Seeking Advice - Need to move, tight on cash, but don't know what to sell or hold!

[Jason Lohse]

Hi!

I work remotely in IT. I'm fairly new to REI. My goal is to continue to purchase properties and build wealth.

My wife and I recently moved from GA to CO almost a year ago. We purchased a home here in CO near Fairplay where we currently live. We still own our GA home and it's currently rented. It was our primary residence for a year and has been rented for a year.

My wife just got a dream job in Denver, so we are planning to move to the city and hopefully purchase. Rent is so high, it seems like purchasing is the better option at this point. For now, my wife is staying with friends during the week until we can figure out the best next steps. We are tight on cash but could afford a small down payment, $40-50K. Purchasing does require renting our CO house in order to qualify for another loan. 

Our GA cash flows about $1K after all expenses, has about $180-200K in equity, mortgage loan at 2.875% rate. I didn't get a HELOC before we started renting. Out of dozens of conversations with lenders, I can only find one bank that offers HELOC's for rentals. I could only get out about $70K, and have thousands in closing costs, with a less-than-desirable rate. We could 1031 the GA house for a new home in Denver, but then I lose cash flow and a good first rental property.

Our CO home value has dropped about 5% in value and comps in our area are low, so we would lose money trying to sell this house in Fairplay. We are having a hard time finding someone to lease it. Zillow lease rate and other lease rates around us are about $1,000 under what we need to cover our mortgage payment. With our two incomes, we can cash flow the Fairplay home and get a small home in Denver, but we would be really, really tight each month - as long as we can keep renters in our GA home. 

I know the housing market, economy, and future rates are hard to get a handle on, so I don't want to make a dumb mistake and end up losing everything we've sacrificed for, with a wrong decision right now. I'm willing to take a risk, but I don't want to put us in danger any further financially.

Thanks in advance for any advice or direction. I truly appreciate it!