Rent, Sell or Payoff personal residence

[Scott R.]

Hi everyone!

We would like to take the next step in our journey towards financial freedom, but my wife and I are at a bit of an impasse.   As we keep learning things, our plan keeps shifting and now we are finding ourselves in analysis paralysis.  Here are several options we keep discussing.

1.  Pay off our house.

2.  Sell our house in this hot market and use the money to buy more real estate.

3.  Try and find a triplex or 4-plex in a really hot Florida market, house hack by living in it as our primary and rent out our current home (basically only breaking even on our current house...more on that later).

4.  Buy a multifamily and stay in our current home.

Backstory:

Four years ago we bought our first home for 229K and 30% down.   At the time we didn't know anything about real estate investing, so it wasn't purchased with that in mind.  However, we'd read Dave Ramsey so we knew we wanted to pay it off quickly.   Fast forward four years.  We've refinanced down to a 15 year at 3.1%  We have about 60K left on the loan, so the house is almost paid off.  But a year ago we were introduced to Bigger Pockets and I recently read 'Set for Life' by Scott Trench.  Over the past year we've pinched pennies and now have about 60K saved up because we want to get into real estate.

Note:  Housing is definitely one of our biggest expenses.  In Scott's book, he talks about focusing on tackling those and he also mentions house hacking, which we are very interested in.

So do we:

1.  Pay off the house with the money we have saved.  It seems getting out of debt is never a bad option.  This would really cut down our housing expense.

2. Sell our house. We've done tons of upgrades (new roof, updated pool area, crown molding, etc.) about 30K worth. If we can get around what Zillow says we can, we'd probably net between 20 - 25K. We could use the money from the sale and our savings to fuel more investments.

3. Buy a multifamily and live in it, rent out our current home. This option exited us the most at first because we can live in a fun area for free and rent out our current house. We eliminate our huge housing expense and increase our wealth. The problem is, we've put a lot of money in our house. I ran the numbers using BP tools and we'll only cash flow about $150 a month and the Cash on Cash ROI is only about 1.6%. Plus, multi-families are crazy expensive in Sarasota right now and we'd have to Airbnb to try and make a profit. Long term renters would put us in the red for the multiplex. So it seems not having that steady income increases the risk.

4.  Buy a multifamily, rent all doors and stay in our current house.  This option seems like it will still leave us with that big housing expense.

Any suggestions would be greatly appreciated!  I think all of them are great options and that's why we are having some difficulty deciding.  I'm leaning on #3 as maximum return, but maybe the highest risk since we would have to Airbnb and renting our house is basically breaking even.

Thanks in advance!