The house has appraised for $335k, my hard money note is for $242k, and I'm looking at only about $15k out once closing costs, taxes, and insurance are accounted for.

Vacancy rate, insurances taxes, interest rate, repairs and maintenance.

There is such a shortage that state government is giving tax breaks to developers to build more multiplexes As far as specific towns I'd say Nashua, Concord, Manchester, Durham (where UNH is), Dover (right next to Durham), Portsmouth, Seabrook, Salem, Exeter and Hampton.I chose Dover because its a mix of students from UNH and young professionals. 

If you need financial help, ask under the "Finance, Tax, and Legal" forum.

They can really throw off your numbers if you are not familiar with a citys transfer tax, and fees.

From a tax perspective, keeping the properties separate may allow step-up in basis benefits for your spouse upon inheritance, reducing capital gains taxes.

Fannie/Freddie (Conventional) loans aren't just about rate and transfer taxes. 

Real estate has so many tax benefits and credits available, that I always tell people it's crucial to have a CPA that's extremely knowledgeable in this area.

My son currently lives in the townhouse b/c he is going to school and works in the area.Since he is young and starting out in life, I would like for him to only cover the basic costs (taxes, HOA, utilities) just enough for me to break even (I believe that will put him slightly little lower than market rent rates). 

@Kelly Taylor who doesn’t like tax free atm withdrawals?