Quote from @Beau Alesi:
Hi so we have one primary residence with about 400k equity and a rental property what about 300K equity. Each mortgage we have about 250k left on. I'm 50 years old and my wife is 44 and we have a 4-year-old. My wife wants to move to a better neighborhood with good school districts and I'm for it. The houses would be looking at I'd imagine would be about 7 to 800 k taxes would be about 4K hire a year. So basically in my mind this would not be a great financial move as we be accruing about 200k more in debt if we were to sell one house and take the cash from there and use it as a down payment. Thoughts? Thank you very much
Beau,
In my opinion the math and the numbers on deals don't lie and are also a great way to build a plan. I would take all of the details of your current properties, project what the sale would be, and what does that leave you to invest? Then plan and design how you're going to deploy that cash via what strategy your wife and you have confidence in.
I use a excel or google doc and my first sheet would layout all of the details of the sale including all costs that go into getting closed. You really should be able to hone this in close and pretty accurately.
My second sheet would start with the amount of capital you have to deploy. I would run a few different scenarios that I had confidence in and as you run the numbers, they should tell you what makes the most sense for you. As you get to this point your gaining more confidence in the options because you know option A and B had a certain outcome that wasn't option C, and this would give you more confidence you're doing the right thing for you.
From there, I would be identifying properties to acquire if you don't already have some in mind and then my next sheet is creating the plan. If you layout a path it may not go the exact way the plan is laid out, but you have a target that you're aiming at getting to and a lot of the secondary decisions fall into place and are clear when you know where you are headed.
Congrats on being in a great place with real estate and options! Real estate provides so many options as far as directions you can take. Just because the spreadsheet works for the way that I process information doesn't mean it's how it translates for you. In general, run the numbers, dream of exactly what you want, and build a plan so you're aiming at the target you set in front of you. Pen and paper, spreadsheet, or whatever provides the information you need. One last thought is your likely going to be getting a larger depreciation write off with new acquisitions.
