Options, options, options

[Kevin Jorgensen]

For those that have seen my posts before. I've yet to come to a decision on my first REI.

As a review:

I live in Beaverton, OR in an 'A' neighborhood. But my current home is feeling a little small for my growing family (three kids under 6 yo). I have ~175k in equity, and am deciding if I should buy a house that I'll stay in for the next 20 years while the kids grow up, or stay put and go REI with the equity.

The Portland Market is clearly a sellers market. Under 2 months of inventory consistently for who knows how long. I've heard two strong opinions 1) it's a bubble, so let it burst and then buy the next home 2) it's the last bastion of 'coastal' cities that is still undervalued and the flood of money and people moving into the city will continue unabated even if rates go up.

I tend to lean to #2 from all the metrics I can look at, so it seems to me that I'll slowly lose buying power if the prices slow and the rates go up. 

1) Buying the big home now (talking around 700k for this area) seems like the easy way out, and I'll gain the appreciation on it.,....but be highly limited in any other investment maneuverability until I gain equity again. And I don't like the leakage involved with the sale of my house.

2) Hold current house and use equity to buy 2 SFR or a single MFR REI, outside the state where my dollar will get me properties that will cash flow more readily than here in Portland. Then move to the bigger home in 3-5 years.

3) Use some equity and do some remodeling of current home to grow it out a bit for the growing kids, then buy an SFR REI. Then move to the bigger home in 5+ years.

Renting my current home and buying a less expensive home also an option. But I'll be lucky to clear 100/month after setting aside money for repairs. The Rent to Value here is pretty bad (maybe .5%).

For all of the REI options I'd likely go Turnkey for my first go around. Yes, I know that the ROI isn't as good. But it seems like a good way to wade into the REI waters.

I'll gladly accept any advice on the matter.