As I remember to breathe (in... out...) this entire process of buying more house than I can afford is strongly reminiscent of trying to buy my electric car. That experience of course, ended well.
Here's the deal:
A 3100 square foot home on a nearly 7000 square foot lot, with an attic space that could be developed into another 1000 to 1200 square feet, is far more home than people need these days. It's adjacent to a retrofit co-housing community. I'd buy it, condo-ize it into 3 units (a 2 bed, 1000 square foot unit in the front, a 1300 square foot unit in the back for my family, and a 800 square foot 1-bed unit upstairs and along the west side). The attic unit would have views of the bay.
The entire building would get incorporated into the intentional community. That's important to know, because it means the units' value is increased by the value of the rest of the property, because of this emotional component.
Did I mention I have a green builder and architect lined up to help with the development? Furthermore, I have a verbal agreement for funds to help with the construction, contingent on my ability to buy the house!
What's the dilemma? The mortgage on the entire property is out of my price range by about $100k.
I've had a a couple people talk with me about partnering up on the purchase, but nothing concrete yet. I've never negotiated an owner-tenant partnertship before, but I know they've been done. My investor partner would need to be involved for 2 to 3 years while the condo-izing took place. Selling the condos off would get them their return. I need someone who is smarter than me to figure out what the ROI would be, but my hunch is it could be 20% easily.
My most recent white knight said he had the money, but that his dad doesn't think it's a good neighborhood to invest in. Thanks for using knowledge from 10 years ago to make your decision! Hopefully this moves me one step closer to the right person to partner with.
Time for more farming!
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