What would you do? My wife and I have aging parents that live in one of our rental homes close to our primary. We are at the stage where we believe it is almost time (within 6 months +/-) for us to help more and consider moving into a single home so that we can be of direct assistance. While our emergency fund has a decent balance, we don’t have funds saved up yet for a down payment on a home that has a mother in-law suite or something similar. Our current home doesn’t have much equity so selling it won’t result in the funds needed for a down payment. We’d likely keep it as a rental.

Two options we are considering for a down payment of a larger home for all of us to live in:

1) I have a 457 from a previous employer that I could access and use for the down payment. We would have to pay taxes but no penalties on the funds withdrawn.

2) Sell one of our cash flowing rentals (we only have two), which would provide more than enough funding for a down payment but reduce monthly cash flow (~$850) for our family. The current interest rate is almost at 3.25% 30yr fixed. We self-manage this unit and our other rental that the grandparents live in.

I’m leaning towards option 1 (cashing out the 457) but wanted to get other thoughts / opinions.

TIA!