We've owned our condo for 5 years and are really happy here. The list of things we'd like in a new place is fairly small, but an exciting opportunity has popped up that satisfies all of them.
To afford the new place we'd need to raid most of our stash - about 500K - for a down payment on a (bigger) new mortgage. This is in a liquid mixed stocks/bonds betterment account today.
If we sold our current home, we'd probably get 650K+ after the sale.
So, my thinking is, cash out the stash, buy the new place, take our time to make small changes to the new place and move in, then sell the current place, and dump it all back into re-start our stash.
I can't see any real downsides of this plan, other than having to pay some capital gains taxes next April, and also maybe some tax on the home sale profit beyond the 500k exemption. Are there any pitfalls that might make this a really dumb idea? Are there other good ways to use cash from selling a current place to buy the next one? Contingencies and such?
Other details on the new place - this opportunity isn't a sure thing, involves an off-market transaction including someone who is currently renting a unit there, who wants to find other families with children to buy into the building at the same time, from an owner who seems genuinely interested in making this happen, in the next month or two.
The unit next door to ours, in our current building, sold for 200k over asking after 2 weeks on the market, 3 months ago.