When we moved, we turned it into a rental, hoping this would be the start of our real estate journey—something we’d like to continue once my husband retires.Some key details:My husband is active duty and will retire in 3 years.We have one final move coming up this summer to Raleigh, NC.Our current debts are crippling us—the high interest makes it tough to stay afloat every month.The plan me and my husband are thinking bout:Sell the rental property.Use the proceeds to pay off all our debts, set aside emergency funds and a down payment for our next home.Free up $1,500/month from debt payments, and that also can stash in a high-yield savings account.Regain full VA loan entitlement, allowing us to purchase a multifamily home and use the house hacking strategy for up coming move.Avoid capital gains tax, since April marks five years of ownership, and the tenant’s lease ends in May.This wasn’t our original plan, and we hate the idea of using our equity to pay off debt.

Here are the key numbers:Potential purchase price: Mid-$400k rangeAppraised value: Estimated at ~$500kRehabbed comparable properties (comps): ~$580-600kMonthly PITI (with 5% down, including mortgage insurance): ~$3400First-year PITI (with 2-1 buydown): ~$2900Monthly income (after taxes): ~4-5kLiving expenses (utilities, groceries, etc.): ~$1600Savings available: ~15-20% of the purchase priceCash to close: ~$34kRehab estimate: ~$34kRemaining reserves: ~$20-25kTo fully fund the rehab, I’d need to come up with an additional ~$15k in the short term, which I anticipate paying back quickly once the rental portion is generating income.

Also, often times the original homeowners still live in the property so once the sale is ratified you have to go through the eviction process or offer cash for keys to get them to leave.

Any key factors to consider or lessons learned when trying to scale efficiently?

The key is finding a great deal and being relentless in securing the right financing for it.

@John BrennanWith an IRA, there is a key factor to consider when it comes to self-storage. 

Compare that to Tierrasanta, where market values hover around $3.01 million for a similar project, and it’s clear that location is key to making SB-9 projects profitable.Agents, this is where you can shine.

If everyone took the cash for keys approach, then the odds of a LL getting such a tenant increases.I have never had to do a cash for keys.  

@Mario Morales - As some others have said I think the strategy is sound, but the key would be to find a distressed property that you can drive up the value with renovations so that the new value is 25% higher than the purchase price so you pay back your HELOC.

Your response really helped me understand the key aspects of short sales, especially regarding title issues, lender valuation, and inspections.I truly appreciate you taking the time to share your expertise!