How to start investing income property with proceeds from a home sale?

[Emiliano Dias]

Hello all,

I have a penthouse condo in downtown San Francisco.  I'm thinking of selling it and moving back to the east coast (southeastern Massachusetts.)  My realtor wants to list my condo at $750,000 which would give me about $400,000 in proceeds after the mortgage is paid off.

Does it make sense to purchase a pair of investment homes outright (possibly a triplex and a slightly nicer duplex to owner occupy), or should I apply for mortgages and put the rest of the money in my savings?

I've never invested in property before, would this be a prudent method to ensure an income an a place to live with little initial effort.

Thanks,

Tony

[Leon Y.]

While you should have a decent amount of cash reserves for any contingencies, putting money in savings just mean guaranteeing your loss through inflation. I'd apply for mortgages right now because the rate are just so cheap. In fact, I'd even consider refinancing the SF house to buy investment properties. This way, I won't have to pay for realtor fees which I think amounts to probably close to 40k no?