Looking for advice on either selling or keeping to rent home

[Ralphie Martinez]

Hello all,

I currently own a house ($195k on the loan) that's located in the Bay Area (Martinez, CA). My wife and I have 3 small children and are looking to uproot and leave the state. The house we own was my grandparents house and has much sentimental value to me and my family. We are going back and forth on what would be our best case scenario with our decisions moving forward with either keeping and renting or selling. 

We are stuck with keeping the house to rent out while we use almost all of our savings to put down on a home when we move (Tennessee is the landing spot) which we believe will be 20% of the purchase price (please tell me if there's another way) and selling our home and use that money to deploy on a home purchase once we finish the transaction.

The idea with selling the home here would give us the amount of money to more than likely buy outright when we move and then give us some breathing room to figure out what we'd like to do for a living when we leave. We currently own a gym in our city and covid has hit us pretty hard and has worn us down for the past 2 years. The sell would more than likely give us somewhere around $550k+ after loan pay off and realtor expenses. Homes we are looking at are around $300-$375k which leaves us around $175-190k give or take.

If this scenario plays out and you had that extra income would you use it to get some properties to rent in TN? Would you invest or put it somewhere to grow like mutual funds etc (we have VTSAX and an ally account currently)?

The other scenario is keeping the house. Renting it out and with what our mortgage payment is, taxes, insurance, repairs etc we could bring in somewhere around $300-400 a month with what we could rent it for. We could afford a 20% down payment on a house in the range of $375k in TN but without a job lined up nor a job we can take with us, it seems risky and makes us a bit uneasy. I have no real transferable skills besides what I've learned being a business owner, no degree etc so I'm unsure if this is just fantasy or something I could make work and wanted some opinions from others. If this worked out, of course we'd find jobs where we needed to, we'd have another mortgage payment BUT our CA house is on a 15 year loan at 2.75%. 

I'm thinking long term, the house in CA would be paid off, we'd have a TN home also being paid down and 15 years from now I'd be 50 years old and my children out of the house and we then can adjust as needed when that time came. 

Thoughts? I appreciate you taking the time to read this and hope it makes sense and comes across appropriately. Thank you in advance.

[Brian Garlington]

Why don't you just do a cash out refi while you are still an owner occupant of the place in Martinez.....then when you move you simply rent out the house for cashflow......and you will also have some money to help you out when you move.