Advice for next step

[Derek Heinz]

Cheers, all. I have a primary home in North Bend, WA (30 miles east of Seattle), a fast-growing town. I also have a rental in Vancouver, WA with good tenants and equity in a hot market. I'm wondering what to do next. Oh yeah, I'm 50 years old and am hoping to retire in the next five years if possible. Doing so will largely depend upon what I'm able to do with real estate. I have a good job, but it requires a lot of time and responsibility, and I'm burning out fast. I've considered selling my primary. I could pull out between 300 and 400k from that. I've also considered renting it. That would cash flow to the tune of about $700, maybe more. One other problem, though: The home next to me has become the neighborhood meth house, which is clear to anyone at first glance. I mention this because it will absolutely affect my ability to sell it for top dollar and possibly even to rent it out. I'm considering waiting them out before selling or renting. The cops are well aware of what's going on there. The occupants rent, but the owner is out of state, very old, and uninterested in what's happening there. I'm hoping the occupants will eventually get arrested, but I've hoped that for three years now.... The house is in terrible shape, and I've reached out to the owner, telling her I'd like to buy it. So far she has been uninterested. Also, I'm not very liquid right now after putting a lot of money into a new roof, siding project, and other home improvements. I've considered renting it out and house-hacking, possibly using an FHA to get in. Any other thoughts are greatly appreciated!

[Nathan Harden]

Derek,
The other problem about your primary is also a good problem to have. If you choose to refi or sell it, either way you will make money. I think the biggest hold up in the whole thing is your meth neighbors. It all rides on the decision if your neighbors landlord will sell or not. If he does sell, he sounds like he isn't very concerned about the property so you would acquire the property with the current tenants in place. Are you willing to the house with the tenants, are you prepared to deal with everything that comes with the eviction process, let alone eviction process with meth heads? I think if you can deal with all of that, you have a serious opportunity sitting as your neighbor.

If you look at all of this like a glass half full, these are all great problems to have in my opinion. Yeah, your neighbors are meth heads, but with that comes with a landlord that does not care or want to have anything to do with it. That is a huge opportunity for you if you are able to capitalize on it. North Bend is a very hot market. 

One last thing to think about. If you acquire your neighbors property, from the sounds of the house, I would be willing to bet that you could not get a loan on it. Would have to be a cash/hard or private money purchase I bet.