This is my first post. Hopefully it goes over well!
My wife and I are just beginning on the path to financial freedom. To make it more difficult (because we like a challenge) we are moving this summer from Michigan (very low cost of housing) to a place on the east coast (very high cost of housing).
In this town we are relocating to there are a few possibilities for where we might live. Also, we have 3 kids, 2 dogs. We like remodeling homes and have done it a few times.
When we arrive in the new spot our financial situation will be as such:
1) Own our Michigan home outright, $175k Equity.
2) $30k Cash/Investments & $5k CC Debt (holding cash for down payment if necessary).
3) $8000 in monthly income.
We've come up with a few options at our new place:
1) Buy the cheapest house we can find and then fix it up. Cheapest would be no lower than $350k. And would probably be a SFH with limited potential for side rental income.
2) Buy the cheapest duplex we can find. Rent one side either long term or short term. It would run about $550k. We could rent one side out for probably $2k a month. Using standard financing this is about the max we could afford with a VA or FHA type loan.
3) Rent at $2500/month.
4) Work some magic and buy a small apartment building. I've talked with one owner. His deal, for example, would be an 8 unit (we'd live in one) that may sell for $1.4M. The owner would carry a large part of the mortgage (mentioned he'd hold 50% and owned it outright). Maybe we could use our Michigan house as down payment or collateral as we have limited cash on hand. The property pulls $11,000 in monthly rents right now - which is low - and is consistently 100% occupied. Property taxes and insurances would come to about $2100 a month on the place before debt service. The owner of this building is 84 and needs to sell.
I'm leaning toward option #4 but I'm worried it's only because it seems to have the biggest upside... also has the most risk.
OK - hope this works and thanks for your help! Sorry if I'm posting in the wrong place or committed some other forum snafu.
