Long term strategy: primary home & investment properties purchase

[Keeya Malo]

Hi BP members,

I am in a dilemma over our primary home purchase & a long term investment strategy.

My husband and I are in our early 30s, no kids (planning to have one soon), work in tech jobs. We need a house with a yard and are confused with how we should tackle this problem while staying focused on our long term strategy.

Our long term goal (10years) is to displace my income from the job with rental income.

Here are our specifics:

• He makes about $325K & I make about $300k, a large portion of it is from stocks.
• We currently own a condo in San Jose and have about $500k equity. Condo can sell for $850k-$900k or rent for $3000 to $3400 per month.
• We have about $370k in cash, about $225k in investments and 401K

Long term (10 years), we are really interested in living and raising our kids in Los Altos or Mountain View and have an income of about $15k from real estate.

We are confused over the following:

1. Buy a primary home worth $1.3m-$1.6m in an upcoming area in Sunnyvale/Santa Clara. Sell Condo and invest that money in 2-3 SFH around the bay area.
2. Buy a primary home worth $1.8m - $2.2m in MV or Sunnyvale with good schools. Sell Condo and buy 1 SFH in bay area and keep $100k aside for rainy days.
3. Buy a primary home worth $2.2m-$2.6m in MV or Los Altos. Sell Condo and gradually buy SFH investment properties in the coming years.

All this, while thinking of all the risks, losing jobs, downturn in the market, need for a good elementary in 6-7 years,etc.

I really appreciate your help and glad to have the opportunity to learn from other's experience. 

[Paul Choi]

@Keeya Malo Sounds like you have strong financials! IMO, I like multifamily units than SFH for investments and cash flow. MFH has better economies of scale (ie. 1 roof to repair for 4 units as oppose to 4 roofs for 4 SFH), and a multitude of other reasons. I also think MFH have less price swings up and down and stable in the long term. Others may disagree. Any reason why you are thinking of only SFH?