Hi All,
OK, I hope this is the place to ask this question since we are in an emotionally charged state in regards to this purchase so really need unbiased opinions.
Here goes:
My husbands family home is available for us to purchase (it has been our dream to live there in retirement). The home is in Marin county, however, the entire house needs to be gutted (electrical, kitchen, baths, pool resurfaced, heating, etc) and rebuilt. We live out of state (upstate NY) and the rental income will just cover the 30yr mortgage, taxes, property management, pool service and garbage expenses on the home. Addtitionally, other siblings believe the house is a gem and will sell for top dollar so unwilling to negotiate on price with us. We would be living on the 'edge of one bad tenant away from digging into our savings to cover mortgage/tax expenses'. I know this is so anti-mustachian and so emotional. Please help!
We have 1/3 stake in the house and would receive that money tax free if the house sold.
This is enough money to purchase 3-4 rentals where we live now with a return of 30-40% after all expenses(not including tax deductions) from each rental.
I have run the financial scenario and cannot financially justify buying the house. We are really about 5-7years form retirement if we do not buy this home. If we do, we will owe a huge mortgage (260K before rebuilding the home) that we may or may not be able to pay off before we retire. Well, we would sell out current home and then we still would not be able to pay it off with the proceeds from this house. Additionally, we could retire right now if we did not purchase this home.
Please, shake me, slap me, and set me/us straight and tell me - Does this appear to be a sound investment? Remember, the home is in Marin county. Thanks for your feed back in this regards. Michelle (Shzasaver)