$700k home on an ~$60k salary. His plan was to build the home he wanted (but couldn't afford) and rent the basement out. His wife was pregnant & working at the time and planned to be a SAHM once their child was born.

He is doing ok now but things haven't worked out like he had hoped. He has renters but is in big trouble if they can't pay rent or his basement sits vacant longer than two months. His wife cannot afford to stay at home so she is forced to work full time. They also cant afford child care but make too much to qualify for any government programs so they've pissed off his parents and hers by having to rely on them to watch their kid.

I guess what I'm getting at is this guy is one step away from potential disaster and is currently not happy because he has put himself in a financial situation with very little wiggle room.

If you can't afford the house you want and you want to buy now then maybe reconsider your criteria (price, location, home condition, etc) but don't back yourself into a corner financially because you're likely to regret it later.