Questions, Questions - what is the best buy-and-hold strategy?

[Shalanna L. Pirtle]

BP Family, deciding which route to take to take to acquire a rental property and would love your two cents. I live in Charlotte, NC and own my primary residence in the fastest growing region of the county. I am debating between either: a) acquiring a rental in one of the local transitional neighborhoods via conventional or owner finance (and would need to make a down payment) or b) renting out my single family home and moving to a new place (as yet identified nearby). Rents for a property in the transitional neighborhoods will range from $1000-$1100, with a 10% CAP rate. Rents in the .5 mile radius of my home range from $1650-$2000, and I would likely be able to demand around $1800 for mine, with about a 15% (conservative estimate) or greater CAP. (Those numbers alone may well make the decision a no brainer, but read on!) The following are some considerations I'm toying with: I built my home new and have lived in it for almost 9 years. It requires no rehab, the major systems/roof should be all good for another couple years and then some and likely only needs some cosmetic touches to get it ready for a renter (coat of paint in some rooms, etc.) Note that the rental properties I am considering are all turnkey or are already cash flowing, so no significant (or zero) costs for make-ready on that front either. If I move, there will be obvious move and possibly storage costs, as well as the loss of time spent purging/packing/unpacking. (Even if I paid packers, still have to get organized). I suspect the next place will be temporary (1-2 years), unless it's a super great deal, so that means those move costs will make an appearance again in a short time period. If I move, what do I move too? An SFH I purchase (that requires a down payment to acquire)? An SFH I rent (obviously if I rent, I lose the tax benefits of primary home-ownership, but might that be off-set by the rental income and business expenses?) A 2, 3, or 4-plex that I buy, living in one unit and renting the others (have heard conflicting views about some multi-families being harder to rent)? If I'm purchasing the next property, do I look for one that requires a little rehab and can be flipped in a year or more, or find one that is mostly move-in ready (but less expensive than my current home)? Or do I just set the max price point and work with whatever deal pops up in those numbers rather than trying to narrow the field now? Re: acquisition costs - I can put my hands on enough funds to acquire the transitional neighborhood rental and have a good-sized cash reserve today. If renting my place and purchasing a new primary residence, I'll likely need a little more time to build up enough for a down payment and have a cash reserve. In either case, once the property is acquired, I'll likely need 8-10 months (maybe more) to build up another down payment/reserves to acquire another property (this obviously doesn't refer to "subject to" and other creative finance deals). I could be over-thinking it or maybe haven't asked enough questions! But I would appreciate your thoughts as I noodle on all of this, especially from my fellow Queen City experts. Thanks!!