Ok, you’ll figure out soon enough, I’m a rookie. Been reading a long time, got my feet wet (but not my hands dirty). Now I need advice/opinions/conjecture – you guys are smarter than me!
Item 1: My wife’s been in (a non-RE) business for 20 years, paying rent that amounts to 21,000 per year.
Item 2: Our four BR brick rancher in the burbs costs 1100/month on the mortgage, with very little equity because of some money problems years ago. Comps say its worth about 180,000
Item 3: Credit is recovering; OK, but still not great. Cash flow is minimal.
Point of all this: We have been offered a 6000 sq/ft two story, dual zoned (commercial AND residential), plus two out buildings that can house other businesses (total of about 8000 sq/ft), for a price of 700,000. Location is one block from wife’s current office in a good part of town on a main thoroughfare. It’s clean, used as a sales floor, and would need some interior walls put in.
The owner has offered to finance, but I think we need more cash to complete the move. We would be essentially trading the rancher mortgage and the rented space for an upstairs loft and a single monthly payment, plus a job as landlord.
Some local prognosticators say the city is planning a build in this direction, with prices jumping maybe 50% in 10 years. Regionally, growth has been a steady 3-5% for almost a decade. The only bubbles seem to be in the condo market.
This should be a no-brainer? But cash is short. I don’t want to get everything locked in, and then not be able complete the job. I’m anxious to start testing my “knowledge”, but this would become our primary residence (something you don’t mess with).
How would you tackle (or not tackle) this situation?
I’m not asking anyone to do my homework for me. But I’ve enjoyed very much and learned a great deal from reading your posts, and I’d just like to see what happens when this one hits the fan.
Thanks in advance?