Welcome to a roller coaster ride of a life time!

To start, you(parents and you) need to decide what is the best option. You might try listing all the wants and needs in a list. Keep in mind the possibility of a major life change.

Now, generally, building new is faster/cheaper than extensive remodeling. Reason? Building new is just putting together the components of the building. Remodeling is removing, restructuring, and replacing parts of an existing building. Twice the work and labor.

The differences depend a great deal on location. We bought a great house that was a foreclosure, built in 1965. I was able to do all the necessary work myself and we got the house for less than the appraised value. Even after all the work, our investments left us with equity. Had I had to have all that work done by others, we would have been over equity and upside down. And there was no structural rework needed. We could not have built new for less money in this area.

On that list, include where you want to be 10 and 20 years from now. And projected needs. Will your parents need handicapped access? Is there room for expansion if necessary? Look at the projected changes in the area. How are the demographics changing?

Example: My neighborhood was original owners and retirees 10 years ago. In a three block section of our street, there are about 25 homes. In 10 years, half of those homes have been sold. Most of the new families all have children. All of those new families, except one, are in their 30's and 40's. My wife and I were the 'New Kids' when we moved in, now we are the 'Old Couple'.

All that change is fine with us, but had we expected things to remain the same(ala retirement home type life) we would have been disappointed.

Once you have the wants and needs list in general terms(number of bedrooms/garage or not/single level or two story/and so on), you need to discuss cost. Two houses will cost twice what one will. Two houses will need twice the maintenance---yard mowing/leaf raking/snow removal/etc.

One building(shared house/duplex) lessens the individual costs. But impacts personal styles/space differences. Your parents may need easy access down the road. A two story means that will be an issue. A single story/duplex minimizes that issue, but raises the cost of the building.

As Virgil posted, you will need help. You need a professional who understands the dynamics of your situation. I'd hesitate to say a realtor would be the best choice. To find the house(s) you finally decide on to be sure, but not what to look for. Realtors are pro's who find/sell properties. There are realtors who can do what you need, but in my experience, those folks are far and few between.

You should talk to different trades. Contractors, realtors, architects, and designers and find the person/firm that can best work with you towards your goal. Your feelings about that choice are important, but it will be a long journey. An extra 6-12 months in deciding on the best option will pay off later.

I'd start by meeting with your financial planner. If you don't have one, it's never too early to find one who can help you plan for the future and tell you what you can afford now. (Before you know it you'll be paying for college.) As mentioned by Virgil, location is the primary consideration (after finances IMO.) With a 6 year old that means good schools. As a single mom, that may also mean walk-to-school locations and proximity to your work, if applicable. You will want the ability to get from work to school fast if needed.

Well...there's yet another issue to consider: resale. At some point, you and your parents may want to sell your house(s) and move on with your lives, based on preferences, mobility, health, etc.

Whatever you think you want to do now, you should also give consideration to what that will influence you to do in the next 10-20 years.

No house design is universal and fits every family need over the life of a family. About the best anyone can do is plan for what they currently know and can reasonably project for the next 5-10 years. After that, no one can really know, or reasonably guess, what life will bring.

So my advice is plan for today, what you know and can reasonably project for the next 5-10 years, and leave yourself some sort of flexibility or reasonably attractive resale and relocation strategy after that, if that should turn out to be needed.

Good luck on your journey.

Thank you all for your replies. Great points and advice. Part of the reason for the 2 houses was to give my parents and myself a feeling of independence while still being close enough to help each other. My mother is my primary source of after school child care. We are currently in Rhode Island and looking at jumping over the border into nearby Massachusetts. It is likely that at first, I will not change jobs but have a longer commute, their being just next door gives me the freedom to do that. As they age, my being close will help them. We already lean on each other a lot, as we are currently sharing a house, but I am definitely looking forward to having my own space again. Schools are a big priority. One of the reasons I like the idea of building is to preplan a home for an aging couple to make for easier living. This might include features like a walk in shower large enough to later include a bench or chair without having to rip out a traditional tub/shower or widen hallways and doorways.

I have spent the better part of the last 4 years putting all my earnings save for my expenses toward debt and by March will be debt free save for a car lease and get myself to the high 700s or maybe even 800s for credit. This is after more than a decade of financial struggle and a bankruptcy in 2007. So by the time we look at financing, I should be in a good spot. I don't make a fortune but I will personally be over the median family income for the area by about $10k and calculators estimate my comparable income in MA will be almost $7k per year more than I earn in RI based on taxes and other expenses. My parents intend to pay me rent for the home or unit in which they reside and may use some of the money from the sale of their current home to help with the down payment. I expect to have at least $20k ready for a down payment by next summer.

I wonder if knowing that one of the two homes will be a rental property results in any difference in the way the bank views the mortgage(s)?

I have spoken to our financial adviser but I am feeling like I should speak to a mortgage representative and I would like to speak with a local architect to see if the plan is really financially realistic. It seems to me that I need to know one of these people's answers before I can have a robust conversation with the other though and maybe that is why I feel stuck. Thank you all again! You were a huge help!

It doesn't cost anything to talk with a mortgage representative, so I don't see why you couldn't talk with one right away. And a visit with a realtor, too. And local zoning officials, as some areas don't allow multi-family dwellings or rentals.

I was interested in your $20k downpayment comment. My son and his wife are in the process of buying their first home; in their conventional mortgage, they needed 20% of the total purchase price for a downpayment. I don't know anything about real estate prices in the northeast - can you buy an appropriate property for $100k? Then you'll need more downpayment money for your construction loan, I assume.

Hi Keri, someone else on this forum was planning a multi generational house. Do a search for mojomom and multi generational. I don't know if the home was ever built but there were some plan ideas posted. Here's one thread:

http://ths.gardenweb.com/discussions/2265543/multigenerational-house?n=17

Hi Littlebug. Yes I know, $20k is not enough for the full down payment. It was meant to imply my timeline and where I will be by this summer and also my parents will be helping with the DP with some of the money from their home sale. So I do plan to have more than a $20k DP. The good news is that by the time early spring rolls around none of my income will be going toward debt anymore so what I previously have put away toward debt ($1k-$2k per month) will go into savings, so the DP should grow rather quickly. But that being said, do construction DPs usually mirror new purchase DPs or should I expect a much heftier requirement?