities.

81 Brightstar #QF8L92, Irvine, CA 92618 | Zillow

81 Brightstar #qf8l92, Irvine CA, is a Single Family home that contains 3225 sq ft and was built in 2023.It contains 4 bedrooms and 5 bathrooms. The Rent Zestimate for this Single Family is $8,033/mo, which has increased by $1,175/mo in the last 30 days.

www.zillow.com

 

[finalpsychyear]

Just gotta make more money, but yes certainly more difficult. That said, the pay is often higher. I have an ER psych position that is paying >$300/hr for overnights. The jail gigs are also above 300/hr. Reimbursements for our common codes are higher. At least in CA, its not all that difficult to make 600k a year as a psychiatrist

I agree. Though it goes quickly. Lets say someone in midwest is 350k vs the 600k cali doc. That 250k extra is more like 125k take home roughly.
Housing payments are at least double lets say. So my 5k payment for a 4k sq ft house here is like 10-12k min for a 3k sq ft house in pasadena.

60-80ish k of that 125 extra income is already gone. Your still net 45k but everything is much more expensive so not sure how much you come ahead but sure it's possible no doubt. Your house will appreciate a lot more probably there as well. But after living in cali for 20-25 years are people going to want to move out... that's when they could realize the gain on the house.

 

[Merovinge]

for most living in cali is a disaster if you are trying to FIRE. 4-5k sq ft new houses where i am in a top 15 city are around 850-950

If you mean top 15 by population (assuming you mean metro area), then I can only see Detroit fitting into that price range. If you mean top 15 just by city population, maybe Jacksonville, Indy, and Columbus would be on the list. If you mean top 15 by desirability than I think no cities fit that. 4-5k sq foot new construction is just not costing under a million in 2023 in even average cost of living areas, unless you are putting new construction into rough to average neighborhoods.

This doesn't detract from you point that living in cali makes it take longer to FIRE, but you can't be expecting 4500 sq ft new construction for under a million in even reasonably desirably cities in this day and age. A million dollar house does not mean what it used to.

 

[BiscoDisco]

I agree. Though it goes quickly. Lets say someone in midwest is 350k vs the 600k cali doc. That 250k extra is more like 125k take home roughly.
Housing payments are at least double lets say. So my 5k payment for a 4k sq ft house here is like 10-12k min for a 3k sq ft house in pasadena.

60-80ish k of that 125 extra income is already gone. Your still net 45k but everything is much more expensive so not sure how much you come ahead but sure it's possible no doubt. Your house will appreciate a lot more probably there as well. But after living in cali for 20-25 years are people going to want to move out... that's when they could realize the gain on the house.

It's actually not as drastic as you'd think.

Kansas 350k income after tax: $257,256
CA 600k income after tax: $391,242

 

[mistafab]

It's actually not as drastic as you'd think.

Kansas 350k income after tax: $257,256
CA 600k income after tax: $391,242

It's pretty drastic.

I got tacos for a hundred dollars the other day in CA (delicious). I'm sure a hundred dollars in Kansas could buy me a house.

 

[sloh]

It's pretty drastic.

I got tacos for a hundred dollars the other day in CA (delicious). I'm sure a hundred dollars in Kansas could buy me a house.

Gotta hit up the taco trucks man. We got the best here!

 

[calvnandhobbs68]

It's actually not as drastic as you'd think.

Kansas 350k income after tax: $257,256
CA 600k income after tax: $391,242

I think you guys are saying the same thing. At higher income brackets, more of your incremental dollar is taken by taxes and especially so if you live in a high state tax state like California, while cost of living is also higher, so that higher income on paper ends up being more of a wash.

 

[untapped]

I echo what others have said about not being house poor. I'm in Los Angeles and feel fine on 300k, which is enough for a nice condo or townhome unless it's in Beverly Hills or on the beach. My single doctor friends here buy condos or townhomes, and the dual doctor couples buy small nice homes in the 1-2m range. I came from the midwest/south where I could buy a 500k McMansion but I'd rather be here. California weather and amenities are a luxury, which I prioritize way more over square footage, but I totally understand why those with families prefer places like Tennessee or whatever. And for those of us who grew up in HCOL places like LA, we don't feel poor or deprived for living in 1200 square feet. My friends from the South seem to think doctors have to live in 4000 square feet or they're slumming it.