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Tell me if I should make an offer

Me (33F) and hubby (37M) own a home in very popular family-friendly suburb of M/HCOL city. $260k per year combined gross income. Looking to upgrade in house and keep our current home as a rental property. This is my (our) first foray into real estate investing and looking for opinions. TIA!

Stats:

Current house: Valued around $600k, 15-year mortgage is around $3k, including taxes and insurance. Expected rental income also would be around $3k. We owe $240k on it and will be paid off in 10 years.

House I want to buy: Originally priced $1.03M, now at $895, and we think they might accept $840 (we get here via another sale price reduction, and a 321 buydown). Very motivated sellers. It’s beautiful, great location, checks all the boxes for us. My husband isn’t totally sold on some of the finishes (house leans a bit more classic than modern/trendy, I am okay with this, I sort of like that about it). We would put 10% down, and one of us would take a 401k loan. We make significant contributions to our 401s currently, my thought is that whoever takes the loan will just pause their contributions while they pay back the loan, essentially making the net paycheck the same.

The kicker - we have a one year old and therefore, an expensive childcare bill rn. Around $3k /mo. Obv this is not factored into our DTI and the pre approval letter from our lender. We have no other debt besides the mortgage on our current home.

Do we pull the trigger? Payment on new house for the first 3 years would be $5000, $5300, $5600 respectively. Thought is that we would refi before the end of the first three years. I am really worried that when things get “easier” for us within the next couple years , houses will have gone up, as they always do, and we won’t be in a position to buy a new home and keep our current home as a rental. For example, I could see us buying a different house down the road a bit for $950+, and making significant sacrifices (I.e. unfinished basement. The house I’m thinking about has a finished basement.) I feel like this is the one shot I have to buy a great house, stay under the conventional loan limits, AND keep our current home.

submitted by /u/Successful_Highway85
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source https://www.reddit.com/r/RealEstate/comments/1gon0m4/tell_me_if_i_should_make_an_offer/
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