Looking for input - Condo > House dilemma
Currently: Own two condos, one in North York, one in downtown Toronto.
- Living in the downtown unit.
- North York is currently rented out, with what seems like a happy stable tenant.
Goal: Looking to buy a small house and start a family - likely in the suburbs (Markham, Richmond Hill, Thornhill).
Currently, between my SO and I, we don't have enough liquid cash for the down payment for a house so we intended to sell our downtown condo since we were living in it anyways and upgrade to a house - using the capital/upside on the condo for the down payment. We decided this back in Sep, during the early signs of the depressed condo market, but it wasn't too clear at the time so we packed up and moved back to the parents since we didn't want to do showings while being in the unit with Covid and all. The unit has been sitting on the market for about 3, heading into 4 weeks now with only a handful of showings. I'd say we are priced ok in general, and competitively in our building so just goes to show how slow it is. Note that this condo was purchased 4-5 years ago, so as you can imagine it has appreciated.
We aren't looking to 'play' the market, want to make the best decision at this time and simply move to the next stage in life. For me, this is all just bad timing where we are selling into a depressed condo market and trying to buy into a crazy house market in the suburbs. We aren't leaving downtown because of Covid19 (I love downtown and honestly would stay there if it were all up to me :P). I think we would have done this move irrespective of the pandemic around this time.
So I've come up with a few options:
Path 1 - Still look for a house, if we see something we really like, we go for it - and use other methods to cover the down payment temporarily.
1.1) Use our HELOC on the condo, all savings, and sell my stocks/investments - I'm uncomfortable with this because we'd basically have no savings left AND I'd be dipping into the other parts of my portfolio which I never wanted to touch. I've kinda ruled this out.
1.2) Use the HELOC, and some cash (not touching emergency savings, stocks) and borrow money from a family member (which we'd need to return within 12 months) - which means the DT condo needs to sell within 1 year - I'm borrowing to buy us time
Note: Between us, we have a good income and could handle the house mortgage + the downtown mortgage (w/o rent) and be okay. I did the math and if the NY condo were vacant as well, we'd be in the red and need to dip into savings, but we'd still be okay for a bit - hence my suggestion in path 1.2 where we still have the savings buffer - assuming the worst case scenario of carrying 3 mortgages.
Path 2 - Play it safe. No looking for a house until the condo sells.
2.1) Leave the unit on the market and just wait for a buyer
2.2) Give up this whole process and move back to the condo and try again when market stabilizes - last resort since living with our parents, to be frank has been a bit depressing after being out for years - but we'll live if it is the best approach.
My gut tells me 2.1 is our path to go, but I've felt pressure from my SO to get back to our own space so I've trying to figure out what else we can do.
Any input and ideas would be much appreciated.