Selling SFR to buy Owner Occupied Multi Unit

[Ryan Hebert]

All,

Well, I had an excellent discussion with my wife this weekend. She continues to surprise me and reaffirm the reasons we're married. 

I have been mulling over different strategies for shoring-up our retirement plan over the past few years. We made a bit of money on the latest equity market upswing (like everybody else) and was content to do that ad infinitum. Geez, even the flier I took on BitCoin turned up roses. However, the RE bug kept popping up and showing me all the other possibilities out there. Long story short, I've come to the conclusion that it might make a lot of sense for my wife and I to sell our current home and purchase an owner occupied multi unit property. I shared this with my wife and she was extremely supportive and much more interested in the idea than I thought she'd be. So... I'm that much more motivated to get this ball rolling. I think this could be a house hack that we repeat a couple of times using the FHA loan system and then branch out into other RE investments.

The issue though (there is always one) is that our house is worth about $205k and we owe $170k... the fees to sell will eat away a chunk of that if we even get asking price. Maybe walk away from the sale with around $12k? I know I'm just getting myself tripped up in the sunk costs and mental block of previous investment, but it's causing me a little anxiety. I guess I just need affirmation that what I'm proposing makes at least a little sense.

We have a couple housing options for the time between selling our home and buying a multi unit property... lots of family with rooms to spare here in ABQ. :) So we have the ability to be a little picky when making our big move. We want to be picky for the financial due diligence reasons, but also because we want a property we'd feel safe raising our son in (he's still an infant).

Thoughts? Cautionary tales? Better ideas? 

Much appreciated!

Ryan

[Jerry Padilla]

@Ryan Hebert

 That is a great way to get started. Would it be worth it to keep your primary and rent it out? Maybe sell down the road when there is more of a profit to be made? Just an idea. If you purchase a new property you can use 75% of the lease agreements towards your income from all the units you won't be living in until they are reflected on your tax returns.