Hello All,
I'll try to keep this fairly to the point but please ask for clarification if needed. My wife and I are currently in the process of potentially selling our primary residence. We will have about $225k left over after closing costs and we're thinking about increasing our living space a bit since we're now all confined home(workplaces being remote) and are bursting at the seams.
With inventory being low and people emotionally purchasing in our area, we played with the idea of buying something smaller for a year and renting it out after. We would have a chunk of cash left-over for the purchase of a larger property when the market hopefully has more inventory, and then a nice cash flow asset on the side.
The problem is the numbers.
We would have 0 debt outside of the mortgage payments, however, even when accounting for the estimated positive $1000 cashflow(a conservative amount) the DTI's are not in our favor and I'm afraid we would be "stuck" in the smaller home. Our back-end was around 42% carrying two mortgages. Not ideal.
Has anyone ever faced a similar situation, and, if so, were there any ways you became creative with lenders to make this happen? Any other scenarios we should hypothetically look at to make the move as well as spin a rental?
Welcome to all suggestions.
As a side note, we were landlords for about 10 years and moved quite far so we had sold our two condos a few years back. We're already very familiar with what being a landlord entails, just not how best to leverage our capital.
