Sounds like you have really done your research (of course). I like the idea of the multi-family dwelling. It sounds too good to be true, which is probably why it will be hard to find something you like, but... even if it paid half your mortgage, it would be so much better not to lose your asset - or rather, have the money sitting there but have the market go up (while your nest egg gets whittled away) so that you can't buy back in.

I'm not making it any better am I? I just hate the thought of you never being able to get back in again. I have a sister and a brother-in-law both trying to break into the housing marketin Australia now, and just four years after we bought this place they are looking at minimum double what we paid. Actually probably more like triple or even quadruple in the places where they live. It's scary.

You might want to check out: http://greenerpastures.typepad.com/

This family made the move from Minneapolis to Victoria, BC so there was the whole element of emigrating as well, but they looked at the multifamily dwelling idea as well.

Good luck!

Maybe you guys should approach Mordecai & Dianne, who have been looking to buy but Manhattan's insane; little Susan just grows bigger. I doubt if NJ as occurred to either of them, but their apt is about the same size as ours....