Whether to buy my childhood home?

[James David Scott]

   I have an opportunity to purchase my late parents property from my two siblings who want to sell the property by me buying them out.  I am trying to decide if I should try and make this deal happen. The property consists of two lots which has an older 4 bedroom home( 2,000 sq ft) and studio apartment (400 sq ft )grossing about $2450 a month rents combined and a small landlocked lot joined to the primary lot that may not be a lot of legal record. It costs about $1,000 to get a land use directors interpretation on whether that lot is build- able.

The appraised price of the house is $429,000 and the land locked lot $78000. The property value may have as much as doubled over the past 5 years. The combined properties .61 acres R-5 zoning could be subdivided into 2 or 3 lots. There are new 2,800-3200 sq ft homes bordering the property which recently sold for $650,000 -$750,000. 

Would it be smart to try and subdivide the property and sell one or two lots or retain a lot or two and sell the old 1951 home in fair condition?

The combined purchase price would stretch me pretty thin which would involve doing a 1031 exchange on an underperforming rental and a ton of cash. How much of a real estate or investment portfolio should be tied to a single property? Any thoughts about this scenario are appreciated. Thanks.

[Lane Kawaoka]

Sounds like you are being a collector not an investor.