@Edgar Duarte Selling now under the primary residence exclusion avoids capital gains taxes, allowing you to reinvest the $500K equity in diversified assets like index funds or additional rental properties.

In southern CA, even garage conversion ADU additions are typically costing more than the value added.  

In short, I can afford the additional $1100/mo cost of a second house, even until I rent it out.I have around $35K in HYSA and emergency funds that I could use for a down payment, but that's less than 20% which would be required for a conventional loan, assuming full purchase price.

It was held by the previous owner for a very long time, so I wouldn't be surprised if some basic facts about the house are incorrect.I was making an offer on a house a couple years ago and discovered that the owner was paying taxes on an additional house that was on the neighbors lot and didn't know it!

We’re fortunate to have an above-average income and live well below our means.This summer, we’ll be moving to Detroit (PCSing in August), and we’ve saved about $120,000 to invest in addition to having funds set aside for the home we’ll purchase in Detroit.The reason I’m posting is that I’m struggling to decide how to best allocate the $120k.

In addition, if this was originally an owner occupied house, there are often homestead exemptions where the first  $XX,XXX. of the value of the home aren't taxed.  

Additionally, the beach is still within reach...just a short 1 hour flight or 6 hour drive.  

Additionally, Mr.

In our market it is important to make sure they are a licensed broker, carry adequate GL and worker's comp (and name you as additional insured).  

You're also able to work with the utility company to install an additional meter.