Help with ideas to finance the purchase of a new house

[Aubrey P.]

Hi, this is a pretty basic question, but having a variety of options would be helpful. I own a row house close to the capitol in Washington DC on Capitol Hill that has $130,000 left on a 15 year note at 2.875%. It has a liveable downstairs apartment. Both upstairs and downstairs can bring in good rent, well at least once Covid blows over. Upstairs could bring $2,600 and downstairs about $1,500 per month. I have friends staying upstairs for a few months now who are paying $1,800 a month, but they are leaving in 2 months. I shouldn't have a huge issue getting it rented. I don't want to sell it, because DC has consistently been on an upward sales trend. Close in DC real estate only lost 5% of its value in the downturn of 2009. I doubt Covid will put a terribly massive dent into values, if a vaccine is found soon. Essentially, I don't see a huge migration to the suburbs when all indicators and trends show cities are where the action are. Older Empty nesters with kids gone, young folks, and people not wanting bad commutes are still choosing cities to live in. I try and track trends and that's just my take, even with folks saying expensive real estate is pushing young folks to smaller, more affordable locales like Austin, or Raleigh-Durham or whatever.

Anyway, I also own a two bedroom condo in downtown U Street in DC, with parking, which is currently rented for 2,300 a month. There are two professionals living there on a two year lease expiring this December 2020. I have had that rented for 4 years. We have not had an issue with vacancy, nothing more than 3 months at time between new renters. This area is full of bars, restaurants and is vibrant.

The condo we are buying would be $600,000 and is a great location in downtown DC and would be for us to live in. It is in a two unit building that was just built. We have two kids. My wife is getting nervous and will probably suggest we sell one of our two rental properties to afford this condo. The condo is actually worth 1.5M, but we're getting a sweet heart deal and it's only $600,000.

Can anyone recommend some financing options, more so based on not selling the two properties we own to do this? I make 100K and my wife makes about 200K a year at our respective day jobs. We have about 40K in savings. I am curious how to best swing this.

Thank you.