Advice on what to do with cash after home sale

2 Replies

Hi all,

Relatively new investor here. I've lived in my current condo for 3 years. I will be selling it for 235k, ideally. I owe 155k on it. Hoping to take that cash (maybe 60-70k) and dump it into a primary residence and a rental property. Is this a wise idea? Any advice on common pitfalls or things to worry about would be greatly appreciated!

I think all of this hinges on how much the new primary residence will cost and how much the new rental property will cost. I suggest putting down just enough to avoid PMI (20%) on the primary residence and see how much money you have leftover from there. You could also look at purchasing a primary residence that has rental potential built-in, such as a duplex, etc

Richard, as mentioned above I would absolutely recommend that your next purchase be a small multi-family property that you can househack. You are selling a Condo so you have to be used to being in close proximity to others.

If you buy the multi-family you will only have one set of closing costs vs. two closings if you buy another primary and a rental. Also, you can possibly qualify for a larger home as you can apply the projected rental income to your current income.

I would suggest getting yourself a quadplex but working down from there to smaller unit count properties if your market does not support. This is to give you the greatest coverage of your mortgage with rents all else being equal.