Itching to make a move.......

[Sidney M.]

Hello BP squad,

First of thanks to everyone one here who has been so informative and open to questions from newbies as im the newest of the new. Now the gist, currently living in my 1st primary residence I purchased in Jan of 2009. Purchase price 126k currently valued at 460k. 140k @2.75 left on the loan. Im interested in purchasing a MFH and moving in myself along with a tenant so I wouldn't have to 1031 and consider it my primary residence for a year at the same time rehab the MFH property while my wife stays in the primary but considering the current market situations a year of analysis paralysis seems like its going to turn into 2 or 3 years due to the fear. I understand HELOC is a option as is a cash out refi. With so much equity in our primary I want to make a move but afraid. I do have a lot to learn so Im hoping we can riff on this topic so I can get insight as to what other people are doing and learn at the same time. Im sure im leaving out vital info needed to get the advice that I need. Feel free to be honest and let me know what info is needed to have a discussion about this topic. Constructive criticism is key pls. Thanks y'all.

[Benjamin Aaker]

Hi Sidney. Thanks for posting your question. That's the first step to achieving your goals. I didn't understand the equity you have in your primary residence. You purchased for 126k but have 140k left on the loan? That can happen but is unusual.
That is a nice rate, so you won't want to get rid of it if possible. A HELOC would be a good plan. Keep in mind that the rate will be high - maybe 7% right now, and will be variable - probably OK as the FED is predicted to raise rates one more time and then slow down.
Sticky situation if you are going to live in one property and your wife in another. Maybe you both could relocate to the multifamily? Turn one unit of a 4-plex into your primary residence and get an FHA loan would be a nice way to get started. You are correct in stating that a 1031 wouldn't be used for this. Since you have lived in your primary residence for > 2 of the last 5 years, you won't have capital gains tax, so nothing to defer upon sale of the primary.
Seems like you need to get your living situation figured out and then determine how much you can pull out of your primary. Talk to the bank that has your mortgage first. Good luck.