sell one house and buy two?

[Malachi Chapman]

Hello there,
I am a Primary residence homeowner here in DFW. My home was purchased for $199K in 2019, now almost 4 years later the house is worth 300K market price. We would receive about 125k in equity if we were to sell. We are looking to attain a slightly larger space (3 bed, 2 bath) and considering selling. The hold-up I have is whether I should try to grind and get the savings for a down payment so we can keep this home as a long-term rental (would be able to receive $300 cash-flow monthly), or should I go ahead and sell and use the money gained and purchase two homes? One primary residence with a 5% down payment and a long or short-term rental with a 20% down payment. Thoughts? 

[Najma Osman]

Hi @Malachi Chapman, 

If your current home could potentially get good rents compared to other homes in the market, consider refinancing or getting a HELOC instead of selling. Especially since it has seen great appreciation and if you expect the area to continue to appreciate. This would give you the capital to finance your second home and potentially a third.