we are planing on selling our house in about 5 years, and moving further from the city.
We just heard of a property that will be listed soon, and it's in a perfect location for us! Exactly where we would be planing to move.
It has a 3br 2 bath house + a big empty lot for building. The house is pretty old and would need some renovation, like replacing old carpets and painting.
The property owner(house + extra lot) wants 260K, the lot is worth no more than 40k
Our current house is worth 350K and has 200K mortgage
If we buy now, we were thinking of renting out the house (can probably get 1,500$/mo) and in 5 years build a new house on the lot.
To fund the purchase we would need to either get a mortgage for the rental, or HELOC on another rental property we own (worth 250K, no mortgage, rents for 2K/month)
So in 5 years (or less) we would sell one of the rental properties (or both.. ) , pay back the money taken out of the HELOC, sell current house, move into a newly built house funded mostly from our current home sale.
Does this make sense, or are we crazy going into this adventure when many things could change in 5 years?
What would you do differently?